<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1996
[ ] 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 33-91412
---------------------------
BENEDEK BROADCASTING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------------
DELAWARE 13-2982954
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
SUBSIDIARY GUARANTOR REGISTRANT
<TABLE>
<CAPTION>
I.R.S.
EXACT NAME OF SUBSIDIARY GUARANTOR EMPLOYER
AS SPECIFIED IN ITS STATE OF IDENTIFICATION
CERTIFICATE OF FORMATION FORMATION NUMBER
------------------------ --------- ------
<S> <C> <C>
BENEDEK LICENSE CORPORATION DELAWARE 36-4081877
</TABLE>
----------------------
STEWART SQUARE, SUITE 210
308 WEST STATE STREET, ROCKFORD, ILLINOIS 61101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANTS' TELEPHONE NUMBER, INCLUDING AREA CODE: (815) 987-5350
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 148.85 shares of
common stock, without par value, were outstanding at August 19, 1996.
-1-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION
FORM 10-Q TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM
NUMBER
PART I- FINANCIAL STATEMENTS
<S> <C>
Item 1. FINANCIAL STATEMENTS
Introductory Comments ....................................................... 3
Benedek Broadcasting Corporation and Subsidiary
Consolidated Balance Sheets as of December 31, 1995 and June 30, 1996...... 4
Consolidated Statements of Operations for the Three Months and Six Months
Ended June 30, 1995 and 1996 ............................................... 5
Consolidated Statements of Stockholder's Equity for the Six Months Ended
June 30, 1996 ........................................................... 6
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1995
and 1996 ................................................................ 7
Notes to financial statements .............................................. 9
Benedek License Corporation
Balance Sheet as of December 31, 1995 and June 30, 1996 .................... 13
Statements of Operations for the Period February 28, 1995 Through
June 30, 1995, Three Months Ended June 30, 1995 and the Three
and Six Months Ended June 30, 1996 ...................................... 14
Statement of Stockholder's Equity for the Period February 28, 1995
Through June 30, 1995, and the Six Months Ended June 30, 1996 ........... 15
Statements of Cash Flows for the Period February 28, 1995 Through
June 30, 1995 and the Six Months Ended June 30, 1996 ..................... 16
Notes to financial statements .............................................. 17
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS............................................ 18
PART II-OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON Form 8-K .............................................. 25
SIGNATURES.............................................................................. 27
-2-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTRODUCTORY COMMENTS:
The Financial Statements included herein have been prepared by Benedek
Broadcasting Corporation ("Benedek Broadcasting") without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations. It is
suggested that these Financial Statements be read in conjunction with the
financial information set forth in Benedek Broadcasting's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
-3-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS 1995 1996
---- ----
(UNAUDITED)
<S> <C> <C>
Current Assets
Cash and cash equivalents ............................ $ 9,668,331 $ 5,690,376
Accounts receivable, net ............................. 12,529,696 20,812,960
Due from sellers .................................... -- 1,799,144
Current portion of program broadcast rights .......... 1,575,324 2,605,440
Prepaid expenses ..................................... 576,697 1,378,292
------------- -------------
TOTAL CURRENT ASSETS ......................... 24,350,048 32,286,212
------------- -------------
Property and Equipment .................................. 20,035,715 91,197,864
------------- -------------
Intangible Assets ....................................... 60,420,617 360,072,212
------------- -------------
Other Assets:
Program broadcast rights, less current portion ....... 687,321 2,521,725
Deferred loan costs .................................. 5,625,261 9,823,656
Other ................................................ 3,334,359 760,537
------------- -------------
9,646,941 13,105,918
------------- -------------
$ 114,453,321 $ 496,662,206
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Current maturities of notes and leases payable ....... $ 318,077 $ 6,295,564
Current maturities of program broadcast rights payable 2,042,643 3,282,547
Deferred revenue .................................... 500,000 694,668
Accounts payable and accrued expenses ................ 7,824,297 13,904,095
------------- -------------
TOTAL CURRENT LIABILITIES .................... 10,685,017 24,176,874
------------- -------------
Long-Term Liabilities:
Notes and capital leases payable ..................... 135,448,947 257,347,823
Program broadcast rights payable ..................... 632,443 1,866,060
Deferred revenue ..................................... 4,250,000 4,515,933
Deferred income taxes ............................... -- 58,872,778
------------- -------------
140,331,390 322,602,594
------------- -------------
Stockholder's Equity (Deficit):
Common stock, no par, authorized 200 shares;
issued 179.09 shares ............................... 1,046,500 1,046,500
Additional paid-in capital ........................... 2,758,178 150,391,778
Accumulated (deficit) ................................ (38,886,615) (74,391)
------------- -------------
(35,081,937) 151,363,887
Less 30.24 shares held in treasury ................... 1,481,149 1,481,149
------------- -------------
(36,563,086) 149,882,738
------------- -------------
$ 114,453,321 $ 496,662,206
------------- -------------
------------- -------------
</TABLE>
-4-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
----------------------------- ----------------------------
1995 1996 1995 1996
---- ----- ---- ----
<S> <C> <C> <C> <C>
Net revenues ................... $ 13,909,076 $ 18,432,157 $ 24,058,657 $ 30,115,028
------------ ------------ ------------ ------------
Operating expenses:
Selling, technical and
program expenses .......... 5,631,023 8,003,457 10,044,707 13,541,029
General and administrative .. 1,898,257 2,683,156 3,791,915 4,693,851
Depreciation and amortization 1,268,398 2,708,863 2,124,505 4,069,293
Corporate ................... 354,503 591,542 697,759 1,087,434
------------ ------------ ------------ ------------
9,152,181 13,987,018 16,658,886 23,391,607
------------ ------------ ------------ ------------
OPERATING INCOME .... 4,756,895 4,445,139 7,399,771 6,723,421
------------ ------------ ------------ ------------
FINANCIAL INCOME (EXPENSE):
Interest expense:
Cash interest .............. (4,121,671) (4,853,727) (7,099,895) (8,879,980)
Other interest ............. (151,881) (216,071) (337,006) (316,528)
------------ ------------ ------------ ------------
(4,273,552) (5,069,798) (7,436,901) (9,196,508)
Interest income ............ 72,786 106,579 209,692 212,434
------------ ------------ ------------ ------------
(4,200,766) (4,963,219) (7,227,209) (8,984,074)
------------ ------------ ------------ ------------
NET INCOME (LOSS)
BEFORE INCOME
TAXES AND EXTRA-
ORDINARY ITEM .... 556,129 (518,080) 172,562 (2,260,653)
------------ ------------ ------------ ------------
Income taxes: .................. -- -- -- --
------------ ------------ ------------ ------------
NET INCOME (LOSS)
BEFORE EXTRA-
ORDINARY ITEM ..... 556,129 (518,080) 172,562 (2,260,653)
Extraordinary item:
Gain on early extinguishment
of debt ..................... -- -- 6,863,762 --
------------ ------------ ------------ ------------
NET INCOME (LOSS) ... $ 556,129 $ (518,080) $ 7,036,324 $ (2,260,653)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
-5-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED TREASURY
STOCK CAPITAL (DEFICIT) STOCK TOTAL
----- ------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 .. $ 1,046,500 $ 2,758,178 $ (38,886,615) $ (1,481,149) $ (36,563,086)
Contribution of Additional
Paid-In Capital by parent in
connection with acquisition -- 188,706,477 -- -- 188,706,477
Reclassification of accumulated
deficit due to change
income tax status .......... -- -- (41,072,877) 41,072,877 --
Net (loss) .................... -- -- (2,260,653) -- (2,260,653)
------------- ------------- ------------- ------------- -------------
BALANCE AT JUNE 30, 1996 ...... $ 1,046,500 $ 150,391,778 $ (74,391) $ (1,481,149) $ 149,882,738
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
</TABLE>
-6-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
----- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net income (loss) ........................................ $ 7,036,324 $ (2,260,653)
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Amortization of program broadcast rights ............. 1,081,647 1,302,515
Depreciation and amortization ........................ 1,345,668 2,701,736
(Gain) on early extinguishment of debt ............... (6,863,762) --
Amortization of intangibles and deferred loan costs .. 1,101,504 1,691,514
(Gain) on sale of property and equipment ............. (17,357) (7,428)
Payment of deferred and contingent interest .......... (4,405,746) --
Payment of prepayment premiums ....................... (2,748,896) --
Other ................................................ 31,691 --
Change in assets and liabilities, net of effects of
station acquisitions:
Recievables .......................................... (1,574,109) 2,631,367
Due from sellers .................................... -- 863,371
Prepaid expenses ..................................... (204,103) (233,827)
Payments on program broadcast rights payable ......... (1,037,876) (1,185,741)
Accounts payable and accrued expenses ................ 4,861,661 2,316,000
Deferred income ...................................... -- (261,810)
Contingent and deferred interest payable ............. 567,533 --
------------- -------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (825,821) 7,557,044
------------- -------------
Cash Flows From Investing Activities
Purchase of property and equipment ....................... (556,992) (1,250,886)
Proceeds from sale of equipment .......................... 25,502 10,300
Payment for acquisitions of stations, net of cash ........ (26,683,772) (321,542,152)
Reimbursement for equipment purchases .................... -- 79,198
Purchase of securities ................................... -- (651,535)
Payment of acquisition costs ............................ -- (316,528)
Other .................................................... 2,587 (1,724)
------------- -------------
NET CASH (USED IN) INVESTING ACTIVITIES ............ (27,212,675) (323,673,327)
------------- -------------
Cash Flows From Financing Activities
Principal payments on notes, including capital lease
payables ................................................. (96,170,752) (53,226)
Proceeds from long term debt ............................. 135,000,000 128,000,000
Contribution of paid-in capital by parent ............... -- 188,706,477
Payment of debt acquisition costs ....................... (5,586,680) (4,514,923)
------------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES .......... 33,242,568 312,138,328
------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,204,072 (3,977,955)
Cash and cash equivalents:
Beginning ................................................ 4,617,242 9,668,331
------------- -------------
Ending ................................................... $ 9,821,314 $ 5,690,376
------------- -------------
------------- -------------
</TABLE>
-7-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
----- ----
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for interest ......................... $ 5,995,139 $ 8,049,422
------------- ------------
------------- ------------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Acquisition of program broadcast rights ............ $ 712,095 $ 368,751
Note payable and capital lease obligation
incurred for purchase of equipment ............... 197,288 44,100
Equipment acquired by barter transactions .......... 162,685 38,719
------------- ------------
------------- ------------
Acquisitions of stations:
Cash purchase price................................. $ 26,683,772 $ 321,542,152
------------- ------------
------------- ------------
Net working capital acquired, net of cash $535,810 . $ -- $ 10,061,537
Property and equipment acquired at fair market value 6,500,000 72,533,059
Intangible assets acquired ......................... 22,313,385 301,026,581
Deferred income taxes assumed ...................... -- (58,872,778)
Other, net ......................................... (129,613) 19,112
------------- ------------
28,683,772 324,767,511
Less: Application of deposit ...................... (2,000,000) (3,225,359)
------------- ------------
$ 26,683,772 $321,542,152
------------- ------------
------------- ------------
</TABLE>
-8-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE A) - NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS: Benedek Broadcasting Corporation ("Benedek
Broadcasting"), is a wholly owned subsidiary of Benedek Communications
Corporation ("BCC"), and operates twenty-two television stations located
throughout the United States which operate under network affiliation contracts.
The networks provide programs to the affiliated stations and the stations sell
commercial time during the programs to national, regional, and local
advertisers. The networks also sell commercial time during the programs to
national advertisers. Credit arrangements are determined on an individual
customer basis.
BASIS OF PRESENTATION: The unaudited consolidated financial statements
include the accounts of Benedek Broadcasting and Benedek License Corporation
("BLC"), a wholly owned subsidiary. All significant intercompany items and
transactions have been eliminated in the unaudited consolidated financial
statements. The financial statements include all adjustments, consisting of
normal and recurring adjustments, which are considered necessary in the opinion
of management for the fair presentation of the financial position as of June 30,
1996 and the results of operations and cash flows for the six months ended June
30, 1995 and 1996. These financial statements do not include all the information
and footnotes required by generally accepted accounting principles.
Operating results for the three and six month periods ended June 30, 1995
and 1996 and for the fiscal year ended 1995 are not necessarily indicative of
the results that may be expected for the fiscal year ending December 31, 1996.
(NOTE B) - ACQUISITIONS, RELATED PARTY AND BUSINESS COMBINATIONS
On April 10, 1996, the sole stockholder of Benedek Broadcasting formed BCC
as a holding company. At the closing of the acquisitions described below, the
stockholder contributed all of the outstanding shares of common stock of Benedek
Broadcasting to BCC in exchange for the issuance to him of all of the
outstanding shares of common stock of BCC.
On June 6, 1996, two acquisition agreements entered into during 1995, were
consummated. The first agreement called for the acquisition of the assets of the
television broadcasting division of Stauffer Communications, Inc., which owned
five television stations (the "Stauffer Stations") for a total purchase price of
$54,500,000. The second agreement was to acquire all the issued and outstanding
shares of capital stock of Brissette Broadcasting Corporation ("Brissette")
which owned and operated eight television stations for a purchase price of
$270,000,000. These acquisitions have been accounted for under the purchase
method of accounting. Accordingly, the results of operations for the acquired
stations are included in the consolidated financial statements since the date of
acquisition. Also, the purchase price has been allocated to acquired assets and
liabilities based on their relative fair values as of the closing date.
-9-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
The pro forma results of operations for the three months ended June 30,
1995 and 1996 and the six months ended June 30, 1995 and 1996 assuming the
acquisitions had taken place on January 1, 1995 are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------------- -------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenue ........... $32,261,688 $32,275,757 $59,753,871 $59,894,169
Operating expenses .... 24,665,748 26,258,925 49,087,596 51,630,526
Financial expenses .... 7,542,482 7,832,957 15,912,181 16,058,439
----------- ----------- ----------- -----------
Income (loss) before
extraordinary item . 53,458 (1,816,125) (5,245,906) (7,794,796)
Extraordinary item .... -- -- 6,863,762 --
----------- ----------- ----------- -----------
Net income (loss) .. $ 53,458 $ (1,816,125) $ 1,617,856 $ (7,794,796)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Broadcast cash flow ... 14,864,911 $ 13,180,847 $ 24,994,055 $22,809,568
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
The financing transactions for the acquisitions consisted of (i) BCC
issuing (a) senior subordinated discount notes, (b) units, consisting of
exchangeable preferred stock, which is exchangeable for exchange debentures, and
warrants to acquire common stock of BCC, and (c) seller junior discount
preferred stock and (ii) Benedek Broadcasting entering into a new credit
agreement, which consists of $128,000,000 term loan facilities and a $15,000,000
revolving credit facility. These financing transactions were consummated
concurrently with the acquisitions.
Since BCC derives all of its operating income and cash flow from Benedek
Broadcasting, BCC's ability to pay its obligations including (i) interest on and
principal of the notes (ii) redemption of and cash dividends on the exchangeable
preferred stock and (iii) redemption of and cash dividends on the seller junior
discount preferred stock will be dependent primarily upon receiving dividends
and other payments on advances from Benedek Broadcasting. Benedek Broadcasting
is a separate and distinct legal entity and has no obligation, contingent or
otherwise, to pay any amounts to BCC or to make funds available to BCC for debt
service or any other obligation.
On April 18, 1996, Benedek Broadcasting formed BLC for the purpose of
holding the licenses and authorizations issued by the FCC, in connection with
the operations of the Stations. Concurrent with the acquisitions described
above, Benedek Broadcasting Company, L.L.C., which had been formed in 1995 for
the same purposes and was holding the licenses of Benedek Broadcasting stations,
was merged into BLC with the result that all licenses of the acquired stations
were transferred to BLC. This was accounted for in a manner similar to that in
pooling-of-interests accounting.
(NOTE C) - LONG-TERM DEBT
As part of the financing transactions described in (Note B), on June 6,
1996 Benedek Broadcasting entered into a new credit agreement which includes two
Term Loan Facilities consisting of (i) a Series A Facility of $70,000,000 at a
fluctuating rate per annum (currently 8.5%) and (ii) a Series B Facility of
$58,000,000 at a fluctuating rate per annum (currently 9.0%). The Term Loan
Facilities provide for quarterly principal payments until final maturity (except
in the first year during which payments will be on a semiannual basis). The
Series A Facility and the Series B Facility will mature five years and six and
one-half years, respectively, after the closing. Benedek Broadcasting will be
required to make scheduled aggregate amortization payments on the Series A and
Series B Facilities, as follows: during the first year after closing, $6.0
million; during the second year after closing, $11.0 million; during the third
year after closing, $14.5 million; during the fourth year after closing, $16.0
million; during the fifth year after closing, $27.5 million;
-10-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
during the sixth year after closing, $15.0 million; and during the first half of
the seventh year after closing, $38.0 million.
The payments agreement also includes a Revolving Credit Facility of
$15,000,000, which would bear interest at a base rate plus a spread. There were
no borrowings on the revolver as of June 30, 1996.
The Term Loan Facilities and the Revolving Credit Facility are guaranteed
by BCC and secured by certain of the BCC's and Benedek Broadcasting's present
and future property and assets. The Term Loan Facilities are also guaranteed by
BLC and secured by all of the stock of BLC. The facility contains various
restrictive covenants relating to, among, others, limitations on dividends,
transactions with affiliates, further issuance of debt and sales of assets and
required compliance with certain financial ratios and covenants. Benedek
Broadcasting was in compliance with these covenants at June 30, 1996.
During 1995, Benedek Broadcasting issued $135,000,000 of 11 7/8% Senior
Secured Notes due 2005 (the "Senior Secured Notes"). The net proceeds of the
Senior Secured Notes were used, together with available cash, to (i) refinance
certain indebtedness, (ii) finance the acquisition of WTVY-TV (the "Dothan
Station") and (iii) pay fees and expenses in connection with the offering. The
Senior Secured Notes have been registered with the Securities and Exchange
Commission in a registration statement declared effective in November 1995.
The Senior Secured Notes bear interest at the rate of 11 7/8%, payable
semiannually on March 1 and September 1 of each year and mature in March 2005.
The Senior Secured Notes may be redeemed by Benedek Broadcasting in whole or in
part after March 1, 2000 subject to certain prepayment premiums. The Senior
Secured Notes contain various restrictive covenants relating to limitations on
dividends, transactions with affiliates, further issuance of debt, and sales of
assets, among others. Benedek Broadcasting was in compliance with these
covenants at June 30, 1996.
The Senior Secured Notes are collateralized by Benedek Broadcasting's 100%
interest in BLC, certain agreements and contract rights related to the stations
which include network affiliation agreements and certain general intangibles.
Notes payable consist of the following:
<TABLE>
<CAPTION>
JUNE 30,
1996
<S> <C>
Senior Secured Notes ................................. $135,000,000
Term loan Series A .................................... 70,000,000
Term loan Series B .................................... 58,000,000
Capital leases and other .............................. 643,387
------------
------------
263,643,387
Less current maturities ............................... 6,295,564
------------
------------
$257,347,823
------------
------------
</TABLE>
(NOTE D) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS
Prior to the consummation of the acquisitions and the related financing,
Benedek Broadcasting, with the consent of its stockholder, elected to be taxed
under sections of federal and state income tax law as an "S Corporation", which
provided that, in lieu of corporation income taxes, the stockholder separately
account for Benedek Broadcasting's income, deductions, losses and credits.
Benedek Broadcasting's election to be taxed as an "S" Corporation automatically
terminated concurrently with the consummation of the Stauffer and Brissette
acquisitions. Benedek Broadcasting will
-11-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
now be subject to federal and state income taxes. As a result, Benedek
Broadcasting recorded a net deferred tax asset of approximately $3,550,000 which
was offset by a valuation allowance of the same amount.
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences, operating losses and
tax credit carryforwards. Deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
Under the provision of Statement of Financial Accounting Standards (SFAS)
No. 109, the deferred tax assets and liabilities, resulting principally from the
Brissette acquisitions explained in Note B, consist of the following components:
<TABLE>
<CAPTION>
JUNE 30,
1996
----
<S> <C>
Deferred tax assets:
Loss carryforwards .................................... $ 2,365,600
Nondeductible allowances and other .................... 978,396
Network agreement ..................................... 1,800,000
------------
5,143,996
------------
Deferred tax liabilities:
Property and equipment ................................ 15,900,374
Intangibles ........................................... 48,116,400
------------
64,016,774
------------
Net deferred tax liability ............................... $(58,872,778)
------------
------------
</TABLE>
At June 30, 1996, a valuation allowance has not been established since
in the opinion of management, it is more likely than not that the deferred tax
assets, including the net deferred tax asset which resulted from the change in
tax status, will be realized.
Under the provisions of the Internal Revenue Code, Benedek Broadcasting has
approximately $5,900,000 of net operating loss carryforwards available to offset
future tax liabilities of Benedek Broadcasting.
-12-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS 1995 1996
---- ----
(UNAUDITED)
<S> <C> <C>
Federal Communication Commission (FCC)
Licenses, at cost, less accumulated amortization
of $326,312 and $727,503 for 1995 and 1996, respectively $ 15,304,138 $ 125,091,826
Goodwill .................................................... -- 34,564,800
------------- -------------
$ 15,304,138 $ 159,656,626
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Deferred tax liability ...................................... $ -- $ 34,564,800
------------- -------------
Stockholder's Equity:
Common stock, $0.01 par authorized 3,000 shares,
issued 100 shares, outstanding 99 shares ............... -- 1
Additional paid-in capital ............................... 16,211,650 126,400,528
Note receivable .......................................... (581,200) --
Accumulated deficit ...................................... (326,312) (727,503)
------------- -------------
15,304,138 125,673,026
Less one share held in treasury .......................... -- 581,200
------------- -------------
15,304,138 125,091,826
------------- -------------
$ 15,304,138 $ 159,656,626
------------- -------------
------------- -------------
</TABLE>
-13-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE PERIOD SIX MONTHS
FEBRUARY 28, ENDED
1995 THROUGH JUNE 30,
THREE MONTHS ENDED JUNE 30, JUNE 30, 1995 1996
--------------------------- -------------- ----------
1995 1996
---- ----
<S> <C> <C> <C> <C>
Operating expense, amortization . $ 79,440 $ 292,420 $ 98,411 $ 401,191
--------- --------- --------- ---------
Net (loss) before income taxes $ (79,440) $(292,420) $ (98,411) $(401,191)
Income taxes .................... -- -- -- --
--------- --------- --------- ---------
NET (LOSS) ........... $ (79,440) $(292,420) $ (98,411) $(401,191)
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
-14-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENT OF STOCKHOLDER'S EQUITY
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN NOTE ACCUMULATED TREASURY
STOCK CAPITAL RECEIVABLE DEFICIT STOCK TOTAL
----- ------- ---------- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 .. $ -- $ 16,211,650 $ (581,200) $ (326,312) $ -- $ 15,304,138
Acquisition of treasury stock
through cancellation of note
receivable ................. -- -- 581,200 -- (581,200) --
Exchange of common stock
for membership interests in LLC 1 (1) -- -- -- --
Capital contribution of FCC
Licenses from parent ....... -- 110,188,879 -- -- -- 110,188,879
Net (loss) .................... -- -- -- (401,191) -- (401,191)
------------- ------------- ------------- ------------- ------------- -------------
Balance at June 30, 1996 ...... $ 1 $ 126,400,528 $ -- $ (727,503) $ (581,200) $ 125,091,826
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
-15-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 25, SIX MONTHS
1995 THROUGH ENDED
JUNE 30, 1995 JUNE 30, 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities
Net (loss) ............................................. $ (98,411) $ (401,191)
Adjustment to reconcile net (loss) to net cash
provided by operating activities:
Amortization ....................................... 98,411 401,191
------------- -------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES ................................... -- --
------------- -------------
NET CHANGE IN
CASH ......................................... -- --
Cash:
Beginning .............................................. -- --
------------- -------------
Ending ................................................. $ -- $ --
------------- -------------
------------- -------------
Supplemental schedule of noncash investing and
financing activities
FCC licenses acquired by issuing membership certificates $ 15,630,450 $ --
FCC licenses acquired by contribution of capital ....... -- 110,188,879
Notes received for issuance of membership certificates . 581,200 --
Acquisition of treasury stock through cancellation
of note receivable ..................................... $ -- $ 581,200
------------- -------------
------------- -------------
</TABLE>
-16-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE A) - NATURE OF THE BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS: Benedek License Corporation ("BLC"), is a wholly owned
subsidiary of Benedek Broadcasting Corporation ("Benedek Broadcasting"). BLC,
located in Rockford, Illinois, was formed April 18, 1996. BLC was formed to own
and hold the Federal Communication Commission ("FCC") licenses for the twenty
two television stations owned by Benedek Broadcasting which are located
throughout the United States.
BASIS OF PRESENTATION: The financial statements include all adjustments,
consisting of normal and recurring adjustments, which are considered necessary
in the opinion of management for the fair presentation of the financial position
as of June 30, 1996 and the results of operations and cash flows for the period
February 28, 1995 through June 30, 1995 and the six months ended June 30, 1996.
These financial statements do not include all the information and footnotes
required by generally accepted accounting principles.
Operating results for the three and six month periods ended June 30, 1996
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1996.
(NOTE B) - BUSINESS COMBINATION
On June 6, 1996, Benedek Broadcasting Company, L.L.C. (the "LLC"), a 99%
owned subsidiary of Benedek Broadcasting was merged into BLC. Since these
entities had identical stockholder ownership, this was accounted for in a manner
similar to a pooling-of-interests and the results of operations are included for
the above mentioned periods since the formation of the LLC on February 28, 1995.
(NOTE C) - ACQUISITIONS
On June 6, 1996, Benedek Broadcasting acquired thirteen television stations
including their respective FCC licenses. These licenses were transferred on that
day to BLC as contributed capital based on the pro rata share of the allocated
purchase price paid by Benedek Broadcasting.
(NOTE D) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS
BLC is subject to federal and state income taxes. Prior to the consummation
of the acquisitions and the related financing, the LLC filed a partnership
income tax return and the members reported their respective shares of the
income, deductions, losses and credits of the LLC on their income tax returns.
(NOTE E) - STOCKHOLDER'S EQUITY
Benedek Broadcasting has pledged 100% of the outstanding common stock of
BLC as collateral on the senior secured notes and the term loan facilities
issued by Benedek Broadcasting.
BLC has guaranteed the obligations of Benedek Broadcasting in respect to
the senior secured notes and the term loan facility.
-17-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The operating revenues of Benedek Broadcasting are derived primarily from
the sale of advertising time and, to a lesser extent, from compensation paid by
the networks for broadcasting network programming and from barter transactions
for goods and services. Revenue depends on the ability of Benedek Broadcasting
to provide popular programming which attracts audiences in the demographic
groups targeted by advertisers, thereby allowing Benedek Broadcasting to sell
advertising time at satisfactory rates. Revenue also depends significantly on
factors such as the national and local economy and the level of local
competition.
Approximately 56.9% of the gross revenues of Benedek Broadcasting in the
six months ended June 30, 1996 was generated from local and regional
advertising, which is sold primarily by a Station's sales staff, and the
remainder of the advertising revenues is comprised primarily of national
advertising, which is sold by national sales representatives retained by Benedek
Broadcasting. Benedek Broadcasting generally pays commissions to advertising
agencies on local, regional and national advertising and to national sales
representatives on national advertising. Net revenues reflect deductions from
gross revenues for commissions payable to advertising agencies and national
sales representatives.
Local/regional advertising and national advertising constitute the largest
categories of Benedek Broadcasting's operating revenues and represent
approximately 84.1% of gross revenues for the six months ended June 30, 1996 as
compared to 87.4% for the six months ended June 30, 1995. Although relatively
constant as a total percentage of gross revenues, the mix of advertising revenue
can vary depending on the level of political advertising revenue. Excluding
political advertising revenue, the percentage of gross revenues attributable to
local/regional advertising and national advertising of Benedek Broadcasting was
86.2% for the six months ended June 30, 1996 as compared to 88.1% for the six
months ended June 30, 1995. The decrease was the result of an increase in
network compensation of $1.0 million or 72.1%, representing 7.1% of gross
revenues (excluding political advertising revenues) for the six months ended
June 30, 1996 as compared to 5.0% of gross revenues (excluding political
advertising revenues) for the six months ended June 30, 1995. For the six months
ended June 30, 1996, Benedek Broadcasting reported net revenues of $30.1 million
compared to net revenues of $24.1 million for the six months ended June 30,
1995. Benedek Broadcasting had a net loss of $2.3 million for the six months
ended June 30, 1996 compared to a net income of $7.0 million (after an
extraordinary gain of $6.9 million) for the six months ended June 30, 1995.
Operating cash flow for the six months ended June 30, 1996 was $10.9 million as
compared to $9.6 million for the six months ended June 30, 1995.
In December 1995, Benedek Broadcasting entered into new long-term
affiliation agreements with CBS effective retroactive to July 1, 1995. In
connection with such arrangements, CBS paid Benedek Broadcasting bonus payments
of $2.5 million in the fourth quarter of 1995 and $2.5 million in the first
quarter of 1996. These payments will be recognized as revenue by the Company at
the rate of $0.5 million per year over the ten-year term of the affiliation
agreements. In connection with these payments, Benedek Broadcasting also agreed
with CBS that, upon the consummation of the Acquisitions, the terms of the
affiliation agreements for the Acquired Stations which are CBS affiliates would
be extended through 2005.
Benedek Broadcasting's primary operating expenses are employee
compensation, programming and depreciation and amortization. Changes in
compensation expense result primarily from adjustments to fixed salaries based
on employee performance and inflation and, to a lesser extent, from changes in
sales commissions paid based on levels of advertising revenues. Programming
expense consists primarily of amortization of program rights. Benedek
Broadcasting purchases first run and off-network syndicated programming on an
ongoing basis and has a policy of closely matching payments for and amortization
of program rights in each period. A network-affiliated station receives
approximately two-thirds of its required daily programming from the network at
no cost. Depreciation and amortization expense has generally declined from
period to period as assets acquired at the time of the acquisition of a station
are fully depreciated. However, for the six months ended June 30, 1996,
depreciation and amortization increased $1.9 million due to the acquisition of
the Brissette and Stauffer Stations (the "Acquired Stations") Barter expense
generally offsets barter revenue and reflects the fair market value of goods and
services received. Benedek Broadcasting's operating expenses (excluding
depreciation and amortization) have remained fairly constant and represent
approximately 64.2% of net revenues for the six months ended June 30, 1996 as
compared to 60.4% of net revenues for the six months ended June 30, 1995.
On March 31, 1995, Benedek Broadcasting acquired for a cash purchase price
of $28.7 million, substantially all of the assets (excluding cash and accounts
receivable) of the CBS affiliate serving both Dothan, Alabama and Panama City,
Florida (the "Dothan Station").
On June 6, 1996, Benedek Broadcasting acquired substantially all of the
broadcast television assets (including working capital of approximately $1.6
million) of Stauffer Communications, Inc. (the "Stauffer Stations") consisting
of five principal broadcast television stations and four satellite broadcast
television stations for a purchase price of $54.5 million. The principal
stations acquired by Benedek Broadcasting were KCOY-TV, Santa Maria, California;
WIBW-TV, Topeka, Kansas; KMIZ-TV, Columbia, Missouri; KGWC-TV. Casper, Wyoming;
and KGWN-TV, Cheyenne, Wyoming. KGWC-TV operates two satellite stations,
KGWL-TV, Lander, Wyoming, and KGWR-TV, Rock Springs, Wyoming, both of which
rebroadcast the programming of KGWC-TV. KGWN-TV operates two satellite stations,
KSTF-TV, Scottsbluff, Nebraska and KTVS-TV, Sterling, Colorado,
-18-
<PAGE>
<PAGE>
both of which rebroadcast the programming of KGWN-TV. All of the Stauffer
Stations are affiliated with CBS, except for KMIZ-TV, Columbia, Missouri, which
is affiliated with ABC.
On June 6, 1996, the Benedek Broadcasting acquired all of the capital stock
of Brissette Broadcasting Corporation for $270.0 million in cash and preferred
stock. All of the outstanding indebtedness of Brissette was paid in full by the
sellers at the closing. Pursuant to the Brissette Agreement, at the closing
Brissette was required to have working capital of at least $8.8 million and any
amount in excess thereof was to be paid to the sellers. By acquiring all of the
capital stock of Brissette, Benedek Broadcasting acquired eight
network-affiliated television stations including WMTV-TV, the NBC affiliate
serving Madison, Wisconsin; WWLP-TV, the NBC affiliate serving Springfield,
Massachusetts; WILX-TV, the NBC affiliate serving Lansing, Michigan; WHOI-TV,
the ABC affiliate serving Peoria, Illinois; WSAW-TV, the CBS affiliate serving
Wausau, Wisconsin; WTRF-TV, the CBS affiliate serving Wheeling, West Virginia
and Steubenville, Ohio; KAUZ-TV, the CBS affiliate serving Wichita Falls, Texas;
and KOSA-TV, the CBS affiliate serving Odessa, Texas. Of the $270.0 million paid
for the capital stock of Brissette, $225.0 million was paid in cash and $45.0
million was paid by the issuance to GECC and Mr. Paul Brissette of the junior
preferred stock of BCC.
Benedek Broadcasting has included operating and broadcast cash flow data
because such data is used by certain investors to measure a company's ability to
service debt. Operating cash flow is defined as operating income before
financial income as derived from statements of operations plus depreciation and
amortization, amortization of program broadcast rights and noncash compensation
less cash payments for program broadcast rights. Broadcast cash flow is defined
as operating cash flow less corporate expenses. Operating cash flow is used to
pay principal and interest on long-term debt and to fund capital expenditures.
Operating cash flow does not purport to represent cash provided by operating
activities as reflected in Benedek Broadcasting's Consolidated Financial
Statements, is not a measure of financial performance under generally accepted
accounting principles and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles.
The historical results of operations and operating data include the results
of operations of the Acquired Stations only from the closing date of June 6,
1996.
-19-
<PAGE>
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth certain historical financial and operating
data (in thousands) for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1995 1996 1995 1996
---------- --------- --------- ---------
% OF % OF % OF % OF
NET NET NET NET
$ Revenue $ REVENUE $ Revenue $ REVENUE
- ------- - ------- - ------- - -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Local/regional $9,530 68.5% $12,006 65.1% $ 16,431 68.3% $19,559 64.9%
National......... 4,255 30.6 5,918 32.1 7,692 32.0 9,355 31.1
Political........ 206 1.5 404 2.2 221 0.9 849 2.8
Network.......... 773 5.5 1,400 7.6 1,378 5.7 2,372 7.9
Barter........... 875 6.3 1,014 5.5 1,362 5.7 1,603 5.3
Other............ 263 1.9 363 2.0 506 2.1 638 2.2
----------------------------------------------------------------------
Gross revenues... $15,902 114.3% $21,105 114.5% $ 27,590 114.7% $34,376 114.2%
Agency/national
commissions..... 1,993 14.3 2,673 14.5 3,531 14.7 4,261 14.2
-----------------------------------------------------------------------
Net revenue......... $13,909 100.0% $18,432 100.0% $ 24,059 100.0% $30,115 100.0%
...................
-----------------------------------------------------------------------
Operating Expenses:
Compensation
and payroll
taxes ........... $ 3,976 28.6% $ 5,793 31.5% $ 7,362 30.6% $ 9,881 32.8%
Amortization of
program broadcast
rights ............ 571 4.1 705 3.8 1,082 4.5 1,302 4.3
Depreciation and
amortization....... 1,268 9.1 2,709 14.7 2,124 8.8 4,069 13.6
Corporate expenses.. 355 2.6 591 3.2 698 2.9 1,087 3.6
Barter.............. 603 4.3 781 4.2 1,037 4.3 1,275 4.2
Other............... 2,379 17.1 3,408 18.5 4,356 18.1 5,778 19.2
-------------------------------------------------------------------------
$ 9,152 65.8% 13,987 75.9% 16,659 69.2% $23,392 77.7%
-------------------------------------------------------------------------
Operating Income.... $ 4,757 34.2% $ 4,445 24.1% $ 7,400 30.8% $ 6,723 22.3%
Financial
expenses, net...... (4,201)(30.2) (4,963) (26.9) $(7,227) (30.1) (8,984)(29.8)
-------------------------------------------------------------------------
Net income (loss)
before extra
items.............. $ 556 4.0% $ (518) (2.8)% $ 173 0.7% $(2,261) (7.5)%
-------------------------------------------------------------------------
Broadcast cash flow.. $ 6,342 $7,787 $ 10,266 $11,995
Broadcast cash flow
margin............ 45.6% 42.2% 42.7% 39.8%
Operating cash flow.. $ 5,987 $7,196 $ 9,568 $10,908
Operating cash flow
margin............ 43.0% 39.0% 39.8% 36.2%
</TABLE>
-20-
<PAGE>
<PAGE>
The following table sets forth certain pro forma operating data (in thousands)
as if the acquisitions of the Brissette and Stauffer Stations and the Dothan
Station had been consummated at the beginning of the periods set forth below
based on their respective historical results without adjustment:
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net ............................ $32,262 $32,276 $59,754 $59,894
revenues
Operating ...................... 17,397 19,095 34,760 37,085
expenses(1)
Broadcast cash ................. $14,865 $13,181 $24,994 $22,810
flow
------- ------- ------- -------
------- ------- ------- -------
Broadcast cash flow margin .... 46.1% 40.8% 41.8% 38.1%
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
(1) Operating expenses as presented are based upon operating expenses
determined in accordance with generally accepted accounting principles
adjusted to eliminate depreciation and amortization, corporate expenses
and amortization of program rights and to add payments for program
broadcast rights.
-21-
<PAGE>
<PAGE>
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
Net revenues for the three months ended June 30, 1996 increased $4.5
million or 32.5% to $18.4 million from $13.9 million for the three months ended
June 30, 1995 primarily as a result of the acquisition on June 6, 1996 of the
Acquired Stations which increased net revenue by $5.0 million. On a proforma
basis, giving effect to the acquisition ("Same Station") net revenues for the
three months ended June 30, 1996 remained flat from the three months ended June
30, 1995. On a Same Station basis, political advertising revenue for the three
months ended June 30, 1996 increased by $0.4 million to $0.7 million. Gross
revenues on a Same Station basis excluding political advertising revenue
decreased $0.3 million or .7% from the three months ended June 30, 1995.
Operating expenses for the three months ended June 30, 1996 increased
$4.8 million or 52.8% to $14.0 million from $9.2 million for the three months
ended June 30, 1995. Of the increase in operating expenses, $2.7 million was
attributable to the acquisition of the Acquired Stations. As a percentage of net
revenues, operating expenses increased to 75.9% from 65.8% in the three months
ended June 30, 1995, primarily as a result of an increase of $1.4 million in
depreciation and amortization expense. On a Same Station basis, operating
expenses for the three months ended June 30, 1996 increased $1.6 million or 6.5%
from the three months ended June 30, 1995. Operating expenses as a percentage of
net revenues on a Same Station basis increased from 76.5% for the three months
ended June 30, 1995 to 81.4% in the three months ended June 30, 1996.
Operating income for the three months ended June 30, 1996 decreased $0.3
million or 6.5% to $4.4 million from $4.7 million for the three months ended
June 30, 1995.
Financial (expenses), net for the three months ended June 30, 1996
increased $.8 million or 18.1% to $5.0 million from $4.2 million in the three
months ended June 30, 1995, due to Benedek Broadcasting's higher debt level
following the offering of the Senior Secured Notes in March 1995.
Net loss for the three months ended June 30, 1996 was $0.5 million as
compared to net income of $0.6 million for the three months ended June 30, 1995.
Broadcast cash flow for the three months ended June 30, 1996 increased
$1.5 million or 23.8% to $7.8 million from $6.3 million for the three months
ended June 30, 1995 primarily as a result of the acquisition of the Acquired
Stations. As a percentage of net revenues, broadcast cash flow margin
decreased to 42.2% for the three months ended June 30, 1996 from 45.6% for the
three months ended June 30, 1995. On a Same Station basis, broadcast cash flow
for the three months ended June 30, 1996 decreased $1.7 million or 11.3% to
$13.2 million from $14.7 million for the three months ended June 30, 1995.
As a percentage of net revenues, broadcast cash flow margin decreased to
40.8% for the three months ended June 30, 1996 from 46.1% for the three months
ended June 30, 1995. The decrease in broadcast cash flow and broadcast cash
flow margin for the three month period ended June 30, 1996 was primarily
related to an increase in operating expenses used in determining broadcast
cash flow. Such expenses increased by $1.3 million or 12.8% at the Acquired
Stations for the three months ended June 30, 1996 from the comparable period
in 1995 and by $0.4 million or 5.4% at Benedek Broadcasting's previously owned
stations.
-22-
<PAGE>
<PAGE>
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
Net revenues for the six months ended June 30, 1996 increased $6.1
million or 25.2% to $30.1 million from $24.0 million for the six months ended
June 30, 1995 primarily as a result of the acquisition on June 6, 1996 of the
Acquired Stations which increased net revenue by $5.0 million. On a Same Station
basis, net revenues for the six months ended June 30, 1996 increased $0.1
million or 0.2% from the six months ended June 30, 1995. Political advertising
revenue for the six months ended June 30, 1996 increased by $1.3 million to $1.6
million. Gross revenues on a Same Station basis excluding political advertising
revenue decreased $1.0 million or 1.5% from the six months ended June 30, 1995.
Operating expenses for the six months ended June 30, 1996 increased $6.7
million or 40.4% to $23.4 million from $16.7 million for the six months ended
June 30, 1995. As a percentage of net revenues, operating expenses increased to
77.8% from 69.2% in the six months ended June 30, 1995, as a result of the
acquisition of the Acquired Stations. On a Same Station basis, operating
expenses for the six months ended June 30, 1996 increased $2.5 million or 5.2%
from the six months ended June 30, 1995. Operating expenses as a percentage of
net revenues on a Same Station basis increased from 82.1% for the six months
ended June 30, 1995 to 86.2% in the six months ended June 30, 1996.
Operating income for the six months ended June 30, 1996 decreased $0.7
million or 9.1% to $6.7 million from $7.4 million for the six months ended June
30, 1995.
Financial (expenses), net for the six months ended June 30, 1996
increased $1.8 million or 24.3% to $9.0 million from $7.2 million in the six
months ended June 30, 1995 due to Benedek Broadcasting's higher debt level
following the offering of the Senior Secured Notes in March 1995.
Net loss for the six months ended June 30, 1996 was $2.3 million as
compared to net income of $7.0 million for the six months ended June 30, 1995
primarily as a result of an extraordinary gain of $6.9 million on the early
extinguishment of debt.
Broadcast cash flow for the six months ended June 30, 1996 increased
$1.7 million or 16.9% to $12.0 million from $10.3 million for the six months
ended June 30, 1995 primarily as a result of the acquisition on June 6, 1996 of
the Acquired Stations. As a percentage of net revenues, broadcast cash flow
margin decreased to 39.8% for the six months ended June 30, 1996 from 42.7% for
the six months ended June 30, 1995. On a Same Station basis, broadcast cash flow
for the six months ended June 30, 1996 decreased $2.2 million or 8.6% to $22.9
million from $25.0 million for the six months ended June 30, 1995. As a
percentage of net revenues, broadcast cash flow margin decreased to 38.1% for
the six months ended June 30, 1996 from 41.8% for the six months ended June 30,
1995.
The decrease in broadcast cash flow and broadcast cast flow margin for
the six month period ended June 30, 1996 was primarily related to an increase in
operating expense used in determining broadcast cash flow. Such expenses
increased by $2.2 million or 11.2% at the Acquired Stations for the six month
period ended June 30, 1996 from the comparable period in 1995, while such
operating expenses at Benedek Broadcasting's previously owned stations remained
flat.
-23-
<PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities is the primary source of liquidity
for Benedek Broadcasting and were $7.6 million for the six months ended June 30,
1996 compared to $(0.8) million for the six months ended June 30, 1995. For the
six months ended June 30, 1996 cash flows from operating activities included
$2.5 million from the bonus payment from CBS. For the six months ended June 30,
1995 cash flows from operating activities primarily resulted from the
refinancing of substantially all of Benedek Broadcasting's existing long-term
debt in March 1995 and the payment of $4.4 million of deferred and contingent
interest and $2.7 million of prepayment premiums. In addition, cash used by
operations included $6.9 million of noncash gain on early extinguishment of
debt.
Cash Flows from Investing Activities were $(323.7) million for the six
months ended June 30, 1996, compared to $(27.2) million for the six months ended
June 30, 1995. For the six months ended June 30, 1996, cash flows from investing
activities primarily resulted from the payment of $321.5 million for the
acquired Stations. For the six months ended June 30, 1995 cash flows used in
investing activities included $26.7 million paid to acquire the Dothan Stations.
Cash Flows from Financing Activities were $312.1 million for the six
months ended June 30, 1996 compared to $33.2 million for the six months ended
June 30, 1995. For the six months ended June 30, 1996 cash flows from financing
activities resulted from the proceeds of financing acquisitions. For the six
months ended June 30, 1995 cash flows from financing activities primarily
resulted from the issuance in March 1995 of $135.0 million of Benedek
Broadcasting's Senior Secured Notes to refinance existing indebtedness and
finance the acquisition of the Dothan Station, offset by $96.0 million of
principal payments on existing indebtedness.
-24-
<PAGE>
<PAGE>
THE FINANCING PLAN
Benedek Broadcasting, together with its parent BCC, implemented a
financing plan in order to finance the acquisitions of the Acquired Stations and
to pay fees and expenses related thereto. The financing plan consisted of (i)
the offer and sale by BCC of the Senior Subordinated Discount Notes to generate
gross proceeds of $90.2 million, (ii) the sale by BCC of units consisting of
redeemable preferred stock and warrants to generate gross proceeds of $60.0
million, (iii) Benedek Broadcasting borrowing $128.0 million pursuant to the
Term Loan Facilities of the Credit Agreement and (iv) BCC issuing an aggregate
of $45.0 million initial liquidation preference of seller junior discount
preferred stock to the sellers of the Brissette Stations. Benedek Broadcasting
also has available to it $15.0 million under the Revolving Credit Facility of
the Credit Agreement.
The Term Loan Facilities consist of (i) Series A Facility of $70.0
million and (ii) Series B Facility of $58.0 million. The Term Loan Facilities
provide for quarterly amortization until final maturity (except in the first
year during which amortization will be on a semiannual basis). The Series A
Facility will mature five years and the Series B Facility will mature six and
one-half years after the closing. Benedek Broadcasting will be required to make
scheduled amortization payments on the Term Loan Facilities, on an aggregate
basis for Series A and Series B Facilities, as follows: during the first year
after closing, $6.0 million; during the second year after closing, $11.0
million; during the third year after closing, $14.5 million; during the fourth
year after closing, $16.0 million; during the fifth year after closing, $27.5
million; during the sixth year after closing, $15.0 million; and during the
first half of the seventh year after closing, $38.0 million.
In addition, Benedek Broadcasting will be required to make prepayments
on the Term Loan Facilities under certain circumstances, including upon certain
asset sales and issuance of debt or equity securities. Benedek Broadcasting will
also be required to make prepayments on the Term Loan Facilities in an amount
equal to 50% of Benedek Broadcasting's excess cash flow (as defined). These
mandatory prepayments will be applied to prepay, on a pro rata basis, the Series
A and Series B Facilities. The Series A Facility bears interest, at the
Company's option, at a base rate plus a spread or at a Eurodollar rate plus a
spread. The Series B Facility bears interest, at Benedek Broadcasting's option,
at a base rate plus a spread or at a Eurodollar rate plus a spread. The margins
above the base rate and the Eurodollar rate at which the Term Loan Facilities
and Revolving Credit Facility will bear interest are subject to reductions at
such times as certain leverage ratio performance tests are met.
Benedek Broadcasting will have the ability, subject to a borrowing base
and compliance with certain covenants and conditions, to borrow up to an
additional $15.0 million for general corporate purposes pursuant to the
revolving credit facility. The revolving credit facility has a term of five
years and is fully revolving until final maturity. The revolving credit facility
bears interest, at Benedek Broadcasting's option, at a base rate plus a spread
or at a Eurodollar rate plus a spread.
The Term Loan Facilities and the revolving credit facility are secured
by certain of Benedek Broadcasting's present and future property and assets. The
Term Loan Facilities are also guaranteed by BLC and will be secured by all of
the stock of BLC.
The Term Loan Facilities and the revolving credit facility contains
certain financial covenants, including, but not limited to, covenants related to
cash interest coverage, fixed charge coverage, bank debt/operating cash flow
ratio, total debt/operating cash flow ratio and minimum operating cash flow. In
addition, the Term Loan Facilities and the revolving credit facility contain
other affirmative and negative covenants relating to (among other things) liens,
payments on other debt, restricted junior payments (excluding distributions from
Benedek Broadcasting to BCC) transactions with affiliates, mergers and
acquisitions, sales of assets, leases, guarantees and investments. The Term Loan
Facilities and the revolving credit facility contain customary events of default
for highly-leveraged financings, including certain changes in ownership or
control of Benedek Broadcasting or BCC.
Benedek Broadcasting believes that the financing plan will provide for a
long-term financing structure that will allow management to concentrate its
efforts on maximizing results of operations. Benedek Broadcasting anticipates
that operating cash flow of Benedek Broadcasting will be sufficient to finance
the operating requirements of the Stations, debt service requirements of BCC and
presently anticipated capital expenditures. Benedek Broadcasting anticipates
that substantial capital expenditures may be required at a number of the
Acquired Stations.
BCC is a holding company that will derive all of its operating income
and cash flow from its sole subsidiary, Benedek Broadcasting, the common stock
of which, together with all other assets of BCC, have been pledged to secure
BCC's senior guarantee of all indebtedness of Benedek Broadcasting outstanding
under the Credit Agreement and in respect of the Senior Secured Notes. As a
holding company, BCC's ability to pay its obligations, including its obligation
to pay interest on and principal of the Notes, whether at maturity, upon a
change of control or otherwise, will be dependent primarily upon receiving
dividends and other payments or advances from Benedek Broadcasting. Benedek
Broadcasting is a separate and distinct legal entity and has no obligation,
contingent or otherwise, to pay any amounts to BCC or to make funds available to
BCC for debt service or any other obligation. Although the Credit Agreement does
not limit the ability of Benedek Broadcasting to pay dividends or make other
payments to BCC, the Senior Secured Note Indenture does contain such
limitations. As a result of the implementation of the financing plan on June 6,
1996, Benedek Broadcasting received a capital contribution from BCC in the
amount of approximately $188.8 million, which was used to complete the
acquisitions and which is the limit of the amount which can be distributed to
BCC under the Senior Secured Note Indenture.
-25-
<PAGE>
<PAGE>
SEASONALITY
Net revenues and operating cash flow of Benedek Broadcasting are
generally higher during the fourth quarter of each year, primarily due to
increased expenditures by advertisers in anticipation of holiday season consumer
spending and an increase in viewership during this period, and, to a lesser
extent, during the second quarter of each year.
INCOME TAXES
Historically, Benedek Broadcasting had elected to be taxed as an S
Corporation. Benedek Broadcasting's election to be taxed as an S Corporation
automatically terminated concurrently with the consummation of the acquisition
of the Acquired Stations and as a result will now be subject to federal and
state income taxes.
EMERGING ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock Based Compensation' in
October 1995, which establishes financial accounting and reporting standards for
stock based employee compensation plans, including stock purchase plans, stock
options, restricted stock, and stock appreciation rights. The Company has
elected to continue accounting for stock based compensation under Accounting
Principles Board Opinion No. 25. The disclosure requirements of SFAS No. 123
will be effective for the Company's financial statements beginning in 1996.
Management does not believe that the implementation of SFAS 123 will have a
material effect on its consolidated financial statements.
-26-
<PAGE>
<PAGE>
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits
- ------- -----------------------
<S> <C>
3.1 - Certificate of Incorporation of the Registrant, as amended,
incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1, File No. 33-91412, filed on April
20, 1995 (the "S-1 Registration Statement").
3.2 - By-laws of the Registrant, as amended, incorporated by reference to
Exhibit 3.2 to the S-1 Registration Statement.
*3.3 - Certificate of Incorporation of Benedek License Corporation.
*3.4 - By-laws of Benedek License Corporation
4.1 - Indenture dated as of March 1, 1995 between the Registrant and The
Bank of New York, relating to the 11 7/8% Senior Secured Notes due
2005, incorporated by reference to Exhibit 4.1 to the S-1 Registration
Statement.
4.2 - Form of 11 7/8% Senior Secured Note due 2005 (included in Exhibit 4.1
hereof), incorporated by reference to Exhibit 4.2 to the S-1
Registration Statement.
*4.3 - First Supplemental Indenture dated as of June 6, 1996 among the
Registrant, Benedek License Corporation and The Bank of New York.
*10.1 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Communications Corporation, the Lenders listed therein, Pearl
Street L.P., Goldman, Sachs & Co. and Canadian Imperial Bank of
Commerce, New York Agency.
*10.2 - Guaranty dated as of June 6, 1996 by Benedek License Corporation in
favor of Canadian Imperial Bank of Commerce, New York Agency.
*10.3 - Acquired Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency.
*10.4 - Tangible Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency.
*10.5 - Accounts Receivable Security Agreement dated as of June 6, 1996 among
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency.
*10.6 - Merger Agreement dated as of June 6, 1996 between the Registrant and
each of Brissette Broadcasting Corporation, Brissette TV of Lansing,
Inc., Brissette TV of Madison, Inc., Brissette TV of Odessa, Inc.,
Brissette TV of Wichita Falls, Inc., Brissette TV of Springfield,
Inc., Brissette TV of Wausau, Inc., Brissette TV of Wheeling, Inc. and
Brissette TV of Peoria, Inc.
*10.7 - Employment Agreement dated as of June 6, 1996 between Registrant and
A. Richard Benedek.
*10.8 - Employment Agreement dated as of June 6, 1996 between Registrant and
K. James Yager.
</TABLE>
-27-
<PAGE>
<PAGE>
EXHIBIT AND REPORTS ON FORM 8-K-(CONTINUED)
<TABLE>
<S> <C>
*10.9 - Employment Agreement dated as of March 8, 1996 between Registrant and
Douglas E. Gealy.
*10.10- Employment Agreement dated as of June 6, 1996 between Registrant and
Ronald L. Lindwall.
*10.11- Employment Agreement dated as of June 6, 1996 between Registrant and
Terrance F. Hurley.
*27 - Financial Data Schedule Pursuant to Article 5 of Regulation S-X.
- -----------------
*Filed herewith
(b) Reports on Form 8-K.
None
</TABLE>
-28-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BENEDEK BROADCASTING CORPORATION
--------------------------------
(Registrant)
By: /S/ RONALD L. LINDWALL
-------------------------------
(Signature)
Ronald L. Lindwall
Senior Vice President and Chief
Financial Officer
(Authorized Officer and Principal
Accounting Officer)
Date: August 19, 1996
-29-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BENEDEK LICENSE CORPORATION
----------------------------
(Subsidiary Guarantor Registrant)
By: /S/ RONALD L. LINDWALL
----------------------------
(Signature)
Ronald L. Lindwall
Senior Vice President and Chief
Financial Officer
(Authorized Officer and Principal
Accounting Officer)
Date: August 19, 1996
-30-
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- ----------------
<S> <C> <C>
3.1 - Certificate of Incorporation of the Registrant, as amended,
incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1, File No. 33-91412, filed on April
20, 1995 (the "S-1 Registration Statement").
3.2 - By-laws of the Registrant, as amended, incorporated by reference to
Exhibit 3.2 to the S-1 Registration Statement.
*3.3 - Certificate of Incorporation of Benedek License Corporation.
*3.4 - By-laws of Benedek License Corporation.
4.1 - Indenture dated as of March 1, 1995 between the Registrant and The
Bank of New York, relating to the 11 7/8% Senior Secured Notes due
2005, incorporated by reference to Exhibit 4.1 to the S-1 Registration
Statement.
4.2 - Form of 11 7/8% Senior Secured Note due 2005 (included in Exhibit 4.1
hereof), incorporated by reference to Exhibit 4.2 to the S-1
Registration Statement.
*4.3 - First supplemental Indenture dated as of June 6, 1996 among the
Registrant, Benedek License Corporation and the Bank of New York.
*10.1 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Communications Corporation, the Lenders listed therein, Pearl
Street L.P., Goldman, Sachs & Co. and Canadian Imperial Bank of
Commerce, New York Agency.
*10.2 - Guaranty dated as of June 6, 1996 by Benedek License Corporation in
favor of Canadian Imperial Bank of Commerce, New York Agency.
*10.3 - Acquired Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency.
*10.4 - Tangible Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency.
*10.5 - Accounts Receivable Security Agreement dated as of June 6, 1996 among
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency.
*10.6 - Merger Agreement dated as of June 6, 1996 between the Registrant and
each of Brissette Broadcasting Corporation, Brissette TV of Lansing,
Inc., Brissette TV of Madison, Inc., Brissette TV of Odessa, Inc.,
Brissette TV of Wichita Falls, Inc., Brissette TV of Springfield,
Inc., Brissette TV of Wausau, Inc., Brissette TV of Wheeling, Inc. and
Brissette TV of Peoria, Inc.
*10.7 - Employment Agreement dated as of June 6, 1996 between Registrant and
A. Richard Benedek.
*10.8 - Employment Agreement dated as of June 6, 1996 between Registrant and
K. James Yager.
*10.9 - Employment Agreement dated as of March 8, 1996 between Registrant and
Douglas E. Gealy.
*10.10- Employment Agreement dated as of June 6, 1996 between Registrant and
Ronald L. Lindwall.
*10.11- Employment Agreement dated as of June 6, 1996 between Registrant and
Terrance F. Hurley.
*27 - Financial Data Schedule Pursuant to Article 5 of Regulation S-X.
</TABLE>
- ----------------
*Filed herewith
<PAGE>
<PAGE>
CERTIFICATE OF INCORPORATION
OF
BENEDEK LICENSE CORPORATION
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the "Corporation")
is BENEDEK LICENSE CORPORATION.
SECOND: The address, including street, number, city and county, of the
registered office of the Corporation in the State of Delaware is 1013 Centre
Road, City of Wilmington, County of New Castle, and the name of the registered
agent of the Corporation in the State of Delaware at such address is The
Corporation Service Company.
THIRD: The nature of the business or purposes to be conducted or promoted
is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 3,000 shares, par value $.01 per share, all of which
are of the same class and all of which are designated as common shares.
<PAGE>
<PAGE>
FIFTH: The name and the mailing address of the incorporator are as follows:
NAME MAILING ADDRESS
---- ---------------
Steven M. Lutt, Esq. Shack & Siegel, P.C.
530 Fifth Avenue
New York, NY 10036
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application
2
<PAGE>
<PAGE>
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this Corporation, as the case
may be, and also on this Corporation.
EIGHTH: In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to make, alter, or
repeal the by-laws, and to adopt any new by-law, of the Corporation.
NINTH: To the fullest extent permitted by the General Corporation Law of
the State of Delaware, as the same may be amended and supplemented, no director
shall be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director.
TENTH: The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, (i) indemnify any and all persons whom it shall have
power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and (ii) advance expenses to any and all said persons. The
indemnification and advancement of expenses provided for herein shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in their official capacities and as to action in
another capacity while holding such offices, and shall continue as to persons
who have ceased to be directors, officers, employees or agents and shall inure
to the benefit of the heirs, executors and administrators of such persons.
3
<PAGE>
<PAGE>
ELEVENTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said law, and all
rights at any time conferred upon the stockholders of the Corporation by this
certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on April 18, 1996.
/s/ Steven M. Lutt
--------------------------------
Steven M. Lutt, Incorporator
Shack & Siegel, P.C.
530 Fifth Avenue
New York, NY 10036
4
<PAGE>
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED that, on April 18, 1996, before me, a Notary Public duly
authorized by law to take acknowledgement of deeds, personally came Steven M.
Lutt, the incorporator who duly executed the foregoing certificate of
incorporation before me and acknowledged the same to be his act and deed, and
that the facts therein stated are true.
GIVEN under my hand on April 18, 1996.
/s/ Leslie A. Diamond
--------------------------
Notary Public
<PAGE>
<PAGE>
BY-LAWS
OF
BENEDEK LICENSE CORPORATION
(Formed under the laws of the State of Delaware)
-------------------
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting. A meeting of the stockholders shall be held
annually for the election of directors and the transaction of other business on
such date in each year as may be determined by the Board of Directors.
Section 2. Special Meetings. Special meetings of the stockholders may be
called by the Board of Directors or by the President and shall be called by the
Board upon the written request of the holders of record of a majority of the
outstanding shares of the Corporation entitled to vote at the meeting requested
to be called. Such request shall state the purpose or purposes of the proposed
meeting.
Section 3. Place of Meetings. Meetings of stockholders shall be held at
such place, within or without the State of Delaware, as may be fixed by the
Board of Directors. If no place is so fixed, such meetings shall be held at the
office of the Corporation in the State of Delaware.
<PAGE>
<PAGE>
Section 4. Notice of Meetings. Notice of each meeting of stockholders shall
be given in writing and shall state the place, date and hour of the meeting and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Notice of a special meeting shall indicate that it is being issued by
or at the direction of the person or persons calling or requesting the meeting.
If, at any meeting, action is proposed to be taken which would, if taken,
entitle objecting stockholders to receive payment for their shares, the notice
shall include a statement of that purpose and to that effect.
A copy of the notice of each meeting shall be given, personally or by first
class mail, not less than 10 nor more than 60 days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed, such
notice is given when deposited in the United States mail, with postage thereon
prepaid, directed to the stockholder at his address as it appears on the record
of stockholders. In the event of a change of address, he shall file with the
Secretary of the Corporation a written request that his address be changed in
the records of the Corporation, in which event notices to him shall be directed
to him at such other address.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
However, if after the adjournment the Board of Directors fixes a new record date
for the adjourned meeting, or if the adjourned meeting is more than 30 days
after the
2
<PAGE>
<PAGE>
adjournment, a notice of the adjourned meeting shall be given to each
stockholder of record on the new record date entitled to notice under the
preceding paragraphs of this Section 4.
Section 5. Waiver of Notice. Notice of a meeting need not be given to any
stockholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting. The attendance of any stockholder at a
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of such meeting, shall constitute a waiver of
notice by him.
Section 6. Inspectors of Election. The Board of Directors, in advance of
any stockholders' meeting, may appoint one or more inspectors to act at the
meeting or any adjournment thereof. If inspectors are not so appointed, the
person presiding at a stockholders' meeting may, and on the request of any
stockholder entitled to vote thereat shall, appoint two inspectors. In case any
person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board in advance of the meeting or at the meeting by the
person presiding thereat. Each inspector, before entering upon the discharge of
his duties, shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best of
his ability.
The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, and the validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the person
presiding at the meeting or
3
<PAGE>
<PAGE>
any stockholder entitled to vote thereat, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and execute a
certificate of any fact found by them. Any report or certificate made by them
shall be prima facie evidence of the facts stated and of the vote as certified
by them.
Section 7. List of Stockholders at Meetings. A list of stockholders as of
the record date, certified by the Secretary or Assistant Secretary or by a
transfer agent, shall be prepared at least 10 days prior to each meeting. Such
list shall be open to the examination of any stockholder for purposes germane to
the meeting and may be inspected by any stockholder who is present. If the right
to vote at any meeting is challenged, the inspectors of election, or person
presiding thereat, shall require such list of stockholders to be produced as
evidence of the right of the persons challenged to vote at such meeting, and all
persons who appear from such list to be stockholders entitled to vote thereat
may vote at such meeting.
Section 8. Qualification of Voters. Unless otherwise provided in the
Certificate of Incorporation, every stockholder of record shall be entitled at
every meeting of stockholders to one vote for every share standing in his name
on the record of stockholders.
Treasury shares as of the record date and shares held as of the record date
by another domestic or foreign corporation of any type or kind, if a majority of
the shares entitled to vote in the election of directors of such other
corporation is held as of the record date by the Corporation, shall not be
shares entitled to vote or to be counted in determining the total number of
outstanding shares.
4
<PAGE>
<PAGE>
Shares held by an administrator, executor, guardian, conservator,
committee, trustee or other fiduciary, may be voted by him, either in person or
by proxy, without transfer of such shares into his name.
Shares standing in the name of another domestic or foreign corporation of
any type or kind may be voted by such officer, agent or proxy as the By-laws of
such corporation may provide, or, in the absence of such provision, as the board
of directors of such corporation may determine.
A stockholder shall not sell his vote or issue a proxy to vote to any
person for any sum of money or anything of value except as permitted by law.
Section 9. Quorum of Stockholders. The holders of a majority of the shares
entitled to vote thereat shall constitute a quorum at a meeting of stockholders
for the transaction of any business, provided that when a specified item of
business is required to be voted on by a class or series, voting as a class, the
holders of a majority of the shares of such class or series shall constitute a
quorum for the transaction of such specified item of business.
When a quorum is once present to organize a meeting, it is not broken by
the subsequent withdrawal of any stockholders.
The stockholders who are present, in person or by proxy, and who are
entitled to vote may, by a majority of votes cast, adjourn the meeting despite
the absence of a quorum.
Section 10. Proxies. Every stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent without a meeting may authorize
another person or persons to act for him by proxy.
5
<PAGE>
<PAGE>
Every proxy must be signed by the stockholder or his attorney-in-fact. No
proxy shall be valid after the expiration of three years from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the stockholder executing it, except as otherwise provided by law.
Except as otherwise required by applicable law, the authority of the holder
of a proxy to act shall not be revoked by the incompetence or death of the
stockholder who executed the proxy unless before the authority is exercised,
written notice of an adjudication of such incompetence or of such death is
received by the Secretary or any Assistant Secretary.
Section 11. Vote or Consent of Stockholders. Directors shall, except as
otherwise required by law, be elected by a plurality of the votes cast at a
meeting of stockholders by the holders of shares entitled to vote in the
election.
Whenever any corporate action, other than the election of directors, is to
be taken by vote of stockholders, it shall, except as otherwise required by law,
be authorized by a majority of the votes cast at a meeting of stockholders by
the holders of shares entitled to vote thereon.
Whenever stockholders are required or permitted to take any action by vote,
such action may be taken without a meeting, without prior notice and without a
vote, on written consent, setting forth the action so taken, signed by the
holders of outstanding stock having not less than the minimum numbers of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Written consent thus
given by such holders so entitled to vote shall have the same effect as a vote
of stockholders at a meeting duly called and held. Prompt notice of the taking
of such action without a meeting
6
<PAGE>
<PAGE>
by less than the unanimous consent of all stockholders shall be given to those
stockholders who did not consent in writing.
Section 12. Fixing Record Date. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining stockholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action, the Board of Directors may fix, in advance, a date
as the record date for any such determination of stockholders. Such date shall
not be more than 60 nor less than 10 days before the date of such meeting, nor
more than 60 days prior to any other action.
When a determination of stockholders of record entitled to notice of or to
vote at any meeting of stockholders has been made as provided in this section,
such determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date for the adjourned meeting.
ARTICLE II
BOARD OF DIRECTORS
Section 1. Power of Board and Qualification of Directors. The business of
the Corporation shall be managed by the Board of Directors. Each director shall
be at least 18 years of age.
Section 2. Number of Directors. The number of directors constituting the
entire Board of Directors shall be the number, not less than one nor more than
15, fixed from time to time by a majority of the total number of directors which
the Corporation would have, prior to
7
<PAGE>
<PAGE>
any increase or decrease, if there were no vacancies, provided, however, that no
decrease shall shorten the term of an incumbent director. Until otherwise fixed
by the directors, the number of directors constituting the entire Board shall be
four.
Section 3. Election and Term of Directors. At each annual meeting of
stockholders, directors shall be elected to hold office until the next annual
meeting of stockholders and until their successors have been elected and qualify
or until their respective deaths, resignations or removals in the manner
hereinafter provided.
Section 4. Quorum of Directors and Action by the Board. A majority of the
entire Board of Directors shall constitute a quorum for the transaction of
business, and, except where otherwise provided by these By-laws, the vote of a
majority of the directors present at a meeting at the time of such vote, if a
quorum is then present, shall be the act of the Board.
Any action required or permitted to be taken by the Board of Directors or
any committee thereof may be taken without a meeting if all members of the Board
or the committee consent in writing to the adoption of a resolution authorizing
the action. The resolution and the written consent thereto by the members of the
Board or committee shall be filed with the minutes of the proceedings of the
Board or committee.
Section 5. Meetings of the Board. An annual meeting of the Board of
Directors shall be held in each year directly after the annual meeting of
stockholders. Regular meetings of the Board shall be held at such times as may
be fixed by the Board. Special meetings of the Board may be held at any time
upon the call of the President or any two directors.
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Meetings of the Board of Directors shall be held at such places as may
fixed by the Board for annual and regular meetings and in the notice of meeting
for special meetings. If no place is so fixed, meetings of the Board shall be
held at the office of the Corporation.
No notice need be given of annual or regular meetings of the Board of
Directors. Notice of each special meeting of the Board shall be given to each
director either by mail not later than noon, Eastern time, on the third day
prior to the meeting or by telegram, written message or orally to the director
not later than noon, Eastern time, on the day prior to the meeting. Notices are
deemed to have been given: by mail, when deposited in the United States mail; by
telegram at the time of filing; and by messenger at the time of delivery.
Notices by mail, telegram or messenger shall be sent to each director at the
address designated by him for that purpose, or, if none has been so designated,
at his last known residence or business address.
Notice of a meeting of the Board of Directors need not to be given to any
director who submits a signed waiver of notice whether before or after the
meeting, or who attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him.
A notice, or waiver of notice, need not specify the purpose of any meeting
of the Board of Directors.
A majority of the directors present, whether or not a quorum is present,
may adjourn any meeting to another time and place. Notice of any adjournment of
a meeting to another time or place shall be given, in the manner described
above, to the directors who were not present at the time of the adjournment and,
unless such time and place are announced at the meeting, to the other directors.
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Section 6. Resignations. Any director of the Corporation may resign at any
time by giving written notice to the Board of Directors or to the President or
to the Secretary of the Corporation. Such resignation shall take effect at the
time specified therein; and unless otherwise specified therein the acceptance of
such resignation shall not be necessary to make it effective.
Section 7. Removal of Directors. Any or all of the directors may be removed
with or without cause by vote of the stockholders.
Section 8. Newly Created Directorships and Vacancies. Newly created
directorships resulting from an increase in the number of directors and
vacancies occurring in the Board of Directors for any reason except the removal
of directors by stockholders may be filled by vote of a majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring as a result of the removal of directors by stockholders shall be
filled by the stockholders. A director elected to fill a vacancy shall be
elected to hold office for the unexpired term of his predecessor.
Section 9. Executive and other Committees of Directors. The Board of
Directors, by resolution adopted by a majority of the entire Board, may
designate from among its members an executive committee and other committees
each consisting of one or more directors and each of which, to the extent
provided in the resolution, shall have all the authority of the Board, except
that no such committee shall have authority as to the following matters:
(1) The submission to stockholders of any action that needs
stockholders' approval;
(2) The amendment of the Certificate of Incorporation;
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(3) The filling of vacancies in the Board or in any committee;
(4) The fixing of compensation of the directors for serving on the
Board or on any committee;
(5) The amendment or repeal of the By-laws, or the adoption of new
By-laws;
(6) The amendment or repeal of any resolution of the Board which, by
its terms, shall not be so amendable or repealable; or
(7) The removal or indemnification of directors; or unless the
resolution, these By-laws or the Certificate of Incorporation otherwise provide:
(8) The declaration of a dividend;
(9) The issuance of stock; or
(10) The adoption of a certificate of ownership and merger pursuant to
Section 253 of the General Corporation Law.
The Board of Directors may designate one or more directors as alternate
members of any such committee, who may replace any absent member or members at
any meeting of such committee.
Unless a greater proportion is required by the resolution designating a
committee, a majority of the entire authorized number of members of such
committee shall constitute a quorum for the transaction of business, and the
vote of a majority of the members present at a meeting at the time of such vote,
if a quorum is then present, shall be the act of such committee.
Each such committee shall serve at the pleasure of the Board of Directors.
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Section 10. Compensation of Directors. The Board of Directors shall have
authority to fix the compensation of directors for services in any capacity.
ARTICLE III
OFFICERS
Section 1. Officers. The Board of Directors, as soon as may be practicable
after the annual election of directors, shall elect a Chairman of the Board,
President, a Secretary and a Treasurer, and from time to time may elect or
appoint one or more Vice Presidents or such other officers as it may determine.
Any two or more offices may be held by the same person.
Section 2. Other Officers. The Board of Directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board.
Section 3. Compensation. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
Section 4. Term of Office and Removal. Each officer shall hold office for
the term for which he is elected or appointed, and until his successor has been
elected or appointed and qualified. Unless otherwise provided in the resolution
of the Board of Directors electing or appointing an officer, his term of office
shall extend to and expire at the meeting of the Board following the next annual
meeting of stockholders. Any officer may be removed by the Board, with or
without cause, at any time. Removal of an officer without cause shall be without
prejudice to his contract rights, if any, and the election or appointment of an
officer shall not of itself create contract rights.
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Section 5. Power and Duties.
(a) Chairman of the Board: The Chairman of the Board shall be the
chief executive officer of the Corporation, shall have general and active
management of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He shall also
preside at all meetings of the stockholders and the Board of Directors.
He shall execute bonds, mortgages and other contracts requiring a seal,
under the seal of the Corporation, except where required or permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the Corporation. The Chairman of the Board shall counsel
freely with the President and shall exercise such other powers, shall preform
such other duties and have such other responsibilities as may be given from time
to time by the Board of Directors or the By-laws of the Corporation.
(b) President: The President shall be the chief operating officer of
the Corporation. He shall have responsibility for general operation of the
business of the Corporation and shall see that all orders and resolutions of the
Board of Directors are carried in effect. In the absence of the Chairman of the
Board or in the event of his inability or refusal to act, the President shall
perform the duties and exercise the powers of the Chairman of the Board. The
President shall perform such other duties and have such other responsibilities
as from time to time may be determined by the Board of Directors.
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(c) Vice Presidents: The Vice Presidents, in the order designated by
the Board of Directors, or in the absence of any designation, then in the order
of their election, during the absence or disability of or refusal to act by the
President, shall perform the duties and exercise the powers of the President,
and shall perform such other duties as the Board of Directors shall prescribe.
(d) Secretary and Assistant Secretaries: The Secretary shall attend
all meetings of the Board of Directors and all meetings of the stockholders and
record all the proceedings of the meetings of the Corporation and of the Board
of Directors in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President, under whose supervision he shall be. He shall have
custody of the corporate seal of the Corporation and he, or an Assistant
Secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such Assistant Secretary. The Board of Directors may give general authority to
any other officer to affix the seal of the Corporation and to attest the
affixing by his signature.
The Assistant Secretary, or if there be more than one, the Assistant
Secretaries in the order determined by the Board of Directors (or if there be no
such determination, then in the order of their election), shall, in the absence
of the Secretary or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the
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Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
(e) Treasurer and Assistant Treasurers: The Treasurer shall have the
custody of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors.
He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires, an account of all his transactions as
Treasurer and of the financial condition of the Corporation.
If required by the Board of Directors, he shall give the Corporation a
bond (which shall be renewed every six years) in such sum and with such surety
or sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
The Assistant Treasurer, or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board of Directors (or of
there be no such determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the
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Treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 6. Books to be Kept. The Corporation shall keep (a) correct and
complete books and records of account, (b) minutes of the proceedings of the
stockholders, Board of Directors and any committees of directors, and (c) a
current list of the directors and officers and their residence addresses; and
the Corporation shall also keep at its office or at the office of its transfer
agent or registrar if any, a record containing the names and addresses of all
stockholders, the number and class of shares held by each and the dates when
they respectively became the owners of record thereof.
The Board of Directors may determine whether and to what extent and at what
times and places and under what conditions and regulations any accounts, books,
records or other documents of the Corporation shall be open to inspection, and
no creditor, security holder or other person shall have any right to inspect any
accounts, books, records or other documents of the Corporation except as
conferred by statute or as so authorized by the Board.
Section 7. Checks, Notes, etc. All checks and drafts on, and withdrawals
from the Corporation's accounts with banks or other financial institutions, and
all bills of exchange, notes and other instruments for the payment of money,
drawn, made, endorsed, or accepted by the Corporation, shall be signed on its
behalf by the person or persons thereunto authorized by, or pursuant to
resolution of, the Board of Directors.
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ARTICLE IV
FORMS OF CERTIFICATES AND LOSS AND
TRANSFER OF SHARES
Section 1. Forms of Share Certificates. The shares of the Corporation shall
be represented by certificates, in such forms as the Board of Directors may
prescribe, signed by the Chairman of the Board, President or a Vice President
and the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer, and may be sealed with the seal of the Corporation or a facsimile
thereof. The signatures of the officers upon a certificate may be facsimiles if
the certificate is countersigned by a transfer agent or registered by a
registrar other than the Corporation or its employee. In case any officer who
has signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the Corporation with the same effect as if he were such officer at the
date of issue.
Each certificate representing shares issued by the Corporation shall set
forth upon the face or back of the certificate, or shall state that the
Corporation will furnish to any stockholder upon request and without charge, a
full statement of the designation, relative rights, preferences and limitations
of the shares of each class of shares, if more than one, authorized to be issued
and the designation, relative rights, preferences and limitations of each series
of any class of preferred shares authorized to be issued so far as the same have
been fixed, and the authority of the Board of Directors to designate and fix the
relative rights, preferences and limitations of other series.
Each certificate representing shares shall state upon the face thereof:
17
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(1) That the Corporation is formed under the laws of the State of
Delaware;
(2) The name of the person or persons to whom issued; and
(3) The number and class of shares, and the designation of the series,
if any, which such certificate represents.
Section 2. Transfers of Shares. Shares of the Corporation shall be
transferable on the record of stockholders upon presentment to the Corporation
or a transfer agent of a certificate or certificates representing the shares
requested to be transferred, with proper endorsement on the certificate or on a
separate accompanying document, together with such evidence of the payment of
transfer taxes and compliance with other provisions of law as the Corporation or
its transfer agent may require.
Section 3. Lost, Stolen or Destroyed Share Certificates. No certificate for
shares of the Corporation shall be issued in place of any certificate alleged to
have been lost, destroyed or wrongfully taken, except, if and to the extent
required by the Board of Directors, upon:
(1) Production of evidence of loss, destruction or wrongful taking;
(2) Delivery of a bond indemnifying the Corporation and its agents
against any claim that may be made against it or them on account of the alleged
loss, destruction or wrongful taking of the replaced certificate or the issuance
of the new certificate;
(3) Payment of the expenses of the Corporation and its agents incurred
in connection with the issuance of the new certificate; and
(4) Compliance with such other reasonable requirements as may be
imposed.
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ARTICLE V
OTHER MATTERS
Section 1. Corporate Seal. The Board of Directors may adopt a corporate
seal, alter such seal at pleasure, and authorize it to be used by causing it or
a facsimile to be affixed or impressed or reproduced in any other manner.
Section 2. Fiscal Year. The fiscal year of the Corporation shall be the 12
months ending December 31 or such other period as may be fixed by the Board of
Directors.
Section 3. Amendments. By-laws of the Corporation may be adopted, amended
or repealed by vote of the holders of the shares at the time entitled to vote in
the election of any directors. By-laws may also be adopted, amended or repealed
by the Board of Directors, but any By-law adopted by the Board may be amended or
repealed by the stockholders entitled to vote thereon as hereinabove provided.
If any By-law regulating an impending election of directors is adopted,
amended or repealed by the Board of Directors, there shall be set forth in the
notice of the next meeting of stockholders for the election of directors the
By-law so adopted, amended or repealed, together with a concise statement of the
changes made.
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of June 6, 1996, among Benedek
Broadcasting Corporation, a Delaware corporation (the "Company"), Benedek
License Corporation, a Delaware corporation ("BLC"), as successor by merger to
Benedek Broadcasting Company, L.L.C., a Delaware limited liability company
("LLC"), and The Bank of New York, as trustee (the "Trustee"), amends and
supplements the Indenture (as defined below).
R E C I T A L S
1. The Company, LLC and the Trustee entered into the Indenture, dated as of
March 1, 1995 (the "Indenture"), relating to the Company's Series A and Series B
11-7/8% Senior Secured Notes due 2005 (the "Notes").
2. The Company's obligations in respect of the Notes and under the
Indenture were guaranteed by LLC (the "LLC Guaranty").
3. The LLC has merged with and into BLC (the "Merger").
4. The parties hereto wish to reflect the express assumption by BLC of the
obligations of LLC set forth in the Indenture.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally binding, the parties hereto hereby
agree as follows:
Section 1. Capitalized terms used herein and not otherwise defined herein
are used as defined in the Indenture.
Section 2. Each of the Company and BLC hereby acknowledges and agrees that,
by virtue of the Merger and by operation of law, BLC has become a party to the
Indenture in accordance with Article X of the Indenture and is responsible for
all the liabilities and obligations of the LLC under the Indenture and the LLC
Guaranty. Accordingly, BLC hereby expressly assumes all the liabilities and
obligations of LLC in respect of the Indenture and the LLC Guaranty as set forth
in Article X of the Indenture.
Section 3. This First Supplemental Indenture shall be governed by and
construed in accordance with the law of the State of New York.
Section 4. This First Supplemental Indenture may be executed in any number
of counterparts, each of which, when so executed, shall be deemed to be an
original, but all of which shall together constitute but one and the same
instrument.
Section 5. This First Supplemental Indenture is an amendment supplemental
to the Indenture and said Indenture and this First Supplemental Indenture to the
Indenture shall
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henceforth be read together.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be executed as of the day and year first above written.
BENEDEK BROADCASTING CORPORATION,
/s/ Ronald L. Lindwall
By:_______________________________________
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
Attest:
/s/ Mary L. Flodin
- ------------------------------
BENEDEK LICENSE CORPORATION,
/s/ Ronald L. Lindwall
By:_______________________________________
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
Attest:
/s/ Mary L. Flodin
- ------------------------------
THE BANK OF NEW YORK
as trustee,
/s/ Helen M. Cotiaux
By:_______________________________________
Name: Helen M. Cotiaux
Title: Vice President
Attest:
/s/ Mary L. Flodin
- ------------------------------
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EXECUTION
________________________________________________________________________________
CREDIT AGREEMENT
DATED AS OF JUNE 6, 1996
AMONG
BENEDEK COMMUNICATIONS CORPORATION,
BENEDEK BROADCASTING CORPORATION,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
PEARL STREET L.P.,
AS ARRANGING AGENT,
GOLDMAN, SACHS & CO.,
AS SYNDICATION AGENT,
AND
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY,
AS ADMINISTRATIVE AGENT
AND
COLLATERAL AGENT
________________________________________________________________________________
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BENEDEK BROADCASTING CORPORATION
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
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SECTION 1.
DEFINITIONS.............................. 2
1.1 Certain Defined Terms.................................................. 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement........................................................ 38
1.3 Other Definitional Provisions and Rules of Construction................ 38
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............................. 39
2.1 Commitments; Making of Loans; the Register; Notes...................... 39
2.2 Interest on the Loans.................................................. 44
2.3 Fees................................................................... 47
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments Under Guaranties............................... 48
2.5 Use of Proceeds........................................................ 58
2.6 Special Provisions Governing Eurodollar Rate Loans..................... 58
2.7 Increased Costs; Taxes; Capital Adequacy............................... 61
2.8 Obligation of Lenders to Mitigate...................................... 65
SECTION 3.
CONDITIONS TO LOANS........................... 65
3.1 Conditions to AXELs.................................................... 65
3.2 Conditions to All Loans................................................ 74
SECTION 4.
REPRESENTATIONS AND WARRANTIES...................... 75
4.1 Organization, Powers, Qualification, Good Standing, Business,
Subsidiaries and FCC and Station Matters............................... 76
4.2 Authorization of Borrowing, etc........................................ 78
4.3 Financial Condition.................................................... 80
(i)
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Page
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4.4 No Material Adverse Change; No Restricted Junior Payments.............. 80
4.5 Title to Properties; Liens; Real Property.............................. 80
4.6 Litigation; Adverse Facts.............................................. 81
4.7 Payment of Taxes....................................................... 82
4.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.............................................................. 82
4.9 Governmental Regulation................................................ 82
4.10 Securities Activities.................................................. 82
4.11 Employee Benefit Plans................................................. 83
4.12 Certain Fees........................................................... 83
4.13 Environmental Protection............................................... 84
4.14 Employee Matters....................................................... 84
4.15 Solvency............................................................... 85
4.16 Matters Relating to Collateral......................................... 85
4.17 Representations and Warranties in Acquisition Agreements............... 86
4.18 Applicable Law......................................................... 86
4.19 Disclosure............................................................. 86
SECTION 5.
AFFIRMATIVE COVENANTS.................... 87
5.1 Financial Statements and Other Reports................................. 87
5.2 Corporate Existence; Board of Directors; etc........................... 93
5.3 Payment of Taxes and Claims; Tax Consolidation......................... 93
5.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds........................................ 94
5.5 Inspection Rights; Audits of Accounts Receivable; Lender Meeting....... 96
5.6 Compliance with Laws, etc.; Maintenance of FCC Licenses; etc........... 96
5.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental
Claims and Violations of Environmental Laws............................ 97
5.8 Matters Relating to Additional Real Property Collateral................ 99
5.9 Maintenance of Key Man Life Insurance Policies......................... 101
5.10 Maintenance of Network Affiliations.................................... 102
5.11 Ownership Reports...................................................... 102
5.12 Determination of Borrowing Base........................................ 102
5.13 Future Capital Contributions; Cash and Cash Equivalents of BCC......... 102
(ii)
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Page
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SECTION 6.
COMPANY'S NEGATIVE COVENANTS............. 103
6.1 Indebtedness........................................................... 103
6.2 Liens and Related Matters.............................................. 104
6.3 Investments; Joint Ventures............................................ 105
6.4 Contingent Obligations................................................. 106
6.5 Restricted Junior Payments............................................. 107
6.6 Financial Covenants.................................................... 108
6.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions....... 111
6.8 Consolidated Capital Expenditures...................................... 113
6.9 Sales and Lease-Backs.................................................. 114
6.10 Sale or Discount of Receivables........................................ 114
6.11 Transactions with Shareholders and Affiliates.......................... 115
6.12 Disposal of Subsidiary Stock........................................... 115
6.13 Conduct of Business.................................................... 115
6.14 Amendments or Waivers of Certain Related Agreements; Payments on
Existing Senior Notes; Designation of "Designated Senior Debt"........ 116
6.15 Fiscal Year............................................................ 117
6.16 Limitation on Creation of Subsidiaries................................. 117
SECTION 7.
EVENTS OF DEFAULT............................ 117
7.1 Failure to Make Payments When Due...................................... 117
7.2 Default in Other Agreements............................................ 117
7.3 Breach of Certain Covenants............................................ 118
7.4 Breach of Warranty..................................................... 118
7.5 Other Defaults Under Loan Documents.................................... 118
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc................... 118
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc..................... 119
7.8 Judgments and Attachments.............................................. 119
7.9 Dissolution............................................................ 119
7.10 Employee Benefit Plans................................................. 119
7.11 Material Adverse Effect................................................ 119
7.12 Change in Executive Officers of Company................................ 120
7.13 Change in Control...................................................... 120
7.14 FCC Licenses........................................................... 120
7.15 Invalidity of Guaranties; Failure of Security; Repudiation of
Obligations............................................................ 120
7.16 Subordinated Indebtedness.............................................. 121
SECTION 8.
(iii)
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AGENTS................................... 122
8.1 Appointment............................................................ 122
8.2 Powers and Duties; General Immunity.................................... 123
8.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness....................................................... 125
8.4 Right to Indemnity..................................................... 125
8.5 Successor Administrative Agent and Collateral Agent.................... 125
8.6 Collateral Documents and Guaranties.................................... 126
SECTION 9.
MISCELLANEOUS.............................. 128
9.1 Assignments and Participations in Loans................................ 128
9.2 Expenses............................................................... 130
9.3 Indemnity.............................................................. 131
9.4 Set-Off; Security Interest in Deposit Accounts......................... 132
9.5 Ratable Sharing........................................................ 133
9.6 Amendments and Waivers................................................. 133
9.7 Independence of Covenants.............................................. 135
9.8 Notices................................................................ 135
9.9 Survival of Representations, Warranties and Agreements................. 135
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.................. 135
9.11 Marshalling; Payments Set Aside........................................ 136
9.12 Severability........................................................... 136
9.13 Obligations Several; Independent Nature of Lenders' Rights............. 136
9.14 Headings............................................................... 136
9.15 Applicable Law......................................................... 136
9.16 Successors and Assigns................................................. 137
9.17 Consent to Jurisdiction and Service of Process......................... 137
9.18 Waiver of Jury Trial................................................... 137
9.19 Confidentiality........................................................ 138
9.20 Maximum Amount......................................................... 138
9.21 Counterparts; Effectiveness............................................ 139
Signature pages S-1
(iv)
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF AXEL SERIES A NOTE
IV FORM OF AXEL SERIES B NOTE
V FORM OF REVOLVING NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF BORROWING BASE CERTIFICATE
VIII FORM OF OPINION OF SHACK & SIEGEL, P.C.
IX FORM OF OPINION OF COVINGTON & BURLING
X FORM OF OPINION OF O'MELVENY & MYERS LLP
XI FORM OF ASSIGNMENT AGREEMENT
XII FORM OF CERTIFICATE RE NON-BANK STATUS
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF COMPANY ACCOUNTS RECEIVABLE SECURITY AGREEMENT
XV FORM OF COMPANY ACQUIRED ASSETS SECURITY AGREEMENT
XVI FORM OF COMPANY TANGIBLE ASSETS SECURITY AGREEMENT
XVII FORM OF BCC GUARANTY
XVIII FORM OF LICENSE SUB GUARANTY
XIX FORM OF BCC PLEDGE AGREEMENT
XX FORM OF BCC SECURITY AGREEMENT
XXI FORM OF MORTGAGE
XXII FORM OF LANDLORD CONSENT AND ESTOPPEL
(v)
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SCHEDULES
1.1 ESTIMATED TAX AMOUNTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1H CLOSING DATE MORTGAGED PROPERTIES
3.1J CLOSING DATE ENVIRONMENTAL REPORTS
4.1A LOAN PARTIES; SUBSIDIARIES OF COMPANY
4.1E STATIONS AND FCC LICENSES
4.3 CERTAIN LIABILITIES
4.5 REAL PROPERTY
4.11 CERTAIN EMPLOYEE BENEFIT PLANS
4.13 ENVIRONMENTAL MATTERS
4.14 EMPLOYEE MATTERS
6.1 CERTAIN EXISTING INDEBTEDNESS
6.2 CERTAIN EXISTING LIENS
6.3 CERTAIN EXISTING INVESTMENTS
6.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
6.6 STIPULATED CONSOLIDATED ADJUSTED EBITDA
(vi)
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BENEDEK BROADCASTING CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of June 6, 1996, and entered into by and
among BENEDEK COMMUNICATIONS CORPORATION, a Delaware corporation ("BCC"),
BENEDEK BROADCASTING CORPORATION, a Delaware corporation ("Company"), PEARL
STREET L.P., as arranging agent (in such capacity, "Arranging Agent"), GOLDMAN,
SACHS & CO., as syndication agent (in such capacity, "Syndication Agent"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "Lender" and collectively as "Lenders"), and CANADIAN
IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY ("CIBC-NYA"), as administrative agent
for Lenders (in such capacity, "Administrative Agent") and as collateral agent
for Lenders (in such capacity, "Collateral Agent").
R E C I T A L S
- - - - - - - -
WHEREAS, Benedek (this and other terms used in these recitals without
definition being used as defined in subsection 1.1) owns 100% of the outstanding
common stock of Company;
WHEREAS, on or before the Closing Date, Benedek will contribute all of the
outstanding common stock of Company to BCC in exchange for all of the
outstanding common stock of BCC;
WHEREAS, on or before the Closing Date, BCC will (i) (a) issue and sell
the Seller Preferred Stock to GE Capital for aggregate cash proceeds of
$45,000,000, and (b) issue and sell the Exchangeable Preferred Stock and the
Warrants for aggregate cash proceeds of not less than $60,000,000, and (ii)
contribute the proceeds from the sale of such Seller Preferred Stock,
Exchangeable Preferred Stock and Warrants to Company;
WHEREAS, on or before the Closing Date, BCC will issue and sell the Senior
Subordinated Notes for aggregate gross proceeds of $90,178,000 and contribute
such proceeds to Company;
WHEREAS, on the Closing Date, (i) pursuant to the Brissette Acquisition
Agreement, Company will acquire 100% of the outstanding capital stock of
Brissette for consideration of approximately $270,000,000 in cash, and (ii)
pursuant to the Stauffer Acquisition Agreement, Company will acquire
substantially all of the assets used in connection with the business and
operations of the Stauffer Stations for consideration of approximately
$54,500,000 in cash;
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WHEREAS, immediately upon the consummation of the Brissette Acquisition,
Brissette and all of its Subsidiaries will be merged with and into Company, with
Company being the surviving corporation in such merger;
WHEREAS, Lenders have agreed to extend certain credit facilities hereunder
to Company, the proceeds of which will be used together with cash on hand of
Company and the proceeds of the issuance and sale of the Seller Preferred Stock,
the Exchangeable Preferred Stock and the Warrants and the Senior Subordinated
Notes described above, (i) to fund the cash portion of the purchase price of the
Acquisitions, (ii) to pay Transaction Costs and (iii) to provide financing for
working capital and other general corporate purposes of Company;
WHEREAS, Company desires (i) to secure all of the Obligations relating to
the AXELs by granting to Collateral Agent, on behalf of Lenders holding
outstanding AXELs, a first priority Lien on (a) all of the collateral under the
Existing Pledge Agreement, shared on an equal and ratable basis with the holders
of the Existing Senior Notes, and (b) all of the real property and tangible
personal property acquired in the Acquisitions, (ii) to secure all of the
Obligations by granting to Collateral Agent, on behalf of Lenders, a first
priority Lien on all other real property and tangible personal property of
Company, shared on an equal and ratable basis with the holders of the Existing
Senior Notes, and (iii) to secure all of the Obligations (up to a maximum amount
not to exceed the greater of $5,000,000 and 75% of Accounts Receivable) by
granting to Collateral Agent, on behalf of Lenders, a first priority Lien on
substantially all of Company's accounts receivable; and
WHEREAS, (i) License Sub has agreed to guarantee all Obligations related
to the AXELs and (ii) BCC has agreed to guarantee all Obligations and to secure
such guarantee by granting to Collateral Agent, (a) on behalf of Lenders and the
holders of the Existing Senior Notes on an equal and ratable basis, a first
priority pledge of all of the outstanding capital stock of Company and (b) on
behalf of Lenders, a first priority pledge of all other assets of BCC;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, BCC, Lenders and Agents
agree as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Accounts Receivable" means any right to payment that is due within
one year from any invoice date for goods sold or leased or for services
rendered no matter how evidenced, including, but not limited to accounts
receivable, contracts rights, notes, drafts, acceptances, and other forms
of obligations and receivables, all as determined in conformity with GAAP.
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"Acquired Stations" means the Brissette Stations and the Stauffer
Stations acquired by Company pursuant to the Brissette Acquisition
Agreement and the Stauffer Acquisition Agreement, respectively.
"Acquisitions" means, collectively, the Brissette Acquisition and
the Stauffer Acquisition.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar
Rate Loan, the rate per annum obtained by dividing (i) the arithmetic
average (rounded upward to the nearest 1/16 of one percent) of the offered
quotations, if any, to first class banks in the interbank Eurodollar
market by Reference Lender for U.S. dollar deposits of amounts in same day
funds comparable to the respective principal amounts of the Eurodollar
Rate Loans of Reference Lender for which the Adjusted Eurodollar Rate is
then being determined (which principal amount shall be deemed to be
$1,000,000 in the case of Reference Lender not making, converting to or
continuing such a Eurodollar Rate Loan) with maturities comparable to such
Interest Period as of approximately 10:00 A.M. (New York time) on such
Interest Rate Determination Date by (ii) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements (including any
marginal, emergency, supplemental, special or other reserves) applicable
on such Interest Rate Determination Date to any member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any successor category of liabilities under Regulation
D).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 8.5A.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract
or otherwise.
"Agent" means, individually, each of Arranging Agent, Syndication
Agent, Administrative Agent and Collateral Agent and "Agents" means
Arranging Agent, Syndication Agent, Administrative Agent and Collateral
Agent, collectively.
"Agreement" means this Credit Agreement dated as of June 6, 1996, as
it may be amended, supplemented or otherwise modified from time to time.
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"Applicable Margin" means, for each AXEL Series A, AXEL Series B and
Revolving Loan, as of any date of determination, a percentage per annum as
set forth below less the Pricing Reduction, if any:
<TABLE>
<CAPTION>
==============================================================================================================
AXELs Series A AXELs Series B Revolving Loans
- --------------------------------------------------------------------------------------------------------------
Base Rate Eurodollar Base Rate Eurodollar Base Rate Eurodollar
Loans Loans Loans Loans Loans Loans
==============================================================================================================
<S> <C> <C> <C> <C> <C>
2.00% 3.00% 2.50% 3.50% 2.00% 3.00%
==============================================================================================================
</TABLE>
"Arranging Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Asset Sale" means the sale by BCC or any of its Subsidiaries to any
Person other than BCC or any of its wholly owned Subsidiaries of (i) any
of the stock of any of BCC's Subsidiaries, (ii) substantially all of the
assets of any division or line of business of BCC or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible)
of BCC or any of its Subsidiaries other than any such other assets to the
extent that the aggregate fair market value of such assets sold in any
single transaction or related series of transactions is equal to or less
than $10,000.
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit XI annexed hereto.
"Auditor's Letter" means a letter, acknowledged and agreed to by
Company and McGladrey & Pullen, LLP and delivered to Arranging Agent and
Administrative Agent pursuant to subsection 3.1Q.
"AXEL" or "AXELs" means one or more of the AXELs Series A or AXELs
Series B or any combination thereof.
"AXEL Commitment" means an AXEL Series A Commitment or an AXEL
Series B Commitment of a Lender, and "AXEL Commitments" means such
commitments of all Lenders in the aggregate.
"AXEL Exposure" means, with respect to any Lender as of any date of
determination, the aggregate AXEL Series A Exposure and AXEL Series B
Exposure of that Lender.
"AXEL Notes" means one or more of the AXEL Series A Notes or AXEL
Series B Notes or any combination thereof.
"AXEL Series A" or "AXELs Series A" means a Loan or Loans,
respectively, made by Lenders to Company as amortization extended loans
pursuant to subsection 2.1A(i).
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"AXEL Series A Commitment" means the commitment of a Lender to make
an AXEL Series A to Company pursuant to subsection 2.1A(i), and "AXEL
Series A Commitments" means such commitments of all Lenders in the
aggregate.
"AXEL Series A Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the AXELs Series A, that
Lender's AXEL Series A Commitment and (ii) after the funding of the AXELs
Series A, the outstanding principal amount of the AXEL Series A of that
Lender.
"AXEL Series A Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(i) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 9.1B(i) in connection with assignments of the AXEL Series A
Commitments or AXELs Series A of any Lenders, in each case substantially
in the form of Exhibit III annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"AXEL Series B" or "AXELs Series B" means a Loan or Loans,
respectively, made by Lenders to Company as amortization extended loans
pursuant to subsection 2.1A(ii).
"AXEL Series B Commitment" means the commitment of a Lender to make
an AXEL Series B to Company pursuant to subsection 2.1A(ii), and "AXEL
Series B Commitments" means such commitments of all Lenders in the
aggregate.
"AXEL Series B Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the AXELs Series B, that
Lender's AXEL Series B Commitment and (ii) after the funding of the AXELs
Series B, the outstanding principal amount of the AXEL Series B of that
Lender.
"AXEL Series B Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(ii) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 9.1B(i) in connection with assignments of the AXEL Series B
Commitments or AXELs Series B of any Lenders, in each case substantially
in the form of Exhibit IV annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (i) the rate that
CIBC-NYA announces from time to time as its "base lending rate" at its
domestic lending office, as in effect from time to time or (ii) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate. The base
lending rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer, and CIBC-NYA or
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any Lender may make commercial loans or other loans at rates of interest
at, above or below such rate.
"Base Rate Loans" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"BCC" means Benedek Communications Corporation, a Delaware
corporation which as of the Closing Date will own 100% of the outstanding
common stock of Company.
"BCC Guaranty" means the BCC Guaranty executed and delivered by BCC
on the Closing Date, substantially in the form of Exhibit XVII annexed
hereto, as such BCC Guaranty may thereafter be amended, supplemented or
otherwise modified from time to time.
"BCC Pledge Agreement" means the BCC Pledge Agreement executed and
delivered by BCC on the Closing Date, substantially in the form of Exhibit
XIX annexed hereto, as such BCC Pledge Agreement may thereafter be
amended, supplemented or otherwise modified from time to time.
"BCC Security Agreement" means the BCC Security Agreement executed
and delivered by BCC on the Closing Date, substantially in the form of
Exhibit XX annexed hereto, as such BCC Security Agreement may thereafter
be amended, supplemented or otherwise modified from time to time.
"Benedek" means A. Richard Benedek.
"Borrowing Base" means, as of any date of determination, an amount
equal to 75% of the Dollar book value of all Accounts Receivable of
Company minus the Dollar book value of any Accounts Receivable which have
not been paid in full within 120 days of the invoice date thereof, as
calculated pursuant to the most recent Borrowing Base Certificate
delivered pursuant to subsection 5.12.
"Borrowing Base Certificate" means a certificate substantially in
the form of Exhibit VII annexed hereto delivered to Administrative Agent
by Company pursuant to subsection 5.12.
"Brissette" means Brissette Broadcasting Corporation, a Delaware
corporation.
"Brissette Acquisition" means the transactions contemplated by the
Brissette Acquisition Agreement, including the Brissette License Transfer.
"Brissette Acquisition Agreement" means that certain Stock Purchase
Agreement dated December 15, 1995, as amended by that certain letter
agreement dated April 11, 1996 and by that certain letter agreement dated
April 24, 1996, by and among
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GE Capital, Paul Brissette, Brissette and Company, in the form delivered
to Arranging Agent, Administrative Agent and Lenders prior to their
execution of this Agreement and as such agreement may be amended from time
to time thereafter to the extent permitted under subsection 6.14A.
"Brissette FCC Consent" means the initial written action or actions
of the FCC approving the transfer of control of the Brissette Stations
from Brissette to Company and the Brissette License Transfer.
"Brissette License Transfer" means the transfer to License Sub of
the FCC Licenses used in connection with the ownership and operation of
the Brissette Stations.
"Brissette Stations" means, collectively, the following television
broadcast stations: KAUZ-TV licensed to serve Wichita Falls, Texas;
KOSA-TV licensed to serve Odessa, Texas; WHOI(TV) licensed to serve
Peoria, Illinois; WILX-TV licensed to serve Onondaga, Michigan; WMTV(TV)
licensed to serve Madison, Wisconsin; WSAW-TV licensed to serve Wausau,
Wisconsin; WTRF-TV licensed to serve Wheeling, West Virginia; and WWLP(TV)
licensed to serve Springfield, Massachusetts.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or
required by law or other governmental action to close, and (ii) with
respect to all notices, determinations, fundings and payments in
connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans,
any day that is a Business Day described in clause (i) above and that is
also a day for trading by and between banks in Dollar deposits in the
interbank Eurodollar market.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government or
(b) issued by any agency of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case
maturing within one year after such date; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after such date and having,
at the time of the acquisition thereof, the highest rating obtainable from
either Standard & Poor's Ratings Group ("S&P") or Moody's Investors
Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than
one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1
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from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year after such date and issued
or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District
of Columbia that (a) is at least "adequately capitalized" (as defined in
the regulations of its primary Federal banking regulator) and (b) has Tier
1 capital (as defined in such regulations) of not less than $100,000,000;
and (v) shares of any money market mutual fund that (a) has at least 95%
of its assets invested continuously in the types of investments referred
to in clauses (i), (ii) and (iii) above, (b) has net assets of not less
than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's.
"Certificate re Non-Bank Status" means a certificate substantially
in the form of Exhibit XII annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"CIBC-NYA" has the meaning assigned to that term in the introduction
to this Agreement.
"Closing Date" means the date on or before July 31, 1996, on which
the initial Loans are made.
"Collateral" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to
be granted pursuant to the Collateral Documents as security for the
Obligations.
"Collateral Account" has the meaning assigned to that term in the
Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account
Agreement executed and delivered by BCC and Collateral Agent on the
Closing Date, substantially in the form of Exhibit XIII annexed hereto, as
such Collateral Account Agreement may hereafter be amended, supplemented
or otherwise modified from time to time.
"Collateral Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Collateral Agent appointed pursuant to subsection 8.5B.
"Collateral Documents" means the Existing Pledge Agreement, the BCC
Pledge Agreement, the BCC Security Agreement, the Company Security
Agreements, the Collateral Account Agreement, the Mortgages and all other
instruments or documents delivered by any Loan Party pursuant to this
Agreement or any of the other Loan Documents in order to grant to
Collateral Agent, on behalf of Lenders, a Lien on any real, personal or
mixed property of that Loan Party as security for the Obligations.
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"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"Communications Act" means the Communications Act of 1934, as
amended (including, without limitation, the Telecommunications Act of
1996), or any successor statute or statutes thereto, and all FCC
Regulations, in each case as from time to time in effect.
"Communications Regulatory Authority" means the FCC and any future
communications regulatory commission, agency, department, board or
authority.
"Company" has the meaning assigned to that term in the introduction
to this Agreement.
"Company Accounts Receivable Security Agreement" means the Accounts
Receivable Security Agreement executed and delivered by Company on the
Closing Date, substantially in the form of Exhibit XIV annexed hereto, as
such Accounts Receivable Security Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
"Company Acquired Assets Security Agreement" means the Acquired
Assets Security Agreement executed and delivered by Company on the Closing
Date, substantially in the form of Exhibit XV annexed hereto, as such
Acquired Assets Security Agreement may thereafter be amended, supplemented
or otherwise modified from time to time.
"Company Security Agreements" means the Company Accounts Receivable
Security Agreement, the Company Acquired Assets Security Agreement and the
Company Tangible Assets Security Agreement.
"Company Tangible Assets Security Agreement" means the Tangible
Assets Security Agreement executed and delivered by Company on the Closing
Date, substantially in the form of Exhibit XVI annexed hereto, as such
Tangible Assets Security Agreement may thereafter be amended, supplemented
or otherwise modified from time to time.
"Compensation Limit" has the meaning assigned to that term in
subsection 6.11.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit VI annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 5.1(iv).
"Confidential Information Memorandum" means that certain
Confidential Information Memorandum and supplement thereto prepared by
Goldman, Sachs & Co. relating to the AXELs and Revolving Loans dated April
1996.
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"Consolidated Adjusted EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense (to the extent deducted in calculating Consolidated Net
Income), (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense (including, without
duplication, the amortization of Program Obligations), (vi) the TeleRep
Bonus Payment when actually received and (vii) other non-cash items
reducing Consolidated Net Income less (a) Program Payments and (b) other
non-cash items increasing Consolidated Net Income (including the
amortization of (1) the bonus payments in an aggregate amount of
$5,000,000 paid by CBS, Inc. to Company in December 1995 and March 1996
and (2) the TeleRep Bonus Payment, but excluding barter), all of the
foregoing as determined on a consolidated basis for BCC and its
Subsidiaries in conformity with GAAP except to the extent the express
provisions of this definition require a calculation other than in
accordance with GAAP.
"Consolidated Capital Expenditures" means, for any period, the sum
of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of
Capital Leases which is capitalized on the consolidated balance sheet of
BCC and its Subsidiaries) by BCC and its Subsidiaries during that period
that, in conformity with GAAP, are included in "additions to property,
plant or equipment" or comparable items reflected in the consolidated
statement of cash flows of BCC and its Subsidiaries plus (ii) to the
extent not covered by clause (i) of this definition, the aggregate of all
expenditures by BCC and its Subsidiaries during that period to acquire (by
purchase or otherwise) the business, property or fixed assets of any
Person, or the stock or other evidence of beneficial ownership of any
Person that, as a result of such acquisition, becomes a Subsidiary of BCC;
provided that Consolidated Capital Expenditures shall not include (a)
expenditures made in connection with (1) the Acquisitions, (2) any
Investment permitted by subsection 6.3(x), and (3) the replacement,
substitution or restoration of assets (x) to the extent financed from
insurance proceeds paid on account of the loss of or damage to the assets
being replaced or restored or (y) with awards of compensation arising from
the taking by eminent domain or condemnation of the assets being replaced,
(b) for purposes of subsection 6.8 only, amounts which would otherwise
constitute Consolidated Capital Expenditures hereunder as a result of (1)
the receipt by Company of a satellite news gathering truck from CBS, Inc.
or the purchase of a satellite news gathering truck from funds received
from CBS, Inc. pursuant to that certain agreement between Company and CBS,
Inc. dated December 1995 and (2) the renovations to the studio and
corporate offices of KDLH-TV in Duluth, Minnesota to the extent such
renovations are paid for or reimbursed by the city of Duluth or (c) for
purposes of subsection 6.8 and the definitions of "Fixed Charge Coverage
Ratio" and "Pro Forma Capital Expenditures", LMA Capital Expenditures and
expenditures made in connection with Permitted Acquisitions.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
interest expense not payable in Cash (including amortization of discount
and amortization of debt issuance costs).
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"Consolidated Credit Facilities Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness of BCC and its Subsidiaries under this Agreement and the Loan
Documents, determined on a consolidated basis in accordance with GAAP.
"Consolidated Current Assets" means, as at any date of
determination, the total assets of BCC and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of BCC and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities
in conformity with GAAP.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for
such period of (a) Consolidated Adjusted EBITDA and (b) the Consolidated
Working Capital Adjustment minus (ii) the sum, without duplication, of the
amounts for such period of (a) voluntary and scheduled repayments of
Consolidated Total Debt (excluding repayments of Revolving Loans except to
the extent the Revolving Loan Commitments are permanently reduced in
connection with such repayments), (b) Consolidated Capital Expenditures
(net of any proceeds of any related financings with respect to such
expenditures) to the extent permitted under this Agreement, (c)
Consolidated Cash Interest Expense, and (d) the provision for current
taxes based on income of BCC and its Subsidiaries and payable in cash with
respect to such period.
"Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of BCC and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of
BCC and its Subsidiaries, including Liquidated Damages, if any, and all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under
Interest Rate Agreements, but excluding, however, any amounts referred to
in subsection 2.3 payable to Agents and Lenders on or before the Closing
Date.
"Consolidated Net Income" means, for any period, the net income (or
loss) of BCC and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of BCC) in which any other Person (other
than BCC or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to
BCC or any of its Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of BCC or is merged into or consolidated with BCC or any of its
Subsidiaries or that Person's assets are acquired by BCC or any of its
Subsidiaries, (iii) the income of any Subsidiary of
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BCC to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (iv) any after-tax gains or
losses attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary
losses.
"Consolidated Rental Payments" means, for any period, the aggregate
amount of all rents paid or payable by BCC and its Subsidiaries on a
consolidated basis during that period under all Capital Leases and
Operating Leases to which BCC or any of its Subsidiaries is a party as
lessee (net of sublease income).
"Consolidated Total Debt" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness (other than
Indebtedness with respect to Program Obligations) of BCC and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds
(or is less than) Consolidated Working Capital as of the end of such
period.
"Contingent Obligation", as applied to any Person, means any direct
or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Hedge
Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse
or sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (1) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise)
or (2) to maintain the solvency or any balance sheet item, level of income
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or financial condition of another if, in the case of any agreement
described under subclauses (1) or (2) of this sentence, the primary
purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to
which such Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Credit Facilities Leverage Ratio" means the ratio of (i)
Consolidated Credit Facilities Debt as of the last day of any Fiscal
Quarter to (ii) Consolidated Adjusted EBIDTA for the four-Fiscal Quarter
period then ended, in each case as set forth in the most recent Compliance
Certificate delivered by Company to Administrative Agent pursuant to
clause (iv) of subsection 5.1 or the certificate delivered by Company
pursuant to subsection 3.1Q.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which BCC or any of its Subsidiaries
is a party.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Eligible Assignee" means (i)(a) a commercial bank organized under
the laws of the United States or any state thereof; (b) a savings and loan
association or savings bank organized under the laws of the United States
or any state thereof; (c) a commercial bank organized under the laws of
any other country or a political subdivision thereof; provided that (1)
such bank is acting through a branch or agency located in the United
States or (2) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; and (d) any other entity which is
an "accredited investor" (as defined in Regulation D under the Securities
Act) which extends credit or buys loans as one of its businesses including
insurance companies, mutual funds and lease financing companies; and (ii)
any Lender and any Affiliate of any Lender; provided that no Affiliate of
Company shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
BCC, any of its Subsidiaries or any of their respective ERISA Affiliates.
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"Employment Agreements" means, collectively, (i) the Employment
Agreement dated as of June 1, 1996 between Company and Benedek, (ii) the
Employment Agreement dated as of June 1, 1996 between Company and K. James
Yager, (iii) the Employment Agreement dated as of June 1, 1996 between
Company and Terry Hurley, and (iv) the Employment Agreement dated as of
March 8, 1996 between Company and Douglas E. Gealy, in each case providing
for the exclusive employment of such Person by Company, in the form
provided to Arranging Agent and Administrative Agent pursuant to
subsection 3.1T on or prior to the Closing Date.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, industrial hygiene, land use or the
protection of human, plant or animal health or welfare, in any manner
applicable to BCC or any of its Subsidiaries or any Facility, including
the Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. 'SS' 9601 et seq.), 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 Federal Water Pollution Control Act (33
U.S.C. 'SS' 1251 et seq.), the Clean Air Act (42 U.S.C. 'SS' 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. 'SS' 2601 et seq.),
the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 'SS'136
et seq.), the Occupational Safety and Health Act (29 U.S.C. 'SS' 651 et
seq.), the Oil Pollution Act (33 U.S.C. 'SS' 2701 et seq) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. 'SS' 11001
et seq.), each as amended or supplemented, any analogous present or
future state or local statutes or laws, and any regulations promulgated
pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) any member of an
affiliated
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service group within the meaning of Section 414(m) or (o) of the Internal
Revenue Code of which that Person, any corporation described in clause (i)
above or any trade or business described in clause (ii) above is a member.
Any former ERISA Affiliate of BCC or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of BCC or such Subsidiary
within the meaning of this definition with respect to the period such
entity was an ERISA Affiliate of BCC or such Subsidiary and with respect
to liabilities arising after such period for which BCC or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to
meet the minimum funding standard of Section 412 of the Internal Revenue
Code with respect to any Pension Plan (whether or not waived in accordance
with Section 412(d) of the Internal Revenue Code) or the failure to make
by its due date a required installment under Section 412(m) of the
Internal Revenue Code with respect to any Pension Plan or the failure to
make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by BCC, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution
by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which would be reasonably likely to
constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on BCC, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal of BCC,
any of its Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and
4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by BCC, any of its Subsidiaries or any
of their respective ERISA Affiliates of notice from any 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 or 4042 of ERISA; (viii) the occurrence of an act or
omission which would be reasonably likely to give rise to the imposition
on BCC, any of its Subsidiaries or any of their respective ERISA
Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409, Section 502(c), (i) or
(l), or Section 4071 of ERISA in respect of any Employee Benefit Plan;
(ix) the assertion of a material claim (other than routine claims for
benefits) against any Employee Benefit Plan other than a Multiemployer
Plan or the assets thereof, or against BCC, any of its Subsidiaries or any
of their respective ERISA Affiliates in connection with any Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice of
the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the
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Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan
to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Exchange Debenture Indenture" means the indenture pursuant to which
the Exchange Debentures may be issued, as such indenture may be amended
from time to time to the extent permitted under subsection 6.14B.
"Exchange Debentures" means the 15% Exchange Debentures due 2007 of
BCC issuable pursuant to the Exchange Debenture Indenture in exchange for
the Exchangeable Preferred Stock.
"Exchangeable Preferred Certificate of Designation" means the
provisions of BCC's Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof relating to the
Exchangeable Preferred Stock, in the form delivered to Arranging Agent,
Administrative Agent and Lenders prior to their execution of this
Agreement and as such provisions may be amended from time to time
thereafter to the extent permitted under subsection 6.14A.
"Exchangeable Preferred Stock" means the 15% Exchangeable Redeemable
Senior Preferred Stock due 2007 of BCC, par value $0.01 per share, with a
liquidation preference of $100 per share and with the other terms set
forth in the Exchangeable Preferred Certificate of Designation.
"Existing Company Pledge Agreement" means that certain Company
Pledge and Security Agreement by and between Company and The Bank of New
York, a New York banking corporation, as agent for and representative of
the trustee under the Existing Senior Note Indenture, the holders of the
Existing Senior Notes and the holders of Permitted Pari Passu Debt (as
defined therein), dated as of March 10, 1995, as amended from time to time
to the extent permitted under subsection 6.14B.
"Existing LLC Pledge Agreement" means that certain LLC Pledge
Agreement by and between Benedek and The Bank of New York, a New York
banking corporation, as agent for and representative of the trustee under
the Existing Senior Note Indenture,
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the holders of the Existing Senior Notes and the holders of Permitted Pari
Passu Debt (as defined therein), dated as of March 10, 1995, as amended
from time to time to the extent permitted under subsection 6.14B, which
shall be terminated upon the consummation of the Reorganization.
"Existing Pledge Agreement" means, collectively, the Existing
Company Pledge Agreement and the Existing LLC Pledge Agreement prior to
the Reorganization, and upon consummation of the Reorganization, the
Existing Company Pledge Agreement.
"Existing Senior Note Indenture" means that certain Indenture by and
among Company, as issuer, License Sub, as guarantor, and The Bank of New
York, a New York banking corporation, as trustee, dated as of March 1,
1995, pursuant to which the Existing Senior Notes were issued, as amended
from time to time to the extent permitted under subsection 6.14B.
"Existing Senior Notes" means Company's $135,000,000 in initial
aggregate principal amount of 11-7/8% Senior Secured Notes due 2005 issued
pursuant to the Existing Senior Note Indenture.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter
or heretofore owned, leased, operated or used by BCC or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"FCC" means the Federal Communications Commission and any successor
or substitute governmental commission, agency, department, board or
authority performing functions similar to those performed by the Federal
Communications Commission on the date hereof.
"FCC Consents" means (i) the Brissette FCC Consent, (ii) the
Stauffer FCC Consent, and (iii) with respect to any television broadcast
station acquired by Company after the Closing Date, the initial written
action or actions of the FCC approving the transfer or assignment of the
FCC Licenses used in connection with the ownership and operation of such
station from the holder thereof immediately prior to giving effect to such
acquisition to License Sub, in form and in substance reasonably
satisfactory to Administrative Agent, Arranging Agent and Requisite
Lenders.
"FCC Licenses" means all licenses, authorizations, waivers and
permits required under the Communications Act or from any Communications
Regulatory Authority.
"FCC Regulations" means all rules, regulations, written policies,
orders and decisions of the FCC under the Communications Act.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted
average of the rates on
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overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
such day on such transactions received by Administrative Agent from three
Federal funds brokers of recognized standing selected by Administrative
Agent.
"Final Order" means a written order, consent or other action of the
FCC (i) which shall not have been reversed, stayed, enjoined, set aside,
annulled or suspended and (ii) in respect of which either (a) the time for
filing a request for administrative or judicial relief, or for instituting
administrative review thereof sua sponte, shall have expired without any
such filing having been made or notice of such review having been issued,
or (b) any filing of a request for administrative or judicial relief, or
administrative review thereof sua sponte, shall have been disposed of
favorably with respect to confirmation of such order or action or the
grant of such consent and the time for seeking further relief with respect
thereto shall have expired without any request for such further relief
having been filed.
"Financial Plan" has the meaning assigned to that term in subsection
5.1(xiv).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
Liens permitted pursuant to subsection 6.2A(iii) and (ii) such Lien is the
only Lien (other than Permitted Encumbrances and Liens permitted pursuant
to subsection 6.2) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of BCC and its Subsidiaries
ending on December 31 of each calendar year.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of
(i) (a) Consolidated Adjusted EBITDA less (b) Consolidated Capital
Expenditures less (c) taxes actually paid and payable in cash by BCC and
its Subsidiaries plus (d) the aggregate amount of all rents paid and
payable by BCC and its Subsidiaries under all Operating Leases, in each
case during such period, to (ii) the sum of (a) Consolidated Cash Interest
Expense plus (b) total scheduled principal amortization of all outstanding
Consolidated Total Debt plus (c) Consolidated Rental Payments, in each
case during such period.
"Flood Hazard Property" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
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"Funding and Payment Office" means (i) the office of Administrative
Agent located at 425 Lexington Avenue, New York, New York 10017 or (ii)
such other office of Administrative Agent as may from time to time
hereafter be designated as such in a written notice delivered by
Administrative Agent to Company and each Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set
forth in 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, in each case as the same are
applicable to the circumstances as of the date of determination.
"GE Capital" means General Electric Capital Corporation, a New York
corporation.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court.
"Guaranties" means the BCC Guaranty and the License Sub Guaranty.
"Hazardous Materials" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "acutely hazardous waste", "radioactive waste",
"biohazardous waste", "pollutant", "toxic pollutant", "contaminant",
"restricted hazardous waste", "infectious waste", "toxic substances", or
any other term or expression intended to define, list or classify
substances by reason of properties harmful to health, safety or the indoor
or outdoor environment (including harmful properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity,
"TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any
radioactive materials; (vi) any asbestos-containing materials; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains
any oil or dielectric fluid containing polychlorinated biphenyls; (ix)
pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor
or outdoor environment.
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"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or
handling of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more
than six months from the date of incurrence of the obligation in respect
thereof or (b) evidenced by a note or similar written instrument, (v) to
the extent not otherwise included above, all liabilities of that Person
with respect to Program Obligations, and (vi) all indebtedness secured by
any Lien on any property or asset owned or held by that Person regardless
of whether the indebtedness secured thereby shall have been assumed by
that Person or is nonrecourse to the credit of that Person. Obligations
under Interest Rate Agreements and Currency Agreements constitute (1) in
the case of Hedge Agreements, Contingent Obligations, and (2) in all other
cases, Investments, and in neither case constitute Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection
9.3.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for
the conduct of the business of BCC and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of BCC and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, each February 1, May 1, August 1 and November 1 of each year,
commencing on the first such date to occur after the Closing Date, and
(ii) with respect to any Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Loan; provided that in the case of each
Interest Period of six months, "Interest Payment Date" shall also include
the date that is three months after the commencement of such Interest
Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
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"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which BCC or any of its Subsidiaries
is a party.
"Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any
successor statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by BCC or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary
of BCC), (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of BCC from any Person
other than BCC or any of its Subsidiaries, of any equity Securities of
such Subsidiary, (iii) any direct or indirect loan, advance (other than
advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by BCC or any of its Subsidiaries to any
other Person, including all indebtedness and accounts receivable from that
other Person that are not current assets or did not arise from sales to
that other Person in the ordinary course of business, or (iv) Interest
Rate Agreements or Currency Agreements not constituting Hedge Agreements.
The amount of any Investment shall be the original cost of such Investment
plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Key Man Life Insurance Policies" means, collectively, key man life
insurance policies in form and substance satisfactory to Arranging Agent
and Administrative Agent obtained and maintained by Company on the lives
of Benedek and K. James Yager, naming Company as the sole beneficiary and
Administrative Agent as collateral assignee.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, satisfactory in form and substance to
Collateral Agent, pursuant to which such lessor agrees, for the benefit of
Collateral Agent, that without any further consent of such lessor or any
further action on the part of the Loan Party holding such Leasehold
Property, such Leasehold Property may be encumbered pursuant to a Mortgage
and may be assigned to the purchaser at a foreclosure sale or in a
transfer in lieu of such a sale (and to a subsequent third party assignee
if Collateral Agent, any Lender, or an Affiliate
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of either so acquires such Leasehold Property) and to such other matters
relating to such Leasehold Property as Collateral Agent may reasonably
request.
"Leasehold Property" means any leasehold interest of any Loan Party
as lessee under any lease of real property.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 9.1; provided that
the term "Lenders", when used in the context of a particular Commitment,
shall mean Lenders having that Commitment.
"Leverage Ratio" means the ratio of (i) Consolidated Total Debt as
of the last day of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period then ended, in each case as set forth
in the most recent Compliance Certificate delivered by Company to
Administrative Agent pursuant to clause (iv) of subsection 5.1 or the
certificate delivered by Company pursuant to subsection 3.1Q.
"License Sub" means, prior to the Reorganization, Benedek
Broadcasting Company, L.L.C., a Delaware limited liability company, and
upon and after the Reorganization, Benedek License Corporation, a Delaware
corporation, and any other Person established solely for the purpose of
holding the FCC Licenses now or hereafter acquired or owned by Company,
which Person shall be a wholly owned Subsidiary of Company.
"License Sub Guaranty" means the License Sub Guaranty executed and
delivered by License Sub on the Closing Date, substantially in the form of
Exhibit XVIII annexed hereto, as such License Sub Guaranty may thereafter
be amended, supplemented or otherwise modified from time to time.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof,
and any agreement to give any security interest) and any option, trust or
other preferential arrangement having the practical effect of any of the
foregoing.
"Liquidated Damages" means additional dividends or interest payable
at the rate of 0.50% per annum on the Senior Subordinated Notes or the
Exchangeable Preferred Stock, as the case may be, as a result of BCC's
failure to comply with the registration rights granted in connection
therewith.
"LMA" means a local marketing arrangement, sale agreement, time
brokerage agreement, management agreement or similar agreement pursuant to
which a Person, subject to customary preemption rights and other
limitations, (i) obtains the right to sell the advertising inventory of a
television broadcast station of which another Person is the licensee, (ii)
obtains the right to exhibit programming and sell advertising time of such
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television broadcast station or (iii) manages the selling operations of
such television broadcast station with respect to advertising inventory of
such station.
"LMA Capital Expenditure" means all expenditures (whether paid in
cash or other consideration or accrued as a liability and including that
portion of Capital Leases which is capitalized on the consolidated balance
sheet of BCC and its Subsidiaries) by Company pursuant to, in connection
with or in respect of an LMA which, in conformity with GAAP, would be
included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of BCC and its
Subsidiaries.
"Loan" or "Loans" means one or more of the AXELs Series A, AXELs
Series B or Revolving Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Guaranties,
the Collateral Documents and any Interest Rate Agreement entered into by
Company with a Lender or an Affiliate of any Lender.
"Loan Party" means each of BCC, Company, License Sub and any of
BCC's other Subsidiaries, if any, from time to time executing a Loan
Document, and "Loan Parties" means all such Persons, collectively.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of BCC and its Subsidiaries, taken as a whole, or
(ii) the material impairment of the ability of any Loan Party to perform,
or of Administrative Agent, Collateral Agent or Lenders to enforce, the
Loan Documents or the Obligations.
"Material Contract" means any of the Network Affiliation Agreements,
the Employment Agreements with Benedek and K. James Yager, any LMA or
acquisition agreement entered into by Company as permitted hereunder, any
Program Contract pursuant to which Company's aggregate Program Obligations
thereunder are equal to or greater than $500,000 (calculated as the
unamortized amount of such Program Obligations on any date of
determination), and any other contract or other arrangement to which BCC
or any of its Subsidiaries is a party (other than the Loan Documents) for
which breach, nonperformance, cancellation or failure to renew would
reasonably be expected to have a Material Adverse Effect.
"Material Fee Property" means any fee interest in real property
reasonably determined by Administrative Agent to be of material value as
Collateral or of material importance to the operations of BCC or any of
its Subsidiaries.
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"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral
or of material importance to the operations of BCC or any of its
Subsidiaries.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and
delivered by any Loan Party, substantially in the form of Exhibit XXI
annexed hereto or in such other form as may be approved by Collateral
Agent in its sole discretion, in each case with such changes thereto as
may be recommended by Collateral Agent's local counsel based on local laws
or customary local mortgage or deed of trust practices, or (ii) at
Collateral Agent's option, in the case of an Additional Mortgaged Property
(as defined in subsection 5.8), an amendment to an existing Mortgage, in
form satisfactory to Collateral Agent, adding such Additional Mortgaged
Property to the Real Property Assets encumbered by such existing Mortgage,
in either case as such security instrument or amendment may be amended,
supplemented or otherwise modified from time to time. "Mortgages" means
all such instruments, including the Closing Date Mortgages (as defined in
subsection 3.1H) and any Additional Mortgages (as defined in subsection
5.8), collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property (as
defined in subsection 3.1H) or an Additional Mortgaged Property (as
defined in subsection 5.8).
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale, net of any
bona fide direct costs incurred in connection with such Asset Sale,
including (i) income taxes reasonably estimated to be actually payable
within two years of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest
on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is required to be repaid under
the terms thereof as a result of such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by BCC or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of BCC or any
of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net
of any actual and reasonable documented costs incurred by BCC or any of
its Subsidiaries in connection with the adjustment or settlement of any
claims of BCC or such Subsidiary in respect thereof.
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"Net Life Insurance Proceeds" means any Cash payments or proceeds
received by BCC or any of its Subsidiaries, or by Collateral Agent as
collateral assignee, under any Key Man Life Insurance Policy.
"Network" means one or more of National Broadcasting Company
Incorporated, American Broadcasting Company, CBS, Inc. or Fox Broadcasting
Company, as the context requires.
"Network Affiliation" means a relationship under a Network
Affiliation Agreement in full force and effect between a Network and the
applicable Station or between a Network and Company in respect of the
applicable Station.
"Network Affiliation Agreements" means, collectively, the
Affiliation Agreements between Company or any Station, as the case may be,
and any of the Networks, as any such agreement may be amended,
supplemented or otherwise modified from time to time, and including any
replacement agreement.
"Nielsen" means A.C. Nielsen Company.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness (i) as to which neither BCC nor its Subsidiaries (a) provide
credit support (including any undertaking, agreement or instrument which
would constitute Indebtedness), (b) is directly or indirectly liable or
(c) constitute the lender and (ii) no default with respect to which would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of BCC or its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Notes" means one or more of the AXEL Series A Notes, AXEL Series B
Notes or Revolving Notes or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified therein.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Agents, Lenders or their respective
Affiliates or any of them under the Loan Documents, whether for principal,
interest, fees, expenses, indemnification or otherwise.
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"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and
by its chief financial officer or its treasurer; provided that every
Officers' Certificate with respect to the compliance with a condition
precedent to the making of any Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of the signers, they have made or have caused to be
made such examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"Ownership Reports" means, with respect to any Station, the reports
and certifications filed with the FCC pursuant to 47 C.F.R. 'SS' 73.3615,
or any comparable reports filed pursuant to any successor regulation
thereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"Permitted Acquisition" means an acquisition, whether through the
purchase of the assets thereof or of the stock or other equity interests
of an entity owning such assets and whether pursuant to the exercise of a
purchase option under a Permitted LMA or otherwise, by Company or a
Special Purpose Subsidiary of a Television Station Asset Group, within a
market in which Company owns and operates a Station or Stations as of the
date hereof; provided, however, that to the extent such acquisition is
made through the acquisition of stock or other equity interests of any
Person, such Person shall, immediately following the consummation of such
acquisition, be merged with and into Company, with Company being the
surviving corporation in such merger.
"Permitted Encumbrances" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or by ERISA and any such Lien relating to or
imposed in connection with any Environmental Claim):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 5.3;
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(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law, in each case incurred in the ordinary course of
business (a) for amounts not yet overdue or (b) for amounts that are
overdue and that (in the case of any such amounts overdue for a
period in excess of 10 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case
of a Lien with respect to any portion of the Collateral, such
contest proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so
long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account
thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 7.8;
(v) leases or subleases granted to third parties permitted
hereunder and not interfering in any material respect with the
ordinary conduct of the business of Company or any of its
Subsidiaries or resulting in a material diminution in the value of
any Collateral as security for the Obligations;
(vi) easements, rights-of-way, restrictions, encroachments,
and other minor defects or irregularities in title, in each case
which do not and will not interfere in any material respect with the
ordinary conduct of the business of Company or any of its
Subsidiaries or result in a material diminution in the value of any
Collateral as security for the Obligations and any exceptions to
title expressly set forth in the Closing Date Mortgage Policies or
any Additional Mortgage Policy;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted hereunder, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to,
or (c) subordination of the interest of the lessee or sublessee
under such lease to any restriction or encumbrance referred to in
the preceding clause (b), so long as the holder of such restriction
or encumbrance agrees to recognize the rights of such lessee or
sublessee under such lease; and
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(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement.
"Permitted LMA" means an LMA entered into by Company or a Special
Purpose Subsidiary with an unaffiliated Person with respect to a
television broadcast station (i) which, immediately prior to the time the
LMA is entered into, is not owned or operated by Company or any of its
Affiliates and (ii) which is located in a market in which Company owns and
operates a Station or Stations as of the date hereof.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments (whether federal, state or local, domestic or foreign, and
including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.
"Pledged Collateral" means, collectively, the "Pledged Collateral"
as defined in the BCC Pledge Agreement and the Existing Company Pledge
Agreement.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Pricing Reduction" means, if at any time after the first
anniversary of the Closing Date, as of the end of any Fiscal Quarter, the
Leverage Ratio is equal to or less than 5.75:1.00, a pricing reduction
equal to .25%. The Pricing Reduction shall be determined by reference to
the Leverage Ratio set forth in the most recent financial statements
delivered by Company to Administrative Agent and Lenders pursuant to
clauses (ii) or (iii) of subsection 5.1 (accompanied by a Compliance
Certificate delivered by Company pursuant to clause (iv) of subsection
5.1). Any changes in the Pricing Reduction shall become effective on the
day following delivery of the relevant Compliance Certificate to
Administrative Agent and Lenders and shall remain in effect through the
next scheduled date for delivery of a Compliance Certificate.
Notwithstanding anything herein to the contrary, (i) from the Closing Date
to and including the date of the first anniversary of the Closing Date,
the Pricing Reduction shall be zero and (ii) at any time an Event of
Default shall have occurred and be continuing, the Pricing Reduction shall
be zero.
"Pro Forma Capital Expenditures" means, as of any date of
determination, the greater of (i) 90% of Consolidated Capital Expenditures
for the 12-month period ending on such date and (ii) Company's good faith
estimate of Consolidated Capital Expenditures for the 12-month period
succeeding the date of determination.
"Pro Forma Fixed Charge Coverage Ratio" means, as of any date of
determination, with respect to any LMA Capital Expenditures in an
aggregate amount in excess of $1,000,000 or any Permitted Acquisition, the
ratio of (i) (a) the sum of Cash
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and Cash Equivalents on the consolidated balance sheet of BCC and its
Subsidiaries as of last day of the most recently ended Fiscal Quarter plus
Consolidated Adjusted EBITDA for the most recently ended four-Fiscal
Quarter period minus (b) the sum of $2,000,000 plus Pro Forma Capital
Expenditures plus taxes actually paid in cash by BCC and its Subsidiaries
during the most recently ended four-Fiscal Quarter period plus the amount
of the applicable LMA Capital Expenditure or aggregate expenditures to be
made in connection with the applicable Permitted Acquisition to (ii) the
aggregate amount of all regularly scheduled payments of principal and
interest due on all outstanding Consolidated Total Debt (excluding any
purchase money Indebtedness to be incurred in accordance with subsection
6.1(viii), the proceeds of which are to be used to make all or a portion
of the applicable LMA Capital Expenditure) during the 12-month period
succeeding the date of determination.
"Program Contracts" means all contracts for the acquisition of the
right to broadcast films, series and other programming material.
"Program Obligations" means all obligations of the Company under
Program Contracts payable in a form other than barter.
"Program Payments" means, for any period of determination, the
aggregate cash payments actually made or required to be made by or on
behalf of Company and its Subsidiaries during such period with respect to
or on account of Program Obligations.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the AXEL Series A Commitment or
the AXEL Series A of any Lender, the percentage obtained by dividing (x)
the AXEL Series A Exposure of that Lender by (y) the aggregate AXEL Series
A Exposure of all Lenders, (ii) with respect to all payments, computations
and other matters relating to the AXEL Series B Commitment or the AXEL
Series B of any Lender, the percentage obtained by dividing (x) the AXEL
Series B Exposure of that Lender by (y) the aggregate AXEL Series B
Exposure of all Lenders, (iii) with respect to all payments, computations
and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender, the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan
Exposure of all Lenders, and (iv) for all other purposes with respect to
each Lender, the percentage obtained by dividing (x) the sum of the AXEL
Series A Exposure of that Lender plus the AXEL Series B Exposure of that
Lender plus the Revolving Loan Exposure of that Lender by (y) the sum of
the aggregate AXEL Series A Exposure of all Lenders plus the aggregate
AXEL Series B Exposure of all Lenders plus the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage may
be adjusted by assignments permitted pursuant to subsection 9.1. The
initial Pro Rata Share of each Lender for purposes of each of clauses (i),
(ii), (iii) and (iv) of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
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"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Collateral Agent's
reasonable judgment, to give constructive notice of such Leasehold
Property to third-party purchasers and encumbrancers of the affected real
property. For purposes of this definition, the term "Record Document"
means, with respect to any Leasehold Property, (a) the lease evidencing
such Leasehold Property or a memorandum thereof, executed and acknowledged
by the owner of the affected real property, as lessor, or (b) if such
Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient
to give such constructive notice upon recordation and otherwise in form
reasonably satisfactory to Collateral Agent.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Reference Lender" means Canadian Imperial Bank of Commerce.
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Agreements" means, collectively, the Brissette Acquisition
Agreement, the Stauffer Acquisition Agreement, the Exchangeable Preferred
Certificate of Designation, the Seller Preferred Certificate of
Designation, the Existing Senior Note Indenture, the Senior Subordinated
Note Indenture, the Warrant Agreement, the Exchange Debentures and the
Exchange Debenture Indenture.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the
air, soil, surface water or groundwater.
"Reorganization" means, collectively, (i) the merger of Brissette
and all of its Subsidiaries with and into Company, with Company being the
surviving corporation, such that all of the operating assets of the
Brissette Stations will be owned directly by Company, and (ii) the merger
of Benedek Broadcasting Company, L.L.C., a Delaware limited liability
company, with and into Benedek License Corporation, a Delaware corporation
and a wholly owned Subsidiary of Company, with Benedek License Corporation
being the surviving corporation.
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"Requisite Lenders" means, except as otherwise provided in
subsection 8.6, (i) Lenders having or holding 51% or more of the aggregate
AXEL Series A Exposure of all Lenders plus the aggregate AXEL Series B
Exposure of all Lenders and (ii) Lenders having or holding 51% or more of
the aggregate Revolving Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of BCC or its Subsidiaries, now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders of
that class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of stock of BCC or its Subsidiaries, now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of BCC or its Subsidiaries, now or hereafter
outstanding, and (iv) any payment or prepayment of principal of, premium,
if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar
payment with respect to, any Subordinated Indebtedness.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(iii), and
"Revolving Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Revolving Loan Commitment Termination Date" means May 1, 2001.
"Revolving Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after
the termination of the Revolving Loan Commitments, the aggregate
outstanding principal amount of the Revolving Loans of that Lender.
"Revolving Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iii).
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(iii) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 9.1B(i) in connection with assignments of the Revolving Loan
Commitments and Revolving Loans of any Lenders, in each case substantially
in the form of Exhibit V annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"Satellite Stations" means, collectively, the following television
broadcast stations: KGWL-TV licensed to serve Lander, Wyoming; KGWR-TV
licensed to serve Rock Springs, Wyoming; KSTF(TV) licensed to serve
Scottsbluff, Nebraska; and KTVS(TV) licensed to serve Sterling, Colorado.
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"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Seller Preferred Certificate of Designation" means the provisions
of BCC's Certificate of Designation, Preferences and Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof relating to the
Seller Preferred Stock, in the form delivered to Arranging Agent,
Administrative Agent and Lenders prior to their execution of this
Agreement and as such provisions may be amended from time to time
thereafter to the extent permitted under subsection 6.14A.
"Seller Preferred Stock" means the preferred stock of BCC issued to
GE Capital with the terms set forth in the Seller Preferred Certificate of
Designation.
"Senior Note Trustee" means The Bank of New York, a New York banking
corporation, in its capacity as trustee under the Existing Senior Note
Indenture and as agent for and representative of the holders of the
Existing Senior Notes, and any successor trustee appointed in accordance
with the Existing Senior Note Indenture.
"Senior Subordinated Note Indenture" means the indenture pursuant to
which the Senior Subordinated Notes are issued, in the form delivered to
Arranging Agent, Administrative Agent and Lenders prior to their execution
of this Agreement and as such indenture may be amended from time to time
to the extent permitted under subsection 6.14B.
"Senior Subordinated Notes" means $90,178,000 in aggregate principal
amount of the 13.25% Senior Subordinated Discount Notes due 2006 of BCC
issued pursuant to the Senior Subordinated Note Indenture.
"Solvent" means, with respect to any Person, that as of the date of
determination both (i)(a) the then fair saleable value of the property of
such Person is (1) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (2) not less than the amount
that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction;
and (c) such Person does not intend to incur, or believe (nor
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should it reasonably believe) that it will incur, debts beyond its ability
to pay such debts as they become due; and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Special Purpose Subsidiary" means a direct Subsidiary of BCC or of
Company (i) which has not acquired any assets (other than Cash to the
extent permitted under subsection 6.3(x)) directly from BCC or any of its
Subsidiaries, (ii) no more than 90% of the capital stock or other equity
interests of which are owned by BCC, Company and any of their Affiliates
(unless such Subsidiary is party to a Permitted LMA or has made a
Permitted Acquisition in accordance with subsection 6.7(ix) in which case
such Subsidiary may be 100% owned by BCC or Company), (iii) the capital
stock or other equity interests of which, to the extent owned by BCC,
Company or any of their Affiliates, is subject to a First Priority Lien of
Collateral Agent for the benefit of Lenders, and (iv) which, except as
otherwise provided in subsection 6.7(ix), has no Indebtedness other than
Non-Recourse Indebtedness.
"Stations" means, collectively, (i) each of the television broadcast
stations owned and operated by Company and its Subsidiaries on the Closing
Date as set forth in Schedule 4.1E annexed hereto, including the Brissette
Stations and the Stauffer Stations, and (ii) any television broadcast
station acquired after the Closing Date by Company or any of its
Subsidiaries.
"Stauffer" means Stauffer Communications, Inc., a Delaware
corporation.
"Stauffer Acquisition" means the transactions contemplated by the
Stauffer Acquisition Agreement, including the Stauffer License Transfer.
"Stauffer Acquisition Agreement" means that certain Assets Purchase
and Sale Agreement dated November 22, 1995, by and among Stauffer, Morris
Communications Corporation, a Georgia corporation, and Benedek Acquisition
Corporation, a Delaware corporation, as amended by that certain letter
agreement dated March 28, 1996 by and among Stauffer, Morris
Communications Corporation and Company, in the form delivered to Arranging
Agent, Administrative Agent and Lenders prior to their execution of this
Agreement and as such agreement may be amended from time to time
thereafter to the extent permitted under subsection 6.14A.
"Stauffer FCC Consent" means the initial written action or actions
of the FCC approving the Stauffer License Transfer.
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"Stauffer License Transfer" means the transfer (whether directly or
through Company) to License Sub of the FCC Licenses used in connection
with the ownership and operation of the Stauffer Stations.
"Stauffer Stations" means, collectively, the following television
broadcast stations: WIBW-TV licensed to serve Topeka, Kansas; KCOY-TV
licensed to serve Santa Maria, California; KMIZ(TV) licensed to serve
Columbia-Jefferson City, Missouri; KGWN-TV licensed to serve Cheyenne,
Wyoming; KSTF(TV) licensed to serve Scottsbluff, Nebraska; KTVS(TV)
licensed to serve Sterling, Colorado; KGWC-TV licensed to serve Casper,
Wyoming; KGWR-TV licensed to serve Rock Springs, Wyoming; and KGWL-TV
licensed to serve Lander, Wyoming.
"Subordinated Indebtedness" means (i) the Indebtedness of BCC
evidenced by the Senior Subordinated Notes, (ii) any Indebtedness of BCC
evidenced by the Exchange Debentures and (iii) any Indebtedness of BCC or
its Subsidiaries subordinated in right of payment to the Obligations
pursuant to documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material
terms in form and substance satisfactory to Administrative Agent and
Requisite Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or
other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the Person
or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the
direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof; provided,
however, that with respect to BCC or Company, references to Subsidiaries
shall not be deemed to include any Special Purpose Subsidiaries except for
purposes of subsections 4.6, 4.7, 4.11, 4.13, 4.18, 5.3, 5.6, 5.7 and 6.2D
and any defined terms used in the foregoing subsections.
"Supermajority Lenders" means (i) Lenders having or holding 75% or
more of the aggregate AXEL Series A Exposure of all Lenders plus the
aggregate AXEL Series B Exposure of all Lenders and (ii) Lenders having or
holding 75% of more of the aggregate Revolving Loan Exposure of all
Lenders.
"Supplemental Collateral Agent" has the meaning assigned to that
term in subsection 8.1D.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
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"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person is organized or in which that
Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business on all or part
of the net income, profits or gains (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case
of a Lender, its lending office).
"Tax Amounts" with respect to any calendar year means the sum of (i)
an amount equal to the product of (a) the Federal taxable income of
Company for such year as determined in good faith by the Board of
Directors and as certified by a nationally recognized tax accounting firm
and without taking into account the deductibility of state income taxes
for Federal income tax purposes multiplied by (b) the State Tax Percentage
(as defined below) plus (ii) the greater of (1) the product of (w) the
Federal taxable income of Company for such year as determined in good
faith by the Board of Directors and as certified by a nationally
recognized tax accounting firm and taking into account the deductibility
of the amount determined in clause (i) above as a state income tax for
Federal income tax purposes multiplied by (x) the Federal Tax Percentage
(as defined below) and (2) the product of (y) the alternative minimum
taxable income attributable to Company's stockholder(s) by reason of the
income of Company for such year as determined in good faith by the Board
of Directors and as certified by a nationally recognized tax accounting
firm multiplied by (z) the Federal Tax Percentage; provided, however, the
amount as calculated above shall be reduced by the amount of any income
tax benefit attributable to Company which could be realized by Company's
stockholder(s) in the current or a prior taxable year (including tax
losses, alternative minimum tax credits, other tax credits and
carryforwards or carrybacks thereof) to the extent not previously taken
into account. The amount of any such income tax benefit described in the
proviso to the preceding sentence shall be determined in a manner
consistent with the calculation of the Tax Amount for the relevant year.
The term "State Tax Percentage" shall mean the highest applicable
statutory marginal rate of state and local income tax to which an
individual resident of the Relevant Jurisdiction (as defined below) would
be subject in the relevant year of determination as a result of being a
stockholder of a corporation taxable as an S Corporation in such
jurisdiction (as certified to Administrative Agent by a nationally
recognized tax accounting firm). The term "Relevant Jurisdiction" shall
mean the jurisdiction in which, during the relevant taxable year, (i)
Company is doing business for state and local income tax purposes, (ii)
Company derives the first, second, third or fourth highest percentage of
its gross income as calculated for Federal income tax purposes (excluding
therefrom any gain or loss from the sale or other disposition of any
television station then owned by Company) and (iii) Company is taxable as
an S Corporation for state and local income tax purposes that imposes the
highest aggregate marginal rate of state and local income tax on
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individuals (as certified to Administrative Agent by a
nationally recognized tax accounting firm). The term "Federal
Tax Percentage" shall mean the highest applicable statutory marginal
rate of Federal income tax or, in the case of clause (ii)(2) above,
alternative minimum tax, to which an individual resident of the
United States would be subject in the relevant year of
determination (as certified to Administrative Agent by a nationally
recognized tax accounting firm); provided, however, that, for any year in
which Company is not taxable as an S Corporation for Federal income tax
purposes, the Federal Tax Percentage shall be zero. Notwithstanding the
foregoing, the sum of the State Tax Percentage and the Federal Tax
Percentage (the "Total Tax Percentage") shall not exceed the percentage
(the "Maximum Tax Percentage") equal to the lesser of (i) the highest
applicable statutory marginal rate of Federal, state, local income tax or,
when applicable, alternative minimum tax, to which a corporation doing
business in any state in which Company is doing business at the time of
determination would be subject in the relevant year of determination (as
certified to Administrative Agent by a nationally recognized tax
accounting firm) plus 5% and (ii) 55%. If the Total Tax Percentage exceeds
the Maximum Tax Percentage, the Federal Tax Percentage shall be reduced to
the extent necessary to cause the Total Tax Percentage to equal the
Maximum Tax Percentage. Distributions of Tax Amounts may be made from time
to time with respect to a tax year based on reasonable estimates, with
reconciliation within 40 days of the earlier of (i) Company's filing of
the Internal Revenue Service Form 1120S for the applicable taxable year
and (ii) the last date such form is required to be filed. Benedek will
enter into a binding agreement with Company to reimburse Company for
certain positive differences between the distributed amount and the Tax
Amount, which difference must be paid at the time of such reconciliation.
Estimated distributions of Tax Amounts are set forth on Schedule 1.1
annexed hereto.
"TeleRep Bonus Payment" means the signing bonus payment of $700,000
by TeleRep, Inc., the national sales representative firm for the Brissette
Stations, to Brissette, a pro rata portion of which shall be payable to
Company following the consummation of the Brissette Acquisition pursuant
to the Brissette Acquisition Agreement.
"Television Station Asset Group" means any group of assets which
constitute all or substantially all of the assets which would be necessary
to carry on the business of a television broadcast station and which, when
purchased by a single purchaser, would (together with any necessary FCC
Licenses, authorizations, working capital and operating location) be
substantially sufficient to allow such purchaser to carry on such
business.
"Title Company" means, collectively, Stewart Title and/or one or
more other title insurance companies reasonably satisfactory to Arranging
Agent and Collateral Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the aggregate principal amount of all outstanding
Revolving Loans.
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"Transaction Costs" means the fees, costs and expenses payable by
BCC and its Subsidiaries in connection with (i) the transactions
contemplated by the Loan Documents, (ii) the issuance of the Senior
Subordinated Notes, the Seller Preferred Stock, the Exchangeable Preferred
Stock and the Warrants, and (iii) the Acquisitions.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Unutilized Compensation Amount" means, as of any date of
determination, (i) the sum of the Compensation Limits for each Fiscal Year
ended after the Closing Date and prior to the date of determination minus
(ii) the sum of (a) the aggregate amount of cash compensation paid or
accrued to Benedek during such Fiscal Years plus (b) the aggregate amount
expended by Company or BCC to repurchase or redeem Warrants prior to the
date of determination.
"Warrants" means the 600,000 initial warrants and 888,000 contingent
warrants issued by BCC pursuant to the Warrant Agreement to the purchasers
of the Exchangeable Preferred Stock.
"Warrant Agreement" means the warrant agreement pursuant to which
the Warrants are issued, in the form delivered to Arranging Agent,
Administrative Agent and Lenders prior to their execution of this
Agreement and as such warrant agreement may be amended from time to time
to the extent permitted under subsection 6.14A.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiv)
of subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 5.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 4.3.
1.3 Other Definitional Provisions and Rules of Construction.
Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
References to "Sections" and "subsections" shall be to Sections and subsections,
respectively, of this Agreement unless otherwise specifically provided. The use
herein of the word "include" or "including", when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting language (such
as "without limitation" or
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"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Loans described in subsections
2.1A(i), 2.1A(ii) and 2.1A(iii).
(i) AXELs Series A. Each Lender severally agrees to lend to Company
on the Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the AXEL Series A Commitments to be used for the
purposes identified in subsection 2.5A. The amount of each Lender's AXEL
Series A Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate amount of the AXEL Series A Commitments is
$70,000,000; provided that the AXEL Series A Commitments of Lenders shall
be adjusted to give effect to any assignments of the AXEL Series A
Commitments pursuant to subsection 9.1B. Each Lender's AXEL Series A
Commitment shall expire immediately and without further action on July 31,
1996 if the AXELs Series A are not made on or before that date. Company
may make only one borrowing under the AXEL Series A Commitments. Amounts
borrowed under this subsection 2.1A(i) and subsequently repaid or prepaid
may not be reborrowed.
(ii) AXELs Series B. Each Lender severally agrees to lend to Company
on the Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the AXEL Series B Commitments to be used for the
purposes identified in subsection 2.5A. The amount of each Lender's AXEL
Series B Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate amount of the AXEL Series B Commitments is
$58,000,000; provided that the AXEL Series B Commitments of Lenders shall
be adjusted to give effect to any assignments of the AXEL Series B
Commitments pursuant to subsection 9.1B. Each Lender's AXEL Series B
Commitment shall expire immediately and without further action on July 31,
1996 if the AXELs Series B are not made on or before that date. Company
may make only one borrowing under the AXEL Series B Commitments. Amounts
borrowed under this subsection 2.1A(ii) and subsequently repaid or prepaid
may not be reborrowed.
(iii) Revolving Loans. Each Lender having a Revolving Loan
Commitment severally agrees, subject to the limitations set forth below
with respect to the maximum amount of Revolving Loans permitted to be
outstanding from time to time, to lend to Company from time to time during
the period from the Closing Date to but excluding
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the Revolving Loan Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5B. The
original amount of each Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate
original amount of the Revolving Loan Commitments is $15,000,000; provided
that the Revolving Loan Commitments of Lenders shall be adjusted to give
effect to any assignments of the Revolving Loan Commitments pursuant to
subsection 9.1B; and provided, further that the amount of the Revolving
Loan Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4B(ii) and 2.4B(iii).
Each Lender's Revolving Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that date; provided that
each Lender's Revolving Loan Commitment shall expire immediately and
without further action on July 31, 1996 if the AXELs are not made on or
before that date. Amounts borrowed under this subsection 2.1A(iii) may be
repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments
shall be subject to the following limitations in the amounts and during
the periods indicated:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the lesser of (1) the Revolving Loan
Commitments then in effect and (2) the Borrowing Base as then in
effect; and
(b) no more than $1,000,000 in Revolving Loans shall be made
on the Closing Date.
B. Borrowing Mechanics. AXELs or Revolving Loans made on any Funding Date
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount. Whenever Company desires that Lenders make
AXELs it shall deliver to Administrative Agent a Notice of Borrowing no later
than 10:00 A.M. (New York City time) at least three Business Days in advance of
the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least
one Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Lenders make Revolving Loans it shall
deliver to Administrative Agent a Notice of Borrowing no later than 10:00 A.M.
(New York City time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan) or on the proposed Funding
Date (in the case of a Base Rate Loan). The Notice of Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), (ii) the amount
and type of Loans requested, (iii) in the case of any Loans made on the Closing
Date, that such Loans shall be Base Rate Loans, (iv) in the case of Revolving
Loans, whether such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and
(v) in the case of any Loans requested to be made as Eurodollar Rate Loans, the
initial Interest Period requested therefor. AXELs and Revolving Loans may be
continued as or converted into
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Base Rate Loans and Eurodollar Rate Loans in the manner provided in subsection
2.2D. In lieu of delivering the above-described Notice of Borrowing, Company may
give Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All AXELs and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Funding Date, in same day funds in Dollars, at the Funding and
Payment Office. Upon satisfaction or waiver of the conditions precedent
specified in subsections 3.1 (in the case of Loans made on the Closing Date) and
3.2 (in the case of all Loans), Administrative Agent shall make the proceeds of
such Loans available to Company on the applicable Funding Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Loans
received by Administrative Agent from Lenders to be credited to the account of
Company at such account as Company shall specify in writing to Administrative
Agent.
Unless Administrative Agent shall have been notified by any Lender prior
to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent
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the amount of such Lender's Loan requested on such Funding Date, Administrative
Agent may assume that such Lender has made such amount available to
Administrative Agent on such Funding Date and Administrative Agent may, in its
sole discretion, but shall not be obligated to, make available to Company a
corresponding amount on such Funding Date. If such corresponding amount is not
in fact made available to Administrative Agent by such Lender, Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from such Funding Date until
the date such amount is paid to Administrative Agent, at the customary rate set
by Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 9.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "Register"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the AXEL
Series A Commitment, AXEL Series B Commitment and Revolving Loan
Commitment and the AXEL Series A, AXEL Series B and Revolving Loans from
time to time of each Lender, and each repayment or prepayment in respect
of the principal amount of the AXEL Series A, AXEL Series B or Revolving
Loans of each Lender. Any such recordation shall be conclusive and binding
on Company and each Lender, absent manifest error; provided that failure
to make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
applicable Loans.
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of the AXEL Series A, AXEL
Series B and each Revolving Loan made by it and each payment in respect
thereof. Any such recordation shall be conclusive and binding on Company,
absent manifest error; provided that failure to make any such recordation,
or any error in such recordation, shall not affect any Lender's
Commitments or Company's Obligations in respect of any applicable Loans;
and provided, further that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register shall
govern.
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(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in
subsection 9.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates CIBC-NYA to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent CIBC-NYA
serves in such capacity, CIBC-NYA and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes under
subsection 9.3.
E. Notes. Company shall execute and deliver on the Closing Date to each
Lender (or to Administrative Agent for that Lender) (i) an AXEL Series A Note
substantially in the form of Exhibit III annexed hereto to evidence that
Lender's AXEL Series A, in the principal amount of that Lender's AXEL Series A
and with other appropriate insertions, (ii) an AXEL Series B Note substantially
in the form of Exhibit IV annexed hereto to evidence that Lender's AXEL Series
B, in the principal amount of that Lender's AXEL Series B and with other
appropriate insertions, and (iii) a Revolving Note substantially in the form of
Exhibit V annexed hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7,
each AXEL and each Revolving Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
Eurodollar Rate. The applicable basis for determining the rate of interest with
respect to any AXEL or any Revolving Loan shall be selected by Company initially
at the time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B, and the basis for determining the interest rate with respect to
any AXEL or any Revolving Loan may be changed from time to time pursuant to
subsection 2.2D; provided that Company may not select the Adjusted Eurodollar
Rate until the earlier of (i) the date the Arranging Agent advises Company that
the AXELs have been fully syndicated and (ii) the date which is two weeks after
the Closing Date. If on any day an AXEL or Revolving Loan is outstanding with
respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable
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basis for determining the rate of interest, then for that day that Loan shall
bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the AXELs Series
A, AXEL Series B and the Revolving Loans shall bear interest through maturity as
follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus the
Applicable Margin in effect from time to time; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Margin in effect from time to time
during the applicable Interest Period.
B. Interest Periods. In connection with each Eurodollar Rate Loan, Company
may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a Eurodollar Rate Loan, or on the date specified in
the applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the AXELs
Series A shall extend beyond May 1, 2001, no Interest Period with respect
to any portion of the AXELs Series B shall extend beyond November 1, 2002,
and no Interest Period with respect to any portion of the Revolving Loans
shall extend beyond the Revolving Loan Commitment Termination Date;
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(vi) no Interest Period with respect to any portion of the AXELs
Series A or AXELs Series B shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the AXELs Series A or
AXELs Series B, as the case may be, unless the sum of (a) the aggregate
principal amount of AXELs Series A or AXELs Series B, as the case may be,
that are Base Rate Loans plus (b) the aggregate principal amount of AXELs
Series A or AXELs Series B, as the case may be, that are Eurodollar Rate
Loans with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on the AXELs Series A or
AXELs Series B, as the case may be, on such date;
(vii) there shall be no more than seven Interest Periods outstanding
at any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice
of Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Revolving Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such
Revolving Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding AXELs Series A, AXELs Series B or Revolving Loans equal to
$1,000,000 and integral multiples of $500,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to one basis to Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate
Loan, to continue all or any portion of such Loan equal to $1,000,000 and
integral multiples of $500,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, that a Eurodollar Rate Loan may only be converted into
a Base Rate Loan on the expiration date of an Interest Period applicable
thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion
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<PAGE>
to, or a continuation of, a Eurodollar Rate Loan, that no Potential Event of
Default or Event of Default has occurred and is continuing. In lieu of
delivering the above-described Notice of Conversion/Continuation, Company may
give Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed on the
basis of a 360-day year, for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted
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from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share of the
Revolving Loan Commitments, commitment fees for the period from and including
the Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over
the aggregate principal amount of outstanding Revolving Loans, multiplied by 1/2
of 1% per annum, such commitment fees to be calculated on the basis of a 360-day
year and the actual number of days elapsed and to be payable quarterly in
arrears on February 1, May 1, August 1 and November 1 of each year, commencing
on the first such date to occur after the Closing Date, and on the Revolving
Loan Commitment Termination Date.
B. Other Fees. Company agrees to pay to Arranging Agent and Administrative
Agent such other fees in the amounts and at the times separately agreed upon
between Company, Arranging Agent and Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of Collateral
and Payments Under Guaranties.
A. Scheduled Payments of AXELs.
(i) Scheduled Payments of AXELs Series A. Company shall make
principal payments on the AXELs Series A in installments on the dates and
in the amounts set forth below:
====================================================
(A) (B)
Scheduled
Payment Repayment of
Date AXELs Series A
====================================================
11/01/96 $2,500,000
----------------------------------------------------
05/01/97 $2,500,000
----------------------------------------------------
08/01/97 $2,500,000
----------------------------------------------------
11/01/97 $2,500,000
----------------------------------------------------
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====================================================
(A) (B)
Scheduled
Payment Repayment of
Date AXELs Series A
====================================================
----------------------------------------------------
02/01/98 $2,500,000
----------------------------------------------------
05/01/98 $2,500,000
----------------------------------------------------
08/01/98 $3,375,000
----------------------------------------------------
11/01/98 $3,375,000
----------------------------------------------------
02/01/99 $3,375,000
----------------------------------------------------
05/01/99 $3,375,000
----------------------------------------------------
08/01/99 $3,750,000
----------------------------------------------------
11/01/99 $3,750,000
----------------------------------------------------
02/01/00 $3,750,000
----------------------------------------------------
05/01/00 $3,750,000
----------------------------------------------------
08/01/00 $6,625,000
----------------------------------------------------
11/01/00 $6,625,000
----------------------------------------------------
02/01/01 $6,625,000
----------------------------------------------------
05/01/01 $6,625,000
----------------------------------------------------
TOTAL $70,000,000
====================================================
; provided that the scheduled installments of principal of the AXELs
Series A set forth above shall be reduced in connection with any voluntary
or mandatory prepayments of the AXELs Series A in accordance with
subsection 2.4B(iv); and provided, further that the AXELs Series A and all
other amounts owed hereunder with respect to the AXELs Series A shall be
paid in full no later than May 1, 2001, and the final installment payable
by Company in respect of the AXELs Series A on such date shall be in an
amount, if such amount is different from that specified above, sufficient
to repay all amounts owing by Company under this Agreement with respect to
the AXELs Series A.
(ii) Scheduled Payments of AXELs Series B. Company shall make
principal payments on the AXELs Series B in installments on the dates and
in the amounts set forth below:
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<PAGE>
==============================================================
(A) (B)
Scheduled
Payment Repayment of
Date AXELs Series B
==============================================================
11/01/96 $500,000
--------------------------------------------------------------
05/01/97 $500,000
--------------------------------------------------------------
08/01/97 $250,000
--------------------------------------------------------------
11/01/97 $250,000
--------------------------------------------------------------
02/01/98 $250,000
--------------------------------------------------------------
05/01/98 $250,000
--------------------------------------------------------------
08/01/98 $250,000
--------------------------------------------------------------
11/01/98 $250,000
--------------------------------------------------------------
02/01/99 $250,000
--------------------------------------------------------------
05/01/99 $250,000
--------------------------------------------------------------
08/01/99 $250,000
--------------------------------------------------------------
11/01/99 $250,000
--------------------------------------------------------------
02/01/00 $250,000
--------------------------------------------------------------
05/01/00 $250,000
--------------------------------------------------------------
08/01/00 $250,000
--------------------------------------------------------------
11/01/00 $250,000
--------------------------------------------------------------
02/01/01 $250,000
--------------------------------------------------------------
05/01/01 $250,000
--------------------------------------------------------------
08/01/01 $3,750,000
--------------------------------------------------------------
11/01/01 $3,750,000
--------------------------------------------------------------
02/01/02 $3,750,000
--------------------------------------------------------------
05/01/02 $3,750,000
--------------------------------------------------------------
08/01/02 $19,000,000
--------------------------------------------------------------
11/01/02 $19,000,000
--------------------------------------------------------------
TOTAL $58,000,000
==============================================================
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; provided that the scheduled installments of principal of the AXELs
Series B set forth above shall be reduced in connection with any voluntary
or mandatory prepayments of the AXELs Series B in accordance with
subsection 2.4B(iv); and provided, further that the AXELs Series B and all
other amounts owed hereunder with respect to the AXELs Series B shall be
paid in full no later than November 1, 2002, and the final installment
payable by Company in respect of the AXELs Series B on such date shall be
in an amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Company under this Agreement with
respect to the AXELs Series B.
B. Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments.
(a) Company may, upon not less than one Business Day's prior
written or telephonic notice, in the case of Base Rate Loans, and
three Business Days' prior written or telephonic notice, in the case
of Eurodollar Rate Loans, in each case given to Administrative Agent
by 12:00 Noon (New York City time) on the date required and, if
given by telephone, promptly confirmed in writing to Administrative
Agent (which original written or telephonic notice Administrative
Agent will promptly transmit by telefacsimile or telephone to each
Lender), at any time and from time to time prepay any AXELs Series
A, AXELs Series B or Revolving Loans on any Business Day in whole or
in part in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of that amount. Notice of prepayment
having been given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the
prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4B(iv).
(b) Prepayment Fees. If any portion of the AXELs Series A or
AXELs Series B is prepaid (1) pursuant to clause (a) of subsection
2.4B(i), (2) pursuant to clause (d) or (g) of subsection 2.4B(iii),
or (3) from Net Asset Sale Proceeds (excluding the proceeds of any
Asset Sale required by order or other action of the FCC) in an
aggregate amount in excess of $25,000,000 pursuant to clause (a) of
subsection 2.4B(iii), (4) pursuant to an acceleration upon the
occurrence of an Event of Default under subsection 7.13, in each
case on or prior to the second anniversary of the Closing Date,
Company shall pay to Administrative Agent, for distribution to the
holders of the AXELs so prepaid in accordance with their Pro Rata
Shares, a fee equal to (x) 2% of the principal amount of AXELs so
prepaid during the period commencing on the Closing Date and ending
on the day prior to the first anniversary of the Closing Date and
(y) 1% of the principal amount of AXELs so prepaid during the period
commencing on the first anniversary of the Closing Date and ending
on the second anniversary of the Closing Date.
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(ii) Voluntary Reductions of Revolving Loan Commitments. Company
may, upon not less than three Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly transmit
by telefacsimile or telephone to each Lender), at any time and from time
to time terminate in whole or permanently reduce in part, without premium
or penalty, the Revolving Loan Commitments in an amount up to the amount
by which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount. Company's notice
to Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share of the Revolving Loan Commitments.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving
Loan Commitments. The Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments to be applied as set
forth below or as more specifically provided in subsection 2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale Proceeds.
No later than the first Business Day following the date of receipt
by BCC or any of its Subsidiaries of any Net Asset Sale Proceeds in
respect of any Asset Sale, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to such Net Asset Sale Proceeds.
Notwithstanding the foregoing, Company shall not be required to make
a prepayment pursuant to this subsection 2.4B(iii)(a) (1) if the
aggregate Net Asset Sale Proceeds received (x) upon any single Asset
Sale or series of related Asset Sales are less than $2,000,000 and
(y) are less than $5,000,000 in the aggregate for all Asset Sales
(excluding for purposes of calculating such $5,000,000 aggregate
amount any single Asset Sale or series of related Asset Sales for
which the Net Asset Sale Proceeds received are less than $250,000)
or (2) if the Net Asset Sale Proceeds are reinvested in assets of
substantially equivalent value within 60 days of receipt thereof,
which assets are pledged on a First Priority basis to the Collateral
Agent for the benefit of the secured parties under the Collateral
Documents in accordance with the terms thereof; provided, however,
that the total Net Asset Sale Proceeds which may be so reinvested,
together with the aggregate amount of Net Asset Sale Proceeds not
applied to mandatory prepayments pursuant clause (1) of this
subsection 2.4B(iii)(a), shall not exceed $10,000,000.
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(b) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the second Business Day following the date
of receipt by Administrative Agent or by BCC or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are
required to be applied to prepay the Loans and/or reduce the
Revolving Loan Commitments pursuant to the provisions of subsection
5.4C, Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount
equal to the amount of such Net Insurance/Condemnation Proceeds.
(c) Prepayments and Reductions Due to Reversion of Surplus
Assets of Pension Plans. On the date of return to BCC or any of its
Subsidiaries of any surplus assets of any pension plan of BCC or any
of its Subsidiaries, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount (such amount being the "Net Pension Proceeds")
equal to 100% of such returned surplus assets, net of transaction
costs and expenses incurred in obtaining such return, including
incremental taxes payable as a result thereof.
(d) Prepayments and Reductions Due to Issuance of Equity
Securities. No later than the first Business Day following the date
of receipt by Company at any time after the Closing Date of the Cash
proceeds (any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, being "Net
Securities Proceeds") from the issuance of any equity Securities of
Company, Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount
equal to such Net Securities Proceeds.
(e) Prepayments and Reductions from Consolidated Excess Cash
Flow. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year (commencing with Fiscal Year 1996, provided that
Consolidated Excess Cash Flow for Fiscal Year 1996 shall be
calculated with respect to the last two Fiscal Quarters of 1996
only), Company shall, no later than 100 days after the end of such
Fiscal Year, prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to 50% of
such Consolidated Excess Cash Flow.
(f) Prepayments from Net Life Insurance Proceeds. Upon receipt
by Company or Collateral Agent of any Net Life Insurance Proceeds
that are required to be applied to prepay the Loans and/or reduce
the Revolving Loan Commitments pursuant to the provisions of
subsection 5.4D, Company shall prepay the Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an aggregate amount
equal to the amount of such Net Life Insurance Proceeds.
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<PAGE>
(g) Prepayments Upon Receipt of Capital Contributions from
BCC. Upon receipt by Company at any time after the Closing Date of
any capital contribution from BCC of the Cash proceeds (any such
proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "Net Contribution
Proceeds") from the issuance of any equity or debt Securities of BCC
(other than equity Securities issued upon the exercise of stock
options (1) by directors, officers, employees or independent
contractors of BCC or any of its Subsidiaries other than Benedek or
(2) by Benedek to the extent such proceeds do not exceed
$2,000,000), Company shall prepay the Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an aggregate amount
equal to such Net Contribution Proceeds.
(h) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction of
the Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(g), Company shall deliver to Administrative Agent an
Officers' Certificate demonstrating the calculation of the amount
(the "Net Proceeds Amount") of the applicable Net Asset Sale
Proceeds or Net Insurance/Condemnation Proceeds, Net Life Insurance
Proceeds, Net Pension Proceeds, Net Securities Proceeds or Net
Contribution Proceeds (as such terms are defined in subsections
2.4B(iii)(c), (d) and (g), respectively), or the applicable
Consolidated Excess Cash Flow, as the case may be, that gave rise to
such prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officers' Certificate,
Company shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to
Administrative Agent an Officers' Certificate demonstrating the
derivation of the additional Net Proceeds Amount resulting in such
excess.
(i) Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments. Company shall from time to time prepay the
Revolving Loans to the extent necessary so that the Total
Utilization of Revolving Loan Commitments shall not at any time
exceed the lesser of (A) the Revolving Loan Commitments then in
effect and (B) the Borrowing Base as then in effect.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection
2.4B(i) shall be applied as specified by Company in the applicable
notice of prepayment; provided that in the event Company fails to
specify the Loans to which any such prepayment shall be applied,
such prepayment shall be applied first to repay
52
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<PAGE>
outstanding Revolving Loans to the full extent thereof, and second
to repay outstanding AXELs to the full extent thereof. Any voluntary
prepayments of the AXELs pursuant to subsection 2.4B(i) shall be
applied to prepay the AXELs Series A and the AXELs Series B on a pro
rata basis (in accordance with the respective outstanding principal
amounts thereof) and to reduce the scheduled installments of
principal of the AXELs Series A and AXELs Series B set forth in
subsections 2.4A(i) and 2.4A(ii) on a pro rata basis.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(g) shall be
applied first to prepay the AXELs to the full extent thereof,
second, to the extent of any remaining portion of the Applied
Amount, to prepay the Revolving Loans to the full extent thereof and
to permanently reduce the Revolving Loan Commitments by the amount
of such prepayment, and third, to the extent of any remaining
portion of the Applied Amount, to further permanently reduce the
Revolving Loan Commitments to the full extent thereof.
Notwithstanding the foregoing, upon the occurrence and during the
continuation of an Event of Default, any Applied Amount shall be
applied to prepay on a pro rata basis the AXELs and the Revolving
Loans and to permanently reduce the Revolving Loan Commitments by
the amount of such prepayment of the Revolving Loans.
(c) Application of Mandatory Prepayments of AXELs to AXELs
Series A and AXELs Series B and the Scheduled Installments of
Principal Thereof. Any mandatory prepayments of the AXELs pursuant
to subsection 2.4B(iii) shall be applied to prepay the AXELs Series
A and the AXELs Series B on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) and shall be
applied to reduce the scheduled installments of principal of the
AXELs Series A or the AXELs Series B, as the case may be, set forth
in subsection 2.4A(i) or 2.4A(ii), respectively, in inverse order of
maturity.
(d) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering AXELs Series A, AXELs Series B
and Revolving Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be
made by Company pursuant to subsection 2.6D.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 Noon
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<PAGE>
(New York City time) on the date due at the Funding and Payment Office for
the account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Company on the
next succeeding Business Day.
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of AXELs and Revolving Loans shall be apportioned
among all outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may
be.
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net Asset Sale
Proceeds, all proceeds received by Collateral Agent in respect of any sale
of, collection from, or other
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<PAGE>
realization upon all or any part of the Collateral under any Collateral
Document may, in the discretion of Collateral Agent, be held by Collateral
Agent as Collateral for, and/or (then or at any time thereafter) applied
in full or in part by Collateral Agent against, the applicable Secured
Obligations (as defined in such Collateral Document) in the following
order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation
to Collateral Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Collateral
Agent in connection therewith, and all amounts for which Collateral
Agent is entitled to indemnification under such Collateral Document
and all advances made by Collateral Agent thereunder for the account
of the applicable Loan Party, and to the payment of all costs and
expenses paid or incurred by Collateral Agent in connection with the
exercise of any right or remedy under such Collateral Document, all
in accordance with the terms of this Agreement and such Collateral
Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the ratable
benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received
by Collateral Agent under either Guaranty shall be applied promptly from
time to time by Collateral Agent in the following order of priority:
(a) To the payment of the costs and expenses of any collection
or other realization under such Guaranty, including reasonable
compensation to Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by Collateral
Agent in connection therewith, all in accordance with the terms of
this Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty) for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such payments, to
the payment to BCC or License Sub or to whosoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct.
55
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(iii) Ratable Sharing of Proceeds of Collateral and License Sub
Guaranty. Any and all amounts received by Collateral Agent in connection
with the enforcement of any of the Collateral Documents or the License Sub
Guaranty or in connection with a distribution in a bankruptcy, insolvency
or similar proceeding to be applied against any of the Obligations
hereunder shall be shared ratably by all Lenders hereunder in accordance
with their Pro Rata Shares (as determined pursuant to clause (iv) of the
definition of "Pro Rata Share"(provided however, that for purposes of such
calculation, the Revolving Loan Exposure of each Lender shall be
determined in accordance with clause (ii) of the definition thereof
whether or not the Revolving Loan Commitments have terminated),
irrespective of whether the Obligations of all Lenders or only the
Obligations of Lenders having outstanding AXELs are secured by the
Collateral with respect to which such amounts are received or guarantied
by the License Sub Guaranty.
2.5 Use of Proceeds.
A. AXELs. The proceeds of the AXELs shall be applied by Company to pay the
cash component of the purchase price in connection with the Acquisitions.
B. Revolving Loans. The proceeds of any Revolving Loans shall be applied
by Company for working capital purposes.
C. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate
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and fair means do not exist for ascertaining the interest rate applicable to
such Loans on the basis provided for in the definition of Adjusted Eurodollar
Rate, Administrative Agent shall on such date give notice (by telefacsimile or
by telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "Affected Lender" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
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D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment or other principal payment or
any conversion of any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Company, or (iv) as a consequence of any other
default by Company in the repayment of its Eurodollar Rate Loans when required
by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of
all amounts payable to a Lender under this subsection 2.6 and under subsection
2.7A shall be made as though that Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of Default, (i)
Company may not elect to have a Loan be made or maintained as, or converted to,
a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the
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event that any Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied,
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collected, withheld or assessed by or within the United States of America
or any political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf of
Company or by any federation or organization of which the United States of
America or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative Agent
or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as
Company becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability
to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or
such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, Administrative Agent or
such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required
by clause (b) above to pay, Company shall deliver to Administrative
Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to
the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature
pages hereof) or after the date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender) in
any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of this
Agreement or at the date of such Assignment Agreement, as the case may be,
in respect of payments to such Lender.
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(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms), properly completed and
duly executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form
W-8 (or any successor form), properly completed and duly executed by
such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of interest payable
under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such Lender
of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and
two original copies of Internal Revenue Service Form W-8, as the
case may be, properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to payments to such Lender under the Loan Documents
or (2) notify Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
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(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a)
or (b)(1) of this subsection 2.7B(iii); provided that if such Lender
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding
as described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by the National Association of Insurance Commissioners, any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of the National Association of
Insurance Commissioners, any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Commitments or
other obligations hereunder with respect to the Loans to a level below that
which such Lender or such controlling corporation could have achieved but for
such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.8 Obligation of Lenders to Mitigate.
Each Lender agrees that, as promptly as practicable after the officer of
such Lender responsible for administering the Loans of such Lender becomes aware
of the occurrence of an event or the existence of a condition that would cause
such Lender to become an Affected Lender or that would entitle such Lender to
receive payments under subsection 2.7, it will, to the extent not inconsistent
with the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
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Commitments of such Lender or the affected Loans of such Lender through another
lending office of such Lender, or (ii) take such other measures as such Lender
may deem reasonable, if as a result thereof the circumstances which would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender pursuant to
subsection 2.7 would be materially reduced and if, as determined by such Lender
in its sole discretion, the making, issuing, funding or maintaining of such
Commitments or Loans through such other lending office or in accordance with
such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or the interests of such Lender;
provided that such Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender as a result of utilizing
such other lending office as described in clause (i) above. A certificate as to
the amount of any such expenses payable by Company pursuant to this subsection
2.8 (setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Company (with a copy to Administrative Agent) shall
be conclusive absent manifest error.
SECTION 3.
CONDITIONS TO LOANS
The obligations of Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions.
3.1 Conditions to AXELs.
The obligations of Lenders to make the AXELs and any Revolving Loans to be
made on the Closing Date are, in addition to the conditions precedent specified
in subsection 3.2, subject to prior or concurrent satisfaction of the following
conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall, and
shall cause each other Loan Party to, deliver to Lenders (or to Administrative
Agent for Lenders with sufficient originally executed copies, where appropriate,
for each Lender and its counsel) the following with respect to Company or such
Loan Party, as the case may be, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of the Certificate or Articles of Incorporation
of such Person, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation and each other
state in which such Person is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each dated a recent date prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
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(iii) Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the Loan
Documents and Related Agreements to which it is a party, certified as of
the Closing Date by the corporate secretary or an assistant secretary of
such Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such Person is
a party; and
(vi) Such other documents as Arranging Agent or Administrative Agent
may reasonably request.
B. No Material Adverse Change. Since December 31, 1995, no adverse change,
or development giving rise to a prospective adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or results
of operations of Company and its Subsidiaries or the Acquired Stations which is,
in the sole opinions of Arranging Agent and Administrative Agent, material shall
have occurred.
C. FCC Consents; FCC Licenses; Compliance with Communications Act; Other
Necessary Governmental Authorizations and Consents; Expiration of Waiting
Periods, Etc.
(i) FCC Consents. The Brissette FCC Consent and the Stauffer FCC
Consent shall have been obtained in form and substance reasonably
satisfactory to Arranging Agent and Administrative Agent and either (a)
such FCC Consents and all other Governmental Authorizations from the FCC
required in connection with the Brissette Acquisition and the Stauffer
Acquisition shall have become Final Orders, or (b) if they shall not have
become Final Orders, neither Arranging Agent nor Administrative Agent
shall have notified Company that it has determined, in its sole
discretion, that there is a reasonable basis for concluding that any such
FCC Consent may not become a Final Order in due course.
(ii) FCC Licenses. Each material FCC License with respect to any of
the Acquired Stations or the other Stations shall be in full force and
effect.
(iii) Compliance with Communications Act. Arranging Agent and
Administrative Agent shall be satisfied that the Acquired Stations and all
other Stations and the Acquisitions and the Reorganization are in
compliance with the Communications Act in all material respects.
(iv) Other Necessary Governmental Authorizations and Consents.
Company shall have obtained all other Governmental Authorizations and all
consents of other Persons, in each case that are necessary or advisable in
connection with the Acquisitions
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and the Reorganization, the other transactions contemplated by the Loan
Documents and the Related Agreements, and the continued operation of the
business conducted by Company, Brissette, Stauffer and their respective
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Acquisitions and the Reorganization, and each of the
foregoing (including the FCC Licenses) shall be in full force and effect,
in each case other than those the failure to obtain or maintain which,
either individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
(v) Expiration of Waiting Periods, Etc. All applicable waiting
periods (other than any periods required for the FCC Consents to become
Final Orders) shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Acquisitions or the
Reorganization or the financing thereof. No action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect
to any of the foregoing shall be pending, and the time for any applicable
agency to take action to set aside its consent on its own motion shall
have expired.
D. Consummation of Acquisitions and Reorganization.
(i) All conditions to the Acquisitions shall have been satisfied or
the fulfillment of any such conditions shall have been waived with the
consent of Arranging Agent and Administrative Agent;
(ii) Arranging Agent and Administrative Agent shall have received
evidence satisfactory to Arranging Agent and Administrative Agent that (a)
the Acquisitions shall become effective immediately upon the making of the
initial Loans and (b) the Reorganization shall become effective
immediately after consummation of the Acquisitions in form and substance
satisfactory to Arranging Agent and Administrative Agent;
(iii) The aggregate consideration paid by Company to the holders of
equity interests in Brissette in respect of such equity interests in
connection with the Brissette Acquisition shall not exceed $270,000,000 in
cash;
(iv) The aggregate consideration paid to Stauffer to purchase the
assets used in connection with the business and operations of the Stauffer
Stations shall not exceed $54,500,000 in cash;
(v) Transaction Costs shall not exceed $12,000,000, and Arranging
Agent and Administrative Agent shall have received evidence to their
satisfaction to such effect; and
(vi) Arranging Agent and Administrative Agent shall have received an
Officers' Certificate of Company to the effect set forth in clauses
(i)-(v) above and stating that
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Company will proceed to consummate the Acquisitions and the Reorganization
immediately upon the making of the initial Loans.
E. Senior Subordinated Notes. On or prior to the Closing Date, BCC shall
have issued and sold the Senior Subordinated Notes and received gross proceeds
of $90,178,000, and BCC shall have contributed the net proceeds from such sale
of the Senior Subordinated Notes to Company as a contribution to capital. The
Senior Subordinated Notes shall be unsecured and shall have terms, including
without limitation, maturity, interest rates, covenants and subordination
provisions, in form and substance satisfactory to Arranging Agent and
Administrative Agent. Company shall have delivered to Arranging Agent and
Administrative Agent true and complete copies of all documentation relating to
the Senior Subordinated Notes, all of which shall be in form and substance
satisfactory to Arranging Agent and Administrative Agent.
F. Preferred Stock. BCC shall have (i) issued and sold the Seller
Preferred Stock to GE Capital and received net cash proceeds of not less than
$45,000,000; (ii) issued and sold the Exchangeable Preferred Stock and the
Warrants and received proceeds thereof (together with the proceeds of any other
equity securities of BCC (excluding the Seller Preferred Stock) with terms
acceptable to Arranging Agent and Administrative Agent) of not less than
$60,000,000; (iii) BCC shall have contributed the proceeds from the sale of the
Seller Preferred Stock, the Exchangeable Preferred Stock and the Warrants and
such other equity securities of BCC to Company as a contribution to capital;
and (iv) all of the foregoing, including the terms and conditions thereof and
all documentation executed in connection therewith, shall be in form and
substance satisfactory to Arranging Agent and Administrative Agent.
G. Cash On Hand. Arranging Agent and Administrative Agent shall have
received reasonably satisfactory evidence that following the consummation of the
Acquisitions and related transactions, and after giving effect thereto
(including the payment of, or taking reserves for, all Transaction Costs),
Company shall have not less than $2,000,000 cash on its balance sheet.
H. Closing Date Mortgages; Closing Date Mortgage Policies; Etc. Agents
shall have received from or on behalf of Company:
(i) Closing Date Mortgages. Fully executed and notarized Mortgages
(each a "Closing Date Mortgage" and, collectively, the "Closing Date
Mortgages"), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 3.1H annexed hereto (each a "Closing Date Mortgaged Property"
and, collectively, the "Closing Date Mortgaged Properties");
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel
shall be reasonably satisfactory to Arranging Agent and Administrative
Agent) in each state in which a Closing Date Mortgaged Property is located
with respect to the enforceability of the forms of Closing Date Mortgages
to be recorded in such state and such other matters as Arranging Agent and
Administrative Agent may reasonably request, in each
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case in form and substance reasonably satisfactory to Arranging Agent and
Administrative Agent;
(iii) Landlord Consents and Estoppels; Recorded Leasehold Interests.
In the case of each Closing Date Mortgaged Property consisting of a
Leasehold Property, (a) a Landlord Consent and Estoppel with respect
thereto and (b) evidence that such Leasehold Property is a Recorded
Leasehold Interest; or the appropriate duly executed documents for
recording to make it a Recorded Leasehold Interest;
(iv) Title Insurance. (a) ALTA mortgagee title insurance policies or
unconditional commitments therefor (the "Closing Date Mortgage Policies")
issued by the Title Company with respect to the Closing Date Mortgaged
Properties listed in Part A of Schedule 3.1H annexed hereto, in amounts
not less than the respective amounts designated therein with respect to
any particular Closing Date Mortgaged Properties, insuring fee simple
title to, or a valid leasehold interest in, each such Closing Date
Mortgaged Property vested in such Loan Party and assuring Administrative
Agent that the applicable Closing Date Mortgages create valid and
enforceable First Priority mortgage Liens on the respective Closing Date
Mortgaged Properties encumbered thereby, subject only to a standard survey
exception, which Closing Date Mortgage Policies (1) shall, if requested by
Administrative Agent, include an endorsement for mechanics' liens and for
future advances under this Agreement and for any other matters reasonably
requested by Arranging Agent or Administrative Agent and (2) shall provide
for affirmative insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to Arranging Agent and Administrative Agent; and (b) evidence
satisfactory to Arranging Agent and Administrative Agent that such Loan
Party has (i) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the issuance
of the Closing Date Mortgage Policies and (ii) paid to the Title Company
or to the appropriate governmental authorities all expenses and premiums
of the Title Company in connection with the issuance of the Closing Date
Mortgage Policies and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording the
Closing Date Mortgages in the appropriate real estate records;
(v) Title Reports. With respect to each Closing Date Mortgaged
Property listed in Part B of Schedule 3.1H annexed hereto, a title report
issued by the Title Company with respect thereto, dated not more than 30
days prior to the Closing Date and satisfactory in form and substance to
Arranging Agent and Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. If requested
by Administrative Agent, copies of all recorded documents listed as
exceptions to title or otherwise referred to in the Closing Date Mortgage
Policies or in the title reports delivered pursuant to subsection 3.1H(v);
and
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(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged Property
is a Flood Hazard Property and (2) the community in which any such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties,
Company's written acknowledgement of receipt of written notification from
Administrative Agent (1) as to the existence of each such Flood Hazard
Property and (2) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event any such Flood Hazard Property is
located in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in respect of
such Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System.
I. Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to subsection 3.1H, each of Arranging Agent and
Administrative Agent shall have received evidence satisfactory to it that each
Loan Party shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Arranging Agent and
Administrative Agent, desirable in order to create in favor of Collateral Agent,
for the benefit of Lenders, a valid and (upon such filing and recording)
perfected First Priority security interest in the entire personal and mixed
property Collateral. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Collateral Agent
of accurate and complete schedules to all of the applicable Collateral
Documents;
(ii) Stock Certificates and Instruments. Delivery to Collateral
Agent or Pledgee under the Existing Pledge Agreement of (a) certificates
(which certificates shall be accompanied by irrevocable undated stock
powers, duly endorsed in blank and otherwise satisfactory in form and
substance to Administrative Agent) representing all capital stock pledged
pursuant to the BCC Pledge Agreement and the Existing Company Pledge
Agreement and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery to
Arranging Agent and Administrative Agent of (a) the results of a recent
search, by a Person satisfactory to Arranging Agent and Administrative
Agent, of all effective UCC financing statements and fixture filings and
all judgment and tax lien filings which may have been made with respect to
any personal or mixed property of any Loan Party, together with copies of
all such filings disclosed by such search, and (b) UCC termination
statements duly executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings
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disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
Collateral Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of
Arranging Agent and Administrative Agent, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents;
(v) Existing Pledge Agreement. Company shall have taken such actions
and delivered such documents or instruments as requested by Arranging
Agent or Administrative Agent to evidence that the AXELs are secured on an
equal and ratable basis with the Existing Senior Notes pursuant to the
Existing Pledge Agreement; and
(vi) Opinions of Local Counsel. Delivery to Arranging Agent and
Administrative Agent of an opinion of counsel (which counsel shall be
reasonably satisfactory to Arranging Agent and Administrative Agent) under
the laws of each jurisdiction in which any Loan Party or any personal or
mixed property Collateral is located with respect to the creation and
perfection of the security interests in favor of Collateral Agent in such
Collateral and such other matters governed by the laws of such
jurisdiction regarding such security interests as Arranging Agent or
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Arranging Agent and Administrative
Agent.
J. Environmental Reports. Administrative Agent and Arranging Agent and,
upon request, any Lender shall have received reports and other information, in
form, scope and substance satisfactory to Arranging Agent and Administrative
Agent, regarding environmental matters relating to the Facilities, which reports
shall include a Phase I environmental assessment for each of the Facilities
listed in Schedule 3.1J annexed hereto.
K. Financial Statements; Pro Forma Balance Sheet. On or before the Closing
Date, Lenders shall have received (i) the audited financial statements for
Company and its Subsidiaries for the period ended December 31, 1995, (ii)
unaudited financial statements for Company and its Subsidiaries for the quarter
ended March 31, 1996 and (iii) pro forma consolidated and consolidating balance
sheets of BCC and its Subsidiaries as at March 31, 1996, prepared in accordance
with GAAP and reflecting the consummation of the Acquisitions and the
Reorganization, the related financings and the other transactions contemplated
by the Loan Documents and the Related Agreements, all of which financial
statements shall be in form and substance satisfactory to Arranging Agent and
Administrative Agent.
L. Solvency Assurances. On the Closing Date, Arranging Agent,
Administrative Agent and Lenders shall have received a letter from Murray,
Devine & Co., dated the Closing Date and addressed to Arranging Agent,
Administrative Agent and Lenders, in form and
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substance satisfactory to Arranging Agent and Administrative Agent and with
appropriate attachments demonstrating that, after giving effect to the
consummation of the Acquisitions and the Reorganization and the other
transactions contemplated by the Loan Documents and the Related Agreements,
including the contemplated borrowings of the full amounts which will be
available under the Commitments and the Senior Subordinated Notes, each of
Company and BCC and its Subsidiaries on a consolidated basis will be Solvent.
M. Evidence of Insurance. Arranging Agent and Administrative Agent shall
each have received a certificate from Company's insurance broker or other
evidence satisfactory to each that all insurance required to be maintained
pursuant to subsection 5.4, and all Key Man Life Insurance Policies required to
be maintained pursuant to subsection 5.9, are in full force and effect, that
Collateral Agent on behalf of Lenders has been named as additional insured
and/or loss payee thereunder to the extent required under subsection 5.4 and
under the definition of Key Man Life Insurance Policies, and that there has been
a collateral assignment of the Key Man Life Insurance Policies to Collateral
Agent.
N. Opinions of Counsel to Loan Parties and FCC Counsel. Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of (a) Shack & Siegel, P.C., counsel for Loan
Parties, and (b) Covington & Burling, FCC counsel for Loan Parties, in each case
in form and substance reasonably satisfactory to Administrative Agent and
Arranging Agent and its counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit VIII and Exhibit
IX, respectively, annexed hereto and as to such other matters as Arranging Agent
or Administrative Agent acting on behalf of Lenders may reasonably request, and
(ii) evidence satisfactory to Arranging Agent and Administrative Agent that
Company has requested each such counsel to deliver such opinions to Lenders.
O. Opinions of Arranging Agent's Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Arranging Agent, dated as of the Closing Date,
substantially in the form of Exhibit X annexed hereto and as to such other
matters as Arranging Agent may reasonably request.
P. Opinions of Counsel Delivered Under Certain Related Agreements.
Administrative Agent and Arranging Agent and its counsel shall have received
copies of each of the opinions of counsel delivered by counsel to the sellers
under each of the Acquisition Agreements and by counsel to Company under the
purchase agreements relating to the Senior Subordinated Notes and Exchangeable
Preferred Stock, together with a letter from each such counsel (other than Kaye,
Scholer, Fierman, Hays & Handler) authorizing Lenders to rely upon such opinion
to the same extent as though it were addressed to Lenders.
Q. Auditor's Letter and Officers' Certificate. Arranging Agent and
Administrative Agent shall have received (i) an executed Auditor's Letter in
form and substance reasonably satisfactory to Arranging Agent and Administrative
Agent and (ii) an Officers' Certificate, dated the Closing Date, demonstrating
that the Leverage Ratio and Credit Facilities Leverage Ratio as of the most
recently ended Fiscal Quarter, calculated, on a pro forma basis after giving
effect
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to all of the transactions consummated on the Closing Date, do not exceed 7.25:1
and 2.65:1, respectively.
R. Fees. Company shall have paid to Arranging Agent and Administrative
Agent the fees payable on the Closing Date referred to in subsection 2.3 and all
other compensation, fees, costs and expenses due and payable hereunder or in
connection herewith to Arranging Agent and Administrative Agent on or prior to
the Closing Date.
S. Representations and Warranties; Performance of Agreements. BCC and
Company shall each have delivered to Arranging Agent and Administrative Agent an
Officers' Certificate, in form and substance satisfactory to Arranging Agent and
Administrative Agent, to the effect that the representations and warranties in
Section 4 hereof are true, correct and complete in all material respects on and
as of the Closing Date to the same extent as though made on and as of that date
(or, to the extent such representations and warranties specifically relate to an
earlier date, that such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date) and that each
of BCC and Company shall have performed in all material respects all agreements
and satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Arranging Agent, Administrative Agent and Requisite
Lenders.
T. Employment Agreements and Key Man Life Insurance. Administrative Agent
and Arranging Agent shall have received duly executed copies of the Employment
Agreements. The Key Man Life Insurance Policies shall have been obtained by
Company and shall be in full force and effect and satisfactory evidence thereof
shall have been delivered to Administrative Agent and Arranging Agent.
U. Related Agreements. (i) Administrative Agent and Arranging Agent shall
have received executed or conformed copies of each of the Related Agreements and
any amendments thereto on or before the Closing Date, the terms or conditions of
which shall be in all respects satisfactory to Administrative Agent and
Arranging Agent, (ii) the Related Agreements shall be in full force and effect
and no term or condition thereof shall have been amended, modified or waived
after the execution thereof, except as provided in a written amendment thereto
delivered to and approved by Administrative Agent and Arranging Agent, (iii) no
Loan Party shall have failed in any material respect to perform any material
obligation or covenant required by the Related Agreements to be performed or
complied with by it on or before the Closing Date and (iv) Administrative Agent
and Arranging Agent shall have received an Officers' Certificate from BCC and
Company in form and substance satisfactory to Administrative Agent and Arranging
Agent from Company to the effect set forth in clauses (i), (ii) and (iii) above.
V. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, or Arranging Agent and its counsel shall be
satisfactory in form and substance to Administrative Agent and Arranging Agent
and such counsel, and Administrative Agent and Arranging Agent
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and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent or Arranging Agent may
reasonably request.
3.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed Notice
of Borrowing, in each case signed by the chief executive officer, the chief
financial officer or the treasurer of Company or by any executive officer of
Company designated by any of the above-described officers on behalf of Company
in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall not
violate any law including Regulation G, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of BCC or any of its Subsidiaries that has not been disclosed by
Company in writing to the extent required pursuant to subsection 4.6 or
5.1(xi) prior to the making of the last preceding Loans (or, in the case
of the initial Loans, prior to the execution of this Agreement), and there
shall have occurred no development not so disclosed in any such action,
suit, proceeding,
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governmental investigation or arbitration so disclosed, that, in either
event, in the opinion of Administrative Agent or of Requisite Lenders,
would be expected to have a Material Adverse Effect; and no injunction or
other restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to enjoin
or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by this
Agreement or the making of Loans hereunder.
SECTION 4.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, BCC and Company each represents and warrants to each Lender, on the date
of this Agreement and on each Funding Date, that the following statements are
true, correct and complete:
4.1 Organization, Powers, Qualification, Good Standing, Business, Subsidiaries
and FCC and Station Matters.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 4.1A annexed hereto. Each
such Loan Party has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and Related
Agreements to which it is a party and to carry out the transactions contemplated
thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where the nature of the
assets located therein or the conduct of its business and operations make such
qualification necessary, except in jurisdictions where the failure to be so
qualified or in good standing has not had and will not have a Material Adverse
Effect.
C. Conduct of Business. Loan Parties are engaged only in the businesses
permitted to be engaged in pursuant to subsection 6.13 and the Loan Documents.
D. Subsidiaries. All of the Subsidiaries of BCC as of the Closing Date are
identified in Schedule 4.1A annexed hereto. The capital stock of BCC and each of
the Subsidiaries of BCC identified in Schedule 4.1A annexed hereto is duly
authorized, validly issued, fully paid and nonassessable and none of such
capital stock constitutes Margin Stock. Each of the Subsidiaries of BCC
identified in Schedule 4.1A annexed hereto is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation set forth therein, has all requisite corporate
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction where the nature of the
assets located therein or the conduct of its business and operations make such
qualification necessary, in each case except where failure to be so qualified or
in good standing or a lack of
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such corporate power and authority has not had and will not have singly or in
the aggregate a Material Adverse Effect. Schedule 4.1A annexed hereto correctly
sets forth, as of the Closing Date, the ownership interest of BCC and Company in
each of the Subsidiaries of BCC identified therein.
E. FCC and Station Matters.
(i) Each of BCC and its Subsidiaries has all requisite power and
authority and FCC Licenses to own and operate its properties and to carry
on its businesses as now conducted and as proposed to be conducted (other
than, for the period prior to consummation of the Acquisitions, with
respect to any properties or businesses to be acquired in connection with
the Acquisitions. Schedule 4.1E annexed hereto, as it may be supplemented
pursuant to subsection 5.1(ix), correctly describes each of the Stations
and sets forth all of the FCC Licenses of Company and its Subsidiaries,
including those Stations and FCC Licenses acquired in connection with the
Acquisitions, and correctly sets forth the termination date, if any, of
each such FCC License. A true, correct and complete copy of each material
FCC License has been made available to Administrative Agent. Each material
FCC License was duly and validly issued by the FCC pursuant to procedures
which comply in all material respects with all requirements of applicable
law. As of the initial funding under this Agreement and at all times
thereafter, BCC and its Subsidiaries have the right to use all FCC
Licenses required in the ordinary course of business for all Stations, and
each such FCC License is in full force and effect. Each of BCC and its
Subsidiaries has taken all material actions and performed all of its
material obligations that are necessary to maintain all material FCC
Licenses without adverse modification or impairment. Except as shown on
Schedule 4.1E, no event has occurred which (i) results in, or after notice
or lapse of time or both would result in, revocation, suspension, adverse
modification, non-renewal, impairment, restriction or termination of or
any order of forfeiture with respect to, any material FCC License or (ii)
materially and adversely affects or could reasonably be expected in the
future to materially adversely affect any of the rights of BCC or any of
its Subsidiaries thereunder. Except as set forth on Schedule 4.1E, each
FCC License is held by License Sub. Except as set forth in Schedule 4.1E,
none of the FCC Licenses requires that any present stockholder, director,
officer or employee of BCC or any of its Subsidiaries remain a stockholder
or employee of such Person, or that any transfer of control of such Person
must be approved by any public or governmental body other than the FCC.
(ii) Except as shown on Schedule 4.1E, neither BCC nor any of its
Subsidiaries is a party to or has knowledge of any investigation, notice
of apparent liability, violation, forfeiture or other order or complaint
issued by or before any court or regulatory body, including the FCC, or of
any other proceedings (other than proceedings relating to the radio or
television industries generally) which could in any manner materially
threaten or adversely affect the validity or continued effectiveness of
the FCC Licenses of any such Person. None of BCC nor any of its
Subsidiaries has any reason to believe that any material FCC Licenses
listed and described in Schedule 4.1E will not be renewed in the ordinary
course. Each of BCC and its Subsidiaries, as applicable, (a) has duly
filed in a timely manner all material filings, reports, applications,
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documents, instruments and information required to be filed by it under
the Communication Act or pursuant to FCC Regulations or requests of any
regulatory body having jurisdiction over any of its FCC Licenses, (b) has
submitted to the FCC on a timely basis all required equal employment
opportunity reports, and (c) is in compliance in all material respects
with the Communications Act, including all FCC Regulations relating to the
broadcast of television signals, all FCC Regulations concerning the limits
on the duration of advertising in children's programming and the
recordkeeping obligations relating to such advertising, the Children's
Television Act and all FCC Regulations promulgated thereunder and all
equal employment opportunity-related FCC Regulations. BCC and its
Subsidiaries maintain appropriate public files at the Stations in a manner
that complies in all material respects with all FCC Regulations.
(iii) None of the Facilities (including the transmitter and tower
sites owned or used by Company or any of its Subsidiaries) violates in any
material respect the provisions of any applicable building codes, fire
regulations, building restrictions or other governmental ordinances,
orders, or regulations and each such Facility is zoned so as to permit the
commercial uses intended by the owner or occupier thereof and there are no
outstanding variances or special use permits materially affecting any of
the facilities or the uses thereof.
(iv) BCC and its Subsidiaries and the properties owned and/or
operated by them, including the Stations, are in compliance in all
material respects with all rules, regulations and policies of the Federal
Aviation Administration applicable to any of them.
(v) The operation of the Stations does not cause or result in
exposure to workers or the general public to levels of radio frequency
radiation in excess of the "Radio Frequency Protection Guidelines"
recommended in "American National Standard Safety Levels with Respect to
Human Exposure to Radio Frequency Electromagnetic Fields 300 Khz to 100
gHz" (ANSI C95.1-1982), issued by the American National Standards
Institute.
(vi) The Ownership Reports filed by BCC, Company and its
Subsidiaries with the FCC are true, correct and complete in all material
respects and there have been no changes in the ownership of BCC, Company
or any Subsidiary of Company since the filing of such Ownership Reports
other than as described in information filed with the FCC and made
available for examination by Administrative Agent pursuant to subsection
5.1(viii).
4.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties of
the Loan Documents and the Related Agreements to which they are parties and the
consummation
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of the transactions contemplated by the Loan Documents and such Related
Agreements do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to any Loan Party or any of their
respective Subsidiaries, the Certificate or Articles of Incorporation or Bylaws
of BCC or any of its Subsidiaries or any order, judgment or decree of any court
or other agency of government binding on any Loan Party or any of their
respective Subsidiaries, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any Contractual
Obligation of BCC or any of its Subsidiaries, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of any
Loan Party or any of their respective Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Collateral Agent on behalf of
Lenders and Liens permitted under subsection 6.2A(iii)), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of any Loan Party or any of their respective
Subsidiaries, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body, other than the FCC Consents, filings required in connection with the
perfection of security interests granted pursuant to the Collateral Documents
and filings required to be made with the Securities and Exchange Commission in
connection with the Exchangeable Preferred Stock and Senior Subordinated Notes.
D. Binding Obligation. Each of the Loan Documents and Related Agreements
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. Valid Issuance of Seller Preferred Stock, Exchangeable Preferred Stock,
Warrants and Senior Subordinated Notes.
(i) Seller Preferred Stock, Exchangeable Preferred Stock and
Warrants. The Seller Preferred Stock, Exchangeable Preferred Stock and
Warrants to be sold on or before the Closing Date, when issued and
delivered, will be duly and validly issued, fully paid and nonassessable.
No stockholder of BCC has or will have any preemptive rights to subscribe
for any additional equity Securities of BCC, except that holders of the
Warrants shall have the right to exchange the Warrants for Class A Common
Stock of BCC in accordance with the terms thereof. The issuance and sale
of such Seller Preferred Stock, Exchangeable Preferred Stock and Warrants,
upon such issuance and sale, will either (a) have been registered or
qualified under applicable federal and state securities laws or (b) be
exempt therefrom.
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(ii) Senior Subordinated Notes . BCC has the corporate power and
authority to issue the Senior Subordinated Notes. The Senior Subordinated
Notes, when issued and paid for, will be the legally valid and binding
obligations of BCC, enforceable against BCC in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The subordination provisions of the Senior Subordinated
Notes will be enforceable against the holders thereof and the Loans and
all other monetary Obligations hereunder are and will be within the
definition of "Senior Debt" included in such provisions. The Senior
Subordinated Notes, when issued and sold, will either (a) have been
registered or qualified under applicable federal and state securities laws
or (b) be exempt therefrom.
4.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of Company and its Subsidiaries as at December 31, 1995, and the
related consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for the Fiscal Year then ended and (ii) the
unaudited consolidated balance sheet of Company and its Subsidiaries as at March
31, 1996 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
quarter then ended. All such statements were prepared in conformity with GAAP
and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Company does not
(and will not following the funding of the initial Loans) have any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment (other than such obligations under
Program Contracts which have not yet been reflected as accrued in accordance
with GAAP) that is not reflected in the foregoing financial statements or the
notes thereto or on Schedule 4.3 annexed hereto and which in any such case is
material in relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries.
4.4 No Material Adverse Change; No Restricted Junior Payments.
Since December 31, 1995, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
Neither Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 6.5 or as
contemplated under the Senior Subordinated Note Indenture, the Seller Preferred
Certificate of Designation and the Exchangeable Preferred Certificate of
Designation.
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4.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Loan Parties have (i) good, sufficient and
legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other personal property),
all of their respective properties and assets reflected in the financial
statements referred to in subsection 4.3 or in the most recent financial
statements delivered pursuant to subsection 5.1, in each case except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under subsection 6.7. Except as permitted
by this Agreement, all such properties and assets are free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 4.5 annexed hereto
contains a true, accurate and complete list of (i) all fee properties and (ii)
all leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Property Asset of any Loan Party where the annual rental payments
thereunder are greater than $100,000, regardless of whether such Loan Party is
the landlord or tenant (whether directly or as an assignee or successor in
interest) under such lease, sublease or assignment. Except as specified in
Schedule 4.5 annexed hereto, each agreement listed in clause (ii) of the
immediately preceding sentence is in full force and effect and neither BCC nor
Company has knowledge of any default that has occurred and is continuing
thereunder, and each such agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles and except in each case
where the default or the failure to be in full force and effect or enforceable
would not, individually or in the aggregate, have a Material Adverse Effect.
Company's good faith estimate of the fair market value of each Material Fee
Property subject to a Closing Date Mortgage is set forth on Schedule 3.1H
annexed hereto.
4.6 Litigation; Adverse Facts.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Company or any Loan
Party or any of its Subsidiaries) at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign (including any
Environmental Claims) that are pending or, to the knowledge of BCC or Company,
threatened against or affecting any Loan Party or any of its Subsidiaries or any
property of any Loan Party or any of its Subsidiaries and that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. No Loan Party or any of its Subsidiaries (i) is in violation of any
applicable laws (including Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or (ii) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that,
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individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
4.7 Payment of Taxes.
Except to the extent permitted by subsection 5.3, all tax returns and
reports of BCC or Company and its Subsidiaries required to be filed by any of
them have been timely filed, and all taxes shown on such tax returns to be due
and payable and all assessments, fees and other governmental charges upon BCC
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Neither BCC nor Company knows of any proposed tax assessment against
Company or any of its Subsidiaries which is not being actively contested by BCC,
Company or such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.
4.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. No Loan Party nor any of its Subsidiaries is a party to or is otherwise
subject to any agreements or instruments or any charter or other internal
restrictions which, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
C. All Material Contracts are in full force and effect and no material
defaults currently exist thereunder (other than any defaults resulting from the
failure to obtain consents to the transfer of certain Program Contracts relating
to the Acquired Stations prior to the Closing Date).
4.9 Governmental Regulation.
No Loan Party nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
4.10 Securities Activities.
A. No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
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B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
6.2 or 6.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 7.2, will be Margin
Stock.
4.11 Employee Benefit Plans.
A. Each Loan Party and each of their respective ERISA Affiliates are in
material compliance with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all of their material obligations
under each Employee Benefit Plan. Each Employee Benefit Plan which is intended
to qualify under Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur which
would have a Material Adverse Effect.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth in Schedule 4.11 annexed hereto, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of any Loan Party or
any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Loan Parties
and their respective ERISA Affiliates for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $1,000,000.
4.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and BCC and
Company, jointly and severally, hereby indemnify Lenders against, and agrees
that it will hold Lenders harmless from, any claim, demand or liability for any
such broker's or finder's fees alleged to have been incurred in connection
herewith or therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
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4.13 Environmental Protection.
(i) Except as set forth on Schedule 4.13 annexed hereto, no Loan
Party nor any of its Subsidiaries nor any of their respective Facilities
or operations are subject to any outstanding written order, consent decree
or settlement agreement with any Person relating to (a) any Environmental
Law, (b) any Environmental Claim, or (c) any Hazardous Materials Activity;
(ii) No Loan Party nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. 'SS'
9604) or any comparable state law;
(iii) There are no and, to BCC's and Company's knowledge, have been
no conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
any Loan Party or any of its Subsidiaries that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
(iv) No Loan Party nor any of its Subsidiaries, nor, to Company's
knowledge, any predecessor of any Loan Party has filed any notice under
any Environmental Law indicating past or present treatment of Hazardous
Materials at any Facility, and no Loan Party's nor any of its
Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste (other than Hazardous
Materials used in the ordinary course of business, the use of which is
immaterial and not reasonably likely to materially adversely affect the
Facilities or have a Material Adverse Effect), as defined under 40 C.F.R.
Parts 260-270 or any state equivalent; and
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 4.13 to the contrary, no event
or condition has occurred or is occurring with respect to any Loan Party
relating to any Environmental Law, any Release of Hazardous Materials, or any
Hazardous Materials Activity which individually or in the aggregate has had or
could reasonably be expected to have a Material Adverse Effect.
4.14 Employee Matters.
Except as set forth on Schedule 4.14 annexed hereto, no Loan Party nor its
Subsidiaries is party to any collective bargaining agreement and, to the
knowledge of Company, no union representative question exists with respect to
the employees of any Loan Party or its Subsidiaries. There is no strike, work
stoppage, slowdown, lockout or other labor dispute pending, or to the knowledge
of Company, threatened, involving any Loan Party or any of its Subsidiaries that
singly or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
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4.15 Solvency.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
4.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the date hereof pursuant to subsections 3.1H, 3.1I and 5.8 and
(ii) the delivery to Collateral Agent of any Pledged Collateral not delivered to
Collateral Agent at the time of execution and delivery of the applicable
Collateral Document (all of which Pledged Collateral on the Closing Date will
have been so delivered) are effective to create in favor of Collateral Agent for
the benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Collateral Agent for filing (but not yet filed), the
filing of any UCC termination statements delivered to Collateral Agent on the
Closing Date (but not yet filed) and the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of
Collateral Agent.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for either (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of Collateral Agent pursuant to any of
the Collateral Documents or (ii) the exercise by Collateral Agent of any rights
or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
4.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities or by the FCC.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Collateral Agent as contemplated by subsection 4.16A and in respect of
Liens permitted under subsection 6.2A(iii) hereof or for which duly executed
termination statements have been delivered to Collateral Agent on the Closing
Date (but not yet filed), no effective UCC financing statement, fixture filing
or other instrument similar in effect covering all or any part of the Collateral
is on file in any filing or recording office.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System.
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E. Information Regarding Collateral. All information supplied to Agents by
or on behalf of any Loan Party with respect to any of the Collateral (in each
case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects.
4.17 Representations and Warranties in Acquisition Agreements.
Except to the extent otherwise set forth herein or in the schedules
hereto, each of the representations and warranties given by any seller or
Company in the Brissette Acquisition Agreement or the Stauffer Acquisition
Agreement is true and correct in all material respects as of the date hereof (or
as of any earlier date to which such representation and warranty specifically
relates) and will be true and correct in all material respects as of the Closing
Date (or as of such earlier date, as the case may be), in each case subject to
the qualifications set forth in the schedules to the Brissette Acquisition
Agreement and the Stauffer Acquisition Agreement, respectively. Notwithstanding
anything in the Brissette Acquisition Agreement or the Stauffer Acquisition
Agreement to the contrary, the representations and warranties of Company set
forth in this subsection shall, solely for purposes of this Agreement, survive
the Closing Date for the benefit of Lenders.
4.18 Applicable Law.
Each Loan Party and its Subsidiaries is in compliance with the
requirements of all applicable laws, rules, regulations, orders, applications,
reporting and licensing requirements of all governmental authorities (including
all Communications Regulatory Authorities) except for violations thereof which
could not reasonably be expected to have a Material Adverse Effect; and no Loan
Party nor any of its Subsidiaries is the subject of any outstanding citation
order or investigation by any Communications Regulatory Authority which could
reasonably be expected to have a Material Adverse Effect, and no such citation,
order or investigation (excluding any rule making proceeding of general
applicability) which could reasonably be expected to have a Material Adverse
Effect, to the knowledge of Company, is contemplated by any Communications
Regulatory Authority.
4.19 Disclosure.
No representation or warranty of BCC or Company contained in the
Confidential Information Memorandum or in any Loan Document or Related Agreement
or in any other document, certificate or written statement furnished to Lenders
by or on behalf of BCC or Company for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Company (other than
matters of a general
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economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been disclosed
herein or in such other documents, certificates and statements furnished to
Lenders for use in connection with the transactions contemplated hereby.
SECTION 5.
AFFIRMATIVE COVENANTS
Each of BCC and Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen), unless
Requisite Lenders shall otherwise give prior written consent, each of BCC and
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 5.
5.1 Financial Statements and Other Reports.
BCC will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent (with sufficient copies
for each Lender) for delivery to Lenders;
(i) Monthly Financials: as soon as available and in any event within
30 days after the end of each month ending after the Closing Date, at any
time that the Leverage Ratio exceeds 5.75:1, the consolidated profit and
loss statements of BCC and its Subsidiaries and of the Stations on a
Station-by-Station basis for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month,
setting forth in each case in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year,
to the extent prepared on a monthly basis, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the profits and losses for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each Fiscal Quarter, the consolidated
balance sheet of BCC and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income, stockholders'
equity and cash flows of BCC and its Subsidiaries and of the Stations on a
Station-by-Station basis for such Fiscal Quarter and for the period from
the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year,
all in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of BCC and its Subsidiaries as at the dates indicated and the
results of their operations and their
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cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of BCC and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, stockholders'
equity and cash flows of BCC and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements,
all in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of BCC and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, (b) a narrative report describing the operations of BCC and its
Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, and (c) in the case of such consolidated financial
statements, a report thereon of McGladrey & Pullen, LLP or other
independent certified public accountants of recognized national standing
selected by Company and satisfactory to Administrative Agent, which report
shall be unqualified, shall express no doubts about the ability of BCC and
its Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material
respects, the consolidated financial position of BCC and its Subsidiaries
as at the dates indicated and the results of their operations and their
cash flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: (a) together with each
delivery of financial statements of BCC and its Subsidiaries pursuant to
subdivisions (i), (ii) and (iii) above, an Officers' Certificate of
Company stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of BCC and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate,
of any condition or event that constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with respect
thereto; and (b) together with each delivery of financial statements of
BCC and its Subsidiaries pursuant to subdivisions (ii) and (iii) above, a
Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 6;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 4.3, the
consolidated financial statements of BCC and
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its Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or
(xiv) of this subsection 5.1 will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant
to such subdivisions had no such change in accounting principles and
policies been made, then (a) together with the first delivery of financial
statements pursuant to subdivision (i), (ii), (iii) or (xiv) of this
subsection 5.1 following such change, consolidated financial statements of
BCC and its Subsidiaries for (y) the current Fiscal Year to the effective
date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case
prepared on a pro forma basis as if such change had been in effect during
such periods, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiv) of this subsection 5.1
following such change, a written statement of the chief accounting officer
or chief financial officer of Company setting forth the differences
(including any differences that would affect any calculations relating to
the financial covenants set forth in subsection 6.6) which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of BCC and its Subsidiaries pursuant to
subdivision (iii) above, a written statement by the independent certified
public accountants giving the report thereon (a) stating that their audit
examination has included a review of the terms of this Agreement and the
other Loan Documents as they relate to accounting matters, (b) stating
whether, in connection with their audit examination, any condition or
event that constitutes an Event of Default or Potential Event of Default
has come to their attention and, if such a condition or event has come to
their attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their audit
examination, and (c) stating that based on their audit examination nothing
has come to their attention that causes them to believe either or both
that the information contained in the certificates delivered therewith
pursuant to subdivision (iv) above is not correct or that the matters set
forth in the Compliance Certificates delivered therewith pursuant to
clause (b) of subdivision (iv) above for the applicable Fiscal Year are
not stated in accordance with the terms of this Agreement; provided that
such accountants may rely without independent investigation on (1)
Schedule 6.6 annexed hereto with respect to the calculation of
Consolidated Adjusted EBITDA for the third and fourth Fiscal Quarters of
1995 and for the first Fiscal Quarter of 1996 and (2) Company's
calculation of Consolidated Adjusted EBITDA for the second Fiscal Quarter
of 1996 as set forth in the Compliance Certificate delivered with respect
to such Fiscal Quarter.
(vii) Accountants' Reports: (a) promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public accountants
in connection with each annual, interim or special audit of the financial
statements of BCC and its Subsidiaries made by such accountants, including
any comment letter submitted by such accountants to management in
connection with their annual audit and (b) together with the first
delivery of consolidated financial statements of BCC and its Subsidiaries
pursuant to subdivision (iii)
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above following any change in the independent certified public accountants
of BCC and its Subsidiaries, a letter acknowledged and agreed to by
Company and such new accountants addressed to Administrative Agent and
Lenders, in substance similar to the Auditor's Letter and otherwise in
form and substance reasonably satisfactory to Administrative Agent;
(viii) SEC Filings, FCC Filings and Press Releases: promptly upon
their becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by BCC to
its security holders or by any Subsidiary of BCC to its security holders
other than BCC or another Subsidiary of BCC, (b) all regular and periodic
reports and all registration statements (other than on Form S-8 or a
similar form) and prospectuses, if any, filed by BCC or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
(c) all press releases and other statements made available generally by
BCC or any of its Subsidiaries to the public concerning material
developments in the business of BCC or any of its Subsidiaries, (d) any
material non-routine correspondence or official notices received by BCC or
any of the other Loan Parties from any Communications Regulatory
Authority, and (e) all material information filed by any Loan Party with
the FCC (including all Ownership Reports and amendments or supplements to
any Ownership Report);
(ix) FCC Licenses, etc.: promptly upon (a) receipt of notice of (1)
any forfeiture, non-renewal, cancellation, termination, revocation,
suspension, impairment or material modification of any material FCC
License held by BCC or any of its Subsidiaries, or any notice of default
or forfeiture with respect to any such FCC License, or (2) any refusal by
any governmental agency or authority (including the FCC) to renew or
extend any such FCC License, an Officers' Certificate specifying the
nature of such event, the period of existence thereof, and what action BCC
and its Subsidiaries are taking and propose to take with respect thereto,
and (b) any acquisition of any Station, a written notice setting forth
with respect to such Station all of the data required to be set forth in
Schedule 4.1E under subsection 4.1E with respect to such Stations and the
FCC Licenses required in connection with the ownership and operation of
such Station (it being understood that such written notice shall be deemed
to supplement Schedule 4.1E annexed hereto for all purposes of this
Agreement);
(x) Events of Default, etc.: promptly upon any officer of BCC or
Company obtaining knowledge (a) of any condition or event that constitutes
an Event of Default or Potential Event of Default, or becoming aware that
any Lender has given any notice (other than to Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to
BCC or any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in
subsection 7.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by BCC with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if BCC were required to file such reports under
the Exchange Act, (d) of any condition or event that constitutes a breach
or default
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by BCC or any of its Subsidiaries with respect to any provision of the
Existing Senior Note Indenture, the Existing Senior Notes, the Senior
Subordinated Note Indenture, the Senior Subordinated Notes, the Seller
Preferred Certificate of Designation, the Exchangeable Preferred
Certificate of Designation, the Warrant Agreement or the Warrants or of
the occurrence of any event or change that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
BCC has taken, is taking and proposes to take with respect thereto;
(xi) Litigation or Other Proceedings: promptly upon any officer of
BCC obtaining knowledge of (a) the institution of, or non-frivolous threat
of, any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration against or affecting
BCC or any of its Subsidiaries or any property of BCC or any of its
Subsidiaries (collectively, "Proceedings") not previously disclosed in
writing by BCC to Lenders or (b) any material development in any
Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to BCC or Company to enable Lenders and their counsel
to evaluate such matters;
(xii) ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any material ERISA Event, a written notice
specifying the nature thereof, what action BCC, any of its Subsidiaries or
any of their respective ERISA Affiliates has taken, is taking or proposes
to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the
PBGC with respect thereto;
(xiii) ERISA Notices: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan; (b) all notices received by BCC, any of its Subsidiaries or any of
their respective ERISA Affiliates from a Multiemployer Plan sponsor
concerning an ERISA Event; and (c) copies of such other documents or
governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
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(xiv) Financial Plans: as soon as practicable and in any event no
later than 30 days after the beginning of each Fiscal Year, a consolidated
financial budget for such Fiscal Year (the "Financial Plan" for such
Fiscal Year), including (a) budgeted consolidated statements of income,
budgeted capital expenditures and Program Payments of BCC and its
Subsidiaries for such Fiscal Year and for each month of such Fiscal Year
on a Station-by-Station basis, together with an explanation of the
assumptions on which such budget is based, and (b) the amount of budgeted
unallocated overhead for such Fiscal Year;
(xv) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained
as of the date of such report by BCC and its Subsidiaries and all material
insurance coverage planned to be maintained by BCC and its Subsidiaries in
the immediately succeeding Fiscal Year;
(xvi) Board of Directors: with reasonable promptness, written notice
of any change in the Board of Directors of BCC or Company;
(xvii) Material Contract: promptly, and in any event within ten
Business Days after any Material Contract (other than any Program
Contract) of BCC or any of its Subsidiaries is terminated or amended in a
manner that is materially adverse to BCC or such Subsidiary, as the case
may be, or any new Material Contract (other than any Program Contract) is
entered into, a written statement describing such event with copies of
such material amendments or new contracts, and an explanation of any
actions being taken with respect thereto;
(xviii) UCC Search Report: as promptly as practicable after the date
of delivery to Collateral Agent of any UCC financing statement executed by
any Loan Party pursuant to subsection 3.1I(iv) or 5.8A, copies of
completed UCC searches evidencing the proper filing, recording and
indexing of all such UCC financing statement and listing all other
effective financing statements that name such Loan Party as debtor,
together with copies of all such other financing statements not previously
delivered to Collateral Agent by or on behalf of Company or such Loan
Party; and
(xix) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
5.2 Corporate Existence; Board of Directors; etc.
Except as permitted under subsection 6.7, BCC will, and will cause each of
its Subsidiaries to, at all times preserve and keep in full force and effect its
corporate existence and each of BCC and Company will maintain such number of
directors and elect any new members to its board of directors in such a manner
so as to insure that no "Change of Control" (as such term is defined in the
Existing Senior Note Indenture or the Senior Subordinated Note Indenture) occurs
and that no such "Change of Control" would occur in the event that the holders
of the
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Seller Preferred Stock and/or the Exchangeable Preferred Stock were to become
entitled to elect, and were to elect, additional directors as a result of an
event giving rise to such entitlement pursuant to any document relating to the
Senior Preferred Stock and the Exchangeable Preferred Stock.
5.3 Payment of Taxes and Claims; Tax Consolidation.
A. BCC will, and will cause each of its Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (i) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (ii) in the case of a charge or claim which has or may become
a Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.
B. BCC will not, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than BCC or any of its Subsidiaries).
5.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds.
A. Maintenance of Properties. BCC will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of BCC and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.
B. Insurance. BCC or Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of BCC and its Subsidiaries as may customarily
be carried or maintained under similar circumstances by corporations of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, BCC will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of
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insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times satisfactory to
Administrative Agent in its commercially reasonable judgment. Each such policy
of insurance shall, (a) if applicable, name Collateral Agent for the benefit of
Lenders as an additional insured thereunder as its interests may appear and (b)
in the case of each business interruption and casualty insurance policy, contain
a lender's loss payable clause or endorsement, satisfactory in form and
substance to Collateral Agent, that names Collateral Agent for the benefit of
Lenders as the loss payee thereunder for any covered loss in excess of $250,000
and provides for at least 30 days prior written notice to Collateral Agent of
any modification or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or any
of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default or Potential Event of Default shall have occurred and be
continuing, Company or such Subsidiary may retain and apply such Net
Insurance/Condemnation Proceeds for working capital purposes, and (b) if
an Event of Default or Potential Event of Default shall have occurred and
be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4B(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds in excess of $250,000 other than from business interruption
insurance, (a) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, Company shall, or shall
cause one or more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/Condemnation Proceeds to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or, to the extent not so
applied, to prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) as provided in subsection 2.4B(iii)(b), and (b) if an Event of
Default or Potential Event of Default shall have occurred and be
continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4B(iii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by Collateral
Agent. Upon receipt by Collateral Agent of any Net Insurance/Condemnation
Proceeds as loss payee, (a) if and to the extent Company would have been
required to apply such Net Insurance/Condemnation Proceeds (if it had
received them directly) to prepay the Loans and/or reduce the Revolving
Loan Commitments, Collateral Agent shall, and Company hereby authorizes
Collateral Agent to, apply such Net Insurance/Condemnation Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
as provided in subsection 2.4B(iii)(b), and (b) to the extent the
foregoing clause (a) does not apply and Company delivers written notice to
Collateral Agent that it has elected to use such Net
Insurance/Condemnation Proceeds to repair, restore or replace the assets
in
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respect of which they were received, Collateral Agent shall deliver such
Net Insurance/Condemnation Proceeds to Company, and Company shall, or
shall cause one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received.
D. Application of Key Man Life Insurance Proceeds. Upon receipt of written
notice from Company that it has elected to use all or a portion of any Net Life
Insurance Proceeds to establish a reserve to cover (i) expenses reasonably
estimated by Company to be incurred in connection with engaging a replacement
for the executive subject to the applicable Key Man Life Insurance Policy or
(ii) amounts reasonably determined by Company reflecting adjustments in
Company's Financial Plan as a result of the loss of such executive, Collateral
Agent shall deliver, or shall direct the insurance carrier to deliver, such
portion of such Net Life Insurance Proceeds to Company, and Company shall hold
such Net Life Insurance Proceeds in reserve to be applied against such expenses
and other amounts. Any amount of Net Life Insurance Proceeds delivered to
Company not so applied by Company within one year of their receipt and any Net
Life Insurance Proceeds which Company does not elect to use for the purposes set
forth in the immediately preceding sentence shall be applied by Company or
Collateral Agent, as the case may be, to prepay the Loans (and/or to reduce the
Revolving Loan Commitments) as provided in subsection 2.4B(iii)(f).
5.5 Inspection Rights; Audits of Accounts Receivable; Lender Meeting.
A. Inspection Rights. BCC shall, and shall cause each of its Subsidiaries
to, permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of BCC or of any of its Subsidiaries, to inspect,
copy and take extracts from its and their financial and accounting records, and
to discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that BCC or Company may,
if it so chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may reasonably be requested.
B. Audits of Accounts Receivable. At any time that Revolving Loans are
outstanding, BCC shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by Administrative Agent, upon the request
of Administrative Agent, to conduct one audit of all Accounts Receivable of Loan
Parties during each twelve-month period after the Closing Date, each such audit
to be in scope and substance satisfactory to Administrative Agent, all upon
reasonable notice and at such reasonable times during normal business hours as
may reasonably be requested.
C. Lender Meeting. BCC and Company will, upon the request of Arranging
Agent, Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
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5.6 Compliance with Laws, etc.; Maintenance of FCC Licenses; etc.
BCC shall comply, and shall cause each of its Subsidiaries to comply, with
the requirements of all applicable laws, rules, regulations and orders
(including all Environmental Laws) of any governmental authority (including any
Communications Regulatory Authority), including the Communications Act,
noncompliance with which could reasonably be expected to cause, individually or
in the aggregate a Material Adverse Effect. BCC shall obtain and maintain in
full force and effect, and cause each of its Subsidiaries to obtain and maintain
in full force and effect, all licenses (including the FCC Licenses), permits,
franchises, certifications or other Governmental Authorizations and approvals
necessary to own, acquire or dispose of their respective properties, to conduct
their respective businesses or to comply with the FCC's or any other
Communications Regulatory Authority's construction, operating and reporting
requirements, the violation of which or the failure to obtain or maintain which
could reasonably be expected to have a Material Adverse Effect.
5.7 Environmental Review and Investigation, Disclosure, Etc.; Company's Actions
Regarding Hazardous Materials Activities, Environmental Claims and
Violations of Environmental Laws.
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company and (ii) in the event (a)
Administrative Agent reasonably believes that Company has breached any
representation or warranty in subsection 4.13 or that there has been a material
violation of Environmental Laws at any Facility or by Company or any of its
Subsidiaries at any other location or (b) an Event of Default has occurred and
is continuing, conduct its own investigation of any Facility; provided that, in
the case of any Facility no longer owned, leased, operated or used by Company or
any of its Subsidiaries, Company shall only be obligated to use commercially
reasonable efforts to obtain permission for Administrative Agent's professional
consultant to conduct an investigation of such Facility. For purposes of
conducting such a review and/or investigation, Company hereby grants to
Administrative Agent and its agents, employees, consultants and contractors the
right, upon reasonable notice to Company, to enter into or onto any Facilities
currently owned, leased, operated or used by Company or any of its Subsidiaries
and to perform such tests on such property (including taking samples of soil,
groundwater and suspected asbestos-containing materials) as are reasonably
necessary in connection therewith. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Company and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Company and
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 5.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company
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acknowledges and agrees that (1) it will indemnify and hold harmless
Administrative Agent and each Lender from any costs, losses or
liabilities relating to Company's use of or reliance on such report, (2) neither
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (3) by delivering such report to Company, neither
Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. Environmental Disclosure. Company will deliver to Administrative Agent
and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported to any federal, state or
local governmental or regulatory agency under any applicable Environmental
Laws, (b) any remedial action taken by Company or any other Person in
response to (1) any Hazardous Materials Activities the existence of which
has a reasonable possibility of resulting in one or more Environmental
Claims having, individually or in the aggregate, a Material Adverse
Effect, or (2) any Environmental Claims that, individually or in the
aggregate, have a reasonable possibility of resulting in a Material
Adverse Effect, and (c) Company's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of any Facility that
could cause such Facility or any part thereof to be subject to any
material restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and (c)
any request for information from any governmental agency that suggests
such agency is investigating whether Company or any of its Subsidiaries
may be potentially responsible for any Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to (1) expose Company or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the
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aggregate, a Material Adverse Effect or (2) affect the ability of Company
or any of its Subsidiaries to maintain in full force and effect
all material Governmental Authorizations required under any Environmental
Laws for their respective operations and (b) any proposed action to be
taken by Company or any of its Subsidiaries to commence manufacturing
or other industrial operations or to modify current operations in a
manner that could reasonably be expected to subject Company or any of its
Subsidiaries to any material additional obligations or requirements
under any Environmental Laws.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 5.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Company shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or abate any Hazardous
Materials Activity on, under or about any Facility that is in violation of
any Environmental Laws or that presents a material risk of giving rise to
an Environmental Claim. In the event Company or any of its Subsidiaries
undertakes any such action with respect to any Hazardous Materials,
Company or such Subsidiary shall conduct and complete such action in
compliance with all applicable Environmental Laws and in accordance with
the policies, orders and directives of all federal, state and local
governmental authorities except when, and only to the extent that,
Company's or such Subsidiary's liability with respect to such Hazardous
Materials Activity is being contested in good faith by Company or such
Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any material violation of applicable Environmental Laws by Company or
its Subsidiaries and (ii) make an appropriate response to any
Environmental Claim against Company or any of its Subsidiaries and
discharge any obligations it may have to any Person thereunder where
failure to do so could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
5.8 Matters Relating to Additional Real Property Collateral.
A. Additional Mortgages, Etc. From and after the Closing Date, in the
event that Company acquires any Material Fee Property (other than a Material Fee
Property acquired with purchase money Indebtedness permitted under subsection
6.1(viii)) or any Material Leasehold Property, excluding any such Real Property
Asset the encumbrancing of which requires the consent of any applicable lessor,
where Company is unable to obtain such lessor's consent (any such non-excluded
Real Property Asset being an "Additional Mortgaged Property"), Company
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shall deliver to Collateral Agent, as soon as practicable after such Person
acquires such Additional Mortgaged Property, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage (an
"Additional Mortgage"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of
Company in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to
Company, in form and substance satisfactory to Collateral Agent and its
counsel, as to the due authorization, execution and delivery by Company of
such Additional Mortgage and such other matters as Collateral Agent may
reasonably request, and (b) if required by Collateral Agent, an opinion of
counsel (which counsel shall be reasonably satisfactory to Collateral
Agent) in the state in which such Additional Mortgaged Property is located
with respect to the enforceability of such Additional Mortgage and such
other matters (including any matters governed by the laws of such state
regarding personal property security interests in respect of any
Collateral) as Collateral Agent may reasonably request, such local counsel
opinion to be substantially in the form of the opinions delivered pursuant
to subsection 3.1H(ii), in each case in form and substance reasonably
satisfactory to Collateral Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of an Additional Mortgaged Property consisting of a Material
Leasehold Property, (a) a Landlord Consent and Estoppel and (b) evidence
that such Material Leasehold Property is a Recorded Leasehold Interest or
the appropriate duly executed documents for recording to make it a
Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent, an
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "Additional Mortgage Policy") issued by the Title Company
with respect to such Additional Mortgaged Property, in an amount
satisfactory to Collateral Agent, insuring fee simple title to, or a valid
leasehold interest in, such Additional Mortgaged Property vested in
Company and assuring Collateral Agent that such Additional Mortgage
creates a valid and enforceable First Priority mortgage Lien on such
Additional Mortgaged Property, subject only to a standard survey
exception, which Additional Mortgage Policy (1) shall, if requested by
Administrative Agent, include an endorsement for mechanics' liens for
future advances under this Agreement and for any other matters reasonably
requested by Collateral Agent and (2) shall provide for affirmative
insurance and such reinsurance as Collateral Agent may reasonably request,
all of the foregoing in form and substance reasonably satisfactory to
Collateral Agent; and (b) evidence satisfactory to Collateral Agent that
Company has (i) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the issuance
of the Additional Mortgage Policy and (ii) paid to the Title Company or to
the appropriate governmental authorities all expenses and premiums of the
Title Company in connection with the issuance of the Additional Mortgage
Policy and all recording and stamp taxes (including
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mortgage recording and intangible taxes) payable in connection with
recording the Additional Mortgage in the appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is required with
respect to such Additional Mortgaged Property, a title report issued by
the Title Company with respect thereto, dated not more than 30 days prior
to the date such Additional Mortgage is to be recorded and satisfactory in
form and substance to Collateral Agent;
(vi) Copies of Documents Relating to Title Exceptions. If requested
by Administrative Agent, copies of all recorded documents listed as
exceptions to title or otherwise referred to in the Additional Mortgage
Policy or title report delivered pursuant to clause (v) or (vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property
is a Flood Hazard Property and (2) if so, whether the community in which
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if such Additional Mortgaged Property is a
Flood Hazard Property, Company's written acknowledgement of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located
in a community that participates in the National Flood Insurance Program,
evidence that Company has obtained flood insurance in respect of such
Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System; and
(viii) Environmental Audit. If required by Collateral Agent, reports
and other information, in form, scope and substance satisfactory to
Collateral Agent and prepared by environmental consultants satisfactory to
Collateral Agent, concerning any environmental hazards or liabilities to
which Company or any of its Subsidiaries may be subject with respect to
such Additional Mortgaged Property.
B. Real Estate Appraisals. If required by applicable laws or regulations
as determined by Collateral Agent, Company shall permit an independent real
estate appraiser satisfactory to Collateral Agent, upon reasonable notice, to
visit and inspect any Additional Mortgaged Property for the purpose of preparing
an appraisal of such Additional Mortgaged Property satisfying the requirements
of any applicable laws and regulations (in each case to the extent required
under such laws and regulations as determined by Collateral Agent in its
discretion).
5.9 Maintenance of Key Man Life Insurance Policies.
Company shall maintain Key Man Life Insurance Policies in full force and
effect in an aggregate amount as determined appropriate by Company from time to
time with respect to
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A. Richard Benedek and an aggregate amount of not less than $4,000,000 with
respect to K. James Yager; provided, however, that if at any time the Leverage
Ratio is less than 5.5:1, Company will not thereafter be required to maintain
the Key Man Life Insurance Policies.
5.10 Maintenance of Network Affiliations.
Company shall cause each Station (other than any of the Satellite
Stations) to maintain a Network Affiliation at all times.
5.11 Ownership Reports.
Company shall file Ownership Reports for any Station acquired after the
Closing Date (reflecting such acquisition by Company) with the FCC within a
period of 30 days after the date of consummation of such acquisition.
5.12 Determination of Borrowing Base.
A. Company shall deliver a Borrowing Base Certificate to Administrative
Agent (i) at any time that Revolving Loans are outstanding, upon the request of
Administrative Agent, (ii) together with each delivery to Administrative Agent
of a Notice of Borrowing requesting Revolving Loans, and (iii) at any time any
Revolving Loans are outstanding, as soon as available and in any event no later
than 30 days after the end of each month. Each such Borrowing Base Certificate
shall be dated such date as may be requested by Administrative Agent from time
to time or, in the case of clause (iii), as of the last day of such month.
B. The Accounts Receivable shown on each Borrowing Base Certificate shall
conform to the requirements set forth in the definition of Borrowing Base, and
shall be Company's exclusive property and shall not be subject to any Lien
(other than Liens created under the Collateral Documents and Permitted
Encumbrances).
C. Company will, and will cause each of its Subsidiaries to, keep proper
books of record and account in which full, true and correct entries in
conformity with sound business practices shall be made of all dealings and
transactions in relation to its business and activities (including all dealings
and transactions with respect to the Collateral covered by the Collateral
Documents and Accounts Receivable). Company agrees to furnish to Administrative
Agent, any information which it may reasonably request regarding the
determination and calculation of the Borrowing Base, including correct and
complete copies of any invoices, underlying agreements, instruments, or other
documents and the identity of all obligors.
5.13 Future Capital Contributions; Cash and Cash Equivalents of BCC.
A. Upon receipt by BCC of any Cash proceeds (any such proceeds net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses) from the
issuance of any debt or equity Securities of BCC, BCC shall contribute such net
Cash proceeds to Company as a contribution to capital (provided that if BCC
receives any capital stock as a result of such contribution it shall
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be common stock) to be used by Company in accordance with subsection
2.4B(iii)(g); provided that foregoing shall not apply to proceeds received by
BCC upon the exercise of stock options (i) by directors, officers, employees or
independent contractors (other than Benedek) of BCC or its Subsidiaries or (ii)
by Benedek to the extent the aggregate amount of such proceeds does not exceed
$2,000,000.
B. BCC shall maintain all Cash and Cash Equivalents owned by it in the
Collateral Account in accordance with the terms of the Collateral Account
Agreement.
SECTION 6.
COMPANY'S NEGATIVE COVENANTS
Each of BCC and Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen), unless
Requisite Lenders shall otherwise give prior written consent, each of BCC and
Company shall perform, and shall cause each of its Subsidiaries, as applicable,
to perform, all covenants in this Section 6.
6.1 Indebtedness.
BCC shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, create, incur, assume or guaranty, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness, except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company may become and remain liable with respect to Contingent
Obligations permitted by subsection 6.4 and, upon any matured obligations
actually arising pursuant thereto, the Indebtedness corresponding to the
Contingent Obligations so extinguished;
(iii) Subject to the limitation contained in subsection
6.1(viii)(c), Company may become and remain liable with respect to
Indebtedness in respect of Capital Leases;
(iv) Company may remain liable with respect to Indebtedness
described in Schedule 6.1 annexed hereto;
(v) Company may become and remain liable with respect to Program
Obligations and deferred employee compensation;
(vi) Company may remain liable with respect to Indebtedness
evidenced by the Existing Senior Notes;
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(vii) BCC may become and remain liable with respect to Indebtedness
evidenced by the Senior Subordinated Notes (and original issue discount
accreted in accordance with the terms thereof); and
(viii) Company may become and remain liable with respect to
Indebtedness, the proceeds of which are used within 180 days of the
incurrence thereof to purchase assets in the ordinary course of business;
provided that (a) the assets purchased with the proceeds of such
Indebtedness are property or equipment relating to the Stations or the
corporate headquarters of Company, (b) at least 75% of the purchase price
of such assets is provided by the proceeds of such Indebtedness, and (c)
the aggregate principal amount of such Indebtedness plus the aggregate
amount of outstanding Indebtedness of Company with respect to Capital
Leases shall not exceed (1) $4,000,000 at any time until the Leverage
Ratio is less than or equal to 5.75:1, and (2) $7,500,000 thereafter.
6.2 Liens and Related Matters.
A. Prohibition on Liens. BCC shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of BCC or any of its Subsidiaries, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit the filing of,
or permit to remain in effect, any financing statement or other similar notice
of any Lien with respect to any such property, asset, income or profits under
the Uniform Commercial Code of any State or under any similar recording or
notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 6.2 annexed hereto; and
(iv) Liens securing Indebtedness permitted pursuant to subsection
6.1(viii) provided that such Liens relate solely to the assets financed
with such Indebtedness.
B. Equitable Lien in Favor of Lenders. If BCC or any of its Subsidiaries
shall create or assume any Lien upon any of its properties or assets, whether
now owned or hereafter acquired, other than Liens excepted by the provisions of
subsection 6.2A, it shall make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably with any and
all other Indebtedness secured thereby as long as any such Indebtedness shall be
so secured; provided that, notwithstanding the foregoing, this covenant shall
not be construed as a consent by Requisite Lenders to the creation or assumption
of any such Lien not permitted by the provisions of subsection 6.2A.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither BCC nor any of
its Subsidiaries shall enter into
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any agreement (other than the Senior Subordinated Note Indenture or any other
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein, BCC will not, and will not permit any
of its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Company or any other Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (iii) make loans or advances to
Company or any other Subsidiary of Company, or (iv) transfer any of its property
or assets to Company or any other Subsidiary of Company except as provided in
the Existing Senior Note Indenture and the Senior Subordinated Note Indenture.
6.3 Investments; Joint Ventures.
BCC shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, make or own any Investment in any Person, including any Joint
Venture, except:
(i) BCC and Company may make and own Investments in Cash
Equivalents, subject, in the case of BCC, to compliance with the terms of
subsection 5.13;
(ii) Company may continue to own the Investments owned by it as of
the Closing Date in License Sub;
(iii) BCC may continue to own the Investments owned by it in Company
as of the Closing Date;
(iv) Company may make Consolidated Capital Expenditures permitted by
subsection 6.8;
(v) Subject to the limitations contained in subsection 6.7(viii),
Company may make LMA Capital Expenditures;
(vi) Company may continue to own the Investments owned by it and
described in Schedule 6.3 annexed hereto;
(vii) Company may make and own Investments consisting of promissory
notes or other Securities received in connection with Asset Sales
permitted under subsection 6.7(v) limited to an amount not in excess of
10% of the total sales price of the assets sold in such Asset Sale;
(viii) Company may make loans to employees to fund the exercise
price of options to purchase stock of BCC;
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(ix) Company may make and own Investments in Satellite Stations
received in exchange for Satellite Stations as permitted by subsection
6.7(vi);
(x) Company may make and own Investments (in addition to the
Investments set forth on Schedule 6.3 annexed hereto) in Joint Ventures
and Company and BCC may make and own Investments in Special Purpose
Subsidiaries engaging in businesses related to television broadcasting in
an aggregate amount not to exceed $10,000,000 less the aggregate principal
amount of any Existing Senior Notes or Senior Subordinated Notes
repurchased under subsection 6.5(ii); provided that any Special Purpose
Subsidiary which is a direct Subsidiary of BCC and which is a party to a
Permitted LMA or makes a Permitted Acquisition in accordance with
subsection 6.7(ix) shall have (a) executed and delivered to Collateral
Agent a guaranty of the Obligations hereunder substantially in the form of
the License Sub Guaranty and otherwise in form and substance reasonably
satisfactory to Collateral Agent and (b) granted to Collateral Agent, for
the benefit of Lenders, as security for the Obligations, a First Priority
security interest in all Material Fee Properties and Material Leasehold
Properties and all personal property and fixtures of such Special Purpose
Subsidiary pursuant to documentation similar to the security documents
delivered on the Closing Date and otherwise in form and substance
satisfactory to Collateral Agent, unless such Special Purpose Subsidiary
is not 100% owned by BCC and any equity holder which is other than an
Affiliate of BCC refuses to consent to the granting of such guaranty and
security interests after BCC has used its good faith efforts to obtain
such consent; and
(xi) Company may make Investments in connection with a Permitted
Acquisition in the stock or other equity interests of an entity owning the
Television Station Asset Group being acquired, provided that immediately
following the consummation of such acquisition, such entity is merged with
and into Company with Company being the surviving corporation.
6.4 Contingent Obligations.
BCC shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, create or become or remain liable with respect to any Contingent
Obligation, except:
(i) License Sub may become and remain liable with respect to
Contingent Obligations in respect of the License Sub Guaranty and the
Existing Senior Note Indenture;
(ii) BCC may become and remain liable with respect to the BCC
Guaranty;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements; and
(iv) Company may remain liable with respect to Contingent
Obligations described in Schedule 6.4 annexed hereto.
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6.5 Restricted Junior Payments.
BCC shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, declare, order, pay, make or set apart any sum for any Restricted
Junior Payment, except:
(i) BCC may make regularly scheduled payments of interest in respect
of Senior Subordinated Notes after May 15, 2001, and pay any Liquidated
Damages required to be paid, in accordance with the terms of, and only to
the extent required by, and subject to the subordination provisions
contained in, the Senior Subordinated Note Indenture;
(ii) At any time the Leverage Ratio is less than or equal to 5.75:1,
BCC may repurchase Existing Senior Notes and/or Senior Subordinated Notes
in an aggregate principal amount not to exceed $10,000,000 less the
aggregate amount of Investments made pursuant to subsection 6.3(x);
(iii) BCC may pay any Liquidated Damages required to be paid in
connection with the Exchangeable Preferred Stock;
(iv) BCC may, with respect to each period for which Company
qualifies as an S Corporation under the Code or any similar provision of
state law make cash distributions of Tax Amounts to Benedek; provided that
prior to any such distribution (a) Administrative Agent has received an
Officers' Certificate certifying that Company qualified as an S
Corporation for such period under the Code or in the states for which
distributions are being made and Company's most recent audited financial
statements reflect that company was treated as an S Corporation for the
applicable period, (b) Benedek shall have entered into a written agreement
with BCC in form and substance satisfactory to Arranging Agent and
Administrative Agent providing that if any amount distributed to Benedek
pursuant to this clause (iv) is later determined, to have been, as a
result of a change in law or the failure of Company to effect or maintain
a valid S Corporation election or otherwise, in excess of the amount
permitted to be distributed or paid under this clause (iv), such excess
shall be refunded to Company at least five Business Days prior to the next
due date of individual estimated income tax payments and (c) Company shall
have requested and received any excess payments required to be refunded by
Benedek pursuant to the agreement referenced in clause (b) above;
(v) Company may make Cash dividends or Cash distributions to BCC;
and
(vi) BCC or Company may redeem or repurchase Warrants in an amount
not exceeding the Unutilized Compensation Amount as of the date of such
redemption or repurchase.
6.6 Financial Covenants.
A. Minimum Cash Interest Coverage Ratio. BCC and Company shall not permit
the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Cash Interest
Expense for
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any four-Fiscal Quarter period ending during any of the periods set forth below
to be less than the correlative ratio indicated:
================================================================================
Minimum
Period Cash Interest
Coverage Ratio
================================================================================
07/01/96 through 09/30/96 1.70:1
- --------------------------------------------------------------------------------
10/01/96 through 09/30/97 1.90:1
- --------------------------------------------------------------------------------
10/01/97 through 09/30/98 2.00:1
- --------------------------------------------------------------------------------
10/01/98 through 09/30/99 2.15:1
- --------------------------------------------------------------------------------
10/01/99 through 09/30/2000 2.40:1
- --------------------------------------------------------------------------------
10/01/2000 through 09/30/01 2.80:1
- --------------------------------------------------------------------------------
Thereafter 2.00:1
================================================================================
B. Minimum Fixed Charge Coverage Ratio. BCC and Company shall not permit
the Fixed Charge Coverage Ratio as of the last day of (i) the third Fiscal
Quarter of 1996 for the Fiscal Quarter then ended, (ii) the fourth Fiscal
Quarter of 1996 for the two Fiscal Quarters then ended, (iii) the first Fiscal
Quarter of 1997 for the three Fiscal Quarters then ended or (iv) any Fiscal
Quarter thereafter for the four-Fiscal Quarter period ended on such date, to be
less than 1.15:1.
C. Maximum Leverage Ratio. BCC and Company shall not permit the Leverage
Ratio as of the last day of any Fiscal Quarter ending during any of the periods
set forth below to exceed the correlative ratio indicated:
================================================================================
Maximum
Period Leverage Ratio
================================================================================
- --------------------------------------------------------------------------------
07/01/96 through 09/30/96 7.10:1
- --------------------------------------------------------------------------------
10/01/96 through 09/30/97 6.75:1
- --------------------------------------------------------------------------------
10/01/97 through 09/30/98 6.50:1
- --------------------------------------------------------------------------------
10/01/98 through 09/30/99 5.75:1
- --------------------------------------------------------------------------------
10/01/99 through 09/30/2000 5.75:1
- --------------------------------------------------------------------------------
10/01/2000 through 09/30/01 5.00:1
- --------------------------------------------------------------------------------
Thereafter 4.75:1
================================================================================
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D. Maximum Credit Facilities Leverage Ratio. BCC and Company shall not
permit the Credit Facilities Leverage Ratio as of the last day of any Fiscal
Quarter ending during any of the periods set forth below to exceed the
correlative ratio indicated:
================================================================================
Maximum Credit
Period Facilities
Leverage Ratio
================================================================================
- --------------------------------------------------------------------------------
07/01/96 through 09/30/97 2.45:1
- --------------------------------------------------------------------------------
10/01/97 through 09/30/98 2.20:1
- --------------------------------------------------------------------------------
10/01/98 through 09/30/99 1.95:1
- --------------------------------------------------------------------------------
10/01/99 through 09/30/2000 1.45:1
- --------------------------------------------------------------------------------
10/01/2000 through 09/30/01 0.85:1
- --------------------------------------------------------------------------------
Thereafter 0.50:1
================================================================================
E. Maximum Program Payments. BCC and Company shall not create, incur,
assume or otherwise become or remain liable for any Program Obligations with
respect to which Program Payments are required during any period set forth below
which exceed the correlative maximum amount indicated:
==========================================================================
Fiscal Year Maximum Program
(or other Payments
specified period)
==========================================================================
07/01/96 through
12/31/96 $3,750,000
- --------------------------------------------------------------------------
1997 $7,500,000
- --------------------------------------------------------------------------
1998 $8,000,000
- --------------------------------------------------------------------------
1999 $8,500,000
- --------------------------------------------------------------------------
2000 and each
year thereafter $10,000,000
==========================================================================
F. Minimum Consolidated Adjusted EBITDA. BCC and Company shall not permit
Consolidated Adjusted EBITDA for any Fiscal Year set forth below to be less than
the correlative amount indicated; provided, however, that following an Asset
Sale of a Television Station Asset Group permitted under subsection 6.7(v), each
of the minimum Consolidated Adjusted EBITDA amounts set forth below shall be
adjusted downward by an amount equal to the portion of Consolidated Adjusted
EBITDA attributable to such Television Station Asset Group during the
four-Fiscal Quarter period most recently ended prior to such Asset Sale:
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========================================================================
Minimum
Fiscal Consolidated Adjusted
Year EBITDA
========================================================================
1996 $53,000,000
- ------------------------------------------------------------------------
1997 $55,000,000
- ------------------------------------------------------------------------
1998 $60,000,000
- ------------------------------------------------------------------------
1999 and each
year thereafter $62,000,000
========================================================================
G. Certain Calculations. With respect to calculations of Consolidated
Adjusted EBITDA, Consolidated Interest Expense and Consolidated Cash Interest
Expense for any four-Fiscal Quarter period including the Closing Date, such
calculations shall be made on a pro forma basis assuming, in each case, that the
Closing Date, the Acquisitions, the issuance and sale of the Seller Preferred
Stock and the Exchangeable Preferred Stock and the related borrowings by Company
and BCC pursuant to this Agreement and the Senior Subordinated Note Indenture
occurred on the first day of the applicable four-Fiscal Quarter period and
assuming further, for purposes of calculation of the pro forma interest accrued
on Loans during such periods prior to the Closing Date, that all Loans
outstanding were Eurodollar Rate Loans and that the applicable reference
interest rates were the average effective Adjusted Eurodollar Rates on the Loans
for the period from the Closing Date through the date of determination, all such
calculations to be in form and substance satisfactory to Administrative Agent.
Further, for purposes of such calculations, Consolidated Adjusted EBITDA on a
pro forma basis for the second, third and fourth Fiscal Quarters of 1995 and the
first Fiscal Quarter of 1996 shall be as set forth on Schedule 6.6 annexed
hereto and Consolidated Adjusted EBITDA on a pro forma basis for the second
Fiscal Quarter of 1996 shall be calculated in a manner consistent with the pro
forma calculations of Consolidated Adjusted EBITDA for such prior Fiscal
Quarters of 1995 and 1996 and otherwise on a basis reasonably satisfactory to
Administrative Agent. With respect to calculations of Consolidated Adjusted
EBITDA for purposes of the definitions of "Leverage Ratio", "Credit Facilities
Leverage Ratio" and "Pro Forma Fixed Charge Coverage Ratio" following an Asset
Sale of a Television Station Asset Group in accordance with subsection 6.7(v) or
a Permitted Acquisition in accordance with subsection 6.7(viii), such
calculations shall be made on a pro forma basis as if such Asset Sale or
Permitted Acquisition occurred on the first day of the applicable four-Fiscal
Quarter period, all such calculations to be in form and substance satisfactory
to Administrative Agent.
6.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
BCC shall not, and shall not permit any of its Subsidiaries to, alter the
corporate, capital or legal structure of BCC or any of its Subsidiaries, or
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
property or assets,
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whether now owned or hereafter acquired, or acquire by purchase or otherwise all
or substantially all the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person or any division or line of
business of any Person, or enter into any LMA or make any LMA Capital
Expenditures, or permit any Special Purpose Subsidiary to enter into any LMA or
make any acquisition of any Television Asset Group, except:
(i) Company may make the Acquisitions on the Closing Date and
Company, Brissette and Brissette's Subsidiaries may consummate the
Reorganization, in each case subject to the provisions contained herein;
(ii) Company may make Consolidated Capital Expenditures permitted
under subsection 6.8 and Investments permitted under subsection 6.3;
(iii) Company may dispose of obsolete, worn out or surplus property
or other assets reasonably determined by Company as no longer useful or
necessary to the operation of the business in the ordinary course of
business;
(iv) Company may enter into leases as the lessor or sublessor in the
ordinary course of business as long as such leases do not materially
interfere with the operation of the Stations or the conduct of business of
Company or result in a material diminution in the value of any Collateral
as security for the Obligations;
(v) subject to subsection 6.12, Company may make Asset Sales of a
Television Station Asset Group; provided that (a) the consideration
received for such assets shall be in an amount at least equal to the fair
market value thereof and in no event less than the product of (1) eight
multiplied by (2) that portion of Consolidated Adjusted EBITDA (excluding
any allocation of corporate overhead expenses) for the most recently ended
four-Fiscal Quarter period of Company attributable to the assets subject
to such Asset Sale (the "Minimum Amount"); (b) the cash consideration
received shall be equal to the greater of the Minimum Amount and 90% of
the total consideration received; (c) the Net Asset Sale Proceeds shall be
applied as required by subsection 2.4B(iii)(a); (d) on a pro forma basis,
after giving effect to such Asset Sale and related prepayment hereunder,
Company shall be in compliance with all of the covenants hereunder as
evidenced in an Officers' Certificate delivered to Administrative Agent,
and Administrative Agent shall have received evidence reasonably
satisfactory to it that Company will be in compliance with all of the
covenants hereunder through the end of the next full Fiscal Year following
any such Asset Sale; (e) the assets subject to such Asset Sales in any
Fiscal Year did not generate more than 10% of Consolidated Adjusted EBITDA
as of the most recently ended four-Fiscal Quarter period prior to the
sale; and (f) the sum of each of the percentages of Consolidated Adjusted
EBITDA generated by the assets subject to each such Asset Sale occurring
during the period from the Closing Date through the date of determination,
as computed according to the foregoing clause (e), shall not exceed 25%;
(vi) Company may sell or exchange Satellite Stations, provided
Company receives fair market consideration in such sale or exchange;
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(vii) Company may enter into Permitted LMAs;
(viii) Company may make Permitted Acquisitions or LMA Capital
Expenditures; provided that (a) no Event of Default or Potential Event of
Default shall have occurred and be continuing, (b) no Revolving Loans
shall be outstanding, (c) with respect to any LMA Capital Expenditures in
excess of $1,000,000 in the aggregate or any Permitted Acquisition,
Company shall have delivered to Administrative Agent an Officers'
Certificate, in form and substance reasonably satisfactory to
Administrative Agent, demonstrating that (1) BCC and its Subsidiaries, on
a pro forma basis after giving effect to the Permitted Acquisition or LMA
Capital Expenditure, shall be in compliance with all of the covenants
hereunder and (2) the Pro Forma Fixed Charge Coverage Ratio calculated
with respect to such Permitted Acquisition or LMA Capital Expenditure is
equal to or greater than 1.05:1, (d) any assets acquired pursuant to the
Permitted Acquisition or LMA Capital Expenditure (other than assets
subject to a Lien permitted under subsection 6.2A(iv)) shall be subject to
a First Priority Lien of the Collateral Agent pursuant to the Collateral
Documents and (e) the aggregate amount of all LMA Capital Expenditures and
expenditures made by Company in connection with Permitted Acquisitions
shall not exceed $20,000,000 less the sum of (x) the aggregate principal
amount of any Existing Senior Notes and Senior Subordinated Notes
repurchased under subsection 6.5(ii) plus (y) the aggregate amount of
Investments made by Company under subsection 6.3(x);
(ix) any Special Purpose Subsidiary may make Permitted Acquisitions
and enter into Permitted LMAs; provided, however, that (a) notwithstanding
anything in this Agreement to the contrary, such Special Purpose
Subsidiary shall not be liable, and shall not create, incur, assume,
guaranty or otherwise become or remain liable, directly or indirectly,
with respect to any Indebtedness other than any guaranty by such Special
Purpose Subsidiary of the Obligations, (b) prior to entering into any
Permitted LMA, Company and such Special Purpose Subsidiary shall have
entered into an agreement providing for a fair and reasonable allocation
of any shared overhead expenses with respect to such Permitted LMA, which
agreement shall be in form and substance satisfactory to Administrative
Agent, and (c) together with each delivery of financial statements of BCC
and its Subsidiaries pursuant to subsections 5.1(ii) and 5.1(iii), Company
shall provide to Administrative Agent an accounting in reasonable detail
of the allocation of shared overhead expenses for the Fiscal Quarter most
recently ended; and
(x) if as a result of the Brissette Acquisition, Company is required
by the FCC to divest itself of certain Stations in order to comply with
the FCC's duopoly rule and Company desires to swap or exchange such
Stations for other television broadcast stations rather than selling such
Stations, Company may make such swap or exchange with the consent of
Requisite Lenders. Lenders agree to consider any proposal by Company to
enter into to such a swap or exchange in good faith and not to withhold
their consent unless after considering all information submitted by
Company and all factors deemed relevant by Lenders in evaluating the
potential impact of the transaction on the creditworthiness of BCC and
Company, Lenders determine that it would not be prudent to grant such
consent.
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6.8 Consolidated Capital Expenditures.
BCC shall not, and shall not permit its Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any period indicated below, in an
aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such period;
provided that the Maximum Consolidated Capital Expenditures Amount for any such
period shall be increased by an amount equal to (i) the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous period over
the actual amount of Consolidated Capital Expenditures for such previous period
and/or, (ii) at Company's option, a portion of the amount of Maximum
Consolidated Capital Expenditures Amount for the immediately succeeding period
(which, to the extent of such increase shall reduce the amount of the Maximum
Consolidated Capital Expenditure Amount for such succeeding period), provided
that in no event shall (a) the amount of any increase to the Maximum
Consolidated Capital Expenditures Amount pursuant to the foregoing clause (i) in
any period exceed 50% of the Maximum Consolidated Capital Expenditures Amount
for the previous period and (b) the amount of any increase to the Maximum
Consolidated Capital Expenditures Amount pursuant to the foregoing clause (ii)
in any period exceed 50% of the Maximum Consolidated Capital Expenditures Amount
for the immediately succeeding period.
================================================================================
Fiscal Year (or other
specified period) Maximum Consolidated
Capital Expenditures
================================================================================
Closing Date through
12/31/96 $6,500,000
- --------------------------------------------------------------------------------
1997 $7,500,000
- --------------------------------------------------------------------------------
1998 $8,000,000
- --------------------------------------------------------------------------------
1999 and each
year thereafter $6,500,000
================================================================================
6.9 Sales and Lease-Backs.
BCC shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, become or remain liable as lessee or as a guarantor or other
surety with respect to any lease, whether an Operating Lease or a Capital Lease,
of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease.
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6.10 Sale or Discount of Receivables.
BCC shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, sell with recourse, or discount or otherwise sell for less than
the face value thereof, any of its notes or Accounts Receivable.
6.11 Transactions with Shareholders and Affiliates.
BCC shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of BCC,
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to BCC or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between BCC or Company and any of their respective wholly owned
Subsidiaries or between any of BCC's wholly owned Subsidiaries or between any of
Company's wholly owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of BCC or Company and its Subsidiaries, (iii)
annual cash compensation to Benedek in a dollar amount (the "Compensation
Limit") not exceeding (a) in Fiscal Year 1996, $750,000, (b) in Fiscal Year
1997, $1,000,000 and (c) in each Fiscal Year thereafter, 110% of the
Compensation Limit for the prior Fiscal Year or (iv) loans or advances made to
directors, officers, employees or independent contractors to fund the exercise
price of options to purchase stock of BCC or its Subsidiaries or for moving,
entertainment, travel expenses, drawing accounts and similar expenditures made
in the ordinary course of business.
6.12 Disposal of Subsidiary Stock.
BCC and Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except (a) to qualify directors if
required by applicable law and (b) as contemplated by the Collateral
Documents; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including
such Subsidiary), except to BCC, Company or another Subsidiary of Company
(other than License Sub) as permitted by subsection 6.7(v), or to qualify
directors if required by applicable law.
6.13 Conduct of Business.
From and after the Closing Date, Company shall not engage, and shall not
permit any of its Subsidiaries to engage, in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such
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other lines of business as may be consented to by Requisite Lenders. License Sub
shall engage in no business other than the holding of FCC Licenses and the
performance of its obligations under the License Sub Guaranty and its guaranty
of the Existing Senior Notes and shall own no material assets other than FCC
Licenses. None of Company nor any Subsidiary of Company other than License Sub
shall own any FCC License other than as set forth on Schedule 4.1E annexed
hereto. BCC shall engage in no business and have no assets other than (i) owning
the stock of Company, (ii) the issuance of and activities related to the
maintenance and servicing of the Seller Preferred Stock, the Exchangeable
Preferred Stock and Warrants and the Senior Subordinated Notes as permitted
hereunder, including performing its obligations as a reporting company under the
Securities Act and the Exchange Act, (iii) the performance of its obligations
under the BCC Guaranty and (iv) the receipt of Cash dividends or Cash
distributions from Company in accordance with the provisions hereof.
6.14 Amendments or Waivers of Certain Related Agreements; Payments on Existing
Senior Notes; Designation of "Designated Senior Debt".
A. Amendments or Waivers of Certain Related Agreements. Neither BCC nor
any of its Subsidiaries will agree to any amendment to, request any waiver of
(other than a waiver for which no fee is paid and no other concessions or
considerations are granted by BCC or Company), or waive any of their respective
rights under, any of the Related Agreements (other than any amendment or waiver
described in the next succeeding sentence) without in each case obtaining the
prior written consent of Administrative Agent and Requisite Lenders (and giving
notice to Arranging Agent) to such amendment, request or waiver. Notwithstanding
the foregoing, BCC and its Subsidiaries may agree to amend or waive any
provisions of the Related Agreements (i) to cure any ambiguity, to correct or
supplement any provision therein which may be defective or inconsistent with any
other provision therein, or (ii) to comply with the Trust Indenture Act of 1939,
as amended, or (iii) to make modifications of a technical or clarifying nature
or which are no less favorable to the Lenders, in the reasonable opinion of
Administrative Agent and Requisite Lenders, than the provisions of the Related
Agreements as in effect on the Closing (for the purposes of this subsection
6.14, any amendment, modification or change which would extend the maturity or
reduce the amount of any payment of principal on the Existing Senior Notes or
the Subordinated Indebtedness or which would reduce the rate or extend the date
for payment of interest thereon, provided that no fee is payable in connection
therewith, shall be deemed to be an amendment, modification or change that is no
less favorable to the Lenders).
B. Payments on Existing Senior Notes. Except as permitted by subsection
6.5(ii), neither BCC nor any of its Subsidiaries shall make any prepayments,
redemptions or repurchases of the Existing Senior Notes without the prior
written consent of Administrative Agent and Requisite Lenders. Neither BCC nor
any of its Subsidiaries will defease, or make any payments the effect of which
is to defease (whether pursuant to the defeasance provisions of the Existing
Senior Notes or otherwise), the Existing Senior Notes, in whole or in part,
without in each case obtaining the prior written consent of Administrative Agent
and Requisite Lenders.
C. Designation of "Designated Senior Debt". Neither BCC nor Company shall
designate any Indebtedness (other than the Obligations and the Existing Senior
Notes) as "Designated Senior Debt", as defined in the Senior Subordinated Note
Indenture, for purposes
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of the Senior Subordinated Note Indenture without the prior written consent of
Administrative Agent.
6.15 Fiscal Year
Neither BCC nor any of its Subsidiaries shall change its Fiscal Year-end
from December 31.
6.16 Limitation on Creation of Subsidiaries.
BCC will not, and will not permit any of its Subsidiaries to, establish,
create or acquire any new Subsidiary other than a Special Purpose Subsidiary.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
7.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or failure by Company to pay
any interest on any Loan or any fee or any other amount due under this Agreement
within three Business Days after the date due; or
7.2 Default in Other Agreements.
(i) Failure of BCC or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
7.1) or Contingent Obligations with an aggregate principal amount of $1,000,000
or more beyond the end of any grace period provided therefor; or (ii) breach or
default by BCC or any of its Subsidiaries with respect to any other material
term of (a) one or more items of Indebtedness or Contingent Obligations in the
aggregate principal amount referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
7.3 Breach of Certain Covenants.
Failure of BCC or any of its Subsidiaries to perform or comply with any
term or condition contained in subsection 2.5 or 5.2 or Section 6 of this
Agreement; or
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7.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by any
Loan Party or any of its Subsidiaries in any Loan Document or in any statement
or certificate at any time given by any Loan Party or any of its Subsidiaries in
writing pursuant hereto or thereto or pursuant to a request of any Agent or
Lenders made pursuant hereto or pursuant to the Collateral Documents shall be
false in any material respect on the date as of which made; or
7.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 7, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Company or such Loan Party becoming aware of such default
or (ii) receipt by Company and such Loan Party of notice from Administrative
Agent or any Lender of such default; or
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of BCC or any of its Subsidiaries in an involuntary
case under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which decree or order is
not stayed; or any other similar relief shall be granted under any applicable
federal or state law; or (ii) an involuntary case shall be commenced against BCC
or any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over BCC or any of its Subsidiaries, or over all
or a substantial part of its property, shall have been entered; or there shall
have occurred the involuntary appointment of an interim receiver, trustee or
other custodian of BCC or any of its Subsidiaries for all or a substantial part
of its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of BCC or any of
its Subsidiaries, and any such event described in this clause (ii) shall
continue for 60 days unless dismissed, bonded or discharged; or
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) BCC or any of its Subsidiaries shall have an order for relief entered
with respect to it or commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or BCC or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) BCC or any of its Subsidiaries
shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Board of Directors
of BCC or any of its
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Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
7.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving in the aggregate at any time an amount in excess of $1,000,000 shall
be entered or filed against BCC or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
7.9 Dissolution.
Any order, judgment or decree shall be entered against BCC or any of its
Subsidiaries decreeing the dissolution or split up of BCC or that Subsidiary and
such order shall remain undischarged or unstayed for a period in excess of 30
days; or
7.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
BCC, any of its Subsidiaries or any of their respective ERISA Affiliates in
excess of $1,000,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $1,000,000; or
7.11 Material Adverse Effect.
Any event or change shall occur that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect; or
7.12 Change in Executive Officers of Company.
Either Benedek or K. James Yager, or any successor to either Person
satisfactory to Requisite Lenders hereunder, shall cease, for any reason
whatsoever, to continuously perform their respective present duties as executive
officers of Company, without a successor satisfactory to Requisite Lenders in
their reasonable discretion having commenced to perform the duties of such
executive officer within 120 days after such cessation; or
7.13 Change in Control.
(i) BCC shall cease to own 100% of the capital stock of Company, (ii)
Benedek or his estate or family members or trusts for the benefit of his family
members shall cease to have a presently exercisable right to vote at least 51%
of all issued and outstanding equity Securities of BCC entitled (without regard
to the occurrence of any contingency) to vote for the election
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of members of the Board of Directors of BCC, (iii) Benedek or his estate or
family members or trusts for the benefit of his family members shall cease to
beneficially own at least 51% of the economic value of BCC, or (iv) a "Change of
Control" under the Existing Senior Note Indenture or under the Senior
Subordinated Note Indenture shall occur; or
7.14 FCC Licenses.
Any material FCC License shall be cancelled, terminated, rescinded,
revoked, suspended, impaired, otherwise finally denied renewal, or otherwise
modified in any material adverse respect, or shall be renewed on terms that
materially and adversely affect the economic or commercial value or usefulness
thereof; or any material FCC License shall cease to be in full force and effect;
or the grant of any material FCC License shall have been stayed, vacated or
reversed, or modified in any material adverse respect by judicial or
administrative proceedings; or any administrative law judge or other
representative of the FCC shall have issued an initial decision in any
non-comparative license renewal, license revocation or any comparative (multiple
applicant) proceeding to the effect that any material FCC License should be
revoked or not be renewed; or any other proceeding shall have been instituted by
or shall have been commenced before any court, the FCC or any other regulatory
body that could reasonably be expected to result in (i) cancellation,
termination, rescission, revocation, material impairment, suspension or denial
of renewal of a material FCC License, or (ii) a modification of a material FCC
License in a material adverse respect or a renewal thereof on terms that
materially and adversely affect the economic or commercial value or usefulness
thereof; or
7.15 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations.
At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations, shall cease
to be in full force and effect (other than in accordance with its terms) or
shall be declared by a court of competent jurisdiction to be null and void, (ii)
any Collateral Document shall cease to be in full force and effect (other than
by reason of a release of Collateral thereunder in accordance with the terms
hereof or thereof, the satisfaction in full of the Obligations or any other
termination of such Collateral Document in accordance with the terms hereof or
thereof) or shall be declared null and void by a court of competent
jurisdiction, or Collateral Agent shall not have or shall cease to have a valid
and perfected First Priority Lien in any Collateral purported to be covered
thereby, in each case for any reason other than the failure of Collateral Agent
or any Lender to take any action within its control, or (iii) any Loan Party
shall contest the validity or enforceability of any Loan Document in writing or
deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Loan Document to which it is a party; or
7.16 Subordinated Indebtedness.
BCC or any of its Subsidiaries shall fail to comply with the subordination
provisions contained in the Senior Subordinated Note Indenture or any other
agreement governing Subordinated Indebtedness;
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THEN (i) upon the occurrence of any Event of Default described in subsection 7.6
or 7.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans and (b) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by Company, and the obligation of
each Lender to make any Loan, hereunder shall thereupon terminate, and (ii) upon
the occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Company, declare all or any portion
of the amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan hereunder shall thereupon terminate.
Notwithstanding anything contained in the second preceding paragraph, if
at any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 9.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to rescind
or annul any acceleration hereunder or to preclude Administrative Agent or
Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
SECTION 8.
AGENTS
8.1 Appointment.
A. Appointment of Agents. Pearl Street L.P. is hereby appointed Arranging
Agent and Goldman, Sachs & Co. is hereby appointed Syndication Agent hereunder,
and each Lender hereby authorizes Arranging Agent and Syndication Agent to act
as its agent in accordance with the terms of this Agreement and the other Loan
Documents. CIBC-NYA is hereby appointed Administrative Agent hereunder and under
the other Loan Documents and Collateral Agent under the Collateral Documents and
each Lender hereby authorizes Administrative Agent and Collateral Agent to act
as its agent in accordance with the terms of this Agreement and the other Loan
Documents. Each Agent hereby agrees to act upon the express conditions contained
in this Agreement and the other Loan Documents, as applicable. The provisions of
this Section 8 are solely for the benefit of Agents and Lenders and Company
shall have no rights as a third party
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beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, each Agent shall act solely as an agent of Lenders
and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for Company or any of its
Subsidiaries. Each of Arranging Agent and Syndication Agent, without consent of
or notice to any party hereto, may assign any and all of its rights or
obligations hereunder to any of its Affiliates. As of the Closing Date, all
obligations of Arranging Agent and Syndication Agent hereunder shall terminate.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Collateral Agent deems that by reason
of any present or future law of any jurisdiction it may not exercise any of the
rights, powers or remedies granted herein or in any of the other Loan Documents
or take any other action which may be desirable or necessary in connection
therewith, it may be necessary that Collateral Agent appoint an additional
individual or institution as a separate trustee, co-trustee, collateral agent or
collateral co-agent (any such additional individual or institution being
referred to herein individually as a "Supplemental Collateral Agent" and
collectively as "Supplemental Collateral Agents").
In the event that Collateral Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Collateral Agent with
respect to such Collateral shall be exercisable by and vest in such Supplemental
Collateral Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either Collateral Agent or
such Supplemental Collateral Agent, and (ii) the provisions of this Section 8
and of subsections 9.2 and 9.3 that refer to Collateral Agent shall inure to the
benefit of such Supplemental Collateral Agent and all references therein to
Collateral Agent shall be deemed to be references to Collateral Agent and/or
such Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Collateral Agent
for more fully and certainly vesting in and confirming to him or it such rights,
powers, privileges and duties, Company shall, or shall cause such Loan Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by Collateral Agent. In case any Supplemental Collateral Agent, or a
successor thereto, shall die, become incapable of acting, resign or be removed,
all the rights, powers, privileges and duties of such Supplemental Collateral
Agent, to the extent permitted by law, shall vest in and be exercised by
Collateral Agent until the appointment of a new Supplemental Collateral Agent.
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8.2 Powers and Duties; General Immunity.
A. Powers; Duties Specified. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Loan Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified in this Agreement and the other Loan Documents. Each Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees. No Agent shall have, by reason of this Agreement or any
of the other Loan Documents, a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon any Agent any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any of Agent to Lenders or by or on behalf of
Company to any Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Potential Event of Default.
C. Exculpatory Provisions. None of Agents nor any of their respective
officers, directors, partners, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 9.6) and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional
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advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
9.6).
D. Agents Entitled to Act as Lenders. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include each Agent in its individual
capacity. Any Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
8.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
8.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent such Agent shall not have been reimbursed by
Company, for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against such Agent in exercising its
powers, rights and remedies or performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as Agent in any way relating
to or arising out of this Agreement or the other Loan Documents; provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or willful
misconduct. Subject to the proviso to the immediately preceding sentence, if any
indemnity furnished to any
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Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
8.5 Successor Administrative Agent and Collateral Agent.
A. Successor Administrative Agent. Administrative Agent may resign at any
time by giving 30 days' prior written notice thereof to Lenders and Company, and
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Section 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
B. Successor Collateral Agent. Collateral Agent may resign at any time by
giving 30 days' prior notice thereof to Lenders, Company and Administrative
Agent and Collateral Agent may be removed at any time with or without cause by
an instrument or concurrent instruments in writing delivered to Company and
Administrative Agent, and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
consultation with Company, to appoint a successor Collateral Agent. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, that successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
or removed Collateral Agent and the retiring or removed Collateral Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring or removed Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this Section 8 shall inure to its benefit as
to any actions taken or omitted to be taken while it was Collateral Agent under
this Agreement.
8.6 Collateral Documents and Guaranties.
Each Lender hereby further authorizes (i) Collateral Agent, on behalf of
and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under each
Guaranty, and each Lender agrees to be bound by the terms of each Collateral
Document and Guaranty; provided that Collateral Agent shall not (i) enter into
or consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or Guaranty or (ii) release any
Collateral (except as otherwise expressly permitted or required pursuant to the
terms of this Agreement or the applicable Collateral Document), in each case
without the prior consent of Requisite Lenders (or, if required pursuant to
subsection 9.6, Supermajority Lenders). Each Lender having AXEL
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Commitments hereunder hereby authorizes Collateral Agent to execute and deliver,
on behalf of and for the benefit of such Lenders, an acknowledgment to the
Existing Company Pledge Agreement as required by Section 18 thereof. In the
event Collateral is sold in an Asset Sale permitted hereunder or otherwise
consented to by Requisite Lenders, Collateral Agent may, without further consent
or authorization from Lenders, release the Liens granted under the Collateral
Documents on the Collateral that is the subject of such Asset Sale concurrently
with the consummation of such Asset Sale; provided that Collateral Agent shall
have received (i) reasonable, and in any event not less than 30 days', prior
written notice of such Asset Sale from Company; (ii) an Officers' Certificate
(1) certifying that no Event of Default or Potential Event of Default shall have
occurred and be continuing as of the date of such release of Collateral, (2)
setting forth a detailed description of the Collateral subject to such Asset
Sale, and (3) certifying such Asset Sale is permitted under this Agreement and
that all conditions precedent to such Asset Sale under this Agreement have been
met; and (iii) evidence satisfactory to it that Administrative Agent shall have
received all Net Cash Proceeds of Asset Sale required to be applied to repay
Secured Obligations under this Agreement. Upon payment in full of all of the
Obligations (other than inchoate indemnification obligations with respect to
claims, losses or liabilities which have not yet arisen) and termination of the
Commitments, Collateral Agent shall release the Liens on such Collateral granted
pursuant to the Collateral Documents. Upon any release of Collateral pursuant to
the foregoing, Collateral Agent shall, at Company's expense, execute and deliver
such documents (without recourse or representation or warranty) as reasonably
requested to evidence such release. Notwithstanding anything herein to the
contrary, upon the occurrence and during the continuation of an Event of
Default, for purposes of any decisions relating to (including decisions relating
to exercising or refraining from exercising remedies under the Collateral
Documents), or taking any actions with respect to, the Collateral Documents or
the Collateral, "Requisite Lenders" shall mean the holders of 51% or more the
aggregate outstanding principal amount of the AXELs and Revolving Loans.
Collateral Agent shall exercise or refrain from exercising remedies under the
Collateral Documents in accordance with the directions of Requisite Lenders (as
defined in the preceding sentence); provided, however, that Lenders acknowledge
and agree that, with respect to the Collateral that is shared on an equal and
ratable basis with the holders of the Existing Senior Notes, decisions relating
to the exercise and manner of exercise of remedies are to be made by Collateral
Agent at the direction of "Requisite Obligees" (as defined in the applicable
Collateral Document) and, therefore, Requisite Lenders may give directions to
Collateral Agent with respect to the exercise of remedies but may not hold a
sufficient amount of secured obligations to constitute Requisite Obligees under
the applicable Collateral Document, in which case Collateral Agent shall follow
the directions of Requisite Obligees. Anything contained in any of the Loan
Documents to the contrary notwithstanding, Company, Collateral Agent and each
Lender hereby agree that (x) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document or to enforce
any Guaranty, it being understood and agreed that all powers, rights and
remedies under the Collateral Documents and the Guaranties may be exercised
solely by Collateral Agent for the benefit of Lenders in accordance with the
terms thereof, and (y) in the event of a foreclosure by Collateral Agent on any
of the Collateral pursuant to a public or private sale, Collateral Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Collateral Agent, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and
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making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Collateral Agent at such sale.
SECTION 9.
MISCELLANEOUS
9.1 Assignments and Participations in Loans.
A. General. Subject to subsection 9.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its Commitments or any
Loan or Loans made by it or any other interest herein or in any other
Obligations owed to it; provided that no such sale, assignment, transfer or
participation shall, without the consent of Company, require Company to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; and provided, further that no such sale, assignment or
transfer described in clause (i) above shall be effective unless and until an
Assignment Agreement effecting such sale, assignment or transfer shall have been
accepted by Administrative Agent and recorded in the Register as provided in
subsection 9.1B(ii). Except as otherwise provided in this subsection 9.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans
or the other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan or other
Obligation may (a) be assigned in any amount to another Lender, or to an
Affiliate of the assigning Lender or another Lender, with the giving of
notice to Company and Administrative Agent or (b) be assigned in an
aggregate amount of not less than $5,000,000 (or such lesser amount as
shall constitute the aggregate amount of the Commitments, Loans and other
Obligations of the assigning Lender) to any other Eligible Assignee with
the consent of Administrative Agent (which consent shall not be
unreasonably withheld or delayed). To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender shall
be relieved of its obligations with respect to its Commitments, Loans or
other Obligations or the portion thereof so assigned. The parties to each
such assignment shall execute and deliver to Administrative Agent, for its
acceptance and recording in the Register, an Assignment Agreement,
together with a processing and recordation fee of $3,500 and such forms,
certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery,
acceptance and recordation, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it
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pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (z) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination of this
Agreement under subsection 9.9B) and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto. The Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of such assigning
Lender and, if any such assignment occurs after the issuance of the Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation, and thereupon
new Notes shall be issued to the assignee and to the assigning Lender,
substantially in the form of Exhibit III, Exhibit IV or Exhibit V annexed
hereto, as the case may be, with appropriate insertions, to reflect the
new Commitments and/or outstanding AXELs Series A and/or AXELs Series B,
as the case may be, of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee,
together with the processing and recordation fee referred to in subsection
9.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Administrative Agent pursuant to subsection
2.7B(iii)(a), Administrative Agent shall, if Administrative Agent has
consented to the assignment evidenced thereby (to the extent such consent
is required pursuant to subsection 9.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent to
such assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to Company. Administrative
Agent shall maintain a copy of each Assignment Agreement delivered to and
accepted by it as provided in this subsection 9.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any Loan allocated to such
participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation, and all amounts
payable by Company hereunder (including amounts payable to such Lender pursuant
to subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 9.4 and 9.5, (a) any participation will give
rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
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D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
9.1, any Lender may assign and pledge all or any portion of its Loans, the other
Obligations owed to such Lender, and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. Information. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 9.19.
F. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 9.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
9.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments,
waivers or other modifications thereto; (ii) all the costs of furnishing all
opinions by counsel for Company (including any opinions requested by Lenders as
to any legal matters arising hereunder) and of Company's performance of and
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including with
respect to confirming compliance with environmental, insurance and solvency
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to Arranging Agent and counsel to Administrative Agent (including allocated
costs of internal counsel) in connection with the negotiation, preparation,
execution and administration of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and any other documents or matters
requested by Company; (iv) all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Collateral Agent on behalf of Lenders
pursuant to any Collateral Document, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, title insurance
premiums, and reasonable fees, expenses and disbursements of counsel to
Arranging Agent and counsel to Administrative Agent and of counsel providing any
opinions that Arranging Agent, Administrative Agent, Collateral Agent or
Requisite Lenders may request in respect of the
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Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or Arranging Agent or its counsel) of obtaining and reviewing any
environmental audits or reports provided for under subsection 3.1J or 5.7 and
any audits or reports provided for under subsection 5.5B with respect to
Accounts Receivable of Company and its Subsidiaries; (vi) all the actual costs
and reasonable expenses (including the reasonable fees, expenses and
disbursements of any consultants, advisors and agents employed or retained by
Collateral Agent or its counsel) in connection with the custody or preservation
of any of the Collateral; (vii) all other actual and reasonable costs and
expenses incurred by Syndication Agent, Arranging Agent or Administrative Agent
in connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Arranging Agent,
Collateral Agent, Administrative Agent and Lenders in enforcing any Obligations
of or in collecting any payments due from any Loan Party hereunder or under the
other Loan Documents by reason of such Event of Default (including in connection
with the sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranties) or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings. As long as no Event of Default shall have occurred and
be continuing, Company shall not be responsible for expenses incurred by Lenders
to attend Lender meetings or exercise inspection rights pursuant to subsection
5.5.
9.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 9.2, whether
or not the transactions contemplated hereby shall be consummated, Company agrees
to defend (subject to Indemnitees' selection of counsel), indemnify, pay and
hold harmless Agents and Lenders, and the officers, directors, partners,
employees, agents and affiliates of any of Agents and Lenders (collectively
called the "Indemnitees"), from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Company shall not have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by
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Indemnitees in enforcing this indemnity), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws, statutes,
rules or regulations (including securities and commercial laws, statutes, rules
or regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) this
Agreement or the other Loan Documents or the Related Agreements or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
any enforcement of any of the Loan Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Guaranties)), (ii) any commitment letter delivered by Arranging Agent,
Administrative Agent or any Lender to Company with respect to the credit
facilities provided hereunder, or (iii) any Environmental Claim or any Hazardous
Materials Activity relating to or arising from, directly or indirectly, any past
or present activity, operation, land ownership, or practice of Company or any of
its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 9.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
9.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by BCC and Company at any time
or from time to time subject to the consent of Administrative Agent, without
notice to BCC or Company or to any other Person (other than Administrative
Agent), any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts), including deposits in the Collateral Account,
and any other Indebtedness at any time held or owing by that Lender to or for
the credit or the account of BCC or Company against and on account of the
obligations and liabilities of BCC or Company to that Lender under this
Agreement and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not (i) that Lender shall have made any
demand hereunder or (ii) the principal of or the interest on the Loans or any
other amounts due hereunder shall have become due and payable pursuant to
Section 7 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Each of BCC and Company hereby further assigns, pledges
and grants to Administrative Agent, Collateral Agent and each Lender a security
interest in all deposits and accounts maintained with Administrative Agent,
Collateral Agent or such Lender as security for the Obligations.
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9.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Loans made and
applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "Aggregate Amounts Due" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations or other similar interests (which it shall be
deemed to have purchased from each seller of a participation or such other
interest simultaneously upon the receipt by such seller of its portion of such
payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations or such other interests shall be returned to such purchasing
Lender ratably to the extent of such recovery, but without interest. Company
expressly consents to the foregoing arrangement and agrees that any holder of a
participation or such other interest so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by Company to that holder with respect thereto as fully as if that
holder were owed the amount of the participation or such other interest held by
that holder.
9.6 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of this
Agreement or of the Notes, and no consent to any departure by any Loan Party
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; changes in any manner the
definition of "Pro Rata Share" or the definition of "Supermajority Lenders" or
the definition of "Requisite Lenders"; changes in any manner any provision of
this Agreement which, by its terms, expressly requires the approval or
concurrence of all Lenders; postpones the scheduled final maturity date (but not
the date of any scheduled installment of principal or prepayment) of any of the
Loans; postpones the date on which any interest or any fees are payable;
decreases the interest rate borne by any of the Loans (other than any waiver of
any increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E) or the amount of any fees payable hereunder; increases the
maximum duration of Interest Periods permitted hereunder; releases BCC from its
obligations under the BCC Guaranty or releases License Sub from its obligations
under the License Sub Guaranty, in each case other than in
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accordance with the terms of the Loan Documents; or changes in any manner the
provisions contained in subsection 7.1 or this subsection 9.6 shall be effective
only if evidenced by a writing signed by or on behalf of all Lenders. In
addition, (i) any amendment, modification, termination or waiver of any of the
provisions contained in Section 3 shall be effective only if evidenced by a
writing signed by or on behalf of Administrative Agent and Requisite Lenders,
(ii) no amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification, termination or waiver
of any provision of Section 8 or of any other provision of this Agreement which,
by its terms, expressly requires the approval or concurrence of Arranging Agent,
Administrative Agent and Collateral Agent shall be effective without the written
concurrence of Arranging Agent, Administrative Agent and Collateral Agent, (iv)
no amendment, modification, termination or waiver of any provision of this
Agreement or the Collateral Documents and no consent to any departure by any
Loan Party therefrom which has the effect of releasing any material portion of
the Collateral (other than as permitted in accordance with the express
provisions of subsection 8.6 or the Collateral Documents) or changing any
scheduled installment of principal, shall be effective without the written
concurrence of Supermajority Lenders; provided that any amendment, modification,
termination or waiver of any provision of subsection 2.4 which has the effect of
postponing or reducing the aggregate scheduled installments of principal
applicable to AXELs Series A or AXELs Series B (each being a "Class") in a
manner that is proportionately greater than the corresponding postponement or
reduction applicable to the other Class shall not be effective without the
written concurrence of the holders of 75% of each Class. Administrative Agent
may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on Company
in any case shall entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 9.6 shall be binding upon
each Lender at the time outstanding, each future Lender and, if signed by BCC
and Company, on BCC and Company. Notwithstanding anything herein to the
contrary, if any Lender fails to fund any Loan required to be funded by such
Lender hereunder, the aggregate AXEL Series A Exposure, AXEL Series B Exposure
and Revolving Loan Exposure of such Lender shall not be counted for purposes of
determining "Requisite Lenders" or "Supermajority Lenders" or the percentage of
a Class required to approve any amendment, modification, termination or waiver
of any provision of this Agreement.
9.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
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9.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Arranging Agent or
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to BCC, Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
9.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 9.2, 9.3
and 9.4 and the agreements of Lenders set forth in subsections 8.2C, 8.4 and 9.5
shall survive the payment of the Loans and the termination of this Agreement.
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Collateral Agent, Administrative Agent
or any Lender in the exercise of any power, right or privilege hereunder or
under any other Loan Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
9.11 Marshalling; Payments Set Aside.
None of Collateral Agent, Administrative Agent nor any Lender shall be
under any obligation to marshal any assets in favor of Company or any other
party or against or in payment of any or all of the Obligations. To the extent
that Company makes a payment or payments to Collateral Agent, Administrative
Agent or Lenders (or to Collateral Agent or Administrative Agent for the benefit
of Lenders), or Collateral Agent, Administrative Agent or Lenders enforce any
security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law,
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common law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor or related thereto, shall be revived and continued
in full force and effect as if such payment or payments had not been made or
such enforcement or setoff had not occurred.
9.12 Severability.
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
9.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
9.14 Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
9.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
9.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 9.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
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9.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BCC OR COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH OF BCC AND COMPANY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO BCC OR COMPANY, AS APPLICABLE, AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 9.8; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BCC OR COMPANY IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT LENDERS RETAIN THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST BCC OR COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT THE PROVISIONS OF THIS SUBSECTION 9.17 RELATING TO JURISDICTION AND VENUE
SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
9.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP OR OTHER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
9.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL
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APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
9.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process or
disclosures required by the National Association of Insurance Commissioners;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further, that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
9.20 Maximum Amount.
A. It is the intention of Company and Lenders to conform strictly to the
usury and similar laws relating to interest from time to time in force, and all
agreements between Company, Administrative Agent and Lenders, whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever, whether by acceleration
of maturity hereof or otherwise, shall the amount paid or agreed to be paid in
the aggregate to Lenders or to Administrative Agent on behalf of Lenders as
interest hereunder or under the other Loan Documents or in any other security
agreement given to secure the Obligations, or in any other document evidencing,
securing or pertaining to the indebtedness evidenced hereby or thereby, exceed
the maximum amount permissible under applicable usury or such other laws (the
"Maximum Amount"). If under any circumstances whatsoever fulfillment of any
provision hereof, or of any of the other Loan Documents, at the time performance
of such provision shall be due, shall involve exceeding the Maximum Amount,
then, ipso facto, the obligation to be fulfilled shall be reduced to the Maximum
Amount. For the purposes of calculating the actual amount of interest paid
and/or payable hereunder in respect of laws pertaining to usury or such other
laws, all sums paid or agreed to be paid to Lenders for the use, forbearance or
detention of the indebtedness of Company evidenced hereby, outstanding from time
to time shall, to the extent permitted by applicable law, be amortized, pro
rated, allocated and spread from the date of disbursement of the proceeds of the
Loans until payment in full of all of such indebtedness, so that the actual rate
of interest on account of such
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indebtedness is uniform throughout the term hereof. The terms and provisions of
this subsection shall control and supersede every other provision of all
agreements between Company, Administrative Agent and Lenders.
B. If under any circumstances Lenders shall receive an amount which would
exceed the Maximum Amount, such amount shall be deemed a payment in reduction of
the principal amount of the Loans and shall be treated as a voluntary prepayment
under subsection 2.4B(i), and shall be so applied in accordance with subsection
2.4B(iv) hereof, or if such amount exceeds the unpaid balance of the Loans and
any other indebtedness of Company in favor of Lenders, the excess shall be
deemed to have been a payment made by mistake and shall be refunded to Company.
9.21 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY AND BCC:
BENEDEK BROADCASTING CORPORATION,
a Delaware corporation
By: /s/ Ronald L. Lindwall
-------------------------------------
Ronald L. Lindwall
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
BENEDEK COMMUNICATIONS CORPORATION,
a Delaware corporation
By: /s/ Ronald L. Lindwall
-------------------------------------
Ronald L. Lindwall
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
Notice Address:
Benedek Broadcasting Corporation
Stewart Square, Suite 210
308 West State Street
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
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AGENTS AND LENDERS:
PEARL STREET L.P.,
individually and as Arranging Agent
By: /s/ Richard Katz
--------------------------------
Authorized Signatory
Notice Address:
Pearl Street L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Richard Katz
Telecopy: (212) 902-2417
with a copy to:
Pearl Street L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Jennifer Perry
Telecopy: (212) 902-3000
S-2
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GOLDMAN, SACHS & CO.,
as Syndication Agent
/s/ Goldman, Sachs & Co.
-----------------------------------------
Notice Address:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Richard Katz
Telecopy: (212) 902-2417
with a copy to:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Jennifer Perry
Telecopy: (212) 902-3000
S-3
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CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY,
individually and as Administrative Agent
and Collateral Agent
By: /s/ Martin W. Friedman
-------------------------------------
Martin W. Friedman
Authorized Signatory
Notice Address:
Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, New York 10017
Attention: Arlene Tellerman
Telecopy: (212) 856-3799
Telephone: (212) 856-3695
CIBC INC.
By: /s/ Martin W. Friedman
-------------------------------------
Martin W. Friedman
Managing Director
Notice Address:
CIBC Inc.
425 Lexington Avenue
New York, New York 10017
Attention: Arlene Tellerman
Telecopy: (212) 856-3799
Telephone: (212) 856-3695
S-4
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EXECUTION
LICENSE SUB GUARANTY
THIS GUARANTY is entered into as of June 6, 1996 by BENEDEK LICENSE
CORPORATION, a Delaware Corporation ("Guarantor"), in favor of and for the
benefit of CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY ("CIBC-NYA"), as
agent for and representative of (in such capacity herein called "Collateral
Agent") the Beneficiaries (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Benedek Broadcasting Corporation, a Delaware corporation
("Company"), of which Guarantor is a wholly owned subsidiary, has entered into
that certain Credit Agreement, dated as of June 6, 1996, with Benedek
Communications Corporation, the financial institutions listed therein
("Lenders"), Pearl Street L.P., as Arranging Agent, Goldman, Sachs & Co., as
Syndication Agent, and CIBC-NYA, as Administrative Agent and Collateral Agent
(said Credit Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement"; capitalized
terms defined therein and not otherwise defined herein being used herein as
therein defined).
B. Pursuant to the Existing Senior Note Indenture, License Sub may
guarantee indebtedness incurred by Company which constitutes "Permitted Pari
Passu Debt" (as defined in the Existing Senior Note Indenture), and the AXELs
constitute Permitted Pari Passu Debt.
C. It is a condition precedent to the making of the initial AXELs under
the Credit Agreement that Company's obligations under the Credit Agreement in
respect of the AXELs be guarantied by Guarantor.
D. Guarantor is willing irrevocably and unconditionally to guaranty
such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Collateral Agent to enter into the Credit
Agreement and to make Loans and other extensions of credit thereunder, Guarantor
hereby agrees as follows:
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SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
As used in this Guaranty, the following terms shall have the following
meanings unless the context otherwise requires:
"AXEL Lenders" means Lenders having AXEL Commitments or
holding outstanding AXELs.
"Beneficiaries" means Collateral Agent and AXEL Lenders.
"Guarantied Obligations" has the meaning assigned to that term
in subsection 2.1.
"Guaranty" means this Guaranty, dated as of June 6, 1996, as
it may be amended, supplemented or otherwise modified from time to
time.
"payment in full", "paid in full" or any similar term means
payment in full of the Guarantied Obligations (other than inchoate
indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen), including without limitation
all principal, interest, costs, fees and expenses (including, without
limitation, reasonable legal fees and expenses) of Beneficiaries as
required under the Loan Documents.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Guaranty unless otherwise specifically
provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Credit Agreement, the terms, conditions and provisions of this
Guaranty shall prevail.
SECTION 2.
THE GUARANTY
2.1 Guaranty of the Guarantied Obligations.
Subject to the provisions of subsection 2.2(a), Guarantor hereby
irrevocably and unconditionally guaranties, as primary obligor and not merely as
surety, the due and punctual payment in full of all Guarantied Obligations when
the same shall become due, whether at stated
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maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. 'ss' 362(a)). The
term "Guarantied Obligations" is used herein in its most comprehensive sense and
includes:
(a) any and all Obligations of Company, in each case now or
hereafter made, incurred or created, whether absolute or contingent,
liquidated or unliquidated, whether due or not due, and however
arising under or in connection with the AXELs and AXEL Commitments
under the Credit Agreement and the AXEL Notes, whether for principal or
interest, fees, expenses, indemnities or otherwise, whether voluntary
or involuntary, direct or indirect, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished
and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any
part of such payment is avoided or recovered directly or indirectly
from Collateral Agent or any Beneficiary as a preference, fraudulent
transfer or otherwise and all obligations of every nature of Guarantor
under this Guaranty, and including interest which, but for the filing
of a petition in bankruptcy with respect to Company, would have accrued
on any Guarantied Obligations, whether or not a claim is allowed
against Company for such interest in the related bankruptcy proceeding;
and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 Limitation on Amount of Guaranty; Contribution by Guarantors.
(a) Anything contained in this Guaranty to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter defined) is
determined by a court of competent jurisdiction to be applicable to the
obligations of Guarantor under this Guaranty, the obligations of Guarantor
hereunder shall be limited to a maximum aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law (collectively,
the "Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of Guarantor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
Guarantor in respect of intercompany indebtedness to Company or other affiliates
of Company to the extent that such indebtedness would be discharged in an amount
equal to the amount paid by Guarantor hereunder) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of Guarantor pursuant to applicable law or
pursuant to the terms of any agreement (including without limitation any such
right of contribution under subsection 2.2(b), or under the BCC Guaranty as
contemplated by subsection 2.2(b)).
(b) Guarantor under this Guaranty and BCC under the BCC Guaranty
together desire to allocate among themselves (collectively, the "Contributing
Guarantors"), in a fair and
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equitable manner, their obligations arising under this Guaranty and the BCC
Guaranty. Accordingly, in the event any payment or distribution is made on any
date by Guarantor under this Guaranty or BCC under the BCC Guaranty (each of
Guarantor and BCC being a "Funding Guarantor") that exceeds its Fair Share (as
defined below) as of such date, that Funding Guarantor shall be entitled to a
contribution from the other Contributing Guarantor in the amount of such other
Contributing Guarantor's Fair Share Shortfall (as defined below) as of such
date, with the result that all such contributions will cause each Contributing
Guarantor's Aggregate Payments (as defined below) to equal its Fair Share as of
such date. "Fair Share" means, with respect to a Contributing Guarantor as of
any date of determination, an amount equal to (i) the ratio of (x) the Adjusted
Maximum Amount (as defined below) with respect to such Contributing Guarantor to
(y) the aggregate of the Adjusted Maximum Amounts with respect to all
Contributing Guarantors multiplied by (ii) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under this Guaranty
and the BCC Guaranty in respect of the obligations guarantied. "Fair Share
Shortfall" means, with respect to a Contributing Guarantor as of any date of
determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "Adjusted
Maximum Amount" means, with respect to a Contributing Guarantor as of any date
of determination, the maximum aggregate amount of the obligations of such
Contributing Guarantor under this Guaranty or the BCC Guaranty, as applicable,
determined as of such date, in the case of Guarantor, in accordance with
subsection 2.2(a); provided that, solely for purposes of calculating the
"Adjusted Maximum Amount" with respect to any Contributing Guarantor for
purposes of this subsection 2.2(b), any assets or liabilities of such
Contributing Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obligations of contribution
hereunder or under subsection 2.2 of the BCC Guaranty shall not be considered as
assets or liabilities of such Contributing Guarantor. "Aggregate Payments"
means, with respect to a Contributing Guarantor as of any date of determination,
an amount equal to (i) the aggregate amount of all payments and distributions
made on or before such date by such Contributing Guarantor in respect of this
Guaranty or the BCC Guaranty, as applicable (including, without limitation, in
respect of this subsection 2.2(b) or subsection 2.2 of the BCC Guaranty) minus
(ii) the aggregate amount of all payments received on or before such date by
such Contributing Guarantor from the other Contributing Guarantor as
contributions under this subsection 2.2(b) or subsection 2.2 of the BCC
Guaranty. The amounts payable as contributions hereunder and under subsection
2.2 of the BCC Guaranty shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in
this subsection 2.2(b) and subsection 2.2 of the BCC Guaranty shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder or under the BCC Guaranty. BCC is a third party beneficiary to the
contribution agreement set forth in this subsection 2.2(b). For purposes of this
Section 2.2(b) only, each reference to "this Guaranty" means, collectively, this
Guaranty and the guaranty by License Sub of the Existing Senior Notes pursuant
to Article 10 of the Existing Senior Note Indenture.
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2.3 Payment by Guarantor; Application of Payments.
Subject to the provisions of subsection 2.2(a), Guarantor hereby
agrees, in furtherance of the foregoing and not in limitation of any other right
which any Beneficiary may have at law or in equity against Guarantor by virtue
hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. 'ss' 362(a)),
Guarantor will upon demand pay, or cause to be paid, in cash, to Collateral
Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guarantied Obligations then due as aforesaid,
accrued and unpaid interest on such Guarantied Obligations (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on such Guarantied Obligations, whether
or not a claim is allowed against Company for such interest in the related
bankruptcy proceeding) and all other Guarantied Obligations then owed to
Beneficiaries as aforesaid. All such payments shall be applied promptly from
time to time by Collateral Agent as provided in subsection 2.4D(ii) of the
Credit Agreement.
2.4 Liability of Guarantor Absolute.
Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Guarantied Obligations. In furtherance
of the foregoing and without limiting the generality thereof, Guarantor agrees
as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Collateral Agent may enforce this Guaranty upon the
occurrence of an Event of Default under the Credit Agreement (an "Event
of Default") notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of such Event
of Default.
(c) The obligations of Guarantor hereunder are independent of
the obligations of Company under the Loan Documents and the obligations
of any other guarantor (including BCC) of the obligations of Company
under the Loan Documents, and a separate action or actions may be
brought and prosecuted against Guarantor whether or not any action is
brought against Company or any of such other guarantors and whether or
not Company is joined in any such action or actions.
(d) Payment by Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the
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generality of the foregoing, if Collateral Agent is awarded a judgment
in any suit brought to enforce Guarantor's covenant to pay a portion of
the Guarantied Obligations, such judgment shall not be deemed to
release Guarantor from its covenant to pay the portion of the
Guarantied Obligations that is not the subject of such suit.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of Guarantor's
liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the
time, place, manner or terms of payment of the Guarantied Obligations,
(ii) settle, compromise, release or discharge, or accept or refuse any
offer of performance with respect to, or substitutions for, the
Guarantied Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the
Guarantied Obligations and take and hold security for the payment of
this Guaranty or the Guarantied Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for
payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person
(including any other Guarantor) with respect to the Guarantied
Obligations; (v) enforce and apply any security now or hereafter held
by or for the benefit of such Beneficiary in respect of this Guaranty
or the Guarantied Obligations and direct the order or manner of sale
thereof, or exercise any other right or remedy that such Beneficiary
may have against any such security, in each case as such Beneficiary in
its discretion may determine consistent with the Credit Agreement and
any applicable security agreement, including foreclosure on any such
security pursuant to one or more judicial or nonjudicial sales, whether
or not every aspect of any such sale is commercially reasonable, and
even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of Guarantor
against Company or any security for the Guarantied Obligations; and
(vi) exercise any other rights available to it under the Loan
Documents.
(f) This Guaranty and the obligations of Guarantor hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following,
whether or not Guarantor shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order
of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents, at law, in equity or
otherwise) with respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security
for the payment of the Guarantied Obligations; (ii) any rescission,
waiver, amendment or modification of, or any consent to departure from,
any of the terms or provisions (including without limitation provisions
relating to events of default) of the
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Credit Agreement, any of the other Loan Documents or any agreement or
instrument executed pursuant thereto, or of any other guaranty or
security for the Guarantied Obligations, in each case whether or not in
accordance with the terms of the Credit Agreement or such Loan Document
or any agreement relating to such other guaranty or security; (iii) the
Guarantied Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect;
(iv) the application of payments received from any source (other than
payments received pursuant to the other Loan Documents or from the
proceeds of any security for the Guarantied Obligations, except to the
extent such security also serves as collateral for indebtedness other
than the Guarantied Obligations) to the payment of indebtedness other
than the Guarantied Obligations, even though any Beneficiary might have
elected to apply such payment to any part or all of the Guarantied
Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence
of Company or any of its Subsidiaries and to any corresponding
restructuring of the Guarantied Obligations; (vi) any failure to
perfect or continue perfection of a security interest in any collateral
which secures any of the Guarantied Obligations; (vii) any defenses,
set-offs or counterclaims which Company may allege or assert against
any Beneficiary in respect of the Guarantied Obligations, including but
not limited to failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do
any other act or thing, which may or might in any manner or to any
extent vary the risk of Guarantor as an obligor in respect of the
Guarantied Obligations.
2.5 Waivers by Guarantor.
Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by Guarantor, to (i) proceed against Company,
any other guarantor (including BCC) of the Guarantied Obligations or
any other Person, (ii) proceed against or exhaust any security held
from Company, any such other guarantor or any other Person, (iii)
proceed against or have resort to any balance of any deposit account or
credit on the books of any Beneficiary in favor of Company or any other
Person, or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of Company from any cause other than payment in full
of the Guarantied Obligations;
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(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon any Beneficiary's errors or
omissions in the administration of the Guarantied Obligations, except
behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting Guarantor's liability hereunder or the enforcement hereof,
(iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property
subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the
Credit Agreement or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guarantied
Obligations or any agreement related thereto, notices of any extension
of credit to Company and notices of any of the matters referred to in
subsection 2.4 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
2.6 Guarantor's Rights of Subrogation, Contribution, Etc.
Until the Guarantied Obligations shall have been paid in full and the
AXEL Commitments shall have terminated, Guarantor hereby waives any claim, right
or remedy, direct or indirect, that Guarantor now has or may hereafter have
against Company or any of its assets in connection with this Guaranty or the
performance by Guarantor of its obligations hereunder, in each case whether such
claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including without limitation (a) any right of
subrogation, reimbursement or indemnification that Guarantor now has or may
hereafter have against Company, (b) any right to enforce, or to participate in,
any claim, right or remedy that any Beneficiary now has or may hereafter have
against Company, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary. In addition,
until the Guarantied Obligations shall have been paid in full and the AXEL
Commitments shall have terminated, Guarantor shall withhold exercise of any
right of contribution Guarantor may have against any other guarantor of the
Guarantied Obligations (including without limitation any such right of
contribution under subsection 2.2(b) or under the
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BCC Guaranty as contemplated by subsection 2.2(b)). Guarantor further agrees
that, to the extent the waiver or agreement to withhold the exercise of its
rights of subrogation, reimbursement, indemnification and contribution as set
forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification Guarantor may have against Company or against any collateral or
security, and any rights of contribution Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights any Beneficiary
may have against Company, to all right, title and interest any Beneficiary may
have in any such collateral or security, and to any right any Beneficiary may
have against such other guarantor. If any amount shall be paid to Guarantor on
account of any such subrogation, reimbursement, indemnification or contribution
rights at any time when all Guarantied Obligations shall not have been paid in
full, such amount shall be held in trust for Collateral Agent on behalf of
Beneficiaries and shall forthwith be paid over to Collateral Agent for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations, whether matured or unmatured, in accordance with the terms hereof.
2.7 Subordination of Other Obligations.
Any indebtedness of Company now or hereafter held by Guarantor is
hereby subordinated in right of payment to the Guarantied Obligations, and any
such indebtedness of Company to Guarantor collected or received by Guarantor
after an Event of Default has occurred and is continuing shall be held in trust
for Collateral Agent on behalf of Beneficiaries and shall forthwith be paid over
to Collateral Agent for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations but without affecting, impairing or limiting
in any manner the liability of Guarantor under any other provision of this
Guaranty.
2.8 Expenses.
Guarantor agrees to pay, or cause to be paid, on demand, and to save
Beneficiaries harmless against liability for, any and all costs and expenses
(including fees and disbursements of counsel and allocated costs of internal
counsel) incurred or expended by any Beneficiary in connection with the
enforcement of or preservation of any rights under this Guaranty.
2.9 Continuing Guaranty.
This Guaranty is a continuing guaranty and shall remain in effect until
all of the Guarantied Obligations shall have been paid in full and the AXEL
Commitments shall have terminated. Guarantor hereby irrevocably waives any right
to revoke this Guaranty as to future transactions giving rise to any Guarantied
Obligations.
2.10 Authority of Guarantor or Company.
It is not necessary for any Beneficiary to inquire into the capacity or
powers of Guarantor or Company or the officers, directors or any agents acting
or purporting to act on behalf of any of them.
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2.11 Financial Condition of Company.
Any Loans may be granted to Company or continued from time to time
without notice to or authorization from Guarantor regardless of the financial or
other condition of Company at the time of any such grant or continuation. No
Beneficiary shall have any obligation to disclose or discuss with Guarantor its
assessment, or Guarantor's assessment, of the financial condition of Company.
Guarantor has adequate means to obtain information from Company on a continuing
basis concerning the financial condition of Company and its ability to perform
its obligations under the Loan Documents, and Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Guarantor hereby waives and relinquishes any duty on the
part of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Company now known or hereafter known by
any Beneficiary.
2.12 Rights Cumulative.
The rights, powers and remedies given to Beneficiaries by this Guaranty
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Beneficiaries by virtue of any statute or rule of law or
in any of the other Loan Documents or any agreement between Guarantor and any
Beneficiary or Beneficiaries or between Company and any Beneficiary or
Beneficiaries. Any forbearance or failure to exercise, and any delay by any
Beneficiary in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or remedy.
2.13 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty.
(a) So long as any Guarantied Obligations remain outstanding, Guarantor
shall not, without the prior written consent of Collateral Agent acting pursuant
to the instructions of Requisite Obligees (as defined in subsection 3.12),
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Company. The obligations
of Guarantor under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or by any defense which Company may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Guarantor acknowledges and agrees that any interest on any portion
of the Guarantied Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of
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Guarantor and Beneficiaries that the Guarantied Obligations which are guarantied
by Guarantor pursuant to this Guaranty should be determined without regard to
any rule of law or order which may relieve Company of any portion of such
Guarantied Obligations. Guarantor will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or similar
person to pay Collateral Agent, or allow the claim of Collateral Agent in
respect of, any such interest accruing after the date on which such proceeding
is commenced.
(c) In the event that all or any portion of the Guarantied Obligations
are paid by Company, the obligations of Guarantor hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty.
2.14 Set Off.
In addition to any other rights any Beneficiary may have under law or
in equity, if after the occurrence and during the continuation of an Event of
Default any amount shall at any time be due and owing by Guarantor to any
Beneficiary under this Guaranty, such Beneficiary is authorized at any time or
from time to time, subject to the consent of Collateral Agent, without notice
(any such notice being hereby expressly waived) other than to Collateral Agent,
to set off and to appropriate and to apply any and all deposits (general or
special, including but not limited to indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness of such
Beneficiary owing to Guarantor and any other property of Guarantor held by any
Beneficiary to or for the credit or the account of Guarantor against and on
account of the Guarantied Obligations and liabilities of Guarantor to any
Beneficiary under this Guaranty.
SECTION 3.
MISCELLANEOUS
3.1 Survival of Warranties.
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Guaranty and the other Loan Documents
and any increase in the Commitments under the Credit Agreement.
3.2 Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided
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that notices to Collateral Agent shall not be effective until received. For
purposes hereof the address of each party shall be as set forth under such
party's name on the signature pages hereof or of the Credit Agreement or such
other address as shall be designated by such party in a written notice delivered
to the other party hereto.
3.3 Severability.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
3.4 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of
this Guaranty, and no consent to any departure by Guarantor therefrom, shall in
any event be effective without the written concurrence of Collateral Agent and,
in the case of any such amendment or modification, Guarantor. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
3.5 Headings.
Section and subsection headings in this Guaranty are included herein
for convenience of reference only and shall not constitute a part of this
Guaranty for any other purpose or be given any substantive effect.
3.6 Applicable Law.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND
BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
3.7 Successors and Assigns.
This Guaranty is a continuing guaranty and shall be binding upon
Guarantor and its respective successors and assigns. This Guaranty shall inure
to the benefit of Beneficiaries and their respective successors and assigns.
Guarantor shall not assign this Guaranty or any of the rights or obligations of
Guarantor hereunder without the prior written consent of all Lenders. Any
Beneficiary may, without notice or consent, assign its interest in this Guaranty
in whole or in part. The terms and provisions of this Guaranty shall inure to
the benefit of any transferee or assignee of any AXEL, and in the event of such
transfer or assignment the rights and
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privileges herein conferred upon such Beneficiary shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
3.8 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY
OF NEW YORK. BY EXECUTING AND DELIVERING THIS GUARANTY, GUARANTOR, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO GUARANTOR AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SUBSECTION 3.2; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GUARANTOR
IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT BENEFICIARIES RETAIN THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI)
AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO JURISDICTION AND
VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER
NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
3.9 Waiver of Trial by Jury.
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, EACH
BENEFICIARY EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The
scope of this waiver is intended to be all encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Guarantor and, by
its acceptance of the benefits hereof, each Beneficiary, each (a) acknowledges
that this waiver is a material inducement for Guarantor and Beneficiaries to
enter into a business relationship, that Guarantor and Beneficiaries have
already relied on this waiver in entering into this Guaranty or accepting the
benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings and (b) further warrants and
represents that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
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THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED BY
COLLATERAL AGENT AND GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. In the
event of litigation, this Guaranty may be filed as a written consent to a trial
by the court.
3.10 No Other Writing.
This writing is intended by Guarantor and Beneficiaries as the final
expression of this Guaranty and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade usage, and no parol
evidence of any nature, shall be used to supplement or modify any terms of this
Guaranty. There are no conditions to the full effectiveness of this Guaranty.
3.11 Further Assurances.
At any time or from time to time, upon the request of Collateral Agent,
Guarantor shall execute and deliver such further documents and do such other
acts and things as Collateral Agent may reasonably request in order to effect
fully the purposes of this Guaranty.
3.12 Collateral Agent.
(a) Collateral Agent has been appointed to act as Collateral Agent
hereunder by AXEL Lenders. Collateral Agent shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action,
solely in accordance with this Guaranty and the Credit Agreement; provided that
Collateral Agent shall exercise, or refrain from exercising, any remedies
hereunder in accordance with the instructions of Requisite Obligees. "Requisite
Obligees" means holders of 51% or more in aggregate principal amount of the
outstanding AXELs.
(b) Collateral Agent shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to subsection 8.5 of the Credit Agreement shall also
constitute notice of resignation as Collateral Agent under this Guaranty;
removal of Collateral Agent pursuant to subsection 8.5 of the Credit Agreement
shall also constitute removal as Collateral Agent under this Guaranty; and
appointment of a successor Collateral Agent pursuant to subsection 8.5 of the
Credit Agreement shall also constitute appointment of a successor Collateral
Agent under this Guaranty. Upon the acceptance of any appointment as Collateral
Agent under subsection 8.5 of the Credit Agreement by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Collateral Agent under this Guaranty, and the retiring or removed
Collateral Agent under this Guaranty shall promptly (i) transfer to such
successor Collateral Agent all sums held hereunder,
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together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Collateral Agent
under this Guaranty, and (ii) take such other actions as may be necessary or
appropriate in connection with the assignment to such successor Collateral Agent
of the rights created hereunder, whereupon such retiring or removed Collateral
Agent shall be discharged from its duties and obligations under this Guaranty.
After any retiring or removed Collateral Agent's resignation or removal
hereunder as Collateral Agent, the provisions of this Guaranty shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Guaranty while it was Collateral Agent hereunder.
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IN WITNESS WHEREOF, the undersigned Guarantor has caused this Guaranty
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
BENEDEK LICENSE CORPORATION
By: /s/ Ronald L. Lindwall
_____________________________________
Ronald L. Lindwall
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
Notice Address:
Benedek License Corporation
c/o Benedek Broadcasting Corporation
Stewart Square, Suite 210
308 West State Street
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
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EXECUTION
ACQUIRED ASSETS SECURITY AGREEMENT
THIS ACQUIRED ASSETS SECURITY AGREEMENT (this "Agreement") is dated as
of June 6, 1996 and entered into by and between BENEDEK BROADCASTING
CORPORATION, a Delaware corporation ("Grantor"), and CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY ("CIBC-NYA"), as agent for and representative of (in
such capacity herein called "Collateral Agent") the AXEL Lenders referred to
below.
PRELIMINARY STATEMENTS
A. Benedek Communications Corporation and Grantor have entered into a
Credit Agreement, dated as of June 6, 1996 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined), with the financial
institutions listed therein ("Lenders"), Pearl Street L.P., as Arranging Agent,
Goldman, Sachs & Co., as Syndication Agent, and CIBC-NYA, as Administrative
Agent and Collateral Agent, pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities, including the AXELs, to Grantor.
B. Grantor has entered into that certain Indenture, dated as of March
1, 1995 (said Indenture, as amended, supplemented or otherwise modified from
time to time, being the "Existing Senior Note Indenture"), with Benedek
Broadcasting Company, L.L.C., a Delaware limited liability company and
subsidiary of Grantor, and The Bank of New York, as trustee, pursuant to which
Grantor has issued $135,000,000 aggregate principal amount of 11-7/8% Senior
Secured Notes due 2005.
C. The proceeds of the AXELs will be used to fund the cash portion of
the purchase price of the Acquired Stations. Since the AXELs constitute
indebtedness issued to finance the purchase of property and assets, Grantor is
permitted pursuant to the terms of the Existing Senior Note Indenture to grant
the AXEL Lenders a first priority security interest in the assets acquired.
D. It is a condition precedent to the making of the initial AXELs under
the Credit Agreement that Grantor shall have (i) granted the security interests
contemplated by this Agreement in favor of Collateral Agent for the benefit of
Lenders having AXEL Commitments or holding outstanding AXELs (each of such
Lenders being an "AXEL Lender" and collectively, the "AXEL Lenders") and (ii)
undertaken the obligations contemplated by this Agreement.
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NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make the AXELs and other extensions of credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Collateral
Agent as follows:
SECTION 1. Grant of Security.
Grantor hereby assigns to Collateral Agent, and hereby grants to
Collateral Agent a security interest in, all of Grantor's right, title and
interest in and to the following, in each case in which Grantor has an interest
as of the consummation of the Acquisitions and after giving effect thereto and
wherever the same may be located (the "Collateral"):
(a) all equipment in all of its forms, all parts thereof and
all accessions thereto held by or used in connection with the operation
of, or relating to, the Acquired Stations (any and all such equipment,
parts and accessions being the "Equipment");
(b) all inventory held by, used in connection with the
operation of, or relating to, the Acquired Stations in all of its forms
(including, but not limited to, (i) all goods held by Grantor for sale
or lease or to be furnished under contracts of service or so leased or
furnished, (ii) all raw materials, work in process, finished goods, and
materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in Grantor's business, (iii)
all goods in which Grantor has an interest in mass or a joint or other
interest or right of any kind, and (iv) all goods which are returned to
or repossessed by Grantor) and all accessions thereto and products
thereof (all such inventory, accessions and products being the
"Inventory") and all negotiable documents of title (including without
limitation warehouse receipts, dock receipts and bills of lading)
issued by any Person covering any Inventory (any such negotiable
document of title being a "Negotiable Document of Title");
(c) all plant fixtures, business fixtures and other fixtures
and storage and office facilities used in connection with the operation
of, or relating to, the Acquired Stations and all accessions thereto
and products thereof;
(d) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon; and
(e) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Collateral Agent
is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect
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to any of the foregoing Collateral. For purposes of this Agreement,
the term "proceeds" includes whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary.
For purposes of this Section 1, "Acquired Stations" means each of the
television broadcast stations acquired by Grantor listed on Schedule I annexed
hereto.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
'ss'362(a)), of all obligations and liabilities of every nature of Grantor now
or hereafter existing under or arising out of or in connection with the AXELs
and the AXEL Commitments under the Credit Agreement and the AXEL Notes and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in bankruptcy
with respect to Grantor, would accrue on such obligations), fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Collateral Agent or any AXEL
Lender as a preference, fraudulent transfer or otherwise and all obligations of
every nature of Grantor now or hereafter existing under this Agreement (all such
obligations of Grantor being the "Secured Obligations").
SECTION 3. Representations and Warranties.
Grantor represents and warrants as follows:
(a) Ownership of Collateral. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Credit Agreement.
(b) Location of Equipment and Inventory. All of the Equipment
and Inventory is, as of the date hereof, located at the places
specified in Schedule II annexed hereto.
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(c) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps
its records regarding the Collateral is, and has been for the
four-month period preceding the date hereof, as set forth on Schedule
III annexed hereto. Grantor has not in the past done, and does not now
do, business under any other name (including any trade-name or
fictitious business name) except as specified on Schedule III annexed
hereto.
(d) Perfection. This Agreement, together with the filing of
UCC financing statements describing the Collateral with the filing
offices indicated on Schedule IV annexed hereto, creates a valid,
perfected and, except for Liens permitted pursuant to the Credit
Agreement, first priority security interest in all Collateral in which
a security interest may be perfected by the filing of a financing
statement, securing the payment of the Secured Obligations.
SECTION 4. Further Assurances.
(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that
Collateral Agent may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Collateral Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Grantor will: (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Collateral Agent may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby, (ii) at any
reasonable time, upon request by Collateral Agent, exhibit the Collateral to and
allow inspection of the Collateral by Collateral Agent, or persons designated by
Collateral Agent, and (iii) at Collateral Agent's request, appear in and defend
any action or proceeding that may affect Grantor's title to or Collateral
Agent's security interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Grantor. Grantor agrees that
a carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by Grantor shall be sufficient as a financing statement and may
be filed as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Collateral Agent may
reasonably request, all in reasonable detail.
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SECTION 5. Certain Covenants of Grantor.
Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering
the Collateral;
(b) notify Collateral Agent of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) keep its chief place of business, chief executive office
or residence, the office where Grantor keeps its records regarding the
Collateral and the places where Equipment and Inventory are kept at the
locations therefor specified in Section 3 hereof, or upon 30 days'
prior written notice to Collateral Agent, at such other places in
jurisdictions where all action that may be necessary or desirable, or
that Collateral Agent may request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to
enable Collateral Agent to exercise and enforce its rights and remedies
hereunder, with respect to the Collateral shall have been taken;
(d) if Collateral Agent gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Grantor shall in any event pay
such taxes, assessments, charges, levies or claims not later than five
days prior to the date of any proposed sale under any judgement, writ
or warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment.
SECTION 6. Insurance.
Grantor shall, at its own expense, maintain insurance with respect to
the Equipment and Inventory in accordance with the terms of the Credit
Agreement.
SECTION 7. Transfers and Other Liens.
Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the
Credit Agreement; or
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(b) except for the security interest created by this
Agreement, create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure the indebtedness or other obligations
of any Person.
SECTION 8. Collateral Agent Appointed Attorney-in-Fact.
Grantor hereby irrevocably appoints Collateral Agent as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Collateral Agent or otherwise, from time to time in
Collateral Agent's discretion to take any action and to execute any instrument
that Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be maintained
by Grantor or paid to Collateral Agent pursuant to Section 6;
(b) upon the occurrence and during the continuation of an
Event of Default, to ask for, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuation of an
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a)
and (b) above;
(d) upon the occurrence and during the continuation of an
Event of Default, to file any claims or take any action or institute
any proceedings that Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of Collateral Agent with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under the Credit Agreement or this Agreement) levied or
placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by Collateral Agent in its sole discretion, any such
payments made by Collateral Agent to become obligations of Grantor to
Collateral Agent, due and payable immediately without demand;
(f) upon the occurrence and during the continuation of an
Event of Default, to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
Accounts and other documents relating to the Collateral;
(g) upon the occurrence and during the continuation of an
Event of Default, to file, or cause to be filed, to the extent
permitted by law, such applications for approval
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and to take all other and further actions required to obtain any
approvals or consents from the FCC required for the exercise of any
right or remedy hereunder; and
(h) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Collateral Agent were the absolute
owner thereof for all purposes, and to do, at Collateral Agent's option
and Grantor's expense, at any time or from time to time, all acts and
things that Collateral Agent deems necessary to protect, preserve or
realize upon the Collateral and Collateral Agent's security interest
therein in order to effect the intent of this Agreement, all as fully
and effectively as Grantor might do.
SECTION 9. Collateral Agent May Perform.
If Grantor fails to perform any agreement contained herein, Collateral
Agent may itself perform, or cause performance of, such agreement, and the
expenses of Collateral Agent incurred in connection therewith shall be payable
by Grantor under Section 12(b).
SECTION 10. Standard of Care.
(a) The powers conferred on Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Collateral Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Collateral Agent accords its own
property.
(b) Neither Collateral Agent nor any AXEL Lender shall be liable to
Grantor (i) for any loss or damage sustained by it, or (ii) for any loss,
damage, depreciation or other diminution in the value of any of the Collateral
that may occur as a result of, in connection with or that is an any way related
to (1) any exercise by Collateral Agent or any AXEL Lender of any right or
remedy under this Agreement or (2) any other act of or failure to act by
Collateral Agent or any AXEL Lender, except to the extent that the same shall be
determined by a final judgment of a court of competent jurisdiction that is
final and not subject to review on appeal, to be the result of acts or omissions
on the part of Collateral Agent or such AXEL Lender constituting gross
negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY GRANTOR AGAINST COLLATERAL AGENT, ANY AXEL
LENDER OR THEIR RESPECTIVE AFFILIATES, DIRECTORS,
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OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY SPECIAL, INDIRECT, OR
CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR WRONGFUL CONDUCT (WHETHER THE
CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR DUTY IMPOSED BY LAW) IN CONNECTION
WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED AND
RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH; AND GRANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and be continuing,
Collateral Agent may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Collateral), and also may (i) require
Grantor to, and Grantor hereby agrees that it will at its expense and upon
request of Collateral Agent forthwith, assemble all or part of the Collateral as
directed by Collateral Agent and make it available to Collateral Agent at a
place to be designated by Collateral Agent that is reasonably convenient to both
parties, (ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Collateral Agent deems appropriate, (iv) take possession of Grantor's
premises or place custodians in exclusive control thereof, remain on such
premises and use the same and any of Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, and (v) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Collateral Agent may deem
commercially reasonable. Collateral Agent or any AXEL Lender may be the
purchaser of any or all of the Collateral at any such sale and Collateral Agent,
as agent for and representative of AXEL Lenders (but not any AXEL Lender or AXEL
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing), shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase price for any
Collateral payable by Collateral Agent at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of Grantor, and Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Grantor agrees that,
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to the extent notice of sale shall be required by law, at least ten days' notice
to Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Collateral
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Grantor hereby waives any claims against Collateral Agent
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Collateral Agent accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen),
Grantor shall be liable for the deficiency and the fees of any attorneys
employed by Collateral Agent to collect such deficiency.
(b) Notwithstanding anything to the contrary set forth herein,
Collateral Agent, on behalf of AXEL Lenders, agrees that to the extent prior FCC
approval is required pursuant to the Communications Act for (i) the operation
and effectiveness of any grant, right or remedy hereunder or under the other
Loan Documents or (ii) taking any action that may be taken by Collateral Agent
hereunder or under the other Loan Documents, such grant, right, remedy or action
will be subject to such prior FCC approval having been obtained by or in favor
of Collateral Agent, on behalf of AXEL Lenders (and Grantor will use its best
efforts to obtain any such approval as promptly as possible). Grantor agrees
that, upon the occurrence and during the continuation of an Event of Default and
at Collateral Agent's request, Grantor will, and will cause its Subsidiaries to,
immediately file, or cause to be filed, such applications for approval and shall
take all other further actions required by Collateral Agent to obtain such
Governmental Authorizations as are necessary to transfer ownership and control
to Collateral Agent on behalf of AXEL Lenders, or their successors or assigns,
of the FCC Licenses held by it or its Subsidiaries, or its interest in any
Person holding any such FCC License. To enforce the provisions of this Section
11(b), Collateral Agent is empowered to request the appointment of a receiver
from any court of competent jurisdiction. Such receiver shall be instructed to
seek from the FCC an involuntary transfer of control of any FCC License for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. Grantor hereby agrees to authorize, and to cause each of its
Subsidiaries to authorize, such an involuntary transfer of control upon the
request of the receiver so appointed, and, if Grantor shall refuse to authorize
or cause any of its Subsidiaries so to authorize the transfer, its approval may
be required by the court. Upon the occurrence and during the continuation of an
Event of Default, Grantor shall further use its best efforts to assist in
obtaining approval of the FCC, if required, for any action or transactions
contemplated by this Agreement or other Loan Documents, including, without
limitation, preparation, execution and filing with the FCC of the assignor's or
transferor's portion of any application or applications for consent to the
assignment of any FCC License or transfer of control necessary or appropriate
under FCC Regulations for approval of the transfer or assignment of any portion
of the Collateral, together with any FCC License or other authorization. Grantor
acknowledges that the assignment or transfer of FCC Licenses is integral
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to the AXEL Lenders' realization of value for the Collateral, that there is no
adequate remedy at law for failure by Grantor to comply with the provisions of
this Section 11(b) and that such failure would not be adequately compensable in
damages, and therefore agrees that the agreements contained in this Section
11(b) may be specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Document, none of Collateral Agent nor any AXEL Lender shall,
without first obtaining the approval of the FCC, take any action pursuant to
this Agreement, the Credit Agreement or any other Loan Document which would
constitute or result in any acquisition or transfer of ownership of Grantor or
its assets, assignment of any FCC License or any change of control of Grantor or
any other Person if such assignment, acquisition, transfer or change in control
would require, under existing law (including FCC Regulations), the prior
approval of the FCC.
SECTION 12. Indemnity and Expenses.
(a) Grantor agrees to indemnify Collateral Agent and each AXEL Lender
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Collateral Agent's or such AXEL Lender's gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Collateral Agent upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Collateral Agent may incur in
connection with (i) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (ii) the exercise or
enforcement of any of the rights of Collateral Agent hereunder, or (iii) the
failure by Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantor under this Section 12 shall survive the
termination of this Agreement and the discharge of Grantor's other obligations
under this Agreement.
SECTION 13. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Collateral Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied as
provided in subsection 2.4D of the Credit Agreement.
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SECTION 14. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen) and the
cancellation or termination of the AXEL Commitments, (b) be binding upon
Grantor, its successors and assigns, and (c) inure, together with the rights and
remedies of Collateral Agent hereunder, to the benefit of Collateral Agent and
its successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), but subject to the provisions of subsection 9.1 of the
Credit Agreement, any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to Lenders herein or otherwise. Upon
the payment in full of all Secured Obligations (other than inchoate
indemnification obligations with respect to claims, losses or liabilities which
have not yet arisen) and the cancellation or termination of the AXEL
Commitments, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Grantor. Upon any such termination Collateral
Agent will, at Grantor's expense, execute and deliver to Grantor such documents
as Grantor shall reasonably request to evidence such termination.
SECTION 15. Collateral Agent.
(a) Collateral Agent has been appointed to act as Collateral Agent
hereunder by AXEL Lenders. Collateral Agent shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement.
(b) Collateral Agent shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to subsection 8.5 of the Credit Agreement shall also
constitute notice of resignation as Collateral Agent under this Agreement;
removal of Collateral Agent pursuant to subsection 8.5 of the Credit Agreement
shall also constitute removal as Collateral Agent under this Agreement; and
appointment of a successor Collateral Agent pursuant to subsection 8.5 of the
Credit Agreement shall also constitute appointment of a successor Collateral
Agent under this Agreement. Upon the acceptance of any appointment as Collateral
Agent under subsection 8.5 of the Credit Agreement by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Collateral Agent under this Agreement, and the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement, and (ii) execute and deliver to such
successor Collateral Agent such amendments to financing statements, and take
such other actions, as may
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be necessary or appropriate in connection with the assignment to such successor
Collateral Agent of the security interests created hereunder, whereupon such
retiring or removed Collateral Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Collateral
Agent's resignation or removal hereunder as Collateral Agent, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Collateral Agent hereunder.
SECTION 16. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by
Collateral Agent and, in the case of any such amendment or modification, by
Grantor. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 17. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Collateral Agent shall not be effective
until received. For purposes hereof the address of each party shall be as set
forth under such party's name on the signature pages hereof or such other
address as shall be designated by such party in a written notice delivered to
the other party hereto.
SECTION 18. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 19. Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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SECTION 20. Governing Law; Terms.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 21. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Grantor and Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
BENEDEK BROADCASTING
CORPORATION
By: /s/ Ronald L. Lindwall
-------------------------------------
Ronald L. Lindwall
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY,
as Collateral Agent
By: /s/ Martin W. Friedman
-------------------------------------
Martin W. Friedman
Authorized Signatory
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EXECUTION
TANGIBLE ASSETS SECURITY AGREEMENT
THIS TANGIBLE ASSETS SECURITY AGREEMENT (this "Agreement") is dated as
of June 6, 1996 and entered into by and between BENEDEK BROADCASTING
CORPORATION, a Delaware corporation ("Grantor"), and CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY ("CIBC-NYA"), as agent for and representative of (in
such capacity herein called "Collateral Agent") Secured Parties referred to
below.
PRELIMINARY STATEMENTS
A. Benedek Communications Corporation and Grantor have entered into a
Credit Agreement, dated as of June 6, 1996 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined), with the financial
institutions listed therein ("Lenders"), Pearl Street L.P., as Arranging Agent,
Goldman, Sachs & Co., as Syndication Agent, and CIBC-NYA, as Administrative
Agent and Collateral Agent, pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Grantor.
B. Grantor has entered into that certain Indenture, dated as of March
1, 1995 (said Indenture, as amended, supplemented or otherwise modified from
time to time, being the "Existing Senior Note Indenture"), with Benedek
Broadcasting Company, L.L.C., a Delaware limited liability company and
subsidiary of Grantor, and The Bank of New York, as trustee (the "Senior Note
Trustee"), pursuant to which Grantor has issued $135,000,000 aggregate principal
amount of 11-7/8% Senior Secured Notes due 2005 (the "Existing Senior Notes"),
and it is a requirement under the Existing Senior Note Indenture that Grantor
secure such obligations equally and ratably with its other obligations secured
hereby.
C. Grantor may from time to time enter into one or more Interest Rate
Agreements (collectively, the "Lender Interest Rate Agreements") with one or
more Lenders or Affiliates of Lenders (in such capacity, collectively, "Interest
Rate Exchangers") in accordance with the terms of the Credit Agreement, and it
is desired that the obligations of Grantor under the Lender Interest Rate
Agreements, including without limitation the obligation of Grantor to make
payments thereunder in the event of early termination thereof, together with all
obligations of Grantor under the Credit Agreement and the other Loan Documents,
be secured hereunder.
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D. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantor shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
E. Collateral Agent is willing to act as agent hereunder for the
benefit of (i) Agents, (ii) Lenders, (iii) the Senior Note Trustee, (iv) the
holders of the Existing Senior Notes (the "Noteholders"), and (v) Interest Rate
Exchangers (each of Agents, Lenders, the Senior Note Trustee, the Noteholders
and Interest Rate Exchangers is hereinafter referred to as a "Secured Party" and
collectively, as "Secured Parties").
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make the initial Loans and other extensions of credit under the
Credit Agreement and to induce Interest Rate Exchangers to enter into the Lender
Interest Rate Agreements, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Grantor hereby agrees
with Collateral Agent as follows:
SECTION 1. Grant of Security.
Grantor hereby assigns to Collateral Agent, and hereby grants to
Collateral Agent a security interest in, all of Grantor's right, title and
interest in and to the following, in each case whether now or hereafter existing
or in which Grantor now has or hereafter acquires an interest and wherever the
same may be located, but excluding any of the following to the extent it
constitutes "Collateral" as defined in the Company Acquired Assets Security
Agreement (the "Collateral"):
(a) all equipment in all of its forms, all parts thereof
and all accessions thereto (any and all such equipment, parts and
accessions being the "Equipment");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be
furnished under contracts of service or so leased or furnished, (ii)
all raw materials, work in process, finished goods, and materials used
or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in Grantor's business, (iii) all goods in
which Grantor has an interest in mass or a joint or other interest or
right of any kind, and (iv) all goods which are returned to or
repossessed by Grantor) and all accessions thereto and products thereof
(all such inventory, accessions and products being the "Inventory") and
all negotiable documents of title (including without limitation
warehouse receipts, dock receipts and bills of lading) issued by any
Person covering any Inventory (any such negotiable document of title
being a "Negotiable Document of Title");
(c) all deposit accounts of Grantor;
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(d) all plant fixtures, business fixtures and other fixtures
and storage and office facilities, and all accessions thereto and
products thereof;
(e) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon; and
(f) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Collateral Agent
is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
'ss'362(a)), of all obligations and liabilities of every nature of Grantor now
or hereafter existing under or arising out of or in connection with (i) the
Credit Agreement, the Notes and all other Loan Documents, (ii) the Existing
Senior Note Indenture and the Existing Senior Notes, and (iii) the Lender
Interest Rate Agreements, and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Grantor, would accrue
on such obligations), payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Collateral Agent or any Secured Party as a preference,
fraudulent transfer or otherwise and all obligations of every nature of Grantor
now or hereafter existing under this Agreement (all such obligations of Grantor
being the "Secured Obligations").
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SECTION 3. Grantor Remains Liable.
Anything contained herein to the contrary notwithstanding, (a) Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Collateral Agent of any of its rights hereunder
shall not release Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Collateral Agent
shall not have any obligation or liability under any contracts and agreements
included in the Collateral by reason of this Agreement, nor shall Collateral
Agent be obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Representations and Warranties.
Grantor represents and warrants as follows:
(a) Ownership of Collateral. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Credit Agreement.
(b) Location of Equipment and Inventory. All of the Equipment
and Inventory is, as of the date hereof, located at certain of the
places specified in Schedule I annexed hereto.
(c) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps
its records regarding the Collateral is, and has been for the
four-month period preceding the date hereof, as set forth on Schedule
II annexed hereto. Grantor has not in the past done, and does not now
do, business under any other name (including any trade-name or
fictitious business name) except as specified on Schedule II annexed
hereto.
(d) Perfection. This Agreement, together with the filing of
UCC financing statements describing the Collateral with the filing
offices indicated on Schedule III annexed hereto, creates a valid,
perfected and, except for Liens permitted pursuant to the Credit
Agreement, first priority security interest in all Collateral in which
a security interest may be perfected by the filing of a financing
statement, securing the payment of the Secured Obligations.
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SECTION 5. Further Assurances.
(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that
Collateral Agent may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Collateral Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Grantor will: (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Collateral Agent may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby, (ii) at
Collateral Agent's request, promptly after the acquisition by Grantor of any
item of Equipment which is covered by a certificate of title under a statute of
any jurisdiction under the law of which indication of a security interest on
such certificate is required as a condition of perfection thereof, execute and
file with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (iii) within 30 days after the end of each calendar quarter, deliver to
Collateral Agent copies of all such applications or other documents filed during
such calendar quarter and copies of all such certificates of title issued during
such calendar quarter indicating the security interest created hereunder in the
items of Equipment covered thereby, (iv) at any reasonable time, upon request by
Collateral Agent, exhibit the Collateral to and allow inspection of the
Collateral by Collateral Agent, or persons designated by Collateral Agent, and
(v) at Collateral Agent's request, appear in and defend any action or proceeding
that may affect Grantor's title to or Collateral Agent's security interest in
all or any part of the Collateral.
(b) Grantor hereby authorizes Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Grantor. Grantor agrees that
a carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by Grantor shall be sufficient as a financing statement and may
be filed as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Collateral Agent may
reasonably request, all in reasonable detail.
SECTION 6. Certain Covenants of Grantor.
Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering
the Collateral;
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(b) notify Collateral Agent of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) keep its chief place of business and chief executive
office, the office where it keeps its records concerning Collateral,
and its Equipment and Inventory at the locations therefor specified in
Section 4 hereof, or, upon 30 days' prior written notice to Collateral
Agent, at such other locations in jurisdictions where all action that
may be necessary or desirable, or that Collateral Agent may request, in
order to perfect and protect any security interest granted or purported
to be granted hereby, or to enable Collateral Agent to exercise and
enforce its rights and remedies hereunder, with respect to the
Collateral shall have been taken. Grantor will hold and preserve such
records and will permit representatives of Collateral Agent at any time
during normal business hours to inspect and make abstracts from such
records, and Grantor agrees to render to Collateral Agent, at Grantor's
cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto;
(d) if Collateral Agent gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Grantor shall in any event pay
such taxes, assessments, charges, levies or claims not later than five
days prior to the date of any proposed sale under any judgement, writ
or warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment.
SECTION 7. Insurance.
Grantor shall, at its own expense, maintain insurance with respect to
the Equipment and Inventory in accordance with the terms of the Credit
Agreement.
SECTION 8. Transfers, Other Liens and Release of Collateral.
(a) Grantor shall not:
(i) except as permitted by the Credit Agreement, sell, assign
(by operation of law or otherwise) or otherwise dispose of any of the
Collateral; or
(ii) except for the security interest created by this
Agreement, create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure the indebtedness or other obligations
of any Person.
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(b) In the event Collateral is sold in an Asset Sale permitted under
the Credit Agreement, Collateral Agent may release the Liens granted hereunder
on the Collateral that is the subject of such Asset Sale in accordance with the
provisions of the Credit Agreement. The Noteholders hereby agree, by their
acceptance of the benefits of this Agreement, that the Collateral Agent may
release Collateral in accordance with this Section 8(b) and the Credit Agreement
without the consent or approval of any Noteholder.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact.
Grantor hereby irrevocably appoints Collateral Agent as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Collateral Agent or otherwise, from time to time in
Collateral Agent's discretion to take any action and to execute any instrument
that Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be maintained
by Grantor or paid to Collateral Agent pursuant to Section 7;
(b) upon the occurrence and during the continuation of an
Event of Default, to ask for, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuation of an
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a)
and (b) above;
(d) upon the occurrence and during the continuation of an
Event of Default, to file any claims or take any action or institute
any proceedings that Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of Collateral Agent with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under (i) this Agreement or the Credit Agreement and (ii) the
Existing Senior Note Indenture) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Collateral
Agent in its sole discretion, any such payments made by Collateral
Agent to become obligations of Grantor to Collateral Agent, due and
payable immediately without demand;
(f) upon the occurrence and during the continuation of an
Event of Default, to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
documents relating to the Collateral;
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(g) upon the occurrence and during the continuation of an
Event of Default, to file, or cause to be filed, to the extent
permitted by law, such applications for approval and to take all other
and further actions required to obtain any approvals or consents from
the FCC required for the exercise of any right or remedy hereunder; and
(h) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Collateral Agent were the absolute
owner thereof for all purposes, and to do, at Collateral Agent's option
and Grantor's expense, at any time or from time to time, all acts and
things that Collateral Agent deems necessary to protect, preserve or
realize upon the Collateral and Collateral Agent's security interest
therein in order to effect the intent of this Agreement, all as fully
and effectively as Grantor might do.
SECTION 10. Collateral Agent May Perform.
If Grantor fails to perform any agreement contained herein, Collateral
Agent may itself perform, or cause performance of, such agreement, and the
expenses of Collateral Agent incurred in connection therewith shall be payable
by Grantor under Section 15(b).
SECTION 11. Standard of Care.
(a) The powers conferred on Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Collateral Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Collateral Agent accords its
own property.
(b) Neither Collateral Agent nor any Secured Party shall be liable to
Grantor (i) for any loss or damage sustained by it, or (ii) for any loss,
damage, depreciation or other diminution in the value of any of the Collateral
that may occur as a result of, in connection with or that is an any way related
to (1) any exercise by Collateral Agent or any Secured Party of any right or
remedy under this Agreement or (2) any other act of or failure to act by
Collateral Agent or any Secured Party, except to the extent that the same shall
be determined by a final judgment of a court of competent jurisdiction that is
final and not subject to review on appeal, to be the result of acts or omissions
on the part of Collateral Agent or such Secured Party constituting gross
negligence or willful misconduct.
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(c) NO CLAIM MAY BE MADE BY GRANTOR AGAINST COLLATERAL AGENT, ANY
SECURED PARTY OR THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS OR AGENTS FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN
RESPECT OF ANY BREACH OR WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED
ON CONTRACT, TORT OR DUTY IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR
IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED
BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH; AND GRANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY
SUCH CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN
OR SUSPECTED TO EXIST IN ITS FAVOR.
SECTION 12. Remedies.
(a) If any Event of Default shall have occurred and be continuing,
Collateral Agent may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Collateral), and also may (i) require
Grantor to, and Grantor hereby agrees that it will at its expense and upon
request of Collateral Agent forthwith, assemble all or part of the Collateral as
directed by Collateral Agent and make it available to Collateral Agent at a
place to be designated by Collateral Agent that is reasonably convenient to both
parties, (ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Collateral Agent deems appropriate, (iv) take possession of Grantor's
premises or place custodians in exclusive control thereof, remain on such
premises and use the same and any of Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, and (v) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Collateral Agent may deem
commercially reasonable. Collateral Agent or any Secured Party may be the
purchaser of any or all of the Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Secured
Party or Secured Parties in its or their respective individual capacities unless
Requisite Obligees (as defined in Section 13) shall otherwise agree in
writing), shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by
Collateral Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Grantor,
and Grantor hereby waives (to the extent
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permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Grantor hereby waives any claims against Collateral Agent arising by
reason of the fact that the price at which any Collateral may have been sold at
such a private sale was less than the price which might have been obtained at a
public sale, even if Collateral Agent accepts the first offer received and does
not offer such Collateral to more than one offeree. If the proceeds of any sale
or other disposition of the Collateral are insufficient to pay all the Secured
Obligations (other than inchoate indemnification obligations with respect to
claims, losses or liabilities which have not yet arisen), Grantor shall be
liable for the deficiency and the fees of any attorneys employed by Collateral
Agent to collect such deficiency.
(b) Notwithstanding anything to the contrary set forth herein,
Collateral Agent, on behalf of Secured Parties, agrees that to the extent prior
FCC approval is required pursuant to the Communications Act for (i) the
operation and effectiveness of any grant, right or remedy hereunder or under the
other Loan Documents or the Existing Senior Note Indenture or (ii) taking any
action that may be taken by Collateral Agent hereunder or under the other Loan
Documents or the Existing Senior Note Indenture, such grant, right, remedy or
action will be subject to such prior FCC approval having been obtained by or in
favor of Collateral Agent, on behalf of Secured Parties (and Grantor will use
its best efforts to obtain any such approval as promptly as possible). Grantor
agrees that, upon the occurrence and during the continuation of an Event of
Default and at Collateral Agent's request, Grantor will, and will cause its
Subsidiaries to, immediately file, or cause to be filed, such applications for
approval and shall take all other further actions required by Collateral
Agent to obtain such Governmental Authorizations as are necessary to transfer
ownership and control to Collateral Agenton behalf of Secured Parties, or their
respective successors or assigns, of the FCC Licenses held by it or its
Subsidiaries, or its interest in any Person holding any such FCC License. To
enforce the provisions of this Section 12(b), Collateral Agent is empowered to
request the appointment of a receiver from any court of competent jurisdiction.
Such receiver shall be instructed to seek from the FCC an involuntary transfer
of control of any FCC License for the purpose of seeking a bona fide purchaser
to whom control will ultimately be transferred. Grantor hereby agrees to
authorize, and to cause each of its Subsidiaries to authorize, such an
involuntary transfer of control upon the request of the receiver so appointed,
and, if Grantor shall refuse to authorize or cause any of its Subsidiaries so to
authorize the transfer, its approval may be required by the court. Upon the
occurrence and during the continuation of an Event of Default, Grantor shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Agreement or
the other Loan Documents or the Existing Senior Note Indenture, including,
without limitation, preparation, execution and filing with the
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FCC of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any FCC License or transfer of control
necessary or appropriate under FCC Regulations for approval of the transfer or
assignment of any portion of the Collateral, together with any FCC License or
other authorization. Grantor acknowledges that the assignment or transfer of FCC
Licenses is integral to the Secured Parties' realization of value for the
Collateral, that there is no adequate remedy at law for failure by Grantor to
comply with the provisions of this Section 12(b) and that such failure would not
be adequately compensable in damages, and therefore agrees that the agreements
contained in this Section 12(b) may be specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Documents or the Existing Senior Note Indenture, none of
Collateral Agent nor any Secured Party shall, without first obtaining the
approval of the FCC, take any action pursuant to this Agreement, the Credit
Agreement, or any other Loan Document or the Existing Senior Note Indenture
which would constitute or result in any acquisition or transfer of ownership of
Grantor or its assets, assignment of any FCC License or any change of control of
Grantor or any other Person if such assignment, acquisition, transfer or change
in control would require, under existing law (including FCC Regulations), the
prior approval of the FCC.
SECTION 13. Decisions Relating to Exercise of Remedies.
Collateral Agent shall exercise, or refrain from exercising, any remedy
provided for in Section 12 in accordance with the directions of Requisite
Obligees. For purposes of this Agreement "Requisite Obligees" means (i) with
respect to the decision of whether to exercise or refrain from exercising any
remedy, either (a) the Senior Note Trustee acting on behalf of the holders of
the Existing Senior Notes in accordance with the terms of the Existing Senior
Note Indenture or (b) the Administrative Agent acting on behalf of the Lenders
in accordance with the terms of the Credit Agreement and (ii) with respect to
the manner of exercising any remedy, the holders of a majority in aggregate
principal amount of the Secured Obligations. For purposes of the definition of
"Requisite Obligees" set forth herein, (i) the Senior Note Trustee shall be
deemed to hold or represent, and shall be entitled to vote and give notice and
directions to Collateral Agent with respect to, the outstanding Existing Senior
Notes in accordance with the provisions of the Existing Senior Note Indenture
and (ii) the Administrative Agent under the Credit Agreement shall be entitled
to vote and give notice and directions to Collateral Agent with respect to
Obligations outstanding under the Credit Agreement in accordance with the terms
of the Credit Agreement.
SECTION 14. Application of Proceeds.
(a) Except as expressly provided elsewhere in this Agreement, all
proceeds received by Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may, in the
discretion of Collateral Agent, be held by Collateral Agent
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as Collateral for, and/or then, or at any time thereafter, applied in full or in
part by Collateral Agent against, the Secured Obligations in the following order
of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including all compensation due to
Collateral Agent and its agents and counsel, and all other expenses,
liabilities, and advances made or incurred by Collateral Agent in
connection therewith, and all amounts for which Collateral Agent is
entitled to indemnification hereunder and all advances made by
Collateral Agent hereunder for the account of Grantor, and to the
payment of all costs and expenses paid or incurred by Collateral Agent
in connection with the exercise of any right or remedy hereunder, all
in accordance with subsection 9.2 of the Credit Agreement;
SECOND: To the payment of interest on and fees, if any, with
respect to the Secured Obligations on an equal and ratable basis;
THIRD: To the payment of the unpaid principal amount of all
Secured Obligations on an equal and ratable basis;
FOURTH: To the payment of all other amounts due with respect
to the Secured Obligations on an equal and ratable basis; and
FIFTH: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
(b) Payments by Collateral Agent to Lenders in respect of Obligations
shall be made to Administrative Agent for distribution to Lenders in accordance
with the Credit Agreement; any payments in respect of any obligations of Grantor
under Lender Interest Rate Agreements shall be made as directed by the Interest
Rate Exchanger to which such obligations are owed; and any payments in respect
of any obligations of Grantor under the Existing Senior Note Indenture and the
Existing Senior Notes shall be made to the Senior Note Trustee for the benefit
of the Noteholders.
SECTION 15. Indemnity and Expenses.
(a) Grantor agrees to indemnify Collateral Agent and each Secured Party
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Collateral Agent's or such Secured Party's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
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(b) Grantor shall pay to Collateral Agent upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Collateral Agent may incur in
connection with (i) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (ii) the exercise or
enforcement of any of the rights of Collateral Agent hereunder, or (iii) the
failure by Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantor in this Section 15 shall survive the
termination of this Agreement and the discharge of Grantor's other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement,
the other Loan Documents and the Existing Senior Note Indenture.
SECTION 16. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of all the Secured Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen) existing under or arising out of or in connection with the Credit
Agreement and the other Loan Documents and the cancellation or termination of
the Commitments, (b) be binding upon Grantor, its successors and assigns, and
(c) inure, together with the rights and remedies of Collateral Agent hereunder,
to the benefit of Collateral Agent and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any holder of
Existing Senior Notes may assign or otherwise transfer any Existing Senior Notes
held by it to any other Person, and, subject to the provisions of subsection 9.1
of the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and in each case such other Person shall
thereupon become vested with all the benefits in respect thereof granted to the
holders of the Existing Senior Notes or Lenders, respectively, herein or
otherwise. Upon the payment in full of all Secured Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen) existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and the
cancellation or termination of the Commitments, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to Grantor.
Upon any such termination Collateral Agent will, at Grantor's expense, execute
and deliver to Grantor such documents as Grantor shall reasonably request to
evidence such termination.
SECTION 17. Collateral Agent.
(a) Collateral Agent has been appointed to act as Collateral Agent
hereunder by Lenders under the Credit Agreement. The Noteholders and Interest
Rate Exchangers, by their acceptance of the benefits hereunder, hereby appoint
Collateral Agent to act as Collateral Agent hereunder in accordance with the
provisions of Section 8 of the Credit Agreement, including without limitation
the provisions of subsection 8.2 of the Credit Agreement, and the Noteholders
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and the Interest Rate Exchangers further hereby agree to indemnify Collateral
Agent on a ratable basis in accordance with subsection 8.4 of the Credit
Agreement. Collateral Agent shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that
Collateral Agent shall exercise, or refrain from exercising, any remedies
hereunder in accordance with the directions of Requisite Obligees.
(b) Collateral Agent shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to subsection 8.5 of the Credit Agreement shall also
constitute notice of resignation as Collateral Agent under this Agreement;
removal of Collateral Agent pursuant to subsection 8.5 of the Credit Agreement
shall also constitute removal as Collateral Agent under this Agreement; and
appointment of a successor Collateral Agent pursuant to subsection 8.5 of the
Credit Agreement shall also constitute appointment of a successor Collateral
Agent under this Agreement. Upon the acceptance of any appointment as Collateral
Agent under subsection 8.5 of the Credit Agreement by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Collateral Agent under this Agreement, and the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement, and (ii) execute and deliver to such
successor Collateral Agent such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Collateral Agent of the security interests created
hereunder, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was Collateral Agent hereunder.
SECTION 18. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by
Collateral Agent and, in the case of any such amendment or modification, by
Grantor. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. Collateral Agent
may execute amendments and waivers to this Agreement if directed to do so in
writing by Requisite Lenders or Supermajority Lenders as required in accordance
with the terms of the Credit Agreement. The Noteholders hereby agree, by
acceptance of the benefits of this Agreement, that no consent or approval of any
Noteholder shall be required for any such amendment or waiver as long as, after
giving effect to such amendment or waiver, the Existing Senior Notes continue to
be
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secured on an equal and ratable basis with the Obligations under the Credit
Agreement secured under this Agreement.
SECTION 19. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Collateral Agent shall not be effective
until received. For purposes hereof the address of each party shall be as set
forth under such party's name on the signature pages hereof or of the Credit
Agreement or such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 20. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 21. Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 22. Governing Law; Terms.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement,
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terms used in Articles 8 and 9 of the Uniform Commercial Code in the State
of New York are used herein as therein defined.
SECTION 23. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Grantor and Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
BENEDEK BROADCASTING
CORPORATION
By: /s/ Ronald L. Lindwall
______________________________________
Ronald L. Lindwall
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY,
as Collateral Agent
By: /s/ Martin W. Friedman
______________________________________
Martin W. Friedman
Authorized Signatory
S - 1
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EXECUTION
ACCOUNTS RECEIVABLE SECURITY AGREEMENT
THIS ACCOUNTS RECEIVABLE SECURITY AGREEMENT (this "AGREEMENT") is dated as
of June 6, 1996 and entered into by and between BENEDEK BROADCASTING
CORPORATION, a Delaware corporation ("GRANTOR"), and CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY ("CIBC-NYA"), as agent for and representative of (in
such capacity herein called "COLLATERAL AGENT") the financial institutions
("LENDERS") party to the Credit Agreement referred to below.
PRELIMINARY STATEMENTS
A. Benedek Communications Corporation and Grantor have entered into a
Credit Agreement, dated as of June 6, 1996 (said Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined), with Lenders, Pearl Street
L.P., as Arranging Agent, Goldman, Sachs & Co., as Syndication Agent, and
CIBC-NYA, as Administrative Agent and Collateral Agent, pursuant to which
Lenders have made commitments, subject to the terms and conditions set forth in
the Credit Agreement, to extend certain credit facilities to Grantor.
B. Grantor has entered into that certain Indenture, dated as of March 1,
1995 (said Indenture, as amended, supplemented or otherwise modified from time
to time, being the "EXISTING SENIOR NOTE INDENTURE"), with Benedek Broadcasting
Company, L.L.C., a Delaware limited liability company and subsidiary of Grantor,
and The Bank of New York, as trustee, pursuant to which Grantor has issued
$135,000,000 aggregate principal amount of the 11-7/8% Senior Secured Notes due
2005. The Existing Senior Note Indenture permits Grantor to incur indebtedness
under a bank credit agreement in an amount not to exceed the greater of $5
million and 75% of the book value of accounts receivable of Grantor and its
Subsidiaries and to grant first priority Liens on its accounts receivable to
secure such indebtedness.
C. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantor shall have (i) granted the
security interests contemplated by this Agreement in favor of Collateral Agent
for the benefit of Lenders and (ii) undertaken the obligations contemplated by
this Agreement.
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NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make the initial Loans and other extensions of credit under the
Credit Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Collateral
Agent as follows:
SECTION 1. GRANT OF SECURITY.
Grantor hereby assigns to Collateral Agent, and hereby grants to Collateral
Agent a security interest in, all of Grantor's right, title and interest in and
to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located (the "COLLATERAL"):
(A) all accounts, chattel paper, instruments, and other rights
and obligations of any kind arising out of accounts receivable of
Grantor, but excluding any of such accounts, chattel paper, instruments
and other obligations to the extent they constitute rights of Grantor to
receive moneys due or to become due under or proceeds of "Assigned
Agreements" as defined in the Existing Company Pledge Agreement (any and
all such accounts, chattel paper, instruments and other obligations
being the "ACCOUNTS");
(B) all agreements and contracts to which Grantor is a party as
of the date hereof or becomes a party after the date hereof relating to
the sale of advertising time by Grantor or the Stations, as each such
agreement may be amended, supplemented or otherwise modified from time
to time (said agreements, as so amended, supplemented or otherwise
modified, being referred to herein individually as an "ASSIGNED
ADVERTISING AGREEMENT" and collectively as the "ASSIGNED ADVERTISING
AGREEMENTS"), including without limitation (i) all rights of Grantor to
receive moneys due or to become due under or pursuant to the Assigned
Advertising Agreements, (ii) all rights of Grantor to receive proceeds
of any insurance, indemnity, warranty, guaranty or security with respect
to the Assigned Advertising Agreements, (iii) all claims of Grantor for
damages arising out of any breach of or default under the Assigned
Advertising Agreements, and (iv) all rights of Grantor to terminate,
amend, supplement, modify or exercise rights or options under the
Assigned Advertising Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
(C) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Accounts or Assigned Advertising Agreements or are otherwise necessary
or helpful in the collection thereof or realization thereupon; and
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(D) all proceeds, products, rents and profits of or from any and
all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Collateral Agent
is the loss payee thereof), any indemnity, warranty or guaranty, payable
by reason of loss or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
ss.362(a)), of all obligations and liabilities of every nature of Grantor now or
hereafter existing under or arising out of or in connection with the Credit
Agreement and the other Loan Documents and all extensions or renewals thereof,
whether for principal, interest (including without limitation interest that, but
for the filing of a petition in bankruptcy with respect to Grantor, would accrue
on such obligations), fees, expenses, indemnities or otherwise, whether
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Collateral Agent or any Lender as a preference,
fraudulent transfer or otherwise and all obligations of every nature of Grantor
now or hereafter existing under this Agreement (all such obligations of Grantor
being the "SECURED OBLIGATIONS"); provided that the aggregate amount of Secured
Obligations secured hereunder shall not at any time exceed the greater of (i)
$5,000,000 and (ii) 75% of the book value of the accounts receivable of Grantor.
SECTION 3. GRANTOR REMAINS LIABLE.
Anything contained herein to the contrary notwithstanding, (a) Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Collateral Agent of any of its rights hereunder
shall not release Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Collateral Agent
shall not have any obligation or liability under any contracts and agreements
included in the Collateral by reason of this Agreement, nor shall Collateral
Agent be obligated to perform any of the
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obligations or duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Grantor represents and warrants as follows:
(A) OWNERSHIP OF COLLATERAL. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Credit Agreement.
(B) OFFICE LOCATIONS; OTHER NAMES. The chief place of business,
the chief executive office and the office where Grantor keeps its
records regarding the Collateral and all originals of all chattel paper
that evidence Collateral is, and has been for the four-month period
preceding the date hereof, as set forth on Schedule I annexed hereto,
Grantor has not in the past done, and does not now do, business under
any other name (including any trade-name or fictitious business name)
except as specified on Schedule I annexed hereto.
(C) DELIVERY OF CERTAIN COLLATERAL. All notes and other
instruments (excluding checks) comprising any and all items of
Collateral have been, or with respect to Collateral acquired after the
date hereof and chattel paper requested by Collateral Agent pursuant to
Section 5(a)(ii) will be, delivered to Collateral Agent duly endorsed
and accompanied by duly executed instruments of transfer or assignment
in blank.
(D) PERFECTION. This Agreement, together with the filing of UCC
financing statements describing the Collateral with the filing offices
indicated on Schedule II annexed hereto, creates a valid, perfected and,
except for Liens permitted pursuant to the Credit Agreement, first
priority security interest in all Collateral in which a security
interest may be perfected by the filing of a financing statement,
securing the payment of the Secured Obligations.
SECTION 5. FURTHER ASSURANCES.
(A) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that
Collateral Agent may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Collateral Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, Grantor will:
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(i) at the request of Collateral Agent, mark conspicuously each item of chattel
paper included in the Accounts, each Assigned Advertising Agreement and, at the
request of Collateral Agent, each of its records pertaining to the Collateral,
with a legend, in form and substance satisfactory to Collateral Agent,
indicating that such Collateral is subject to the security interest granted
hereby, (ii) at the request of Collateral Agent, deliver and pledge to
Collateral Agent hereunder all promissory notes and other instruments (including
checks) and all original counterparts of chattel paper constituting Collateral,
duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to Collateral Agent, (iii)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Collateral Agent may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby, (iv) at any
reasonable time, upon request by Collateral Agent, exhibit the Collateral to and
allow inspection of the Collateral by Collateral Agent, or persons designated by
Collateral Agent, and (v) at Collateral Agent's request, appear in and defend
any action or proceeding that may affect Grantor's title to or Collateral
Agent's security interest in all or any part of the Collateral.
(B) Grantor hereby authorizes Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Grantor. Grantor agrees that
a carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by Grantor shall be sufficient as a financing statement and may
be filed as a financing statement in any and all jurisdictions.
(C) Grantor will furnish to Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Collateral Agent may
reasonably request, all in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTOR.
Grantor shall:
(A) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the
Collateral;
(B) notify Collateral Agent of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(C) keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Collateral and
all originals of all chattel
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paper that evidence Accounts at the location therefor specified in
subsection 4(b) hereof, or, upon 30 days' prior written notice to
Collateral Agent, at such other location in a jurisdiction where all
action that may be necessary or desirable, or that Collateral Agent may
request, in order to perfect and protect any security interest granted
or purported to be granted hereby, or to enable Collateral Agent to
exercise and enforce its rights and remedies hereunder, with respect to
the Collateral shall have been taken. Grantor will hold and preserve
such records and chattel paper and will permit representatives of
Collateral Agent at any time during normal business hours to inspect and
make abstracts from such records and chattel paper, and Grantor agrees
to render to Collateral Agent, at Grantor's cost and expense, such
clerical and other assistance as may be reasonably requested with regard
thereto;
(D) if Collateral Agent gives value to enable Grantor to acquire
rights in or the use of any Collateral, use such value for such
purposes; and
(E) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof is being contested
in good faith; provided that Grantor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Grantor or any of the Collateral as
a result of the failure to make such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS.
(A) Grantor shall, for not less than 5 years from the date on which such
Account arose, maintain (i) complete records of each Account, including records
of all payments received and credits granted, and (ii) all documentation
relating thereto.
(B) Except as otherwise provided in this subsection (c), Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
Grantor under the Accounts. In connection with such collections, Grantor may
take such action as Grantor may deem necessary or advisable to enforce
collection of amounts due or to become due under the Accounts; provided,
however, that Collateral Agent shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default and upon written
notice to Grantor of its intention to do so, to notify the account debtors or
obligors under any Accounts of the assignment of such Accounts to Collateral
Agent and to direct such account debtors or obligors to make payment of all
amounts due or to become due to Grantor thereunder directly to Collateral Agent,
to notify each Person maintaining a lockbox or similar arrangement to which
account debtors or obligors under any Accounts have been directed to make
payment to remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox or other
arrangement
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directly to Collateral Agent and, upon such notification and at the expense of
Grantor, to enforce collection of any such Accounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as Grantor might have done. After receipt by Grantor of the notice from
Collateral Agent referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including checks and other instruments) received by
Grantor in respect of the Accounts shall be received in trust for the benefit of
Collateral Agent hereunder, shall be segregated from other funds of Grantor and
shall be forthwith paid over or delivered to Collateral Agent in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 14, and (ii) Grantor shall not adjust, settle
or compromise the amount or payment of any Account, or release wholly or partly
any account debtor or obligor thereof, or allow any credit or discount thereon.
SECTION 8. SPECIAL PROVISIONS WITH RESPECT TO ASSIGNED ADVERTISING AGREEMENTS.
(A) Grantor shall at its expense perform and observe all material terms
and provisions of the Assigned Advertising Agreements to be performed or
observed by it, maintain the Assigned Advertising Agreements in full force and
effect, and enforce the Assigned Advertising Agreements in accordance with their
terms.
(B) Grantor shall not cancel, terminate, amend or otherwise modify any
of the Assigned Advertising Agreements, consent to or accept any cancellation or
termination thereof, give any consent, waiver or approval thereunder, or take
any other action in connection therewith except to the extent such cancellation,
termination, amendment, modification, consent, waiver, approval or other action
would not have a Material Adverse Effect.
SECTION 9. TRANSFERS AND OTHER LIENS.
Grantor shall not:
(A) except as permitted by the Credit Agreement, sell, assign
(by operation of law or otherwise) or otherwise dispose of any of the
Collateral; or
(B) except for the security interest created by this Agreement,
create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness of other obligations of any
Person.
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SECTION 10. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Collateral Agent as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Collateral Agent or otherwise, from time to time in
Collateral Agent's discretion to take any action and to execute any instrument
that Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including without limitation:
(A) upon the occurrence and during the continuation of an Event
of Default, to ask for, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(B) upon the occurrence and during the continuation of an Event
of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (a)
above;
(C) upon the occurrence and during the continuation of an Event
of Default, to file any claims or take any action or institute any
proceedings that Collateral Agent may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the
rights of Collateral Agent with respect to any of the Collateral;
(D) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed
upon or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined
by Collateral Agent in its sole discretion, any such payments made by
Collateral Agent to become obligations of Grantor to Collateral Agent,
due and payable immediately without demand;
(E) upon the occurrence and during the continuation of an Event
of Default, to sign and endorse any invoices, drafts against debtors,
assignments, verifications and notices in connection with the Accounts
and other documents relating to the Collateral;
(F) upon the occurrence and during the continuation of an Event
of Default, to file, or cause to be filed, to the extent permitted by
law, such applications for approval and to take all other and further
actions required to obtain any approvals or consents from the FCC
required for the exercise of any right or remedy hereunder; and
(G) upon the occurrence and during the continuation of an Event
of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Collateral
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Agent were the absolute owner thereof for all purposes, and to do, at
Collateral Agent's option and Grantor's expense, at any time or from
time to time, all acts and things that Collateral Agent deems necessary
to protect, preserve or realize upon the Collateral and Collateral
Agent's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 11. COLLATERAL AGENT MAY PERFORM.
If Grantor fails to perform any agreement contained herein, Collateral
Agent may itself perform, or cause performance of, such agreement, and the
expenses of Collateral Agent incurred in connection therewith shall be payable
by Grantor under Section 15(b).
SECTION 12. STANDARD OF CARE.
(A) The powers conferred on Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Collateral Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Collateral Agent accords its own
property.
(B) Neither Collateral Agent nor any Lender shall be liable to Grantor
(i) for any loss or damage sustained by it, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral that may
occur as a result of, in connection with or that is an any way related to (1)
any exercise by Collateral Agent or any Lender of any right or remedy under this
Agreement or (2) any other act of or failure to act by Collateral Agent or any
Lender, except to the extent that the same shall be determined by a final
judgment of a court of competent jurisdiction that is final and not subject to
review on appeal, to be the result of acts or omissions on the part of
Collateral Agent or such Lender constituting gross negligence or willful
misconduct.
(C) NO CLAIM MAY BE MADE BY GRANTOR AGAINST COLLATERAL AGENT, ANY LENDER
OR THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR
AGENTS FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
BREACH OR WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT,
TORT OR DUTY IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY
RELATED TO THE TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS
AGREEMENT, OR ANY ACT, OMISSION OR EVENT
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OCCURRING IN CONNECTION THEREWITH; AND GRANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
SECTION 13. REMEDIES.
(A) If any Event of Default shall have occurred and be continuing,
Collateral Agent may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Collateral), and also may (i) require
Grantor to, and Grantor hereby agrees that it will at its expense and upon
request of Collateral Agent forthwith, assemble all or part of the Collateral as
directed by Collateral Agent and make it available to Collateral Agent at a
place to be designated by Collateral Agent that is reasonably convenient to both
parties, (ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store or process, the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent Collateral
Agent deems appropriate, (iv) take possession of Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and use the
same and any of Grantor's equipment for the purpose of taking any actions
described in the preceding clause (iii) and collecting any Secured Obligation,
and (v) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Collateral Agent may deem commercially reasonable. Collateral Agent or
any Lender may be the purchaser of any or all of the Collateral at any such sale
and Collateral Agent, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Collateral Agent at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of Grantor, and Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed
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therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Grantor hereby waives any claims against
Collateral Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Collateral Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations (other than inchoate
indemnification obligations with respect to claims, losses or liabilities which
have not yet arisen), Grantor shall be liable for the deficiency and the fees of
any attorneys employed by Collateral Agent to collect such deficiency.
(B) Notwithstanding anything to the contrary set forth herein,
Collateral Agent, on behalf of Lenders, agrees that to the extent prior FCC
approval is required pursuant to the Communications Act for (i) the operation
and effectiveness of any grant, right or remedy hereunder or under the other
Loan Documents or (ii) taking any action that may be taken by Collateral Agent
hereunder or under the other Loan Documents, such grant, right, remedy or action
will be subject to such prior FCC approval having been obtained by or in favor
of Collateral Agent, on behalf of Lenders (and Grantor will use its best efforts
to obtain any such approval as promptly as possible). Grantor agrees that, upon
the occurrence and during the continuation of an Event of Default and at
Collateral Agent's request, Grantor will, and will cause its Subsidiaries to,
immediately file, or cause to be filed, such applications for approval and shall
take all other further actions required by Collateral Agent to obtain such
Governmental Authorizations as are necessary to transfer ownership and control
to Collateral Agent on behalf of Lenders, or their successors or assigns, of the
FCC Licenses held by it or its Subsidiaries, or its interest in any Person
holding any such FCC License. To enforce the provisions of this Section 13(b),
Collateral Agent is empowered to request the appointment of a receiver from any
court of competent jurisdiction. Such receiver shall be instructed to seek from
the FCC an involuntary transfer of control of any FCC License for the purpose of
seeking a bona fide purchaser to whom control will ultimately be transferred.
Grantor hereby agrees to authorize, and to cause each of its Subsidiaries to
authorize, such an involuntary transfer of control upon the request of the
receiver so appointed, and, if Grantor shall refuse to authorize or cause any of
its Subsidiaries so to authorize the transfer, its approval may be required by
the court. Upon the occurrence and during the continuation of an Event of
Default, Grantor shall further use its best efforts to assist in obtaining
approval of the FCC, if required, for any action or transactions contemplated by
this Agreement or the other Loan Documents, including, without limitation,
preparation, execution and filing with the FCC of the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
FCC License or transfer of control necessary or appropriate under FCC
Regulations for approval of the transfer or assignment of any portion of the
Collateral, together with any FCC License or other authorization. Grantor
acknowledges that the assignment or transfer of FCC Licenses is integral to
Lenders' realization of value for the Collateral, that there is no adequate
remedy at law for failure by Grantor to comply with the provisions of this
Section 13(b) and that such failure would not be adequately compensable in
damages, and
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therefore agrees that the agreements contained in this Section 13(b) may be
specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Document, none of Collateral Agent nor any Lender shall, without
first obtaining the approval of the FCC, take any action pursuant to this
Agreement, the Credit Agreement or any other Loan Document which would
constitute or result in any acquisition or transfer of ownership of Grantor or
its assets, assignment of any FCC License or any change of control of Grantor or
any other Person if such assignment, acquisition, transfer or change of control
would require, under existing law (including FCC Regulations), the prior
approval of the FCC.
SECTION 14. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Collateral Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied as
provided in subsection 2.4D of the Credit Agreement.
SECTION 15. INDEMNITY AND EXPENSES.
(A) Grantor agrees to indemnify Collateral Agent and each Lender from
and against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Collateral Agent's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(B) Grantor shall pay to Collateral Agent upon demand the amount of any
and all costs and expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that Collateral Agent may incur in
connection with (i) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (ii) the exercise or
enforcement of any of the rights of Collateral Agent hereunder, or (iii) the
failure by Grantor to perform or observe any of the provisions hereof.
(C) The obligations of Grantor under this Section 15 shall survive the
termination of this Agreement and the discharge of Grantor's other obligations
under this Agreement.
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SECTION 16. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen) and the
cancellation or termination of the Commitments, (b) be binding upon Grantor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Collateral Agent hereunder, to the benefit of Collateral Agent and its
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), but subject to the provisions of subsection 9.1 of the
Credit Agreement, any Lender may assign or otherwise transfer any Loans held by
it to any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to Lenders herein or otherwise. Upon
the payment in full of all Secured Obligations (other than inchoate
indemnification obligations with respect to claims, losses or liabilities which
have not yet arisen) and the cancellation or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination Collateral Agent
will, at Grantor's expense, execute and deliver to Grantor such documents as
Grantor shall reasonably request to evidence such termination.
SECTION 17. COLLATERAL AGENT.
(A) Collateral Agent has been appointed to act as Collateral Agent
hereunder by Lenders. Collateral Agent shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement.
(B) Collateral Agent shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to subsection 8.5 of the Credit Agreement shall also
constitute notice of resignation as Collateral Agent under this Agreement;
removal of Collateral Agent pursuant to subsection 8.5 of the Credit Agreement
shall also constitute removal as Collateral Agent under this Agreement; and
appointment of a successor Collateral Agent pursuant to subsection 8.5 of the
Credit Agreement shall also constitute appointment of a successor Collateral
Agent under this Agreement. Upon the acceptance of any appointment as Collateral
Agent under subsection 8.5 of the Credit Agreement by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Collateral Agent under this Agreement, and the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement, and (ii) execute and deliver to such
successor Collateral Agent such
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amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Collateral Agent of the security interests created hereunder, whereupon such
retiring or removed Collateral Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Collateral
Agent's resignation or removal hereunder as Collateral Agent, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Collateral Agent hereunder.
SECTION 18. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by
Collateral Agent and, in the case of any such amendment or modification, by
Grantor. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 19. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Collateral Agent shall not be effective
until received. For purposes hereof the address of each party shall be as set
forth under such party's name on the signature pages hereof or of the Credit
Agreement or such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 20. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
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SECTION 21. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 22. GOVERNING LAW; TERMS.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Grantor and Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
BENEDEK BROADCASTING
CORPORATION
By:/s/ Ronald L. Lindwall
_______________________________________
Ronald L. Lindwall
Senior Vice-President - Finance,
Chief Financial Officer and Treasurer
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY,
as Collateral Agent
By: /s/ Martin W. Friedman
_______________________________________
Martin W. Friedman
Authorized Signatory
S-1
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MERGER AGREEMENT
MERGER AGREEMENT dated as of June 6, 1996, pursuant to Section 251 of the
General Corporation Law of Delaware, between Benedek Broadcasting Corporation, a
Delaware corporation (the "Surviving Corporation"), and each of Brissette
Broadcasting Corporation, a Delaware corporation, Brissette TV of Lansing, Inc.,
a Delaware corporation, Brissette TV of Madison, Inc., a Delaware corporation,
Brissette TV of Odessa, Inc., a Delaware corporation, Brissette TV of Wichita
Falls, Inc., a Delaware corporation, Brissette TV of Springfield, Inc., a
Delaware corporation, Brissette TV of Wausau, Inc., a Delaware corporation,
Brissette TV of Wheeling, Inc., a Delaware corporation and Brissette TV of
Peoria, Inc., a Delaware corporation (collectively, the "Merged Corportions").
W I T N E S S E T H:
WHEREAS, the Merged Corporations desire to merge with and into the
Surviving Corporation as hereinafter specified; and
WHEREAS, the merger is subject to the approval of the Federal
Communications Commission, which approval has been obtained.
NOW, THEREFORE, the constituent corporations, parties to this Agreement, in
consideration of the mutual covenants, agreements and provisions hereinafter
contained do hereby prescribe the terms and conditions of said merger and mode
of carrying the same into effect as follows:
FIRST: The Merged Corporations shall be merged into the Surviving
Corporation which shall be the surviving corporation. Upon the merger becoming
effective as hereinafter provided, the separate existence and corporate
organization of the Merged Corporations shall cease. The corporate existence of
the Surviving Corporation, with all its purposes, powers and objects, shall
continue unaffected and unimpaired by the merger of the Merged Corporations with
and into the Surviving Corporation.
SECOND: The Certificate of Incorporation of the Surviving Corporation, as
heretofore amended and as in effect on the effective date of the merger provided
for in this Agreement,
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shall continue in full force and effect as the Certificate of Incorporation of
the corporation surviving this merger.
THIRD: All the outstanding shares of capital stock of each of the Merged
Corporations will be cancelled and no additional shares of the Surviving
Corporation will be issued since the Surviving Corporation owns, directly or
indirectly, 100% of the outstanding capital stock of each of the Merged
Corporations.
FOURTH: The terms and conditions of the merger are as follows:
(a) The by-laws of the Surviving Corporation as they shall exist on the
effective date of the merger shall be and remain the by-laws of the Surviving
Corporation until the same shall be altered, amended or repealed as therein
provided.
(b) The directors and officers of the Surviving Corporation shall continue
in office until the next annual meeting of stockholders and until their
successors shall have been elected and qualified.
(c) The merger shall become effective upon filing of this Agreement or a
Certificate of Merger with the Secretary of State of Delaware.
(d) Upon the merger becoming effective, all the property, rights,
privileges, franchises, patents, trademarks, licenses, registrations and other
assets of every kind and description of each of the Merged Corporations shall be
transferred to, vested in and devolve upon the Surviving Corporation without
further act or deed and all property, rights, and every other interest of the
Surviving Corporation and each of the Merged Corporations shall be as
effectively the property of the Surviving Corporation as they were of the
Surviving Corporation and each of the Merged Corporations respectively. The
Merged Corporations hereby agree from time to time, as and when requested by the
Surviving Corporation or by its successors or assigns, to execute and deliver or
cause to be executed and delivered all such deeds and instruments and to take or
cause to be taken such further or other action as the Surviving Corporation may
deem necessary or desirable in order to vest in and confirm to the Surviving
Corporation title to and possession of any property of the Merged Corporations
acquired by reason of or as a result of the merger herein provided for and
otherwise to carry out the intent and purposes hereof and the proper officers
and directors of each of the Merged Corporations and the proper officers and
directors of the Surviving Corporation are fully authorized in the name of each
of the Merged Corporations or otherwise to take any and all such action.
FIFTH: Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and abandoned by the Board of Directors of any
constituent corporation at any time prior to the date of filing the Certificate
of Merger with the Secretary of State. This Agreement may be amended by the
Boards of Directors of the constituent corporations at any
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time prior to the date of filing the Certificate of Merger or this Agreement
with the Secretary of State, provided that an amendment made subsequent to the
adoption of the Agreement by the stockholders of any constituent corporation
shall not (1) alter or change the amount or kind of shares, securities, cash
property and/or rights to be received in exchange for or on conversion of all or
any of the shares of any class or series thereof of such constituent
corporation, (2) alter or change any term of the Certificate of Incorporation of
the Surviving Corporation to be effected by the merger, or (3) alter or change
any of the terms and conditions of this Agreement if such alteration or change
would adversely affect the holders of any shares of any class or series thereof
of such constituent corporation.
IN WITNESS WHEREOF, the parties to this Agreement, pursuant to the approval
and authority duly given by resolutions adopted by their respective Boards of
Directors and stockholders, have caused this Agreement to be executed as of the
6th day of June, 1996.
BENEDEK BROADCASTING
CORPORATION
By: /s/ Ronald L. Lindwall
----------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
BRISSETTE BROADCASTING CORPORATION
By: /s/ Ronald L. Lindwall
-------------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
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BRISSETTE TV OF LANSING, INC.
By: /s/ Ronald L. Lindwall
------------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
BRISSETTE TV OF MADISON, INC.
By: /s/ Ronald L. Lindwall
------------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
BRISSETTE TV OF ODESSA, INC.
By: /s/ Ronald L. Lindwall
----------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
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BRISSETTE TV OF WICHITA FALLS, INC.
By: /s/ Ronald L. Lindwall
----------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
BRISSETTE TV OF SPRINGFIELD, INC.
By: /s/ Ronald L. Lindwall
----------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
BRISSETTE TV OF WAUSAU, INC.
By: /s/ Ronald L. Lindwall
----------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
BRISSETTE TV OF WHEELING, INC.
By: /s/ Ronald L. Lindwall
----------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
5
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BRISSETTE TV OF PEORIA, INC.
By: /s/ Ronald L. Lindwall
----------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President - Finance
ATTEST:
By: /s/ Paul S. Goodman
---------------------------
Name: Paul S. Goodman
Title: Assistant Secretary
6
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EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and A.
RICHARD BENEDEK, residing at 211 Central Park West, New York, New York 10024
(hereinafter called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its Chief Executive
Officer to perform such supervisory or executive duties on behalf of the Company
as the Board of Directors of the Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote substantially
all of his business time and his attention, knowledge and skills, faithfully,
diligently and to the best of his ability, in furtherance of the business of the
Company, will perform the duties of the Company's Chief Executive Officer,
subject, at all times, to the direction and control of the Board of Directors of
the Company. Executive shall at all times be subject to, observe and carry out
such rules, regulations, policies, directions and restrictions as the Board of
Directors of the Company shall from time to time establish. During the period of
Executive's employment hereunder, Executive shall not be entitled to additional
compensation for serving in any office of the Company or any of its subsidiaries
to which he is elected.
3. Term. Executive shall be employed for a term of four years commencing as
of the 1st day of June, 1996, and ending on the 31st day of May, 2000. After the
expiration of the term, the employment of the Executive shall continue "at will"
until terminated for any reason by either Executive or the Company upon 90 days'
prior written notice.
4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Base Salary. A base salary at the rate of $525,000 (the "Initial
Base Salary") per annum during 1996 and such amount not less than the Initial
Base Salary as the Company and Executive may agree upon as to each year
thereafter. The Company shall pay Executive the base salary in accordance with
the Company's normal payroll practices. Executive shall also be eligible to
receive a bonus in respect of each fiscal year of the term of this Agreement in
such amount as the Company may determine.
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4.2 Additional Benefits. Executive shall also be entitled to
participate, to the extent he is eligible under the terms and conditions
thereof, in any pension, profit-sharing, retirement, hospitalization, insurance,
medical service, or other employee benefit plan generally available to the
executives of the Company which may be in effect from time to time during the
period of his employment hereunder, it being understood that the Company shall
pay the entire cost of any health insurance or disability insurance maintained
by the Company for Executive in accordance with the Company's policies generally
in effect. Except for such health insurance and disability insurance, the
Company shall be under no obligation to institute or continue the existence of
any such employee benefit plan and may from time to time amend, modify or
terminate any such employee benefit plan.
4.3 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time. Executive's employment by the
Company in any year is not a precondition to Executive's entitlement to vacation
time in the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 Executive shall not, during the full term of this Agreement, for
himself or on behalf of any other person, partnership, corporation or entity,
directly or indirectly, or by action in concert with others, own, manage,
operate, join, control, participate in, invest in, or otherwise be connected
with, in any manner, whether as an officer, director, employee, partner,
investor or otherwise, any business entity which is engaged in any business in
which the Company or any of its subsidiaries is currently engaged or is engaged
at the time of termination of Executive's employment hereunder. Nothing herein
contained shall be deemed to prohibit Executive from investing his funds in
securities of a company if the securities of such company are listed for trading
on a national stock exchange or traded in the over-the-counter market and
Executive's holdings therein represent less than one (1%) percent of the total
number of shares or principal amount of other securities of such company
outstanding.
6.2 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the same
valid and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales,
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business and affairs, and he shall not, at any time hereafter, use, disclose or
divulge any such information, knowledge or data to any person, firm or
corporation other than to the Company or its designees or except as may
otherwise be required in connection with the business and affairs of the
Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and injunctive relief as may be available to restrain Executive and any
business, firm, partnership, individual, corporation or entity participating in
such breach or threatened breach from the violation of the provisions hereof.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
11. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
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12. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
211 Central Park West
New York, New York 10024
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 12. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
13. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
14. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of New York and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
16. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement
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which can be effected without such illegal clause, paragraph or part shall
nevertheless remain in full force and effect. If, in the opinion of any court,
any clause, paragraph or part of this Agreement is unreasonable or
unenforceable, such court shall have the right, power and authority to excise or
modify such provisions, or portions thereof, of this Agreement as to the court
shall not be reasonable or enforceable and to enforce the remainder of such
clause, paragraph or part as so excised or modified.
17. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
18. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
---------------------------
/s/ A. Richard Benedek
---------------------------
A. Richard Benedek
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EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and K. JAMES
YAGER, residing at 6767 Woodcrest Parkway, Rockford, Illinois 61109 (hereinafter
called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its President and
Chief Operating Officer to perform such supervisory or executive duties on
behalf of the Company as the Chief Executive Officer or Board of Directors of
the Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the Chief Executive Officer and the Board of Directors
of the Company. Executive shall at all times be subject to, observe and carry
out such rules, regulations, policies, directions and restrictions as the
Company shall from time to time establish. During the period of his employment
hereunder, Executive shall not, without the written approval of the Board of
Directors first had and obtained in each instance, directly or indirectly accept
employment or compensation from or perform services of any nature for, any
business enterprise other than the Company and its subsidiaries. During the
period of Executive's employment hereunder, Executive shall not be entitled to
additional compensation for serving in any office of the Company or any of its
subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of four years commencing as
of the 1st day of June, 1996, and ending on the 31st day of May 2000, unless his
employment is terminated prior to the expiration of said term pursuant to the
provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
Executive or the Company upon 90 days' prior written notice.
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4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Salary. A base salary at the rate of $400,000 (the "Initial Base
Salary") per annum during 1996 and such amount not less than the Initial Base
Salary as the Company and Executive may agree upon as to each year thereafter.
The Company shall pay Executive the base salary in accordance with the Company's
normal payroll practices. Executive shall also be eligible to receive a bonus in
respect of each fiscal year of the term of this Agreement in such amount as the
Company may determine.
4.2 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club and
such civic organizations as the Company and Executive may agree upon, and (iii)
reimburse Executive for costs incurred in connection with a telephone and fax
machine located in his home. Executive shall also be entitled to participate, to
the extent he is eligible under the terms and conditions thereof, in any
pension, profit-sharing, retirement, hospitalization, insurance, medical
service, or other employee benefit plan generally available to the executives of
the Company which may be in effect from time to time during the period of his
employment hereunder, it being understood that the Company shall pay the entire
cost of any health insurance or disability insurance maintained by the Company
for Executive in accordance with the Company's policies generally in effect.
Except for such health insurance and disability insurance, the Company shall be
under no obligation to institute or continue the existence of any such employee
benefit plan and may from time to time amend, modify or terminate any such
employee benefit plan.
4.3 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company. Executive's employment
by the Company in any year is not a precondition to Executive's entitlement to
vacation time in the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 Executive shall not, during the full term of this Agreement, for
himself or on behalf of any other person, partnership, corporation or entity,
directly or indirectly, or by action in concert with others, own, manage,
operate, join, control, participate in, invest in, or otherwise be connected
with, in any manner, whether as an officer, director, employee, partner,
investor or otherwise, any business entity which is engaged in any business in
which the Company or any of its subsidiaries is currently engaged or is engaged
during the period of Executive's employment hereunder. Nothing herein contained
shall be deemed to prohibit Executive from investing his funds in securities of
a company if
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the securities of such company are listed for trading on a national stock
exchange or traded in the over-the-counter market and Executive's holdings
therein represent less than one (1%) percent of the total number of shares or
principal amount of other securities of such company outstanding.
6.2 Executive shall not, during the full term of this Agreement and
for a period of one year thereafter, for himself or on behalf of any other
person, partnership, corporation or entity, directly or indirectly, or by action
in concert with others (a) solicit, induce, or encourage any person known to him
to be an employee of the Company or any affiliate of the Company to terminate
his or her employment or other contractual relationship with the Company or any
of its affiliates; (b) solicit, induce or encourage any person known by him to
have a contractual relationship with the Company to discontinue, terminate,
cancel or refrain from entering into any contractual relationship with the
Company or any of its affiliates; or (c) in any way solicit or attempt to
solicit the business or patronage of any person, firm, corporation, partnership,
association or other entity, whose business the Company has enjoyed during
Executive's tenure with the Company ("customers") or otherwise induce such
customers of the Company to reduce, terminate, restrict or otherwise alter their
business relationships with the Company in any fashion.
6.3 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the same
valid and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such information, knowledge or
data to any person, firm or corporation other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and
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injunctive relief as may be available to restrain Executive and any business,
firm, partnership, individual, corporation or entity participating in such
breach or threatened breach from the violation of the provisions hereof. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Termination.
10.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of Executive's
death during the term of this Agreement, the Company shall pay to Executive's
surviving spouse, if any, or if Executive does not have a surviving spouse, to
his then living children, if any, in equal shares, a monthly payment in an
aggregate amount equal to Executive's then current monthly Base Salary for a
period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the Base Salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
10.2 Without Cause. If the Company shall terminate Executive's
employment other than for "cause", as provided in Paragraph above, Executive
shall be entitled to receive, as damages, and as his sole and exclusive right
and remedy on account of such termination, the base salary to which he would
otherwise have been entitled under this Agreement throughout the remaining
portion of the term. Executive shall also be entitled to receive any approved
unreimbursed business expenses and other employee benefits (as described above)
to the date of termination. Amounts payable by the Company under this Paragraph
10.2 shall be payable when and as the same would otherwise have been payable
under the terms hereof and shall be subject to Executive's duty to mitigate his
damages by using reasonable efforts to seek other comparable employment.
Compensation (in whatever form) earned by Executive on account of other
employment during the unexpired portion of the term of this Agreement (without
regard to when such compensation is paid) shall be applied in reduction of the
Company's obligations hereunder. Executive shall not otherwise be entitled to
receive any further salary, bonus,
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expenses, benefits or other compensation hereunder. The willful and material
breach by the Company of any of its material obligations under this Agreement,
which breach is not fully cured promptly upon written notice to the Company
shall, at Executive's election, constitute a termination of this Agreement by
the Company without cause pursuant to the provisions of this Paragraph 10.2.
11. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
12. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
13. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
6767 Woodcrest Parkway
Rockford, Illinois 61109
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 13. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
14. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain
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employed pursuant to the provisions hereof by any successor of the Company,
whether by merger, consolidation, acquisition of all or substantially all of the
business or assets, or otherwise, and the Company shall have the right to assign
this Agreement to any such successor in interest. This Agreement shall be
binding upon Executive, his heirs, executors and administrators and upon the
Company, its successors and assigns.
15. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
17. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement which can be effected without such illegal
clause, paragraph or part shall nevertheless remain in full force and effect.
If, in the opinion of any court, any clause, paragraph or part of this Agreement
is unreasonable or unenforceable, such court shall have the right, power and
authority to excise or modify such provisions, or portions thereof, of this
Agreement as to the court shall not be reasonable or enforceable and to enforce
the remainder of such clause, paragraph or part as so excised or modified.
18. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
19. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ A. Richard Benedek
------------------------
/s/ K. James Yager
----------------------------
K. James Yager
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<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 8 day of March, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and DOUGLAS
E. GEALY, residing at 7125 Bluffstream Court, Columbus, Ohio 43235(hereinafter
called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as an Executive Vice
President to perform such supervisory or executive duties on behalf of the
Company as the President, Chief Executive Officer or Board of Directors of the
Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the President, Chief Executive Officer and the Board of
Directors of the Company. Executive may render his services in Columbus, Ohio
but will do such traveling as may be reasonably required of him in the
performance of his duties and will be available at the Company's executive
offices in Rockford, Illinois and at the Company's other facilities at such
times as may be required by the Company. The Company acknowledges that Executive
resides with his family in Columbus, Ohio and that Executive will not be
required to relocate to Rockford, Illinois. If during the term of this Agreement
Executive desires to relocate his family to Rockford, Illinois, the Company
shall reimburse Executive for the cost of such relocation in accordance with the
Company's existing relocation policy, a copy of which is annexed hereto as
Exhibit A. Executive shall at all times be subject to, observe and carry out
such rules, regulations, policies, directions and restrictions as the Company
shall from time to time establish. During the period of his employment
hereunder, Executive shall not, without the written approval of the Board of
Directors first had and obtained in each instance, directly or indirectly accept
employment or compensation from or perform services of any nature for, any
business enterprise other than the Company and its subsidiaries. During the
period of Executive's employment hereunder, Executive shall not be entitled to
additional compensation for serving in any office of the Company or any of its
subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of three years commencing
as of the 1st day of May, 1996, and ending on the 30th day of April 1999, unless
his employment is terminated prior to the expiration of said term pursuant to
the provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
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Executive or the Company upon 90 days' prior written notice.
4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Base Salary. A base salary ("Base Salary") at the rate of $235,000
per annum during the first year of the term of this Agreement, $260,000 per
annum during the second year of the term of this Agreement and $285,000 per
annum during the third year of the term of this Agreement. The Company shall pay
Executive the Base Salary in accordance with the Company's normal payroll
practices.
4.2 Performance Bonus. Executive shall be eligible to receive a
performance bonus in respect of each fiscal year during the term of this
Agreement in an amount equal to up to 20% of the Base Salary in effect at the
end of such fiscal year. One-half of such performance bonus shall be determined
based upon the achievement of performance goals established by the Company at or
prior to the beginning of such fiscal year (except for the 1996 fiscal year, the
performance goals for which shall be established by the Company prior to the
commencement of Executive's employment hereunder); and the balance of the
performance bonus shall be determined in the sole discretion of the Company.
4.3 Stock Options and/or Stock Appreciation Rights. Executive shall be
eligible to receive stock options and/or stock appreciation rights in accordance
with the terms of any plan therefor adopted by the Company. Executive
acknowledges that the Company does not currently maintain any such plan and is
under no obligation to institute or continue the existence of any such plan and
may from time to time amend, modify or terminate any such plan.
4.4 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club, and
(iii) reimburse Executive for costs incurred in connection with a telephone and
fax machine located in his home. Executive shall also be entitled to
participate, to the extent he is eligible under the terms and conditions
thereof, in any pension, profit-sharing, retirement, hospitalization, insurance,
medical service, or other employee benefit plan generally available to the
executives of the Company which may be in effect from time to time during the
period of his employment hereunder, it being understood that the Company shall
pay the entire cost of any health insurance or disability insurance maintained
by the Company for Executive in accordance with the Company's policies generally
in effect. Except for such health insurance and disability insurance, the
Company shall be under no obligation to institute or continue the existence of
any such employee benefit plan and may from time to time amend, modify or
terminate any such employee benefit plan.
4.5 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company and with the prior
approval of the President of the Company. Executive's employment by the Company
in any year is not a precondition to Executive's entitlement to vacation time in
the year subsequent thereto.
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5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company (including without limitation the cost
of travel to and from his home in Columbus, Ohio to any of the Company's
facilities), upon the submission to the Company of appropriate vouchers
therefor, provided that such expenses shall in all events be incurred in
accordance with and within applicable limits under the Company's expense
reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 In consideration of the Company's entering into this Agreement,
Executive agrees that during the period of his employment hereunder, he will not
(i) directly or indirectly own, manage, operate, join, control, participate in,
invest in, or otherwise be connected with, in any manner, whether as an officer,
director, employee, partner, investor or otherwise, any business entity which is
engaged in any business in which the Company or any of its subsidiaries is
currently engaged or is engaged at the time of termination of Executive's
employment hereunder, or (ii) for himself or on behalf of any other person,
partnership, corporation or entity, call on any customer of the Company for the
purpose of soliciting, diverting or taking away any customer from the Company.
Nothing herein contained shall be deemed to prohibit Executive from investing
his funds in securities of a company if the securities of such company are
listed for trading on a national stock exchange or traded in the
over-the-counter market and Executive's holdings therein represent less than one
(1%) percent of the total number of shares or principal amount of other
securities of such company outstanding.
6.2 Executive shall not, during the full term of his employment by the
Company and for a period of one year thereafter, for himself or on behalf of any
other person, partnership, corporation or entity, directly or indirectly, or by
action in concert with others (a) solicit, induce, or encourage any person known
to him to be an employee of the Company or any affiliate of the Company to
terminate his or her employment or other contractual relationship with the
Company or any of its affiliates; (b) solicit, induce or encourage any person
known by him to have a contractual relationship with the Company to discontinue,
terminate, cancel or refrain from entering into any contractual relationship
with the Company or any of its affiliates; (c) directly or indirectly own,
manage, operate, join, control, participate in, invest in, or otherwise be
connected with, in any manner, whether as an officer, director, employee,
partner, investor or otherwise, any business entity which owns, manages,
operates, controls or is otherwise connected with, in any manner, a television
station in any designated market area (as defined by Nielsen) then served by a
television station then owned by the Company or any of its affiliates; or (d) in
any way solicit or attempt to solicit the business or patronage of any person,
firm, corporation, partnership, association or other entity, whose business the
Company has enjoyed during Executive's tenure with the Company ("customers") or
otherwise induce such customers of the Company to reduce, terminate, restrict or
otherwise alter their business relationships with the Company in any fashion.
6.3 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions
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shall be deemed, without further action on the part of the parties hereto,
modified, amended and limited to the extent necessary to render the same valid
and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such information, knowledge or
data to any person, firm or corporation other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and injunctive relief as may be available to restrain Executive and any
business, firm, partnership, individual, corporation or entity participating in
such breach or threatened breach from the violation of the provisions hereof.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Termination.
10.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of
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Executive's death during the term of this Agreement, the Company shall pay to
Executive's surviving spouse, if any, or if Executive does not have a surviving
spouse, to his then living children, if any, in equal shares, a monthly payment
in an aggregate amount equal to Executive's then current monthly Base Salary for
a period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the Base Salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
10.2 Without Cause. If the Company shall terminate Executive's
employment other than for "cause", as provided in Paragraph above, Executive
shall be entitled to receive, as damages, and as his sole and exclusive right
and remedy on account of such termination, the base salary to which he would
otherwise have been entitled under this Agreement throughout the remaining
portion of the term. Executive shall also be entitled to receive any approved
unreimbursed business expenses and other employee benefits (as described above)
to the date of termination. Amounts payable by the Company under this Paragraph
10.2 shall be payable when and as the same would otherwise have been payable
under the terms hereof and shall be subject to Executive's duty to mitigate his
damages by using reasonable efforts to seek other comparable employment.
Compensation (in whatever form) earned by Executive on account of other
employment during the unexpired portion of the term of this Agreement (without
regard to when such compensation is paid) shall be applied in reduction of the
Company's obligations hereunder. Executive shall not otherwise be entitled to
receive any further salary, bonus, expenses, benefits or other compensation
hereunder. The willful and material breach by the Company of any of its material
obligations under this Agreement, which breach is not fully cured promptly upon
written notice to the Company shall, at Executive's election, constitute a
termination of this Agreement by the Company without cause pursuant to the
provisions of this Paragraph 10.2.
11. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
12. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
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<PAGE>
13. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
7125 Bluffstream Court
Columbus, Ohio 43235
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 13. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
14. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
15. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
17. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement
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which can be effected without such illegal clause, paragraph or part shall
nevertheless remain in full force and effect. If, in the opinion of any court,
any clause, paragraph or part of this Agreement is unreasonable or
unenforceable, such court shall have the right, power and authority to excise or
modify such provisions, or portions thereof, of this Agreement as to the court
shall not be reasonable or enforceable and to enforce the remainder of such
clause, paragraph or part as so excised or modified.
18. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
19. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
----------------------------
/s/ Douglas E. Gealy
----------------------------
Douglas E. Gealy
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EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and RONALD
L. LINDWALL, residing at 4815 Crested Butte, Rockford, Illinois 61114
(hereinafter called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its Senior Vice
President-Finance and Chief Financial Officer to perform such supervisory or
executive duties on behalf of the Company as the President, Chief Executive
Officer or Board of Directors of the Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the President, Chief Executive Officer and the Board of
Directors of the Company. Executive shall at all times be subject to, observe
and carry out such rules, regulations, policies, directions and restrictions as
the Company shall from time to time establish. During the period of his
employment hereunder, Executive shall not, without the written approval of the
Board of Directors first had and obtained in each instance, directly or
indirectly accept employment or compensation from or perform services of any
nature for, any business enterprise other than the Company and its subsidiaries.
During the period of Executive's employment hereunder, Executive shall not be
entitled to additional compensation for serving in any office of the Company or
any of its subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of three years commencing
as of the 1st day of June, 1996, and ending on the 31st day of May 1999, unless
his employment is terminated prior to the expiration of said term pursuant to
the provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
Executive or the Company upon 90 days' prior written notice.
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4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Salary. A base salary at the rate of $150,000 (the "Initial Base
Salary") per annum during 1996 and such amount not less than the Initial Base
Salary as the Company and Executive may agree as to each year thereafter. The
Company shall pay Executive the base salary in accordance with the Company's
normal payroll practices. Executive shall also be eligible to receive a bonus in
respect of each fiscal year of the term of this Agreement in such amount as the
Company may define.
4.2 Stock Options and/or Stock Appreciation Rights. Executive shall be
eligible to receive stock options and/or stock appreciation rights in accordance
with the terms of any plan therefor adopted by the Company. Executive
acknowledges that the Company does not currently maintain any such plan and is
under no obligation to institute or continue the existence of any such plan and
may from time to time amend, modify or terminate any such plan.
4.3 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club and
such civic organizations as the Company and Executive may agree upon, and (iii)
reimburse Executive for costs incurred in connection with a telephone and fax
machine located in his home. Executive shall also be entitled to participate, to
the extent he is eligible under the terms and conditions thereof, in any
pension, profit-sharing, retirement, hospitalization, insurance, medical
service, or other employee benefit plan generally available to the executives of
the Company which may be in effect from time to time during the period of his
employment hereunder, it being understood that the Company shall pay the entire
cost of any health insurance or disability insurance maintained by the Company
for Executive in accordance with the Company's policies generally in effect.
Except for such health insurance and disability insurance, the Company shall be
under no obligation to institute or continue the existence of any such employee
benefit plan and may from time to time amend, modify or terminate any such
employee benefit plan.
4.4 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company and with the prior
approval of the President of the Company. Executive's employment by the Company
in any year is not a precondition to Executive's entitlement to vacation time in
the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such
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information, knowledge or data to any person, firm or corporation other than to
the Company or its designees or except as may otherwise be required in
connection with the business and affairs of the Company.
7. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii) give the Company all assistance it reasonably
requires, including the giving of testimony in any suit, action or proceeding,
in order to obtain, maintain and protect the Company's right therein and
thereto.
8. Termination.
8.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of Executive's
death during the term of this Agreement, the Company shall pay to Executive's
surviving spouse, if any, or if Executive does not have a surviving spouse, to
his then living children, if any, in equal shares, a monthly payment in an
aggregate amount equal to Executive's then current monthly base salary for a
period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the base salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
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8.2 Without Cause.
8.2.1 If the Company shall terminate Executive's employment other than
(i) pursuant to Paragraph 8.2.2 or (ii) for "cause" as provided in Paragraph 8.1
above, Executive shall be entitled to receive, as damages, and as his sole and
exclusive right and remedy on account of such termination, the base salary to
which he would otherwise have been entitled under this Agreement throughout the
remaining portion of the term. Executive shall also be entitled to receive any
approved unreimbursed business expenses and other employee benefits (as
described above) to the date of termination. The willful and material breach by
the Company of any of its material obligations under this Agreement, which
breach is not fully cured promptly upon written notice to the Company shall, at
Executive's election, constitute a termination of this Agreement by the Company
without cause pursuant to the provisions of this Paragraph 8.2.1.
8.2.2 In addition to any other rights and remedies provided by law or
in this Agreement, at any time prior to a Change of Control (as defined in the
Indenture dated as of March 1, 1995 with respect to the Company's outstanding
11 7/8% Senior Secured Notes) the Company may terminate Executive's employment
hereunder without cause upon six months' written notice. If the Company shall
terminate Executive's employment pursuant to this Paragraph 8.2.2, Executive
shall be entitled to receive, as damages, and as his sole and exclusive right
and remedy on account of such termination, the base salary to which he would
otherwise have been entitled under this Agreement through the effective date of
termination. Executive shall also be entitled to receive any approved
unreimbursed business expenses and other employee benefits (as described above)
to the date of termination.
8.2.3 Amounts payable by the Company under this Paragraph 8.2 shall be
payable when and as the same would otherwise have been payable under the terms
hereof and shall be subject to Executive's duty to mitigate his damages by using
reasonable efforts to seek other comparable employment. Compensation (in
whatever form) earned by Executive on account of other employment during the
unexpired portion of the term of this Agreement or through the effective date of
termination, as the case may be (without regard to when such compensation is
paid), shall be applied in reduction of the Company's obligations hereunder.
Executive shall not otherwise be entitled to receive any further salary, bonus,
expenses, benefits or other compensation hereunder.
9. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
10. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
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<PAGE>
11. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
4815 Crested Butte
Rockford, Illinois 61114
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 11. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
12. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
13. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
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<PAGE>
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
15. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement which can be effected without such illegal
clause, paragraph or part shall nevertheless remain in full force and effect.
If, in the opinion of any court, any clause, paragraph or part of this Agreement
is unreasonable or unenforceable, such court shall have the right, power and
authority to excise or modify such provisions, or portions thereof, of this
Agreement as to the court shall not be reasonable or enforceable and to enforce
the remainder of such clause, paragraph or part as so excised or modified.
16. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
17. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
----------------------------
/s/ Ronald L. Lindwall
-----------------------------
Ronald L. Lindwall
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<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of June, 1996, by and between BENEDEK
BROADCASTING CORPORATION, a Delaware corporation, with offices at 308 West State
Street, Rockford, Illinois 61101 (hereinafter called the "Company") and TERRANCE
F. HURLEY, residing at 3531 East 1st Street, Duluth, Minnesota 55804
(hereinafter called "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ Executive and Executive is willing
to undertake such employment on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Employment. The Company hereby employs Executive as its Senior Vice
President to perform such supervisory or executive duties on behalf of the
Company as the President, Chief Executive Officer or Board of Directors of the
Company may from time to time determine.
2. Duties. Executive hereby accepts such employment and agrees that
throughout the period of his employment hereunder, he will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
ability, in furtherance of the business of the Company, will perform the duties
assigned to him pursuant to Paragraph 2 hereof, subject, at all times, to the
direction and control of the President, Chief Executive Officer and the Board of
Directors of the Company. Executive shall at all times be subject to, observe
and carry out such rules, regulations, policies, directions and restrictions as
the Company shall from time to time establish. During the period of his
employment hereunder, Executive shall not, without the written approval of the
Board of Directors first had and obtained in each instance, directly or
indirectly accept employment or compensation from or perform services of any
nature for, any business enterprise other than the Company and its subsidiaries.
During the period of Executive's employment hereunder, Executive shall not be
entitled to additional compensation for serving in any office of the Company or
any of its subsidiaries to which he is elected.
3. Term. Executive shall be employed for a term of three years commencing
as of the 1st day of June, 1996, and ending on the 31st day of May 1999, unless
his employment is terminated prior to the expiration of said term pursuant to
the provisions hereof. After the expiration of the term, the employment of the
Executive shall continue "at will" until terminated for any reason by either
Executive or the Company upon 90 days' prior written notice.
4. Compensation. As full compensation for his services hereunder, the
Company will pay to Executive the following:
4.1 Salary. A base salary at the rate of $150,000 (the "Initial Base
Salary") per annum during 1996 and such amount not less than the Initial Base
Salary as the Company and Executive may agree upon as to each year thereafter.
The Company shall pay Executive the base salary
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in accordance with the Company's normal payroll practices. Executive shall also
be eligible to receive a bonus in respect of each fiscal year of the term of
this Agreement in such amount as the Company may define.
4.2 Stock Options and/or Stock Appreciation Rights. Executive shall be
eligible to receive stock options and/or stock appreciation rights in accordance
with the terms of any plan therefor adopted by the Company. Executive
acknowledges that the Company does not currently maintain any such plan and is
under no obligation to institute or continue the existence of any such plan and
may from time to time amend, modify or terminate any such plan.
4.3 Additional Benefits. During the term of this Agreement, the
Company shall (i) provide Executive with a suitable car for his use in the
performance of his duties for the Company and for his personal use, (ii)
reimburse Executive for the annual dues for membership in one country club and
such civic organizations as the Company and Executive may agree upon, and (iii)
reimburse Executive for costs incurred in connection with a telephone and fax
machine located in his home. Executive shall also be entitled to participate, to
the extent he is eligible under the terms and conditions thereof, in any
pension, profit-sharing, retirement, hospitalization, insurance, medical
service, or other employee benefit plan generally available to the executives of
the Company which may be in effect from time to time during the period of his
employment hereunder, it being understood that the Company shall pay the entire
cost of any health insurance or disability insurance maintained by the Company
for Executive in accordance with the Company's policies generally in effect.
Except for such health insurance and disability insurance, the Company shall be
under no obligation to institute or continue the existence of any such employee
benefit plan and may from time to time amend, modify or terminate any such
employee benefit plan.
4.4 Vacations. Executive shall be entitled to a paid vacation (in
addition to Company-wide holiday periods) during the period of his employment by
the Company in accordance with the Company's vacation policies for employees of
comparable level, as in effect from time to time, such vacation to be taken at
times consistent with Executive's duties to the Company and with the prior
approval of the President of the Company. Executive's employment by the Company
in any year is not a precondition to Executive's entitlement to vacation time in
the year subsequent thereto.
5. Reimbursement. The Company shall reimburse Executive for all expenses
reasonably incurred by him in connection with the performance of his duties
hereunder and the business of the Company, upon the submission to the Company of
appropriate vouchers therefor, provided that such expenses shall in all events
be incurred in accordance with and within applicable limits under the Company's
expense reimbursement policy in effect from time to time.
6. Non-Compete.
6.1 In consideration of the Company's entering into this Agreement,
Executive agrees that during the period of his employment hereunder, he will not
(i) directly or indirectly own, manage, operate, join, control, participate in,
invest in, or otherwise be connected with, in any manner, whether as an officer,
director, employee, partner, investor or otherwise, any business entity which is
engaged in any business in which the Company or any of its subsidiaries is
currently engaged or is engaged at any time during the period of Executive's
employment hereunder, or (ii) for himself or on behalf of any other person,
partnership, corporation or entity, call on any customer of the Company for
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<PAGE>
the purpose of soliciting, diverting or taking away any customer from the
Company. Nothing herein contained shall be deemed to prohibit Executive from
investing his funds in securities of a company if the securities of such company
are listed for trading on a national stock exchange or traded in the
over-the-counter market and Executive's holdings therein represent less than one
(1%) percent of the total number of shares or principal amount of other
securities of such company outstanding.
6.2 Executive shall not, during the full term of this Agreement and
for a period of one year thereafter, for himself or on behalf of any other
person, partnership, corporation or entity, directly or indirectly, or by action
in concert with others (a) solicit, induce, or encourage any person known to him
to be an employee of the Company or any affiliate of the Company to terminate
his or her employment or other contractual relationship with the Company or any
of its affiliates; (b) solicit, induce or encourage any person known by him to
have a contractual relationship with the Company to discontinue, terminate,
cancel or refrain from entering into any contractual relationship with the
Company or any of its affiliates; (c) directly or indirectly own, manage,
operate, join, control, participate in, invest in, or otherwise be connected
with, in any manner, whether as an officer, director, employee, partner,
investor or otherwise, any business entity which owns, manages, operates,
controls or is otherwise connected with, in any manner, a television station in
any designated market area (as defined by Nielsen) then served by a television
station then owned by the Company or any of its affiliates; or (d) in any way
solicit or attempt to solicit the business or patronage of any person, firm,
corporation, partnership, association or other entity, whose business the
Company has enjoyed during Executive's tenure with the Company ("customers") or
otherwise induce such customers of the Company to reduce, terminate, restrict or
otherwise alter their business relationships with the Company in any fashion.
6.3 Executive acknowledges that the provisions of this Paragraph 6 are
reasonable and necessary for the protection of the Company, and that each
provision, and the period or periods of time, geographic areas and types and
scope of restrictions on the activities specified herein are, and are intended
to be divisible. In the event that any provision of this Paragraph 6, including
any sentence, clause or part hereof, shall be deemed contrary to law or invalid
or unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the discretion
of such court, remain in full force and effect and any invalid and unenforceable
provisions shall be deemed, without further action on the part of the parties
hereto, modified, amended and limited to the extent necessary to render the same
valid and enforceable.
7. Confidentiality. Executive shall hold in a fiduciary capacity for the
benefit of the Company all information, knowledge and data relating to or
concerned with its operations, sales, business and affairs, and he shall not, at
any time hereafter, use, disclose or divulge any such information, knowledge or
data to any person, firm or corporation other than to the Company or its
designees or except as may otherwise be required in connection with the business
and affairs of the Company.
8. Property Rights. Any invention, improvement, design, development or
discovery conceived, developed, created or made by Executive alone or with
others, during the period of his employment hereunder and applicable to the
business of the Company, whether or not patentable or registrable, shall become
the sole and exclusive property of the Company. Executive shall disclose the
same promptly and completely to the Company and shall, during the period of his
employment hereunder and at any time from time to time thereafter (i) execute
all documents requested by the Company for vesting in the Company the entire
right, title and interest in and to the same, (ii) execute all documents
requested by the Company for filing and prosecuting such applications for
patents, trademarks and/or copyrights as the Company, in its sole discretion,
may desire to prosecute, and (iii)
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<PAGE>
give the Company all assistance it reasonably requires, including the giving of
testimony in any suit, action or proceeding, in order to obtain, maintain and
protect the Company's right therein and thereto.
9. Remedies. The parties hereto acknowledge that Executive's services are
unique and that, in the event of a breach or a threatened breach by Executive of
any of his obligations under this Agreement, the Company will not have an
adequate remedy at law. Accordingly, in the event of any such breach or
threatened breach by Executive, the Company shall be entitled to such equitable
and injunctive relief as may be available to restrain Executive and any
business, firm, partnership, individual, corporation or entity participating in
such breach or threatened breach from the violation of the provisions hereof.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies available at law or in equity for such breach or threatened
breach, including the recovery of damages and the immediate termination of the
employment of Executive hereunder.
10. Termination.
10.1 For Cause. In addition to any other rights and remedies provided
by law or this Agreement, the Company may terminate Executive's employment
hereunder forthwith upon written notice for "cause". For purposes of this
paragraph, "cause" shall include: (i) commission of any act of material fraud or
gross negligence by Executive in the course of his employment hereunder which,
in the case of gross negligence, has a materially adverse effect on the business
or financial condition of the Company; (ii) willful misrepresentation at any
time during the term hereof by Executive to any superior executive officer of
the Company; (iii) voluntary termination by Executive of his employment or
failure, refusal or neglect by Executive to comply with any of his material
obligations hereunder or failure by Executive to comply with a reasonable
instruction of superior officers of the Company, which failure, refusal or
neglect, if curable, is not fully and completely cured to the reasonable
satisfaction of the Company promptly upon written notice to Executive; (iv)
engagement by Executive in any conduct or the commission by Executive of any act
which is, in the reasonable opinion of the Company, materially injurious or
detrimental to the substantial interest of the Company; (v) engagement by
Executive in any act, whether with respect to his employment or otherwise, which
is in violation of the criminal laws of the United States or any state thereof
or any similar foreign law to which he may be subject involving acts of moral
turpitude; or (vi) death or disability of Executive. In the event of Executive's
death during the term of this Agreement, the Company shall pay to Executive's
surviving spouse, if any, or if Executive does not have a surviving spouse, to
his then living children, if any, in equal shares, a monthly payment in an
aggregate amount equal to Executive's then current monthly base salary for a
period of six months after the date of Executive's death; provided, however,
that if Executive does not have a surviving spouse or children, then no such
payments shall be due. Executive shall be deemed disabled if he shall be unable
by reason of mental or physical incapacity from performing his duties hereunder
for a period of 45 consecutive days or an aggregate of 60 days in any
consecutive three-month period. If Executive's employment by the Company shall
be terminated pursuant to this Paragraph, Executive shall be entitled to receive
only the base salary actually earned and payable to him through the date of the
termination of his employment, together with any approved unreimbursed expenses
and other accrued employee benefits (as described above) through the date of
termination, and he shall not thereafter be entitled to receive any further
salary, bonus, expenses, benefits or other compensation of any kind hereunder.
10.2 Without Cause.
10.2.1 If the Company shall terminate Executive's employment
other than (i) pursuant to Paragraph 10.2.2 or (ii) for "cause" as provided in
Paragraph 10.1 above, Executive shall be entitled to receive, as damages, and as
his sole and exclusive right and remedy on account of such
-4-
<PAGE>
<PAGE>
termination, the base salary to which he would otherwise have been entitled
under this Agreement throughout the remaining portion of the term. Executive
shall also be entitled to receive any approved unreimbursed business expenses
and other employee benefits (as described above) to the date of termination. The
willful and material breach by the Company of any of its material obligations
under this Agreement, which breach is not fully cured promptly upon written
notice to the Company shall, at Executive's election, constitute a termination
of this Agreement by the Company without cause pursuant to the provisions of
this Paragraph 10.2.1.
10.2.2 In addition to any other rights and remedies provided by
law or in this Agreement, at any time prior to a Change of Control (as defined
in the Indenture dated as of March 1, 1995 with respect to the Company's
outstanding 11 7/8% Senior Secured Notes) the Company may terminate Executive's
employment hereunder without cause upon six months' written notice. If the
Company shall terminate Executive's employment pursuant to this Paragraph
10.2.2, Executive shall be entitled to receive, as damages, and as his sole and
exclusive right and remedy on account of such termination, the base salary to
which he would otherwise have been entitled under this Agreement through the
effective date of termination. Executive shall also be entitled to receive any
approved unreimbursed business expenses and other employee benefits (as
described above) to the date of termination.
10.2.3 Amounts payable by the Company under this Paragraph 10.2
shall be payable when and as the same would otherwise have been payable under
the terms hereof and shall be subject to Executive's duty to mitigate his
damages by using reasonable efforts to seek other comparable employment.
Compensation (in whatever form) earned by Executive on account of other
employment during the unexpired portion of the term of this Agreement or through
the effective date of termination, as the case may be (without regard to when
such compensation is paid), shall be applied in reduction of the Company's
obligations hereunder. Executive shall not otherwise be entitled to receive any
further salary, bonus, expenses, benefits or other compensation hereunder.
11. Executive's Representations and Warranties. Executive represents and
warrants to the Company that (i) Executive has the unfettered right to enter
into this Agreement on the terms and subject to the conditions hereof, and (ii)
neither the execution and delivery of this Agreement by Executive nor the
performance by Executive of any of Executive's obligations hereunder constitute
or will constitute a violation or breach of, or a default under, any Agreement,
arrangement or understanding, or any other restriction of any kind, to which
Executive is a party or by which Executive is bound.
12. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings among the parties or any of them. There are
no representations, warranties, agreements or understandings other than
expressly contained herein. No termination, alteration, modification, variation
or waiver of this Agreement or any of the provisions hereof shall be effective
unless in writing and signed by the party against whom enforcement thereof is
sought.
-5-
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<PAGE>
13. Notice. Any notice required, permitted or desired to be given pursuant
to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if sent by certified or registered
mail, return receipt and postage prepaid, hand delivered, overnight delivery
service or sent by telephone facsimile as follows:
If to the Company, to it at:
308 West State Street
Rockford, Illinois 61101
Attention: President
Facsimile: 815-987-5335
with a copy to:
Paul S. Goodman
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Facsimile: 212-730-1964
If to Executive, to him at:
3531 East 1st Street
Duluth, Minnesota 55804
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Paragraph 13. The date of the giving of any notice sent by mail
shall be the date of the posting of the mail.
14. Assignment. Neither this Agreement nor the right to receive any
payments hereunder may be assigned by Executive. It is the intention of the
parties hereto that Executive remain employed pursuant to the provisions hereof
by any successor of the Company, whether by merger, consolidation, acquisition
of all or substantially all of the business or assets, or otherwise, and the
Company shall have the right to assign this Agreement to any such successor in
interest. This Agreement shall be binding upon Executive, his heirs, executors
and administrators and upon the Company, its successors and assigns.
15. Waiver. No course of dealing nor any delay on the part of the Company
in exercising any rights hereunder shall operate as a waiver of any such rights.
No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to agreements
executed and to be performed entirely therein and each party hereto, by their
execution of this Agreement, hereby consents to the personal jurisdiction of the
courts of the State of Illinois and the Federal courts located within such State
in connection with any dispute arising under or related to this Agreement and
further agrees that service of process in any such action may be made by
certified mail to the address set forth herein.
17. Severability. Should any clause, paragraph or part of this Agreement be
held or declared to be void or illegal for any reason, all other clauses,
paragraphs or parts of this Agreement
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<PAGE>
which can be effected without such illegal clause, paragraph or part shall
nevertheless remain in full force and effect. If, in the opinion of any court,
any clause, paragraph or part of this Agreement is unreasonable or
unenforceable, such court shall have the right, power and authority to excise or
modify such provisions, or portions thereof, of this Agreement as to the court
shall not be reasonable or enforceable and to enforce the remainder of such
clause, paragraph or part as so excised or modified.
18. Binding Effect. This document is not intended to constitute an
agreement, commitment, or offer of employment binding upon the Company until and
unless executed on behalf of the Company, as provided below, and no
representative of the Company has authority to make any commitment or to give
any assurance to the contrary.
19. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not constitute a part hereof or affect in any way
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
BENEDEK BROADCASTING CORPORATION
By: /s/ K. James Yager
----------------------------
/s/ Terrance F. Hurley
---------------------------
Terrance F. Hurley
-7-
<PAGE>
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