<PAGE>
<PAGE>
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
COMMISSION FILE NUMBERS:
BENEDEK BROADCASTING CORPORATION 33-78792
BENEDEK COMMUNICATIONS CORPORATION 333-09529
---------------------------
BENEDEK BROADCASTING CORPORATION
AND
BENEDEK COMMUNICATIONS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------------
<TABLE>
<S> <C> <C>
DELAWARE BENEDEK BROADCASTING CORPORATION 13-2982954
DELAWARE BENEDEK COMMUNICATIONS CORPORATION 36-4076007
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
---------------------------
SUBSIDIARY GUARANTOR REGISTRANT
<TABLE>
<S> <C> <C>
BENEDEK LICENSE CORPORATION DELAWARE 36-4081877
(EXACT NAME OF SUBSIDIARY GUARANTOR (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION)
</TABLE>
---------------------------
<TABLE>
<S> <C>
100 PARK AVENUE 61101
ROCKFORD, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 815-987-5350
---------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<S> <C>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS: ON WHICH REGISTERED:
NONE NONE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
---------------------------
Indicate by check mark whether the registrants (1) have 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, and (2) have been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
100% of the voting common stock of Benedek Communications Corporation is
owned by affiliates thereof. 100% of the voting common stock of Benedek
Broadcasting Corporation is owned by Benedek Communications Corporation.
Indicate the number of shares outstanding of each of Benedek Broadcasting
Corporation's classes of common stock as of the latest practicable date: At
November 13, 1998, there were outstanding 148.85 shares of common stock, without
par value.
Indicate the number of shares outstanding of each of Benedek Communications
Corporation's classes of common stock, as of the latest practicable date: At
November 13, 1998, there were outstanding 7,400,000 shares of common stock,
$0.01 par value.
- - --------------------------------------------------------------------------------
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
FORM 10-Q TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM
NUMBER PAGE
------ ----
PART I - FINANCIAL STATEMENTS
<S> <C> <C>
Item 1. FINANCIAL STATEMENTS
Introductory Comments.......................................................................... 1
Benedek Communications Corporation and Subsidiaries and Benedek Broadcasting Corporation
and Subsidiaries
Consolidated Balance Sheets as of December 31, 1997 and September 30, 1998................... 2
Consolidated Statements of Operations for the Three Months Ended
September 30, 1997 and 1998............................................................... 3
Consolidated Statements of Operations for the Nine Months Ended
September 30, 1997 and 1998............................................................... 4
Consolidated Statement of Stockholders' Equity (Deficit) for the Nine Months Ended
September 30, 1998........................................................................ 5
Consolidated Statements of Cash Flows for the Nine Months Ended September 30,
1997 and 1998............................................................................. 6
Notes to Consolidated Financial Statements................................................... 8
Benedek License Corporation
Balance Sheets as of December 31, 1997 and September 30, 1998................................ 11
Statements of Operations for the Three Months and Nine Months Ended
September 30, 1997 and 1998............................................................... 12
Statement of Stockholder's Equity for the Nine Months Ended September 30, 1998............... 13
Statements of Cash Flows for the Nine Months ended September 30, 1997 and 1998............... 14
Notes to Financial Statements................................................................ 15
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................................................... 16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................................................ 26
Item 6. Exhibits and Reports on Form 8-K............................................................. 26
SIGNATURES.................................................................................................. 28
</TABLE>
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
IMPORTANT EXPLANATORY NOTE:
The integrated Form 10-Q is filed, without audit, pursuant to the
Securities Exchange Act of 1934, as amended, for each of Benedek
Communications Corporation ("Benedek Communications") and its wholly owned
subsidiary, Benedek Broadcasting Corporation ("Benedek Broadcasting").
Unless the context requires otherwise, references to the "Company" refer to
both Benedek Communications and its wholly-owned operating subsidiary,
Benedek Broadcasting, and financial information with respect to the Company
refers to the consolidated financial information of Benedek Communications
which includes Benedek Broadcasting and its wholly-owned subsidiaries,
Benedek License Corporation and Benedek Cable, Inc. Benedek Communications
is a holding company with minimal separate operations from its operating
subsidiary, Benedek Broadcasting. Separate financial information has been
provided for each entity and, where appropriate, separate disclosures.
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 the integrated Annual Reports on Form
10-K of Benedek Communications and Benedek Broadcasting for the fiscal year
ended December 31, 1997.
-1-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1997 September 30, 1998
--------------- --------------- ---------------- ------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
--------------- ---------------- ---------------- -----------------
(Unaudited)
<S> <C> <C> <C> <C>
ASSETS (In thousands, except share and per share data)
Current Assets
Cash and cash equivalents ............................... $ 2,647 $ 2,648 $ 2,937 $ 2,938
Receivables
Trade, net ........................................... 25,004 25,004 21,522 21,522
Other ................................................ 1,729 1,729 966 966
Current portion of program broadcast rights ............. 4,869 4,869 6,294 6,294
Prepaid expenses ........................................ 1,659 1,659 1,815 1,815
Deferred income taxes ................................... 1,004 1,004 1,106 1,106
--------- --------- --------- ---------
TOTAL CURRENT ASSETS ..................... 36,912 36,913 34,640 34,641
--------- --------- --------- ---------
Property and equipment ..................................... 73,811 73,811 66,384 66,384
--------- --------- --------- ---------
Intangible assets .......................................... 345,588 345,588 338,040 338,040
--------- --------- --------- ---------
Other Assets
Program broadcast rights, less current portion .......... 1,796 1,796 1,429 1,429
Deferred loan costs ..................................... 7,245 10,216 6,275 8,788
Land held for sale ...................................... 109 109 109 109
Other ................................................... 62 62 93 93
--------- --------- --------- ---------
9,212 12,183 7,906 10,419
--------- --------- --------- ---------
$ 465,523 $ 468,495 $ 446,970 $ 449,484
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current Liabilities
Current maturities of notes payable ..................... $ 13,480 $ 13,480 $ 14,647 $ 14,647
Current program broadcast rights payable ................ 6,762 6,762 8,199 8,199
Accounts payable and accrued expenses ................... 13,476 13,477 8,510 8,510
Deferred revenue ........................................ 683 683 677 677
--------- --------- --------- ---------
TOTAL CURRENT LIABILITIES ................ 34,401 34,402 32,033 32,033
--------- --------- --------- ---------
Long-Term Obligations
Notes and leases payable ................................ 247,114 357,437 240,330 361,755
Program broadcast rights payable ........................ 1,353 1,353 1,079 1,079
Deferred revenue ........................................ 3,760 3,760 3,249 3,249
Deferred income taxes ................................... 50,345 41,895 46,752 34,003
--------- --------- --------- ---------
302,572 404,445 291,410 400,086
--------- --------- --------- ---------
Exchangeable redeemable senior preferred stock .......... -- 73,660 -- 103,621
--------- --------- --------- ---------
Seller junior discount preferred stock .................. -- 50,896 -- 53,980
--------- --------- --------- ---------
Stockholders' Equity (Deficit)
Common stock, no par, authorized 200 shares,
issued 179.09 shares ................................. 1,047 -- 1,047 --
Common stock, Class A $0.01 par value
25,000,000 authorized none issued or
outstanding .......................................... -- -- -- --
Common stock, Class B $0.01 par value
25,000,000 authorized, 7,030,000 and 7,400,000
issued and outstanding for 1997
and 1998 ............................................. -- 70 -- 74
Additional paid-in capital .............................. 149,592 (40,192) 152,884 (57,937)
Accumulated (deficit) ................................... (20,608) (54,786) (28,923) (81,802)
Stockholder's note receivable (Note C) .................. -- -- -- (571)
--------- --------- --------- ---------
130,031 (94,908) 125,008 (140,236)
Less 30.24 shares of common stock held in
treasury .............................................. (1,481) -- (1,481) --
--------- --------- --------- ---------
128,550 (94,908) 123,527 (140,236)
--------- --------- --------- ---------
$ 465,523 $ 468,495 $ 446,970 $ 449,484
========= ========= ========= =========
</TABLE>
-2-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended September 30,
---------------------------------------------------------------------
1997 1998
---------------- ---------------- ---------------- ------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
---------------- ---------------- --------------- -------------------
(Unaudited)
(In thousands, except share and per share data)
<S> <C> <C> <C> <C>
Net revenues ...................................... $ 30,986 $ 30,986 $ 31,889 $ 31,889
----------- ----------- ----------- -----------
Operating expenses:
Selling, technical and program expenses ........ 14,454 14,454 16,052 16,052
General and administrative ..................... 4,658 4,658 5,013 5,013
Depreciation and amortization .................. 7,416 7,416 7,642 7,642
Corporate ...................................... 950 950 1,080 1,080
----------- ----------- ----------- -----------
27,478 27,478 29,787 29,787
----------- ----------- ----------- -----------
OPERATING INCOME ............................ 3,508 3,508 2,102 2,102
----------- ----------- ----------- -----------
Financial income (expense):
Interest expense:
Cash interest ............................... (7,439) (7,439) (6,751) (6,751)
Other interest .............................. (375) (3,948) (291) (4,306)
----------- ----------- ----------- -----------
(7,814) (11,387) (7,042) (11,057)
Interest income ................................ 29 29 34 34
----------- ----------- ----------- -----------
(7,785) (11,358) (7,008) (11,023)
Loss on investment ............................. (608) (608) -- --
----------- ----------- ----------- -----------
(LOSS) BEFORE INCOME TAX BENEFIT ............ (4,885) (8,458) (4,906) (8,921)
Income tax benefit ................................ 1,592 3,021 1,388 2,799
----------- ----------- ----------- -----------
NET (LOSS) ............................... $ (3,293) (5,437) $ (3,518) (6,122)
=========== ===========
Preferred stock dividends and accretion ........... (4,638) (3,936)
----------- -----------
Net (loss) applicable to common stock ............. $ (10,075) $ (10,058)
=========== ===========
Basic and diluted (loss) per common share:
(Loss) per common share ........................ $ (1.43) $ (1.36)
=========== ===========
Weighted-average common shares outstanding ........ 7,030,000 7,400,000
=========== ===========
</TABLE>
-3-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------------------------------------------
1997 1998
---------------- ---------------- ---------------- ------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
---------------- ---------------- --------------- -------------------
(Unaudited)
(In thousands, except share and per share data)
<S> <C> <C> <C> <C>
Net revenues ...................................... $ 92,180 $ 92,180 $ 98,896 $ 98,896
----------- ----------- ----------- -----------
Operating expenses:
Selling, technical and program expenses ........ 44,084 44,084 47,444 47,444
General and administrative ..................... 14,080 14,080 15,315 15,315
Depreciation and amortization .................. 22,960 22,960 23,075 23,075
Corporate ...................................... 2,771 2,771 3,671 3,671
----------- ----------- ----------- -----------
83,895 83,895 89,505 89,505
----------- ----------- ----------- -----------
OPERATING INCOME ............................ 8,285 8,285 9,391 9,391
----------- ----------- ----------- -----------
Financial income (expense):
Interest expense:
Cash interest ............................... (21,613) (21,613) (20,428) (20,428)
Other interest .............................. (1,112) (11,522) (1,001) (12,562)
----------- ----------- ----------- -----------
(22,725) (33,135) (21,429) (32,990)
Interest income ................................ 99 99 133 457
----------- ----------- ----------- -----------
(22,626) (33,036) (21,296) (32,533)
Loss on Investment ............................... (609) (609) -- --
----------- ----------- ----------- -----------
(LOSS) BEFORE INCOME TAX BENEFIT ............ (14,950) (25,360) (11,905) (23,142)
Income tax benefit ................................ 4,691 8,881 3,590 7,890
----------- ----------- ----------- -----------
NET (LOSS) ............................... $ (10,259) (16,479) $ (8,315) (15,252)
=========== ===========
Preferred stock dividends and accretion ........... (13,519) (25,813)
----------- -----------
Net (loss) applicable to common stock ............. $ (29,998) $ (41,065)
=========== ===========
Basic and diluted (loss) per common share:
(Loss) per common share ........................ $ (4.29) $ (5.55)
=========== ===========
Weighted-average common shares outstanding ........ 7,030,000 7,400,000
=========== ===========
</TABLE>
-4-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
NINE MONTHS ENDED SEPTEMBER 30, 1998
BENEDEK BROADCASTING CORPORATION
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated Treasury
Stock Capital Deficit Stock Total
--------- ---------- ----------- --------- ---------
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 ..................... $ 1,047 $ 149,592 $ (20,608) $ (1,481) $ 128,550
Contribution of additional paid-in capital
by parent .................................. -- 3,292 -- -- 3,292
Net (loss) .................................... -- -- (8,315) -- (8,315)
--------- --------- --------- --------- ---------
Balance at September 30, 1998 ................. $ 1,047 $ 152,884 $ (28,923) $ (1,481) $ 123,527
========= ========= ========= ========= =========
</TABLE>
BENEDEK COMMUNICATIONS CORPORATION
<TABLE>
<CAPTION>
Additional Stockholder's
Common Paid-In Accumulated Note
Stock Capital Deficit Receivable Total
--------- ---------- ----------- ---------- ---------
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 ..................... $ 70 $ (40,192) $ (54,786) $ -- $ (94,908)
Accretion to exchangeable redeemable
senior preferred stock ..................... -- (14,049) -- -- (14,049)
Dividends on preferred stock .................. -- -- (11,764) -- (11,764)
Financial costs related to the sale of
preferred stock ............................ -- (4,263) -- -- (4,263)
Stock options exercised in exchange
for note (Note C) .......................... 4 567 -- (571) --
Net (loss) .................................... -- -- (15,252) -- (15,252)
--------- --------- --------- --------- ---------
Balance at September 30, 1998 ................. $ 74 $ (57,937) $ (81,802) $ (571) $(140,236)
========= ========= ========= ========= =========
</TABLE>
-5-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------------
1997 1998
------------------------------ ------------------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
------------- -------------- ------------ ---------------
(Unaudited) (In thousands)
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net (loss) ......................................... $ (10,259) $ (16,479) $ (8,315) $ (15,252)
Adjustments to reconcile net (loss)
to net cash provided by operating activities:
Amortization of program broadcast rights ....... 4,601 4,601 4,922 4,992
Depreciation and amortization .................. 15,574 15,574 15,711 15,711
Amortization and write-off of intangibles
and deferred loan costs ...................... 8,502 9,145 8,301 8,758
Amortization of note discount .................. -- 9,767 -- 11,103
Loss on sale of property & equipment ..... 24 24 104 104
Deferred income taxes .......................... (5,070) (9,260) (3,696) (7,994)
Other .................................... 608 608 (564) (564)
Changes in operating assets and liabilities:
Receivables .................................... 1,389 1,389 4,245 4,245
Due to sellers ................................. 97 97 -- --
Prepaid expenses and other ..................... (549) (549) (156) (156)
Payments on program broadcast rights
payable ...................................... (4,157) (4,157) (4,888) (4,888)
Accounts payable and accrued expenses .......... (6,276) (6,276) (4,926) (4,926)
Deferred revenue ............................... (540) (540) (516) (516)
--------- --------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES .... 3,944 3,944 10,292 10,617
--------- --------- --------- ---------
Cash flows from investing activities
Purchase of property and equipment ................. (3,472) (3,472) (5,094) (5,094)
Proceeds from sale of equipment .................... 16 16 148 148
Purchase of other assets ........................... -- -- (31) (31)
Payment for acquisition of stations, net of cash ... (210) (210) -- --
--------- --------- --------- ---------
NET CASH (USED IN) INVESTING ACTIVITIES ........ (3,666) (3,666) (4,977) (4,977)
--------- --------- --------- ---------
Cash flows from financing activities
Principal payments on notes payable ................ (11,893) (11,893) (2,285) (2,285)
Proceeds (payments) from long-term borrowing ....... 7,000 7,000 (6,000) (6,000)
Contribution of paid-in capital by parent .......... -- -- 3,292 --
Proceeds from senior preferred stock ............... -- -- -- (100,000)
Payoff of senior preferred stock ................... -- -- -- (92,678)
Payment of debt and preferred stock
acquisition costs ................................ (843) (843) (32) (4,297)
--------- --------- --------- ---------
NET CASH (USED IN) FINANCING
ACTIVITIES ................................... (5,736) (5,736) (5,025) (5,350)
--------- --------- --------- ---------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS .................................. (5,458) (5,458) 290 290
Cash and cash equivalents:
Beginning .................................... 8,090 8,091 2,647 2,648
--------- --------- --------- ---------
Ending ....................................... $ 2,632 $ 2,633 $ 2,937 $ 2,938
========= ========= ========= =========
</TABLE>
-6-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------------
1997 1998
------------------------------ ------------------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
------------- -------------- ------------ ---------------
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C>
Supplemental disclosure of cash flow information:
Cash payments for interest .................... $25,291 $25,291 $24,489 $24,489
Cash payments for income taxes ................ 432 432 307 307
======= ======= ======= =======
Supplemental schedule of noncash investing
and financing activities:
Acquisition of program broadcast rights ... $ 6,169 $ 6,169 $ 6,050 $ 6,050
Notes payable incurred for purchase of
equipment ............................... 2,468 2,468 2,667 2,667
Equipment acquired by barter transactions . 203 203 775 775
Dividends accrued on redeemable preferred
stock ................................... -- 4,143 -- 11,764
Accretion to exchange redeemable senior
preferred stock ......................... -- -- -- 14,049
Stock options exercised in exchange for
note receivable ......................... -- -- -- 571
======= ======= ======= =======
</TABLE>
-7-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE A) - NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS:
Benedek Communications is a holding company with minimal operations other
than from its wholly-owned subsidiary, Benedek Broadcasting. Benedek
Broadcasting owns and operates twenty-three television stations (the "Stations")
located throughout the United States. The operating revenues of the Stations 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
barter transactions for goods and services. 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 consolidated financial statements of the Company include the accounts
of Benedek Communications and its wholly-owned subsidiary, Benedek Broadcasting
and its wholly-owned subsidiaries, Benedek License Corporation ("BLC") and
Benedek Cable, Inc. ("BCI"). The consolidated financial statements of Benedek
Broadcasting include the accounts of Benedek Broadcasting and BLC. Separate
financial statements have been provided for each reporting entity and, where
there are differences, separate disclosures. All significant intercompany items
and transactions have been eliminated in each of the sets of consolidated
financial statements.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for the fair presentation of the
financial position as of September 30, 1998 and the results of operations for
the three months and the nine months ended September 30, 1998 have been
included. Operating results for the three month and the nine month periods ended
September 30, 1998 are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1998. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the integrated Annual Report on Form 10-K of Benedek Communications and Benedek
Broadcasting for the year ended December 31, 1997.
(NOTE B) - REDEEMABLE EQUITY SECURITIES
On May 8, 1998, Benedek Communications issued 100,000 shares of 11 1/2%
Senior Exchangeable Preferred Stock due 2008, $0.01 per value per share of (the
"Exchangeable Preferred Stock") with an initial liquidation preference equal to
the proceeds of $100,000,000. Subject to certain conditions, the Exchangeable
Preferred Stock are exchangeable for exchange debentures at the option of
Benedek Communications on any dividend date. The Exchangeable Preferred Stock
ranks senior to all classes of common stock.
-8-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Benedek Communications has the option to pay dividends quarterly at 11 1/2%
of the then effective liquidation preference on any payment date occurring on or
before May 15, 2003 either in cash or by adding such dividends to the then
effective liquidation preference. Benedek Communications also has the option to
redeem these shares, in whole or in part, at predetermined redemption prices
after May 15, 2003.
On June 8, 1998, Benedek Communications redeemed its 15% Exchangeable
Redeemable Preferred Stock due 2007 (the "Existing Preferred Stock") at a
redemption price of 115.0% of the effective liquidation preference together with
accumulated and unpaid dividends for a total of approximately $92,800,000. The
redemption was funded by the proceeds of the issuance of the Exchangeable
Preferred Stock, net of fees and expenses of the issuance which totaled
approximately $4,100,000.
(NOTE C) - STOCK OPTION AGREEMENTS
In 1988 and 1995, Benedek Communications granted options whereby a key
employee could exercise these options to purchase 239,216 shares and 130,784
shares of common stock, Class B, at exercise prices of $1.58 per share and $4.12
per share, respectively, which was the fair market values on the respective
grant dates. On January 1, 1998, Benedek Communications changed the exercise
price for the options to $1.50 per share based upon a method of valuation chosen
by Benedek Communications. As permitted under generally accepted accounting
principles, the Company accounts for the options under the provisions of APB
Option No. 25 and its related interpretations. Accordingly, no compensation cost
has been recognized for the grant of the options. Additionally, on January 1,
1998, the key employee exercised options to purchase 370,000 shares of common
stock, Class B, of Benedek Communications for an aggregate exercise price of
$555,000. The key employee borrowed the funds necessary to pay the exercise
price from Benedek Communications, which loan is evidenced by a promissory note
which bears interest at the rate of 5.93% per annum and is payable, in the event
of the sale of the shares to the extent of the net proceeds thereof, but in no
event later than December 31, 2007.
(NOTE D) - PENDING ADOPTION OF ACCOUNTING STANDARDS
The FASB (Financial Accounting Standards Board) has issued two new
pronouncements that the Company will be required to adopt for its year ending
December 31, 1998. These pronouncements are not expected to have a significant
impact on the Company's financial statements.
FASB Statement No. 130 "Reporting Comprehensive Income" establishes
standards for reporting and display of comprehensive income and its components
in the financial statements. This statement requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. This statement requires that
a company (a) classify terms of other comprehensive income by their nature in a
financial statement, and (b) display the accumulated balance of other
comprehensive income
-9-
<PAGE>
<PAGE>
separately from retained earnings and additional paid-in capital in the equity
section of a statement of financial position. The Company currently has no items
of comprehensive income.
FASB Statement No. 131 "Disclosures about Segments of an Enterprise and
Related Information" establishes standards for reporting information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial reports
issued to stockholders. Operating segments are components of an enterprise about
which separate financial information is available and evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance.
-10-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1997 1998
---- ----
(Unaudited)
(In thousands except share and
per share data)
<S> <C> <C>
Federal Communication Commission (FCC)
Licenses, at cost, less accumulated amortization of $5,514 and $7,910
for 1997 and 1998, respectively ..................................... $ 120,526 $ 118,129
Goodwill, less accumulated amortization of $1,322 and $1,983 for 1997
and 1998, respectively .............................................. 33,915 33,254
--------- ---------
$ 154,441 $ 151,383
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Deferred tax liability ................................................. $ 33,017 $ 32,058
--------- ---------
Stockholder's Equity:
Common stock, $0.01 par authorized 3,000 shares,
issued and outstanding 99 shares ................................. -- --
Additional paid-in capital .......................................... 126,040 126,040
Accumulated deficit ................................................. (4,616) (6,715)
--------- ---------
121,424 119,325
--------- ---------
$ 154,441 $ 151,383
========= =========
</TABLE>
-11-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1997 1998 1997 1998
---- ---- ---- ----
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C>
Operating expense, amortization ... $ 1,018 $ 1,020 $ 3,062 $ 3,057
------- ------- ------- -------
(Loss) before income tax benefit (1,018) (1,020) (3,062) (3,057)
Income tax benefit ................ 319 319 1,170 958
------- ------- ------- -------
NET (LOSS) ................... $ (699) $ (701) $(1,892) $(2,099)
======= ======= ======= =======
</TABLE>
-12-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF STOCKHOLDER'S EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated
Stock Capital Deficit Total
--------- --------- ------------- ---------
(Unaudited)
(In thousands)
<S> <C> <C> <C> <C>
Balance at December 31, 1997 ..... $ -- $ 126,040 $ (4,616) $ 121,424
Net (loss) .................. -- -- (2,099) (2,099)
--------- --------- --------- ---------
Balance at September 30, 1998..... $ -- $ 126,040 $ (6,715) $ 119,325
========= ========= ========= =========
</TABLE>
-13-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------
1997 1998
---- ----
(Unaudited)
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net (loss) ............................................. $(1,892) $(2,099)
Adjustments to reconcile net (loss) to net cash provided
by operating activities:
Amortization ........................................ 3,062 3,057
Deferred income tax ................................. (1,170) 958
------- -------
Net cash provided by operating activities ......... -- --
Cash:
Beginning .............................................. -- --
------- -------
Ending ................................................. $ -- $ --
======= =======
</TABLE>
-14-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE A) - NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS:
Benedek License Corporation ("BLC") is a wholly owned subsidiary of Benedek
Broadcasting Corporation ("Benedek Broadcasting"). BLC was formed on April 18,
1996 to own and hold the Federal Communications Act ("FCC") licenses for the
twenty-three television stations owned by Benedek Broadcasting which are located
throughout the United States.
BASIS OF PRESENTATION:
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for the fair presentation of the
financial position as of September 30, 1998 and the results of operations for
the three months and nine months ended September 30, 1998 have been included.
Operating results for the three month and nine month periods ended September 30,
1998 are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Annual
Report on Form 10-K of Benedek Broadcasting for the year ended December 31,
1997.
(NOTE B) - STOCKHOLDER'S EQUITY
Benedek Broadcasting has pledged 100% of the outstanding common stock of
BLC as collateral for the Senior Secured Notes and the Term Loan Facilities
issued by Benedek Broadcasting.
BLC has guaranteed the obligations of Benedek Broadcasting with respect to
the Senior Secured Notes and the Term Loan Facilities.
-15-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
This Quarterly Report on Form 10-Q contains forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including changes in national and regional economies, competition in
the television business, pricing fluctuations in local and national advertising,
program ratings and changes in programming costs, among other factors.
As used herein, "Adjusted EBITDA" is defined as operating income before
financial income as derived from the consolidated statements of operations plus
depreciation and amortization, amortization of program broadcast rights and
noncash compensation less payments for program broadcast rights. As used
herein,"broadcast cash flow" is defined as Adjusted EBITDA plus corporate
expenses. The Company has included Adjusted EBITDA and broadcast cash flow data
because such data is used by certain investors to measure a company's ability to
service debt. Adjusted EBITDA is used to pay principal and interest on long-term
debt and to fund capital expenditures. Adjusted EBITDA and broadcast cash flow
do not purport to represent cash provided by operating activities as reflected
in the Company'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.
Unless the context otherwise requires, references to the "Company" refer to
both Benedek Communications and its wholly-owned operating subsidiary, Benedek
Broadcasting, and financial information with respect to the Company refers to
the consolidated financial information of Benedek Communications, which includes
Benedek Broadcasting and its wholly-owned subsidiaries, Benedek License
Corporation and Benedek Cable, Inc.
For the three months ended September 30, 1998, the Company reported net
revenues of $31.9 million compared to net revenues of $31.0 million for the
three months ended September 30, 1997. The Company had a net loss of $6.1
million for the three months ended September 30, 1998 as compared to $5.4
million for the three months ended September 30, 1997. Benedek Broadcasting had
a net loss of $3.5 million for the three months ended September 30, 1998
compared to a net loss of $3.3 million for the three months ended September 30,
1997. Adjusted EBITDA for the three months ended September 30, 1998 was $10.0
million compared to $11.1 million for the three months ended September 30, 1997.
For the nine months ended September 30, 1998, the Company reported net
revenues of $98.9 million compared to net revenues of $92.2 million for the nine
months ended September 30, 1997. The Company had a net loss of $15.3 million for
the nine months ended September 30, 1998 compared to a net loss of $16.5 million
for the nine months ended September 30, 1997. Benedek Broadcasting had a net
loss of $8.3 million for the nine months ended September 30, 1998 compared to a
net loss of $10.3 million for the nine months ended September 30, 1997. Adjusted
EBITDA for the nine months ended September 30, 1998 was $32.6 million as
compared to $31.7 million for the nine months ended September 30, 1997.
The operating revenues of the Company are derived primarily from the sale
of local, regional and national advertising time and, to a lesser extent, from
compensation paid by the networks for broadcasting network programming and
barter transactions for goods and services. Revenues depend on the ability of
the
-16-
<PAGE>
<PAGE>
Company to provide popular programming which attracts audiences in the
demographic groups targeted by advertisers, thereby allowing the Company to sell
advertising time at competitive rates. Revenues also depend significantly on
factors such as the national and local economy and the level of competition for
advertising revenues.
Time sales to local/regional advertisers and national advertisers
constitute the largest concentration of the Company's operating revenues and
represent approximately 89% of gross revenues for the nine months ended
September 30, 1998 as compared to 85% for the nine months ended September 30,
1997. Approximately 56% of the gross revenues of the Company for the nine
months ended September 30, 1998 was generated from local and regional
advertising, which is sold primarily by the Stations' sales staff, and the
remainder of the advertising revenues is comprised primarily of national
advertising, which is sold by national sales representatives retained by the
Company. The Company 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.
The Company'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. The Company purchases
first run and off-network syndicated programming on an ongoing basis. Under its
contract with the network, a network-affiliated station receives approximately
two-thirds of its daily programming from its network and in turn is compensated,
in most cases, by its network for carrying such programming with the network's
commercial content intact. Depreciation and amortization expense has decreased
as assets purchased in the 1996 acquisitions have depreciated. Barter expense
generally offsets barter revenue and reflects the fair market value of goods and
services received. The Company's operating expenses (excluding depreciation and
amortization) represent approximately 67% of net revenues for the nine months
ended September 30, 1998 as compared to 66% for the nine months ended September
30, 1997.
-17-
<PAGE>
<PAGE>
The following table sets forth certain historical results of the operations
and operating data for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
---------------------------------- ---------------------------------
1997 1998 1997 1998
---- ---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Operating income .................... $ 3,508 $ 2,102 $ 8,285 $ 9,391
Add:
Amortization of program broadcast
rights .......................... 1,559 1,672 4,601 4,992
Depreciation and amortization ... 7,416 7,642 22,959 23,075
Corporate expenses .............. 950 1,080 2,771 3,671
Less:
Payment for program broadcast
liabilities ......................... (1,336) (1,361) (4,157) (4,888)
-------- -------- -------- --------
Broadcast cash flow ............. 12,097 $ 11,135 34,459 36,241
Corporate ..................... 950 1,080 2,771 3,671
-------- -------- -------- --------
Adjusted EBITDA .................. $ 11,147 $ 10,055 $ 31,688 $ 32,570
======== ======== ======== ========
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1997
The following table provides historical information.
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------------
1997 1998 % Change
---- ---- --------
(Dollars in Thousands)
<S> <C> <C> <C>
Net revenues ....................... $30,986 $31,889 2.9%
------- ------- ----
Operating expenses:
Selling, technical and
program expenses ............... 14,454 16,052 11.1
General and administrative ....... 4,658 5,013 7.6
Depreciation and amortization .... 7,416 7,642 3.0
Corporate ........................ 950 1,080 13.7
------- ------- ----
27,478 29,787 8.4
------- ------- ----
OPERATING INCOME .......... $ 3,508 $ 2,102 (40.1)%
======= ======= ====
Broadcast cash flow................ $12,097 $11,135 (8.0)%
Broadcast cash flow margin......... 39.0% 34.9%
Adjusted EBITDA.................... $11,147 $10,055 (9.8)%
Adjusted EBITDA margin............. 36.0% 31.5%
</TABLE>
Net revenues for the three months ended September 30, 1998 increased
$0.9 million or 2.9% to $31.9 million from $31.0 million for the three months
ended September 30, 1997. Gross revenues excluding political advertising revenue
decreased $1.2 million or 3.3 % from the three months ended September 30, 1997.
Net revenues during the three months ended September 30, 1998 showed an
improvement in advertising revenue for the Company due primarily to an increase
in political advertising revenue.
Net revenues during the three month period ended September 30, 1998
were adversely affected by a General Motors Corporation strike and a general
weakness in local and national revenue. Gross revenues excluding political
advertising revenue decreased $1.2 million or 3.3% from the three months ended
-18-
<PAGE>
<PAGE>
September 30, 1997. Political advertising revenue for the three months ended
September 30, 1998 increased by $2.5 million to $2.6 million.
Operating expenses for the three months ended September 30, 1998
increased $2.3 million or 8.4% to $29.8 million from $27.5 million for the three
months ended September 30, 1997. As a percentage of net revenues, operating
expenses increased to 93.5% from 88.7% for the three months ended September 30,
1998. The increase in expenses was due primarily to compensation and
trade/barter expense related to news expansion. Operating expenses, excluding
depreciation and amortization and corporate, for the last four quarters were:
September 30, 1998, $21.1 million; June 30, 1998, $21.1 million; March 31, 1998,
$20.6 million; and December 31, 1997, $21.8 million respectively.
Operating income for the three months ended September 30, 1998
decreased $1.4 million or 40.1% to $2.1 million from $3.5 million for the three
months ended September 30, 1997.
Financial (expenses), net for Benedek Broadcasting decreased $0.8
million or 10.0 % to $7.0 million from $7.8 million for the three months ended
September 30, 1998 due to the lower interest rates on its Term Loan Facilities.
The Company's financial expenses (net) for the three months ended September 30,
1998 decreased $0.4 million or 2.9% to $11.0 million from $11.4 million for the
three months ended September 30, 1997. The Company has higher financial expenses
than Benedek Broadcasting as a result of the interest on its Senior Subordinated
Discount Notes.
Income tax benefit for Benedek Broadcasting for the three months ended
September 30, 1998 was $1.4 million compared to $1.6 million for the three
months ended September 30, 1997. For the three months ended September 30, 1998,
the Company had a $2.8 million income tax benefit compared to $3.0 million for
the three months ended September 30, 1997. The Company has a greater income tax
benefit than Benedek Broadcasting due to the net tax effect on the difference in
financial expenses.
Net loss for Benedek Broadcasting for the three months ended September
30, 1998 was $3.5 million as compared to $3.3 million net loss for the three
months ended September 30, 1997. The Company had a net loss of $6.1 million for
the three months ended September 30, 1998 as compared to a net loss of $5.4
million for the three months ended September 30, 1997.
Broadcast cash flow for the three months ended September 30, 1998
decreased $1.0 million or 8.0% to $11.1 million from $12.1 million for the three
months ended September 30, 1997. As a percentage of net revenues, broadcast cash
flow margin decreased to 34.9% for the three months ended September 30, 1998
from 39.0% for the three months ended September 30, 1997.
-19-
<PAGE>
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 1997
The following table provides historical information.
<TABLE>
<CAPTION>
Historical
Nine Months Ended September 30,
-----------------------------------
1997 1998 % Change
---- ---- -------
(Dollars in Thousands)
<S> <C> <C> <C>
Net revenues .................. $92,180 $98,896 7.3%
------- ------- -----
Operating expenses:
Selling, technical and
program expenses .......... 44,084 47,444 7.6
General and administrative .. 14,080 15,315 8.8
Depreciation and amortization 22,960 23,075 0.5
Corporate ................... 2,771 3,671 32.5
------- ------- -----
83,895 89,505 6.7
------- ------- -----
OPERATING INCOME ..... $ 8,285 $ 9,391 13.3%
======= ======= =====
Broadcast cash flow ........... $34,459 $36,242 5.2%
Broadcast cash flow margin .... 37.4% 36.6%
Adjusted EBITDA ............... $31,688 $32,570 2.8%
Adjusted EBITDA margin ........ 34.4% 32.9%
</TABLE>
Net revenues for the nine months ended September 30, 1998 increased
$6.7 million or 7.3% to $98.9 million from $92.2 million for the nine months
ended September 30, 1997. Gross revenues for the nine months ended September 30,
1998 increased $8.6 million to $111.3 million from $102.7 million from the nine
months ended September 30, 1997. Gross revenues excluding political advertising
revenue increased $3.9 million or 3.8% from the nine months ended September 30,
1997. Net revenues for the nine months ended September 30, 1998 were positively
affected by political spending and the Winter Olympics shown on the Company's 12
CBS stations. Political advertising revenue for the nine months ended September
30, 1998 increased by $4.1 million to $4.7 million.
Operating expenses for the nine months ended September 30, 1998
increased $5.6 million or 6.7% to $89.5 million from $83.9 million for the nine
months ended September 30, 1997. As a percentage of net revenues, operating
expenses decreased to 90.5% from 91.0% for the nine months ended September 30,
1998. The increase in expenses was due to increased compensation expense as the
Company expanded news operations and increased programming expense.
Operating income for the nine months ended September 30, 1998 increased
$1.1 million or 13.3% to $9.4 million from $8.3 million for the nine months
ended September 30, 1997.
Financial (expenses), net for Benedek Broadcasting for the nine months
ended September 30, 1998 decreased $1.3 million or 5.7% to $21.3 million from
$22.6 million in the nine months ended September 30, 1997 due to the lower
interest rates on its Term Loan Facilities. For the nine months ended September
30, 1998, the Company's financial expenses (net) decreased $0.5 million or 1.5%
to $32.5 million from $33.0 million for the nine months ended September 30,
1997. The Company has higher financial expenses than Benedek Broadcasting as a
result of the interest on its Senior Subordinated Discount Notes.
-20-
<PAGE>
<PAGE>
Income tax benefit for Benedek Broadcasting for the nine months ended
September 30, 1998 was $3.6 million compared to $4.7 for the nine months ended
September 30, 1997. For the nine months ended September 30, 1998, the Company
had a $7.9 million income tax benefit compared to $8.9 for the nine months ended
September 30, 1997. The Company has a greater income tax benefit than Benedek
Broadcasting due to the net income tax affect on the difference in financial
expenses. The tax effect of the excess of book depreciation over tax
depreciation and a current period net operating loss for tax purposes were the
primary factors resulting in the income tax benefit for the nine months ended
September 30, 1998.
Net loss for Benedek Broadcasting for the nine months ended September
30, 1998 was $8.3 million as compared to a $10.3 million net loss for the nine
months ended September 30, 1997. The Company had a net loss of $15.3 million for
the nine months ended September 30, 1998 as compared to a net loss of $16.5
million for the nine months ended September 30, 1997.
Broadcast cash flow for the nine months ended September 30, 1998
increased $1.7 million or 5.2% to $36.2 million from $34.5 million for the nine
months ended September 30, 1997. As a percentage of net revenues, broadcast cash
flow margin decreased to 36.6% for the nine months ended September 30, 1998 from
37.4% for the nine months ended September 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities is the primary source liquidity
for the Company. Benedek Broadcasting had cash provided by operating activities
of $10.3 million for the nine months ended September 30, 1998 compared to $3.9
million for the nine months ended September 30, 1997. Cash provided by operating
activities for the Company was $10.6 million for the nine months ended September
30, 1998 as compared to $3.9 million for the nine months ended September 30,
1997. Cash flows from operating activities included cash payments of interest
expense which totaled $24.5 million for the nine months ended September 30, 1998
as compared to $25.3 million for the nine months ended September 30, 1997.
Cash Flows from Investing Activities were $(4.9) million for the nine
months ended September 30, 1998 as compared to $(3.7) million for the nine
months ended September 30, 1997. Cash flows provided by operating were used to
fund cash used to purchase $5.1 million of property and equipment.
Cash Flows from Financing Activities were $(5.0) million for Benedek
Broadcasting for the nine months ended September 30, 1998 compared to $(5.7)
million for the nine months ended September 30, 1997. For the nine months ended
September 30, 1998, the Company had cash used in financing activities of $5.4
million compared to $5.7 million for the nine months ended September 30, 1997.
Benedek Broadcasting had less cash used in financing due to a $0.3 million
contribution of paid in capital from Benedek Communications generated from
interest income. For the nine months ended September 30, 1998, cash flows from
financing activities included $100.0 million of proceeds from the issuances of
Benedek Communications' 11 1/2% Exchangeable Redeemable Senior Preferred Stock
issued during the quarter ended June 30, 1998. The proceeds were used to redeem
Benedek Communications' Existing Preferred Stock totaling $92.8 million and to
pay fees and expenses totaling $4.3 million associated with the offering.
In 1996, the Company implemented a financing plan in order to finance
the acquisition of thirteen television stations and to pay fees and expenses
related thereto. The financing plan consisted of (i) the offer and sale by
Benedek Communications of the Senior Subordinated Discount Notes (the "Discount
Notes")
-21-
<PAGE>
<PAGE>
to generate gross proceeds of $90.2 million, (ii) the sale by Benedek
Communications of units consisting of Exchangeable Redeemable Senior Preferred
Stock (the "Existing 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) Benedek
Communications issuing an aggregate of $45.0 million initial liquidation
preference of Seller Junior Discount Preferred Stock (the "Junior Preferred
Stock") to GECC and Mr. Paul Brissette. Benedek Broadcasting also has
outstanding $135.0 million of Senior Secured Notes due 2005 (the "Senior Secured
Notes") which were issued in 1995 to refinance outstanding indebtedness and
finance the acquisition of the Company's station in Dothan, Alabama.
On June 8, 1998, Benedek Communications redeemed the Existing Preferred
Stock for $92.8 million (including approximately $12.1 million representing
premiums relating to the redemption) which was funded by the proceeds of the
issuance of the Exchangeable Preferred Stock of $100.0 million before fees and
expenses of the offering. The Exchangeable Preferred Stock was registered with
the Securities and Exchange Commission pursuant to an S-4 registration statement
declared effective on June 15, 1998.
The Company believes that its long-term financing structure allows
management to concentrate its efforts on maximizing results of operations. The
Company anticipates that Adjusted EBITDA of Benedek Broadcasting will be
sufficient to finance the operating requirements of the Stations, debt service
requirements in respect of the Senior Secured Notes and Term Loan Facilities and
presently anticipated capital expenditures for at least the period until the
Company is required to make cash payments in respect of the Discount Notes. The
Company expects that at that time it will be necessary to refinance the Discount
Notes and the Junior Preferred Stock. Such refinancing will also require
amending or refinancing the Term Loan Facilities since the Credit Agreement
currently prohibits the repayment or redemption of the Discount Notes or the
redemption of the Junior Preferred Stock.
The Company anticipates that capital expenditures of approximately
$9.0 million will be made in 1998 of which $8.5 million has been expended for
the nine months ended September 30, 1998. Capital expenditures are financed
either from cash provided by operations, borrowings under the Revolving Credit
Facility or purchase money financing.
The Discount Notes do not bear interest until May 15, 2001, and the
Company will not be obligated to pay cash interest on the Discount Notes until
November 15, 2001. Through and including May 15, 2003, the Company may, at its
option, pay dividends and/or interest, as applicable, by adding the amount
thereof to the then effective liquidation preference of the Exchangeable
Preferred Stock or pay interest on the Exchange Debentures by issuing
additional Exchange Debentures. The Credit Agreement currently prohibits Benedek
Communications from making cash payments with respect to dividends on the
Exchangeable Preferred Stock and interest on the Exchange Debentures at any
time. Accordingly, Benedek Communications currently intends not to pay cash
dividends on the Exchangeable Preferred Stock or cash interest on the Exchange
Debentures, as applicable, prior to May 15, 2003. For all dividend payment
dates with respect to the Seller Junior Discount Preferred Stock prior to
October 1, 2001, Benedek Communications will pay such dividends by adding the
amount thereof to the then effective liquidation preference of the Seller Junior
Discount Preferred Stock.
Benedek Communications is a holding company that derives all of its
operating income and Adjusted EBITDA from its sole subsidiary, Benedek
Broadcasting, the common stock of which, together with all other assets of
Benedek Communications, have been pledged to secure Benedek Communications'
senior guarantee of all indebtedness of Benedek Broadcasting outstanding under
the Credit Agreement. As a holding company, Benedek Communications' ability to
pay its obligations, including its obligation to pay interest on and principal
of the Discount Notes, whether at maturity, upon a change of control or
otherwise, is 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
-22-
<PAGE>
<PAGE>
or otherwise, to pay any amounts to Benedek Communications or to make funds
available to Benedek Communications 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 Benedek Communications, the Senior
Secured Note Indenture does contain such limitations. However, as of September
30, 1998, Benedek Broadcasting could have distributed approximately $192.7
million to Benedek Communications under such limitations.
The Credit Agreement was amended and restated as of December 17, 1997
to convert existing Term Loans to new term loans, to modify certain financial
covenants and ratios, to increase the Revolving Credit Facility to $15.0 million
and to replace certain parties to the agreement. As of December 17, 1997, the
outstanding principal balance of the existing term loans which totaled $110.8
million were converted to (1) Term Loan Series A of $77.0 million and (2) Term
Loan Series B of $33.8 million. The Term Loan Facilities generally provide for
quarterly amortization until final maturity on December 31, 2004. The Company is
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
1998, $2.5 million; during 1999, $11.0 million; during 2000, $13.0 million;
during 2001, $13.0 million; during 2002, $14.0 million; during 2003, $15.0
million; and during 2004, $42.3 million.
In addition, the Company will be required to make prepayments on the
Term Loan Facilities under certain circumstances, including upon certain asset
sales and the issuance of certain debt or equity securities. The Company will
also be required beginning in 1999 to make prepayments on the Term Loan
Facilities in an amount equal to 50% of excess cash flow (as defined). These
mandatory prepayments will be applied to prepay, on a pro rata basis, the Term
Loan Series A and Term Loan Series B.
The Term Loan Series A bears interest, at the Company's option, at a
base rate plus a spread or at a Eurodollar rate plus a spread. The Term Loan
Series B bears interest, at the Company'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 Loans and Revolving Credit Facility will bear
interest are subject to reductions at such times as certain leverage ratio
performance tests are satisfied.
At September 30, 1998, Benedek Broadcasting had available to it a
maximum of $15.0 million under the Revolving Credit Facility of the Credit
Agreement (the "Revolving Credit Facility") of which $11.0 million was unused.
From time to time throughout 1998, Benedek Broadcasting's cash needs has
required the use of the Revolving Credit Facility for general working capital
purposes and to fund capital expenditures. During the nine months ended
September 30, 1998, the highest outstanding balance under the Revolving Credit
Facility was $14.6 million. The Revolving Credit Facility has a term expiring in
2004 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 Loans and the Revolving Credit Facility are secured by certain
of Benedek Broadcasting's present and future property and assets. The Term Loans
are also guaranteed by BLC, a wholly-owned subsidiary of Benedek Broadcasting
that holds the FCC licenses and authorizations for the Stations, and is secured
by all of the common stock of BLC.
The Term Loans and the Revolving Credit Facility contain certain
financial covenants, including, but not limited to, covenants related to cash
interest coverage, maximum leverage ratio and minimum Consolidated Adjusted
EBITDA (as defined). In addition, the Term Loans and the Revolving Credit
Facility
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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 Benedek Communications) transactions
with affiliates, mergers and acquisitions, sales of assets, guarantees and
investments. The Term Loans 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 the Company.
RECENT DEVELOPMENTS
Effective September 21, 1998, the Company began delivering The Warner
Television Network programming to local cable companies in 15 of the Company's
20 markets which rank above market 100 as measured by A.C. Nielsen Company's
surveys. These local affiliates are called the "WeB" and are operated by a
newly-formed subsidiary of Benedek Broadcasting called Benedek Cable, Inc.
("BCI"). The WeB is a 24 hour, seven day a week television channel which
broadcasts The Warner Bros. Television Network prime time programming, WB
children's programming and syndicated programming of Warner Bros. and others.
The Company is continuing its negotiations with cable systems in its markets for
the carriage of WeB programming to all households within its markets. The
Company is responsible for all local sales efforts for the new channels in its
markets. The Company does not anticipate a significant effect on operations
during 1998 nor were significant capital expenditures required in connection
with the development of its WeB affiliates.
During October 1998, the Company transferred WMTV, Madison, Wisconsin
to a trust ("The WMTV Trust") due to the Grade A broadcast signal overlap
between WMTV and the Company's station in Rockford, Illinois. Under the FCC's
current duopoly rules, the Company will be required to dispose of one of such
stations within six months after the transfer to the trust. The Company is
seeking to comply with the FCC requirements by exchanging one of the stations
for another broadcast station.
On October 1, 1998, Benedek Communications purchased 50,000 of its
outstanding warrants for $0.5 million. Of the 600,000 warrants issued during
1996, 550,000 warrants remain outstanding.
SEASONALITY
Net revenues and operating cash flow of the Company are generally the
lowest during the first quarter of each year followed in rank by the third
quarter. The fourth quarter of each year is generally the highest quarter for
net revenue and Adjusted EBITDA due to increased expenditures by advertisers in
anticipation of holiday season consumer spending and an increase in viewership
during this period.
YEAR 2000
The Company has conducted a comprehensive review of its computer
systems to identify the systems that could be affected by the Year 2000 Issue,
and is developing an implementation plan to resolve the issue. The issue is
whether computer systems will properly recognize date sensitive information when
the year changes to 2000. Systems that do not properly recognize such
information could generate erroneous data or cause a system to fail. In the
sales system area, the majority of applications have been identified as being
Year 2000 compliant due to their recent implementation. The Company's core
financial system is not Year 2000 compliant but is scheduled for upgrade or
replacement in 1999. Based on the review of the computer
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systems, management does not believe the cost of remediation will be material to
the Company's financial systems.
RECENTLY PROMULGATED ACCOUNTING STANDARDS
The Financial Accounting Standards Board (the "FASB") has issued two
new pronouncements that the Company will be required to adopt December 31, 1998.
These pronouncements are not expected to have a significant impact on the
Company's financial statements.
FASB Statement No. 130 "Reporting Comprehensive Income" establishes
standards for reporting and display of comprehensive income and its components
in the financial statements. This statement requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. This statement requires that
a company (a) classify terms of other comprehensive income by their nature in a
financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of a statement of financial position. The Company
currently has no items of comprehensive income.
FASB Statement No. 131 "Disclosures about Segments of an Enterprise and
Related Information" establishes standards for reporting information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial reports
issued to stockholders. Operating segments are components of an enterprise about
which separate financial information is available and evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. The Company does not divide its business into operating
segments.
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PART II - OTHER INFORMATION
ITEM 2. LEGAL PROCEEDINGS.
The Company currently and from time to time is involved in litigation
incidental to the conduct of its business. The Company (including in its
capacity as successor of Brissette) is not currently a party to any lawsuit or
proceeding which, in the opinion of management, is likely to have a material
adverse effect on the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a)(3) Exhibits.
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<S> <C> <C>
3.1 -- Certificate of Incorporation of Benedek Communications Corporation, as amended,
incorporated by reference to Exhibit 3.1 to Benedek Communications Corporation's
Registration Statement on Form S-4, File No. 333-09529, filed on August 2, 1996 (the
"S-4 Registration Statement").
3.2 -- By-Laws of Benedek Communications Corporation, incorporated by reference to
Exhibit 3.2 to the S-4 Registration Statement.
3.3 -- Certificate of Designation of the Powers, Preferences and Relative, Participating,
Optional and Other Special Rights of 11.1/2% Senior Exchangeable Preferred Stock due
2008 and Qualifications, Limitations and Restrictions thereof of Benedek
Communications Corporation, incorporated by reference to Exhibit 3.3 of Benedek
Communications Corporation's Registration Statement on Form S-4, File No. 333-
09529, filed on June 9, 1998.
3.4 -- Certificate of Designation, Preferences and Relative, Participating, Optional and Other
Special Rights of Series C Junior Discount Preferred Stock and Qualifications,
Limitations and Restrictions thereof of Benedek Communications Corporation,
incorporated by reference to Exhibit 3.4 to the S-4 Registration Statement.
3.5 -- Certificate of Incorporation of Benedek Broadcasting Corporation, as amended,
incorporated by reference to Exhibit 3.1 to Benedek Broadcasting Corporation's
Registration Statement on Form S-1, File No. 33-91412, filed on April 20, 1995 (the
"S-1 Registration Statement").
3.6 -- By-Laws of Benedek Broadcasting Corporation, as amended, incorporated by reference
to Exhibit 3.2 to the S-1 Registration Statement.
3.7 -- Certificate of Incorporation of Benedek License Corporation, incorporated by reference
to Exhibit 3.3 to Benedek Broadcasting Corporation's Quarterly Report on From 10-Q
for the quarter ended June 30, 1996 (the "Second Quarter 1996 10-Q").
3.8 -- By-Laws of Benedek License Corporation, incorporated by reference to Exhibit 3.4 to
the Second Quarter 1996 10-Q.
4.1 -- Indenture dated as of May 15, 1996 between Benedek Communications Corporation
and United States Trust Company of New York, relating to the 13 1/4% Senior
Subordinated Discount Notes due 2006 of Benedek Communications Corporation,
incorporated by reference to Exhibit 4.1 to the S-4 Registration Statement.
</TABLE>
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<S> <C> <C>
4.2 -- Form of 13 1/4% Senior Subordinated Discount Note due 2006 of Benedek
Communications Corporation (included in Exhibit 4.1 hereof), incorporated by
reference to Exhibit 4.2 to the S-4 Registration Statement.
4.3 -- Indenture dated as of March 1, 1995 between Benedek
Broadcasting Corporation and The Bank of New York,
relating to the 11 7/8% Senior Secured Notes due 2005
of Benedek Broadcasting Corporation, incorporated by
reference to Exhibit 4.3 to the S-4 Registration
Statement.
4.4 -- Form of 11 7/8% Senior Secured Note due 2005 of Benedek Broadcasting Corporation
(included in Exhibit 4.3 hereof), incorporated by reference to Exhibit 4.4 to the S-4
Registration Statement.
4.5 -- First Supplemental Indenture dated as of June 6, 1996 among Benedek Broadcasting
Corporation, Benedek License Corporation and The Bank of New York, incorporated
by reference to Exhibit 4.3 to the Second Quarter 1996 10-Q.
4.6 -- Certificate of Designation of the Powers, Preferences and Relative, Participating,
Optional and Other Special Rights of 11 1/2% Senior Exchangeable Preferred Stock due
2008 and Qualifications, Limitations and Restrictions thereof of Benedek
Communications Corporation (filed as Exhibit 3.3 hereof), incorporated by reference
to Exhibit 4.6 to Benedek Communication's Registration Statement on Form S-4, File
No. 333-09529, filed on June 9, 1998.
4.7 -- Certificate of Designation, Preferences and Relative, Participating, Optional and Other
Special Rights of Series C Junior Discount Preferred Stock and Qualifications,
Limitations and Restrictions thereof of Benedek Communications Corporation (filed as
Exhibit 3.4 hereof), incorporated by reference to Exhibit 4.6 to the S-4 Registration
Statement.
4.8 -- Warrant Agreement dated as of June 5, 1996 between Benedek Communications
Corporation and IBJ Schroder Bank & Trust Company with respect to Class A
Common Stock of Benedek Communications Corporation, incorporated by reference
to Exhibit 4.7 to the S-4 Registration Statement.
*10.1 -- Limited Waiver and First Amendment to Credit Agreemend dated as of May 6, 1998, among
Benedek Communications Corporation, Benedek Broadcasting Corporation, the Lenders listed
therein and Bankers Trust Company, as Agent.
*10.2 -- Second Amendment to the Credit Agreement dated as of October 31,1998, among Benedek
Communications Corporation, Benedek Broadcasting Corporation, the Lenders listed therein
and Bankers Trust Company, as Agent.
*27.1 -- Financial Data Schedule pursuant to Article 5 of Regulation S-X with respect to
Benedek Communications Corporation.
*27.2 -- Financial Data Schedule pursuant to Article 5 of Regulation S-X with respect to
Benedek Broadcasting Corporation.
</TABLE>
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* Filed herewith
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
BENEDEK COMMUNICATIONS CORPORATION
(REGISTRANT)
By: /s/ RONALD L. LINDWALL
.....................................................
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
DATE: November 16, 1998
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, 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
.....................................................
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
DATE: November 16, 1998
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, 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
.....................................................
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
DATE: November 16, 1998
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EXECUTION
LIMITED WAIVER
AND FIRST AMENDMENT TO CREDIT AGREEMENT
This LIMITED WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT (this
"AMENDMENT") is dated as of May 6, 1998 and entered into by and among BENEDEK
COMMUNICATIONS CORPORATION, a Delaware corporation ("BCC"), BENEDEK BROADCASTING
CORPORATION, a Delaware corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a
"LENDER" and collectively as "LENDERS"), and Bankers Trust Company ("BTCO"), as
agent for Lenders (in such capacity, "AGENT"), and solely with respect to
Section 5 hereof, Benedek License Corporation, a Delaware corporation ("BLC"),
and is made with reference to that certain Amended and Restated Credit Agreement
dated as of December 17, 1997 (the "CREDIT AGREEMENT"), by and among BCC,
Company, Lenders and Agent. Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, BCC, Company and Lenders desire to (i) amend the Credit
Agreement to permit BCC to issue $100,000,000 in aggregate principal amount of
__% Senior Exchangeable Preferred Stock, (ii) make certain other amendments as
set forth below and (iii) permit the net proceeds resulting from the sale of
such __% Senior Exchangeable Preferred Stock to be utilized to (a) redeem 100%
of the Exchangeable Preferred Stock and (b) for other general corporate
purposes.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1
AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1: PROVISIONS RELATING TO DEFINED TERMS
A. Subsection 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:
"NEW EXCHANGE DEBENTURE INDENTURE" means the indenture pursuant to
which the New Exchange Indentures may be issued in the form described
in the draft Offering Memorandum dated April 28, 1998 and otherwise in
form and substance satisfactory to Agent and delivered to Lenders on or
before May 15, 1998, as such indenture may be amended from time to time
to the extent permitted under subsection 6.14.
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"NEW EXCHANGE DEBENTURES" means the ___% Exchange Debentures due 2008
of BCC which may be issued pursuant to the New Exchange Debenture
Indenture in exchange for the New Exchangeable Preferred Stock.
"NEW EXCHANGEABLE PREFERRED CERTIFICATE OF DESIGNATION" means the
provisions of BCC's Certificate of Designation, Preferences Relative,
Participating, Optional and Other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions Thereof relating to the
New Exchangeable Preferred Stock, in the form described in the draft
Offering Memorandum dated April 28, 1998 and otherwise in form and
substance satisfactory to Agent and delivered to Lenders on or before
May 15, 1998, and as such provisions may be amended from time to time
thereafter to the extent permitted under subsection 6.14.
"NEW EXCHANGEABLE PREFERRED STOCK" means the __% Exchangeable Preferred
Stock due 2008 of BCC, par value $.01 per share, with a liquidation
preference of $1,000 per share and with the other terms set forth in
the New Exchangeable Preferred Certificate of Designation.
"LIQUIDATED DAMAGES" means additional dividends or interest payable at
the rate of 0.5% per annum on the New Exchangeable Preferred Stock or
New Exchange Debentures, as the case may be, as a result of BCC's
failure to comply with the registration rights granted in connection
therewith.
B. Subsection 1.1 of the Credit Agreement is hereby further amended by
deleting the definition of "Related Agreements" therefrom in its entirety and
substituting the following therefor:
"RELATED AGREEMENTS" means, collectively, the Brissette Acquisition
Agreement, the Stauffer Acquisition Agreement, the Exchangeable
Preferred Certificate of Designation, the New 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, the New Exchange Debentures, the Exchange Debenture
Indenture and the New Exchange Debenture Indenture.
C. Subsection 1.1 of the Credit Agreement is hereby further amended by
inserting the phrase "Liquidated Damages, if any," immediately following the
second reference to "including" in the definition of "Consolidated Interest
Expense" and immediately prior to the reference to "all commissions" in such
definition.
D. Subsection 1.1 of the Credit Agreement is hereby further amended by
deleting clause (ii) of the definition of "Subordinated Indebtedness" and
substituting the following therefor:
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"(ii) any Indebtedness of BCC evidenced by the Exchange Debentures or
the New Exchange Debentures and".
1.2 AMENDMENTS TO SECTION 4: COMPANY'S REPRESENTATIONS AND WARRANTIES
A. Subsection 4.2C of the Credit Agreement is hereby amended by
inserting the phrase ",New Exchangeable Preferred Stock" immediately after the
reference to "Exchangeable Preferred Stock" contained therein .
B. Subsection 4.2E(i) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting the following therefor:
"(i) Seller Preferred Stock, Exchangeable Preferred Stock, New
Exchangeable Preferred Stock and Warrants. The Seller Preferred Stock,
Exchangeable Preferred Stock and Warrants sold on or before the
Acquisition Date are duly and validly issued, fully paid and
nonassessable. The New Exchangeable Preferred Stock sold on or before
May 15, 1998 is or will be, as the case may be, duly and validly
issued, fully paid and non-assessable. 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, New Exchangeable
Preferred Stock and Warrants, have either (a) been registered or
qualified under applicable federal and state securities laws or (b) are
exempt therefrom.
1.3 AMENDMENTS TO SECTION 5: COMPANY'S AFFIRMATIVE COVENANTS
A. Subsection 5.1(x) of the Credit Agreement is hereby amended by
inserting the phrase "New Exchangeable Preferred Certificate of Designation"
immediately after the reference to "Exchangeable Preferred Certificate of
Designation," contained in clause (d) of subsection 5.1(x).
B. Subsection 5.2 of the Credit Agreement is hereby amended by
inserting the phrase ",New Exchangeable Preferred Stock" immediately following
the first reference to "Seller Preferred Stock" and immediately prior to the
reference to "and/or Exchangeable Preferred Stock".
C. Section 5 of the Credit Agreement is hereby further amended by
adding the following new subsection thereto:
"5.15 NEW EXCHANGEABLE PREFERRED STOCK.
On or before May 15, 1998, each of BCC and Company shall
deliver to Lenders a copy of each of the documents, agreements,
certificates and instruments executed and delivered or to be executed
and delivered in connection with the New
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Exchangeable Preferred Stock, including, without limitation, the New
Exchangeable Preferred Certificate of Designation, the New Exchange
Debentures, and the New Exchange Debenture Indenture (collectively, the
"NEW EXCHANGEABLE PREFERRED STOCK DOCUMENTS"), and such New
Exchangeable Preferred Stock Documents shall be in the form described
in that certain draft Offering Memorandum dated April 28, 1998 and
otherwise in form and substance satisfactory to Agent."
1.4 AMENDMENTS TO SECTION 6: COMPANY'S NEGATIVE COVENANTS
A. Subsection 6.5 of the Credit Agreement is hereby amended by deleting
the reference to "and" contained in clause (v) thereof, deleting the reference
to "." in clause (vi) thereof and substituting a reference to "; and" therefor
and inserting the following "(vii) BCC may pay any Liquidated Damages required
to be paid in connection with the New Exchangeable Preferred Stock."
B. Subsection 6.13 of the Credit Agreement is hereby amended by
inserting a reference to ", New Exchangeable Preferred Stock" immediately
following the reference to "Exchangeable Preferred Stock and Warrants" contained
therein.
SECTION 2
WAIVER
2.1 WAIVER. Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of BCC and Company herein
contained, Lenders hereby waive compliance with (i) the provisions of
subsections 5.12A of the Credit Agreement to the extent, and only to the extent,
necessary to permit (a) BCC to apply up to $97,000,000 of the net proceeds of
the New Exchangeable Preferred Stock (the "NET NEW SECURITIES PROCEEDS") to (1)
redeem all of the issued and outstanding Exchangeable Preferred Stock, (2) pay
any premium in connection with the redemption of the Exchangeable Preferred
Stock and (3) pay fees and expenses in connection with the issuance of New
Exchangeable Preferred Stock and the redemption of the Exchangeable Preferred
Stock and (b) BCC to apply the balance of such Net New Securities Proceeds (the
"NET SECURITIES PROCEEDS BALANCE") to its general corporate purposes; provided
that BCC will redeem all of the issued and outstanding Exchangeable Preferred
Stock on or before June 15, 1998, (ii) the provisions of subsection
2.4(B)(iii)(f) of the Credit Agreement to the extent, and only to the extent,
necessary to permit Company to apply the portion of the Net Securities Proceeds
Balance that constitute Net Contribution Proceeds, if any, to its general
corporate purposes, including to repay the Revolving Loans without permanently
reducing the Revolving Loan Commitments and (iii) the provisions of subsection
6.5 of the Credit Agreement to the extent, and solely to the extent, necessary
to permit BCC to redeem all of the issued and outstanding Exchangeable Preferred
Stock with, together with the payment of any premiums in connection with the
redemption of the Exchangeable Preferred Stock and any fees and expenses in
connection with the issuance of the New Exchangeable Preferred Stock and the
redemption of the Exchangeable Preferred Stock, up to $97,000,000 of the Net
New Securities Proceeds of the
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sale of the New Exchangeable Preferred Stock; provided that BCC shall have
redeemed all of the issued and outstanding Exchangeable Preferred Stock on or
before June 15, 1998.
2.2 LIMITATION OF WAIVER.
Without limiting the generality of the provisions of subsection 9.6
of the Credit Agreement, the waiver set forth above shall be limited precisely
as written and relates solely to the noncompliance by BCC and Company, as the
case may be, with the provisions of subsections 5.12A, 2.4B(iii)(f) and 6.5 of
the Credit Agreement in the manner and to the extent described above, and
nothing in this Section 2 shall be deemed to:
(a) constitute a waiver of compliance by BCC and Company, as the
case may be, with respect to (i) subsections 5.12A, 2.4B(iii)(f) and
6.5 of the Credit Agreement in any other instance or (ii) any other
term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein (whether in connection with
the issuance, sale or redemption described herein or otherwise); or
(b) prejudice any right or remedy that Agent or any Lender may now
have (except to the extent such right or remedy was based upon existing
defaults that will not exist after giving effect to this Section 2) or
may have in the future under or in connection with the Credit Agreement
or any other instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
SECTION 3
CONDITIONS TO EFFECTIVENESS
Section 1 and Section 2 of this Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIRST AMENDMENT
EFFECTIVE DATE"):
A. On or before the First Amendment Effective Date, each of BCC,
Company and BLC shall deliver to Lenders (or to Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) the following, each, unless otherwise noted, dated the First
Amendment Effective Date:
(i) Resolutions of its Board of Directors approving and authorizing
the execution, delivery, and performance of this Amendment and each of
the New Exchangeable Preferred Stock Documents, certified as of the
First Amendment Effective Date by its corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment;
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(ii) Signature and incumbency certificates of its officers
executing this Amendment; and
(iii) Executed copies of this Amendment.
B. On or before the First Amendment Effective Date, 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 Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Agent and such counsel, and Agent and such
counsel shall have received all such counterpart originals or certified copies
of such documents (other than New Exchangeable Preferred Stock Documents to be
executed and delivered after the First Amendment Effective Date) as Agent may
reasonably request.
SECTION 4
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, each of BCC and Company
represents and warrants to each Lender that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. Each of BCC and Company has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT") and
the New Exchangeable Preferred Stock Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the New Exchangeable Preferred Stock Documents have been duly
authorized by all necessary corporate action on the part of Company and BCC, as
the case may be.
C. NO CONFLICT. The execution and delivery by each of BCC and Company
of this Amendment and the New Exchangeable Preferred Stock Documents and the
performance by each of BCC and Company of the Amended Agreement and the New
Exchangeable Preferred Documents do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to BCC or any of
its 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 BCC or any of its 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 BCC or any of its Subsidiaries, or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of BCC or any of its Subsidiaries,
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except for such approvals or consents which have been obtained on or before the
First Amendment Effective Date and disclosed in writing to Lender.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each of BCC and
Company of this Amendment and the New Exchangeable Preferred Stock Documents and
the performance by each of BCC and Company of the Amended Agreement and the New
Exchangeable Preferred Stock Documents 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.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have
been and, upon their execution and delivery, the New Exchangeable Preferred
Stock Documents will be, duly executed and delivered by each of BCC and Company
and this Amendment and the Amended Agreement are and, upon their execution and
delivery, the New Exchangeable Preferred Stock Documents will be, the legally
valid and binding obligations of BCC and Company, enforceable against BCC and
Company 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.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective 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 they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.
H. ORGANIZATIONAL DOCUMENTS. None of the Certificate of Incorporation,
Bylaws or any other constating document of any of BCC, Company or BLC has been
amended, modified or otherwise supplemented since December 17, 1997 and the
Certificates of Incorporation, Bylaws and other constating documents of each of
BCC, Company and BLC delivered to Agent and Lenders in connection with execution
and delivery of the Credit Agreement on December 19, 1997 are true, correct and
complete copies of such Certificate of Incorporation, Bylaws or other constating
documents as in effect as of the date hereof.
SECTION 5
ACKNOWLEDGMENT AND CONSENT
BLC hereby acknowledges that it has read this Amendment and consents to
the terms hereof and further hereby confirms and agrees that, notwithstanding
the effectiveness of this Amendment, the obligations of BLC under the License
Sub Guaranty and each of the other
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Loan Documents to which it is a party shall not be impaired and the License Sub
Guaranty and each of the other Loan Documents to which it is a party are, and
shall continue to be, in full force and effect and are hereby confirmed and
ratified in all respects.
SECTION 6
MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the First Amendment Effective Date, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and
each reference in the other Loan Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of Agent or any Lender under, the Credit Agreement or any of the other
Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees and
expenses as described in subsection 9.2 of the Credit Agreement incurred by
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT 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.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which
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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 Amendment (other than the provisions of Sections 1 and 2
hereof, the effectiveness of which is governed by Section 3 hereof) shall become
effective upon the execution of a counterpart hereof by BCC, Company, BLC and
Requisite Lenders and receipt by Company and Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BCC:
BENEDEK COMMUNICATIONS CORPORATION
By: /s/ Ronald L. Lindwall
_________________________
Title:
COMPANY:
BENEDEK BROADCASTING CORPORATION
By: /s/ Ronald L. Lindwall
_________________________
Title:
LENDERS:
BANKERS TRUST COMPANY,
individually and as Agent
By: /s/_______________________
Title:
NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/_______________________
Title:
S-1
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<PAGE>
PILGRIM AMERICA PRIME RATE TRUST
By: PILGRIM AMERICA INVESTMENTS, INC.,
as its Investment Manager
By: /s/ THOMAS C. HUNT
__________________________________
Thomas C. Hunt
Title: Assistant Portfolio Manager
PRIME INCOME TRUST
By: /s/ _______________________
Title: Authorized Signatory
KZH HOLDING CORPORATION III
By: _________________________
Title:
SENIOR DEBT PORTFOLIO
BY: BOSTON MANAGEMENT RESEARCH, AS
Investment Advisor
By: /s/ Scott H. Page
______________________
Scott H. Page
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: _________________________
Title:
VAN KAMPEN CLO I, LIMITED
By: VAN KAMPEN AMERICAN CAPITAL
MANAGEMENT, INC.,
as Collateral Manager
By: /s/ Jeffrey W. Mallet
_________________________
Jeffrey W. Mallet
Title: Senior Vice President
& Director
S-2
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<PAGE>
VAN KAMPEN CLO I, LIMITED
By: VAN KAMPEN AMERICAN CAPITAL
MANAGEMENT, INC.,
as Collateral Manager
By: _________________________
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: /s/ Jeffrey W. Mallet
_________________________
Jeffrey W. Mallet
Title: Senior Vice President
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/
________________________
Title: Manager Director
STRATA FUNDING LTD.
By: /s/
__________________________
Title: Director
S-3
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<PAGE>
ACKNOWLEDGED AND CONSENTED
TO AS OF MAY 6, 1998:
BENEDEK LICENSE CORPORATION
By: /s/ Ronald L. Lindwall
_________________________
Title:
S-4
<PAGE>
<PAGE>
EXECUTION
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of October 31, 1998 and entered into by and among BENEDEK
COMMUNICATIONS CORPORATION, a Delaware corporation ("BCC"), BENEDEK BROADCASTING
CORPORATION, a Delaware corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS
LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a
"LENDER" and collectively as "LENDERS"), and Bankers Trust Company ("BTCO"), as
agent for Lenders (in such capacity, "AGENT"), and solely with respect to
Sections 3 and 4 hereof, Benedek License Corporation, a Delaware corporation
("LICENSE SUB"), Philip A. Jones, solely in his capacity as Trustee under The
WMTV Trust ("WMTV TRUST"), a Wisconsin trust created pursuant to a Trust
Agreement dated as of September 21, 1998 (the "TRUSTEE") and WMTV License Co.,
LLC, a Delaware limited liability company ("WMTV LICENSE CO.") and is made with
reference to that certain Amended and Restated Credit Agreement dated as of
December 17, 1997, by and among BCC, Company, Lenders and Agent, as amended by
that certain Limited Waiver and First Amendment to Credit Agreement, dated as of
May 6, 1998, by and among BCC, Company, the financial institutions listed on the
signature pages thereof as Lenders and Agent, and solely with respect to Section
5 thereof, License Sub (such Amended and Restated Credit Agreement, as so
amended, the "CREDIT AGREEMENT"). Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, Company owns and operates Stations WIFR (TV),
Rockford, Illinois ("WIFR"), and WMTV (TV), Madison, Wisconsin ("WMTV"). The FCC
Licenses for WIFR and WMTV are owned by License Sub. Company has been the
licensee of WIFR since 1986. In June 1996, Company acquired WMTV as part of
Company's acquisition of all of the outstanding stock of Brissette. The
Communications Act does not permit Company to own and operate both WMTV and
WIFR. Pursuant to a temporary waiver of such rules by the FCC, Company has
continued to own both WMTV and WIFR since the acquisition of WMTV;
WHEREAS, subsection 6.7(xii) of the Credit Agreement provides
that, in the event that the FCC requires Company to divest itself of either WIFR
or WMTV in order to comply with the FCC duopoly rules, Company may assign (x)
the assets associated with either such Station to a grantor trust and (y) the
FCC Licenses associated with such Station to a limited liability company
wholly-owned by such grantor trust; provided that such grantor trust shall grant
a First Priority Lien in favor of Agent or the Senior Note Trustee, as the case
may be, on such assets and the equity interests in such limited liability
company pursuant to
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documentation substantially similar to certain of the Collateral Documents as
collateral security for the Obligations of Company and obligations of Company
pursuant to the Existing Senior Note Indenture, as the case may be;
WHEREAS, in order to comply with the Communications Act,
Company has applied for and received the approval of the FCC to (a) transfer the
assets of WMTV (other than the FCC Licenses associated with WMTV) to the Trustee
for the benefit of Company and (b) cause License Sub to transfer the FCC
Licenses associated with WMTV to WMTV License Co., in each case pending the sale
of WMTV or WIFR. The Trustee is the sole member of WMTV License Co.;
WHEREAS, in connection with Company's transfer of the assets of
WMTV (other than the FCC Licenses associated with WMTV) to the Trustee for the
benefit of Company, the Trustee will execute and deliver (v) that certain WMTV
Trust Guaranty dated as of October 31, 1998 (the "WMTV TRUST GUARANTY"), (w)
that certain WMTV Trust Acquired Assets Security Agreement dated as of October
31, 1998 (the "WMTV TRUST ACQUIRED ASSETS SECURITY AGREEMENT"), (x) that certain
WMTV Trust Accounts Receivable Security Agreement dated as of October 31, 1998
(the "WMTV TRUST ACCOUNTS RECEIVABLE SECURITY AGREEMENT"), (y) that certain WMTV
Trust Pledge and Security Agreement dated as of October 31, 1998 (the "WMTV
TRUST PLEDGE AND SECURITY AGREEMENT") and (z) that certain WMTV Trust Tangible
Assets Security Agreement dated as of October 31, 1998 (the "WMTV TRUST TANGIBLE
ASSETS SECURITY AGREEMENT"; and together with the WMTV Trust Acquired Assets
Security Agreement, the WMTV Trust Accounts Receivable Security Agreement and
the WMTV Trust Pledge and Security Agreement, the "WMTV TRUST SECURITY
DOCUMENTS");
WHEREAS, in connection with License Sub's transfer of the FCC
Licenses associated with WMTV to WMTV License Co., WMTV License Co. will enter
into that certain Additional License Sub Guaranty dated as of October 31, 1998
(the "ADDITIONAL LICENSE SUB GUARANTY"; and together with the WMTV Trust
Guaranty, the WMTV Acquired Assets Security Agreement, the WMTV Trust Accounts
Receivable Agreement, the WMTV Trust Pledge and Security Agreement, the WMTV
Trust Tangible Assets Security Agreement and the Mortgage Amendment (as defined
below), the "TRANSFER SUPPORT DOCUMENTS"); and
WHEREAS, BCC, Company and Lenders desire to make certain (x)
amendments to the Credit Agreement in connection with (i) the Trustee's
execution and delivery of the WMTV Trust Guaranty and the WMTV Trust Security
Documents and (ii) WMTV License Co.'s execution and delivery of the Additional
License Sub Guaranty and (y) other amendments as set forth below.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
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SECTION 1
AMENDMENTS TO THE CREDIT AGREEMENT
AND CERTAIN LOAN DOCUMENTS
SECTION 1.1 AMENDMENTS TO SECTION 1: PROVISIONS RELATING TO DEFINED TERMS
A. Subsection 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions, which shall be inserted in proper
alphabetical order:
"ADDITIONAL LICENSE SUB GUARANTY" means the Additional License
Sub Guaranty executed and delivered by WMTV License Co. on the Second
Amendment Effective Date, substantially in the form of Exhibit XXV
annexed hereto, as such Additional License Sub Guaranty may thereafter
be amended, supplemented or otherwise modified from time to time.
"SECOND AMENDMENT EFFECTIVE DATE" means October 31, 1998.
"TRUSTEE" means Philip A. Jones, solely in his capacity as
Trustee under The WMTV Trust, a Wisconsin trust created pursuant to a
Trust Agreement dated as of September 21, 1998.
"TRUST AGREEMENT" means that certain Trust Agreement dated as
of September 21, 1998 by and among the Trustee and Company, as amended
from time to time pursuant to subsection 6.14.
"WMTV LICENSE CO." means WMTV License Co., LLC, a Delaware
limited liability company.
"WMTV TRUST" means The WMTV Trust, a Wisconsin trust.
"WMTV TRUST ACQUIRED ASSETS SECURITY AGREEMENT" means the WMTV
Trust Acquired Assets Security Agreement executed and delivered by the
Trustee and Agent on or before the Second Amendment Effective Date,
substantially in the form of Exhibit XXVI annexed hereto, as such WMTV
Trust Acquired Assets Security Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
"WMTV TRUST ACCOUNTS RECEIVABLE SECURITY AGREEMENT" means the
WMTV Trust Accounts Receivable Security Agreement executed and
delivered by the Trustee and Agent on or before the Second Amendment
Effective Date, substantially in the form of Exhibit XXVII annexed
hereto, as such WMTV Trust Accounts Receivable Security Agreement may
thereafter be amended, supplemented or otherwise modified from time to
time.
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"WMTV TRUST GUARANTY" means the WMTV Trust Guaranty executed
and delivered by the Trustee on or before the Second Amendment
Effective Date, substantially in the form of Exhibit XXVIII annexed
hereto, as such WMTV Trust Guaranty may thereafter be amended,
supplemented or otherwise modified from time to time.
"WMTV TRUST PLEDGE AND SECURITY AGREEMENT" means the WMTV Trust
Pledge and Security Agreement executed and delivered by the Trustee and
The Bank of New York, a New York banking corporation, on or before the
Second Amendment Effective Date, substantially in the form of Exhibit
XXIX annexed hereto, as amended from time to time to the extent
permitted under subsection 6.14.
"WMTV TRUST SECURITY AGREEMENTS" means the WMTV Trust Acquired
Assets Security Agreement, the WMTV Trust Accounts Receivable Security
Agreement, the WMTV Trust Pledge and Security Agreement and the WMTV
Trust Tangible Assets Security Agreement.
"WMTV TRUST TANGIBLE ASSETS SECURITY AGREEMENT" means the WMTV
Trust Tangible Assets Security Agreement executed and delivered by the
Trustee and Agent on or before the Second Amendment Effective Date,
substantially in the form of Exhibit XXX annexed hereto, as such WMTV
Trust Tangible Assets Security Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
B. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Borrowing Base" by inserting the phrase
"and the Trustee" after the reference to "Company" contained therein.
C. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Collateral Documents" by inserting the
phrase ", the WMTV Trust Security Agreements" immediately following the
reference to "Mortgages" contained therein.
D. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Guaranties" by deleting the word "and"
immediately following the reference to "BCC Guaranty" contained therein and
substituting "," therefor and by inserting the phrase ", the Additional License
Sub Guaranty and the WMTV Trust Guaranty" immediately after the reference to
"the License Sub Guaranty" contained therein.
E. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Loan Party" by inserting the phrase ",
the Trustee and WMTV License Co." immediately following the reference to
"License Sub" contained therein.
F. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Pledged Collateral" by inserting the
phrase ", the WMTV Trust
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Pledge and Security Agreement" immediately after the reference to "BCC Pledge
Agreement" contained therein.
G. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Program Obligations" by deleting the
phrase "the Company" contained therein and substituting the phrase "each of
Company and the Trustee" therefor.
H. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Related Agreements" by inserting the
phrase ", Existing Company Pledge Agreement, WMTV Trust Pledge and Security
Agreement, the Trust Agreement" after the reference to "Stauffer Acquisition
Agreement" contained therein.
I. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Restricted Junior Payment" by inserting
the phrase "or any membership interests" after the first, third and fourth
reference to "class of stock" contained therein.
J. Subsection 1.1 of the Credit Agreement is hereby further
amended by amending the definition of "Subsidiaries" by inserting the sentence
"It is expressly acknowledged and agreed that each of the Trustee, WMTV Trust
and WMTV License Co. shall be deemed to be a Subsidiary of each of Company and
BCC for all purposes under this Agreement; provided that Lenders acknowledge and
agree that the Trustee shall be deemed to be a "Subsidiary" under this Agreement
solely in his capacity as trustee under the WMTV Trust and not in his individual
capacity" immediately following the last sentence thereof.
SECTION 1.2 AMENDMENTS TO SECTION 2: CONVERSION; AMOUNTS AND TERMS OF REVOLVING
LOAN COMMITMENTS AND LOANS
Subsection 2.4D of the Credit Agreement is hereby amended by
deleting the reference to "either" contained in clause (ii) thereof and
substituting "any" therefor and by inserting the phrase ", the Additional
License Sub Guaranty, the WMTV Trust Guaranty" immediately after the reference
to "the BCC Guaranty" contained in clause (iii) thereof.
SECTION 1.3 AMENDMENTS TO SECTION 4: REPRESENTATIONS AND WARRANTIES
Subsection 4.1E of the Credit Agreement is hereby amended by
inserting the phrase "and except, from and after the Second Amendment Effective
Date, for the FCC Licenses related to WMTV, which are held by WMTV License Co.,"
immediately following the phrase "Except as set forth on Schedule 4.1E" in the
penultimate sentence of Section 4.1E(i).
SECTION 1.4 AMENDMENTS TO SECTION 5: COMPANY'S AFFIRMATIVE COVENANTS
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A. Subsection 5.11B of the Credit Agreement is hereby amended
by deleting the reference to "Company's" contained therein and substituting
"either Company's or the Trustee's" therefor.
SECTION 1.5 AMENDMENTS TO SECTION 6: COMPANY'S NEGATIVE COVENANTS
A. Subsection 6.4(i) of the Credit Agreement is hereby amended
by inserting the phrase ", WMTV License Co. may become and remain liable with
respect to Contingent Obligations in respect of the Additional License Sub
Guaranty and the Existing Senior Note Indenture and the Trustee may become and
remain liable with respect to Contingent Obligations in respect of the WMTV
Guaranty and the Existing Senior Note Indenture" immediately following the
reference to "Existing Senior Note Indenture" contained therein.
B. Subsection 6.7(v) of the Credit Agreement is hereby amended
by inserting the phrase "and the Trustee may make Asset Sales of the Television
Station Asset Group with respect to WMTV" immediately following the first
reference to "Television Station Asset Group" contained therein and is hereby
further amended by inserting the phrase "provided that the foregoing clause (e)
shall not apply in the event that the Company elects (and delivers an Officer's
Certificate to Agent in form and substance satisfactory to Agent certifying as
to such election and the reasons therefor) to sell the Television Station Asset
Group with respect to WMTV held by the Trustee in order to comply with the
Communications Act;" immediately after the reference to "sale;" contained in
clause (e) of Subsection 6.7(v).
C. Subsection 6.12 of the Credit Agreement is hereby amended by
inserting the phrase ", the Trustee or WMTV License Co." immediately following
the reference to "License Sub" contained therein.
D. Subsection 6.13 of the Credit Agreement is hereby amended by
(i) inserting the following sentence immediately after the second sentence
thereof: "WMTV License Co. shall engage in no business other than the holding of
FCC Licenses related to WMTV and the performance of its obligations under the
Additional License Sub Guaranty and its guaranty of the Existing Senior Notes
and shall own no material assets other than FCC Licenses related to WMTV.", (ii)
inserting the following phrase after the first sentence of Section 6.13 "From
and after the Second Amendment Effective Date, the Trustee and the Trust, as the
case may be, shall not engage in any business other than the business engaged in
by the Trustee and the Trust, as the case may be, on the Second Amendment
Effective Date; provided that Lenders acknowledge and agree that the preceding
references to the Trustee in this sentence shall be a reference solely to the
Trustee in his capacity as trustee under the WMTV Trust and not in his
individual capacity" and (iii) inserting the phrase "and WMTV License Co."
immediately after the reference to "License Sub" contained in the penultimate
sentence of Section 6.13.
SECTION 1.6 AMENDMENTS TO SECTION 7: EVENTS OF DEFAULT
Subsection 7.13 of the Credit Agreement is hereby amended by
deleting the reference to "or" immediately preceding the reference to "(v)"
contained therein and
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substituting "," therefor and by inserting the following phrase immediately
after the reference to "License Sub" contained therein ", (vi) (a) Company shall
cease to own 100% of the beneficial interests in the WMTV Trust or (b) the
Trustee (or a successor thereto reasonably acceptable to Agent, such acceptance
to be acknowledged in writing by Agent) shall cease to be the trustee under the
Trust Agreement or (vii) (a) the Trustee (or a successor thereto reasonably
acceptable to Agent, such acceptance to be acknowledged in writing by Agent)
shall cease to be the sole member of WMTV License Co. or (b) the Trustee (or a
successor thereto reasonably acceptable to Agent, such acceptance to be
acknowledged in writing by Agent) shall cease to hold 100% of the membership
interests in WMTV License Co.; provided that the occurrence of any of the events
described in the foregoing clauses (vi) and (vii) of this Subsection 6.13 shall
not constitute an Event of Default if (x) such event occurs following a transfer
or other disposition of all of (i) the assets related to WMTV held by the
Trustee and (ii) the FCC Licenses held by WMTV License Co. that is permitted
pursuant to, and complies with, the terms of this Agreement and the other Loan
Documents and (y) prior to the occurrence of such event, BCC and its
Subsidiaries (including, without limitation, the Trust, the Trustee and WMTV
License Co.) shall have complied with all of their respective obligations,
covenants and agreements under this Agreement and the other Loan Documents
(including, without limitation, the application of the proceeds received by any
of the BCC and its Subsidiaries (including, without limitation, the Trustee, the
Trust and WMTV License Co.) in connection with such transfer or other
disposition in accordance with the terms of this Agreement) in connection with
such transfer or other disposition and otherwise; provided further that,
notwithstanding anything to the contrary contained herein, this subsection 6.13
shall not be deemed to be a consent to a transfer or other disposition of (x)
the assets related to WMTV held by the Trustee or (y) the FCC Licenses held by
WMTV License Co; or"
SECTION 1.7 AMENDMENTS TO SECTION 8: AGENT
A. Subsection 8.6 of the Credit Agreement is hereby amended by
inserting the following phrase at the end of the first sentence therein:
"; provided, however in connection with any Loan
Party's entering into any lease of equipment permitted pursuant to this
Agreement (including, without limitation, a Capital Lease permitted
under subsection 6.1(iii)), at the request of the lessor under such
equipment lease, from and after the Restatement Date, Agent, in its
sole discretion, may enter into a collateral waiver agreement with such
lessor pursuant to which Agent acknowledges that Agent, on behalf of
Lenders, waives any interests it has in the leased equipment to the
extent the lessor of the leased equipment has any rights or interest in
such equipment"
B. Subsection 8.6 of the Credit Agreement is hereby amended by
inserting the following phrase at the end of the seventh sentence thereof:
"and each Lender having Term Loans hereunder hereby
authorizes Agent to be the agent for and representative of Lenders
having Term Loans under the WMTV Trust Pledge and Security Agreement".
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SECTION 1.8 AMENDMENTS TO SECTION 9: MISCELLANEOUS
Section 9 of the Credit Agreement is hereby amended by
inserting the following new subsection:
"9.22 ADDITIONAL LICENSE SUB GUARANTY
Any amendment, modification, termination or waiver of
any provision of this Agreement or of the Notes, and any consent to any
departure by any Loan Party therefrom, that releases the WMTV License
Co. from its obligations under the Additional License Sub Guaranty or
releases the Trustee from its obligation under the WMTV Trust Guaranty,
in each case other than in accordance with the Loan Documents, shall be
effective only if evidenced by a writing signed by or on behalf of all
Lenders; provided that WMTV License Co. shall be released from its
obligations under the Additional License Sub Guaranty and the Trustee
shall be released from its obligations under the WMTV Trust Guaranty
following a transfer or other disposition of all of the assets related
to WMTV held by the Trustee and the FCC Licenses held by WMTV License
Co. that is permitted pursuant to, and complies with, the terms of this
Agreement and the other Loan Documents if, prior to such release each
of BCC and its Subsidiaries (including, without limitation, the Trust,
the Trustee and WMTV License Co.) shall have complied with all of their
respective obligations, covenants and agreements under this Agreement
and the other Loan Documents (including, without limitation, the
application of the proceeds received by any of BCC and its Subsidiaries
(including, without limitation, the Trustee, the Trust and WMTV License
Co.) in connection with such transfer or other disposition in
accordance with the terms of this Agreement) in connection with such
transfer or other disposition and otherwise; provided, further that,
notwithstanding anything to the contrary contained herein, this
Subsection 9.22 shall not be deemed to be a consent to a transfer or
other disposition of (x) the assets related to WMTV held by the Trustee
or (y) the FCC Licenses held by WMTV License Co."
SECTION 1.9 ADDITION OF EXHIBITS
A. Exhibit XXV: Form of Additional License Sub Guaranty. The
Credit Agreement is hereby amended by adding thereto a new Exhibit XXV in the
form of Annex A to this Amendment.
B. Exhibit XXVI: Form of WMTV Trust Acquired Assets Security
Agreement. The Credit Agreement is hereby amended by adding thereto a new
Exhibit XXVI in the form of Annex B to this Amendment.
C. Exhibit XXVII: Form of WMTV Trust Accounts Receivable
Security Agreement. The Credit Agreement is hereby amended by adding thereto a
new Exhibit XXVII in the form of Annex C to this Amendment.
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D. Exhibit XXVIII: Form of WMTV Trust Guaranty. The Credit
Agreement is hereby amended by adding thereto a new Exhibit XXVIII in the form
of Annex D to this Amendment.
E. Exhibit XXIX: Form of WMTV Trust Pledge and Security
Agreement. The Credit Agreement is hereby amended by adding thereto a new
Exhibit XXIX in the form of Annex E to this Amendment.
F. Exhibit XXX: Form of WMTV Trust Tangible Assets Security
Agreement. The Credit Agreement is hereby amended by adding thereto a new
Exhibit XXX in the form of Annex F to this Amendment.
SECTION 1.10 AMENDMENTS TO CERTAIN LOAN DOCUMENTS
A. Notwithstanding anything to the contrary contained herein,
Lenders hereby consent to the amendment of the Existing Company Pledge Agreement
pursuant to the letter agreement in the form of Annex I hereto.
B. Notwithstanding anything to the contrary contained herein,
the Company Accounts Receivable Security Agreement is hereby amended by amending
the proviso to Section 2 thereof by deleting the reference to "hereunder" and
substituting the phrase "hereunder and under the WMTV Trust Accounts Receivable
Security Agreement" therefor as by inserting the phrase ",the Trust and the
Trustee on a consolidated basis" immediately after the reference to "Grantor"
contained therein.
SECTION 2
CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "SECOND
AMENDMENT EFFECTIVE DATE"):
A. On or before the Second Amendment Effective Date, each of
BCC, Company, License Sub, the Trustee and WMTV License Co. shall deliver to
Lenders (or to Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following, each, unless
otherwise noted, dated the Second Amendment Effective Date:
(i) Resolutions of its Board of Directors or such other
governing body, as the case may be, approving and authorizing the
execution, delivery, and performance of each of this Amendment, the
Transfer Support Documents and the WMTV Documents (as hereinafter
defined) to which it is a party, certified as of the Second Amendment
Effective Date by its corporate secretary or an assistant secretary or
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manager, as the case may be, as being in full force and effect without
modification or amendment;
(ii) Signature and incumbency certificates of its officers or
other responsible party, as the case may be, executing this Amendment
and the Transfer Support Documents to which it is a party;
(iii) originally executed copies of one or more favorable
written opinions of Shack & Siegel, P.C., counsel for Company, in form
and substance reasonably satisfactory to Agent and its counsel, dated
as of the Second Amendment Effective Date and setting forth the matters
in the opinions designated in Annex G to this Amendment and as to such
other matters as Agent acting on behalf of Lenders may reasonably
request; and
(iv) Executed copies of this Amendment and the Transfer Support
Documents.
B. The delivery to Agent of originals of each of the documents,
agreements, certificates and instruments executed and delivered or to be
executed and delivered in connection with the formation of, and transfer by
Company and License Sub, as the case may be, of the assets and the FCC Licenses
relating to WMTV to the Trustee and WMTV License Co., as the case may be,
including, without limitation, the WMTV License Co. Certificate of Formation,
the Trust Agreement (as defined in Section 1.1) and the WMTV License Co.
Operating Agreement (collectively, the "WMTV DOCUMENTS"), in form and substance
reasonably satisfactory to Agent and its counsel.
C. The delivery to Agent of (a) (i) a fully executed and
notarized First Amendment to Open-End Mortgage, Fixture Filing, and Assignment
of Rents (the "MORTGAGE AMENDMENT"), substantially in the form in Annex H to
this Amendment, in proper form for recording in all appropriate places in all
applicable jurisdictions and (ii) endorsements to the existing ALTA mortgagee
title insurance policies issued in respect of the Mortgage encumbering the
property described in the Mortgage Amendment, all of the foregoing in form and
substance reasonably satisfactory to Agent; and (b) evidence satisfactory to
Agent of (1) delivery to the Title Company of all certificates and affidavits
required by the Title Company in connection with the issuance of the Title
Endorsements and (2) payment to the Title Company or to the appropriate
governmental authorities of all expenses and premiums of the Title Company in
connection with the issuance of the Title Endorsements and all recording and
stamp taxes (including mortgage recording, documentary stamp and intangible
taxes) payable in connection with recording the Mortgage Amendment in the
appropriate real estate records.
D. 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
10
<PAGE>
<PAGE>
described in clauses (iii) and (iv) below) that may be necessary or, in the
opinion of Agent, desirable in order to create in favor of 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) Delivery to Agent of accurate and complete schedules to all
of the applicable Collateral Documents;
(ii) Delivery to Agent or Pledgee under the Existing Company
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 Agent) representing
all capital stock pledged pursuant to the Existing Company Pledge
Agreement and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Agent)
evidencing any Collateral; and
(iii) Delivery to Agent of UCC financing statements and, where
appropriate, fixture filings (including, where applicable, amendments
with respect to UCC financing statements and 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 Agent,
desirable to perfect the security interests created in such Collateral
pursuant to the applicable Collateral Documents.
E. On or before the Second Amendment Effective Date, 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 Agent, acting on behalf of Lenders, and its
counsel shall be satisfactory in form and substance to Agent and such counsel,
and Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.
SECTION 3
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, each of BCC, Company,
License Sub, the Trustee (as to each of the following subsections other than F
and G) and WMTV License Co. (as to each of the following subsections other than
F and G) represents and warrants to each Lender that the following statements
are true, correct and complete:
A. CORPORATE POWER AND AUTHORITY. Each of BCC, Company, License
Sub, the Trustee and WMTV License Co. has all requisite corporate or other
organizational power and authority to enter into this Amendment, each of the
Transfer Support Documents and each of the WMTV Documents to which it is a party
and to carry out the transactions contemplated
11
<PAGE>
<PAGE>
by, and perform its obligations under, the Credit Agreement as amended by this
Amendment (the "AMENDED AGREEMENT"), the Transfer Support Documents and the WMTV
Documents to which it is a party.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment, the Transfer Support Documents and the WMTV Documents have been
duly authorized by all necessary corporate or other action on the part of BCC,
Company, License Sub, the Trustee and WMTV License Co., as the case may be.
C. NO CONFLICT. The execution and delivery by each of BCC,
Company, License Sub, the Trustee and WMTV License Co. of each of this
Amendment, the Transfer Support Documents and the WMTV Documents to which it is
a party and the performance by each of BCC, Company, License Sub, the Trustee
and WMTV License Co. of each of the Amended Agreement, the Transfer Support
Documents and the WMTV Documents to which it is a party do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to BCC or any of its Subsidiaries (including, without limitation, the
Trustee and the WMTV License Co.), the Certificate or Articles of Incorporation
or Certificate of Formation, as the case may be, or Bylaws, Operating Agreement
or Trust Agreement, as the case may be, of BCC or any of its Subsidiaries
(including, without limitation, the Trustee and the WMTV License Co.) or any
order, judgment or decree of any court or other agency of government binding on
BCC or any of its Subsidiaries (including, without limitation, the Trustee and
the WMTV License Co.), (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 (including, without limitation, the
Trustee and the WMTV License Co.), (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of BCC or any of its
Subsidiaries (including, without limitation, the Trustee and the WMTV License
Co.), or (iv) require any approval of stockholders or any other equityholders or
any approval or consent of any Person under any Contractual Obligation of BCC or
any of its Subsidiaries (including, without limitation, the Trustee and the WMTV
License Co.), except for such approvals or consents which have been obtained on
or before the Second Amendment Effective Date and disclosed in writing to
Lender.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each of
BCC, Company, License Sub, the Trustee and WMTV License Co. of this Amendment,
the Transfer Support Documents and the WMTV Documents to which it is a party and
the performance by each of BCC, Company, License Sub, the Trustee and WMTV
License Co. of the Amended Agreement, the Transfer Support Documents and the
WMTV Documents to which it is a party 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.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement
have been and, upon their execution and delivery, the Transfer Support Documents
and the WMTV Documents to which it is a party will be, duly executed and
delivered by each of BCC,
12
<PAGE>
<PAGE>
Company, License Sub, the Trustee and WMTV License Co. and this Amendment and
the Amended Agreement are and, upon their execution and delivery, the Transfer
Support Documents and the WMTV Documents to which it is a party will be, the
legally valid and binding obligations of BCC, Company, License Sub, the Trustee
and WMTV License Co., enforceable against BCC, Company, License Sub, the Trustee
and WMTV License Co. 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.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Second Amendment Effective 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 they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
H. ORGANIZATIONAL DOCUMENTS. None of the Articles or
Certificate of Incorporation or Certificate of Formation, as the case may be,
Bylaws or Operating Agreement, as the case may be, or any other constating
document of any of BCC, Company or License Sub has been amended, modified or
otherwise supplemented since December 17, 1997 and the Articles or Certificates
of Incorporation or Certificate of Formation, as the case may be, Bylaws or
Operating Agreement, as the case may be, and other constating documents of each
of BCC, Company and License Sub delivered to Agent and Lenders in connection
with execution and delivery of the Credit Agreement on December 19, 1997 are
true, correct and complete copies of such Certificate of Incorporation, Bylaws
or other constating documents as in effect as of the date hereof. The
Certificate of Formation, Operating Agreement or Trust Agreement, as the case
may be, and other constating documents of each of the Trustee and WMTV License
Co. delivered to Agent and Lenders in connection with execution and delivery of
this Amendment are true, correct and complete copies of such Certificate of
Formation, Operating Agreement or Trust Agreement, as the case may be, or other
constating documents as in effect as of the date hereof.
SECTION 4
ACKNOWLEDGMENT AND CONSENT
Each of License Sub, the Trustee and WMTV License Co. hereby
acknowledges that it has read this Amendment and consents to the terms hereof
and further hereby confirms and agrees that, notwithstanding the effectiveness
of this Amendment, the obligations of such Loan Party under each of the Loan
Documents to which it is a party (including Loan Documents executed and
delivered by such Loan Party as of the date hereof) shall not be
13
<PAGE>
<PAGE>
impaired and each of the Loan Documents (including Loan Documents executed and
delivered by such Loan Party as of the date hereof) to which it is a party are,
and shall continue to be, in full force and effect and are hereby confirmed and
ratified in all respects.
SECTION 5
MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the Second Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of Agent or any Lender under, the Credit Agreement or any of the other
Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees
and expenses as described in subsection 9.2 of the Credit Agreement incurred by
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT 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.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which
14
<PAGE>
<PAGE>
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 Amendment (other than the provisions of Sections 1 and 2
hereof, the effectiveness of which is governed by Section 2 hereof) shall become
effective upon the execution of a counterpart hereof by BCC, Company, License
Sub, the Trustee, WMTV License Co. and Supermajority Lenders and receipt by
Company and Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
15
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BCC:
BENEDEK COMMUNICATIONS CORPORATION
By: /s/ RONALD L. LINDWALL
-----------------------------
Ronald L. Lindwall
Senior Vice President, Chief
Financial Officer, Secretary
and Treasurer
COMPANY:
BENEDEK BROADCASTING CORPORATION
By: /s/ RONALD L. LINDWALL
-----------------------------
Ronald L. Lindwall
Senior Vice President, Chief
Financial Officer, Secretary
and Treasurer
S-1
<PAGE>
<PAGE>
ACKNOWLEDGED AND CONSENTED
TO AS OF OCTOBER 31, 1998:
BENEDEK LICENSE CORPORATION
By: /s/ RONALD L. LINDWALL
-----------------------------
Ronald L. Lindwall
Senior Vice President, Chief
Financial Officer, Secretary
and Treasurer
PHILIP A. JONES, SOLELY IN HIS
CAPACITY AS TRUSTEE UNDER THE
WMTV TRUST, A WISCONSIN TRUST
By: /s/ PHILIP A. JONES
-----------------------------
Philip A. Jones
WMTV TRUST LICENSE CO., LLC.
By: PHILIP A. JONES, SOLELY IN HIS
CAPACITY AS TRUSTEE UNDER THE
WMTV TRUST, A WISCONSIN TRUST,
ITS MEMBER
By: /s/ PHILIP A. JONES
-----------------------------
Philip A. Jones
S-2
<PAGE>
<PAGE>
LENDERS:
BANKERS TRUST COMPANY,
individually and as Agent
By: /s/ GREG SHEFRIN
_________________________
Greg Shefrin
Vice President
S-3
<PAGE>
<PAGE>
STRATA FUNDING LTD.
By: /s/ DAVID EGGLLSHAW
_________________________
David Eggllshaw
Title: Director
S-4
<PAGE>
<PAGE>
PILGRIM AMERICA PRIME RATE TRUST
By: PILGRIM AMERICA INVESTMENTS, INC.,
as its Investment Manager
By: /s/ ROBERT L. WILSON
_________________________
Name: Robert L. Wilson
Title: Vice President
S-5
<PAGE>
<PAGE>
KZH III LLC
By: /s/ VIRGINIA CONWAY
_________________________
Name: Virginia Conway
Title: Authorized Agent
S-6
<PAGE>
<PAGE>
KZH CNC LLC
By: /s/ VIRGINIA CONWAY
_________________________
Virginia Conway
Authorized Agent
S-7
<PAGE>
<PAGE>
SENIOR DEBT PORTFOLIO
By: BOSTON MANAGEMENT AND RESEARCH,
as Investment Advisor
By: /s/ PAYSON F. SWAFFIELD
_________________________
Name: Payson F. Swaffield
Title: Vice President
S-8
<PAGE>
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ KOREN VOLK
_________________________
Name: Koren Volk
Title: Authorized Signatory
S-9
<PAGE>
<PAGE>
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ WALTER T. DWYER
_________________________
Name: Walter T. Dwyer
Title: Managing Director
S-10
<PAGE>
<PAGE>
TORONTO DOMINION (TEXAS), INC.
By: /s/ David G. Parker
_________________________
Name: David G. Parker
Title: Managing Director
Vice President
S-11
<PAGE>
<PAGE>
HARVARD MANAGEMENT COMPANY INC.
By: /s/ Timothy S. Peterson
--------------------------
Name: Timothy S. Peterson
Title: Authorized Signatory
S-12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 1017522
<NAME> BENEDEK COMMUNICATIONS CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,938,394
<SECURITIES> 0
<RECEIVABLES> 23,084,331
<ALLOWANCES> 596,177
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<PP&E> 137,915,401
<DEPRECIATION> 71,531,520
<TOTAL-ASSETS> 449,483,863
<CURRENT-LIABILITIES> 32,032,997
<BONDS> 361,754,573
<COMMON> 74,000
157,600,955
0
<OTHER-SE> (140,309,733)
<TOTAL-LIABILITY-AND-EQUITY> 449,483,863
<SALES> 111,329,416
<TOTAL-REVENUES> 113,660,926
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<LOSS-PROVISION> 306,958
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<INCOME-PRETAX> (23,141,978)
<INCOME-TAX> (7,889,530)
<INCOME-CONTINUING> (15,252,449)
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<CHANGES> 0
<NET-INCOME> (15,252,449)
<EPS-PRIMARY> (5.55)
<EPS-DILUTED> (5.55)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 923027
<NAME> BENEDEK BROADCASTING CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
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0
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