<PAGE>
<PAGE>
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
[x] ANNUAL 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 FISCAL YEAR ENDED DECEMBER 31, 1997
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>
------------------------
<TABLE>
<S> <C> <C>
SUBSIDIARY GUARANTOR REGISTRANT
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
March 24, 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
March 24, 1998, there were outstanding 7,400,000 shares of common stock, $0.01
par value.
________________________________________________________________________________
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-K
<TABLE>
<CAPTION>
ITEM
NUMBER PAGE
- --------- ----
<C> <C> <S> <C>
PART I
Item 1. Business................................................................................... 1
Item 2. Properties................................................................................. 29
Item 3. Legal Proceedings.......................................................................... 32
Item 4. Submission of Matters to a Vote of Security Holders........................................ 32
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters...................... 33
Item 6. Selected Financial Data.................................................................... 33
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations...... 35
Item 7A. Quantitative and Qualitative Disclosures About Market Risk................................. 44
Item 8. Financial Statements and Supplementary Data................................................ 44
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure....... 44
PART III
Item 10. Directors and Executive Officers of the Registrant......................................... 45
Item 11. Executive Compensation..................................................................... 47
Item 12. Security Ownership of Certain Beneficial Owners and Management............................. 48
Item 13. Certain Relationships and Related Transactions............................................. 48
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K............................ 49
Signatures ................................................................................................ 53
</TABLE>
<PAGE>
<PAGE>
PART I
ITEM 1. BUSINESS.
This Annual Report on Form 10-K contains forward-looking statements that
involve risks and uncertainties. Wherever possible, the Company (as defined) has
identified these forward looking statements by words such as 'anticipates,'
'believes,' 'estimates,' 'expects' and similar expressions. 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. The Company assumes no obligation to update publicly any
forward looking statements, whether as a result of new information, future
events or otherwise. Discussions containing such forward looking statements may
be found in the materials set forth under 'Item 1. Business,' 'Item 3. Legal
Proceedings' and 'Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations' contained herein.
Except as otherwise provided, the financial data set forth herein is
derived from the historical financial statements of Benedek Communications
Corporation ('Benedek Communications') and its wholly-owned subsidiary, Benedek
Broadcasting Corporation, prepared in accordance with generally accepted
accounting principles. Unless the context requires otherwise, references to the
'Company' refer to Benedek Communications and Benedek Broadcasting Corporation
and its wholly-owned subsidiary, Benedek License Corporation ('BLC'). Unless the
context requires otherwise, references to 'Benedek Broadcasting' refer to
Benedek Broadcasting Corporation and BLC. The Company 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. Such historical financial data includes the
results of operations of five television stations acquired from Stauffer
Communications, Inc. (the 'Stauffer Stations') and the eight television stations
acquired by reason of the acquisition of all of the capital stock of Brissette
Broadcasting Corporation (the 'Brissette Stations,' and together with the
Stauffer Stations, the 'Acquired Stations') from the date of such acquisitions
(the 'Acquisitions') on June 6, 1996. As used herein, 'Same Station' data refers
to the historical results of operations of all the Stations (as defined)
currently owned by the Company as if such Stations were owned by the Company
throughout the periods with pro forma adjustments only for corporate expenses,
depreciation and amortization. The 'Benedek Stations' refers to the existing
nine stations owned by the Company prior to the June 6, 1996 acquisitions.
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
non-cash compensation less payments for program broadcast rights. 'Consolidated
Adjusted EBITDA' as defined in the Company's Credit Agreement excludes from the
foregoing definition certain non-cash revenues used in determining operating
income. As used herein, 'broadcast cash flow' is defined as Adjusted EBITDA plus
corporate expenses. Adjusted EBITDA and broadcast cash flow are measures used by
certain investors to measure a company's ability to service debt. Adjusted
EBITDA and broadcast cash flow should not be considered as a substitute for
measures of performance prepared in accordance with generally accepted
accounting principles.
GENERAL
The Company owns 23 network-affiliated television stations (the 'Stations')
in the United States. The Stations owned by the Company are diverse in
geographic location and network affiliation, serve small to medium-sized markets
and, in the aggregate, reach communities in 24 states. Twelve of the Stations
are affiliated with CBS, six are affiliated with ABC, four are affiliated with
NBC and one is affiliated with Fox. Additionally, the Company has entered into
agreements with The Warner Bros. Television Network to develop a local cable
affiliate called the 'WeB' in each of the Company's 20 markets which rank above
100.
The Stations are located in markets ranked in size from 84 to 200 out of
the 211 markets surveyed by A.C. Nielsen Company ('Nielsen'). The Company's
broadcast signals reach approximately 2.9
1
<PAGE>
<PAGE>
million households, representing more than 20% of all television households in
the markets which rank above 100. The Company believes that broadcast television
stations in small to medium-sized markets offer an opportunity to generate
attractive and stable Adjusted EBITDA due to limited competition for viewers
from other over-the-air broadcasters, from other media soliciting advertising
expenditures and from other broadcasters purchasing syndicated programming. The
Company targets small and medium-sized markets that have stable employment and
population and a diverse base of employers. The markets targeted by the Company
generally have population centers that share common community interests and are
receptive to local programming. The Company believes that network affiliations
with one of the four established networks provides its Stations with an
established audience and reputation for national news, sports and entertainment
programming. With the established audiences provided by network affiliations,
management seeks to enhance the ratings of its local news and non-network
programming and increase revenues while controlling costs.
The Company believes that the television industry is in a period of
consolidation as a result of which a relatively small number of station
operators will emerge as the leading television station group owners in the
United States. Recent telecommunications legislation that eliminates
restrictions on the number of television stations that any individual or entity
may own so long as the aggregate audience reach does not exceed 35% of all
United States households is likely to accelerate this trend. The Company's
growth strategy is to become one of the leading group owners of small to
medium-sized market television stations in the United States. In connection
therewith, in June 1996 the Company acquired five network-affiliated television
stations from Stauffer Communications, Inc. ('Stauffer') and all of the capital
stock of Brissette Broadcasting Corporation ('Brissette') which owned eight
network-affiliated television stations. The Company believes that the
Acquisitions have created economies of scale which have (i) improved its ability
to negotiate more favorable arrangements with program suppliers, national sales
representation firms, equipment vendors and television networks, (ii) enabled it
to develop program consortiums for regional news and sports programming and
(iii) enhanced its ability to attract and retain strong Station management and
on-air talent.
STRATEGY
The Company's senior management team, led by A. Richard Benedek, Chairman
and Chief Executive Officer, and K. James Yager, President and Chief Operating
Officer, has extensive experience in acquiring and improving the operations of
television stations. In addition, the Company is supported by a team of senior
vice presidents, who directly oversee the day-to-day operations of the Stations.
Terrance F. Hurley, Raymond P. Maselli and Raymond J. Schonbak who manage nine,
seven and seven of the Stations, respectively, each have significant experience
operating and managing broadcast television stations. Management's primary
operating strategy is to maximize each Station's advertising revenue through the
production of local news, information and community-oriented programming that
has broad audience appeal and value-added sales potential, while maintaining
strict cost controls. Key elements of management's strategy include:
LOCAL NEWS LEADERSHIP AND LOCAL PROGRAMMING. Management believes that
local news and informational programming leadership contributes to higher
ratings and, therefore, increased advertising revenues. Management's
emphasis on local news and on-going community involvement allows the
Stations to maximize the advertising rates they can charge local, regional
and national accounts, not only for news, but for network and
nationally-syndicated programming which the Stations broadcast in time
periods adjacent to regularly scheduled local newscasts and local news
specials.
The Company has focused on maintaining and building each Station's
local news franchise as the key element in its strategy to build and
maintain audience loyalty. Management believes that strong,
well-differentiated local news programming attracts high viewership levels,
particularly of demographic groups that are appealing to both local and
national advertisers, thereby allowing the Company to maximize advertising
rates.
Management of the Company believes that television stations with a
prominent local identity and active community involvement can realize
additional revenues from local advertisers through the development and sale
of special promotional programming. The Stations have developed high-
2
<PAGE>
<PAGE>
quality programming which highlights community events and topics of local
interest. Locally produced programming includes 'Our Town' segments
featuring local news reports, special promotional announcements and local
advertising focused on communities within a particular market; 'Town
Meetings,' which provide a forum for members of local communities to
discuss and debate issues of local concern; 'Live Line' programs on health,
money and legal matters in which viewers call in to a panel of local
experts; and home shopping programs sold exclusively to local merchants.
The Stations also sell promotional advertising packages tied to various
local events such as youth expos, county fairs, parades, athletic events
and other local activities. These local programs have proven successful in
attracting incremental advertising revenues and are a core element of each
Station's local identity.
Nine of the 23 Stations are the number one ranked news stations in
their respective markets. Since the Acquisitions in June 1996, the Company
has added 62 hours of local news programming per week to the Acquired
Stations' programming schedules.
SYNDICATED PROGRAMMING. The Company selectively purchases first run
and off-network syndicated programming designed to reach specific
demographic groups attractive to advertisers. Currently, the three most
highly-rated syndicated programs airing during the hour preceding network
prime time are 'Wheel of Fortune,' 'Jeopardy' and 'Home Improvement.' In
early fringe and daytime periods (generally, 9:00 am to 5:00 pm), the three
most highly-rated syndicated programs are 'The Oprah Winfrey Show,' 'The
Jerry Springer Show' and 'The Rosie O'Donnell Show.' The Company broadcasts
'Wheel of Fortune' on 13 of the Stations, 'Jeopardy' on eight of the
Stations, 'Home Improvement' on eight of the Stations, 'The Oprah Winfrey
Show' on eight of the Stations, 'The Rosie O'Donnell Show' on five of the
Stations and 'The Jerry Springer Show' on one of the Stations.
Additionally, the Company broadcasts other highly-rated first run
syndicated programs on several of the Stations including 'Live with Regis &
Kathie Lee,' 'Montel Williams' and 'Sally Jessy Raphael.' A number of the
Stations also broadcast other highly-rated off-network syndicated programs
including 'Seinfeld,' 'Mad About You' and 'Frasier.' Further, the Company
has acquired the rights to broadcast the newly syndicated programs 'The
Roseanne Show,' 'Friends' and 'Hollywood Squares' beginning in the fall of
1998.
The Company seeks to acquire programs that are available on a
cost-effective basis for limited licensing periods, allow scheduling
flexibility, complement each Station's overall programming mix and counter
competitive programming. The Company has been able to purchase syndicated
programming at attractive rates in part as a result of the limited
competition for such programming in the Company's markets. As a result of
the limited competition from other broadcasters purchasing syndicated
programming in the small and medium-sized markets served by the Company,
cash program expense as a percentage of net revenues for the Stations was
3.4% and 4.7% in 1996 and 1997, respectively, as compared to approximately
7.6% for all network-affiliated stations in 1996.
In addition, since the Acquisitions, the Company has made significant
changes to the Acquired Stations' syndicated programming schedules,
including adding some of the most highly-rated programs to their current
broadcast schedules, as well as obtaining the rights to several of the most
highly sought after newly syndicated programs for the 1998 broadcast
season.
LOCAL SALES EMPHASIS. Management's sales strategy focuses on
increasing the sale of local advertising by attracting new advertisers to
television and increasing the amount of advertising dollars being spent by
existing local advertisers. Management of the Company believes that its
leadership in local news and informational programming enhances its ability
to develop and attract local advertising expenditures. Management believes
that through local sales efforts it can stimulate local advertising
expenditures more readily than it can national advertising expenditures.
This enables the Company to react promptly to changes in the national and
local advertising climate and better maintain consistent Adjusted EBITDA.
Trained and experienced sales personnel sell local advertising for the
Company in each of its markets. The Company focuses on local advertisers by
producing their commercials, producing news and informational programming
with local advertiser appeal and sponsoring or co-promoting local events
and activities that give local advertisers unique value-added community
identity.
3
<PAGE>
<PAGE>
Approximately 56.1% of the Company's gross revenues in 1997 were generated
from local and regional advertisers.
FINANCIAL PLANNING AND CONTROLS. Management emphasizes strict control
of the Company's programming and operating costs as an important factor in
increasing broadcast cash flow. The Company continually seeks to identify
and implement cost savings opportunities. Furthermore, the Company
maintains a detailed budgeting process and reviews performance relative to
budget monthly with respect to both revenues and expenses, thereby enabling
management to react promptly to changes in market conditions. Management of
the Company believes that controlling costs is an essential factor in
achieving and maintaining profitability. The Company intends to continue to
identify opportunities to increase Adjusted EBITDA through its on-going
strategic planning and budgeting process.
FUTURE ACQUISITIONS AND OPPORTUNITIES. The Company has a long-term
strategy to pursue additional acquisitions of broadcast television
stations, primarily of network-affiliated stations in small to medium-sized
markets where the Company believes it can successfully implement its
operating strategy and where such stations can be acquired on financially
acceptable terms. Additionally, the Company has entered into 10 year
agreements with The Warner Bros. Television Network to develop a local
cable affiliate called the 'WeB' in each of the Company's 20 markets which
rank above 100. The WeB is scheduled to begin service in September 1998.
BACKGROUND OF THE COMPANY
The Company was incorporated under the laws of the State of Delaware on
April 10, 1996. Benedek Broadcasting was incorporated under the laws of the
State of Delaware on January 22, 1979. Benedek Broadcasting is a wholly-owned
subsidiary of the Company. The principal executive offices of the Company and
Benedek Broadcasting are located at 100 Park Avenue, Rockford, Illinois 61101.
The telephone number at the executive offices is (815) 987-5350.
4
<PAGE>
<PAGE>
THE STATIONS
The following table sets forth certain information for each of the Stations
and the markets they serve:
<TABLE>
<CAPTION>
NUMBER OF
COMMERCIAL
STATIONS STATION
MARKET CALL NETWORK IN RANK IN STATION CABLE
MARKET AREA RANK(a) LETTERS CHANNEL(b) AFFILIATION MARKET(a) MARKET(c) RATING(a) PENETRATION(a)
- --------------- -------- ------- ---------- ------------ ---------- ------------ --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Madison, 84 WMTV(TV) 15 NBC 4 2 4 62%
Wisconsin
Youngstown, 97 WYTV 33 ABC 3 2 5 73%
Ohio
Springfield and 103 WWLP(TV) 22 NBC 2 1 6 82%
Holyoke,
Massachusetts
Lansing, 105 WILX-TV 10 NBC 4 2 4 67%
Michigan
Peoria and 110 WHOI(TV) 19 ABC 4 3 4 72%
Bloomington,
Illinois
Santa Barbara, 115 KCOY-TV 12 CBS 4 2 3 83%
Santa Maria
and
San Luis
Obispo,
California
Duluth, 134 KDLH-TV 3 CBS 3 2 5 51%
Minnesota and
Superior,
Wisconsin
Rockford, 135 WIFR-TV 23 CBS 4 1 5 69%
Illinois
Wausau and 136 WSAW-TV 7 CBS 3 1 6 53%
Rhinelander,
Wisconsin
Wheeling, West 138 WTRF-TV 7 CBS 2 2 7 77%
Virginia and
Steubenville,
Ohio
Topeka, Kansas 139 WIBW-TV 13 CBS 4 1 6 72%
Wichita Falls, 144 KAUZ-TV 6 CBS 4 1 5 68%
Texas and
Lawton,
Oklahoma
Columbia and 145 KMIZ(TV) 17 ABC 5 3 3 61%
Jefferson
City,
Missouri
Columbia and 145 KO2NQ(d) 2(d) FOX 5(d) 4(d) N/A 61%
Jefferson 145 K11TB(d) 11(d) FOX 5(d) 4(d) N/A 61%
City,
Missouri
Odessa and 150 KOSA-TV 7 CBS 4 2 4 74%
Midland,
Texas
Quincy, 160 KHQA-TV 7 CBS 2 1 7 61%
Illinois,
Hannibal,
Missouri and
Keokuk, Iowa
Dothan, Alabama 173 WTVY-TV 4 CBS 3 1 8 69%
Panama City, 157 WTVY-TV 4 CBS 4 3 4 67%
Florida
Harrisonburg, 177 WHSV-TV 3 ABC 1 1 7 76%
Virginia
Bowling Green, 182 WBKO-TV 13 ABC 2 1 8 56%
Kentucky
Meridian, 183 WTOK-TV 11 ABC 3 1 8 54%
Mississippi
Parkersburg, 186 WTAP-TV 15 NBC 1 1 10 78%
West Virginia
Cheyenne, 195 KGWN-TV 5 CBS 3 1(h) 5(h) 73%(h)
Wyoming and 195 KSTF-TV(e) 10 CBS (g) (h) (h) (h)
Scottsbluff, 195 KTVS-TV(e) 3 CBS (g) (h) (h) (h)
Nebraska
Casper and 200 KGWC-TV 14 CBS 4 2(i) 3(i) 66%(i)
Riverton, 200 KGWL-TV(f) 5 CBS (g) (i) (i) (i)
Wyoming 200 KGWR-TV(f) 13 CBS (g) (i) (i) (i)
</TABLE>
- ------------
(a) Based on data complied from the November 1997 Nielsen surveys.
(b) Channels 2 through 13 are broadcast over the very high frequency ('VHF')
band of the broadcast spectrum and channels 14 through 69 are broadcast
over the ultra high frequency ('UHF') band of the broadcast spectrum.
(c) Station Rank in Market is a Station's rank in the market among all
commercial stations in a Station's market, measured by such Station's
average rating during the measurement period Sunday through Saturday, 6:00
am to 2:00 am.
(d) KO2NQ and K11TB are low-power broadcast television stations operated by
KMIZ(TV) and distributed primarily via cable television. These two Stations
began operating in September 1997 as a single entity operating from one
facility and offering an identical programming schedule. Additionally, such
Stations are treated as one station for purposes of determining the number
of commercial stations in the market and rank in the market.
(e) Satellite station of KGWN-TV.
(f) Satellite station of KGWC-TV.
(g) Satellite stations are not considered distinct stations in this market for
Nielsen purposes.
(h) Station Rank, Station Rating and Cable Penetration information for KGWN-TV
includes data for satellite stations KSTF-TV, Scottsbluff, Nebraska and
KTVS-TV, Sterling, Colorado, as reported by Nielsen.
(i) Station Rank, Station Rating and Cable Penetration information for KGWC-TV
includes data for satellite stations KGWL-TV, Lander, Wyoming and KGWR-TV,
Rock Springs, Wyoming, as reported by Nielsen.
5
<PAGE>
<PAGE>
WMTV(TV) (NBC) MADISON, WISCONSIN
Market Description. The Madison designated market area ('DMA') consists of
11 counties in southwestern Wisconsin. Recent growth in the area has increased
the population in the Madison DMA, moving it from the 93rd largest market in
1991 to the 84th largest market in 1997. Madison, the Wisconsin state capital,
is located in southcentral Wisconsin, 150 miles north of Chicago, Illinois and
75 miles west of Milwaukee, Wisconsin. The Madison economy is a diverse and
stable balance of the industrial, governmental and service sectors.
Additionally, agricultural production of corn, alfalfa, tobacco, oats, eggs,
cattle, hogs and, of course, dairy products have greatly contributed to further
stability in the local economy. Many of the country's leading insurance
companies, including American Family Mutual Insurance Group, CUNA Mutual
Insurance Company and General Casualty have facilities in Madison. Other
prominent corporations with facilities in the area include General Motors
Corporation, Meriter Health Services, Oscar Mayer Foods Corporation, Famous
Footwear, Lands' End and Rayovac Corporation. Madison is also home to the
University of Wisconsin, with approximately 40,000 students.
Station History and Characteristics. WMTV(TV) was originally licensed in
1953 to serve Madison, Wisconsin. The Madison market is ranked 84th in the
United States, with approximately 316,370 television households and a population
of approximately 823,000. This market has a cable penetration rate of 62%.
WMTV(TV) is broadcast on UHF channel 15 and is an NBC affiliate. There are three
other commercial television stations in the Madison DMA, a CBS affiliate which
broadcasts on a VHF channel and ABC and Fox affiliates which broadcast on UHF
channels. In addition, a UPN affiliate broadcasting on a UHF channel is
scheduled to begin operations on May 1, 1998.
Station Performance. According to the 1997 Nielsen ratings reports,
WMTV(TV) was ranked number two in its market with a 4 rating and a 15% share of
households viewing television. WMTV(TV) is currently the number three ranked
news station in the Madison market. Since being acquired in June 1996 by the
Company, the Station has expanded its weekday morning newscast from 30 to 90
minutes and added a weekly local sports program on Sunday evening. Currently,
the Station airs 19 hours and five minutes of local news programming per week as
opposed to 13 hours and 35 minutes it broadcast each week prior to being
acquired by the Company. WMTV(TV)'s special value-added local sales efforts in
1997 included 'Neighborhood WeatherNet,' placing fully-automated weather
monitoring systems at local schools, 'Kids Matter,' a program promoting the
accomplishments of children, 'Help-A-Thons,' special events mobilizing the
community towards a common cause, and 'Share Your Holiday,' Madison's largest
annual food drive. Further, the Station provides extensive local coverage of
University of Wisconsin and other Big Ten conference basketball and football
games. Since being acquired by the Company, the Station has added 'Jeopardy' to
its syndicated programming schedule. WMTV(TV)'s first run syndicated programming
also includes 'Wheel of Fortune' and 'Live with Regis & Kathie Lee.' In
addition, beginning in the fall of 1998, the Station will air 'Hollywood
Squares' and 'Donny and Marie.'
WYTV (ABC) YOUNGSTOWN, OHIO
Market Description. The Youngstown DMA consists of four counties, three of
which are in northeastern Ohio and one of which is in western Pennsylvania.
Youngstown is situated in northeastern Ohio along the Ohio/Pennsylvania border
within 75 miles of Cleveland, Ohio to the northwest and 60 miles of Pittsburgh,
Pennsylvania to the southeast. The Youngstown economy is historically based on
the processing of steel and allied industries. While still part of a major steel
producing area, Youngstown's economy has diversified and is now primarily
manufacturing based. Some of the major employers in the area include the Buick,
Oldsmobile and Cadillac Division of General Motors Corporation, the Delphi
Packard Electric Corporation Division of General Motors Corporation, St.
Elizabeth's Health Center, Western Reserve Care System and LTV Steel Tubular
Products Division of Republic Steel Works. This area is also the home of
Youngstown State University, with approximately 12,000 students.
Station History and Characteristics. WYTV was originally licensed in 1953
to serve Youngstown, Ohio. The Youngstown market is ranked 97th in the United
States, with approximately 273,960 television households and a population of
approximately 725,000. This market has a cable penetration
6
<PAGE>
<PAGE>
rate of 73%. WYTV is broadcast on UHF channel 33 and is an ABC affiliate. The
Company acquired WYTV in 1983. The other local stations with which WYTV competes
are also UHF stations, one of which is an NBC affiliate and the other of which
is a CBS affiliate.
Station Performance. According to the 1997 Nielsen ratings reports, WYTV
was ranked number two in its market with a 5 rating and a 14% share of
households viewing television. WYTV currently is the number two ranked news
station in this market and broadcasts 16 hours of local news programming per
week. WYTV's special value-added local sales efforts in 1997 included
'LiveLine,' a program focusing on issues ranging from health care to legal
concerns, 'Success By Six,' a project encouraging educational growth in young
children, 'WeatherSchool,' an educational project undertaken with area schools
to build interest in weather and science, and 'Hot Fun in the Summertime,' a
sales promotion targeting non-traditional advertisers. WYTV's first run and
off-network syndicated programming includes 'Wheel of Fortune,' 'Jeopardy,'
'Home Improvement' and 'The Rosie O'Donnell Show.' Additionally, beginning in
the fall of 1998, the Station will add 'Friends' to its off-network syndicated
programming schedule.
WWLP(TV) (NBC) SPRINGFIELD AND HOLYOKE, MASSACHUSETTS
Market Description. The Springfield-Holyoke DMA consists of three counties
in midwestern Massachusetts running north to south between the New
Hampshire/Vermont and Connecticut state borders. Springfield is located in the
Pioneer Valley, approximately 25 miles north of Hartford, Connecticut and 85
miles east of Boston, Massachusetts. The Springfield economy has a diversified
industrial base. The area's most prominent employers include Massachusetts
Mutual Life Insurance Company, Milton Bradley, Inc., Monsanto Company, Friendly
Ice Cream Corporation, Spalding Sports Worldwide and Baystate Medical Center.
Many universities and colleges are located in this region, including, the
University of Massachusetts, with a student population of approximately 23,000,
Amherst College, Smith College and Mount Holyoke College. Springfield is also
the home of the Naismith Memorial Basketball Hall of Fame.
Station History and Characteristics. WWLP(TV) was originally licensed in
1953 to serve the greater Springfield area. Springfield-Holyoke is the 103rd
largest market in the United States, with approximately 243,020 television
households and a population of approximately 666,000. This market has a cable
penetration rate of 82%. WWLP(TV) is broadcast on UHF channel 22 and is an NBC
affiliate. The Company acquired WWLP(TV) in June 1996. The only other commercial
television station in this market is an ABC affiliate which also broadcasts on a
UHF channel. WWLP(TV) also competes with a CBS affiliate on a VHF channel and,
to a lesser extent, a Fox affiliate on a UHF channel both of which are broadcast
from Hartford, Connecticut.
Station Performance. According to the 1997 Nielsen ratings reports,
WWLP(TV) was ranked number one in its market with a 6 rating and 21% share of
households viewing television. WWLP(TV) is the number one ranked news station in
this market and currently broadcasts 24 hours of local news programming per
week. WWLP(TV)'s special value-added local sales efforts in 1997 included 'As
Schools Match Wits,' the nation's longest running locally produced quiz show in
which area high school students compete academically, participation in the
Easter Seals and Children's Miracle Network Telethons, and various community
projects run in conjunction with organizations such as The Ronald McDonald
House, The Girl Scouts, Alzheimers Association, and The United Way. WWLP(TV)'s
first run syndicated programming includes 'Wheel of Fortune,' 'Jeopardy' and
'Live with Regis & Kathie Lee.' Additionally, beginning in the fall of 1998, the
Station will add 'The Roseanne Show' to its first run syndicated programming
schedule.
WILX-TV (NBC) LANSING, MICHIGAN
Market Description. The Lansing DMA consists of five counties in
southcentral Michigan. Lansing is the state capital of Michigan and is located
approximately 75 miles west of Detroit, Michigan. The Lansing economy is
diversified among the manufacturing, education and service industries. Prominent
employers in the area include General Motors Corporation, Meijer, Inc., Michigan
Capital Healthcare and Michigan National Bank. Additionally, there are many
smaller companies, employing in excess of
7
<PAGE>
<PAGE>
3,000 people, that provide auto parts to General Motors. Moreover, KieKert AG
and Swedish Plannja HardTeck plan on constructing new plants in the Lansing
area. Lansing is also home to the largest university in Michigan, Michigan State
University, with more than 40,000 students and 12,000 faculty and staff.
Station History and Characteristics. WILX-TV was originally licensed in
1957 to Onondaga, Michigan. The Lansing market is ranked 105th in the United
States, with approximately 236,150 television households and a population of
approximately 638,000. This market has a cable penetration rate of 67%. WILX-TV
is broadcast on VHF channel 10 and is an NBC affiliate. WILX-TV competes with
three other commercial stations in this market, a CBS affiliate which also
broadcasts on a VHF channel and ABC and Fox affiliates which broadcast on UHF
channels.
Station Performance. According to the 1997 Nielsen ratings reports, WILX-TV
was ranked number two in its market with a 4 rating and a 15% share of
households viewing television. WILX-TV is currently the number two ranked news
station in this market. Since being acquired in June 1996 by the Company, the
Station has expanded its weekday morning newscast from 60 to 90 minutes.
Currently, the Station airs 21 hours and 10 minutes of local news programming
per week as opposed to 18 hours and 40 minutes it broadcast each week prior to
being acquired by the Company. Additionally, WILX-TV airs the only weekend
morning newscast in its market. WILX-TV's special value-added local sales
efforts in 1997 included 'Kids Count,' a campaign to reach mentors for children,
'Route 10,' a series of human interest reports from Mid-Michigan and 'First
Class,' a project saluting successes in the educational arena. Since being
acquired by the Company, the Station has added 'Sally Jessy Raphael' to its
syndicated programming schedule. WILX-TV's first run and off-network syndicated
programming also includes 'Wheel of Fortune,' 'Jeopardy,' 'Seinfeld' and 'Live
with Regis & Kathie Lee.' In addition, the Station has added 'The Roseanne Show'
to its syndicated programming schedule for the fall of 1998.
WHOI(TV) (ABC) PEORIA AND BLOOMINGTON, ILLINOIS
Market Description. The Peoria-Bloomington DMA consists of nine counties
located in central Illinois. Peoria is located approximately 150 miles southwest
of Chicago, Illinois and 170 miles north of St. Louis, Missouri. The major
economic sectors in the area include agriculture, manufacturing and information
technology. Prominent employers in the greater Peoria area include Caterpillar,
Inc., State Farm Insurance, Saint Francis Medical Center, Diamond Star Motors
and Methodist Medical Center. This area is also home to Illinois State
University, with approximately 18,000 students and 3,100 employees, as well as
Bradley University and the University of Illinois School of Medicine.
Station History and Characteristics. WHOI(TV) was originally licensed in
1953 to serve Peoria, Illinois. The Peoria-Bloomington market is ranked 110th in
the United States, with approximately 225,370 television households and a
population of approximately 600,000. This market has a cable penetration rate of
72%. WHOI(TV) is broadcast on UHF channel 19 and is an ABC affiliate. There are
three other commercial stations in this market, affiliates of CBS, NBC and Fox.
All of these competitor stations are also broadcast on UHF channels.
Station Performance. According to the 1997 Nielsen ratings reports,
WHOI(TV) was ranked number three in its market with a 4 rating and a 13% share
of households viewing television. WHOI(TV) currently is the number three ranked
news station in this market. Since being acquired in June 1996 by the Company,
the Station has added a weekday newscast at 5:00 pm and expanded its morning
newscast from 60 to 90 minutes. Currently, the Station airs 18 hours and 30
minutes of local news programming per week as opposed to 13 hours and 30 minutes
it broadcast each week prior to being acquired by the Company. WHOI(TV)'s
special value-added local sales efforts in 1997 included 'Foodshare Canathon,' a
community food drive, 'Touch-A-Topic,' a free phone service allowing viewers
access to hundreds of useful topics and 'First Warn,' providing weather
information on a 24-hour basis. In addition WHOI(TV) sponsors community events
such as 'The Peoria Art Guild Fine Art Fair,' 'The John Keets March for AIDS
Research and Education' and 'The Jingle Bell Run for Arthritis.' WHOI(TV)'s
first run and off-network syndicated programming includes 'Home Improvement,'
'Live with Regis & Kathie Lee,' 'Entertainment Tonight' and 'Married . . . With
Children.'
8
<PAGE>
<PAGE>
Additionally, beginning in the fall of 1998, the Station will add 'The Roseanne
Show' to its first run syndicated programming schedule.
KCOY-TV (CBS) SANTA BARBARA, SANTA MARIA AND SAN LUIS OBISPO, CALIFORNIA
Market Description. The Santa Barbara - Santa Maria - San Luis Obispo DMA
consists of two counties on the southcentral coast of California. Santa Maria is
approximately 170 miles north of Los Angeles and 270 miles south of San
Francisco. The region has a stable economic base which includes agriculture,
transportation, oil, tourism and manufacturing. Prominent corporations with
facilities in the area include Raytheon Company, Delco Systems Operations,
Chevron USA, Santa Barbara Research (a subsidiary of the Hughes Corporation),
Applied Magnetics Corp. and Lockheed Martin Corporation. The area is also site
of the Vandenberg United States Air Force Base with approximately 9,000
military, civil service and civilian employees. Currently, the base is not on
the government list of facilities to be closed, but there can be no assurance
that such status will not change in the future. Additionally, the University of
California at Santa Barbara and California Polytechnic University, with an
aggregate student population of approximately 34,000, are located within this
DMA.
Station History and Characteristics. KCOY-TV was originally licensed in
1964 to serve Santa Maria, California. The Santa Barbara - Santa Maria - San
Luis Obispo market is ranked 115th in the United States, with approximately
216,820 television households and a population of approximately 630,000. This
market has a cable penetration rate of 83%. KCOY-TV is broadcast on VHF channel
12 and is a CBS affiliate. There are three other commercial stations in this
market, ABC and NBC affiliates which broadcast on VHF channels and a Fox
affiliate which broadcasts on a UHF channel. Until recently, KCOY-TV was
negatively impacted by the cable television retransmission in Santa Barbara of
KCBS, Los Angeles, California. However, in September 1995, KCOY-TV was granted
non-duplication protection against KCBS and is now the only CBS affiliate whose
programming is available on the Santa Barbara cable system.
Station Performance. According to the 1997 Nielsen ratings reports, KCOY-TV
was ranked number two in its market with a 3 rating and a 10% share of
households viewing television. KCOY-TV currently is the number three ranked news
station in this market. Since being acquired in June 1996 by the Company, the
Station has added an hour-long weekday morning newscast and a weekday newscast
at 5:00 pm. Currently, the Station airs 22 hours of local news programming per
week as opposed to 11 hours and 35 minutes it broadcast each week prior to being
acquired by the Company. KCOY-TV's special value-added local sales efforts in
1997 included 'Health and Fitness Drive,' a campaign to promote health and
fitness in the community, 'Santa Maria Symphony Drive,' a project to create
awareness and support of the arts, 'WeatherNet,' placing fully-automated weather
monitoring systems at local schools and 'The Crystal Apple Awards,' saluting
area teachers. Further KCOY-TV sponsors local events such as 'The Santa Barbara
Autumn Arts & Wine Festival' and 'Danish Days.' KCOY-TV's first run syndicated
programming includes 'Montel Williams,' 'Martha Stewart Living,' 'Entertainment
Tonight' and 'Real TV.' Additionally, beginning in the fall of 1998, the Station
will add 'Hollywood Squares' to its first run syndicated programming schedule.
KDLH-TV (CBS) DULUTH, MINNESOTA AND SUPERIOR, WISCONSIN
Market Description. The Duluth-Superior DMA consists of 13 counties, seven
of which are in northeastern Minnesota, five of which are in northwestern
Wisconsin and one of which is in the upper peninsula of Michigan. Duluth,
Minnesota and Superior, Wisconsin are adjacent to each other and are
approximately 150 miles from Minneapolis, Minnesota. The Duluth-Superior
economy, historically based on mining and shipping, also includes the fishing,
food products, paper, education, medical, timber and tourism industries. Duluth
is one of the major United States ports from which iron ore, taconite, coal,
lumber, cement, grain, paper and chemicals are shipped. Prominent corporations
with facilities in the area include Minnesota Power, US West Communications,
Duluth, Missabe & Iron Range Railway Co., Lake Superior Paper Industries,
Potlatch Corporation, Boise Cascade, Burlington Northern Sante Fe Railway,
Georgia-Pacific Corporation, U.S. Steel, National Steel Pellet Co. and Norwest
Bank-Minnesota North. The region is also host to a number of colleges and
universities, including the University of Minnesota-Duluth ('UMD'), UMD Medical
School, College of St. Scholastica, Northland
9
<PAGE>
<PAGE>
College and the University of Wisconsin-Superior. In addition, the area's
extensive forests and numerous lakes have fostered a local tourism industry and
attract thousands of tourists annually who camp, hike, ski, fish and boat in
hundreds of state and Federal parks.
Station History and Characteristics. KDLH-TV was originally licensed in
1954 to serve the Duluth, Minnesota-Superior, Wisconsin metropolitan area. The
Duluth-Superior market is ranked 134th in the United States, with approximately
169,270 television households and a population of approximately 431,000. This
market has a cable penetration rate of 51%. KDLH-TV is broadcast on VHF channel
3 and is a CBS affiliate. The Company acquired KDLH-TV in 1985. KDLH-TV competes
with both an ABC and NBC affiliate which are also broadcast on VHF channels.
Station Performance. According to the 1997 Nielsen ratings reports, KDLH-TV
was ranked number two in its market with a 5 rating and a 17% share of
households viewing television. KDLH-TV currently is the number three ranked news
station in this market and broadcasts 16 hours and 30 minutes of local news
programming per week. KDLH-TV's special value-added local sales efforts in 1997
included 'Safe Kids Expo,' an event promoting and teaching child safety, 'Our
Town,' programs providing one week salutes to area communities, 'Zoo Year's
Eve,' an annual family event held at the Lake Superior Zoo, the exclusive
television sponsorship of the Duluth Bayfront Blues Fest which had attendance of
approximately 75,000 and various projects under the 'Volunteer 3' banner.
KDLH-TV also presents local coverage of UMD Bulldog Hockey and area high school
hockey. KDLH-TV's first run and off-network syndicated programming includes
'Seinfeld,' 'Montel Williams,' 'Martha Stewart Living' and 'Frasier.' In
addition, the Station will begin airing 'The Roseanne Show' and 'Donny & Marie'
in the fall of 1998.
WIFR-TV (CBS) ROCKFORD, ILLINOIS
Market Description. The Rockford DMA consists of five counties in northern
Illinois. Rockford is approximately 80 miles west of Chicago, Illinois. The
Rockford economy, historically centered on manufacturing, has recently
diversified with the growth of service-based industries such as healthcare,
insurance and financial services. Nevertheless, manufacturing still represents
the largest source of private employment in Rockford, known as the 'Fastener
Capital of the World.' Prominent corporations with facilities located in the
greater Rockford area include Chrysler Corporation, Sundstrand Corporation,
Ingersoll Milling Machine Co., Barber-Colman Company, Elco Industries, Inc. and
Warner-Lambert Company. One of the largest employers in the service industry in
this area is Rockford Memorial Hospital. Other service industry employers in the
area include AMCORE Bank N.A., and Blue Cross/Blue Shield of Illinois.
Additionally, United Parcel Service completed construction of a major facility
at the Rockford Airport in late 1994, which functions as its distribution center
for the entire mid-western region of the United States.
Station History and Characteristics. WIFR-TV was licensed in 1965 to
Freeport, Illinois to serve the greater Rockford market. Rockford is the 135th
largest market in the United States, with approximately 166,510 television
households and a population of approximately 438,000. This market has a cable
penetration rate of 69%. WIFR-TV is broadcast on UHF channel 23 and is a CBS
affiliate. The Company acquired WIFR-TV in 1986. There are three other licensed
commercial television stations in the Rockford market, of which two are UHF
stations and one is a VHF station. Although the VHF station's signal extends to
a larger geographical area than any of the UHF stations, including WIFR-TV, such
area is outside the Rockford DMA and does not impact audience ratings or shares
within the DMA. The other three stations in this market are affiliated with ABC,
NBC and Fox.
Station Performance. According to the 1997 Nielsen ratings reports, WIFR-TV
was ranked number one in its market with a 5 rating and a 17% share of
households viewing television. WIFR-TV currently is the number one ranked news
station in this market. The Station has recently expanded its weekday morning
newscast from 60 to 90 minutes and airs 21 hours and 30 minutes of local news
programming per week. WIFR-TV's special value-added local sales efforts in 1997
included a summer long promotion called 'Celebrate Rockford,' and a fourth
quarter promotion called 'Kids Checks,' which generated local revenue and raised
money for local schools. In January 1998, WIFR-TV broadcast a two hour telethon
in prime-time and raised over $100,000 for a local homeless shelter. WIFR-TV is
also this market's Big Ten Football and Basketball network station. WIFR-TV's
first run syndicated
10
<PAGE>
<PAGE>
programming includes 'The Oprah Winfrey Show,' 'Inside Edition' and 'Martha
Stewart Living.' Additionally, beginning in the fall of 1998, the Station will
add 'The Roseanne Show' to its first run syndicated programming schedule.
WSAW-TV (CBS) WAUSAU AND RHINELANDER, WISCONSIN
Market Description. The Wausau-Rhinelander DMA consists of 11 counties in
central Wisconsin bisected by the Wisconsin River. Wausau is approximately 90
miles west of Green Bay, Wisconsin and 180 miles east of Minneapolis, Minnesota.
The Wausau economy, historically based on the timber industry, has diversified
into the farming, manufacturing and service sectors. The area continues to be
one of the nation's leading producers of cheddar cheese and ginseng. Prominent
corporations with facilities in the greater Wausau area include Wausau Insurance
Companies, Sentry Insurance, Kolbe & Kolbe Millwork, Inc., Weyerhauser Co.,
Consolidated Papers, Inc., Ore-Ida Foods, Inc., Marathon Cheese Corp. and
Georgia-Pacific Corporation. The area is also home to the University of
Wisconsin-Stevens Point with approximately 10,000 students and the University of
Wisconsin-Marathon Center with a student population of approximately 1,300.
Station History and Characteristics. WSAW-TV was originally licensed in
1954 to serve Wausau, Wisconsin. The Wausau-Rhinelander market is ranked 136th
in the United States, with approximately 162,820 television households and a
population of approximately 438,000. This market has a cable penetration rate of
53%. WSAW-TV is broadcast on VHF channel 7 and is a CBS affiliate. WSAW-TV
competes with affiliates of ABC and NBC which are also broadcast on VHF
channels.
Station Performance. According to the 1997 Nielsen ratings reports, WSAW-TV
was ranked number one in its market with a 6 rating and a 24% share of
households viewing television. WSAW-TV currently is the number two ranked news
station in the market. Since being acquired in June 1996 by the Company, the
Station has added an hour-long weekday morning newscast and a weekday newscast
at 5:00 pm. Currently, the Station airs 22 hours and 45 minutes of local news
programming per week as opposed to 16 hours and 45 minutes it broadcast each
week prior to being acquired by the Company. WSAW-TV's special value-added local
sales efforts in 1997 included 'WeatherSchool,' an educational project
undertaken with area schools to build interest in weather and science,
'WeatherNet,' placing fully-automated weather monitoring systems at local
schools and 'Behind The Headlines,' a weekly news magazine designed to inform
and educate viewers about current local issues. WSAW-TV's first run and
off-network syndicated programming includes 'Home Improvement,' 'Live with Regis
& Kathie Lee,' 'Montel Williams' and 'Martha Stewart Living.' In addition, the
Station will begin airing 'The Roseanne Show' in the fall of 1998.
WTRF-TV (CBS) WHEELING, WEST VIRGINIA AND STEUBENVILLE, OHIO
Market Description. The Wheeling-Steubenville DMA consists of 12 counties,
six of which are in northwestern West Virginia and six of which are in eastern
Ohio. Located in the Ohio Valley, Wheeling and Steubenville are situated along
opposite sides of the Ohio River approximately 25 miles apart. Wheeling is
approximately 55 miles southwest of Pittsburgh, Pennsylvania and approximately
120 miles east of Columbus, Ohio. The area's economy, historically based on
heavy manufacturing, has diversified into the manufacturing, services and
advanced technology sectors. Prominent corporations with facilities in this
region include Wheeling Pittsburgh Steel Corporation, TIMET, Bayer
Pharmaceutical, Inc., PPG Industries and Consolidation Coal Company. Wheeling is
also home to the National Technology Transfer Center, an independent
organization formed to provide private business and industry with a central
access point for the knowledge and data gathered by the Federal government's
100,000 research professionals.
Station History and Characteristics. WTRF-TV was originally licensed in
1953 to serve the Wheeling, West Virginia market. The Wheeling-Steubenville
market is ranked 138th in the United States, with approximately 157,770
television households and a population of approximately 409,000. This market has
a cable penetration rate of 77%. WTRF-TV is broadcast on VHF channel 7 and is a
CBS affiliate. There is one other commercial station in this market, an NBC
affiliate also broadcast on a VHF channel.
11
<PAGE>
<PAGE>
Station Performance. According to the 1997 Nielsen ratings reports, WTRF-TV
was ranked number two in its market with a 7 rating and an 18% share of
households viewing television. WTRF-TV currently is the number two ranked news
station in this market. Since being acquired in June 1996 by the Company, the
Station has added an hour-long weekday morning newscast at 5:00 am. Currently,
the Station airs 24 hours and 53 minutes of local news programming per week as
opposed to 19 hours and 53 minutes it broadcast prior to being acquired by the
Company. WTRF-TV's special value-added local sales efforts in 1997 included
'HealthLine,' a live program offering information and seminars to seniors and
'Best of the Class,' a program recognizing accomplished students. In addition,
the Station produces 'Call It Home,' one week salutes to area communities and
'The Santa Claus Program,' which provides children the opportunity to write
letters to Santa c/o WTRF-TV as part of a long-running holiday event. WTRF-TV's
first run and off-network syndicated programming includes 'Home Improvement,'
'Live with Regis & Kathie Lee,' 'Martha Stewart Living,' 'Grace Under Fire' and
'Frasier.' In addition, the Station will begin airing 'Hollywood Squares' in the
fall of 1998.
WIBW-TV (CBS) TOPEKA, KANSAS
Market Description. The Topeka DMA consists of 15 counties in northeastern
Kansas. Topeka, the capital of Kansas, is located near the geographic center of
the United States, approximately 60 miles west of Kansas City, Missouri and 120
miles south of Omaha, Nebraska. This area's diversified economy includes
concentrations in the agriculture, manufacturing and service industries. Major
employers in this market include Goodyear Tire & Rubber Company, Payless
ShoeSource, Jostens Printing and Publishing, Hallmark Cards, Inc., Frito-Lay,
Inc., Burlington Northern Santa Fe Railway, Blue Cross/Blue Shield of Kansas,
Stormont-Vail Regional Medical Center and Menninger Hospital and School of
Psychiatric Medicine. The region is also home to several universities including
the University of Kansas, Kansas State University, Washburn University of Topeka
and Emporia State University, with an aggregate student population in excess of
60,000.
Station History and Characteristics. WIBW-TV was originally licensed in
1953 to serve Topeka, Kansas. The Topeka market is ranked 139th in the United
States with approximately 156,800 television households and a population of
414,000. This market has a cable penetration rate of 72%. WIBW-TV is broadcast
on VHF channel 13 and is a CBS affiliate. The other two commercial stations in
the market, affiliates of ABC and NBC, are broadcast on UHF channels with
smaller broadcast coverage than WIBW-TV.
Station Performance. According to the 1997 Nielsen ratings reports, WIBW-TV
was ranked number one in its market with a 6 rating and a 22% share of
households viewing television. WIBW-TV currently is the number one ranked news
station in this market. Since being acquired in June 1996 by the Company, the
Station has expanded its weekday morning newscast from 30 minutes to two hours.
Currently, the Station airs 22 hours and 30 minutes of local news programming
per week as opposed to 15 hours it broadcast each week prior to being acquired
by the Company. WIBW-TV's special value-added local sales efforts in 1997
included 'WeatherSchool,' an educational project undertaken with area schools to
build interest in weather and science, 'WeatherNet,' placing fully-automated
weather monitoring systems at local schools, and participation in such events as
'The MDA Telethon,' 'The Great Topeka Duck Race' and 'The Bridal Fair.' Further
WIBW-TV produces the long-running quiz show 'High Q' and presents the annual
'CBS-13 Christmas Parade.' WIBW-TV's first run syndicated programming includes
'Wheel of Fortune,' 'Montel Williams' and 'Martha Stewart Living.' Additionally,
beginning in the fall of 1998, the Station will add 'The Roseanne Show' to its
first run syndicated programming schedule.
KAUZ-TV (CBS) WICHITA FALLS, TEXAS AND LAWTON, OKLAHOMA
Market Description. The Wichita Falls-Lawton DMA consists of 17 counties,
11 of which are in northcentral Texas and six of which are in southwestern
Oklahoma. Wichita Falls is located in the cross timbers section of the North
Central Plains of Texas, approximately 60 miles south of Lawton, Oklahoma and
approximately 125 miles from Dallas, Texas and Oklahoma City, Oklahoma. The
Wichita Falls-Lawton economy, historically based on agriculture, ranching and
petroleum, also includes the manufacturing, transportation, tourism and service
industries. Prominent corporations with facilities
12
<PAGE>
<PAGE>
in the area include the Cryovac Division of W.R. Grace & Co., the Mechanics
Tools Division of Stanley Works, Levi Strauss & Company, PPG Industries and
Goodyear Tire & Rubber Co. In addition, in 1995 the Texas Department of Criminal
Justice ('TDCJ') opened its James V. Allred Unit in Wichita Falls adding
approximately 875 jobs to the area. The TDCJ has announced expansion plans for
this Unit which is expected to create an additional 200 local jobs. The area is
also home to the Sheppard United States Air Force Base which trains over 20,000
military, civilian and allied students, annually. Currently, the base is not on
the government list of facilities to be closed, but there can be no assurance
that such status will not change in the future.
Station History and Characteristics. KAUZ-TV was originally licensed in
1953 to serve the Wichita Falls area. The Wichita Falls-Lawton market is ranked
144th in the United States, with approximately 152,400 television households and
a population of approximately 418,000. This market has a cable penetration rate
of 68%. KAUZ-TV is broadcast on VHF channel 6 and is a CBS affiliate. KAUZ-TV
competes with three other commercial stations in this market, ABC and NBC
affiliates which broadcast on VHF channels and a Fox affiliate which broadcasts
on a UHF channel.
Station Performance. According to the 1997 Nielsen ratings reports, KAUZ-TV
was ranked number one in its market with a 5 rating and a 15% share of
households viewing television. KAUZ-TV currently is the number three ranked news
station in this market. Currently, the Station airs 15 hours of local news
programming per week as opposed to 14 hours and 30 minutes it broadcast each
week prior to being acquired by the Company. KAUZ-TV's special value-added local
sales efforts in 1997 included 'Safe Kids Safari,' an event promoting and
teaching child safety, 'The Texoma Farm and Ranch Show,' a program presenting
the latest agricultural products and services and 'Race For The Cure,' an annual
event to benefit cancer research. In addition, KAUZ-TV presents 'Friday Night
High School Football Update' and a local sports program focusing on Midwestern
State University Football. Since being acquired in June 1996 by the Company, the
Station has added 'Jeopardy' and 'Sally Jessy Raphael' to its first run
syndicated programming schedule. KAUZ-TV's first run syndicated programming also
includes 'Wheel of Fortune,' 'The Oprah Winfrey Show' and 'The Jerry Springer
Show.'
KMIZ(TV) (ABC) COLUMBIA AND JEFFERSON CITY, MISSOURI
KO2NQ (FOX) COLUMBIA, MISSOURI
K11TB (FOX) JEFFERSON CITY, MISSOURI
Market Description. The Columbia-Jefferson City DMA consists of 14 counties
in central Missouri. Columbia and Jefferson City, approximately 30 miles apart,
are situated in the center of Missouri within 125 miles of Kansas City, Missouri
to the west and St. Louis, Missouri to the east. The Columbia-Jefferson City
economy is based primarily on education, health, insurance and agriculture.
Additionally, Jefferson City is the capital of Missouri adding governmental
employment to the economic base of the area that has been called a recession
resistant community due to its diversity and stable economy. Prominent
corporations with facilities in this market include Toastmaster, Inc., State
Farm Insurance Companies, Shelter Insurance Companies, Quaker Oats, Columbia
Foods, Scholastic Books, ABB Power T&D Company, Dana Corporation, 3M and A.B.
Chance Company. The area is also home to the University of Missouri, with
approximately 24,000 students and 13,000 employees. In addition, the Fort
Leonard Wood United States Army Base and the Whitman United States Air Force
Base are located within this market. Currently, these locations are not on the
government list of facilities to be closed, but there can be no assurance that
such status will not change in the future.
Station History and Characteristics. KMIZ(TV) was originally licensed in
1971 to serve the Columbia-Jefferson City, Missouri area. The Columbia-Jefferson
City market is ranked 145th in the United States, with approximately 147,850
television households and a population of approximately 395,000. This market has
a cable penetration rate of 61%. KMIZ(TV) is broadcast on UHF channel 17 and is
an ABC affiliate. KMIZ(TV) competes with three full power commercial stations,
affiliates of CBS and NBC, which broadcast on VHF channels, and a Warner Bros.
affiliate, which broadcasts on a UHF channel.
Station Performance. According to the 1997 Nielsen ratings reports,
KMIZ(TV) was ranked number three in its market with a 3 rating and a 12% share
of households viewing television. KMIZ(TV) currently is the number three ranked
news station in this market. Since being acquired in
13
<PAGE>
<PAGE>
June 1996 by the Company, the Station has added a weekday 5:00 pm newscast and a
weekday rebroadcast of its 10:00 pm newscast. In addition, KMIZ(TV) has added an
hour-long weekday morning newscast. Currently, the Station airs 20 hours and 27
minutes of local news programming per week as opposed to 8 hours and 51 minutes
it broadcast each week prior to being acquired by the Company. KMIZ(TV)'s
special value-added local sales efforts in 1997 included the sponsorship and
live broadcast of the 'Fire in the Sky' Fourth of July fireworks celebration,
'Partners in Education' and 'Excellence in Mid-Missouri,' two campaigns to
recognize and encourage educational development, and numerous events benefiting
area charities such as The American Heart Association, Central Missouri Food
Bank, The Leukemia Society and The March of Dimes. Since being acquired by the
Company, the Station has added 'The Rosie O'Donnell Show' to its first run
syndicated programming schedule. KMIZ(TV)'s first run and off-network syndicated
programming also includes 'Home Improvement,' 'Seinfeld,' 'Live with Regis &
Kathie Lee' and 'Mad About You.' In addition, KMIZ(TV) will begin airing 'The
Roseanne Show' in the fall of 1998.
During August 1997, the Company completed the purchase of the television
broadcasting licenses and certain equipment of two low-power television stations
located in Columbia and Jefferson City, Missouri for a purchase price of $0.2
million. One-half of the purchase price was paid at closing with the remainder
due in two installments during 1998 and 1999. Concurrently with such purchase,
the Company entered into network affiliation agreements for such Stations with
the Fox Television Network. These two Stations began operating in September 1997
as a single entity operating from one facility and offering an identical
programming schedule. K02NQ is broadcast on VHF channel 2 and K11TB is broadcast
on VHF channel 11. However, these Stations are jointly known as 'Fox 11' based
on their channel position on most area cable systems which provide the primary
means of distribution. This market has a cable penetration rate of 61%.
Additionally, for purposes of all Nielsen statistics, these Stations are treated
as one entity. Fox 11's first run and off-network programming includes
'Fraiser,' 'Hard Copy,' 'Judge Judy' and 'Star Trek: The Next Generation.'
Additionally, these Stations have acquired the rights to broadcast 'The Nanny'
beginning in the fall of 1998.
KOSA-TV (CBS) ODESSA AND MIDLAND, TEXAS
Market Description. The Odessa-Midland DMA consists of 19 counties, 18 of
which are in southwestern Texas and one of which is in southeastern New Mexico.
Odessa, the largest city in the Permian Basin, is approximately 300 miles east
of El Paso, Texas and 350 miles west of Dallas, Texas. The Odessa-Midland
economy is historically based on the oil and gas industry. The area has recently
diversified into the manufacturing and industrial services sectors, although
ties to the energy sector remain very significant. Some of the major employers
in the area include Phillips Petroleum Company, Exxon Corporation, the Shell Oil
Co. Odessa Refinery, EVI-Highland Pump Company, Rexene Corporation, Ref-Chem
Corporation, Texas Instruments Inc. and Medical Center Hospital. Odessa is also
home to the University of Texas of the Permian Basin, Texas Tech University
Health Sciences Center at Odessa and Odessa College, with an aggregate student
enrollment of approximately 7,000.
Station History and Characteristics. KOSA-TV was originally licensed in
1956 to serve Odessa, Texas. The Odessa-Midland market is ranked 150th in the
United States, with approximately 133,740 television households and a population
of approximately 383,000. This market has a cable penetration rate of 74%.
KOSA-TV is broadcast on VHF channel 7 and is a CBS affiliate. The Company
acquired KOSA-TV in June 1996. There are three other commercial stations in the
market, ABC and NBC affiliates which broadcast on VHF channels and a Fox
affiliate which broadcasts on a UHF channel.
Station Performance. According to the 1997 Nielsen ratings reports, KOSA-TV
was ranked number two in its market with a 4 rating and a 14% share of
households viewing television. KOSA-TV currently is the number three ranked news
station in the market and broadcasts 11 hours of local news programming each
week. The Station plans to expand its weekend news coverage and add a one hour
weekday morning news program later this year. KOSA-TV's special value-added
local sale efforts in 1997 included 'The Ector County Foodbank Telethon,' 'The
Permian Basin Fair' and 'Cop of the Week,' a sponsored project saluting
excellence in local law enforcement. In addition, KOSA-TV produces sports
programs focusing on area high school football teams and the local minor league
hockey team. KOSA-TV's first run and off-network syndicated programming includes
'Live With Regis
14
<PAGE>
<PAGE>
& Kathie Lee,' 'Montel Williams,' 'Grace Under Fire' and 'Married . . . With
Children.' Additionally, beginning in the fall of 1998, the Station will add
'The Roseanne Show' to its first run syndicated programming schedule.
KHQA-TV (CBS) QUINCY, ILLINOIS, HANNIBAL, MISSOURI AND KEOKUK, IOWA
Market Description. The Quincy-Hannibal-Keokuk DMA consists of 17 counties,
eight of which are in western Illinois, eight of which are in northeastern
Missouri and one of which is in southeastern Iowa. Quincy, Illinois and
Hannibal, Missouri are situated on opposite sides of the Mississippi River
approximately 100 miles northwest of St. Louis, Missouri. Keokuk, Iowa is also
located along the Mississippi River approximately 40 miles north of the
Quincy-Hannibal area. The local economy is predominantly agricultural. This
market is considered one of the largest soybean, hog and corn producing areas in
the nation. Prominent corporations with facilities in this market include
Moorman Manufacturing Company, American Cyanamid Company, Archer-Daniels
Midland, Pillsbury, Inc., Quincy Soybean Co., Harris Corporation, Shaeffer Pen
Company and Buckhorn Rubber Products.
Station History and Characteristics. KHQA-TV was originally licensed in
1953 to serve the greater Quincy, Illinois-Hannibal, Missouri market. The
Quincy-Hannibal-Keokuk market is ranked 160th in the United States, with
approximately 111,400 television households and a population of approximately
309,000. This market has a cable penetration rate of 61%. KHQA-TV is broadcast
on VHF channel 7 and is a CBS affiliate. The Company acquired KHQA-TV in 1986.
There is one other commercial station in this market, an NBC affiliate carried
on a VHF channel. In January 1998, KHQA-TV relocated to a new 18,000 square foot
state-of-the-art digital television facility in Quincy, Illinois.
Station Performance. According to the 1997 Nielsen ratings reports, KHQA-TV
was ranked number one in its market with a 7 rating and a 23% share of
households viewing television. KHQA-TV currently is the number two ranked news
station in this market and broadcasts 13 hours and 30 minutes of local news
programming each week. KHQA-TV's special value-added local sales efforts in 1997
included '7 Who Care,' a program saluting area volunteers, 'Kids Who Care,' a
campaign to teach and promote child safety, 'Made in the Tri-States' and 'Beyond
the Book,' news projects focusing on area businesses and schools, and 'The
Holiday Shopping Show,' a sales promotion presenting holiday shopping ideas.
KHQA-TV's first run and off-network syndicated programming includes 'Wheel of
Fortune,' 'Jeopardy,' 'Seinfeld,' 'The Oprah Winfrey Show' and the recently
acquired 'The Rosie O'Donnell Show.'
WTVY-TV (CBS) DOTHAN, ALABAMA AND PANAMA CITY, FLORIDA
Market Description. WTVY-TV is one of the few television stations in the
United States that serves two DMAs. The Dothan DMA consists of six counties,
five of which are in southeastern Alabama and one of which is in southwestern
Georgia. Dothan is located approximately 90 miles southeast of Montgomery,
Alabama and 80 miles north of Panama City, Florida. The Panama City DMA consists
of nine counties in the middle of the Florida Panhandle.
The Dothan economy, historically agricultural, is currently evenly
distributed among the service, light manufacturing and agricultural sectors.
Dothan is known as the 'Peanut Capital of the World,' producing 25% of all
peanuts grown in the United States. Peanuts account for half of the area's farm
income, with cattle, poultry, corn, wheat, soybeans, cotton, fruits and
vegetables making up the other half. Prominent corporations with facilities in
the area include the Sony Corporation, Perdue Farms, Inc., General Electric
Company and AAA Cooper Transport Company. Dothan is also home to the area's
largest regional shopping mall, two regional hospitals and five educational
institutions offering collegiate, technical and vocational studies. The Dothan
DMA is also the site of the Fort Rucker United States Army Aviation Station.
Currently, the base is not on the government list of facilities to be closed,
but there can be no assurance that such status will not change in the future.
Panama City is the county seat of Bay County, Florida and is located on the
Gulf of Mexico at the mouth of St. Andrew's Bay. The Panama City economy is
heavily based on year-round tourism as a result of its affordability when
compared to other Florida beach areas. Prominent corporations in the area
include the Champion Paper Company and Stone Container Corporation, as well as
more than 100
15
<PAGE>
<PAGE>
other manufacturers. The Panama City DMA is also the site of the Tyndall United
States Air Force Base and the Coastal Systems Station of the United States Navy.
Currently these locations are not on the government list of facilities to be
closed, but there can be no assurance that such status will not change in the
future. In addition, Panama City has a foreign trade zone and deep water port,
rail transportation and easy access to Interstate-10, the Jacksonville, Florida
to New Orleans, Louisiana Interstate highway.
Station History and Characteristics. WTVY-TV, originally licensed in 1955
to serve the Dothan, Alabama metropolitan area, currently serves the DMAs of
Dothan, Alabama and Panama City, Florida. The Dothan market is ranked 173rd in
the United States, with approximately 86,390 television households and a
population of approximately 230,000, while the Panama City market is ranked
157th with approximately 117,220 television households and a population of
approximately 303,000. The Dothan market has a cable penetration rate of 69% and
the Panama City market has a cable penetration rate of 67%. If combined, these
two markets would rank as the 123rd largest market in the United States. WTVY-TV
is broadcast on VHF channel 4 and is a CBS affiliate. The Company acquired
WTVY-TV on March 31, 1995. WTVY-TV competes with two other stations in the
Dothan market, affiliates of ABC and Fox which broadcast on UHF channels. In the
Panama City market, WTVY-TV competes with three other commercial stations,
affiliates of ABC and NBC which broadcast on VHF channels and a Fox affiliate
which broadcasts on a UHF channel.
Station Performance. According to the 1997 Nielsen ratings reports, WTVY-TV
was ranked number one in the Dothan market with an 8 rating and a 25% share of
households viewing television. It was also ranked third in the Panama City
market with a 4 rating and a 12% share of households viewing television. WTVY-TV
currently is the number one ranked news station in the Dothan market and
broadcasts 16 hours of local news programming each week. WTVY-TV's special
value-added local sales efforts in 1997 included 'Hometown Salutes,' saluting
area communities, 'LiveLine,' live call-in programs focusing on issues such as
health, 'Energy for Education,' a campaign to recognize superior students and
teachers and 'WeatherSchool,' an educational project undertaken with area
schools to build interest in weather and science. WTVY-TV's first run syndicated
programming includes 'Wheel of Fortune,' 'Live with Regis & Kathie Lee,' 'Martha
Stewart Living' and the recently acquired 'The Oprah Winfrey Show.'
WHSV-TV (ABC) HARRISONBURG, VIRGINIA
Market Description. The Harrisonburg DMA consists of four counties, two of
which are in northwestern Virginia and two of which are in northeastern West
Virginia. Harrisonburg is located in the Shenandoah Valley between the Allegheny
and Blue Ridge Mountains, approximately 110 miles west of Washington, D.C. and
110 miles northwest of Richmond, Virginia. The Harrisonburg economy has been
growing rapidly over the past several years. Several prominent companies have
established regional operations in the Harrisonburg market, including the Coors
Brewing Company and R.R. Donnelly & Sons Co., Inc. Other companies in this area
include Rocco Turkey, Inc., WLR Foods, Inc., Tyson Foods, Inc., Hershey Co.,
Owens-Brockway Plastics & Closures and Merck & Co., Inc. Harrisonburg is also
the home of James Madison University, the largest state university in the
Virginia University system with approximately 12,000 students.
Station History and Characteristics. Since its inception in 1953, WHSV-TV
has been the only VHF commercial television station serving the Harrisonburg
market. The Harrisonburg market is ranked 177th in the United States, with
approximately 81,120 television households and a population of approximately
218,000. This market has a cable penetration rate of 76%. WHSV-TV is broadcast
on VHF channel 3 and is an ABC affiliate. The Company acquired WHSV-TV in 1986.
The Station is also carried on a UHF translator on channel 64 in the adjacent
Charlottesville, Virginia market. The higher costs for advertising in
surrounding urban areas results in a competitive advantage for WHSV-TV in
attracting local advertising revenues.
Station Performance. According to the 1997 Nielsen ratings reports, WHSV-TV
had a 7 rating and a 23% share of households viewing television. WHSV-TV
currently broadcasts 15 hours and 20 minutes of local news programming each
week. WHSV-TV's special value-added local sales efforts in 1997 included 'Toys
for Tots,' an annual holiday toy drive, 'Children First,' a campaign to raise
awareness
16
<PAGE>
<PAGE>
of children's needs and issues and 'WeatherSchool,' an educational project
undertaken with area schools to build interest in weather and science. In
addition, WHSV-TV supports 'Celebrate Smart,' a project to combat drunk driving,
and 'First Night Harrisonburg,' an annual New Year's celebration. WHSV-TV's
first run and off-network syndicated programming includes 'Wheel of Fortune,'
'Jeopardy,' 'Home Improvement,' 'The Oprah Winfrey Show' and 'Live with Regis &
Kathie Lee.' Additionally, beginning in the fall of 1998, the Station will add
'Hollywood Squares' to its first run syndicated programming schedule.
WBKO-TV (ABC) BOWLING GREEN, KENTUCKY
Market Description. The Bowling Green DMA consists of eight counties in
southcentral Kentucky. Bowling Green is approximately 110 miles south of
Louisville, Kentucky and 60 miles north of Nashville, Tennessee. Bowling Green
lies between two different geographic regions: the 'Pennyroyal,' a rural area
where agriculture and mining are major factors in the economy, and the
'Bluegrass,' a region featuring rich soil and rolling hills on which some of the
most prominent thoroughbred horse farms in the world are located. Prominent
corporations with facilities in this area include Fruit of the Loom, General
Motors Corvette Assembly Division, the Holley Division of Coltec Industries,
Eaton Corporation, Lord Corporation, Country Oven Bakery Division of Kroger
Stores, Inc. and Hills Pet Products. Bowling Green is also the home of Western
Kentucky University with approximately 15,000 students and 2,500 employees.
Station History and Characteristics. WBKO-TV was originally licensed in
1962 to serve southcentral Kentucky. The Bowling Green market is ranked 182nd in
the United States, with approximately 74,740 television households and a
population of approximately 185,000. This market has a cable penetration rate of
56%. WBKO-TV is broadcast on VHF channel 13 and is an ABC affiliate. The Company
acquired WBKO-TV in 1983. The only other local commercial station broadcasting
in this market is a Fox affiliate which broadcasts on a UHF channel. WBKO-TV
also competes to some extent with three stations broadcasting from Nashville,
Tennessee.
Station Performance. According to the 1997 Nielsen ratings reports, WBKO-TV
was ranked number one in its market with an 8 rating and a 29% share of
households viewing television. WBKO-TV currently is the number one ranked news
station in this market and broadcasts 19 hours and 30 minutes of local news
programming each week, including 30 minutes recently added to the Station's
daily 'AM Kentucky' program. WBKO-TV's special value-added local sales efforts
in 1997 included 'Children First,' a campaign to raise awareness of children's
needs and issues, 'Home and Garden Expo,' and 'Bikes for Kids for Christmas'
projects. Further, WBKO-TV supports events such as 'Relay for Life,' which
benefits The American Cancer Society, 'The Glasgow Highland Games,' and 'The
TransFinancial Balloon Classic.' WBKO-TV's first run and off-network syndicated
programming includes 'Home Improvement,' 'The Oprah Winfrey Show,' 'Live with
Regis & Kathie Lee' and 'Martha Stewart Living.'
WTOK-TV (ABC) MERIDIAN, MISSISSIPPI
Market Description. The Meridian DMA consists of seven counties, five of
which are in eastern Mississippi and two of which are in western Alabama.
Meridian is approximately 150 miles west of Montgomery, Alabama and 90 miles
east of Jackson, Mississippi. The Meridian economy, traditionally based on the
cattle and timber industries, has recently evolved into a medical and financial
hub for eastern Mississippi and western Alabama. In addition, Meridian's
favorable industrial climate has lured over 100 manufacturing plants to the
area, including Peavey Electronics Corporation, James River Corp., Avery
Dennison Stationery Products Division and the Delco-Remy Division of General
Motors. There are also many large hospitals in the area, including Rush
Foundation Hospital, East Mississippi State Hospital, Riley Memorial Hospital
and Jeff Anderson Regional Medical Center, which together employ over 3,800
individuals. Additionally, the opening of a regional shopping mall in 1997 has
generated approximately 2,000 jobs. Meridian is also site of the Meridian Naval
Air Station, a United States Naval training facility. Currently, the base is not
on the government list of facilities to be closed, but there can be no assurance
that such status will not change in the future.
17
<PAGE>
<PAGE>
Station History and Characteristics. WTOK-TV was originally licensed in
1953 to serve Meridian, Mississippi. The Meridian market is ranked 183rd in the
United States, with approximately 67,030 television households and a population
of approximately 185,000. This market has a cable penetration rate of 54%.
WTOK-TV is broadcast on VHF channel 11 and is an ABC affiliate. The Company
acquired WTOK-TV in 1988. The other two commercial stations in the market,
affiliates of NBC and CBS, are broadcast on UHF channels with considerably
smaller broadcast coverage than WTOK-TV. The CBS affiliate recommenced
broadcasting in April 1994 after ceasing operations in April 1992. In August
1995, the CBS and NBC affiliates entered into a local marketing agreement
pursuant to which the CBS affiliate manages the NBC affiliate.
Station Performance. According to the 1997 Nielsen ratings reports, WTOK-TV
was ranked number one in its market with an 8 rating and a 25% share of
households viewing television. WTOK-TV currently is the number one ranked news
station in this market and broadcasts 13 hours and 55 minutes of local news
programming each week. WTOK-TV's special value-added local sales efforts in 1997
included 'Coats for Kids,' a program to provide for area children in need,
'Children's First Day,' an annual information and entertainment festival and
'Toy-a-thon,' an annual holiday toy drive. In addition, WTOK-TV presents
significant local political coverage, including debates, forums and town
meetings. WTOK-TV's first run syndicated programming includes 'The Oprah Winfrey
Show,' 'Montel Williams,' 'Sally Jessy Raphael' and 'Live with Regis & Kathie
Lee.'
WTAP-TV (NBC) PARKERSBURG, WEST VIRGINIA
Market Description. The Parkersburg DMA consists of three counties, two of
which are in western West Virginia and one of which is in eastern Ohio.
Parkersburg is located at the confluence of the Little Kanawha and the Ohio
rivers, approximately 140 miles from Pittsburgh, Pennsylvania and approximately
75 miles from Charleston, West Virginia. The Parkersburg economy is evenly
distributed among the manufacturing and services sectors. A number of prominent
companies maintain facilities in the Parkersburg market, including E. I. du Pont
de Nemours & Co., General Electric Plastics, Shell Chemical, Ames Company,
Nashua Photo, Inc. and Schott Scientific Glass, Inc. The area is also home to
the Bureau of Public Debt, the printer for all United States government bonds,
as well as several regional educational institutions including West Virginia
University at Parkersburg, Ohio Valley College and Marietta State College with
an aggregate student population of approximately 5,500.
Station History and Characteristics. WTAP-TV was originally licensed in
1953 and is the only commercial television station licensed to serve the
Parkersburg market. The Parkersburg market is ranked 186th in the United States,
with approximately 61,730 television households and a population of
approximately 160,000. This market has a cable penetration rate of 78%. WTAP-TV
is broadcast on UHF channel 15 and is an NBC affiliate. The Company acquired
WTAP-TV in 1979. Other network affiliated stations, including one NBC affiliate,
located in Charleston, West Virginia and Columbus, Ohio are carried on cable
systems in Parkersburg, but are not part of the Parkersburg DMA.
Station Performance. According to the 1997 Nielsen ratings reports, WTAP-TV
had a 10 rating and a 30% share of households viewing television. WTAP-TV
currently broadcasts 15 hours of local news programming each week. WTAP-TV's
special value-added local sales efforts in 1997 included 'Coats for Kids,' a
program to provide for area children in need, and 'Back to School Safety Tips'
and 'Hunter Safety Tips,' campaigns to teach and promote safety concerns.
Further, WTAP-TV presents significant local election coverage, including
debates. WTAP-TV's first run and off-network syndicated programming includes
'Wheel of Fortune,' 'Jeopardy,' 'Home Improvement,' 'Seinfeld,' 'The Oprah
Winfrey Show,' 'Montel Williams' and 'Live with Regis & Kathie Lee.'
KGWN-TV (CBS) CHEYENNE, WYOMING
KSTF-TV (CBS) SCOTTSBLUFF, NEBRASKA
KTVS-TV (CBS) STERLING, COLORADO
Market Description. The Cheyenne-Scottsbluff DMA consists of the three
counties, two in southeastern Wyoming and one in western Nebraska. Cheyenne, the
state capital of Wyoming, is located approximately 100 miles north of Denver,
Colorado. The Cheyenne economy is supported
18
<PAGE>
<PAGE>
primarily by government, transportation, tourism, services and light
manufacturing. Significant employers in the area include Union Pacific Railroad,
United Medical Center, Veteran's Administration Hospital, Safecard and Frontier
Oil Refinery. Cheyenne is also home to the F. E. Warren United States Air Force
Base, which employs more than 4,200 people in military and civilian capacities.
Currently, the base is not on the government list of facilities to be closed,
but there can be no assurance that such status will not change in the future.
In order to properly serve the Cheyenne-Scottsbluff DMA, KGWN-TV operates
two satellite television stations, KSTF-TV in Scottsbluff, Nebraska and KTVS-TV
in Sterling, Colorado. Scottsbluff is located in Scotts Bluff County, Nebraska
approximately 100 miles northeast of Cheyenne. Sterling is located in Logan
County, Colorado approximately 100 miles southeast of Cheyenne. The satellite
stations serve sparsely populated rural areas which lack the resources to
support full-service broadcast operations unrelated to the parent Station's more
populous communities.
Station History and Characteristics. KGWN-TV, originally licensed in 1954
to serve Cheyenne, Wyoming, also serves Scottsbluff, Nebraska through satellite
station KSTF-TV and Sterling, Colorado through satellite station KTVS-TV. Since
first going on the air, KGWN-TV has been the only home market station in the
city of Cheyenne and Laramie County. The Cheyenne-Scottsbluff market is ranked
195th in the United States with approximately 49,940 television households and a
population of approximately 129,000. This market has a cable penetration rate of
73%. KGWN-TV is broadcast on VHF channel 5 and is a CBS affiliate. KSTF-TV,
broadcast on VHF channel 10, and KTVS-TV, broadcast on VHF channel 3, are
operated as S-2 satellites receiving a substantial portion of their programming
from KGWN-TV. However, as S-2 satellites, KSTF-TV and KTVS-TV broadcast some
self-produced local programming which is not provided by KGWN-TV. KGWN-TV
competes with two other commercial stations in the Cheyenne market, a satellite
station of an ABC affiliate in Casper, Wyoming which broadcasts Fox programming
in Cheyenne, and a satellite station of an NBC affiliate, both of which
satellite stations broadcast on UHF channels. KSTF-TV competes with one other
commercial station in the Scottsbluff market, a satellite station of an ABC
affiliate which broadcasts on a VHF channel. KTVS-TV competes to some extent
with several stations broadcasting from Denver, Colorado.
Station Performance. According to the 1997 Nielsen ratings reports, KGWN-TV
was ranked number one in its market with a 5 rating and a 16% share of
households viewing television. KGWN-TV currently is the number one news station
in this market. Since being acquired in June 1996 by the Company, the Station
has added weekday newscasts at 6:30 am, 12:00 noon and 5:00 pm, as well as
expanded coverage during the 7:00 to 9:00 am time period. Currently, the Station
airs 13 hours and 53 minutes of local news programming per week as opposed to 6
hours and 50 minutes it broadcast each week prior to being acquired by the
Company. KGWN-TV's special value-added local sales efforts in 1997 included live
and promotional coverage of Cheyenne Frontier Days, a 10-day western celebration
featuring the world's largest outdoor rodeo, the live broadcast of the 'Fire in
the Sky' Fourth of July celebration and 'Motorsports Shootout,' a car and bike
show and festival. Further, KGWN-TV presents the 'Cheyenne Christmas Parade,'
'Christmas Choral Festival' and 'Holiday Shopper,' a direct mail campaign. Since
being acquired by the Company, the Station has added 'The Rosie O'Donnell Show'
to its first run syndicated programming schedule. KGWN-TV's first run and off-
network syndicated programming also includes 'Live with Regis & Kathie Lee,'
'Mad About You' and 'Martha Stewart Living.'
KGWC-TV (CBS) CASPER, WYOMING
KGWL-TV (CBS) LANDER, WYOMING
KGWR-TV (CBS) ROCK SPRINGS, WYOMING
Market Description. The Casper-Riverton DMA consists of five counties in
central Wyoming. Casper is located approximately 280 miles southeast of
Billings, Montana and 275 miles north of Denver, Colorado. The Casper economy,
historically centered on oil and agriculture, has recently diversified with the
growth of its service sector. Major employers in the area include the Wyoming
Medical Center, Wotco, Inc, Union Pacific Railroad, Safecard and Frontier Oil
Refinery. Casper is also
19
<PAGE>
<PAGE>
home to Casper College and the University of Wyoming-Casper, with an aggregate
student population of approximately 4,500.
In order to properly serve the vast geographic area covered by the
Casper-Riverton DMA, KGWC-TV operates two satellite television stations, KGWL-TV
in Lander, Wyoming and KGWR-TV in Rock Springs, Wyoming. Lander is located in
Freemont County approximately 120 miles west of Casper. Rock Springs is located
in Sweetwater County approximately 165 miles southwest of Casper. The satellite
stations serve sparsely populated rural areas which lack the resources to
support full-service broadcast operations unrelated to the parent Station's more
populous communities.
Station History and Characteristics. KGWC-TV, originally licensed in 1980
to serve Casper, Wyoming, also serves Lander, Wyoming through satellite station
KGWL-TV and Rock Springs, Wyoming through satellite station KGWR-TV. The
Casper-Riverton market is ranked 200th in the United States, with approximately
47,820 television households and a population of approximately 125,000. This
market has a cable penetration rate of 66%. KGWC-TV is broadcast on UHF channel
14 and is a CBS affiliate. KGWL-TV, broadcast on VHF channel 5, and KGWR-TV,
broadcast on VHF channel 13, are operated as S-1 satellite stations receiving
all of their programming from KGWC-TV. KGWC-TV competes with three other
commercial stations in this market, an NBC affiliate which broadcasts on a VHF
channel and ABC and Fox affiliates which broadcast on UHF channels. In November
1997, KGWC-TV relocated to a 10,000 square foot leased facility in downtown
Casper. The new location includes significant technological improvements in
order to better serve the market.
Station Performance. According to the 1997 Nielsen ratings reports, KGWC-TV
was ranked number two in its market with a 3 rating and a 9% share of households
viewing television. KGWC-TV currently is the number two ranked news station in
this market. Since being acquired in June 1996 by the Company, the Station has
added 10:00 pm newscasts on Saturday and Sunday. Currently, the Station airs 6
hours of local news programming per week as opposed to 5 hours it broadcast each
week prior to being acquired by the Company. KGWC-TV's special value-added local
sales efforts in 1997 included sponsorship of the local and state-wide 'Catch a
Rising Star' talent contest, 'Celebrate Casper,' a local art festival, and 'The
Central Wyoming Fair and Rodeo.' In addition, KGWC-TV produces the annual
'Christmas Parade' and provides coverage of the Wyoming State Wrestling and
Basketball tournaments. Since being acquired by the Company, the Station has
added 'Wheel of Fortune' and 'The Rosie O'Donnell Show' to its first run
syndicated programming schedule and has acquired the rights to air 'The Roseanne
Show' beginning in the fall of 1998. KGWC-TV's first run and off-network
syndicated programming also includes 'Live with Regis & Kathie Lee,' 'Mad About
You' and 'Martha Stewart Living.'
INDUSTRY BACKGROUND
Commercial television broadcasting began in the United States on a regular
basis in the 1940s. Currently there are a limited number of channels available
for broadcasting in any one geographic area, and the license to operate a
broadcast station is granted by the Federal Communications Commission (the
'FCC'). Television stations can be distinguished by the frequency on which they
broadcast. Television stations which broadcast over the very high frequency
(VHF) band (channels 2-13) of the spectrum generally have some competitive
advantage over television stations which broadcast over the ultra-high frequency
(UHF) band (channels 14-69) of the spectrum because VHF channels typically cover
larger geographic areas and operate at a lower transmission cost. However,
specific market characteristics such as population densities, geographic
features or other factors may determine whether UHF stations are in fact at a
competitive disadvantage.
Television station revenues are primarily derived from local, regional and
national advertising and, to a modest extent, from network compensation and
revenues from tower rentals and commercial production activities. Advertising
rates are based upon numerous factors including a program's popularity among the
viewers an advertiser wishes to attract, the number of advertisers competing for
the available time allotted to commercials, the size and demographic make-up of
the audience and the availability of alternative advertising media in the market
area. The extent of advertising expenditures, which are sensitive to broad
economic trends, has historically affected the broadcast industry.
20
<PAGE>
<PAGE>
Whether or not a station is affiliated with one of the four major networks
(ABC, CBS, NBC or Fox) may have a significant impact on the composition of the
station's programming, revenues, expenses and operations. A typical network
affiliate receives a significant portion of its daily programming from the
network. This programming, together with cash payments, is provided to the
affiliate by the network in exchange for a substantial majority of the
advertising time sold during the broadcast of network programming. The Fox
network has operating characteristics which are similar to ABC, CBS and NBC,
although the hours of network programming produced for Fox affiliates is less
than that produced by the other major networks. In addition, UPN and The Warner
Bros. Television Network recently have been launched as new television networks.
However, neither produce a significant amount of network programming.
Through the 1970s, network television broadcasting generally enjoyed
dominance in viewership and television advertising revenues. FCC regulation
evolved to address this dominance, with the focus on increasing competition and
diversity of programming in the television broadcasting industry. See
' -- Federal Regulation of Television Broadcasting.'
Cable television systems were first installed in significant numbers in the
late 1960s and early 1970s and were initially used to retransmit broadcast
television programming in areas with poor broadcast signal reception. According
to the 1998 Television & Cable Factbook, cable television currently passes
approximately 93% of all television households nationwide and approximately 69%
of such households are cable subscribers. Cable-originated programming has
emerged as a significant competitor for viewers of broadcast television
programming. With increased cable penetration, the cable programming share of
advertising revenues has increased. Notwithstanding increased cable viewership
and advertising, broadcast television remains the dominant distribution system
for mass market television advertising. No single cable programming network
regularly attains audience levels amounting to more than a small fraction of any
single major broadcast network. Despite the growth in alternative programming
from cable, according to Nielsen, 59% of all prime time television viewing time
during the 1996-1997 broadcast season was spent viewing ABC, CBS, NBC and Fox
programming.
Other developments have also affected television programming and delivery.
Independent stations have emerged as viable competitors for television
viewership share, particularly as the result of the availability of first run
network programming from UPN and The Warner Bros. Television Network. In
addition, there has been substantial growth in the number of home satellite dish
receivers and VCRs, which has further expanded the number of programming
alternatives for television audiences. Furthermore, direct broadcast satellite
services ('DBS') to homes from satellites became available on a nationwide basis
during 1994. See ' -- Competition.'
NETWORK AFFILIATION OF THE STATIONS
Each of the Stations is affiliated with either ABC, CBS, NBC or Fox
pursuant to an affiliation agreement (an 'Affiliation Agreement'). Each
Affiliation Agreement provides the affiliated Station with the right to
broadcast all programs transmitted by the network with which the Station is
affiliated. In return, the network has the right to sell a substantial majority
of the advertising time during such broadcasts. In exchange for every hour that
a Station elects to broadcast network programming, the network pays the Station
a specified fee, which varies with the time of day. Typically, prime-time
programming generates the highest hourly rates. Rates are subject to increase or
decrease by the network during the term of an Affiliation Agreement, with
provisions for advance notices and the right of termination by the Station in
the event of a reduction of rates.
Each of the Stations' network affiliation agreements currently runs for a
period of two to ten years. WYTV, WBKO-TV, WTOK-TV and WHSV-TV, all of which are
ABC affiliates, each have a five-year affiliation agreement which expires in
1999. KMIZ(TV), an ABC affiliate, operates under an affiliation agreement which
expires in 2000 and is automatically renewed for successive terms, subject to
either party's right to terminate the agreement at the end of its term upon 180
days' advance notice. WHOI(TV), an ABC affiliate, currently operates under an
affiliation agreement which expires in 2005 and which does not provide for
renewals. Each of KDLH-TV, WIFR-TV, KHQA-TV, WTVY-TV, KGWN-TV, KGWC-TV, KCOY-TV,
WIBW-TV, WSAW-TV, WTRF-TV, KAUZ-TV and KOSA-TV, all of which are CBS affiliates,
has a ten-year affiliation agreement which expires in 2005 and is
21
<PAGE>
<PAGE>
automatically renewed for successive five-year terms, subject to either party's
right to terminate the agreement at the end of any term upon six months' advance
notice. Each of WMTV(TV), WWLP(TV) and WILX-TV, all of which are NBC affiliates,
has an affiliation agreement which expires in 2006 and is automatically renewed
for successive five-year terms, subject to either party's right to terminate the
agreement at the end of any term upon six months' advance notice. WTAP-TV, an
NBC affiliate, currently operates under a five-year affiliation agreement which
expires in 2000 and is automatically renewed for successive terms, subject to
either party's right to terminate the agreement at the end of any term upon 12
months' advance notice.
In December 1995, the Company entered into new long-term affiliation
agreements with CBS effective retroactive to July 1, 1995 on behalf of KDLH-TV,
WIFR-TV and KHQA-TV and agreed to extend the term of the affiliation agreement
for WTVY-TV from 2004 to 2005. In connection with such arrangements, CBS paid
the Company bonus payments of $2.5 million in the fourth quarter of 1995 and
$2.5 million in the first quarter of 1996. These payments will be recognized as
revenue by the Company at the rate of $0.5 million per year over the ten-year
period of the affiliation agreements. The Company also agreed with CBS that,
upon the consummation of the Acquisitions, the term of the affiliation
agreements of the Stauffer Stations that are CBS affiliates would be extended
from 2000 to 2005 and the term of the affiliation agreements of the Brissette
Stations that are CBS affiliates would be extended from 2004 to 2005.
During August 1997, the Company completed the purchase of the television
broadcasting licenses and certain equipment of K02NQ and K11TB, two low-power
television stations located in Columbia and Jefferson City, Missouri.
Concurrently with such purchase, the Company entered into a network affiliation
agreement for such Stations with Fox which expires July 31, 1999, and
automatically continues until terminated by either party upon 120 days' advance
notice. These two Stations began operating in September 1997. The primary means
of distribution for these Stations is via cable television.
In addition to its affiliation arrangements, the Company entered into
agreements with Fox to broadcast football games of the National Football
Conference ('NFC') of the National Football League and certain other Fox
programming in non-network time periods for the 1996 and 1997 broadcast seasons.
The Company has had similar arrangements with Fox since 1994. In 1997, the
Company broadcast the NFC football games and other Fox programming on KHQA-TV,
KDLH-TV, WYTV, K02NQ and K11TB. The Company believes that broadcasting NFC
football games increased its audience ratings during the times the games were
broadcast. Beginning in the fall of 1998, CBS will broadcast football games of
the American Football Conference ('AFC') of the National Football League. All of
the Stations which are CBS affiliates will broadcast AFC football games. The
Company intends to enter into agreements with Fox to broadcast NFC football
games in 1998 for certain of the Stations, however, to date no such agreements
have been completed.
In the third quarter of 1997, the Company entered into definitive
agreements with The Warner Bros. Television Network to develop a local cable
affiliate called the 'WeB' in each of the Company's 20 markets which rank above
100. The WeB is intended to be a 24 hour, seven day a week television channel
which will broadcast The Warner Bros. Television Network prime time programming,
Warner Bros. children's programming and syndicated programming of Warner Bros.
and others. The Company is currently in negotiations with cable systems in its
markets for the carriage of WeB programming. The WeB is scheduled to begin
service by the fall of 1998 in most 100-plus markets. The Company will be
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
does it anticipate that significant capital expenditures will be required in
connection with the development of its WeB affiliates.
ADVERTISING SALES
Television station revenues are derived primarily from 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. Advertising rates are based upon numerous factors including a
program's popularity among the viewers an advertiser wishes to target, the
number of advertisers competing for the available time, the size and demographic
composition of a program's audience and the availability of competing or
alternative advertising media in the market area. Because
22
<PAGE>
<PAGE>
broadcast television stations rely on advertising revenue, declines in
advertising budgets, particularly in recessionary periods, adversely affect the
broadcast industry and as a result may contribute to a decrease in the revenues
of broadcast television stations. The Company seeks to manage its spot inventory
efficiently thereby maximizing advertising rates.
Local Sales. Approximately 56.1% of the gross revenues of the Stations in
1997 came from local and regional advertisers. Local and regional advertising is
sold primarily by each Station's professional sales staff. Typical local and
regional advertisers include automobile dealerships, retailers, local grocery
chains, soft drink bottlers, state lotteries and restaurants. The Company
focuses on local advertisers by producing their commercials, producing news and
informational programming with local advertising appeal and sponsoring or
co-promoting local events and activities that give local advertisers value-added
community identity. The Company's management team monitors sales plans and
promotional activities and shares such information among the Stations on a
weekly basis.
National Sales. Approximately 29.1% of the gross revenues of the Stations
in 1997 came from national advertisers. Typical national advertisers include
automobile manufacturers, consumer goods manufacturers, communications
companies, fast food franchisors, national retailers and direct marketers.
National advertising time is sold through representative agencies retained by
the Company. Nine of the Stations are represented by Katz Communications, Inc.,
six Stations are represented by Petry Television, Inc., five Stations are
represented by Harrington, Righter & Parsons, L.L.P. and three Stations are
represented by TeleRep, Inc. The Stations' national sales coordinators actively
assist their national sales representatives to induce national advertisers to
increase their national spot expenditures designated to the Company's markets.
COMPETITION
The principal methods of competition in television broadcasting are the
development of audience interest through programming and promotions and
competition in rates charged to advertisers. Broadcast television stations
compete for advertising revenues with other broadcast stations, cable television
and all other advertising media in their market areas and generally do not
compete with stations in other markets. The Company has generally acquired
stations in markets where there are only a limited number of over-the-air
television stations competing for local viewership and for local advertising
revenues. In two of its markets, the Company owns the only local television
station. In four markets, the Company owns one of only two local television
stations. In five markets, the Company owns one of three local television
stations. In nine markets, the Company owns one of four local television
stations. In the Columbia and Jefferson City, Missouri market the Company owns
two of five stations, one of the owned stations being the jointly operated
low-power stations known in the market as Fox-11. In addition, WTVY-TV competes
with two other stations in the Dothan market and with three other stations in
the Panama City market.
Audience. Stations compete for audience on the basis of program popularity
which has a direct effect on advertising rates. A significant portion of the
Company's daily programming is supplied by the networks. In those time periods,
the Stations are totally dependent upon the performance of the networks'
programs in attracting viewers. Non-network time periods are programmed by the
Stations with local news and syndicated programs generally purchased for cash
and barter and, to a lesser extent, barter-only. The Stations also air sports,
public affairs and other entertainment programming.
The development of methods of television transmission of video programming
other than over-the-air broadcasting, and in particular the growth of cable
television and DBS, have significantly altered competition for audience in the
television industry. These other transmission methods can increase competition
for a broadcasting station by bringing into its market distant broadcasting
signals not otherwise available to the station's audience and also by serving as
a distribution system for non-broadcast programming distributed by the cable
system. As the technology of satellite program delivery to cable systems
advanced in the late 1970s, development of programming for cable television
accelerated dramatically, resulting in the emergence of multiple, national-scale
program alternatives and the rapid expansion of cable television and higher
subscriber growth rates. Historically, cable operators generally have not sought
to compete with broadcast stations for a share of the local news audience in
small and medium-sized markets.
23
<PAGE>
<PAGE>
The FCC has authorized several entities to construct and launch satellites
to deliver DBS to homes from satellites. Three DBS companies provide nationwide
service and MCI Communications has acquired the right to launch a fourth DBS
satellite server in a joint venture with the parent of Fox. Fox has announced
plans to sell its DBS license to a coalition of cable companies.
Several DBS companies provide signals of out-of-market network affiliated
stations to 'unserved households' in the Stations' markets. The legal definition
of an 'unserved household' is one that, among other things, cannot receive a
specific grade of service from a local broadcast station. Many stations have
alleged in litigation that satellite carriers sell these signals to households
that are served by local stations. In addition, DBS provider Echostar began
providing transmission of local television stations to viewers in the markets in
which those stations are licensed and has asked for a change in legislation to
permit that service to be provided to 'served' households.
The FCC has also adopted rules which may significantly increase the number
of multipoint distribution service stations ('MDS') (i.e., video service
distributed on microwave frequencies which can only be received by special
microwave antennae). These MDS stations have launched service in several cities,
and several telephone companies have also begun offering MDS service. In
addition, the FCC has proposed to authorize a 28 GHz microwave cable service
that will have the potential to provide up to 100 channels or more of video. The
FCC is also licensing low-power television stations which are television
stations with coverage areas much smaller than those served by full-power
conventional television stations.
Current technology offers several different methods for transmitting
television signals with greatly improved definition, color rendition, sound and
wider screen picture. Collectively, these improvements are referred to as
digital television ('DTV'), with the most advanced type of transmission system
being high definition television. Intensive research and development efforts
have achieved forms of DTV that can be transmitted by existing terrestrial
broadcasters in the United States. A number of such proposed systems have been
extensively tested by an industry test center under the auspices of an Industry
Advisory Committee reporting to the FCC. Following such testing, the major
proponents of the competing systems agreed to combine their efforts to produce a
single DTV system, and these efforts resulted in technical standards that were
submitted to the FCC in 1995. In late 1996, the FCC adopted a technical standard
for DTV. The standard will involve the broadcast of DTV on a separate television
channel from that used for conventional broadcasting. This separate channel may
also be used by broadcasters for data transmission and multi-channel
transmission. The FCC has recently assigned licenses to permit television
broadcasters to provide DTV services. Although in some cases a DTV channel may
provide a station with a smaller geographic service area than its current
channel, most stations are expected to obtain DTV service areas that are
consistent with their current service areas. At the end of a transition period,
each broadcaster is required to return to the FCC one of these two channels.
This transition ultimately will permit broadcasters to provide higher quality
services to their viewers and may permit broadcasters to compete more
effectively with other digital video systems. However, constructing and
operating a second television channel will require a substantial capital outlay
for all of the Stations. The Company is unable to predict the effect that
technological changes will have on the broadcast television industry or the
future results of the Company's operations.
In addition, the 1997 Budget Act requires (unless the FCC finds that
certain requirements have not been met) broadcasters to return their analog
channels on an expedited basis by 2005 to permit them to be reauctioned to new
licensees. An expedited transition period could require the Company to end
analog transmission before all its viewers (particularly those in the smaller
markets which the Company serves) have purchased DTV-compatible reception
equipment.
Programming. Competition for programming involves negotiating with national
program distributors or syndicators which sell first run and off-network rerun
packages of programming. The Stations compete against other local broadcast
stations for exclusive access to first run product (such as 'The Oprah Winfrey
Show,' 'Wheel of Fortune' and 'Jeopardy') and for off-network reruns (such as
'Home Improvement,' 'Seinfeld' and 'Mad About You') in their respective markets.
Cable systems generally do not compete with local stations for programming,
although various national cable networks have acquired programs that would have
otherwise been offered to local television stations. Competition also occurs for
exclusive news stories and features.
24
<PAGE>
<PAGE>
Advertising. The Stations compete for advertising revenues with other
television stations in their respective markets, as well as with other
advertising media, such as newspapers, radio, magazines, outdoor advertising,
transit advertising, yellow page directories, direct mail and local cable
systems. Competition for advertising expenditures in the broadcasting industry
occurs primarily in individual markets. Generally, television broadcasting
stations in one market do not compete with stations in other market areas.
Management cannot predict the exact nature of the competition it will face
in any market since competing stations may change owners, affiliations and/or
programming focus at any time. The Company cannot predict the effect the changes
in legislation or technology, discussed herein, will have on its operations. In
certain markets, construction permits for new stations have been or may be
granted.
RATING SERVICE DATA
All television stations in the United States are grouped into 211
television markets which are ranked in size according to the numbered television
households in such markets. Nielsen periodically publishes reports on the
estimated audience for the television stations in the various television markets
throughout the country. The audience estimates are expressed in terms of the
percentage of the total potential audience in a market viewing a particular
station (the station's 'rating') and of the percentage of households actually
viewing television (the station's 'share'). The ratings reports provide data on
the basis of total television households and selected demographic groupings in
15-minute or half-hour increments for a particular market. Each specific
geographic market is called a DMA. Every county in the continental United States
is assigned to a DMA of a specific television market on an exclusive basis. In
larger markets, ratings are determined by a combination of meters connected
directly to selected television sets (the results of which are reported on a
daily basis) and weekly diaries of television viewing prepared by the actual
viewers, while in smaller markets only weekly diaries are completed during four
separate four-week periods during the course of any year. These periods are
commonly known as 'sweeps periods.' All the Company's markets are measured
during these sweeps periods.
FEDERAL REGULATION OF TELEVISION BROADCASTING
Existing Regulation. Television broadcasting is subject to the jurisdiction
of the FCC, pursuant to the Communications Act of 1934, as amended (the
'Communications Act'). The Communications Act prohibits the operation of
television broadcasting stations except under a license issued by the FCC and
empowers the FCC to issue, renew, revoke and modify broadcasting licenses,
regulate the frequency and operating power of stations, determine station
location, regulate the equipment used by stations, adopt rules and regulations
to carry out the provisions of the Communications Act and to impose certain
penalties for violation of the Communications Act. The Communications Act
prohibits the assignment of a license or the transfer of control of a licensee
without prior approval of the FCC.
License Grant and Renewal. Television broadcasting licenses are usually
granted or renewed for the maximum allowable term of eight years. Prior to March
1996, the maximum allowable term was five years. The FCC may revoke a license or
renew a license for a period shorter than the maximum allowable term if the FCC
finds that the licensee has committed a serious violation of FCC rules, has
committed other violations which taken together would constitute a pattern of
abuse, or has otherwise failed to serve the public interest. At the time the
application is made for renewal of a television license, parties in interest may
file petitions to deny renewal, and such parties as well as members of the
public may comment upon the service the station has provided during the
preceding license term and urge denial of the application. Additionally, if an
incumbent licensee fails to meet the renewal standard, and if it does not show
other mitigating factors warranting a lesser sanction, the FCC then has the
authority to deny the renewal application and consider a competing application.
In the vast majority of cases, broadcast licenses are renewed by the FCC
even when petitions to deny are filed against broadcast license renewal
applications. All of the Stations are presently operating under licenses
expiring on various dates from 1998 to 2006. Currently, KDLH-TV, serving Duluth,
Minnesota and Superior Wisconsin; WIBW-TV, serving Topeka, Kansas; and satellite
stations
25
<PAGE>
<PAGE>
KTVS(TV), Sterling, Colorado and KSTF(TV), Scottsbluff, Nebraska, have pending
applications for license renewal. The Company is not aware of any facts or
circumstances that might prevent any of the Stations from having its current
license renewed at the end of its respective term or which might prevent the
license renewal for KDLH-TV, WIBW-TV, KTVS(TV) or KSTF(TV) from being granted.
The Communications Act prohibits the assignment of a license or the
transfer of control of a license without prior approval of the FCC. Under the
Communications Act, no license may be held by a corporation of which more than
20% of the capital stock is owned of record, voted or subject to control by
aliens, and no corporation may hold the capital stock of another corporation
holding broadcast licenses if more than 25% of the capital stock of such parent
corporation is owned of record, voted or subject to control by aliens, unless
specific FCC authorization is obtained.
Multiple Ownership Restrictions. The FCC has promulgated a number of rules
designed to limit the ability of individuals and entities to own or have an
ownership interest above a certain level (an 'attributable interest,' defined
more fully below) in broadcast stations, as well as other mass media entities.
These rules include limits on the number of television stations that may be
owned both on a national and a local basis. On a national basis, FCC rules
generally limit any individual or entity from having attributable interests in
television stations with an aggregate audience reach exceeding 35% of all United
States households.
The FCC also limits the common ownership of broadcast stations with
overlapping service areas, combined local ownership of a newspaper and a
broadcast station and combined local ownership of a cable television system and
a broadcast television station. The FCC's duopoly rule currently bars an entity
from having an attributable interest in television stations in the same market
with overlapping Grade B service contours. However, pending resolution of an FCC
proceeding that may result in the liberalization of this rule, the FCC may allow
an entity to acquire an attributable interest in two stations in different
markets with overlapping Grade B contours provided the stations' Grade A
contours do not overlap. Based on this interim policy, the FCC has permitted
common ownership by the Company of WTRF-TV, serving Wheeling, West Virginia and
Stuebenville, Ohio, and WYTV, serving Youngstown, Ohio, and of WTRF-TV and
WTAP-TV, serving Parkersburg, West Virginia, subject to the outcome of the
pending proceeding. In 1996, the FCC granted the Company authority to acquire
WMTV-TV, serving Madison, Wisconsin, despite the overlap of Grade B and Grade A
contours of that station with the Company's WIFR-TV, serving Rockford, Illinois,
pursuant to a temporary waiver of the duopoly rule. Prior to the end of the
waiver period, the Company requested an extension of the waiver subject to the
outcome of the pending proceeding, but has been informed that such relief is not
currently available because of the partially overlapping Grade A contours. As an
alternative, the Company intends to file an application to transfer one of the
Stations to a disposition trust. The Company may be required to dispose of one
of the two Stations to a third party within six months after the processing and
the grant of the application. There can be no assurance that the FCC will act to
liberalize the rule or that it will do so in time to avoid the Company being
required to divest certain Stations in order to eliminate any signal overlap.
Expansion of the Company's broadcast operations in particular areas and
nationwide will continue to be subject to the FCC's ownership rules and any
changes the FCC may adopt.
Under the FCC's ownership rules, if a purchaser of the Company's common
stock acquires an 'attributable' interest in the Company, a violation of FCC
regulations could result if that purchaser owned or acquired an attributable
interest in other media properties in a manner prohibited by the FCC's rules.
All officers and directors of a licensee, as well as stockholders who own 5% or
more of the outstanding voting stock of a licensee (either directly or
indirectly), will generally be deemed to have an attributable interest. For
certain institutional investors who exert no control or influence over a
licensee, the bench-mark is 10% or more of such outstanding voting stock before
attribution occurs. Under FCC regulations, debt instruments, non-voting stock
and certain limited partnership interests and voting stock held by non-majority
stockholders in cases in which there is a single majority stockholder are not
generally subject to attribution. The FCC has initiated an inquiry into
modifying several of these attribution standards. It is likely that this inquiry
will be concluded in 1998, however there can be no assurance that these rules
will be changed.
26
<PAGE>
<PAGE>
To the best of the Company's knowledge, no officer, director or stockholder
of the Company holds an interest in another radio or television station, cable
television system or daily newspaper that is inconsistent with the FCC's
ownership rules and policies.
Regulation of Broadcast Operations. Television broadcasters are subject to
FCC regulation in several other areas, including political broadcasting,
children's programming, obscene and indecent programming and equal employment
opportunities.
Qualified candidates for Federal elective office have a right to buy
advertising time on television stations. Stations may also choose, but are not
required, to carry advertising by qualified state or local candidates. When a
station carries advertising by one candidate (whether Federal, state, or local),
the station must afford 'equal time' for advertising by that candidate's
opponent(s). During the last 45 days of a primary campaign and the last 60 days
of a general electlon campaign, stations may not charge political candidates
rates any higher than the rate being charged to the most favored commercial
advertiser for a spot of the same length and class in the same period. These
requirements can have the effect of reducing the revenues that a station might
otherwise earn during pre-election periods.
Television stations must serve the educational and informational needs of
children in their overall programming, and must air some programming
specifically designed to serve the needs of children 16 years of age or younger.
The FCC recently enacted rules which provide that television stations must
generally air approximately three hours of core children's programs per week in
order to assure routine staff-level approval of FCC license renewals. Core
children's programs are defined as regularly scheduled, weekly (or more
frequent) programs at least 30 minutes long which air between 7:00 am and 10:00
pm and which have as a significant purpose the educational and informational
needs of children 16 years old or younger. Additionally, the FCC recently
promulgated rules governing the publicizing of children's programming by
broadcasters. Since 1992, FCC rules have limited the amount of commercial matter
to no more than 10.5 minutes per hour on weekends and 12 minutes per hour on
weekdays in programs originally produced and broadcast primarily for an audience
of children 12 years of age and younger.
Television stations may not air obscene programming at any time, and may
not air indecent programming during the morning, afternoon and early evening (6
a.m. to 10 p.m.). Material is obscene if it appeals to viewers' prurient
interests by depicting sexual conduct in a patently offensive manner and lacks
serious literary, artistic, political or scientific value. Material is indecent
if it describes in patently offensive terms, sexual or excretory activities or
organs.
Television stations must have an equal employment opportunity ('EEO')
policy that prohibits discrimination based on race, color, sex, religion or
national origin, and must establish EEO programs that encourage recruitment and
hiring of women and minorities. The FCC requires licensees to file regular
employment reports with the agency, recruit minority or female applicants for
vacancies, maintain records documenting the recruitment of women and minorities,
work with local organizations to identify female and minority job candidates,
and examine their sources of job referrals to determine if those sources are
effective in providing a station with female or minority applicants.
In all of the foregoing areas, as well as in other matters that affect
operations and competition in the television broadcast industry, regulatory
policies are subject to change over time and cannot be fully predicted.
Proposed Legislation and Regulation. The Congress and the FCC currently
have under consideration, and may in the future adopt, new rules, regulations
and policies regarding a wide variety of matters which could, directly or
indirectly, affect the operation and ownership of the Stations. In addition to
the proposed changes set forth above, examples of such matters include policies
concerning eliminating certain cross-ownership restrictions, political
advertising and programming practices, flexible use of broadcast spectrum,
spectrum use fees, the standards to govern evaluation of television programming
directed toward children and violent and indecent programming. Other matters
that could affect the Company's broadcast properties include technological
innovations and developments generally affecting competition in the mass
communications industry, such as the continued establishment of DBS and wireless
cable systems and low-power television stations and the participation of
telephone companies in the provision of video programming.
27
<PAGE>
<PAGE>
Implementation of the Cable Act of 1992. The Cable Television Consumer
Protection and Competition Act of 1992 (the 'Cable Act') was enacted on October
5, 1992. The Cable Act imposes cable rate regulation, establishes cable
ownership limitations, regulates the relationships between cable operators and
their program suppliers, regulates signal carriage and retransmission consent
and regulates numerous other aspects of the cable television business.
The signal carriage, or 'must carry,' provisions of the Cable Act require
cable operators to carry the signals of local commercial and non-commercial
television stations and certain low-power television stations. Systems with 12
or fewer usable activated channels and more than 300 subscribers must carry the
signals of at least three local commercial television stations. A cable system
with more than 12 usable activated channels, regardless of the number of
subscribers, must carry the signals of all local commercial television stations,
up to one-third of the aggregate number of usable activated channels of such
system. The Cable Act also includes a retransmission consent provision that
requires cable operators and other multi-channel video programming distributors
to obtain the consent of broadcast stations prior to carrying them in certain
circumstances. The must carry and retransmission consent provisions are related
in that a television station must elect once every three years either to waive
its right to mandatory, but uncompensated, carriage or to negotiate a grant of
retransmission consent to permit the cable system to carry the station's signal.
In April 1993, a three-judge panel of the United States District Court of
the District of Columbia upheld the constitutionality of the legislative
must-carry provisions. In June 1994, the Supreme Court ruled that the must-carry
provisions were 'content-neutral' and, thus, not subject to strict scrutiny and
that Congress' stated interests in preserving the benefits of free, off-air
local broadcast television, promoting the widespread dissemination of
information from a multiplicity of sources and promoting fair competition in the
market for television programming all qualify as important governmental
interests. The Court, however, remanded to the lower Federal court with
instructions to hold further proceedings with respect to evidence that lack of
the must-carry requirements would harm free, off-air broadcasting. In 1995, the
lower court again upheld the constitutionality of must-carry requirements after
reviewing the required evidence. In its March 31, 1997 decision, the Supreme
Court, by a 5 to 4 vote, affirmed the judgment of the district court. The Court
concluded that the record supports Congress' judgment that the must-carry
provisions serve significant governmental interests, namely preserving the
benefits of free, over-the-air local broadcast television, promoting the
widespread dissemination of information from a multiplicity of sources and
promoting fair competition in the market for television programming.
Under rules adopted to implement these must carry and retransmission
consent provisions, local broadcast stations were required to make their initial
elections of must carry or retransmission consent by June 17, 1993, effective
October 6, 1993. Stations that failed to elect were deemed to have elected
carriage under the must-carry provisions. Other issues addressed in the FCC
rules were market designations, the scope of retransmission consent and
procedural requirements for implementing the signal carriage provisions. By
October 1, 1996, stations were required to make their second election, covering
the three-year period from January 1, 1997 to December 31, 1999.
The Company has entered into agreements for the Stations with substantially
all of the local cable system operators which carry the Stations' signals. All
of these agreements grant such cable system operators consent to retransmit the
Station's signal. These retransmission arrangements do not represent a
significant source of revenue for the Company. The terms of these retransmission
agreements range from six months to five years. The Stations are currently
negotiating with these operators to enter into longer term agreements. The
Company cannot predict the outcome of these negotiations. In addition, although
the Company expects to be able to renew its current retransmission agreements
when such agreements expire, there can be no assurance that such renewals will
be obtained.
EMPLOYEES
The Company currently employs approximately 1,272 full-time employees.
Approximately 230 of the Company's employees located at WMTV(TV), WILX-TV,
WHOI(TV), WTRF-TV, KDLH-TV and WYTV are represented by labor unions under
collective bargaining agreements. The collective
28
<PAGE>
<PAGE>
bargaining agreements expire at various times from 1998 through 2000. There are
no unionized employees at the remaining Stations. The Company believes that its
relationship with all of its employees, including those represented by labor
unions, is satisfactory.
ITEM 2. PROPERTIES.
The Company's principal executive offices are located in leased premises in
Rockford, Illinois.
The types of properties required to support each of the Stations include
offices, studios and tower and transmitter sites. A station's studio and office
are generally located in business districts while tower and transmitter sites
are generally located so as to provide maximum signal coverage to each market.
The following table contains certain information describing the general
character of the properties of the Company.
<TABLE>
<CAPTION>
MARKET AREA, STATION AND USE OWNED OR LEASED APPROXIMATE SIZE(a) HEIGHT/POWER EXPIRATION OF LEASE
- ------------------------------------ --------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Madison, Wisconsin
WMTV(TV)
Office and Studio................... Owned 16,485 sq. ft. -- --
Tower/Transmitter Site.............. Owned (b) 1,040 ft./955 kw --
Youngstown, Ohio
WYTV
Office and Studio................... Owned 18,964 sq. ft. -- --
Tower/Transmitter Site.............. Owned (b) 642 ft./550 kw --
Springfield and Holyoke,
Massachusetts
WWLP(TV)
Office and Studio................... Owned 20,000 sq. ft. -- --
Tower/Transmitter Site.............. Owned (b) 500 ft./342 kw --
Lansing, Michigan
WILX-TV
Office and Studio................... Owned 13,700 sq. ft. -- --
Tower/Transmitter Site.............. Owned 5,000 sq. ft. 994 ft./309 kw --
Peoria and Bloomington, Illinois
WHOI(TV)
Office and Studio................... Owned 16,900 sq. ft. -- --
Tower/Transmitter Site.............. Owned (b) 640 ft./2,240 kw --
Santa Barbara, Santa Maria and San
Luis Obispo, California
KCOY-TV
Office and Studio................... Owned 18,000 sq. ft. -- --
Tower/Transmitter Site.............. Leased 1,200 sq. ft. 140 ft./115 kw 12/31/17(c)
Duluth, Minnesota and Superior,
Wisconsin
KDLH-TV
Office and Studio................... Owned 25,000 sq. ft.(d) -- --
Tower/Transmitter Site.............. Owned 1,040 sq. ft. 811 ft./100 kw --
Rockford, Illinois
WIFR-TV
Office and Studio................... Owned 13,500 sq. ft. -- --
Tower/Transmitter Site.............. Owned (b) 674 ft./562 kw --
</TABLE>
(table continued on next page)
29
<PAGE>
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
MARKET AREA, STATION AND USE OWNED OR LEASED APPROXIMATE SIZE(a) HEIGHT/POWER EXPIRATION OF LEASE
- ------------------------------------ --------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Wausau and Rhinelander, Wisconsin
WSAW-TV
Office and Studio................... Owned 24,400 sq. ft. -- --
Tower/Transmitter Site.............. Leased(e) 432 sq. ft. 650 ft./316 kw 08/01/02
Wheeling, West Virginia and
Steubenville, Ohio
WTRF-TV
Office and Studio................... Owned 43,872 sq. ft.(f) -- --
Tower/Transmitter Site.............. Owned 2,000 sq. ft. 741 ft. /316 kw --
Topeka, Kansas
WIBW-TV
Office and Studio................... Leased 18,774 sq. ft.(g) -- 08/31/98
Tower/Transmitter Site.............. Leased 2,338 sq. ft. 1,249 ft./316 kw 02/14/62
Wichita Falls, Texas and Lawton,
Oklahoma
KAUZ-TV
Office and Studio................... Owned 13,078 sq. ft. -- --
Tower/Transmitter Site.............. Owned (b) 1,028 ft./100 kw --
Columbia and Jefferson City,
Missouri
KMIZ(TV)
Office and Studio................... Owned 5,993 sq. ft. -- --
Tower/Transmitter Site.............. Owned 875 sq. ft. 1,030 ft./1,580 kw --
Columbia and Jefferson City,
Missouri
K02NQ (low-power)
Tower/Transmitter................... Leased (h) 60 ft./30 w 09/03/02
K11TB (low-power)
Tower/Transmitter................... Leased (i) 100 ft./10 w 05/15/00
Odessa and Midland, Texas
KOSA-TV
Office and Studio................... Owned 14,222 sq. ft. -- --
Tower/Transmitter Site.............. Leased 930 sq. ft. 726 ft./316 kw 10/31/03
Quincy, Illinois,
Hannibal, Missouri and Keokuk,
Iowa
KHQA-TV
Office and Studio................... Owned 18,000 sq. ft. -- --
Tower/Transmitter Site.............. Owned 1,200 sq. ft. 804 ft./269 kw --
Dothan, Alabama and
Panama City, Florida
WTVY-TV
Office and Studio................... Leased 20,440 sq. ft. -- 12/31/02
Tower/Transmitter Site.............. Owned 2,500 sq. ft. 1,880 ft./100 kw --
Harrisonburg, Virginia
WHSV-TV
Office and Studio................... Owned 6,720 sq. ft. -- --
Tower/Transmitter Site.............. Leased 2,016 sq. ft. 337 ft./8.32 kw 12/31/01(c)
</TABLE>
(table continued on next page)
30
<PAGE>
<PAGE>
(table continued from previous page)
<TABLE>
<CAPTION>
MARKET AREA, STATION AND USE OWNED OR LEASED APPROXIMATE SIZE(a) HEIGHT/POWER EXPIRATION OF LEASE
- ------------------------------------ --------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Bowling Green, Kentucky
WBKO-TV
Office and Studio................... Owned 17,598 sq. ft. -- --
Tower/Transmitter Site.............. Owned 1,175 sq. ft. 603 ft./316 kw --
Meridian, Mississippi
WTOK-TV
Office and Studio................... Owned 13,188 sq. ft. -- --
Tower/Transmitter Site.............. Owned 1,504 sq. ft. 316 ft./316 kw --
Parkersburg, West Virginia
WTAP-TV
Office and Studio................... Leased 17,500 sq. ft. -- 04/30/05(j)
Tower/Transmitter Site.............. Owned 3,600 sq. ft. 439 ft./208 kw --
Cheyenne, Wyoming
KGWN-TV
Office and Studio................... Owned 7,500 sq. ft. -- --
Tower/Transmitter Site.............. (k) 2,646 sq. ft. 620 ft./100 kw --
Scottsbluff, Nebraska
KSTF-TV (satellite)
Office and Studio................... Owned 2,400 sq. ft. -- --
Tower/Transmitter Site.............. Owned 2,457 sq. ft. 674 ft./240 kw --
Sterling, Colorado
KTVS-TV (satellite)
Office and Studio................... Owned 3,750 sq. ft. -- --
Tower/Transmitter Site.............. Owned 2,640 sq. ft. 730 ft./60.6 kw
Casper and Riverton,
Wyoming
KGWC-TV
Office and Studio................... Leased 10,000 sq. ft. -- 03/04/07
Tower/Transmitter Site.............. Owned 1,692 sq. ft. 235 ft./60 kw --
Lander, Wyoming
KGWL-TV (satellite)
Tower/Transmitter Site.............. Leased 768 sq. ft. 155 ft./30 kw 12/31/07
Rock Springs, Wyoming
KGWR-TV (satellite)
Tower/Transmitter Site.............. Leased 400 sq. ft. 100 ft./12 kw 05/22/99
</TABLE>
- ------------
(a) Approximate size is for building space only and does not include the land on
which the facilities are located.
(b) Tower/Transmitter Site is located at and included within the size of the
office and studio premises.
(c) Occupied pursuant to a Special Use Permit granted by the United States
Department of Agriculture Forest Service.
(d) The Company owns a building of approximately 55,000 sq. ft. in which the
offices and studio of KDLH-TV are located and of which approximately 30,000
sq. ft. are leased to third parties.
(e) Leased together with TAK Communications from the Wisconsin Educational
Board.
(f) The Company owns a building of approximately 46,872 sq. ft. in which the
offices and studio of WTRF-TV are located and of which approximately 3,000
sq. ft. are leased to a third party.
(g) The Company leases a building of approximately 23,837 sq. ft. in which the
offices and studio of WIBW-TV are located and of which approximately 5,063
sq. ft. are subleased to Stauffer, which owns and operates radio stations
WIBW AM and FM.
(h) The Company leases rooftop space for its tower/transmitter.
(i) The Company leases space on a tower on which it has mounted a broadcasting
antenna.
(j) The Company has an option to purchase the premises on each of May 1, 2000
and 2005 for $650,000 and $750,000, respectively.
(k) This property is utilized subject to an easement granted by the State of
Wyoming.
31
<PAGE>
<PAGE>
ITEM 3. 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
32
<PAGE>
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Not applicable.
ITEM 6. SELECTED FINANCIAL DATA.
The following selected consolidated financial data for the five years ended
December 31, 1997 represents the consolidated financial information of the
Company and are derived from the audited Consolidated Financial Statements,
which Consolidated Financial Statements for the three years ended December 31,
1997 together with the report of McGladrey & Pullen, LLP, independent certified
public accountants, are included elsewhere in this Annual Report on Form 10-K.
The selected consolidated financial information presented below should be read
in conjunction with the Consolidated Financial Statements included elsewhere in
this Annual Report on Form 10-K and 'Management's Discussion and Analysis of
Financial Condition and Results of Operations.'
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
1993 1994 1995(a) 1996(b) 1997
-------- -------- -------- ------------------------------ ------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ --------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenues(c)............... $ 38,352 $ 44,221 $ 50,329 $ 96,386 $ 96,386 $127,073 $127,073
Operating expenses:
Station operating
expenses................ 22,805 24,810 29,049 58,603 58,603 80,003 80,003
Depreciation and
amortization............ 3,721 3,403 5,042 20,220 20,220 31,380 31,380
-------- -------- -------- ------------ -------------- ------------ --------------
Station operating income...... 11,826 16,008 16,238 17,563 17,563 15,690 15,690
Corporate................. 1,249 1,309 1,575 2,695 2,695 3,787 3,787
Special bonus,
officer-stockholder..... 1,400 -- -- -- -- -- --
-------- -------- -------- ------------ -------------- ------------ --------------
Operating income.............. 9,177 14,699 14,663 14,868 14,868 11,903 11,903
-------- -------- -------- ------------ -------------- ------------ --------------
Financial expenses, net:
Interest expense, net(d):
Cash interest, net........ (8,194) (7,740) (14,763) (22,559) (22,559) (28,866) (28,866)
Other interest............ (6,161) (4,905) (712) (1,030) (8,130) (5,352) (19,374)
-------- -------- -------- ------------ -------------- ------------ --------------
(14,355) (12,645) (15,475) (23,589) (30,689) (34,218) (48,240)
Other, net.................... 144 (10) -- -- -- -- --
-------- -------- -------- ------------ -------------- ------------ --------------
(14,211) (12,655) (15,475) (23,589) (30,689) (34,218) (48,240)
-------- -------- -------- ------------ -------------- ------------ --------------
Income (loss) before income
tax benefit and
extraordinary item.......... (5,034) 2,044 (812) (8,721) (15,821) (22,315) (36,337)
Income tax benefit (e)........ -- -- -- 1,849 4,664 6,393 12,027
-------- -------- -------- ------------ -------------- ------------ --------------
Income (loss) before
extraordinary item.......... (5,034) 2,044 (812) (6,872) (11,157) (15,922) (24,310)
Extraordinary item (f)........ -- -- 6,864 -- -- -- --
-------- -------- -------- ------------ -------------- ------------ --------------
Net income (loss)............. (5,034) 2,044 6,052 $ (6,872) (11,157) $(15,922) (24,310)
------------ ------------
------------ ------------
Preferred stock dividends and
accretion................... -- -- -- (9,519) (19,037)
-------- -------- -------- -------------- --------------
Net income (loss) applicable
to common stock............. $ (5,034) $ 2,044 $ 6,052 $(20,676) $(43,347)
-------- -------- -------- -------------- --------------
-------- -------- -------- -------------- --------------
Basic earnings (loss) per
common share (k):
Income (loss) before
extraordinary item...... $ (0.72) $ 0.29 $ (0.12) $ (2.94) $ (6.17)
Extraordinary item........ -- -- 0.98 -- --
-------- -------- -------- -------------- --------------
Earnings (loss) per common
share................... $ (0.72) $ 0.29 $ 0.86 $ (2.94) $ (6.17)
-------- -------- -------- -------------- --------------
-------- -------- -------- -------------- --------------
Weighted-average common shares
outstanding................. 7,030,000 7,030,000 7,030,000 7,030,000 7,030,000
-------- -------- -------- -------------- --------------
-------- -------- -------- -------------- --------------
</TABLE>
33
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
1993 1994 1995(a) 1996(b) 1997
-------- -------- -------- ------------------------------ ------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Cash Flow Data:
Net cash provided by
operating activities...... $ 4,926 $ 10,493 $ 3,250 $ 17,842 $ 17,843 $ 8,471 $ 8,471
Net cash (used in) investing
activities................ (864) (2,507) (30,972) (326,632) (326,632) (6,282) (6,282)
Net cash provided by (used
in) financing
activities................ (6,951) (7,037) 32,773 307,212 307,212 (7,632) (7,632)
Certain Financial Data:
Broadcast cash flow (g)..... $ 15,546 $ 19,627 $ 21,310 $ 38,864 $ 38,864 $ 47,534 $ 47,534
Broadcast cash flow margin
(h)....................... 40.5% 44.4% 42.3% 40.3% 40.3% 37.4% 37.4%
Adjusted EBITDA (i)......... $ 14,297 $ 18,318 $ 19,734 $ 36,169 $ 36,169 $ 43,747 $ 43,747
Adjusted EBITDA margin
(j)....................... 37.3% 41.4% 39.2% 37.5% 37.5% 34.4% 34.4%
Amortization of program
broadcast rights.......... $ 2,179 $ 2,104 $ 2,162 $ 4,399 $ 4,399 $ 6,401 $ 6,401
Payment for program
broadcast rights.......... 2,180 1,888 2,132 3,318 3,318 5,937 5,937
Capital expenditures........ 1,278 1,161 2,008 5,003 5,003 10,833 10,833
Balance Sheet Data
(end of period):
Total assets................ $ 72,818 $ 73,621 $114,453 $491,296 $495,015 $465,523 $468,495
Working capital............. 3,684 1,611 13,665 3,697 3,697 2,511 2,511
Long-term debt (l).......... 112,874 107,607 135,767 261,186 358,234 260,594 370,917
Redeemable preferred
stock..................... -- -- -- -- 105,519 -- 124,556
Stockholder's equity
(deficit)................. (44,660) (42,616) (36,564) 144,472 (51,561) 128,550 (94,908)
</TABLE>
- ------------
(a) On March 31, 1995, the Company acquired WTVY-TV serving Dothan, Alabama and
Panama City, Florida. The statement of operations and other data does not
include information with respect to WTVY-TV prior to the date of
acquisition.
(b) On June 6, 1996, the Company acquired the Stauffer Stations and the
Brissette Stations. The statement of operations and other data does not
include information with respect to the Acquired Stations prior to the date
of acquisition.
(c) Net revenues reflect deductions from gross revenues for agency and national
sales representative commissions.
(d) Cash interest expense, net includes cash interest paid and normal
adjustments to accrued interest. Other interest expense includes accrued
interest with respect to warrants to purchase the Company's common stock,
accrued interest with respect to the contingent equity value of the Company
and long-term deferred interest, accrued interest added to long-term debt
balances, deferred loan amortization and accretion of discounts.
(e) The Company had historically elected to be taxed as an S Corporation for
Federal and state income tax purposes. The Company's election to be taxed
as an S Corporation terminated automatically concurrently with the
consummation of the Acquisitions. Accordingly, the sole stockholder of the
Company is responsible for the payment of income taxes on the Company's
taxable income for any time prior to June 6, 1996. The Company is now
subject to Federal and state income taxes.
(f) The Company recorded an extraordinary gain from the early extinguishment of
debt comprised of a gain of $11.1 million reduced by losses of $2.7 million
of prepayment premiums and contingent payments and $1.5 million of
unamortized debt discount and deferred loan costs.
(g) Broadcast cash flow 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, corporate
expenses and non-cash compensation less payments for program broadcast
rights. The Company has included broadcast cash flow data because such data
is used by certain investors to measure a company's ability to service
debt. Broadcast cash flow does 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.
(h) Broadcast cash flow margin is defined as broadcast cash flow divided by net
revenues.
(i) 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 non-cash
compensation less payments for program broadcast rights. The Company has
included Adjusted EBITDA data because such data is used by certain
investors to measure a company's ability to service debt. Adjusted EBITDA
does 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.
(j) Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net
revenues.
(k) Basic earnings (loss) per common share is computed by dividing income
(loss) after the deduction of preferred dividends and accretion of the
redemption prepayment premium and amortization of the initial warrants, by
the weighted average number of common shares outstanding. The effect of the
stock options, initial warrants and contingent warrants has not been
reflected in the computation since their inclusion as common stock
equivalents for both primary and fully-diluted earnings (loss) per share
was anti-dilutive.
(l) Long-term debt is defined as notes payable and capital leases payable
(including the current portion thereof), net of discount.
34
<PAGE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
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 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.
In 1997, the Company reported net revenues of $127.1 million compared to
net revenues of $96.4 million in 1996 and $50.3 million in 1995. The increase in
1997 net revenues was due largely to the Acquisitions. Benedek Communications
had a net loss of $24.0 million for 1997 compared to a net loss of $11.2 million
for 1996 and net income of $6.0 million (after an extraordinary gain of $6.9
million) for 1995. Benedek Broadcasting had a net loss of $15.9 million for 1997
compared to a net loss of $6.9 million for 1996 and net income of $6.0 million
(after an extraordinary gain of $6.9 million) in 1995. Adjusted EBITDA for the
year ended December 31, 1997 was $43.7 million as compared to $36.2 million for
the year ended December 31, 1996 and $19.7 million for the year ended December
31, 1995.
Time sales to local/regional advertisers and national advertisers
constitute the largest concentration of the Company's operating revenues and
represent approximately 85% of gross revenues in 1997 as compared to 79% in
1996. Excluding political advertising revenue, however, the percentage of gross
revenues attributable to local/regional advertising and national advertising of
the Company in 1995, 1996 and 1997 was 87.4%, 86.6% and 85.9%, respectively.
Approximately 56.1% of the gross revenues of the Company in 1997 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.
In December 1995, the Company entered into new long-term affiliation
agreements with CBS with respect to the 12 Stations affiliated with CBS. In
connection with such arrangements, CBS paid the Company bonus payments of $2.5
million in the fourth quarter of 1995 and $2.5 million in the first quarter of
1996. These payments are being recognized as revenue by the Company at the rate
of $0.5 million per year over the ten-year term of the affiliation agreements.
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 increased
as assets purchased at fair market value in connection with the Acquisitions
have begun to depreciate. 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 66% of net revenues for 1997 as compared to 64% for 1996 and 61%
for 1995. During the 18 months following the consummation of the Acquisitions,
the Company implemented significant personnel, operational and programming
changes at the Acquired Stations, which management believes will result in
improvements in operating revenues and broadcast cash flow.
35
<PAGE>
<PAGE>
On March 31, 1995, the Company acquired, for a cash purchase price of
$28.7, million substantially all of the assets of WTVY-TV (the 'Dothan Station')
which is the CBS affiliate serving both Dothan, Alabama and Panama City,
Florida.
On June 6, 1996, the Company acquired substantially all of the broadcast
television assets of Stauffer consisting of five principal broadcast television
stations and four satellite broadcast television stations for a purchase price
of $54.5 million. The principal stations acquired by the Company were KCOY-TV,
Santa Maria, California; WIBW-TV, Topeka, Kansas; KMIZ(TV), Columbia, Missouri;
KGWC-TV, Casper, Wyoming; and KGWN-TV, Cheyenne, Wyoming. KGWC-TV operates two
satellite stations, KGWL-TV, Lander, Wyoming, and KGWR-TV, Rock Springs,
Wyoming, both of which rebroadcast the programming of KGWC-TV. KGWN-TV operates
two satellite stations, KSTF-TV, Scottsbluff, Nebraska, and KTVS-TV, Sterling,
Colorado, both of which rebroadcast the programming of KGWN-TV. All of the these
Stations are affiliated with CBS, except for KMIZ-TV, Columbia, Missouri, which
is affiliated with ABC.
On June 6, 1996, the Company acquired all of the capital stock of Brissette
for $270.0 million in cash and preferred stock. All of the outstanding
indebtedness of Brissette was paid in full by the sellers at the closing. By
acquiring all of the capital stock of Brissette, the Company acquired eight
network-affiliated television stations including WMTV(TV), the NBC affiliate
serving Madison, Wisconsin; WWLP(TV), the NBC affiliate serving Springfield,
Massachusetts; WILX-TV, the NBC affiliate serving Lansing, Michigan; WHOI(TV),
the ABC affiliate serving Peoria, Illinois; WSAW-TV, the CBS affiliate serving
Wausau, Wisconsin; WTRF-TV, the CBS affiliate serving Wheeling, West Virginia
and Steubenville, Ohio; KAUZ-TV, the CBS affiliate serving Wichita Falls, Texas;
and KOSA-TV, the CBS affiliate serving Odessa, Texas. Of the $270.0 million paid
for the capital stock of Brissette, $225.0 million was paid in cash and $45.0
million was paid by the issuance of the junior preferred stock of the Company to
General Electric Capital Corporation ('GECC') and Mr. Paul Brissette.
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.
The following table sets forth certain historical results of the operations
and operating data for the periods indicated. The table includes the results of
operations of the Acquired Stations only from the closing date of June 6, 1996.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1995 1996 1997
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Operating income....................................................... $14,663 $14,868 $11,903
Add:
Amortization of program broadcast rights..................... 2,162 4,399 6,401
Depreciation and amortization................................ 5,042 20,220 31,380
Corporate expenses........................................... 1,575 2,695 3,787
Less:
Payment for program broadcast liabilities.................... (2,132) (3,318) (5,937)
------- ------- -------
Broadcast cash flow.................................................... $21,310 $38,864 $47,534
------- ------- -------
------- ------- -------
</TABLE>
The following table provides both historical and Same Station information.
The Same Station information gives effect to the Acquisitions as if such
transactions were consummated on January 1, 1996. The Same Station information
for the year ended December 31, 1996 does not purport to represent what the
Company's results of operations would have been if such transactions had been
effected at such date and do not purport to project results of operations of the
Company in any future period.
36
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
HISTORICAL SAME STATION
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------------- ------------------------------
% %
1996 1997 CHANGE 1996 1997 CHANGE
------- -------- ------ -------- -------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenues................................... $96,386 $127,073 31.8% $126,165 $127,073 0.7%
Operating expenses:
Selling, technical and program expenses... 43,759 60,385 38.0 57,332 60,385 5.3
General and administrative................ 14,844 19,618 32.2 20,239 19,618 (3.1)
Depreciation and amortization............. 20,220 31,380 55.2 29,955 31,380 4.8
Corporate................................. 2,695 3,787 40.5 3,700 3,787 2.4
------- -------- ------ -------- -------- ------
81,518 115,170 41.3 111,226 115,170 3.5
------- -------- ------ -------- -------- ------
Operating income..................... 14,868 11,903 (19.9) 14,939 11,903 (20.3)
------- -------- ------ -------- -------- ------
------- -------- ------ -------- -------- ------
Broadcast cash flow............................ $38,864 $ 47,534 22.3% $ 49,741 $ 47,534 (4.4)%
Broadcast cash flow margin..................... 40.3% 37.4% 39.4% 37.4%
Adjusted EBITDA................................ $36,169 $ 43,747 20.9% $ 46,041 $ 43,747 (5.0)%
Adjusted EBITDA margin......................... 37.5% 34.4% 36.5% 34.4%
</TABLE>
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
Net revenues for the year ended December 31, 1997 increased $30.7 million
or 31.8% to $127.1 million from $96.4 million for the year ended December 31,
1996 primarily as a result of the acquisition on June 6, 1996 of the Acquired
Stations. On a Same Station basis, net revenues for the year ended December 31,
1997 increased $1.0 million or 0.7% from the year ended December 31, 1996. Gross
revenues on a Same Station basis excluding political advertising revenue
decreased $8.8 million or 6.5% from the year ended December 31, 1996.
Net revenues during the year ended December 31, 1997 continued to be
adversely affected by weakness in advertising revenue for the Company's 12 CBS
affiliated stations and six ABC affiliated stations. On a Same Station basis,
net revenues of the Company's CBS affiliated stations decreased by 1.6% and net
revenues of the Company's ABC affiliated stations increased 0.8%, while net
revenues of the Company's NBC affiliated stations increased by 3.9%. Based on
Nielsen ratings reports in November 1997 and February 1998, CBS programming
generally enjoyed increased ratings and shares. The Company expects these higher
ratings and shares to have a positive impact on net revenues.
Operating expenses for the year ended December 31, 1997 increased $33.7
million or 41.3% to $115.2 million from $81.5 million for the year ended
December 31, 1996. The increase in operating expenses was attributable to the
Acquisitions. As a percentage of net revenues, operating expenses for the
Stations increased to 90.6% from 84.6% in the year ended December 31, 1996,
primarily as a result of an increase of $11.2 million in depreciation and
amortization expense. On a Same Station basis, operating expenses for the year
ended December 31, 1997 increased $4.0 million or 3.5% from the year ended
December 31, 1996. Such operating expenses were $115.2 million for the year
ended December 31, 1997 as compared to $111.2 million for the year ended
December 31, 1996. Operating expenses as a percentage of net revenues on a Same
Station basis increased from 88.2% for the year ended December 31, 1996 to 90.6%
for the year ended December 31, 1997. The increase in expenses on a Same Station
basis was due to increased compensation expense as the Company expanded the news
operations at the Acquired Stations, increased programming expense as the
Company revamped programming schedules at certain of the Acquired Stations and,
to a lesser extent, increased depreciation and amortization.
Operating income for the year ended December 31, 1997 decreased $3.0
million or 20.1% to $11.9 million from $14.9 million for the year ended December
31, 1996.
Financial (expenses), net for Benedek Communications increased $17.5
million or 57.0% to $48.2 million from $30.7 million for the year ended December
31, 1996. Benedek Broadcasting's financial expenses (net) for the year ended
December 31, 1997 increased $10.6 million or 44.9% to $34.2 million from $23.6
million in the year ended December 31, 1996. For the year ended December 31,
1997, the increases were due to the Company's higher debt level following the
completion of the financing of the
37
<PAGE>
<PAGE>
purchase price of the Acquired Stations. Benedek Communications has higher
financial expenses than Benedek Broadcasting as a result of the interest on its
Senior Subordinated Discount Notes.
Loss on investment of $0.6 million was the result of uncertainty as to the
future realization of a 1995 investment in a start-up operation in a television
production business. The Company acquired a minority interest in the business
which has experienced losses since that date. The Company has reflected this
investment as a non-operating loss.
Income tax benefit for Benedek Broadcasting for the year ended December 31,
1997 was $6.4 million compared to $1.9 million for the year ended December 31,
1996. For the year ended December 31, 1997, Benedek Communications had a $12.0
million income tax benefit compared to $4.7 million for the year ended December
31, 1996. Benedek Communications has a greater income tax benefit than Benedek
Broadcasting due to the net 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 year ended December 31, 1997.
Net loss for Benedek Broadcasting for the year ended December 31, 1997 was
$15.9 million as compared to $6.9 million net loss for the year ended December
31, 1996. Benedek Communications had a net loss of $24.3 million for the year
ended December 31, 1997 as compared to a net loss of $11.2 million for the year
ended December 31, 1996.
Broadcast cash flow for the year ended December 31, 1997 increased $8.6
million or 22.1% to $47.5 million from $38.9 million for the year ended December
31, 1996 primarily as a result of the addition of the Acquired Stations. As a
percentage of net revenues, broadcast cash flow margin decreased to 37.4% for
the year ended December 31, 1997 from 40.3% for the year ended December 31,
1997. On a Same Station basis, broadcast cash flow for the year ended December
31, 1997 decreased $2.2 million or 4.4% to $47.5 million from $49.7 million for
the year ended December 31, 1996. As a percentage of net revenues, broadcast
cash flow margin on a Same Station basis decreased to 37.4% for the year ended
December 31, 1997 from 39.4% for the year ended December 31, 1996.
The following table provides both historical and Same Station information.
The Same Station information gives effect to the acquisition of the Dothan
Station and the Acquired Stations as if such transactions were consummated on
January 1, 1995. The Same Station information for the years ended December 31,
1995 and 1996 does not purport to represent what the Company's results of
operations would have been if such transactions had been effected at such date
and do not purport to project results of operations of the Company in any future
period.
<TABLE>
<CAPTION>
HISTORICAL SAME STATION
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------------- ------------------------------
% %
1995 1996 CHANGE 1995 1996 CHANGE
------- -------- ------ -------- -------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenues................................... $50,329 $ 96,386 91.5% $120,617 $126,165 4.6%
------- -------- ------ -------- -------- ------
Operating expenses:
Selling, technical and program expenses... 21,199 43,759 106.4 51,842 57,332 10.6
General and administrative................ 7,850 14,844 89.1 19,683 20,239 2.8
Depreciation and amortization............. 5,042 20,220 301.1 28,138 29,955 6.4
Corporate................................. 1,575 2,695 71.0 3,200 3,700 15.6
------- -------- ------ -------- -------- ------
35,666 81,518 128.4 102,863 111,226 8.1
------- -------- ------ -------- -------- ------
Operating income............................... $14,663 $ 14,868 1.4% $ 17,754 $ 14,939 (15.8)%
------- -------- ------ -------- -------- ------
------- -------- ------ -------- -------- ------
Broadcast cash flow............................ $21,310 $ 38,864 82.4% $ 49,292 $ 49,741 1.0%
Broadcast cash flow margin..................... 42.3% 40.3% 40.9% 39.4%
Adjusted EBITDA................................ $19,734 $ 36,169 83.3% $ 46,092 $ 46,041 (0.1)%
Adjusted EBITDA margin......................... 39.2% 37.5% 38.2% 36.5%
</TABLE>
38
<PAGE>
<PAGE>
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
Net revenues for the year ended December 31, 1996 increased $46.1 million
or 91.5% to $96.4 million from $50.3 million for the year ended December 31,
1995 primarily as a result of the Acquisitions which increased net revenues by
$43.9 million. On a Same Station basis, net revenues for the year ended December
31, 1996 increased $5.5 million or 4.6% from the year ended December 31, 1995.
On a Same Station basis, political advertising revenue for the year ended
December 31, 1996 increased by $8.4 million to $9.8 million. Gross revenues on a
Same Station basis excluding political advertising revenue decreased $1.4
million or 1.0% from the year ended December 31, 1995.
Net revenues during the year ended December 31, 1996 were adversely
affected by an unexpected weakness in advertising revenues for the Company's 12
CBS affiliated stations and six ABC affiliated stations which experienced a
decline in audience shares relative to NBC affiliates. On a Same Station basis,
net revenues of the Company's CBS affiliated stations increased by 0.9% and net
revenues of the Company's ABC affiliated stations increased by 5.2%, while net
revenues of the Company's NBC affiliated stations increased by 10.4%.
Operating expenses for the year ended December 31, 1996 increased $45.9
million or 128.5% to $81.5 million from $35.7 million for the year ended
December 31, 1995. Of the increase in operating expenses, $40.4 million was
attributable to the Acquisitions and $2.8 million was attributable to
depreciation and amortization at the Benedek Stations owned by Benedek
Broadcasting for all of 1996. As a percentage of net revenues, operating
expenses for the Stations increased to 84.6% from 70.9% in the year ended
December 31, 1995, primarily as a result of an increase of $15.2 million in
depreciation and amortization expense. On a Same Station basis, operating
expenses for the year ended December 31, 1996 increased $8.4 million or 8.1%
from the year ended December 31, 1995. Such operating expenses were $111.2
million for the year ended December 31, 1996 as compared to $102.9 million for
the year ended December 31, 1995. The increase was primarily caused by expansion
of locally-produced news programs and increased depreciation and amortization.
Operating expenses as a percentage of net revenues on a Same Station basis
increased from 85.3% for the year ended December 31, 1995 to 88.2% for the year
ended December 31, 1996.
Operating income for the year ended December 31, 1996 increased $0.2
million or 1.4% to $14.9 million from $14.7 million for the year ended December
31, 1995.
Financial (expenses), net for the year ended December 31, 1996 increased
$15.2 million or 98.3% to $30.7 million from $15.5 million in the year ended
December 31, 1995, due to the Company's higher debt level following the
completion of the financing of the purchase price for the Acquired Stations in
June 1996.
Income tax benefit for the year ended December 31, 1996 was $4.7 million
compared to none for the year ended December 31, 1995. Reductions in the
deferred tax liabilities related to the Acquisitions and the creation of
deferred tax assets generated the income tax benefit for the year ended December
31, 1996. For the year ended December 31, 1995, the Company recognized no income
tax benefit due to its Subchapter S Corporation status.
Net loss for the year ended December 31, 1996 was $11.2 million as compared
to net income of $6.1 million for the year ended December 31, 1995. The year
ended December 31, 1995 included an extraordinary gain of $6.9 million on the
early extinguishment of debt.
Broadcast cash flow for the year ended December 31, 1996 increased $17.6
million or 82.4% to $38.9 million from $21.3 million for the year ended December
31, 1995 primarily as a result of the Acquisitions. As a percentage of net
revenues, broadcast cash flow margin decreased to 40.3% for the year ended
December 31, 1996 from 42.3% for the year ended December 31, 1995. On a Same
Station basis, broadcast cash flow for the year ended December 31, 1996
increased $0.4 million or 1.0% to $49.7 million from $49.3 million for the year
ended December 31, 1995. As a percentage of net revenues, broadcast cash flow
margin on a Same Station basis decreased to 39.4% for the year ended December
31, 1996 from 40.9% for the year ended December 31, 1995.
39
<PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities is the primary source liquidity for
the Company and were $8.5 million for the year ended December 31, 1997 compared
to $17.8 million for the year ended December 31, 1996. Cash flows from operating
activities included cash payments of interest expense which totaled $29.0
million for the year ended December 31, 1997 as compared to $22.8 million for
the year ended December 31, 1996. The increase in payments of interest expense
of $6.2 million was due to the Company's higher debt level following the
Acquisitions. For the year ended December 31, 1996, cash flows from operating
activities included $2.5 million from the bonus payment from CBS and $2.2
million of collections on net accounts receivable provided by Stauffer.
Cash Flows from Financing Activities were $(7.6) million for the year ended
December 31, 1997 compared to $307.2 million for the year ended December 31,
1996. For the year ended December 31, 1997, cash flows from financing activities
included principal payments on notes and capital leases payable of $14.9 million
funded in part by aggregate draw downs on Benedek Broadcasting's revolving
credit facility of $10.0 million. For the year ended December 31, 1996, cash
flows from financing activities resulted from the proceeds of financing the
Acquisitions.
At December 31, 1997, 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 $5.0 million was unused. From time to time
throughout 1997, 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 year December 31, 1997, the highest outstanding
balance under the Revolving Credit Facility was $10.0 million.
THE FINANCING PLAN
The Company implemented a financing plan in order to finance the
Acquisitions and to pay fees and expenses related thereto. The financing plan
consisted of (i) the offer and sale by the Company of the Senior Subordinated
Discount Notes (the 'Discount Notes') to generate gross proceeds of $90.2
million, (ii) the sale by the Company of units consisting of Exchangeable
Redeemable Senior Preferred Stock (the 'Senior 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) the Company 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 Dothan Station.
The Company believes that the financing plan provides for a long-term
financing structure that 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
until such time that the debt matures or requires payment in full for at least
the period until the Company is required to make cash payments in respect of the
Discount Notes, the Senior Preferred Stock and the Junior Preferred Stock. The
Company anticipates that capital expenditures of approximately $9.0 million will
be made in 1998. Such capital expenditures will be financed either from cash
provided by operations, borrowings under the Revolving Credit Facility or
purchase money financing.
The 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.
In addition, for all dividend payment dates with respect to the Senior Preferred
Stock and interest payment dates with respect to the Discount Notes through and
including July 1, 2001, 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 Senior Preferred Stock or pay interest on the
Discount Notes by issuing additional Discount Notes. For all dividend payment
dates with respect to the Junior Preferred Stock prior to October 1, 2001, the
Company is required to pay such dividends by adding the amount thereof to the
then effective
40
<PAGE>
<PAGE>
liquidation preference of the Junior Preferred Stock. In order for the Company
to meet its debt service obligations after May 2001 with respect to the Discount
Notes and pay required dividends after July 1, 2001 with respect to the Senior
Preferred Stock and from and after October 1, 2001 with respect to the Junior
Preferred Stock, the Company will need to substantially increase broadcast cash
flow at the Stations or refinance the Discount Notes, Senior Preferred Stock and
Junior Preferred Stock. The Company's debt service obligations, including
scheduled principal amortization, in the 12 month period beginning May 15, 2001
would be approximately $58.0 million (assuming that there will not have been any
mandatory or voluntary prepayments of any indebtedness prior to that time and
assuming a blended interest rate on the amounts then outstanding under the
Credit Agreement comparable to the rate the Company is currently paying). The
Company's cash dividend payments during such period on the Senior Preferred
Stock and the Junior Preferred Stock would be approximately $27.0 million.
The Senior Secured Notes are senior secured obligations of Benedek
Broadcasting and rank pari passu in right of payment with the Term Loan
Facilities and revolving credit facility under the Credit Agreement. The Senior
Secured Notes are guaranteed by BLC and the Company and secured by the common
stock of BLC. The Senior Secured Notes will mature on March 1, 2005 and are
redeemable at Benedek Broadcasting's option, in whole or in part, at any time
after March 1, 2000.
In order to repay the Discount Notes and the Senior Secured Notes at
maturity, the Company will need to refinance all or a portion of such notes. The
Company's ability to refinance the Discount Notes and the Senior Secured Notes
will depend upon the Company's operating performance, as well as prevailing
economic and market conditions, levels of interest rates, refinancing costs and
other factors, many of which are beyond the Company's control.
Benedek Communications is a holding company that will derive 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 the
Company, have been pledged to secure the Company's senior guarantee of all
indebtedness of Benedek Broadcasting outstanding under the Credit Agreement and
in respect of the Senior Secured Notes. As a holding company, the Company's
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, will be dependent primarily upon receiving dividends and other
payments or advances from Benedek Broadcasting. Benedek Broadcasting is a
separate and distinct legal entity and has no obligation, contingent or
otherwise, to pay any amounts to the Company or to make funds available to the
Company 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, after giving effect to the implementation of
the financing plan on June 6, 1996 (including the contribution to the common
equity of Benedek Broadcasting of net cash proceeds of approximately $188.8
million from the sale of the Discount Notes, the Senior Preferred Stock and the
Junior Preferred Stock), as of December 31, 1997, the Company could have
distributed approximately $188.8 million to the Company under such limitations.
The Credit Agreement entered into by the Company as part of the financing
plan included Term Loan Facilities totaling $128.0 million and a revolving
credit facility. The Company did not meet certain financial ratios contained in
the Credit Agreement at September 30 and December 31, 1996 due to lower than
expected Adjusted EBITDA (as defined in the Credit Agreement). The lenders under
the Credit Agreement agreed to waive such noncompliance and during February
1997, amended certain covenants applicable to 1997 and the first half of 1998.
The amendment provided that for so long as the ratio of debt to Adjusted EBITDA
(as defined in the Credit Agreement) exceeded certain levels, the Term Loan
Facilities would bear interest at varying additional spreads from that
originally provided for in the Credit Agreement. The amendment further reduced
the revolving credit facility from $15.0 million to $10.0 million and increased
the percentage of excess cash flow to be applied as prepayments of the Term Loan
Facilities from 50% to 75% until Benedek Broadcasting's ratio of debt to
Adjusted EBITDA (as defined in the Credit Agreement) was at 6.75 or lower.
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
convenants and ratios, to increase the revolving credit facility to $15.0
million and to replace certain parties of the agreement. As of
41
<PAGE>
<PAGE>
December 17, 1997, the outstanding principal balance of the existing term loans
which totaled $100.8 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 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.
The Company entered into an interest rate cap agreement which matures in
May 1998 to reduce the impact of changes in interest rates on its floating-rate
long-term debt. That agreement effectively entitles the Company to receive from
a financial institution the amount, if any, by which the London Interbank
Offering Rate (LIBOR) exceeds 7.36% on a notional amount totaling $125.0 million
subject to an amortization schedule. Although Benedek Broadcasting is exposed to
credit loss in the event of nonperformance by the counterparty on the interest
rate cap, management does not expect nonperformance by the counterparty.
Benedek Broadcasting has the ability, subject to a borrowing base and
compliance with certain covenants and conditions, to borrow up to an additional
$15.0 million for general corporate purposes pursuant to the Revolving Credit
Facility. The Revolving Credit Facility has a term 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 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 the Company) 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
In the third quarter of 1997, the Company entered into definitive
agreements with The Warner Bros. Television Network to develop a local cable
affiliate called the 'WeB' in each of the Company's 20 markets which rank above
100. The WeB is intended to be a 24 hour, seven day a week television channel
which will broadcast The Warner Bros. Television Network prime time programming,
WB children's programming and syndicated programming of Warner Bros. and others.
The Company is currently in negotiations with cable systems in its markets for
the carriage of WeB programming. The WeB is scheduled to begin service in the
fall of 1998. The Company will be responsible for all local sales efforts for
the new channels in its markets. The Company does not anticipate a significant
effect on
42
<PAGE>
<PAGE>
operations during 1998 nor does it anticipate that significant capital
expenditures will be required in connection with the development of its WeB
affiliates.
During August 1997, Benedek Broadcasting completed the purchase of the
television broadcasting licenses and certain equipment of two low-power
television stations located in Columbia and Jefferson City, Missouri for a
purchase price of $0.2 million. One-half of the purchase price was paid at
closing with the remainder due in two installments during 1998 and 1999.
Concurrently with such purchase, the Company entered into network affiliation
agreements for these two Stations with the Fox Television Network. These
Stations began operating in September of 1997 without material expenditures for
equipment needs.
In connection with the acquisition of the Brissette Stations, the Company
obtained a temporary waiver of the FCC's duopoly rules which would otherwise
have precluded the Company from acquiring the Brissette Station in Madison,
Wisconsin due to the Grade A broadcast signal overlap between that Station 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. In
addition, the FCC has advised it will not extend the Company's temporary waiver
of such rules and as a result the Company will be required to place one of such
Stations in a trust with an independent trustee. The Company will seek to comply
with the FCC requirements by exchanging one of the Stations for another
broadcast station.
INCOME TAXES
For the year ended December 31, 1997, Benedek Broadcasting had a tax
benefit of $6.4 million recognized consisting of a $6.7 million benefit related
to the net reduction of deferred income tax liabilities and $0.3 million of
taxes currently due. Benedek Communications had a tax benefit of $12.0 million
for the year ended December 31, 1997 consisting of a $12.3 million benefit
related to the net reduction of deferred income tax liabilities and $0.3 million
of taxes currently due.
Under the provisions of the Internal Revenue Code, Benedek Broadcasting has
approximately $17.4 million of actual net operating loss carryforwards available
to offset future tax liabilities whereas Benedek Communications has
approximately $18.4 million available to it. These net operating loss
carryforwards expire between 2007 through 2011.
SEASONALITY
Net revenues and operating cash flow of the Company are generally higher
during the fourth quarter of each year, primarily due to increased expenditures
by advertisers in anticipation of holiday season consumer spending and an
increase in viewership during this period, and, to a lesser extent, during the
second quarter of each year.
EMERGING 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
43
<PAGE>
<PAGE>
financial information is available and evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See pages F-1 and S-2.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
44
<PAGE>
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
The following table sets forth certain information with respect to each
director and executive officer of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ ------- -----------------------------------------------------------
<S> <C> <C>
A. Richard Benedek.................. 59 Chairman, Chief Executive Officer and Director
K. James Yager...................... 62 President and Director
Ronald L. Lindwall.................. 52 Senior Vice President-Finance, Chief Financial Officer,
Treasurer, Secretary and Director
Terrance F. Hurley.................. 42 Senior Vice President of Benedek Broadcasting
Raymond P. Maselli.................. 57 Senior Vice President of Benedek Broadcasting
Clyde G. Payne...................... 62 Senior Vice President of Benedek Broadcasting
Raymond J. Schonbak................. 55 Senior Vice President of Benedek Broadcasting
Keith L. Bland...................... 42 Senior Vice President-Planning and Technology of Benedek
Broadcasting
Mary L. Flodin...................... 42 Vice President and Controller of Benedek Broadcasting
Jay Kriegel......................... 57 Director
Paul S. Goodman..................... 43 Director
</TABLE>
Mr. A. Richard Benedek has been engaged in the television broadcasting
industry for over 18 years. Mr. Benedek is the Chairman and Chief Executive
Officer of the Company, positions he has held since the formation of the Company
in 1996. Mr. Benedek has served as Chairman and Chief Executive Officer of
Benedek Broadcasting since its formation in January 1979. From the formation of
Benedek Broadcasting until March 1995, Mr. Benedek also served as President of
Benedek Broadcasting. Additionally, Mr. Benedek has also served as President and
Chief Executive Officer of Blue Grass Television, Inc. ('Blue Grass') and
Youngstown Broadcasting Co., Inc. ('Youngstown') from their formation in January
1980 and September 1982, respectively, until both were merged into Benedek
Broadcasting on March 10, 1995 (the 'Merger'). Prior to his activities in the
television broadcasting industry, Mr. Benedek was a partner in the investment
banking firm of Bear, Stearns & Co. Inc. Mr. Benedek currently serves on the
board of directors of the ABC Affiliates Association.
Mr. K. James Yager has been engaged in the television broadcasting industry
for over 38 years. Mr. Yager is the President and a director of the Company,
positions he has held since the formation of the Company in 1996. Mr. Yager has
served as President of Benedek Broadcasting since March 1995. From 1987 until he
became President, Mr. Yager served as Executive Vice President of Benedek
Broadcasting. Mr. Yager has been a director of Benedek Broadcasting since 1986.
Mr. Yager has also served as Vice President of each of Blue Grass and Youngstown
from 1990 and 1993, respectively, until the Merger. Mr. Yager was employed by
Cosmos Broadcasting from 1960 until 1980, most recently as general manager of
its television stations in Columbia, South Carolina and New Orleans, Louisiana.
From 1980 until 1986, Mr. Yager was Executive Vice President and Chief Operating
Officer of Spartan Radiocasting, which then owned three television stations and
four radio stations. Mr. Yager currently serves on the board of directors of
each of the National Association of Broadcasters, Broadcast Music, Inc. and the
Television Bureau of Advertising.
Mr. Ronald L. Lindwall is the Senior Vice President-Finance, Chief
Financial Officer, Secretary and Treasurer and a director of the Company,
positions he has held since the formation of the Company in 1996. Mr. Lindwall
has also held the same positions at Benedek Broadcasting since March 1995. From
1990 until March 1995, Mr. Lindwall served as Senior Vice President, Chief
Financial Officer and Treasurer of Benedek Broadcasting. Mr. Lindwall has been a
director of Benedek Broadcasting since 1994. Mr. Lindwall has also served as
Senior Vice President, Chief Financial Officer and Treasurer of each of Blue
Grass and Youngstown from 1990 until the Merger. From 1982 to 1990, Mr. Lindwall
was a partner at the accounting firm of McGladrey & Pullen.
45
<PAGE>
<PAGE>
Mr. Terrance F. Hurley has served as Senior Vice President of Benedek
Broadcasting since May 1996. From December 1995 until he became Senior Vice
President, Mr. Hurley served as Vice President/General Manager of KDLH-TV
serving Duluth, Minnesota and Superior, Wisconsin. Mr. Hurley also served as
General Manager of KDLH-TV from October 1994 until December 1995 and General
Sales Manager of KHQA-TV serving Quincy, Illinois and Hannibal, Missouri from
May 1993 until October 1994. From 1991 until May 1993, Mr. Hurley was employed
by Dix Communications as the General Sales Manager of KAAL-TV serving
Rochester-Austin, Minnesota. Mr. Hurley currently serves on the 100 Plus
Committee of the National Association of Broadcasters.
Mr. Raymond P. Maselli was promoted to Senior Vice President of Benedek
Broadcasting effective March 1997. Mr. Maselli has been with Benedek
Broadcasting as Vice President, General Manager of WYTV in Youngstown, Ohio
since 1989. He was the Vice President of Sales and Programming for WGRZ-TV of
Buffalo, New York from 1983 to 1989. Mr. Maselli started his broadcast career in
1965.
Mr. Clyde G. Payne has been engaged in the television broadcasting industry
for over 30 years. Mr. Payne was promoted to Senior Vice President of Benedek
Broadcasting effective March 1997. From March 1995 until February 1997, he
served as Divisional Vice President of Benedek Broadcasting. Mr. Payne also
served as General Manager of WBKO-TV serving Bowling Green, Kentucky from 1970
until 1997. Mr. Payne was also part owner of WBKO-TV from 1976 until the Station
was acquired by Blue Grass in 1983. Mr. Payne has served as chairman of the
Arbitron Television Advisory Counsel and the ABC Affiliates Association, as well
as Vice Chairman of the Television Board of the National Association of
Broadcasters.
Mr. Raymond J. Schonbak was hired effective April 1997 to serve as a Senior
Vice President of Benedek Broadcasting. Mr. Schonbak was the founder and
President of US Broadcast Group LLP of Shelton, Connecticut from 1995 to 1997.
He served as the Chief Executive Officer of Triad Communications of San
Francisco, California from 1991 to 1995. Prior to that time, Mr. Schonbak held a
variety of management positions in the broadcast field beginning in 1970.
Mr. Keith L. Bland has been engaged in the television broadcasting industry
for over 23 years. Mr. Bland has served as Senior Vice President-Planning and
Technology of Benedek Broadcasting since January 1996. From March 1995 until
January 1996, Mr. Bland served as Vice President and General Manager of WTAP-TV
serving Parkersburg, West Virginia. Mr. Bland also served as General Manager of
WTAP-TV from January 1990 until March 1995, General Sales Manager of WIFR-TV
serving Rockford, Illinois from September 1989 until January 1990 and
Local/Regional Sales Manager of WIFR-TV from July 1987 until September 1989.
Ms. Mary L. Flodin has served as Vice President and Controller of the
Company since its formation in 1996. Ms. Flodin has also held the same positions
at Benedek Broadcasting since 1990. From 1988 to 1990, Ms. Flodin served as
Controller of Benedek Broadcasting. Ms. Flodin has also served as Vice President
and Controller of each of Blue Grass and Youngstown from 1990 until the Merger.
From 1983 to 1988, Ms. Flodin served in various financial capacities as Vice
President of AMCORE Financial, Inc.
Mr. Jay L. Kriegel has been engaged in the communications industry for over
20 years. Since March 1994, Mr. Kriegel has been a counselor with the public
relations firm of Abernathy MacGregor Frank and its predecessor firm. From 1988
to 1994, Mr. Kriegel was Senior Vice President of CBS Inc. Mr. Kriegel has
served as a director of Benedek Broadcasting since May 1994 and as a director of
the Company since its formation in 1996.
Mr. Paul S. Goodman has been corporate counsel to Benedek Broadcasting
since 1983 and the Company since its formation in 1996. Since April 1993, Mr.
Goodman has been a member of the law firm of Shack & Siegel, P.C. From January
1990 to April 1993, Mr. Goodman was a member of the law firm of Whitman &
Ransom. Mr. Goodman has served as a director of Benedek Broadcasting since
November 1994 and as a director of the Company since its formation in 1996.
46
<PAGE>
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation paid to the Company's Chief Executive Officer and the other five
most highly-compensated executives during the fiscal years ended December 31,
1997, December 31, 1996 and December 31, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------
OTHER ALL
ANNUAL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) COMPENSATION($)(a)
- ---------------------------------------- ---- --------- -------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
A. Richard Benedek, Chairman 1997 750,000 -- -- 11,218
and Chief Executive Officer 1996 525,000 -- -- 9,598
1995 475,000 -- -- 8,378
K. James Yager, President 1997 415,500 -- -- 14,875
1996 406,586 -- -- 15,465
1995 344,950 -- -- 17,826
Ronald L. Lindwall, Senior Vice 1997 174,327 25,000 -- 4,555
President-Finance, Chief Financial 1996 149,530 25,000 -- 4,458
Officer, Secretary and Treasurer 1995 107,652 55,000 -- 3,649
Terrance F. Hurley, Senior Vice 1997 174,327 -- -- 3,530
President 1996 125,538 25,000 -- 2,573
Raymond P. Maselli, Senior Vice 1997 174,352 -- -- 7,703
President
Raymond J. Schonbak, Senior Vice 1997 182,693 -- 99,561(b) 5,544
President
</TABLE>
- ------------
(a) Represents the amount of the Company's contribution under its 401(k) plan
and life insurance premiums.
(b) Represents relocation expenses ($63,554), amounts reimbursed for the
payment of taxes ($31,116), personal use of Company vehicle and medical
insurance.
------------------------
As of December 31, 1997, K. James Yager, the President of the Company, held
options to purchase 370,000 shares of Class B Common Stock of the Company. Based
upon a method of valuation chosen by the Company, the Company believes the
options were not in-the-money as of December 31, 1997.
DIRECTOR COMPENSATION
All directors hold office until their successors are duly elected and
qualify. Executive officers of the Company are appointed by the Board of
Directors and serve at the Board's discretion. In 1997, the Company paid each
director who is not an employee of the Company $2,500 per quarter and $500 per
Board meeting for his services as a director. No family relationship exists
between any of the executive officers or directors of the Company.
EMPLOYMENT AGREEMENTS
Mr. Benedek is employed by Benedek Broadcasting pursuant to an employment
agreement that expires May 31, 2000. During the term of the agreement, Mr.
Benedek is to be paid at a rate per annum of not less than $525,000. The
employment agreement requires Mr. Benedek to devote substantially all of his
business time to the business of Benedek Broadcasting and precludes Mr. Benedek
from engaging in activities competitive with the business of Benedek
Broadcasting throughout the term of the employment agreement.
Mr. Yager is employed by Benedek Broadcasting pursuant to an employment
agreement that expires May 31, 2000. During the term of the agreement, Mr. Yager
is to be paid at a rate per annum of
47
<PAGE>
<PAGE>
not less than $400,000. The employment agreement requires Mr. Yager to devote
his full time to the business of Benedek Broadcasting and precludes Mr. Yager
from engaging in activities competitive with the business of Benedek
Broadcasting throughout the term of the employment agreement.
Mr. Lindwall is employed by Benedek Broadcasting pursuant to an employment
agreement that expires May 31, 1999. During the term of the agreement, Mr.
Lindwall is to be paid at a rate per annum of not less than $150,000. The
employment agreement requires Mr. Lindwall to devote his full time to the
business of Benedek Broadcasting.
Mr. Hurley is employed by Benedek Broadcasting pursuant to an employment
agreement that expires May 31, 1999. During the term of the agreement, Mr.
Hurley is to be paid at a rate per annum of not less than $150,000. The
employment agreement requires Mr. Hurley to devote his full time to the business
of Benedek Broadcasting and precludes Mr. Hurley from engaging in activities
competitive with the business of Benedek Broadcasting throughout the term of the
employment agreement and for a period of one year thereafter with respect to
designated market areas then served by a television station owned by Benedek
Broadcasting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Benedek, Yager and Lindwall, all of whom are executive officers of
the Company, serve as directors of the Company. Presently, the Company does not
have a compensation committee. Compensation for executive officers is
recommended to the Board of Directors by the Chief Executive Officer. In making
his compensation recommendations, the Chief Executive Officer considers several
criteria, including the Company's performance and growth, industry standards for
similarly situated companies and experience and qualitative performance of such
executive officers.
On January 1, 1998, Mr. K. James Yager, the President and a director of the
Company, exercised options to purchase 370,000 shares of Class B Common Stock of
the Company for an aggregate exercise price of $555,000. Mr. Yager borrowed the
funds necessary to pay the exercise price from the Company, which loan is
evidenced by a promissory note which bears interest at the rate of 5.93% per
annum and is payable on December 31, 2007.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Mr. A. Richard Benedek, the Chairman and Chief Executive Officer of the
Company, owns 6,467,600 shares of Class B Common Stock of the Company,
representing 87.4% of its outstanding common stock.
Mr. Stephen Benedek, the son of Mr. A. Richard Benedek, owns 562,400 shares
of Class B Common Stock of the Company, representing 7.6% of its outstanding
common stock. Mr. Stephen Benedek is not an officer, director or employee of the
Company.
Mr. K. James Yager, the President and a director of the Company, owns
370,000 shares of Class B Common Stock of the Company, representing 5.0% of its
outstanding common stock.
See 'Management's Discussion and Analysis of Financial Condition and
Results of Operations -- The Financing Plan' for a discussion with respect to
arrangements which may result in a change in control of Benedek Broadcasting
and/or BLC.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On January 1, 1998, Mr. K. James Yager, the President and a director of the
Company, exercised options to purchase 370,000 shares of Class B Common Stock of
the Company for an aggregate exercise price of $555,000. Mr. Yager borrowed the
funds necessary to pay the exercise price from the Company, which loan is
evidenced by a promissory note which bears interest at the rate of 5.93% per
annum and is payable on December 31, 2007.
Paul S. Goodman, a member of the law firm of Shack & Siegel, P.C., is a
director of the Company. During the fiscal year ended December 31, 1997, the
Company paid approximately $222,000 for legal services to Shack & Siegel, P.C.
48
<PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) Consolidated Financial Statements of the Company.
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Benedek Communications Corporation and Subsidiaries
Independent Auditor's Report.......................................................................... F-2
Consolidated Balance Sheets as of December 31, 1996 and 1997.......................................... F-3
Consolidated Statements of Operations for the Three Years Ended December 31, 1997..................... F-4
Consolidated Statements of Stockholder's Equity (Deficit) for the Three Years Ended December 31,
1997................................................................................................. F-5
Consolidated Statements of Cash Flows for the Three Years Ended December 31, 1997..................... F-6
Notes to Consolidated Financial Statements............................................................ F-8
Benedek License Corporation
Independent Auditor's Report.......................................................................... F-25
Balance Sheets as of December 31, 1996 and 1997....................................................... F-26
Statements of Operations for the Period February 28, 1995 through December 31, 1995 and the Two Years
Ended December 31, 1997.............................................................................. F-27
Statements of Stockholder's Equity for the Period February 28, 1995 through December 31, 1995 and the
Two Years Ended December 31, 1997.................................................................... F-28
Statements of Cash Flows for the Period February 28, 1995 through December 31, 1995 and the Two Years
Ended December 31, 1997.............................................................................. F-29
Notes to Financial Statements......................................................................... F-30
(a)(2) Supplemental Schedule.
Benedek Communications Corporation and Subsidiaries
Independent Auditor's Report.......................................................................... S-1
Schedule II -- Valuation and Qualifying Accounts...................................................... S-2
</TABLE>
All other schedules for which provision is made in the applicable
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.
49
<PAGE>
<PAGE>
(a)(3) Exhibits.
<TABLE>
<C> <S>
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 15.0% Exchangeable Redeemable Senior Preferred Stock due 2007 and Qualifications,
Limitations and Restrictions thereof of Benedek Communications Corporation, incorporated by reference to
Exhibit 3.3 to the S-4 Registration Statement.
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.
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 15.0% Exchangeable Redeemable Senior Preferred Stock due 2007 and Qualifications,
Limitations and Restrictions thereof of Benedek Communications Corporation (filed as Exhibit 3.3 hereof),
incorporated by reference to Exhibit 4.5 to the S-4 Registration Statement.
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 -- Purchase Agreement dated May 30, 1996 between Benedek Communications Corporation and Goldman, Sachs &
Co., incorporated by reference to Exhibit 10.1 to the S-4 Registration Statement.
</TABLE>
50
<PAGE>
<PAGE>
<TABLE>
<C> <S>
10.2 -- Exchange and Registration Rights Agreement dated May 30, 1996 between Benedek Communications Corporation
and Goldman, Sachs & Co. with respect to the 13 1/4% Senior Subordinated Discount Notes due 2006 of
Benedek Communications Corporation, incorporated by reference to Exhibit 10.2 to the S-4 Registration
Statement.
10.3 -- Placement Agreement dated June 5, 1996 among Benedek Communications Corporation, Goldman, Sachs & Co. and
BT Securities Corporation, incorporated by reference to Exhibit 10.3 to the S-4 Registration Statement.
10.4 -- Exchange and Registration Rights Agreement dated June 5, 1996 among Benedek Communications Corporation,
Goldman, Sachs & Co. and BT Securities Corporation with respect to the 15.0% Exchangeable Redeemable
Senior Preferred Stock due 2007 of Benedek Communications Corporation, incorporated by reference to
Exhibit 10.4 to the S-4 Registration Statement.
10.5 -- Warrant Agreement dated as of June 5, 1996 between Benedek Communications Corporation and IBJ Schroder
Bank & Trust Company (filed as Exhibit 4.8 hereof), incorporated by reference to Exhibit 10.5 to the S-4
Registration Statement.
10.6 -- Contingent Warrant Escrow Agreement dated June 5, 1996 between Benedek Communications Corporation and IBJ
Schroder Bank & Trust Company, incorporated by reference to Exhibit 10.6 to the S-4 Registration
Statement.
10.7 -- Common Stock Registration Rights Agreement dated as of June 5, 1996 among Benedek Communications
Corporation, Goldman, Sachs & Co. and BT Securities Corporation, incorporated by reference to Exhibit 10.7
to the S-4 Registration Statement.
*10.8 -- Amended and Restated Credit Agreement dated as of December 17, 1997 among Benedek Communications
Corporation, Benedek Broadcasting Corporation, the Lenders listed therein and Bankers Trust Company, as
Agent.
*10.9 -- Amended and Restated Guaranty dated as of December 17, 1997 by Benedek Communications Corporation in
favor of Bankers Trust Company.
*10.10 -- Amended and Restated Guaranty dated as of December 17, 1997 by Benedek License Corporation in favor of
Bankers Trust Company.
*10.11 -- Amended and Restated Pledge Agreement dated as of December 17, 1997 between Benedek Communications
Corporation and Bankers Trust Company.
*10.12 -- Amended and Restated Security Agreement dated as of December 17, 1997 between Benedek Communications
Corporation and Bankers Trust Company.
*10.13 -- Amended and Restated Accounts Receivable Security Agreement dated as of December 17, 1997 between Benedek
Broadcasting Corporation and Bankers Trust Company.
*10.14 -- Amended and Restated Acquired Assets Security Agreement dated as of December 17, 1997 between Benedek
Broadcasting Corporation and Bankers Trust Company.
*10.15 -- Amended and Restated Tangible Assets Security Agreement dated as of December 17, 1997 between Benedek
Broadcasting Corporation and Bankers Trust Company.
*10.16 -- Amended and Restated Collateral Account Agreement dated as of December 17, 1997 between Benedek
Communications Corporation and Bankers Trust Company.
*10.17 -- Master Assignment Agreement dated as of December 17, 1997 among Benedek Communications Corporation,
Benedek Broadcasting Corporation, Canadian Imperial Bank of Commerce, New York Agency, and the Financial
Institutions listed therein.
10.18 -- Form of Indemnity Agreement between Benedek Communications Corporation and each of its executive officers
and directors, incorporated by reference to Exhibit 10.14 to the S-4 Registration Statement.
10.19 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and A. Richard
Benedek, incorporated by reference to Exhibit 10.16 to the S-4 Registration Statement.
10.20 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and K. James
Yager, incorporated by reference to Exhibit 10.17 to the S-4 Registration Statement.
10.21 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and Ronald L.
Lindwall, incorporated by reference to Exhibit 10.19 to the S-4 Registration Statement.
10.22 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and Terrance F.
Hurley, incorporated by reference to Exhibit 10.20 to the S-4 Registration Statement.
</TABLE>
51
<PAGE>
<PAGE>
<TABLE>
<C> <S>
*21 -- Subsidiaries of Benedek Communications Corporation and Benedek Broadcasting Corporation.
*23 -- Consent of McGladrey & Pullen, LLP.
*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>
- ------------
* Filed herewith
(b) Reports on Form 8-K
None.
52
<PAGE>
<PAGE>
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.
Date: March 24, 1998
BENEDEK COMMUNICATIONS CORPORATION
(REGISTRANT)
By: /S/ A. RICHARD BENEDEK
.................................
A. RICHARD BENEDEK
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ A. RICHARD BENEDEK Chairman and Chief Executive Officer March 24, 1998
......................................... (Principal Executive Officer) and Director
A. RICHARD BENEDEK
/s/ K. JAMES YAGER President and Director March 24, 1998
.........................................
K. JAMES YAGER
/s/ RONALD L. LINDWALL Senior Vice President -- Finance, Chief March 24, 1998
......................................... Financial Officer, Secretary and Treasurer
RONALD L. LINDWALL (Principal Financial and Accounting
Officer) and Director
/s/ JAY KRIEGEL Director March 24, 1998
.........................................
JAY KRIEGEL
/s/ PAUL S. GOODMAN Director March 24, 1998
.........................................
PAUL S. GOODMAN
</TABLE>
53
<PAGE>
<PAGE>
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.
Date: March 24, 1998
BENEDEK BROADCASTING CORPORATION
(REGISTRANT)
By: /S/ A. RICHARD BENEDEK
.................................
A. RICHARD BENEDEK
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ A. RICHARD BENEDEK Chairman and Chief Executive Officer March 24, 1998
......................................... (Principal Executive Officer) and Director
A. RICHARD BENEDEK
/s/ K. JAMES YAGER President and Director March 24, 1998
.........................................
K. JAMES YAGER
/s/ RONALD L. LINDWALL Senior Vice President -- Finance, Chief March 24, 1998
......................................... Financial Officer, Secretary and Treasurer
RONALD L. LINDWALL (Principal Financial and Accounting
Officer) and Director
/s/ JAY KRIEGEL Director March 24, 1998
.........................................
JAY KRIEGEL
/s/ PAUL S. GOODMAN Director March 24, 1998
.........................................
PAUL S. GOODMAN
</TABLE>
54
<PAGE>
<PAGE>
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.
Date: March 24, 1998
BENEDEK LICENSE CORPORATION
(SUBSIDIARY GUARANTOR REGISTRANT)
By: /S/ RONALD L. LINDWALL
.................................
RONALD L. LINDWALL
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL OFFICER, SECRETARY AND
TREASURER
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ A. RICHARD BENEDEK Chairman and Chief Executive Officer March 24, 1998
......................................... (Principal Executive Officer) and Director
A. RICHARD BENEDEK of Benedek License Corporation
/s/ K. JAMES YAGER President and Director of Benedek License March 24, 1998
......................................... Corporation
K. JAMES YAGER
/s/ RONALD L. LINDWALL Senior Vice President, Chief Financial March 24, 1998
......................................... Officer, Secretary and Treasurer
RONALD L. LINDWALL (Principal Financial and Principal
Accounting Officer) and Director of
Benedek License Corporation
/s/ PAUL S. GOODMAN Director of Benedek License Corporation March 24, 1998
.........................................
PAUL S. GOODMAN
</TABLE>
55
<PAGE>
<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.
No annual report or proxy material was sent to security holders by the
Company during the fiscal year ended December 31, 1997.
56
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Benedek Communications Corporation and Subsidiaries and Benedek Broadcasting Corporation and
Subsidiary
Independent Auditor's Report................................................................ F-2
Consolidated Balance Sheets as of December 31, 1996 and 1997................................ F-3
Consolidated Statements of Operations for the Three Years Ended December 31, 1997........... F-4
Consolidated Statements of Stockholder's Equity (Deficit) for the Three Years Ended December
31, 1997................................................................................... F-5
Consolidated Statements of Cash Flows for the Three Years Ended December 31, 1997........... F-6
Notes to Consolidated Financial Statements.................................................. F-8
Benedek License Corporation
Independent Auditor's Report................................................................ F-25
Balance Sheets as of December 31, 1996 and 1997............................................. F-26
Statements of Operations for the Period February 28, 1995 through December 31, 1995 and the
Two Years Ended December 31, 1997.......................................................... F-27
Statements of Stockholder's Equity for the Period February 28, 1995 through December 31,
1995 and the Two Years Ended December 31, 1997............................................. F-28
Statements of Cash Flows for the Period February 28, 1995 through December 31, 1995 and the
Two Years Ended December 31, 1997.......................................................... F-29
Notes to Financial Statements............................................................... F-30
</TABLE>
F-1
<PAGE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
Rockford, Illinois
We have audited the accompanying consolidated balance sheets of Benedek
Communications Corporation and subsidiaries and Benedek Broadcasting Corporation
(a wholly-owned subsidiary of Benedek Communications Corporation) and subsidiary
as of December 31, 1996 and 1997 and the related consolidated statements of
operations, stockholder's equity (deficit), and cash flows for the years ended
December 31, 1995, 1996 and 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Benedek
Communications Corporation and subsidiaries and Benedek Broadcasting Corporation
and subsidiary as of December 31, 1996 and 1997 and the results of their
operations and their cash flows for the years ended December 31, 1995, 1996 and
1997, in conformity with generally accepted accounting principles.
/S/ MCGLADREY & PULLEN, LLP
Rockford, Illinois
February 7, 1998
F-2
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------
1996 1997
----------------------------- -----------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ --------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
ASSETS (Note G)
Current Assets
Cash and cash
equivalents.............. $ 8,090 $ 8,091 $ 2,647 $ 2,648
Receivables
Trade, less allowance
for doubtful accounts
of $484 and $472 for
1996 and 1997......... 23,744 23,744 25,004 25,004
Due from seller....... 474 474 -- --
Other................. 386 385 1,729 1,729
Current portion of program
broadcast rights......... 4,428 4,428 4,869 4,869
Prepaid expenses.......... 1,453 1,453 1,659 1,659
Deferred income taxes..... 1,333 1,333 1,004 1,004
------------ -------------- ------------ --------------
Total current
assets................ 39,908 39,908 36,912 36,913
------------ -------------- ------------ --------------
Property and equipment (Note
D).......................... 84,021 84,021 73,811 73,811
------------ -------------- ------------ --------------
Intangible assets (Note E).... 354,622 354,622 345,588 345,588
------------ -------------- ------------ --------------
Other Assets
Program broadcast rights,
less current portion
(Note H)................. 2,298 2,298 1,796 1,796
Deferred loan costs....... 9,667 13,386 7,245 10,216
Land held for sale........ 109 109 109 109
Other..................... 671 671 62 62
------------ -------------- ------------ --------------
12,745 16,464 9,212 12,183
------------ -------------- ------------ --------------
$491,296 $495,015 $465,523 $468,495
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
LIABILITIES AND STOCKHOLDER'S
EQUITY (DEFICIT)
Current Liabilities
Current maturities of
notes payable............ $ 14,015 $ 14,015 $ 13,480 $ 13,480
Current program broadcast
rights payable........... 6,120 6,120 6,762 6,762
Accounts payable and
accrued expenses (Note
I)....................... 15,369 15,369 13,476 13,477
Deferred revenue.......... 707 707 683 683
------------ -------------- ------------ --------------
Total current
liabilities.... 36,211 36,211 34,401 34,402
------------ -------------- ------------ --------------
Long-Term Obligations
Notes and leases payable
(Note G)................. 247,171 344,219 247,114 357,437
Program broadcast rights
payable (Note H)......... 1,592 1,592 1,353 1,353
Deferred revenue.......... 4,435 4,435 3,760 3,760
Deferred income taxes
(Note K)................. 57,415 54,600 50,345 41,895
------------ -------------- ------------ --------------
310,613 404,846 302,572 404,445
------------ -------------- ------------ --------------
Exchangeable redeemable senior
preferred stock liquidation
preference 1996 $65,257,
1997 $75,610 (Note F)....... -- 58,462 -- 73,660
------------ -------------- ------------ --------------
Seller junior discount
preferred stock (Note F).... -- 47,057 -- 50,896
------------ -------------- ------------ --------------
Commitments (Note H, J)
Stockholder's Equity (Deficit)
(Note C, F, L)
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 issued and
outstanding.............. -- 70 -- 70
Additional paid-in
capital.................. 149,592 (35,347) 149,592 (40,192)
Accumulated deficit....... (4,686) (16,284) (20,608) (54,786)
------------ -------------- ------------ --------------
145,953 (51,561) 130,031 (94,908)
Less 30.24 shares of common
stock held in treasury...... (1,481) -- (1,481) --
------------ -------------- ------------ --------------
144,472 (51,561) 128,550 (94,908)
------------ -------------- ------------ --------------
$491,296 $495,015 $465,523 $468,495
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-3
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
1995 1996 1997
------------------------------ ------------------------------ ------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ -------------- ------------ --------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................. $ 50,329 $ 50,329 $ 96,386 $ 96,386 $127,073 $127,073
------------ -------------- ------------ -------------- ------------ --------------
Operating expenses:
Selling, technical and
program expenses........ 21,199 21,199 43,759 43,759 60,385 60,385
General and
administrative.......... 7,850 7,850 14,844 14,844 19,618 19,618
Depreciation and
amortization............ 5,042 5,042 20,220 20,220 31,380 31,380
Corporate................. 1,575 1,575 2,695 2,695 3,787 3,787
------------ -------------- ------------ -------------- ------------ --------------
35,666 35,666 81,518 81,518 115,170 115,170
------------ -------------- ------------ -------------- ------------ --------------
Operating income...... 14,663 14,663 14,868 14,868 11,903 11,903
------------ -------------- ------------ -------------- ------------ --------------
Financial income (expense):
Interest expense: (Note A)
Cash interest......... (15,160) (15,160) (22,841) (22,841) (28,996) (28,996)
Other interest........ (712) (712) (1,030) (8,130) (5,352) (19,374)
------------ -------------- ------------ -------------- ------------ --------------
(15,872) (15,872) (23,871) (30,971) (34,348) (48,370)
Interest income........... 397 397 282 282 130 130
------------ -------------- ------------ -------------- ------------ --------------
(15,475) (15,475) (23,589) (30,689) (34,218) (48,240)
------------ -------------- ------------ -------------- ------------ --------------
(Loss) before income
tax benefit and
extraordinary
item................ (812) (812) (8,721) (15,821) (22,315) (36,337)
Income tax benefit (Note K)... -- -- 1,849 4,664 6,393 12,027
------------ -------------- ------------ -------------- ------------ --------------
(Loss) before
extraordinary
item................ (812) (812) (6,872) (11,157) (15,922) (24,310)
Extraordinary item, gain on
early extinguishment of debt
(Note G).................... 6,864 6,864 -- -- -- --
------------ -------------- ------------ -------------- ------------ --------------
Net income (loss)..... $ 6,052 6,052 $ (6,872) (11,157) $(15,922) (24,310)
------------ ------------ ------------
------------ ------------ ------------
Preferred stock dividends and
accretion................... -- (9,519) (19,037)
-------------- -------------- --------------
Net income (loss) applicable
to common stock............. $ 6,052 $(20,676) $(43,347)
-------------- -------------- --------------
-------------- -------------- --------------
Basic and diluted earnings
(loss) per common share:
Loss before extraordinary
item.................... $ (0.12) $ (2.94) $ (6.17)
Extraordinary item........ 0.98 -- --
-------------- -------------- --------------
Earnings (loss) per common
share....................... $ 0.86 $ (2.94) $ (6.17)
-------------- -------------- --------------
-------------- -------------- --------------
Weighted-average common shares
outstanding................. 7,030,000 7,030,000 7,030,000
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-4
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
BENEDEK BROADCASTING CORPORATION
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED TREASURY
STOCK CAPITAL DEFICIT STOCK TOTAL
------ -------- ----------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994......................... $1,047 $ 2,758 $ (44,939) $ (1,481) $(42,615)
Net Income...................................... -- -- 6,052 -- 6,052
------ -------- ----------- -------- --------
Balance at December 31, 1995......................... $1,047 $ 2,758 $ (38,887) $ (1,481) $(36,563)
Contribution of additional paid-in capital by
parent in connection with acquisitions........ -- 187,907 -- -- 187,907
Reclassification of accumulated deficit due to
change in income tax status................... -- (41,073) 41,073 -- --
Net (loss)...................................... -- -- (6,872) -- (6,872)
------ -------- ----------- -------- --------
Balance at December 31, 1996......................... $1,047 $149,592 $ (4,686) $ (1,481) $144,472
Net (loss)...................................... -- -- (15,922) -- (15,922)
------ -------- ----------- -------- --------
Balance at December 31, 1997......................... $1,047 $149,592 $ (20,608) $ (1,481) $128,550
------ -------- ----------- -------- --------
------ -------- ----------- -------- --------
</TABLE>
BENEDEK COMMUNICATIONS CORPORATION
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
STOCK CAPITAL DEFICIT TOTAL
------ ---------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance at December 31, 1994.................................... $ 70 $ 2,253 $ (44,939) $(42,616)
------ ---------- ----------- --------
Net income................................................. -- -- 6,052 6,052
------ ---------- ----------- --------
Balance at December 31, 1995.................................... $ 70 $ 2,253 $ (38,887) $(36,564)
Allocation of proceeds from sale of exchangeable redeemable
senior preferred stock to initial warrants............... -- 9,000 -- 9,000
Accretion to exchangeable redeemable senior preferred stock
(Note F)................................................. -- (2,205) -- (2,205)
Financial costs related to the sale of preferred stock..... -- (3,322) -- (3,322)
Reclassification of accumulated deficit due to change in
income tax status........................................ -- (41,073) 41,073 --
Dividends on preferred stock............................... -- -- (7,313) (7,313)
Net (loss)................................................. -- -- (11,157) (11,157)
------ ---------- ----------- --------
Balance at December 31, 1996.................................... $ 70 $(35,347) $ (16,284) $(51,561)
Accretion to exchangeable redeemable senior preferred stock
(Note F)................................................. -- (4,845) -- (4,845)
Dividends on preferred stock............................... -- -- (14,192) (14,192)
Net (loss)................................................. -- -- (24,310) (24,310)
------ ---------- ----------- --------
Balance at December 31, 1997.................................... $ 70 $(40,192) $ (54,786) $(94,908)
------ ---------- ----------- --------
------ ---------- ----------- --------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-5
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1995 1996 1997
----------------------------- ----------------------------- -----------------------------
BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ -------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating
activities
Net income (loss)......... $ 6,052 $ 6,052 $ (6,872) $ (11,157) $(15,922) $(24,310)
Adjustments to
reconcile net
income (loss) to
net cash provided
by operating
activities:
Amortization of
program
broadcast
rights......... 2,162 2,162 4,399 4,399 6,401 6,401
Depreciation and
amortization... 3,297 3,297 13,839 13,839 20,971 20,971
(Gain) on early
extinguishment
of debt........ (6,864) (6,864) -- -- -- --
Amortization and
write-off of
intangibles and
deferred loan
costs.......... 2,425 2,425 7,387 7,617 15,031 15,779
Amortization of
note
discount....... -- -- -- 6,870 -- 13,275
Payment of
deferred and
contingent
interest....... (4,406) (4,406) -- -- -- --
Payment of
prepayment
premiums....... (2,749) (2,749) -- -- -- --
Deferred income
taxes.......... -- -- (1,944) (4,759) (6,741) (12,376)
Other............ 32 32 -- -- 610 610
Changes in operating
assets and liabilities,
net of effects of
acquisitions:
Receivables...... (4,574) (4,574) (723) (722) (2,603) (2,603)
Due to sellers... -- -- 2,188 2,188 (153) (153)
Prepaid expenses
and other...... (48) (48) (266) (266) (206) (206)
Payments on
program
broadcast
rights
payable........ (2,132) (2,132) (3,318) (3,318) (5,937) (5,937)
Accounts payable
and accrued
expenses....... 4,738 4,738 3,566 3,566 (2,281) (2,281)
Deferred
revenue........ 4,750 4,750 (414) (414) (699) (699)
Deferred and
contingent
interest
payable........ 567 567 -- -- -- --
------------ -------------- ------------ -------------- ------------ --------------
Net cash
provided
by
operating
activities... 3,250 3,250 17,842 17,843 8,471 8,471
------------ -------------- ------------ -------------- ------------ --------------
Cash flows from investing
activities
Purchase of property and
equipment............... (1,479) (1,479) (4,165) (4,165) (6,174) (6,174)
Proceeds from sale of
equipment............... 426 426 207 207 103 103
Payment for acquisition of
stations................ (26,699) (26,699) (322,082) (322,082) -- --
Deposit on acquisition and
acquisition costs....... (3,225) (3,225) -- -- -- --
Purchase of other
assets.................. -- -- (671) (671) (211) (211)
Other..................... 5 5 79 79 -- --
------------ -------------- ------------ -------------- ------------ --------------
Net cash
(used in)
investing
activities... (30,972) (30,972) (326,632) (326,632) (6,282) (6,282)
------------ -------------- ------------ -------------- ------------ --------------
Cash flows from financing
activities
Principal payments on
notes payable........... (96,351) (96,351) (3,647) (3,647) (14,864) (14,864)
Proceeds from issuance of
preferred stock......... -- -- -- 105,000 -- --
Proceeds from long-term
borrowing............... 135,000 135,000 128,000 218,178 10,000 10,000
Contribution of paid-in
capital by parent....... -- -- 187,907 -- -- --
Payment of debt and
preferred stock
acquisition costs....... (5,876) (5,876) (5,048) (12,319) (2,768) (2,768)
------------ -------------- ------------ -------------- ------------ --------------
Net cash
provided
by (used
in)
financing
activities... 32,773 32,773 307,212 307,212 (7,632) (7,632)
------------ -------------- ------------ -------------- ------------ --------------
Increase (decrease) in cash
and cash equivalents........ $ 5,051 $ 5,051 $ (1,578) $ (1,577) $ (5,443) $ (5,443)
Cash and cash equivalents:
Beginning................. 4,617 4,617 9,668 9,668 8,090 8,091
------------ -------------- ------------ -------------- ------------ --------------
Ending.................... $ 9,668 $ 9,668 $ 8,090 $ 8,091 $ 2,647 $ 2,648
------------ -------------- ------------ -------------- ------------ --------------
------------ -------------- ------------ -------------- ------------ --------------
(Continued)
</TABLE>
F-6
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1995 1996 1997
----------------------------- ----------------------------- -----------------------------
BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ -------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Supplemental Disclosure of
Cash Flow Information:
Cash payments for
interest................ $ 13,654 $ 13,654 $ 20,945 $ 20,945 $ 30,489 $ 30,489
Cash payments for income
taxes................... -- -- -- -- 432 432
------------ -------------- ------------ -------------- ------------ --------------
------------ -------------- ------------ -------------- ------------ --------------
Supplemental Schedule of
Noncash Investing and
Financing Activities:
Acquisition of program
broadcast rights........ $ 2,558 $ 2,558 $ 4,630 $ 4,630 $ 6,340 $ 6,340
Notes payable incurred for
purchase of equipment... 197 197 1,067 1,067 4,271 4,271
Equipment acquired by
barter transactions..... 332 332 161 161 388 388
Dividends accrued on
redeemable preferred
stock................... -- -- -- 7,313 -- 14,192
Accretion to exchange
redeemable senior
preferred stock......... -- -- -- 2,205 -- 4,845
------------ -------------- ------------ -------------- ------------ --------------
------------ -------------- ------------ -------------- ------------ --------------
Acquisition of stations:
Cash purchase
price.............. $ 26,699 $ 26,699 $ 322,082 $ 322,082 $ -- $--
------------ -------------- ------------ -------------- ------------ --------------
------------ -------------- ------------ -------------- ------------ --------------
Net working capital
acquired, excluding
cash of $536 in
1996............... $ -- $-- $ 9,982 $ 9,982 $ -- $--
Property and
equipment acquired
at fair market
value.............. 7,533 7,533 72,578 72,578 -- --
Intangible assets
acquired........... 21,306 21,306 300,559 300,559 -- --
Deferred income taxes
assumed............ -- -- (58,026) (58,026) -- --
Other, net........... (140) (140) 214 214 -- --
------------ -------------- ------------ -------------- ------------ --------------
28,699 28,699 325,307 325,307 -- --
Less: Application of
advance to
affiliate.......... (2,000) (2,000) -- -- -- --
Less: Amount paid in
1995............... -- -- (3,225) (3,225) -- --
------------ -------------- ------------ -------------- ------------ --------------
$ 26,699 $ 26,699 $ 322,082 $ 322,082 $ -- $--
------------ -------------- ------------ -------------- ------------ --------------
------------ -------------- ------------ -------------- ------------ --------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-7
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE A) -- NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
NATURE OF BUSINESS
Benedek Communications Corporation (the 'Company') is a holding company
with minimal operations other than from its wholly-owned subsidiary, Benedek
Broadcasting Corporation ('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 the Company and its wholly-owned subsidiary, Benedek Broadcasting and its
wholly-owned subsidiary, Benedek License Corporation ('BLC'). 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 Company was formed on April 10, 1996. Benedek Broadcasting and the
Company had identical stock ownership, so the capitalization of the Company by
the stockholder of Benedek Broadcasting was accounted for in a manner similar to
pooling-of-interests accounting. These consolidated financial statements include
the consolidated financial statements of Benedek Broadcasting for the period
prior to June 6, 1996 recast to reflect the difference in par value of the
Company's and Benedek Broadcasting's stock.
SIGNIFICANT ACCOUNTING POLICIES
(1) Accounting estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in financial statements and the
accompanying notes. Actual results could differ from those estimates.
(2) Cash equivalents and concentration
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
At various times during the periods, the Company had cash and cash
equivalents on deposit with a financial institution in excess of federal
depository insurance limits. The Company has not experienced any credit losses
on these deposits.
(3) Revenues
Revenue related to the sale of advertising, network compensation and
contracted time is recognized at the time of broadcast. Net revenues are shown
net of agency and national representatives commissions.
Deferred revenues primarily relate to compensation due from the network and
national sales representatives at the inception of the network affiliation
agreement and the national sales
F-8
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
representative agreements, respectively. These revenues are recognized over the
life of the agreement on a straight-line method. Since these payments are earned
over the life of the respective agreements, the network affiliation payment is
recognized over ten years and the national sales representative payments are
recognized over five years.
(4) Barter transactions
Revenue from barter transactions (advertising provided in exchange for
goods and services) is recognized as income when advertisements are broadcast
and merchandise or services received are charged to expense (or capitalized as
appropriate) when received or used. The transactions are recorded at the fair
market value of the asset or service received.
(5) Program broadcast rights and liabilities
Program broadcast rights represent rights for the telecast of feature
length motion pictures, series produced for television and other films, and are
presented at the lower of amortized cost or net realizable value. Each agreement
is recorded as an asset and liability when the license period begins and the
program is available for its first showing. Program broadcast rights are
amortized on a straight-line method over the life of the contract, which is
included in selling, technical and program expenses. The agreements are
classified between current and long-term assets according to the estimated time
of future usage. The related liability is classified between current and
long-term on the basis of the payment terms.
(6) Deferred loan and acquisition costs
Deferred loan costs are amounts incurred in connection with long-term
financing. The costs are amortized on a straight-line method over the terms of
the related debt security. Costs incurred in connection with long-term financing
which is not consummated are expensed at the point in time when the negotiation
on the financing ceases. Costs incurred in connection with the issuance of
preferred stock are included in stockholder's deficit as a permanent reduction
of additional paid-in capital.
Acquisition costs are amounts incurred in connection with acquiring
additional television stations. Costs incurred in connection with acquisitions
which are not consummated are expensed at the point of time when the negotiation
on the acquisition ceases. The acquisition costs related to successful
acquisitions are treated as part of the purchase price and are allocated to the
assets purchased.
(7) Property and equipment and intangible assets
(a) Property and equipment are recorded at cost and depreciated using the
straight-line method over the following estimated ranges of useful lives:
<TABLE>
<CAPTION>
YEARS
--------
<S> <C>
Buildings and improvements............................................................ 5-40
Towers................................................................................ 5-12
Transmission equipment................................................................ 3-10
Other equipment....................................................................... 1-5
</TABLE>
Gains and losses on the disposition of property and equipment are
insignificant and included in depreciation and amortization on the consolidated
statement of operations.
(b) Intangible assets, which include FCC licenses, network affiliation
agreements and goodwill, have been recorded at cost and are amortized over 40
years using the straight-line method.
F-9
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(c) The Company reviews its property and equipment and intangibles annually
to determine potential impairment by comparing the carrying value of the assets
with the undiscounted anticipated future cash flows of the related property
before interest charges. If the future cash flows are less than the carrying
value, the Company would obtain an appraisal on the property and adjust the
carrying value of the assets to the appraisal value if the appraisal value is
less than the carrying value.
(8) Other interest expense
Other interest expense includes interest due to the increase in the
warrants to purchase Benedek Broadcasting common stock (which were redeemed in
1995), contingent equity value, accrued interest added to long-term debt
balances, deferred loan cost amortization and write offs, financing costs not
consummated, and accretion of discounts.
(9) Income taxes
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences, operating losses and
tax credit carryforwards. Deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment. Reference
should also be made to (Note K) regarding a change in tax status in 1996 and the
recording of deferred taxes upon change in status.
The Company and its subsidiaries file a consolidated federal income tax
return.
(10) Interest rate cap agreement
Interest rate cap agreements are used to manage interest rate exposure by
hedging certain liabilities. Income and expense are accrued under the terms of
the agreement based on the expected settlement payments and are recorded as a
component of interest income or expense. The premium paid for the interest rate
cap is being amortized on a straight line method.
(11) Employee benefits
The Company has a defined contribution plan covering all eligible
employees. The Company's contribution is at the discretion of the Board of
Directors.
The Company self-insures for health benefits which are provided to all
full-time employees with specified periods of service. Insurance coverage is
maintained by the Company for claims in excess of specific and annual aggregate
limits.
Benedek Broadcasting has elected to continue accounting for stock-based
compensation under Accounting Principles Board Opinion No. 25.
(12) Earnings (loss) per common share
The FASB has issued Statement No. 128, Earnings per Share, which supersedes
APB Opinion No. 15. Statement No. 128 requires the presentation of earnings per
share by all entities that have common stock or potential common stock, such as
options, warrants and convertible securities, outstanding that trade in a public
market. Those entities that have only common stock outstanding are required to
present basic earnings per-share amounts. Basic per-share amounts are computed
by dividing income before extraordinary items and net income adjusted for
dividends declared on
F-10
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
preferred stock (the numerator) by the weighted-average number of common shares
outstanding (the denominator). All other entities are required to present basic
and diluted per-share amounts. Diluted per-share amounts assume the conversion,
exercise or issuance of all potential common stock instruments unless the effect
is to reduce the loss or increase the income per common share from continuing
operations.
The Company initially applied Statement No. 128 for the year ended December
31, 1997. The Statement requires restatement of prior years per share
information, however, the adoption of this Statement did not have any effect on
the computation in prior years. The Company has no present dilutive per share
amounts as the effect of the potential stock instruments consisting of the stock
options, initial warrants and contingent warrants would be anti-dilutive.
(NOTE B) -- ACQUISITIONS, RELATED PARTY AND BUSINESS COMBINATIONS
On June 6, 1996, Benedek Broadcasting completed two acquisitions. These
acquisitions included (i) the assets of the television broadcasting division of
Stauffer Communications, Inc., consisting of five television stations for a
total purchase price of $54,500,000 and (ii) all the issued and outstanding
capital stock of Brissette Broadcasting Corporation which owned and operated
eight television stations for a purchase price of $270,000,000.
On March 31, 1995, the Company acquired substantially all the assets of
WTVY-TV, a television station serving Dothan, Alabama and Panama City, Florida,
for an aggregate purchase price of approximately $28,699,000.
These acquisitions have been accounted for under the purchase method of
accounting. Accordingly, the results of operations of the acquired stations are
included in the consolidated financial statements since the date of the
respective acquisitions. The purchase price has been allocated to the acquired
assets and liabilities based on their relative fair values as of the closing
date. The excess of the purchase price over the net assets received from these
acquisitions is being amortized on a straight-line method over a period of 40
years.
F-11
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The pro forma results of operations and earnings per share for the year
ended December 31, 1996 assuming the acquisitions had taken place on January 1,
1996, is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1996
------------------------------
BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION
------------ --------------
(IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA)
<S> <C> <C>
Net revenue............................................................. $126,165 $126,165
Operating expenses...................................................... 111,226 111,226
Financial expenses...................................................... 28,897 41,334
------------ --------------
(Loss) before income tax benefit and extraordinary item............ (13,958) (26,344)
Income tax benefit...................................................... 3,863 8,809
------------ --------------
Net (loss)......................................................... $(10,095) $(17,535)
------------
------------
Preferred stock dividends and amortization.............................. 17,345
--------------
Net (loss) applicable to common shares............................. $(34,880)
--------------
--------------
Basic and diluted earnings (loss) per common share:
Loss before extraordinary item..................................... $ (4.96)
Extraordinary item................................................. --
--------------
Loss per common share.............................................. $ (4.96)
--------------
--------------
Weighted-average common shares outstanding.............................. 7,030,000
--------------
--------------
</TABLE>
(NOTE C) -- RELATED PARTY TRANSACTIONS AND SUBSEQUENT EVENT
(1) Benedek License Corporation
On April 18, 1996, Benedek Broadcasting formed BLC for the purpose of
holding the licenses and authorizations issued by the FCC in connection with the
operations of the Stations. Concurrently with the acquisitions described in
(Note B), Benedek Broadcasting Company, L.L.C., which had been formed in 1995
for the same purposes and which was holding the licenses of the nine Stations
then owned by Benedek Broadcasting, was merged into BLC with the result that all
licenses of the Stations after the merger and acquisitions discussed in (Note B)
are owned by BLC. This was accounted for in a manner similar to that in
pooling-of-interests accounting.
(2) Stock option agreements
In 1988 and 1995, the Company granted options whereby a key employee could
exercise these options to purchase 130,784 shares and 239,216 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.
These options entitled the key employee to shares representing 5% of the
outstanding common stock, Class B, of the Company after giving effect to the
issuance thereof and before the conversion of the initial or the contingent
warrants. The 1988 and 1995 options were exercisable at any time and expired in
1998 and 2004, respectively. As permitted under generally accepted accounting
principles, the Company accounts for the options under the provisions of APB
Opinion No. 25 and its related interpretations. Accordingly, no compensation
cost has been recognized for the grant of the options. Had compensation cost
been determined based on the fair value method proscribed in FASB
F-12
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Statement No. 123, the reported net income (loss) and basic earnings (loss) per
common share would have been as follows:
<TABLE>
<CAPTION>
NET INCOME
(LOSS) BASIC
APPLICABLE EARNINGS
YEAR ENDED TO COMMON (LOSS)
DECEMBER 31, STOCK PER SHARE
- -------------------------------------------------------- -------------- ---------
(IN THOUSANDS)
<S> <C> <C>
1995................................................. $ 5,668 $ 0.81
1996................................................. (20,676) (2.94)
1997................................................. (43,347) (6.17)
</TABLE>
In determining the pro forma amounts, the fair value per share for each
option for the 1995 grant was estimated to be $2.68 per share at the grant date
by using the Black-Scholes option-pricing model with the following assumptions:
no dividends will be paid on the common stock, Class B; a risk-free interest
rate of 6.3%; an expected life of nine years; and an expected price volatility
of 45%.
No options had been exercised prior to January 1, 1998 and all options
granted were outstanding at December 31, 1997. The following summarizes the
options outstanding, exercisable and the average exercise prices at the end of
each year.
<TABLE>
<CAPTION>
WEIGHTED
YEAR ENDED OPTIONS OPTIONS AVERAGE
DECEMBER 31, OUTSTANDING EXERCISABLE EXERCISE PRICE
- ------------------------------------------ ----------- ----------- --------------
<S> <C> <C> <C>
1994................................... 130,784 130,784 $ 1.58
1995................................... 370,000 370,000 3.22
1996................................... 370,000 370,000 3.22
1997................................... 370,000 370,000 3.22
</TABLE>
On January 1, 1998, the Company changed the exercise price for the options
to $1.50 per share based upon a method of valuation chosen by the Company.
Additionally, on January 1, 1998, the key employee exercised options to purchase
370,000 shares of common stock, Class B, of the Company for an aggregate
exercise price of $555,000. The key employee borrowed the funds necessary to pay
the exercise price from the Company, which loan is evidenced by a promissory
note which bears interest at the rate of 5.93% per annum and is payable on
December 31, 2007.
(3) Director Fees
The Company paid fees of approximately $567,000, $1,062,000 and $222,000
during the years ended December 31, 1995, 1996 and 1997, respectively, to the
law firm of Shack & Siegel, P.C., a partner of which serves as a director to the
Company and Benedek Broadcasting.
F-13
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(NOTE D) -- PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Land and improvements........................................................... $ 5,823 $ 5,820
Buildings and improvements...................................................... 25,243 25,834
Towers.......................................................................... 14,772 15,058
Transmission and studio equipment............................................... 68,157 70,252
Office equipment................................................................ 7,026 8,139
Records and tapes............................................................... 144 145
Transportation equipment........................................................ 2,236 2,640
Construction in progress........................................................ 470 4,106
-------- --------
123,871 131,994
Less accumulated depreciation and amortization.................................. 39,850 58,183
-------- --------
$ 84,021 $ 73,811
-------- --------
-------- --------
</TABLE>
(NOTE E) -- INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Goodwill........................................................................ $167,631 $163,774
FCC licenses.................................................................... 123,539 120,525
Network affiliations............................................................ 61,508 59,857
Other........................................................................... 1,944 1,432
-------- --------
$354,622 $345,588
-------- --------
-------- --------
</TABLE>
Intangible assets are recorded net of accumulated amortization of
$19,729,000 and $29,569,000 as of December 31, 1996 and 1997, respectively.
(NOTE F) -- REDEEMABLE EQUITY SECURITIES AND DISCOUNT NOTES
Concurrent with the acquisitions described in (Note B), the Company entered
into the following financing transactions, the net proceeds of which were
contributed by the Company to Benedek Broadcasting to finance the acquisitions.
(1) The Company sold 60,000 Units in a private placement, which generated
proceeds of $60,000,000. Each Unit consisted of (i) ten shares of Exchangeable
Redeemable Senior Preferred Stock, (ii) ten Initial Warrants, and (iii) 14.8
Contingent Warrants.
(i) Senior Preferred Stock -- The Company issued 600,000 shares of 15%
Exchangeable Redeemable Senior Preferred Stock due 2007 (the 'Senior
Preferred Stock'), with an initial liquidation preference equal to the
proceeds received of $60,000,000. Of these proceeds, $9,000,000 was
allocated to the initial warrants described in (ii) below. The Senior
Preferred Stock is being accreted to its initial liquidation preference of
$60,000,000 using the effective interest method from June 5, 1996 to July
1, 2000. The Company has the option to pay dividends quarterly at 15% of
the then effective liquidation preference on any dividend payment date
occurring on or before July 1, 2001 either in cash or by adding such
dividends to the then effective liquidation preference. The
F-14
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Company also has the option to immediately redeem these shares, in whole or
in part, at predetermined redemption prices. If redeemed prior to July 1,
2000, the redemption price is 115% of the then effective liquidation
preference. Since it is management's intention to redeem the Senior
Preferred Stock prior to such date, the amount of the redemption premium
payable at such time is being accreted as a constructive distribution from
June 5, 1996 to July 1, 2000. The Senior Preferred Stock is exchangeable
into debentures at the Company's option, subject to certain conditions, in
whole on any scheduled dividend payment date. The Senior Preferred Stock
has been registered with the Securities and Exchange Commission pursuant to
a registration statement declared effective in October 1996.
(ii) Initial Warrants -- The Company issued 600,000 initial warrants
(the 'Initial Warrants') which expire on July 1, 2007. Each Initial Warrant
entitles the holder thereof to purchase one share of Class A Common Stock
at an exercise price of $0.01 per share. The value of the Initial Warrants
at the date of issuance was $9,000,000 which was allocated to paid-in
capital.
(iii) Contingent Warrants -- The Company issued 888,000 contingent
warrants (the 'Contingent Warrants'), each warrant to acquire one share of
Class A Common Stock at an exercise price of $0.01 per share. The
Contingent Warrants were issued to an escrow agent and are not outstanding.
The Contingent Warrants are not separable from the Senior Preferred Stock
and will not be delivered out of escrow unless the Senior Preferred Stock
is not redeemed on or prior to July 1, 2000. Since it is management's
intention to redeem the Senior Preferred Stock prior to any release of the
Contingent Warrants from escrow, no allocation of the proceeds was made to
the Contingent Warrants.
(2) Junior Preferred Stock -- The Company issued 450,000 shares of Seller
Junior Discount Preferred Stock due July 1, 2008 (the 'Junior Preferred Stock')
with an aggregate liquidation preference equal to the proceeds of $45,000,000.
Dividends are payable to the holders of the Junior Preferred Stock at 7.92% per
annum, cumulative until the fifth anniversary of the issuance thereof and
thereafter at increasing rates up to 18%. Since the Company intends to redeem
the Junior Preferred Stock prior to the fifth anniversary, dividends are being
accrued at the initial rate. The dividends on the Junior Preferred Stock are
cumulative. Prior to June 1, 2001, dividend payments on the Junior Preferred
Stock are not permitted to be made in cash and instead will be added
automatically to the liquidation preference and as a result will be deemed paid
in full and will not accumulate. The Junior Preferred Stock is subject to
mandatory redemption in whole on July 1, 2008 and the Company has the option to
redeem these shares in whole or in part at a price equal to the sum of the
liquidation value per share plus an amount equal to all accumulated and unpaid
dividends per share to the date of redemption.
(3) Discount Notes -- The Company issued Senior Subordinated Discount Notes
due 2006 (the 'Discount Notes') in the principal amount of $170,000,000. These
Discount Notes were issued at a discount of $79,822,000 which generated gross
proceeds of $90,178,000. The Discount Notes mature on May 15, 2006 and yield
13.25% per annum with no cash interest accruing prior to May 15, 2001.
Thereafter, cash interest will accrue until maturity payable semiannually,
commencing November 15, 2001. On or after May 15, 2000, the Discount Notes are
redeemable at the option of the Company, in whole or in part, at predetermined
redemption prices and under specified conditions. The Discount Notes are
subordinated to all Senior Debt of the Company. The Discount Notes contain
various restrictive covenants. The Discount Notes have been registered with the
Securities and Exchange Commission pursuant to a registration statement declared
effective in October 1996.
F-15
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table summarizes these activities from June 6, 1996 through
December 31, 1997 as follows:
<TABLE>
<CAPTION>
SENIOR JUNIOR
PREFERRED PREFERRED DISCOUNT
STOCK STOCK NOTES
--------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Issuance of preferred stock.......................................... $51,000 $45,000 $ --
Issuance of Discount Notes........................................... -- -- 90,178
Accrued dividends.................................................... 5,257 2,057 --
Accretion of initial discount and redemption prepayment premium...... 2,205 -- --
Accretion of note discount........................................... -- -- 6,870
--------- --------- --------
Balance at December 31, 1996......................................... 58,462 47,057 97,048
Accrued dividends.................................................... 10,353 3,839 --
Accretion of initial discount and redemption prepayment premium...... 4,845 -- --
Accretion of note discount........................................... -- -- 13,275
--------- --------- --------
Balance at December 31, 1997......................................... $73,660 $50,896 $110,323
--------- --------- --------
--------- --------- --------
</TABLE>
Since the Company derives all of its operating income and cash flow from
Benedek Broadcasting, the Company's ability to pay its obligations including (i)
interest on and principal of the Discount Notes, (ii) redemption of and cash
dividends on the Senior Preferred Stock, and (iii) redemption of and cash
dividends on the Junior Preferred Stock will be dependent primarily upon
receiving dividends and other payments or advances from Benedek Broadcasting.
Benedek Broadcasting is a separate and distinct legal entity and has no
obligation, contingent or otherwise, to pay any amounts to the Company or to
make funds available to the Company for debt service or any other obligation.
NOTE G -- NOTES PAYABLE, INTEREST RATE CAP AND GAIN ON EXTINGUISHMENT OF DEBT
(1) Notes payable
(a) Term Loans and Revolver. As part of the financing transactions
described in Note F on June 6, 1996, Benedek Broadcasting entered into a new
credit agreement which included two Term Loan Facilities in an initial aggregate
principal amount of $128,000,000. This agreement was amended and restated as of
December 17, 1997 to convert the existing Term Loans to new Term Loans, to
modify certain financial covenants and ratios, to increase the revolving credit
facility to $15,000,000 and to replace certain parties to the agreement.
Associated with this amendment and change in lead banks, fees of $3,631,000 were
written off to other interest expense.
The outstanding principal balance at December 17, 1997 of $100,817,000 was
converted to (1) Term Loan (A) of $77,000,000 at the bank's base rate plus the
Applicable Margin or the Eurodollar rate plus the Applicable Margin (currently
8.69%) and (ii) Term Loan (B) of $33,817,000 at the bank's base rate plus 2.25%
per annum or the Eurodollar rate plus 3.25% per annum (currently 9.19%).
Applicable Margin is determined as a per annum percentage ranging from 0.75% to
2.75% by reference to the Leverage Ratio on such date. Interest is payable, at
Benedek Broadcasting's option, on either a one, two, three or six month period,
subject to certain conditions. Each Term Loan Facility provides for quarterly
principal payments until final maturity on December 31, 2004.
The credit agreement also includes a Revolving Credit Facility of
$15,000,000 which bears interest at the bank's base rate plus the Applicable
Margin or the Eurodollar rate plus the Applicable Margin. At December 31, 1997,
the outstanding balance on the revolver was $10,000,000 at 8.69%. The unused
portion of the Revolving Credit Facility bears interest at 0.5% per annum, paid
quarterly.
F-16
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The credit agreement contains several mandatory principal prepayment or
permanent reductions of Revolving Loan Commitment provisions of which none were
applicable at December 31, 1997. The Term Loan Facilities also contain various
restrictive covenants and require compliance with certain financial ratios and
covenants.
The Term Loan Facilities and the Revolving Credit Facility are guaranteed
by the Company and secured by certain of the Company's and Benedek
Broadcasting's present and future property and assets. The Term Loan Facilities
are also guaranteed by BLC and are collateralized by all of the stock of BLC
which is also collateral on the Senior Secured Notes which have an equal
position in the stock of BLC to the Term Loan Facilities.
(b) Senior Secured Notes. During 1995, Benedek Broadcasting issued
$135,000,000 of 11 7/8% Senior Secured Notes due 2005 (the 'Senior Secured
Notes'). The net proceeds of the Senior Secured Notes were used, together with
available cash to (i) refinance certain indebtedness, (ii) finance the
acquisition of WTVY-TV ('the Dothan Station'), and (iii) pay fees and expenses
in connection with the offering. The Senior Secured Notes have been registered
with the Securities and Exchange Commission in a registration statement declared
effective in November 1995.
The Senior Secured Notes bear interest at the rate of 11 7/8% payable
semiannually on March 1 and September 1 of each year and mature in March 2005.
The Senior Secured Notes may be redeemed by Benedek Broadcasting in whole or in
part after March 1, 2000 subject to certain prepayment premiums. The Senior
Secured Notes contain various restrictive covenants relating to limitations on
dividends, transactions with affiliates, further issuance of debt, and the sales
of assets, among others.
The Senior Secured Notes are collateralized by all of the stock of BLC,
which is also collateral on the Term Loan Facilities which have an equal
position in the stock of BLC to the Senior Secured Notes. The Senior Secured
Notes are also collateralized by certain agreements and contract rights related
to the Stations which includes network affiliation agreements and certain
general intangibles.
(c) Other Notes. Other notes payable consist of multiple financing
agreements requiring monthly payments including interest ranging from 2.9% to
15.8% maturing from 1998 through 2002 collateralized by various assets of
Benedek Broadcasting.
Notes payable of the Company and Benedek Broadcasting consist of the
following:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1997
------------------------------ ------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Senior Secured Notes.............................. $135,000 $135,000 $135,000 $135,000
Revolving Credit Facility......................... -- -- 10,000 10,000
Term Loan A....................................... 67,500 67,500 77,000 77,000
Term Loan B....................................... 57,500 57,500 33,817 33,817
Discount Notes -- see (Note F) for terms.......... -- 97,048 -- 110,323
Other............................................. 1,186 1,186 4,777 4,777
------------ -------------- ------------ --------------
261,186 358,234 260,594 370,917
Less current maturities........................... 14,015 14,015 13,480 13,480
------------ -------------- ------------ --------------
$247,171 $344,219 $247,114 $357,437
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>
F-17
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 1997, the notes of the Company and Benedek Broadcasting
provide for annual reductions as follows:
<TABLE>
<CAPTION>
BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS
YEAR ENDING DECEMBER 31, CORPORATION CORPORATION
- ------------------------------------------------------------------------ ------------ --------------
(IN THOUSANDS)
<S> <C> <C>
1998........................................................... $ 13,480 $ 13,480
1999........................................................... 11,870 11,870
2000........................................................... 13,787 13,787
2001........................................................... 13,825 13,825
2002........................................................... 15,315 15,315
Thereafter..................................................... 192,317 302,640
------------ --------------
$260,594 $370,917
------------ --------------
------------ --------------
</TABLE>
(2) Interest rate cap
The Company entered into an interest rate cap agreement which matures in
May 1998, to reduce the impact of changes in interest rates on its floating-rate
long-term debt. That agreement effectively entitles the Company to receive from
a financial institution the amount, if any, by which the London Interbank
Offering Rate (LIBOR) exceeds 7.36% on a notional amount totaling $125,000,000
subject to an amortization schedule. The $207,000 premium paid for this interest
rate cap is being amortized ratably to interest expense over the 18-month term
of the cap, and is reported as an other asset in the accompanying consolidated
balance sheets. LIBOR at December 31, 1997 was 5.94%.
Although the Company is exposed to credit loss in the event of
nonperformance by the counterparty on the interest rate cap, management does not
expect nonperformance by the counterparty. (Note M) describes the methods and
assumptions used in estimating the fair value of these instruments, and provides
a summary of the carrying amount and fair values of all of the Company's and
Benedek Broadcasting's financial instruments.
(3) Gain on early extinguishment of debt
In 1995, the Company recognized an extraordinary gain on early
extinguishment of debt consisting of subordinated capital notes issued in 1986
with detachable stock purchase warrants. The extraordinary gain of approximately
$11,128,000 was reduced by losses of approximately $1,140,000 from unrecognized
deferred loan costs, approximately $2,749,000 of prepayment premiums and
contingent payments, and $375,000 of unamortized debt discount, related to the
existing debt.
F-18
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(NOTE H) -- PROGRAM BROADCAST RIGHTS PAYABLE
(1) Program broadcast rights and program broadcast rights payable consist of the
following:
<TABLE>
<CAPTION>
PROGRAM PROGRAM
BROADCAST BROADCAST
RIGHTS RIGHTS PAYABLE
--------- --------------
(IN THOUSANDS)
<S> <C> <C>
Balance at December 31, 1995................................................ $ 2,263 $ 2,675
Contracts acquired..................................................... 8,862 8,355
Amortization........................................................... (4,399) --
Payments............................................................... -- (3,318)
--------- --------------
Balance at December 31, 1996................................................ $ 6,726 $ 7,712
Contracts acquired..................................................... 6,340 6,340
Amortization........................................................... (6,401) --
Payments............................................................... -- (5,937)
--------- --------------
Balance at December 31, 1997................................................ $ 6,665 $ 8,115
--------- --------------
--------- --------------
</TABLE>
(2) The current maturities of program broadcast rights payable consist of the
following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1996 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
Program contracts, due in varying installments through 2000................ $7,712 $8,115
Less current maturities.................................................... 6,120 6,762
------ ------
Long-term portion.......................................................... $1,592 $1,353
------ ------
------ ------
</TABLE>
The maturities of the program contracts are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- -------------------------------------------------------------------- (IN THOUSANDS)
<S> <C>
1998....................................................... $6,762
1999....................................................... 960
2000....................................................... 383
2001....................................................... 10
-------
$8,115
-------
-------
</TABLE>
In addition, the Company has entered into noncancellable commitments for
future program broadcast rights aggregating approximately $12,822,000 as of
December 31, 1997 with future payments as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (IN THOUSANDS)
- -------------------------------------------------------------------- --------------
<S> <C>
1998....................................................... $ 1,410
1999....................................................... 4,449
2000....................................................... 3,320
2001....................................................... 2,129
2002....................................................... 1,514
--------------
$ 12,822
--------------
--------------
</TABLE>
F-19
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(NOTE I) -- ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Trade payables.......................................................... $ 1,364 $ 1,754
Barter, net............................................................. 443 85
Compensation and benefits............................................... 4,329 4,084
Interest................................................................ 7,240 5,747
Other................................................................... 1,993 1,807
------- -------
$15,369 $13,477
------- -------
------- -------
</TABLE>
(NOTE J) -- LEASES
The Company leases land, office space and office and transportation
equipment under agreements which expire from 1998 through 2004 and require
various minimum annual rentals. The leases also require payment of the normal
maintenance, real estate taxes and insurance on the properties. The Company has
the option to acquire one of the leased premises on each of May 1, 2000 and 2005
for $650,000 and $750,000 respectively.
The approximate total minimum rental commitments at December 31, 1997 under
these leases are due as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (IN THOUSANDS)
- -------------------------------------------------------------------- --------------
<S> <C>
1998....................................................... $1,060
1999....................................................... 754
2000....................................................... 467
2001....................................................... 368
2002....................................................... 348
Thereafter................................................. 507
-------
$3,504
-------
-------
</TABLE>
Total rental expense under these agreements and other monthly rentals for
the years ended 1995, 1996 and 1997 was approximately $626,000, $1,064,000 and
$1,416,000, respectively.
The Company is a lessor of certain portions of its real property to various
organizations. Total rental income under these agreements for the years ended
1995, 1996 and 1997 was approximately $324,000, $680,000 and $1,030,000,
respectively.
(NOTE K) -- INCOME TAX MATTERS AND CHANGE IN TAX STATUS
Prior to the consummation of the acquisitions and the related financing in
1996, Benedek Broadcasting, with the consent of its stockholder, elected to be
taxed under sections of federal and state income tax law, which provided that,
in lieu of corporation income taxes, the stockholder separately accounted for
Benedek Broadcasting's income, deductions, losses and credits. Due to the
structure of the financing for the acquisitions, the election to be taxed as an
'S' Corporation automatically terminated and Benedek Broadcasting became subject
to federal and state income taxes. As a result, Benedek Broadcasting recognized
a net deferred tax asset of approximately $3,550,000. Concurrent with the change
in tax status the accumulated deficit of $41,073,000 which existed on that date
was reclassified to additional paid-in capital.
F-20
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The deferred tax assets and liabilities, resulting primarily from the
acquisitions explained in (Note B) consist of the following components for the
Company and Benedek Broadcasting:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1997
------------------------------ ------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Deferred tax assets:
Loss carryforwards................. $ 3,676 $ 3,769 $ 6,968 $ 7,360
Receivable allowances and
accruals......................... 1,050 1,050 1,003 1,003
Network agreements................. 2,057 2,057 1,777 1,777
Original issue discount............ -- 2,722 -- 8,058
------------ -------------- ------------ --------------
6,783 9,598 9,748 18,198
------------ -------------- ------------ --------------
Deferred tax liabilities:
Property and equipment............. 14,307 14,307 11,748 11,748
Intangibles........................ 48,558 48,558 47,341 47,341
------------ -------------- ------------ --------------
62,865 62,865 59,089 59,089
------------ -------------- ------------ --------------
Net deferred tax liability.............. $(56,082) $(53,267) $(49,341) $(40,891)
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>
The income tax benefit for the Company and Benedek Broadcasting consisted
of the following:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1997
------------------------------ ------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Current tax expense..................... $ (95) $ (95) $ (349) $ (349)
Deferred tax benefit.................... 1,944 4,759 6,742 12,376
------------ ------- ------------ --------------
$1,849 $4,664 $6,393 $ 12,027
------------ ------- ------------ --------------
------------ ------- ------------ --------------
</TABLE>
Under the provisions of the Internal Revenue Code, the Company and its
subsidiaries have approximately $18,400,000 of actual net operating loss
carryforwards available to offset future tax liabilities which expire in 2007
through 2011.
A reconciliation of the statutory federal income tax rate to the Company's
effective tax rate is as follows:
F-21
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1995 1996 1997
----------------------------- ----------------------------- -----------------------------
BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION CORPORATION
------------ -------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Computed 'expected' income tax
benefit........................... (35.0)% (35.0)% (35.0)% (35.0)% (35.0)% (35.0)%
Increase (decrease) resulting from:
State income taxes, net of
federal effect............... -- -- (5.0) (5.0) (5.0) (5.0)
(Income) loss allocated to
stockholder due to 'S'
corporation status........... (36.2) (36.2) 9.4 5.2 -- --
Nondeductible amortization and
expenses..................... 71.2 71.2 12.9 7.1 8.2 5.1
Other, net..................... -- -- (3.5) (1.8) 3.2 1.8
------ ------ ------ ------ ------ ------
Effective tax rate.................. -- -- (21.2)% (29.5)% (28.6)% (33.1)%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
</TABLE>
(NOTE L) -- PREFERRED STOCK
The Board of Directors of the Company has authorized 2,500,000 shares of
preferred stock of which 1,050,000 was issued in conjunction with the financing
discussed in (Note F). The Board has the right and ability to set the terms and
preferences of the preferred stock. The Board has not set the terms and
preferences of the remaining 1,450,000 unissued shares.
(NOTE M) -- FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value of financial instruments has been estimated by the
Company using available market information and appropriate valuation
methodologies as discussed below. Considerable judgment was required, however,
to interpret market data to develop the estimates of fair value. Accordingly,
the estimates presented below are not necessarily indicative of the amounts the
Company could realize in a current market exchange.
Cash and cash equivalents, current receivables, current payables, the
interest rate cap agreement have carrying values which approximate fair value
because of the short-term nature of those instruments. The floating rate
long-term debt carrying amount approximates fair value because the interest rate
fluctuates with the bank's lending rate.
The following table shows the carrying amounts and estimated fair values of
other financial instrument liabilities and other off-balance sheet activities at
December 31, 1996 and 1997:
<TABLE>
<CAPTION>
1996 1997
---------------------- ----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Benedek Broadcasting:
Program broadcast rights payable.................. $ 7,712 $ 7,552 $ 8,115 $ 7,967
Other notes payable............................... 1,186 1,186 4,777 4,777
Senior Secured Notes.............................. 135,000 138,375 135,000 153,900
</TABLE>
(table continued on next page)
F-22
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(table continued from previous page)
<TABLE>
<CAPTION>
1996 1997
---------------------- ----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Benedek Communications:
Discount Notes.................................... 97,048 97,750 110,323 130,475
Senior Preferred Stock............................ 58,462 58,462 73,660 73,660
Junior Preferred Stock............................ 47,057 31,711 50,896 37,306
Initial Warrants.................................. 7,826 2,800 6,874 900
</TABLE>
The fair value of program broadcast rights payable and other notes payable
were estimated using the discounted cash flow method.
The fair value of the Discount Notes and Senior Secured Notes was estimated
using readily available quoted market prices.
The fair value of the Senior Preferred Stock approximates carrying value
based upon discounting the contractual cash flows including the redemption
prepayment premium related to the optional redemption right that the Company
intends to exercise, using estimated market discount rates which reflect the
interest rate and other risks inherent in the instrument.
The fair value of the Junior Preferred Stock is estimated using discounted
cash flow analyses, based on the interest rate, preferences and other risks
inherent in the instrument.
The fair value of the Initial Warrants as of December 31, 1996 was
estimated as 7.5% of the multiple of the broadcast cash flow less interest
bearing debt. The fair value of the Initial Warrants as of December 31, 1997 was
estimated based on a method of valuation chosen by the Company.
The fair value of the Contingent Warrants was not estimated because it is
management's intention to redeem the Senior Preferred Stock prior to any release
of the Contingent Warrants from escrow.
The above fair value estimates were made at a discrete point in time based
on relevant market information and other assumptions about the financial
instruments. As no active market exists for a significant portion of the
Company's financial instruments, fair value estimates were based on judgments
regarding current economic conditions, future expected cash flows, risk
characteristics and other factors. These estimates are subjective in nature and
involve uncertainties and, therefore, cannot be calculated with precision.
Changes in assumptions could significantly affect these estimates.
(NOTE N) -- YEAR 2000 ISSUE
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 data-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.
Based on the review of the computer systems, management does not believe
the cost of remediation will be material to the Company's financial statements.
(NOTE O) -- 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.
F-23
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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.
F-24
<PAGE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
BENEDEK LICENSE CORPORATION
Rockford, Illinois
We have audited the accompanying balance sheets of Benedek License
Corporation as of December 31, 1996 and 1997 and the related statements of
operations, stockholder's equity and cash flows for the period February 28, 1995
(date of inception) to December 31, 1995 and for the years ended December 31,
1996 and 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Benedek License Corporation
as of December 31, 1996 and 1997 and the results of its operations and its cash
flows for the period February 28, 1995 (date of inception) to December 31, 1995
and for the years ended December 31, 1996 and 1997, in conformity with generally
accepted accounting principles.
/s/ MCGLADREY & PULLEN, LLP
Rockford, Illinois
February 7, 1998
F-25
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
-------- --------
(IN THOUSANDS, EXCEPT
SHARE AND PER
SHARE DATA)
<S> <C> <C>
ASSETS
Federal Communication Commission (FCC)
Licenses, at cost, less accumulated amortization of $2,323 and $5,514 for 1996 and
1997, respectively................................................................ $123,538 $120,526
Goodwill, less accumulated amortization of $432 and $1,322 for 1996 and 1997,
respectively.......................................................................... 34,805 33,915
-------- --------
$158,343 $154,441
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDER'S EQUITY
Deferred tax liability.................................................................. $ 34,506 $ 33,017
-------- --------
Stockholder's equity (Note E):
Common stock, $0.01 par authorized 3,000 shares, issued and outstanding 99
shares............................................................................ -- --
Additional paid-in capital......................................................... 125,861 126,040
Accumulated deficit................................................................ (2,024) (4,616)
-------- --------
123,837 121,424
-------- --------
$158,343 $154,441
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-26
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 28, 1995 YEAR ENDED
THROUGH DECEMBER 31,
DECEMBER 31, -------------------
1995 1996 1997
------------------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Operating expense, amortization.......................................... $327 $ 2,428 $ 4,081
------ ------- -------
(Loss) before income tax benefit.................................... 327 (2,428) (4,081)
Income tax benefit....................................................... -- 731 1,489
------ ------- -------
Net (loss)..................................................... $327 $(1,697) $(2,592)
------ ------- -------
------ ------- -------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-27
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE PERIOD FEBRUARY 28, 1995 THROUGH DECEMBER 31, 1995 AND THE
YEARS ENDED DECEMBER 31, 1996 AND 1997
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
STOCK CAPITAL DEFICIT TOTAL
------ ---------- ----------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Issuance of 99 shares of common stock........................... $-- $ 15,630 $-- $ 15,630
Net (loss)................................................. -- -- (327) (327)
------ ---------- ----------- --------
Balance at December 31, 1995.................................... -- 15,630 (327) 15,303
Capital contribution of FCC licenses from parent........... -- 110,231 -- 110,231
Net (loss)................................................. -- -- (1,697) (1,697)
------ ---------- ----------- --------
Balance at December 31, 1996.................................... -- 125,861 (2,024) 123,837
Capital contribution of FCC licenses from parent........... -- 179 -- 179
Net (loss)................................................. -- -- (2,592) (2,592)
------ ---------- ----------- --------
Balance at December 31, 1997.................................... $-- $126,040 $(4,616) $121,424
------ ---------- ----------- --------
------ ---------- ----------- --------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-28
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE PERIOD YEAR ENDED
FEBRUARY 28, 1995 DECEMBER 31,
THROUGH -------------------
DECEMBER 31, 1995 1996 1997
----------------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss)............................................................. $ (327) $ (1,697) $(2,592)
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Amortization...................................................... 327 2,428 4,081
Deferred income tax............................................... -- (731) (1,489)
----------------- -------- -------
Net cash provided by operating activities.................... -- -- --
Cash:
Beginning.............................................................. -- -- --
----------------- -------- -------
Ending................................................................. $-- $ -- $ --
----------------- -------- -------
----------------- -------- -------
Supplemental Schedule of Noncash Investing and Financing Activities:
FCC licenses acquired by issuing common stock.......................... $15,630 $ -- $ --
FCC licenses acquired by contribution of capital from parent........... -- 110,231 179
Transfer of deferred tax liability and offsetting goodwill related to
FCC licenses......................................................... -- 35,237 --
----------------- -------- -------
----------------- -------- -------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-29
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(NOTE A) -- NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 Commission ('FCC') licenses for
the twenty-three television stations owned by Benedek Broadcasting which are
located throughout the United States.
SIGNIFICANT ACCOUNTING POLICIES
(1) Accounting estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and the
accompanying notes. Actual results could differ from those estimates.
(2) Intangibles
Intangible assets, which include FCC licenses and goodwill, have been
recorded at cost and are amortized over 40 years using the straight-line method.
Benedek Broadcasting reviews its intangibles annually to determine potential
impairment by comparing the carrying value of the intangible with the
undiscounted anticipated future cash flows of the related property before
interest charges. If the future cash flows are less than the carrying value,
Benedek Broadcasting would obtain an appraisal on the property and adjust the
carrying value of the intangibles to the appraisal value if the appraisal value
is less than the carrying value.
(3) Income taxes
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences, operating losses and
tax credit carryforwards. Deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment. Reference
should also be made to (Note D) regarding a change in tax status and the
recording of deferred taxes upon change in status.
(NOTE B) -- BUSINESS COMBINATION
On June 6, 1996, Benedek Broadcasting Company, L.L.C. (the 'LLC'), a wholly
owned subsidiary of Benedek Broadcasting, was merged into BLC. Since these
entities had identical stockholder ownership, this was accounted for in a manner
similar to a pooling-of-interests and the results of operations are included for
the above-mentioned periods since the formation of the LLC on February 28, 1995.
The stockholder's equity section for the 1995 financial statements has been
recast to reflect the BLC as if it was formed on February 28, 1995.
(NOTE C) -- ACQUISITIONS
On June 6, 1996, Benedek Broadcasting acquired thirteen television stations
including their respective FCC licenses. These licenses and the related goodwill
and deferred tax liability were transferred on that day to BLC as contributed
capital based on the pro rata share of the allocated purchase price paid by
Benedek Broadcasting.
F-30
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(NOTE D) -- INCOME TAX MATTERS AND CHANGE IN TAX STATUS
Prior to the consummation of the business combination discussed in (Note
B), the LLC filed a partnership income tax return and the members reported their
respective shares of the income, deductions, losses and credits of the LLC on
their income tax returns. BLC is a 'C' corporation, subject to federal and state
income taxes. As a result of the merger of the LLC with BLC on June 6, 1996, BLC
recognized a net deferred tax asset of approximately $650,000.
The deferred tax assets and liabilities consist of the following
components:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax asset:
Loss carryforwards..................................... $ 418 $ 1,161
Deferred tax liability:
FCC licenses........................................... (34,924) (34,178)
-------- --------
Net deferred tax liability........................ $(34,506) $(33,017)
-------- --------
-------- --------
</TABLE>
Under the provisions of the Internal Revenue Code, BLC has approximately
$2,902,000 of net operating loss carryforwards available to offset future tax
liabilities of BLC and its parent which begin to expire in 2011.
Reconciliation of the statutory federal income tax rate to BLC's effective
tax rate is as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FEBRUARY 28, 1995
THROUGH YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1996 DECEMBER 31, 1997
----------------- ----------------- -----------------
<S> <C> <C> <C>
Computed 'expected' income tax benefit.......... (35.0)% (35.0)% (35.0)%
Increase (decrease) resulting from:
State income taxes, net of federal
effect................................... -- (5.0) (5.0)
Loss allocated to members of LLC.............. 35.0 3.6 --
Nondeductible amortization and expenses.... -- 7.1 8.7
Other...................................... -- (0.8) (5.2)
------ ------ ------
Effective rate tax......................... -- % (30.1)% (36.5)%
------ ------ ------
------ ------ ------
</TABLE>
(NOTE E) -- 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.
F-31
<PAGE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Benedek Communications Corporation and Subsidiaries
Rockford, Illinois
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The consolidated
supplemental schedule is presented for purposes of complying with the Securities
and Exchange Commission's rules and are not a part of the basic consolidated
financial statements. These schedules have been subjected to the auditing
procedures applied in our audits of the basic consolidated financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the basic consolidated financial statements taken as a whole.
/s/ McGLADREY & PULLEN, LLP
Rockford, Illinois
February 7, 1998
S-1
<PAGE>
<PAGE>
SCHEDULE II
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT BALANCES CHARGED TO BALANCE AT
BEGINNING ACQUIRED IN COSTS AND DEDUCTIONS END OF
OF PERIOD ACQUISITIONS EXPENSES DESCRIBED(1) PERIOD
---------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Deducted from asset account -- allowance for
doubtful accounts:
Year ended December 31, 1994............... $ 91,778 $-- $130,622 $122,132 $100,268
Year ended December 31, 1995............... 100,268 -- 201,382 52,627 249,023
Year ended December 31, 1996............... 249,023 86,458 403,843 255,804 483,519
Year ended December 31, 1997............... 483,519 -- 231,479 243,347 471,652
</TABLE>
- ------------
(1) Uncollectible accounts written off, net of recoveries
S-2
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ----------------------------------------------------------------------------------------------- ----------
<C> <S> <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 15.0% Exchangeable Redeemable Senior Preferred Stock due 2007 and
Qualifications, Limitations and Restrictions thereof of Benedek Communications Corporation,
incorporated by reference to Exhibit 3.3 to the S-4 Registration Statement...................
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...............................................................
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 15.0% Exchangeable Redeemable Senior Preferred Stock due 2007 and
Qualifications, Limitations and Restrictions thereof of Benedek Communications Corporation
(filed as Exhibit 3.3 hereof), incorporated by reference to Exhibit 4.5 to the S-4
Registration Statement.......................................................................
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...................
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ----------------------------------------------------------------------------------------------- ----------
<C> <S> <C>
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 -- Purchase Agreement dated May 30, 1996 between Benedek Communications Corporation and
Goldman, Sachs & Co., incorporated by reference to Exhibit 10.1 to the S-4 Registration
Statement....................................................................................
10.2 -- Exchange and Registration Rights Agreement dated May 30, 1996 between Benedek Communications
Corporation and Goldman, Sachs & Co. with respect to the 13 1/4% Senior Subordinated Discount
Notes due 2006 of Benedek Communications Corporation, incorporated by reference to Exhibit
10.2 to the S-4 Registration Statement.......................................................
10.3 -- Placement Agreement dated June 5, 1996 among Benedek Communications Corporation, Goldman,
Sachs & Co. and BT Securities Corporation, incorporated by reference to Exhibit 10.3 to the
S-4 Registration Statement...................................................................
10.4 -- Exchange and Registration Rights Agreement dated June 5, 1996 among Benedek Communications
Corporation, Goldman, Sachs & Co. and BT Securities Corporation with respect to the 15.0%
Exchangeable Redeemable Senior Preferred Stock due 2007 of Benedek Communications
Corporation, incorporated by reference to Exhibit 10.4 to the S-4 Registration Statement.....
10.5 -- Warrant Agreement dated as of June 5, 1996 between Benedek Communications Corporation and
IBJ Schroder Bank & Trust Company (filed as Exhibit 4.8 hereof), incorporated by reference to
Exhibit 10.5 to the S-4 Registration Statement...............................................
10.6 -- Contingent Warrant Escrow Agreement dated June 5, 1996 between Benedek Communications
Corporation and IBJ Schroder Bank & Trust Company, incorporated by reference to Exhibit 10.6
to the S-4 Registration Statement............................................................
10.7 -- Common Stock Registration Rights Agreement dated as of June 5, 1996 among Benedek
Communications Corporation, Goldman, Sachs & Co. and BT Securities Corporation, incorporated
by reference to Exhibit 10.7 to the S-4 Registration Statement...............................
*10.8 -- Amended and Restated Credit Agreement dated as of December 17, 1997 among Benedek
Communications Corporation, Benedek Broadcasting Corporation, the Lenders listed therein and
Bankers Trust Company, as Agent..............................................................
*10.9 -- Amended and Restated Guaranty dated as of December 17, 1997 by Benedek Communications
Corporation in favor of Bankers Trust Company................................................
*10.10 -- Amended and Restated Guaranty dated as of December 17, 1997 by Benedek License Corporation
in favor of Bankers Trust Company............................................................
*10.11 -- Amended and Restated Pledge Agreement dated as of December 17, 1997 between Benedek
Communications Corporation and Bankers Trust Company.........................................
*10.12 -- Amended and Restated Security Agreement dated as of December 17, 1997 between Benedek
Communications Corporation and Bankers Trust Company.........................................
*10.13 -- Amended and Restated Accounts Receivable Security Agreement dated as of December 17, 1997
between Benedek Broadcasting Corporation and Bankers Trust Company...........................
*10.14 -- Amended and Restated Acquired Assets Security Agreement dated as of December 17, 1997
between Benedek Broadcasting Corporation and Bankers Trust Company...........................
*10.15 -- Amended and Restated Tangible Assets Security Agreement dated as of December 17, 1997
between Benedek Broadcasting Corporation and Bankers Trust Company...........................
*10.16 -- Amended and Restated Collateral Account Agreement dated as of December 17, 1997 between
Benedek Communications Corporation and Bankers Trust Company.................................
*10.17 -- Master Assignment Agreement dated as of December 17, 1997 among Benedek Communications
Corporation, Benedek Broadcasting Corporation, Canadian Imperial Bank of Commerce, New York
Agency, and the Financial Institutions listed therein........................................
10.18 -- Form of Indemnity Agreement between Benedek Communications Corporation and each of its
executive officers and directors, incorporated by reference to Exhibit 10.14 to the S-4
Registration Statement.......................................................................
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
- ------- ----------------------------------------------------------------------------------------------- ----------
<C> <S> <C>
10.19 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and
A. Richard Benedek, incorporated by reference to Exhibit 10.16 to the S-4 Registration
Statement....................................................................................
10.20 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and
K. James Yager, incorporated by reference to Exhibit 10.17 to the S-4 Registration
Statement....................................................................................
10.21 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and
Ronald L. Lindwall, incorporated by reference to Exhibit 10.19 to the S-4 Registration
Statement....................................................................................
10.22 -- Employment Agreement dated as of June 6, 1996 between Benedek Broadcasting Corporation and
Terrance F. Hurley, incorporated by reference to Exhibit 10.20 to the S-4 Registration
Statement....................................................................................
*21 -- Subsidiaries of Benedek Communications Corporation and Benedek Broadcasting Corporation.....
*23 -- Consent of McGladrey & Pullen, LLP..........................................................
*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>
- ------------
* Filed herewith
<PAGE>
<PAGE>
EXHIBIT 10.8
EXECUTION
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 17, 1997
AMONG
BENEDEK COMMUNICATIONS CORPORATION,
BENEDEK BROADCASTING CORPORATION,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
AND
BANKERS TRUST COMPANY,
AS AGENT
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION
BENEDEK BROADCASTING CORPORATION
CREDIT AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 1.
DEFINITIONS................................................... ....................................2
1.1 Certain Defined Terms.................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.......................................................................... 35
1.3 Other Definitional Provisions and Rules of Construction.................................. 35
SECTION 2.
CONVERSION; AMOUNTS AND
TERMS OF REVOLVING LOAN COMMITMENTS AND LOANS.................................. 36
2.1 Conversion of Existing AXELs to Term Loans; Amount and Terms of
Revolving Loan Commitments and Loans; the Register; Notes................................ 36
2.2 Interest on the Loans.................................................................... 41
2.3 Fees..................................................................................... 45
2.4 Repayments; Prepayments; Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of
Collateral and Payments Under Guaranties................................................. 45
2.5 Use of Proceeds.......................................................................... 54
2.6 Special Provisions Governing Eurodollar Rate Loans....................................... 55
2.7 Increased Costs; Taxes; Capital Adequacy................................................. 57
2.8 Obligation of Lenders to Mitigate........................................................ 61
SECTION 3.
CONDITIONS TO EFFECTIVENESS; CONDITIONS TO LOANS................................. 61
3.1 Conditions to Existing AXELs and initial Revolving Loans................................. 61
3.2 Conditions to Effectiveness of this Agreement, the Conversion of Existing
AXELs to Term Loans and the Making of Revolving Loans on the Restate-
ment Date................................................................................ 62
3.3 Conditions to Conversion of Existing AXELs to Term Loans; Conditions to
All Loans................................................................................ 67
SECTION 4.
REPRESENTATIONS AND WARRANTIES.......................................... 68
4.1 Organization, Powers, Qualification, Good Standing, Business, Subsidiaries
and FCC and Station Matters.............................................................. 69
4.2 Authorization of Borrowing, etc.......................................................... 71
</TABLE>
(i)
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
4.3 Financial Condition...................................................................... 72
4.4 No Material Adverse Change; No Restricted Junior Payments................................ 73
4.5 Title to Properties; Liens; Real Property................................................ 73
4.6 Litigation; Adverse Facts................................................................ 74
4.7 Payment of Taxes......................................................................... 74
4.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts................................................................................ 74
4.9 Governmental Regulation.................................................................. 75
4.10 Securities Activities.................................................................... 75
4.11 Employee Benefit Plans................................................................... 75
4.12 Certain Fees............................................................................. 76
4.13 Environmental Protection................................................................. 76
4.14 Employee Matters......................................................................... 77
4.15 Solvency................................................................................. 77
4.16 Matters Relating to Collateral........................................................... 77
4.17 Applicable Law........................................................................... 78
4.18 Disclosure............................................................................... 78
SECTION 5.
AFFIRMATIVE COVENANTS.............................................. 79
5.1 Financial Statements and Other Reports................................................... 79
5.2 Corporate Existence; Board of Directors; etc............................................. 84
5.3 Payment of Taxes and Claims; Tax Consolidation........................................... 84
5.4 Maintenance of Properties; Insurance; Application of Net Insur-
ance/Condemnation Proceeds............................................................... 85
5.5 Inspection Rights; Audits of Accounts Receivable; Lender Meeting......................... 86
5.6 Compliance with Laws, etc.; Maintenance of FCC Licenses; etc............................. 87
5.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental Claims
and Violations of Environmental Laws..................................................... 87
5.8 Matters Relating to Additional Real Property Collateral.................................. 89
5.9 Maintenance of Network Affiliations...................................................... 91
5.10 Ownership Reports........................................................................ 91
5.11 Determination of Borrowing Base.......................................................... 92
5.12 Future Capital Contributions; Cash and Cash Equivalents of BCC........................... 92
5.13 Lien Searches and UCC Termination Statements............................................. 92
SECTION 6.
COMPANY'S NEGATIVE COVENANTS........................................... 93
6.1 Indebtedness............................................................................. 93
6.2 Liens and Related Matters................................................................ 94
6.3 Investments; Joint Ventures.............................................................. 95
6.4 Contingent Obligations................................................................... 97
6.5 Restricted Junior Payments............................................................... 97
</TABLE>
(ii)
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
6.6 Financial Covenants...................................................................... 98
6.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.........................100
6.8 Consolidated Capital Expenditures........................................................104
6.9 Sales and Lease-Backs....................................................................105
6.10 Sale or Discount of Receivables..........................................................105
6.11 Transactions with Shareholders and Affiliates............................................105
6.12 Disposal of Subsidiary Stock.............................................................105
6.13 Conduct of Business......................................................................106
6.14 Amendments or Waivers of Certain Related Agreements; Payments on
Existing Senior Notes; Designation of "Designated Senior Debt ".........................106
6.15 Fiscal Year..............................................................................107
6.16 Limitation on Creation of Subsidiaries...................................................107
SECTION 7.
EVENTS OF DEFAULT................................................107
7.1 Failure to Make Payments When Due........................................................107
7.2 Default in Other Agreements..............................................................107
7.3 Breach of Certain Covenants..............................................................108
7.4 Breach of Warranty.......................................................................108
7.5 Other Defaults Under Loan Documents......................................................108
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc.....................................108
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.......................................109
7.8 Judgments and Attachments................................................................109
7.9 Dissolution..............................................................................109
7.10 Employee Benefit Plans...................................................................109
7.11 Material Adverse Effect..................................................................109
7.12 Change in Executive Officers of Company..................................................110
7.13 Change in Control........................................................................110
7.14 FCC Licenses.............................................................................110
7.15 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations................110
7.16 Subordinated Indebtedness................................................................111
SECTION 8.
AGENT......................................................112
8.1 Appointment..............................................................................112
8.2 Powers and Duties; General Immunity......................................................113
8.3 Representations and Warranties; No Responsibility For Appraisal of Credit-
worthiness...............................................................................114
8.4 Right to Indemnity.......................................................................115
8.5 Successor Agent..........................................................................115
8.6 Collateral Documents and Guaranties......................................................115
</TABLE>
(iii)
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
SECTION 9.
MISCELLANEOUS..................................................117
9.1 Assignments and Participations in Loans..................................................117
9.2 Expenses.................................................................................119
9.3 Indemnity................................................................................120
9.4 Set-Off; Security Interest in Deposit Accounts...........................................121
9.5 Ratable Sharing..........................................................................121
9.6 Amendments and Waivers...................................................................122
9.7 Independence of Covenants................................................................123
9.8 Notices..................................................................................123
9.9 Survival of Representations, Warranties and Agreements...................................123
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative....................................124
9.11 Marshalling; Payments Set Aside..........................................................124
9.12 Severability.............................................................................124
9.13 Obligations Several; Independent Nature of Lenders' Rights...............................124
9.14 Headings.................................................................................125
9.15 Applicable Law...........................................................................125
9.16 Successors and Assigns...................................................................125
9.17 Consent to Jurisdiction and Service of Process...........................................125
9.18 Waiver of Jury Trial.....................................................................126
9.19 Confidentiality..........................................................................126
9.20 Maximum Amount...........................................................................127
9.21 Counterparts; Effectiveness..............................................................127
Signature pages S-1
</TABLE>
(iv)
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF AMENDED AND RESTATED TRANCHE A NOTE
IV FORM OF AMENDED AND RESTATED TRANCHE B NOTE
V FORM OF AMENDED AND RESTATED REVOLVING NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF BORROWING BASE CERTIFICATE
VIII FORM OF OPINION OF SHACK & SIEGEL, P.C.
IX FORM OF OPINION OF COVINGTON & BURLING
X FORM OF OPINION OF O'MELVENY & MYERS LLP
XI FORM OF ASSIGNMENT AGREEMENT
XII FORM OF CERTIFICATE RE NON-BANK STATUS
XIII FORM OF AMENDED AND RESTATED COLLATERAL ACCOUNT
AGREEMENT
XIV FORM OF AMENDED AND RESTATED COMPANY ACCOUNTS
RECEIVABLE SECURITY AGREEMENT
XV FORM OF AMENDED AND RESTATED COMPANY ACQUIRED ASSETS
SECURITY AGREEMENT
XVI FORM OF AMENDED AND RESTATED COMPANY TANGIBLE ASSETS
SECURITY AGREEMENT
XVII FORM OF AMENDED AND RESTATED BCC GUARANTY
XVIII FORM OF AMENDED AND RESTATED LICENSE SUB GUARANTY
XIX FORM OF AMENDED AND RESTATED BCC PLEDGE AGREEMENT
XX FORM OF AMENDED AND RESTATED BCC SECURITY AGREEMENT
XXI FORM OF MORTGAGE
XXII FORM OF LANDLORD CONSENT AND ESTOPPEL
XXIII FORM OF MASTER ASSIGNMENT AGREEMENT
XXIV FORM OF COMPANY COLLATERAL ACCOUNT AGREEMENT
</TABLE>
(v)
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SCHEDULES
1.1 ESTIMATED TAX AMOUNTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.2F ACQUISITION DATE MORTGAGED PROPERTIES
4.1A LOAN PARTIES; SUBSIDIARIES OF COMPANY
4.1E STATIONS AND FCC LICENSES
4.3 CERTAIN LIABILITIES
4.5 REAL PROPERTY
4.11 CERTAIN EMPLOYEE BENEFIT PLANS
4.13 ENVIRONMENTAL MATTERS
4.14 EMPLOYEE MATTERS
6.1 CERTAIN EXISTING INDEBTEDNESS
6.2 CERTAIN EXISTING LIENS
6.3 CERTAIN EXISTING INVESTMENTS
6.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
</TABLE>
(vi)
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of December 17,
1997, 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").
R E C I T A L S
WHEREAS, on or before June 6, 1996, BCC (i) issued and sold (a) the
Seller Preferred Stock (this and other terms used in these recitals without
definition being used as defined in subsection 1.1) to GE Capital and Paul
Brissette, (b) the Exchangeable Preferred Stock, (c) the Warrants and (d) the
Senior Subordinated Notes and (ii) contributed the proceeds thereof to Company;
WHEREAS, on June 6, 1996, (i) Company utilized the proceeds from the
Existing AXELs under the Existing Credit Agreement, together with the proceeds
of the Seller Preferred Stock, the Exchangeable Preferred Stock, the Warrants
and the Senior Subordinated Notes, to consummate the Acquisitions and (ii)
effected the Reorganization (as defined in the Existing Credit Agreement);
WHEREAS, Company desires to amend and restate the Existing Credit
Agreement so as to (i) convert the Existing AXELs to Term Loans, (ii) to amend
certain provisions of the Existing Credit Agreement and (iii) to delete
provisions of the Existing Credit Agreement no longer necessary or useful after
giving effect to such amendment and restatement;
WHEREAS, Company secured (i) all of the Obligations relating to the
Existing AXELs under the Existing Credit Agreement by granting to Collateral
Agent (as defined in the Existing Credit Agreement), on behalf of Lenders under
the Existing Credit Agreement holding outstanding Existing AXELs, a first
priority Lien on (a) all of the collateral under the Existing Company Pledge
Agreement, shared on an equal and ratable basis with the holders of the Existing
Senior Notes, and (b) all of the real property and tangible personal property
acquired in the Acquisitions, (ii) all of the Obligations under the Existing
Credit Agreement by granting to Collateral Agent, on behalf of Lenders under the
Existing Credit Agreement, a first priority Lien on all other real property and
tangible personal property of Company, shared on an equal and ratable basis with
the holders of the Existing Senior Notes, and (iii) all of the Obligations under
the Existing Credit Agreement (up to a maximum amount not to exceed the greater
of $5,000,000 and 75% of Accounts Receivable) by
1
<PAGE>
<PAGE>
granting to Collateral Agent, on behalf of Lenders under the Existing Credit
Agreement, a first priority Lien on substantially all of Company's accounts
receivable;
WHEREAS, concurrently with the effectiveness of this Agreement, Company
desires to (i) affirm its grant of a first priority Lien under the Loan
Documents executed in connection with the Existing Credit Agreement to secure
the Obligations under this Agreement and (ii) acknowledge Collateral Agent's
assignment to Agent of the first priority Liens granted by Company;
WHEREAS, License Sub (i) guaranteed all Obligations related to the
Existing AXELs under the Existing Credit Agreement and (ii) has agreed to affirm
its guarantee of all Obligations related to the Term Loans under this Agreement;
WHEREAS, BCC (i) guaranteed all Obligations under the Existing Credit
Agreement, (ii) secured such guarantee by granting to Collateral Agent, (a) on
behalf of Lenders under the Existing Credit Agreement and the holders of the
Existing Senior Notes on an equal and ratable basis, a first priority pledge of
all of the outstanding capital stock of Company and (b) on behalf of Lenders
under the Existing Credit Agreement, a first priority pledge of all other assets
of BCC, (iii) has agreed to affirm (a) its guarantee of all Obligations under
this Agreement and (b) its grant of a first priority pledge under the Loan
Documents executed in connection with the Existing Credit Agreement to secure
such guarantee and (iv) acknowledges Collateral Agent's assignment to Agent of
the first priority Liens granted by BCC;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, BCC, Lenders and Agent agree
as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACCOUNTS RECEIVABLE" means any right to payment that is due
within one year from any invoice date for goods sold or leased or for
services rendered no matter how evidenced, including, but not limited
to accounts receivable, contracts rights, notes, drafts, acceptances,
and other forms of obligations and receivables, all as determined in
conformity with GAAP.
"ACQUISITION DATE" means June 6, 1996.
"ACQUISITION DATE MORTGAGED PROPERTY" and "ACQUISITION DATE
MORTGAGED PROPERTIES" have the respective meanings assigned such terms
in subsection 3.2F.
2
<PAGE>
<PAGE>
"ACQUISITIONS" means, collectively, the Brissette Acquisition
and the Stauffer Acquisition.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar
Rate Loan, the rate per annum obtained by dividing (i) the arithmetic
average (rounded upward to the nearest 1/16 of one percent) of the
offered quotations, if any, to first class banks in the interbank
Eurodollar market by BTCo for U.S. dollar deposits of amounts in same
day funds comparable to the respective principal amounts of the
Eurodollar Rate Loans of BTCo for which the Adjusted Eurodollar Rate is
then being determined (which principal amount shall be deemed to be
$1,000,000 in the case of BTCo not making, converting to or continuing
such a Eurodollar Rate Loan) with maturities comparable to such
Interest Period as of approximately 10:00 A.M. (New York time) on such
Interest Rate Determination Date by (ii) a percentage equal to 100%
minus the stated maximum rate of all reserve requirements (including
any marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of "Eurocurrency liabilities"
as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"ADMINISTRATIVE AGENT" means Agent.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any
successor Agent appointed pursuant to subsection 8.5.
"AGREEMENT" means this Credit Agreement dated as of December
17, 1997, as it may be amended, supplemented or otherwise modified from
time to time.
"APPLICABLE MARGIN" means, for each Tranche A Term Loan and
each Revolving Loan, as of any date of determination, a percentage per
annum determined by reference to the Leverage Ratio on such date as set
forth below:
3
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
==================================================================================================================
BASE EURODOLLAR
LEVEL RATE LOANS RATE LOANS
==================================================================================================================
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Leverage Ratio greater than or 1.75% 2.75%
equal to 5.50:1.00
- ------------------------------------------------------------------------------------------------------------------
Leverage Ratio greater than or 1.50% 2.50%
equal to 5.00:1.00 but less than
5.50:1.00
- ------------------------------------------------------------------------------------------------------------------
Leverage Ratio greater than or 1.25% 2.25%
equal to 4.50:1.00 but less than
5.00:1.00
- ------------------------------------------------------------------------------------------------------------------
Leverage Ratio greater than or 1.00% 2.00%
equal to 4.00:1.00 but less than
4.50:1.00
- ------------------------------------------------------------------------------------------------------------------
Leverage Ratio less than 0.75% 1.75%
4.00:1.00
==================================================================================================================
</TABLE>
The applicable Leverage Ratio (i) for the Restatement Date shall be
determined by the pro forma Compliance Certificate delivered pursuant
to subsection 3.2N on the Restatement Date and (ii) for any date after
the Restatement Date shall be determined by the most recent Compliance
Certificate delivered pursuant to subsection 5.1(iv) after the
Restatement Date; provided that, without limiting any rights of Agent
or Lenders with respect to any Event of Default or Potential Event of
Default that may result therefrom, in the event Company does not
deliver any Compliance Certificate required pursuant to subsection
5.1(iv) by the date specified therefor, then the Applicable Margin
shall automatically be adjusted to the highest rate set forth above
during the period commencing on the date such Compliance Certificate
was required to be delivered and ending on the actual date of delivery
thereof."
"ASSET SALE" means the sale by BCC or any of its Subsidiaries
to any Person other than BCC or any of its wholly owned Subsidiaries of
(i) any of the stock of any of BCC's Subsidiaries, (ii) substantially
all of the assets of any division or line of business of BCC or any of
its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of BCC or any of its Subsidiaries other than any such other
assets to the extent that the aggregate fair market value of such
assets sold in any single transaction or related series of transactions
is equal to or less than $10,000.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit XI annexed hereto.
"AUDITOR'S LETTER" means a letter, acknowledged and agreed to
by Company and McGladrey & Pullen, LLP and delivered to Agent pursuant
to subsection 3.2M.
"AXEL" or "AXELS" means, respectively, Term Loan or Term
Loans.
4
<PAGE>
<PAGE>
"AXEL COMMITMENT" and "AXEL COMMITMENTS" means, respectively,
Term Loan and Term Loans.
"AXEL NOTES" means the Term Notes.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the higher of (i) the rate
that BTCo announces from time to time as its "PRIME" lending rate" as
in effect from time to time or (ii) the rate which is 1/2 of 1% in
excess of the Federal Funds Effective Rate. The prime lending rate is a
reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer, and BTCo or any other Lender may
make commercial loans or other loans at rates of interest at, above or
below such rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection
2.2A.
"BCC" means Benedek Communications Corporation, a Delaware
corporation.
"BCC GUARANTY" means the Amended and Restated BCC Guaranty
executed and delivered by BCC on or before the Restatement Date,
substantially in the form of Exhibit XVII annexed hereto, as such
Amended and Restated BCC Guaranty may thereafter be amended,
supplemented or otherwise modified from time to time.
"BCC PLEDGE AGREEMENT" means the Amended and Restated BCC
Pledge Agreement executed and delivered by BCC on or before the
Restatement Date, substantially in the form of Exhibit XIX annexed
hereto, as such Amended and Restated BCC Pledge Agreement may
thereafter be amended, supplemented or otherwise modified from time to
time.
"BCC SECURITY AGREEMENT" means the Amended and Restated BCC
Security Agreement executed and delivered by BCC on or before the
Restatement Date, substantially in the form of Exhibit XX annexed
hereto, as such Amended and Restated BCC Security Agreement may
thereafter be amended, supplemented or otherwise modified from time to
time.
"BENEDEK" means A. Richard Benedek.
"BORROWING BASE" means, as of any date of determination, an
amount equal to 75% of the Dollar book value of all Accounts Receivable
of Company minus the Dollar book value of any Accounts Receivable which
have not been paid in full within 120 days of the invoice date thereof,
as calculated pursuant to the most recent Borrowing Base Certificate
delivered pursuant to subsection 5.11.
5
<PAGE>
<PAGE>
"BORROWING BASE CERTIFICATE" means a certificate substantially
in the form of Exhibit VII annexed hereto delivered to Agent by Company
pursuant to subsection 5.11.
"BRISSETTE" means Brissette Broadcasting Corporation, a
Delaware corporation.
"BRISSETTE ACQUISITION" means the transactions contemplated by
the Brissette Acquisition Agreement.
"BRISSETTE ACQUISITION AGREEMENT" means that certain Stock
Purchase Agreement dated December 15, 1995, as amended by that certain
letter agreement dated April 11, 1996 and by that certain letter
agreement dated April 24, 1996, by and among GE Capital, Paul
Brissette, Brissette and Company, in the form delivered to Lenders
under the Existing Credit Agreement on the Acquisition Date and as such
agreement may be amended from time to time thereafter to the extent
permitted under subsection 6.14.
"BRISSETTE STATIONS" means, collectively, the following
television broadcast stations: KAUZ-TV licensed to serve Wichita Falls,
Texas; KOSA-TV licensed to serve Odessa, Texas; WHOI(TV) licensed to
serve Peoria, Illinois; WILX-TV licensed to serve Onondaga, Michigan;
WMTV(TV) licensed to serve Madison, Wisconsin; WSAW-TV licensed to
serve Wausau, Wisconsin; WTRF-TV licensed to serve Wheeling, West
Virginia; and WWLP(TV) licensed to serve Springfield, Massachusetts.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New
York or is a day on which banking institutions located in such state
are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings
and payments in connection with the Adjusted Eurodollar Rate or any
Eurodollar Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and between
banks in Dollar deposits in the interbank Eurodollar market.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government
or (b) issued by any agency of the United States the obligations of
which are backed by the full faith and credit of the United States, in
each case maturing within one year after such date; (ii) marketable
direct obligations issued by any state of the United States of America
or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard &
6
<PAGE>
<PAGE>
Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc.
("MOODY'S"); (iii) commercial paper maturing no more than one year from
the date of creation thereof and having, at the time of the acquisition
thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing
within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that (a) is at
least "adequately capitalized" (as defined in the regulations of its
primary Federal banking regulator) and (b) has Tier 1 capital (as
defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has at least 95% of its
assets invested continuously in the types of investments referred to in
clauses (i), (ii) and (iii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P
or Moody's.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XII annexed hereto delivered by a
Lender to Agent pursuant to subsection 2.7B(iii).
"CIBC" means Canadian Imperial Bank of Commerce, New York
Agency, in its capacity as collateral agent under the Existing Credit
Agreement.
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including capital stock) in which Liens are
purported to be granted pursuant to the Collateral Documents as
security for the Obligations.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Amended and Restated
Collateral Account Agreement executed and delivered by BCC and Agent on
or before the Restatement Date, substantially in the form of Exhibit
XIII annexed hereto, as such Collateral Account Agreement may hereafter
be amended, supplemented or otherwise modified from time to time.
"COLLATERAL AGENT" means Agent.
"COLLATERAL DOCUMENTS" means the Existing Company Pledge
Agreement, the BCC Pledge Agreement, the BCC Security Agreement, the
Company Security Agreements, the Collateral Account Agreement, the
Company Collateral Account Agreement, the Mortgages and all other
instruments or documents delivered by any Loan Party pursuant to this
Agreement or any of the other Loan Documents in order to grant to
Agent, on behalf of Lenders, a Lien on any real, personal or mixed
property of that Loan Party as security for the Obligations.
"COMMITMENTS" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.
7
<PAGE>
<PAGE>
"COMMUNICATIONS ACT" means the Communications Act of 1934, as
amended (including, without limitation, the Telecommunications Act of
1996), or any successor statute or statutes thereto, and all FCC
Regulations, in each case as from time to time in effect.
"COMMUNICATIONS REGULATORY AUTHORITY" means the FCC and any
future communications regulatory commission, agency, department, board
or authority.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY ACCOUNTS RECEIVABLE SECURITY AGREEMENT" means the
Amended and Restated Accounts Receivable Security Agreement executed
and delivered by Company on or before the Restatement Date,
substantially in the form of Exhibit XIV annexed hereto, as such
Amended and Restated Accounts Receivable Security Agreement may
thereafter be amended, supplemented or otherwise modified from time to
time.
"COMPANY ACQUIRED ASSETS SECURITY AGREEMENT" means the Amended
and Restated Acquired Assets Security Agreement executed and delivered
by Company on or before the Restatement Date, substantially in the form
of Exhibit XV annexed hereto, as such Amended and Restated Acquired
Assets Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"COMPANY COLLATERAL ACCOUNT" has the meaning assigned the term
"Collateral Account" in the Company Collateral Account Agreement.
"COMPANY COLLATERAL ACCOUNT AGREEMENT" means the Company
Collateral Account Agreement executed and delivered by Company and
Agent pursuant to Section 5.14 within 20 days of the Restatement Date,
in form and substance satisfactory to the Agent, as such Company
Collateral Account Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"COMPANY SECURITY AGREEMENTS" means the Company Accounts
Receivable Security Agreement, the Company Acquired Assets Security
Agreement and the Company Tangible Assets Security Agreement.
"COMPANY TANGIBLE ASSETS SECURITY AGREEMENT" means the Amended
and Restated Tangible Assets Security Agreement executed and delivered
by Company on or before the Restatement Date, substantially in the form
of Exhibit XVI annexed hereto, as such Amended and Restated Tangible
Assets Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"COMPENSATION LIMIT" has the meaning assigned to that term in
subsection 6.11.
8
<PAGE>
<PAGE>
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit VI annexed hereto delivered to Agent and Lenders by
Company pursuant to subsection 5.1(iv).
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain
Confidential Information Memorandum and supplement thereto prepared by
Agent relating to the Term Loans and Revolving Loans dated October
1997.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum
of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense (to the extent deducted in calculating
Consolidated Net Income), (iii) provisions for taxes based on income,
(iv) total depreciation expense, (v) total amortization expense
(including, without duplication, the amortization of Program
Obligations), and (vi) other non-cash items reducing Consolidated Net
Income less (a) Program Payments and (b) other non-cash items
increasing Consolidated Net Income (but excluding barter and any
recognition of non-cash income to the extent that such income is in
respect of cash received in an earlier period), all of the foregoing as
determined on a consolidated basis for BCC and its Subsidiaries in
conformity with GAAP except to the extent the express provisions of
this definition require a calculation other than in accordance with
GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or
other consideration or accrued as a liability and including that
portion of Capital Leases which is capitalized on the consolidated
balance sheet of BCC and its Subsidiaries) by BCC and its Subsidiaries
during that period that, in conformity with GAAP, are included in
"additions to property, plant or equipment" or comparable items
reflected in the consolidated statement of cash flows of BCC and its
Subsidiaries plus (ii) to the extent not covered by clause (i) of this
definition, the aggregate of all expenditures by BCC and its
Subsidiaries during that period to acquire (by purchase or otherwise)
the business, property or fixed assets of any Person, or the stock or
other evidence of beneficial ownership of any Person that, as a result
of such acquisition, becomes a Subsidiary of BCC; provided that
Consolidated Capital Expenditures shall not include (a) expenditures
made in connection with (1) any Investment permitted by subsection
6.3(x), and (2) the replacement, substitution or restoration of assets
(x) to the extent financed from insurance proceeds paid on account of
the loss of or damage to the assets being replaced or restored or (y)
with awards of compensation arising from the taking by eminent domain
or condemnation of the assets being replaced or (b) for purposes of
subsection 6.8 only, amounts which would otherwise constitute
Consolidated Capital Expenditures hereunder as a result of (1)
advertising time barter agreements to the extent that the fair market
value of the advertising time bartered pursuant to such agreements does
not exceed $500,000 in the aggregate in any Fiscal Year and (2) LMA
Capital Expenditures and expenditures made in connection with Permitted
Acquisitions.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
interest expense not payable in Cash (including amortization of
discount and amortization of debt issuance costs).
9
<PAGE>
<PAGE>
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of BCC and its Subsidiaries on a
consolidated basis which may properly be classified as current assets
in conformity with GAAP, excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of BCC and its Subsidiaries on a
consolidated basis which may properly be classified as current
liabilities in conformity with GAAP other than the current portion of
Funded Debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
amount (if positive) equal to (i) the sum, without duplication, of the
amounts for such period of (a) Consolidated Adjusted EBITDA and (b) the
Consolidated Working Capital Adjustment minus (ii) the sum, without
duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Consolidated Total Debt (excluding repayments
of Revolving Loans except to the extent the Revolving Loan Commitments
are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related
financings with respect to such expenditures) to the extent permitted
under this Agreement, (c) Consolidated Cash Interest Expense, and (d)
the provision for current taxes based on income of BCC and its
Subsidiaries and payable in cash with respect to such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases
in accordance with GAAP and capitalized interest) of BCC and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of BCC and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letters of
credit and bankers' acceptance financing and net costs under Interest
Rate Agreements, but excluding, however, any amounts referred to in
subsection 2.3B. payable to Agent and Lenders on or before the
Restatement Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of BCC and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in
conformity with GAAP; provided that there shall be excluded (i) the
income (or loss) of any Person (other than a Subsidiary of BCC) in
which any other Person (other than BCC or any of its Subsidiaries) has
a joint interest, except to the extent of the amount of dividends or
other distributions actually paid to BCC or any of its Subsidiaries by
such Person during such period, (ii) the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of BCC or is merged
into or consolidated with BCC or any of its Subsidiaries or that
Person's assets are acquired by BCC or any of its Subsidiaries, (iii)
the income of any Subsidiary of BCC to the extent that the declaration
or payment of dividends or similar distributions by that Subsidiary of
that income is not at the time permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary,
(iv) any after-tax gains or losses attributable to Asset Sales or
returned surplus assets of any Pension Plan, and (v) (to the extent not
included in clauses (i) through (iv) above) any net extraordinary gains
or net non-cash extraordinary losses.
10
<PAGE>
<PAGE>
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness (other than Indebtedness with respect to Program
Obligations) of Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over
Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
period on a consolidated basis, the amount (which may be a negative
number) by which Consolidated Working Capital as of the beginning of
such period exceeds (or is less than) Consolidated Working Capital as
of the end of such period.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings, or (iii) under Hedge Agreements.
Contingent Obligations shall include (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an
agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (1) to
purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (2) to maintain the
solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any
of its properties is bound or to which it or any of its properties is
subject.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement or arrangement to which BCC or any of
its Subsidiaries is a party.
11
<PAGE>
<PAGE>
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (i)(a) a commercial bank organized
under the laws of the United States or any state thereof; (b) a savings
and loan association or savings bank organized under the laws of the
United States or any state thereof; (c) a commercial bank organized
under the laws of any other country or a political subdivision thereof;
provided that (1) such bank is acting through a branch or agency
located in the United States or (2) such bank is organized under the
laws of a country that is a member of the Organization for Economic
Cooperation and Development or a political subdivision of such country;
and (d) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys
loans as one of its businesses including insurance companies, mutual
funds and lease financing companies; and (ii) any Lender, any Affiliate
of any Lender and, with respect to any Lender that is an investment
fund that invests in commercial loans, any other investment fund that
invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor; provided that no Affiliate of Company shall be an Eligible
Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by BCC, any of its Subsidiaries or any of their
respective ERISA Affiliates.
"EMPLOYMENT AGREEMENTS" means, collectively, (i) the
Employment Agreement dated as of June 1, 1996 between Company and
Benedek, (ii) the Employment Agreement dated as of June 1, 1996 between
Company and K. James Yager, (iii) the Employment Agreement dated as of
June 1, 1996 between Company and Terry Hurley and (iv) the Employment
Agreement dated as of June 1, 1996 between Company and Ronald L.
Lindwall, in each case providing for the exclusive employment of such
Person by Company, in the form delivered to the Agent on or prior to
the Restatement Date.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order
or other order or directive (conditional or otherwise), by any
governmental authority or any other Person, arising (i) pursuant to or
in connection with any actual or alleged violation of any Environmental
Law, (ii) in connection with any Hazardous Materials or any actual or
alleged Hazardous Materials Activity, or (iii) in connection with any
actual or alleged damage, injury, threat or harm to health, safety,
natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents,
judgments, Governmental Authorizations, or any other requirements of
governmental authorities relating to (i) environmental matters,
12
<PAGE>
<PAGE>
including those relating to any Hazardous Materials Activity, (ii) the
generation, use, storage, transportation or disposal of Hazardous
Materials, or (iii) occupational safety and health, industrial hygiene,
land use or the protection of human, plant or animal health or welfare,
in any manner applicable to BCC or any of its Subsidiaries or any
Facility, including the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. 'SS' 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. 'SS' 1801 et seq.),
the Resource Conservation and Recovery Act (42 U.S.C. 'SS' 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. 'SS' 1251 et
seq.), the Clean Air Act (42 U.S.C. 'SS' 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. 'SS' 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 'SS'136 et seq.),
the Occupational Safety and Health Act (29 U.S.C. 'SS' 651 et seq.),
the Oil Pollution Act (33 U.S.C. 'SS' 2701 et seq) and the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. 'SS' 11001 et
seq.), each as amended or supplemented, any analogous present or future
state or local statutes or laws, and any regulations promulgated
pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of
which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA Affiliate
of BCC or any of its Subsidiaries shall continue to be considered an
ERISA Affiliate of BCC or such Subsidiary within the meaning of this
definition with respect to the period such entity was an ERISA
Affiliate of BCC or such Subsidiary and with respect to liabilities
arising after such period for which BCC or such Subsidiary could be
liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by regulation);
(ii) the failure to meet the minimum funding standard of Section 412 of
the Internal Revenue Code with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any
Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by BCC, any of its
Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section
4063
13
<PAGE>
<PAGE>
or 4064 of ERISA; (v) the institution by the PBGC of proceedings
to terminate any Pension Plan, or the occurrence of any event or
condition which would be reasonably likely to constitute grounds under
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on BCC,
any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of BCC,
any of its Subsidiaries or any of their respective ERISA Affiliates in
a complete or partial withdrawal (within the meaning of Sections 4203
and 4205 of ERISA) from any Multiemployer Plan if there is any
potential liability therefor, or the receipt by BCC, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from
any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which would be reasonably
likely to give rise to the imposition on BCC, any of its Subsidiaries
or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 409, Section 502(c), (i) or (l),
or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix)
the assertion of a material claim (other than routine claims for
benefits) against any Employee Benefit Plan other than a Multiemployer
Plan or the assets thereof, or against BCC, any of its Subsidiaries or
any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Internal Revenue Service of
notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension
Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant
to ERISA with respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCHANGE DEBENTURE INDENTURE" means the indenture pursuant to
which the Exchange Debentures may be issued, as such indenture may be
amended from time to time to the extent permitted under subsection
6.14.
"EXCHANGE DEBENTURES" means the 15% Exchange Debentures due
2007 of BCC issuable pursuant to the Exchange Debenture Indenture in
exchange for the Exchangeable Preferred Stock.
"EXCHANGEABLE PREFERRED CERTIFICATE OF DESIGNATION" means the
provisions of BCC's Certificate of Designation, Preferences and
Relative, Participating, Optional and
14
<PAGE>
<PAGE>
Other Special Rights of Preferred Stock and Qualifications, Limitations
and Restrictions Thereof relating to the Exchangeable Preferred Stock,
in the form delivered to Lenders under the Existing Credit Agreement
on or before the Acquisition Date and as such provisions may be amended
from time to time thereafter to the extent permitted under
subsection 6.14.
"EXCHANGEABLE PREFERRED STOCK" means the 15% Exchangeable
Redeemable Senior Preferred Stock due 2007 of BCC, par value $0.01 per
share, with a liquidation preference of $100 per share and with the
other terms set forth in the Exchangeable Preferred Certificate of
Designation.
"EXISTING ADMINISTRATIVE AGENT" has the meaning assigned to
the term "Administrative Agent" in the Existing Credit Agreement as in
effect immediately prior to the Restatement Date.
"EXISTING AXEL" or "EXISTING AXELS" have the respective
meanings assigned to the terms "AXEL" and "AXELs" in the Existing
Credit Agreement as in effect immediately prior to the Restatement
Date.
"EXISTING AXEL NOTES" has the meaning assigned the term "AXEL
Notes" in the Existing Credit Agreement as in effect immediately prior
to the Restatement Date.
"EXISTING AXEL SERIES A" and "EXISTING AXELS SERIES A" have
the respective meanings assigned to the terms "AXEL Series A" and
"AXELs Series A" in the Existing Credit Agreement as in effect
immediately prior to the Restatement Date.
"EXISTING AXEL SERIES B" and "EXISTING AXELS SERIES B" have
the respective meanings assigned to the terms "AXEL Series B" and
"AXELs Series B" in the Existing Credit Agreement as in effect
immediately prior to the Restatement Date.
"EXISTING COLLATERAL AGENT" has the meaning assigned to the
term "Collateral Agent" in the Existing Credit Agreement as in effect
immediately prior to the Restatement Date.
"EXISTING COMPANY PLEDGE AGREEMENT" means that certain Company
Pledge and Security Agreement by and between Company and The Bank of
New York, a New York banking corporation, as agent for and
representative of the trustee under the Existing Senior Note Indenture,
the holders of the Existing Senior Notes and the holders of Permitted
Pari Passu Debt (as defined therein), dated as of March 10, 1995, as
amended from time to time to the extent permitted under subsection
6.14.
"EXISTING CREDIT AGREEMENT" means that certain Credit
Agreement dated as of June 6, 1996 among BCC, Company, Pearl Street
L.P., as Arranging Agent, Goldman, Sachs & Co., as Syndication Agent,
the Lenders party thereto and Canadian Imperial Bank of Commerce, New
York Agency, as Administrative Agent and as Collateral Agent, as
15
<PAGE>
<PAGE>
amended by (i) that certain Limited Waiver and First Amendment to
Credit Agreement dated as of
October 31, 1996 and (ii) that certain Limited Waiver and Second
Amendment dated as of February 28, 1997.
"EXISTING LENDER" means each Lender under the Existing Credit
Agreement on the Restatement Date immediately prior to the consummation
of the assignment and assumption transactions contemplated by the
Master Assignment Agreement.
"EXISTING LOANS" means the loans outstanding under the
Existing Credit Agreement on the Restatement Date and immediately prior
to the consummation of the assignment and assumption transactions
contemplated by the Master Assignment Agreement, including Existing
AXELs Series A, Existing AXELs Series B and Revolving Loans.
"EXISTING SENIOR NOTE INDENTURE" means that certain Indenture
by and among Company, as issuer, License Sub, as guarantor, and The
Bank of New York, a New York banking corporation, as trustee, dated as
of March 1, 1995, pursuant to which the Existing Senior Notes were
issued, as amended from time to time to the extent permitted under
subsection 6.14.
"EXISTING SENIOR NOTES" means Company's $135,000,000 in
initial aggregate principal amount of 11-7/8% Senior Secured Notes due
2005 issued pursuant to the Existing Senior Note Indenture.
"EXISTING TITLE POLICIES" has the meaning assigned that term
in subsection 3.2F.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by BCC or any
of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FCC" means the Federal Communications Commission and any
successor or substitute governmental commission, agency, department,
board or authority performing functions similar to those performed by
the Federal Communications Commission on the date hereof.
"FCC CONSENTS" means, with respect to any television broadcast
station acquired by Company after the Restatement Date, the initial
written action or actions of the FCC approving the transfer or
assignment of the FCC Licenses used in connection with the ownership
and operation of such station from the holder thereof immediately prior
to giving effect to such acquisition to License Sub, in form and in
substance reasonably satisfactory to Agent and Requisite Lenders.
"FCC LICENSES" means all licenses, authorizations, waivers and
permits required under the Communications Act or from any
Communications Regulatory Authority.
16
<PAGE>
<PAGE>
"FCC REGULATIONS" means all rules, regulations, written
policies, orders and decisions of the FCC under the Communications Act.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of
recognized standing selected by Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 5.1(xiv).
"FINAL ORDER" means a written order, consent or other action
of the FCC (i) which shall not have been reversed, stayed, enjoined,
set aside, annulled or suspended and (ii) in respect of which either
(a) the time for filing a request for administrative or judicial
relief, or for instituting administrative review thereof sua sponte,
shall have expired without any such filing having been made or notice
of such review having been issued, or (b) any filing of a request for
administrative or judicial relief, or administrative review thereof sua
sponte, shall have been disposed of favorably with respect to
confirmation of such order or action or the grant of such consent and
the time for seeking further relief with respect thereto shall have
expired without any request for such further relief having been filed.
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that
(i) such Lien has priority over any other Lien on such Collateral
(other than Liens permitted pursuant to subsection 6.2A(iii)) and (ii)
such Lien is the only Lien (other than Liens permitted pursuant to
subsection 6.2) to which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of BCC and its
Subsidiaries ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in
an area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"FUNDED DEBT", as applied to any Person, means all
Indebtedness of that Person which by its terms or by the terms of any
instrument or agreement relating thereto matures more than one year
from, or is directly renewable or extendable at the option of that
Person to a date more than one year from (including an option of that
Person under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of one year or more
from), the date of the creation thereof.
17
<PAGE>
<PAGE>
"FUNDING AND PAYMENT OFFICE" means (i) the office of Agent
located at One Bankers Trust Plaza, 130 Liberty Street, New York, New
York 10006 or (ii) such other office of Agent as may from time to time
hereafter be designated as such in a written notice delivered by Agent
to Company and each Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GE CAPITAL" means General Electric Capital Corporation, a
New York corporation.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or
court.
"GUARANTIES" means the BCC Guaranty and the License Sub
Guaranty.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "acutely hazardous waste", "radioactive
waste", "biohazardous waste", "pollutant", "toxic pollutant",
"contaminant", "restricted hazardous waste", "infectious waste", "toxic
substances", or any other term or expression intended to define, list
or classify substances by reason of properties harmful to health,
safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable
Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam
insulation; (viii) electrical equipment which contains any oil or
dielectric fluid containing polychlorinated biphenyls; (ix) pesticides;
and (x) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
18
<PAGE>
<PAGE>
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any
Hazardous Materials, including the use, manufacture, possession,
storage, holding, presence, existence, location, Release, threatened
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective
action or response action with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement designed to
hedge against fluctuations in interest rates.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on
a balance sheet in conformity with GAAP, (iii) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any
part of the deferred purchase price of property or services (excluding
any such obligations incurred under ERISA), which purchase price is (a)
due more than six months from the date of incurrence of the obligation
in respect thereof or (b) evidenced by a note or similar written
instrument, (v) to the extent not otherwise included above, all
liabilities of that Person with respect to Program Obligations, and
(vi) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person. Obligations under Interest
Rate Agreements and Currency Agreements constitute (1) in the case of
Hedge Agreements, Contingent Obligations, and (2) in all other cases,
Investments, and in neither case constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 9.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of BCC and its Subsidiaries
as currently conducted that are material to the condition (financial or
otherwise), business or operations of BCC and its Subsidiaries, taken
as a whole.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each February 1, May 1, August 1 and November 1 of each
year, commencing on the first such date to occur after the Restatement
Date, and (ii) with respect to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan; provided that in the
case of each Interest Period of six months, "Interest Payment Date"
shall also include the date that is three months after the commencement
of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
19
<PAGE>
<PAGE>
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement to which BCC or any of its
Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter,
and any successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by BCC or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person (including
any Subsidiary of BCC), (ii) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by any Subsidiary
of BCC from any Person other than BCC or any of its Subsidiaries, of
any equity Securities of such Subsidiary, (iii) any direct or indirect
loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital
contribution by BCC or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that
other Person in the ordinary course of business, or (iv) (a) Currency
Agreements or (b) Interest Rate Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; provided that in no event shall any corporate Subsidiary of any
Person be considered to be a Joint Venture to which such Person is a
party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in
writing from the lessor under the related lease, satisfactory in form
and substance to Agent, pursuant to which such lessor agrees, for the
benefit of Agent, that without any further consent of such lessor or
any further action on the part of the Loan Party holding such Leasehold
Property, such Leasehold Property may be encumbered pursuant to a
Mortgage and may be assigned to the purchaser at a foreclosure sale or
in a transfer in lieu of such a sale (and to a subsequent third party
assignee if Agent, any Lender, or an Affiliate of either so acquires
such Leasehold Property) and to such other matters relating to such
Leasehold Property as Agent may reasonably request.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan
Party as lessee under any lease of real property.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together
with their successors and permitted assigns
20
<PAGE>
<PAGE>
pursuant to subsection 9.1; provided that the term "Lenders", when
used in the context of a particular Commitment, shall mean Lenders
having that Commitment.
"LEVERAGE RATIO" means the ratio of (i) Consolidated Total
Debt as of the last day of any Fiscal Quarter to (ii) Consolidated
Adjusted EBITDA for the four-Fiscal Quarter period then ended, in each
case as set forth in the most recent Compliance Certificate delivered
by Company to Agent pursuant to clause (iv) of subsection 5.1.
"LICENSE SUB" means Benedek License Corporation, a Delaware
corporation, and any other Person established solely for the purpose of
holding the FCC Licenses now or hereafter acquired or owned by Company,
which Person shall be a wholly owned Subsidiary of Company.
"LICENSE SUB GUARANTY" means the Amended and Restated License
Sub Guaranty executed and delivered by License Sub on or before the
Restatement Date, substantially in the form of Exhibit XVIII annexed
hereto, as such Amended and Restated License Sub Guaranty may
thereafter be amended, supplemented or otherwise modified from time to
time.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"LMA" means a local marketing arrangement, sale agreement,
time brokerage agreement, management agreement or similar agreement
pursuant to which a Person, subject to customary preemption rights and
other limitations, (i) obtains the right to sell the advertising
inventory of a television broadcast station of which another Person is
the licensee, (ii) obtains the right to exhibit programming and sell
advertising time of such television broadcast station or (iii) manages
the selling operations of such television broadcast station with
respect to advertising inventory of such station.
"LMA CAPITAL EXPENDITURE" means all expenditures (whether paid
in cash or other consideration or accrued as a liability and including
that portion of Capital Leases which is capitalized on the consolidated
balance sheet of BCC and its Subsidiaries) by Company pursuant to, in
connection with or in respect of an LMA which, in conformity with GAAP,
would be included in "additions to property, plant or equipment" or
comparable items reflected in the consolidated statement of cash flows
of BCC and its Subsidiaries.
"LOAN" or "LOANS" means one or more of the Tranche A Term
Loans, Tranche B Term Loans or Revolving Loans or any combination
thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Guaranties and the Collateral Documents.
21
<PAGE>
<PAGE>
"LOAN PARTY" means each of BCC, Company, License Sub and any
of BCC's other Subsidiaries, if any, from time to time executing a Loan
Document, and "LOAN PARTIES" means all such Persons, collectively.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as
in effect from time to time.
"MASTER ASSIGNMENT AGREEMENT" means the Master Assignment
Agreement substantially in the form of Exhibit XXIII annexed hereto.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects of BCC and its Subsidiaries, taken as a
whole, or (ii) the material impairment of the ability of any Loan Party
to perform, or of Agent or Lenders to enforce, the Loan Documents or
the Obligations.
"MATERIAL CONTRACT" means any of the Network Affiliation
Agreements, the Employment Agreements with Benedek and K. James Yager,
any LMA or acquisition agreement entered into by Company as permitted
hereunder, any Program Contract pursuant to which Company's aggregate
Program Obligations thereunder are equal to or greater than $1,000,000
(calculated as the unamortized amount of such Program Obligations on
any date of determination), and any other contract or other arrangement
to which BCC or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew would reasonably be expected to have a Material Adverse Effect.
"MATERIAL FEE PROPERTY" means any fee interest in real
property reasonably determined by Agent to be of material value as
Collateral or of material importance to the operations of BCC or any of
its Subsidiaries.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property
reasonably determined by Agent to be of material value as Collateral or
of material importance to the operations of BCC or any of its
Subsidiaries.
"MEDIA BUSINESS" means broadcasting (including television and
radio broadcasting), cable television, programming production or
distribution, advertising and advertising sales, newspaper and outdoor
advertising businesses, any similar business and businesses related to
any of the foregoing.
"MORTGAGE" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and
delivered by any Loan Party, substantially in the form of Exhibit XXI
annexed hereto or in such other form as may be approved by Agent in its
sole discretion, in each case with such changes thereto as may be
recommended by Agent's local counsel based on local laws or customary
local mortgage or deed of trust practices, or (ii) at Agent's option,
in the case of an Additional Mortgaged
22
<PAGE>
<PAGE>
Property (as defined in subsection 5.8), an amendment to an existing
Mortgage, in form satisfactory to Agent, adding such Additional
Mortgaged Property to the Real Property Assets encumbered by such
existing Mortgage, in either case as such security instrument or
amendment may be amended, supplemented or otherwise modified from
time to time. "MORTGAGES" means all such instruments, including the
Mortgages encumbering the Acquisition Date Mortgaged Properties and
any Additional Mortgages (as defined in subsection 5.8),
collectively.
"MORTGAGE AMENDMENTS" means an amendment to the existing
Mortgages encumbering the Real Property Assets located in Colorado,
Texas, Michigan and Tazewell County, Illinois, in each case in form
satisfactory to Agent, addressing such matters not inconsistent with
this Agreement as Agent may require, as such instrument may be amended,
supplemented or otherwise modified from time to time.
"MORTGAGE ASSIGNMENTS" means an assignment to Agent of all
right, title and interest of CIBC in the existing Mortgages encumbering
the Acquisition Date Mortgaged Properties, in each case in form
satisfactory to Agent, as such instrument may be amended, supplemented
or otherwise modified from time to time.
"MORTGAGED PROPERTY" means an Acquisition Date Mortgaged
Property (as defined in subsection 3.2F) or an Additional Mortgaged
Property (as defined in subsection 5.8).
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received from such Asset
Sale, net of any bona fide direct costs incurred in connection with
such Asset Sale, including (i) income taxes reasonably estimated to be
actually payable within two years of the date of such Asset Sale as a
result of any gain recognized in connection with such Asset Sale and
(ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the
Loans) that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of
such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by BCC or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a
covered loss thereunder or (ii) as a result of the taking of any assets
of BCC or any of its Subsidiaries by any Person pursuant to the power
of eminent domain, condemnation or otherwise, or pursuant to a sale of
any such assets to a purchaser with such power under threat of such a
taking, in each case net of any actual and reasonable documented costs
incurred by BCC or any of its Subsidiaries in connection with the
adjustment or settlement of any claims of BCC or such Subsidiary in
respect thereof.
23
<PAGE>
<PAGE>
"NETWORK" means one or more of National Broadcasting Company
Incorporated, American Broadcasting Company, CBS, Inc., Warner Brothers
Television Network, UPN Network, or Fox Broadcasting Company, as the
context requires.
"NETWORK AFFILIATION" means a relationship under a Network
Affiliation Agreement in full force and effect between a Network and
the applicable Station or between a Network and Company in respect of
the applicable Station.
"NETWORK AFFILIATION AGREEMENTS" means, collectively, the
Affiliation Agreements between Company or any Station, as the case may
be, and any of the Networks, as any such agreement may be amended,
supplemented or otherwise modified from time to time, and including any
replacement agreement.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness or that portion
of Indebtedness (i) as to which neither BCC nor its Subsidiaries (a)
provide credit support (including any undertaking, agreement or
instrument which would constitute Indebtedness), (b) is directly or
indirectly liable or (c) constitute the lender and (ii) no default with
respect to which would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of BCC or its Subsidiaries to declare
a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"NOTES" means one or more of the Tranche A Term Notes, Tranche
B Term Notes or Revolving Notes or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by
Company to Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the
interest rate with respect to the Loans specified therein.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agent, Lenders or their respective
Affiliates or any of them under the Loan Documents, whether for
principal, interest, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of
the board (if an officer) or its president or one of its vice
presidents and by its chief financial officer or its treasurer;
provided that every Officers' Certificate with respect to the
compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers,
they have made or have caused to be made such examination or
24
<PAGE>
<PAGE>
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital
Lease other than any such lease under which that Person is the lessor.
"OWNED TELEVISION STATION ASSET GROUP" means a Television
Station Asset Group owned by Company.
"OWNERSHIP REPORTS" means, with respect to any Station,
the reports and certifications filed with the FCC pursuant to
47 C.F.R. 'SS' 73.3615, or any comparable reports filed
pursuant to any successor regulation thereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"PERMITTED ACQUISITION" means an acquisition, whether through
the purchase of the assets thereof or of the stock or other equity
interests of an entity owning such assets and whether pursuant to the
exercise of a purchase option under a Permitted LMA or otherwise, by
Company of a Television Station Asset Group or a business related to
the ownership or operation of a television broadcast station; provided,
however, that to the extent such acquisition is made through the
acquisition of stock or other equity interests of any Person, such
Person shall, immediately following the consummation of such
acquisition, be merged with and into Company, with Company being the
surviving corporation in such merger.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or by ERISA and any such Lien
relating to or imposed in connection with any Environmental Claim):
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 5.3;
(ii) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or
(b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 10 days) are
being contested in good faith by appropriate proceedings, so
long as (1)
25
<PAGE>
<PAGE>
such reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any
such contested amounts, and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or
similar proceedings have been commenced with respect to any
portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not
constituting an Event of Default
under subsection 7.8;
(v) leases or subleases granted to third parties
permitted hereunder and not interfering in any material
respect with the ordinary conduct of the business of Company
or any of its Subsidiaries or resulting in a material
diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in
title, in each case which do not and will not interfere in any
material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the
Obligations and any exceptions to title expressly set forth in
the Existing Title Policies or any Additional Mortgage Policy;
(vii) any (a) interest or title of a lessor or
sublessor under any lease permitted hereunder, (b) restriction
or encumbrance that the interest or title of such lessor or
sublessor may be subject to, or (c) subordination of the
interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause
(b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee
under such lease; and
(viii) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement.
"PERMITTED LMA" means an LMA entered into by Company or a
Special Purpose Subsidiary with an unaffiliated Person with respect to
a television broadcast station (i) which, immediately prior to the time
the LMA is entered into, is not owned or operated by Company or any of
its Affiliates and (ii) which is located in a market in which Company
owns and operates a Station or Stations as of the date hereof.
26
<PAGE>
<PAGE>
"PERMITTED SPECIAL PURPOSE ACQUISITION" means an acquisition,
whether through the purchase of the assets thereof or of the stock or
other equity interests of an entity owning such assets and whether
pursuant to the exercise of a purchase option under a Permitted LMA or
otherwise, by a Special Purpose Subsidiary of a business principally
engaged in one or more Media Businesses; provided, however, that to the
extent such acquisition is made through the acquisition of stock or
other equity interests of any Person, such Person shall, immediately
following the consummation of such acquisition, be merged with and into
such Special Purpose Subsidiary, with such Special Purpose Subsidiary
being the surviving corporation in such merger.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal
entities, and governments (whether federal, state or local, domestic or
foreign, and including political subdivisions thereof) and agencies or
other administrative or regulatory bodies thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged
Collateral" as defined in the BCC Pledge Agreement and the Existing
Company Pledge Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"PROGRAM CONTRACTS" means all contracts for the acquisition of
the right to broadcast films, series and other programming material.
"PROGRAM OBLIGATIONS" means all obligations of the Company
under Program Contracts payable in a form other than barter.
"PROGRAM PAYMENTS" means, for any period of determination, the
aggregate cash payments actually made by or on behalf of Company and
its Subsidiaries during such period with respect to or on account of
Program Obligations.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Tranche A Term Loan of
any Lender, the percentage obtained by dividing (x) the Tranche A Term
Loan Exposure of that Lender by (y) the aggregate Tranche A Term Loan
Exposure of all Lenders, (ii) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan of
any Lender, the percentage obtained by dividing (x) the Tranche B Term
Loan Exposure of that Lender by (y) the aggregate Tranche B Term Loan
Exposure of all Lenders, (iii) with respect to all payments,
computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender, the percentage
obtained by dividing (x) the Revolving Loan Exposure of that Lender by
(y) the aggregate Revolving Loan Exposure of all Lenders, and (iv) for
all other purposes with respect to each Lender, the percentage obtained
by dividing (x) the sum of the Tranche A Term Loan Exposure of that
Lender plus the Tranche B Term
27
<PAGE>
<PAGE>
Loan Exposure of that Lender plus the Revolving Loan
Exposure of that Lender by (y) the sum of the aggregate
Tranche A Term Loan Exposure of all Lenders plus the aggregate Tranche
B Term Loan Exposure of all Lenders plus the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage
may be adjusted by assignments permitted pursuant to subsection 9.1.
The initial Pro Rata Share of each Lender for purposes of each of
clauses (i), (ii), (iii) and (iv) of the preceding sentence is set
forth opposite the name of that Lender in Schedule 2.1 annexed hereto.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Agent's reasonable
judgment, to give constructive notice of such Leasehold Property
to third-party purchasers and encumbrancers of the affected real
property. For purposes of this definition, the term "RECORD
DOCUMENT" means, with respect to any Leasehold Property,
(a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real
property, as lessor, or (b) if such Leasehold Property was acquired or
subleased from the holder of a Recorded Leasehold Interest, the
applicable assignment or sublease document, executed and acknowledged
by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Agent.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED AGREEMENTS" means, collectively, the Brissette
Acquisition Agreement, the Stauffer Acquisition Agreement, the
Exchangeable Preferred Certificate of Designation, the Seller Preferred
Certificate of Designation, the Existing Senior Note Indenture, the
Senior Subordinated Note Indenture, the Warrant Agreement, the Exchange
Debentures and the Exchange Debenture Indenture.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including the abandonment or
disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), including the movement of any
Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE LENDERS" means, except as otherwise provided in
subsection 8.6, (i) Lenders having or holding 51% or more of the
aggregate Tranche A Term Loan Exposure of all Lenders plus the
aggregate Tranche B Term Loan Exposure of all Lenders
28
<PAGE>
<PAGE>
and (ii) Lenders having or holding 51% or more of the
aggregate Revolving Loan Exposure of all Lenders.
"RESTATEMENT DATE" means the date on or before December 19,
1997, on which the conditions to the effectiveness of this Agreement
set forth in subsection 3.2 are satisfied.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of BCC or its Subsidiaries, now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock to
the holders of that class, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of BCC
or its Subsidiaries, now or hereafter outstanding, (iii) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of
stock of BCC or its Subsidiaries, now or hereafter outstanding, and
(iv) any payment or prepayment of principal of, premium, if any, or
interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with
respect to, any Subordinated Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender
to make Revolving Loans to Company pursuant to subsection 2.1A(iii),
and "REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders
in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means
December 31, 2003.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment and
(ii) after the termination of the Revolving Loan Commitments, the
aggregate outstanding principal amount of the Revolving Loans of that
Lender.
"REVOLVING LOANS" means the Loans maintained or made by
Lenders to Company pursuant to subsection 2.1A(ii).
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(iii) of this Agreement on the
Restatement Date to Lenders having a Revolving Loan Commitment on the
Restatement Date and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 9.1B(i) in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of
any Lenders, in each case substantially in the form of Exhibit V
annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"SATELLITE STATIONS" means, collectively, the following
television broadcast stations: KGWL-TV licensed to serve Lander,
Wyoming; KGWR-TV licensed to serve Rock Springs, Wyoming; KSTF(TV)
licensed to serve Scottsbluff, Nebraska; and KTVS(TV) licensed to serve
Sterling, Colorado.
29
<PAGE>
<PAGE>
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SELLER PREFERRED CERTIFICATE OF DESIGNATION" means the
provisions of BCC's Certificate of Designation, Preferences and
Relative, Participating, Optional and Other Special Rights of Preferred
Stock and Qualifications, Limitations and Restrictions Thereof relating
to the Seller Preferred Stock, in the form delivered to Lenders under
the Existing Credit Agreement on or before the Acquisition Date and as
such provisions may be amended from time to time thereafter to the
extent permitted under subsection 6.14.
"SELLER PREFERRED STOCK" means the preferred stock of BCC
issued to GE Capital with the terms set forth in the Seller Preferred
Certificate of Designation.
"SENIOR NOTE TRUSTEE" means The Bank of New York, a New York
banking corporation, in its capacity as trustee under the Existing
Senior Note Indenture and as agent for and representative of the
holders of the Existing Senior Notes, and any successor trustee
appointed in accordance with the Existing Senior Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture
pursuant to which the Senior Subordinated Notes are issued, in the form
delivered to Lenders under the Existing Credit Agreement on or before
the Acquisition Date and as such indenture may be amended from time to
time to the extent permitted under subsection 6.14.
"SENIOR SUBORDINATED NOTES" means $90,178,000 in initial
aggregate principal amount of the 13.25% Senior Subordinated Discount
Notes due 2006 of BCC issued pursuant to the Senior Subordinated Note
Indenture.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (i)(a) the then fair saleable value of the
property of such Person is (1) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (2)
not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such
Person's capital is not unreasonably small in relation to its business
or any contemplated or undertaken transaction; and (c) such Person does
not intend to incur, or believe (nor should it reasonably believe) that
it will incur, debts beyond its ability to pay such debts as they
become due; and (ii) such Person is "solvent" within the meaning given
that term and similar terms under applicable
30
<PAGE>
<PAGE>
laws relating to fraudulent transfers and conveyances. For purposes
of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the
facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or
matured liability.
"SPECIAL PURPOSE SUBSIDIARY" means a direct Subsidiary of
Company (i) which has not acquired any assets (other than Cash to the
extent permitted under subsection 6.3(x)) directly from BCC or any of
its Subsidiaries, (ii) the capital stock or other equity interests of
which, to the extent owned by Company or any of its Affiliates, is
subject to a First Priority Lien of Agent for the benefit of Lenders,
and (iii) which has no Indebtedness other than Non-Recourse
Indebtedness.
"STATIONS" means, collectively, (i) each of the television
broadcast stations owned and operated by Company and its Subsidiaries
on the Restatement Date as set forth in Schedule 4.1E annexed hereto,
and (ii) any television broadcast station acquired after the
Restatement Date by Company or any of its Subsidiaries.
"STAUFFER" means Stauffer Communications, Inc., a Delaware
corporation.
"STAUFFER ACQUISITION" means the transactions contemplated by
the Stauffer Acquisition Agreement.
"STAUFFER ACQUISITION AGREEMENT" means that certain Assets
Purchase and Sale Agreement dated November 22, 1995, by and among
Stauffer, Morris Communications Corporation, a Georgia corporation, and
Benedek Acquisition Corporation, a Delaware corporation, as amended by
that certain letter agreement dated March 28, 1996 by and among
Stauffer, Morris Communications Corporation and Company, in the form
delivered to the Lenders under the Existing Credit Agreement on or
before the Acquisition Date and as such agreement may be amended from
time to time thereafter to the extent permitted under subsection 6.14.
"STAUFFER STATIONS" means, collectively, the following
television broadcast stations: WIBW-TV licensed to serve Topeka,
Kansas; KCOY-TV licensed to serve Santa Maria, California; KMIZ(TV)
licensed to serve Columbia-Jefferson City, Missouri; KGWN-TV licensed
to serve Cheyenne, Wyoming; KSTF(TV) licensed to serve Scottsbluff,
Nebraska; KTVS(TV) licensed to serve Sterling, Colorado; KGWC-TV
licensed to serve Casper, Wyoming; KGWR-TV licensed to serve Rock
Springs, Wyoming; and KGWL-TV licensed to serve Lander, Wyoming.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of BCC
evidenced by the Senior Subordinated Notes, (ii) any Indebtedness of
BCC evidenced by the Exchange Debentures and (iii) any Indebtedness of
BCC or its Subsidiaries subordinated in right of payment to the
Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance satisfactory
to Agent and Requisite Lenders.
31
<PAGE>
<PAGE>
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint
venture or other business entity of which more than 50% of the total
voting power of shares of stock or other ownership interests entitled
(without regard to the occurrence of any contingency) to vote in the
election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the
power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or
a combination thereof; provided, however, that with respect to BCC or
Company, references to Subsidiaries shall not be deemed to include any
Special Purpose Subsidiaries except for purposes of subsections 4.6,
4.7, 4.11, 4.13, 4.18, 5.3, 5.6, 5.7 and 6.2D and any defined terms
used in the foregoing subsections.
"SUPERMAJORITY LENDERS" means (i) Lenders having or holding
75% or more of the aggregate Tranche A Term Loan Exposure of all
Lenders plus the aggregate Tranche B Term Loan Exposure of all Lenders
and (ii) Lenders having or holding 75% of more of the aggregate
Revolving Loan Exposure of all Lenders.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
that term in subsection 8.1D.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided that "TAX ON THE
OVERALL NET INCOME" of a Person shall be construed as a reference to a
tax imposed by the jurisdiction in which that Person is organized or in
which that Person's principal office (and/or, in the case of a Lender,
its lending office) is located or in which that Person (and/or, in the
case of a Lender, its lending office) is deemed to be doing business on
all or part of the net income, profits or gains (whether worldwide, or
only insofar as such income, profits or gains are considered to arise
in or to relate to a particular jurisdiction, or otherwise) of that
Person (and/or, in the case of a Lender, its lending office).
"TAX AMOUNTS" with respect to any calendar year means the sum
of (i) an amount equal to the product of (a) the Federal taxable income
of Company for such year as determined in good faith by the Board of
Directors and as certified by a nationally recognized tax accounting
firm and without taking into account the deductibility of state income
taxes for Federal income tax purposes multiplied by (b) the State Tax
Percentage (as defined below) plus (ii) the greater of (1) the product
of (w) the Federal taxable income of Company for such year as
determined in good faith by the Board of Directors and as certified by
a nationally recognized tax accounting firm and taking into account the
deductibility of the amount determined in clause (i) above as a state
income tax for Federal income tax purposes multiplied by (x) the
Federal Tax Percentage (as defined below) and (2) the product of (y)
the alternative minimum taxable income attributable to Company's
stockholder(s) by reason of the income of Company for such year as
determined in good faith by the Board of Directors and as certified by
a nationally recognized tax accounting firm multiplied by (z) the
Federal Tax Percentage; provided, however, the amount as
32
<PAGE>
<PAGE>
calculated above shall be reduced by the amount of any income tax
benefit attributable to Company which could be realized by Company's
stockholder(s) in the current or a prior taxable year (including tax
losses, alternative minimum tax credits, other tax credits and
carryforwards or carrybacks thereof) to the extent not previously taken
into account. The amount of any such income tax benefit described in
the proviso to the preceding sentence shall be determined in a manner
consistent with the calculation of the Tax Amount for the relevant
year. The term "STATE TAX PERCENTAGE" shall mean the highest applicable
statutory marginal rate of state and local income tax to which an
individual resident of the Relevant Jurisdiction (as defined below)
would be subject in the relevant year of determination as a result of
being a stockholder of a corporation taxable as an S Corporation in
such jurisdiction (as certified to Agent by a nationally recognized tax
accounting firm). The term "RELEVANT JURISDICTION" shall mean the
jurisdiction in which, during the relevant taxable year, (i) Company is
doing business for state and local income tax purposes, (ii) Company
derives the first, second, third or fourth highest percentage of its
gross income as calculated for Federal income tax purposes (excluding
therefrom any gain or loss from the sale or other disposition of any
television station then owned by Company) and (iii) Company is taxable
as an S Corporation for state and local income tax purposes that
imposes the highest aggregate marginal rate of state and local income
tax on individuals (as certified to Agent by a nationally recognized
tax accounting firm). The term "FEDERAL TAX PERCENTAGE" shall mean the
highest applicable statutory marginal rate of Federal income tax or, in
the case of clause (ii)(2) above, alternative minimum tax, to which an
individual resident of the United States would be subject in the
relevant year of determination (as certified to Agent by a nationally
recognized tax accounting firm); provided, however, that, for any year
in which Company is not taxable as an S Corporation for Federal income
tax purposes, the Federal Tax Percentage shall be zero. Notwithstanding
the foregoing, the sum of the State Tax Percentage and the Federal Tax
Percentage (the "TOTAL TAX PERCENTAGE") shall not exceed the percentage
(the "MAXIMUM TAX PERCENTAGE") equal to the lesser of (i) the highest
applicable statutory marginal rate of Federal, state, local income tax
or, when applicable, alternative minimum tax, to which a corporation
doing business in any state in which Company is doing business at the
time of determination would be subject in the relevant year of
determination (as certified to Agent by a nationally recognized tax
accounting firm) plus 5% and (ii) 55%. If the Total Tax Percentage
exceeds the Maximum Tax Percentage, the Federal Tax Percentage shall be
reduced to the extent necessary to cause the Total Tax Percentage to
equal the Maximum Tax Percentage. Distributions of Tax Amounts may be
made from time to time with respect to a tax year based on reasonable
estimates, with reconciliation within 40 days of the earlier of (i)
Company's filing of the Internal Revenue Service Form 1120S for the
applicable taxable year and (ii) the last date such form is required to
be filed. Benedek will enter into a binding agreement with Company to
reimburse Company for certain positive differences between the
distributed amount and the Tax Amount, which difference must be paid at
the time of such reconciliation. Estimated distributions of Tax Amounts
are set forth on Schedule 1.1 annexed hereto.
"TELEVISION STATION ASSET GROUP" means any group of assets
which constitute all or substantially all of the assets which would be
necessary to carry on the business of a
33
<PAGE>
<PAGE>
television broadcast station and which, when purchased
by a single purchaser, would (together with any necessary FCC
Licenses, authorizations, working capital and operating
location) be substantially sufficient to allow such purchaser
to carry on such business.
"TERM LOANS" means, collectively, the Tranche A Term Loans and
the Tranche B Term Loans.
"TERM NOTES" means one or more of the Tranche A Term Notes or
Tranche B Term Notes or any combination thereof.
"THIRD PARTY PERMITTED LMA" means an LMA entered into by
Company with an unaffiliated Person with respect to a Satellite Station
which, immediately prior to the time the LMA is entered into, is owned
and operated by Company.
"TITLE COMPANY" means, collectively, Stewart Title and/or one
or more other title insurance companies reasonably satisfactory to
Agent.
"TITLE ENDORSEMENTS" has the meaning assigned that term in
subsection 3.2F.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the aggregate principal amount of all
outstanding Revolving Loans.
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination, the outstanding principal
amount of the Tranche A Term Loan of that Lender.
"TRANCHE A TERM LOANS" means the Loans made by Lenders to
Company which were converted from Existing AXELs Series A and Existing
AXELs Series B on the Restatement Date pursuant to subsection
2.1A(i)(a).
"TRANCHE A TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E(i) of this Agreement on the
Restatement Date to Lenders having outstanding Tranche A Term Loans on
the Restatement Date and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 9.1B(i) in connection with
assignments of the Tranche A Term Loans of any Lenders, in each case
substantially in the form of Exhibit III annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination, the outstanding principal
amount of the Tranche B Term Loan of that Lender.
"TRANCHE B TERM LOANS" means the Loans made by Lenders to
Company which were converted from Existing AXEls Series B on the
Restatement Date pursuant to subsection 2.1A(i)(b).
34
<PAGE>
<PAGE>
"TRANCHE B TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E(ii) of this Agreement on the
Restatement Date to Lenders having outstanding Tranche B Term Loans on
the Restatement Date and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 9.1B(i) in connection with
assignments of the Tranche B Term Loans of any Lenders, in each case
substantially in the form of Exhibit IV annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNUTILIZED COMPENSATION AMOUNT" means, as of any date of
determination, (i) the sum of the Compensation Limits for each Fiscal
Year ended after the Acquisition Date and prior to the date of
determination minus (ii) the sum of (a) the aggregate amount of
cash compensation paid or accrued to Benedek during such Fiscal
Years plus (b) the aggregate amount expended by Company or BCC to
repurchase or redeem Warrants prior to the date of determination.
"WARRANTS" means the 600,000 initial warrants and 888,000
contingent warrants issued by BCC pursuant to the Warrant Agreement to
the purchasers of the Exchangeable Preferred Stock.
"WARRANT AGREEMENT" means the warrant agreement pursuant to
which the Warrants are issued, in the form delivered to Lenders under
the Existing Credit Agreement on or before the Acquisition Date and as
such warrant agreement may be amended from time to time to the extent
permitted under subsection 6.14.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiv) of subsection 5.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 5.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 4.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
References to "Sections" and "subsections" shall be to Sections and subsections,
respectively, of this Agreement unless otherwise specifically provided. The use
herein of the word "include" or "including", when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the
35
<PAGE>
<PAGE>
specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting language (such
as "without limitation" or "but not limited to" or words of similar import) is
used with reference thereto, but rather shall be deemed to refer to all other
items or matters that fall within the broadest possible scope of such general
statement, term or matter.
SECTION 2.
CONVERSION; AMOUNTS AND
TERMS OF REVOLVING LOAN COMMITMENTS AND LOANS
2.1 CONVERSION OF EXISTING AXELS TO TERM LOANS; AMOUNT AND TERMS OF
REVOLVING LOAN COMMITMENTS AND LOANS; THE REGISTER; NOTES.
A. AMOUNT AND TERMS OF REVOLVING LOAN COMMITMENTS AND LOANS. Pursuant
to the Existing Credit Agreement, (x) certain Existing Lenders made Existing
AXELs Series A thereunder in an initial aggregate principal amount of
$70,000,000, (y) certain Existing Lenders made Existing AXELs Series B
thereunder in an initial aggregate principal amount of $58,000,000 and (z)
certain Existing Lenders had Revolving Loan Commitments in an aggregate
principal amount immediately preceding the Restatement Date of $10,000,000. As
of the Restatement Date, but immediately prior to the consummation of the
assignment and assumption transactions contemplated by the Master Assignment
Agreement, the aggregate outstanding principal amount of (x) Existing AXELs
Series A was $56,931,180, (y) Existing AXELs Series B was $53,885,820 and (z)
Revolving Loans was $9,499,670.75. Immediately prior to the effectiveness of
this Agreement, pursuant to the Master Assignment Agreement, certain of the
Existing Lenders are selling and assigning all of their respective rights in and
to, and all of their respective obligations under, the Existing AXELs Series A,
Existing AXELs Series B and Revolving Loans owing to such Existing Lender and
the Revolving Loan Commitment of such Existing Lender, to certain of the
Lenders, in the amounts and subject to the terms set forth in such Master
Assignment Agreement.
(i) Conversion of Existing AXELs into Term Loans.
(a) Conversion of Existing AXELs into Tranche A Term Loans.
Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company
herein set forth, as of the Restatement Date and immediately
following the consummation of the assignment and assumption
transactions contemplated by the Master Assignment Agreement,
$56,931,180 in aggregate principal amount of Existing AXELs
Series A which were outstanding under the Existing Credit
Agreement and $20,068,820 in aggregate principal amount of
Existing AXELs Series B which were outstanding under the
Existing Credit Agreement shall be converted into and shall
thereafter be $77,000,000 in outstanding principal amount of
Tranche A Term Loans for all purposes under this Agreement. On
the Restatement Date and immediately following the
consummation of the assignment and assumption transactions
contemplated by the Master Assignment Agreement, the aggregate
outstanding principal amount of Tranche A Term Loans
36
<PAGE>
<PAGE>
of each Lender which have been converted from Existing AXELs
Series A and Existing AXELs Series B as provided in the first
sentence of this subsection 2.1A(i)(a) is set forth opposite
the name of that Lender on Schedule 2.1 annexed hereto and the
aggregate outstanding principal amount of the Tranche A Term
Loans on the Restatement Date is $77,000,000. Any amounts owed
(whether or not presently due and payable) by Company to a
Lender under or in respect of an Existing AXEL converted into
a Tranche A Term Loan shall, as of the Restatement Date and
immediately following the consummation of the assignment
and assumption transactions contemplated by the Master
Assignment Agreement, be deemed to be owed under or
in respect of the Tranche A Term Loan into which such
Existing AXEL was converted and such amounts shall
thereafter be evidenced by the Tranche A Term Note delivered
by Company to or on behalf of such Lender pursuant to
subsection 2.1E(i). In connection with the conversion of the
Existing AXELs into Tranche A Term Loans pursuant to this
subsection 2.1A(i)(a), Company shall be required to satisfy
the conditions set forth in Section 3.2 and Section 3.3;
provided that Company shall not be required to deliver a
Notice of Borrowing with respect to such conversion. The
Existing AXEL Notes issued by Company in favor of Existing
Lenders pursuant to subsection 2.1E(i) of the Existing Credit
Agreement shall be of no further force and effect and each
Lender, or Agent on behalf of such Lender, shall return to
Company for cancellation the Existing AXEL Note held by such
Lender. Amounts repaid or prepaid with respect to the Tranche
A Term Loans may not be reborrowed.
(b) Conversion of Existing AXELs Series B into Tranche B Term
Loans. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of
Company herein set forth, as of the Restatement Date and
immediately following the consummation of the assignment and
assumption transactions contemplated by the Master Assignment
Agreement, $33,817,000 in aggregate principal amount of
Existing AXELs Series B which were outstanding under the
Existing Credit Agreement shall be converted into and shall
thereafter be $33,817,000 in outstanding principal amount of
Tranche B Term Loans for all purposes under this Agreement. On
the Restatement Date and immediately following the
consummation of the assignment and assumption transactions
contemplated by the Master Assignment Agreement, the aggregate
outstanding principal amount of the Tranche B Term Loans of
each Lender which have been converted from Existing AXELs
Series B as provided in the first sentence of this subsection
2.1A(i)(b) is set forth opposite the name of that Lender on
Schedule 2.1 annexed hereto and the aggregate outstanding
principal amount of the Tranche B Term Loans is $33,817,000.
Any amounts owed (whether or not presently due and payable) by
Company to a Lender under or in respect of an Existing AXELs
Series B converted into a Tranche B Term Loan shall, as of the
Restatement Date and immediately following the consummation of
the assignment and assumption transactions contemplated by the
Master Assignment Agreement, be deemed to be owed under or in
respect of the Tranche B Term Loan into which such Existing
AXELs Series B was converted and such amounts shall thereafter
be evidenced by the Tranche B Term Note delivered
37
<PAGE>
<PAGE>
by Company to or on behalf of such Lender pursuant to
subsection 2.1E(ii). In connection with the conversion of
the Existing AXELs Series B into Tranche B Term Loans pursuant
to this subsection 2.1A(i)(b), Company shall be required to
satisfy the conditions set forth in Section 3.2 and Section
3.3; provided that Company shall not be required to deliver a
Notice of Borrowing with respect to such conversion. The
Existing AXEL Notes issued by Company in favor of Existing
Lenders pursuant to subsection 2.1E(ii) of the Existing Credit
Agreement shall be of no further force and effect and each
Lender, or Agent on behalf of such Lender, shall return to
Company for cancellation the Existing AXEL Note held by such
Lender. Amounts repaid or prepaid with respect to the Tranche
B Term Loans may not be reborrowed.
(ii) Revolving Loans. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties
of Company, each Lender having a Revolving Loan Commitment severally
agrees, subject to the limitations set forth below with respect to the
maximum amount of Revolving Loans permitted to be outstanding from time
to time, to (a) maintain its outstanding Revolving Loans and (b) to
make additional Revolving Loans to Company from time to time during the
period from the Restatement Date to but excluding the Revolving Loan
Commitment Termination Date, in an aggregate amount not exceeding its
Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5B.
On the Restatement Date, simultaneously with the effectiveness of this
Agreement but without giving effect to any borrowings hereunder, the
aggregate outstanding principal amount of Revolving Loans was
$9,499,670.75. The aggregate amount of each Lender's outstanding
Revolving Loans on the Restatement Date, simultaneously with the
effectiveness of this Agreement but without giving effect to any
borrowings hereunder, is set forth opposite its name on Schedule 2.1
annexed hereto. The original amount of each Lender's Revolving Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate original amount of the Revolving Loan
Commitments is $15,000,000; provided that the Revolving Loan
Commitments of Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to subsection
9.1B; and provided, further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4B(ii) and 2.4B(iii).
Each Lender's Revolving Loan Commitment shall expire on the Revolving
Loan Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later than that
date; provided that each Lender's Revolving Loan Commitment shall
expire immediately and without further action on December 18, 1997 if
the Existing AXELs are not converted to Tranche A Term Loans and
Tranche B Term Loans on or before that date. Amounts borrowed under
this subsection 2.1A(ii) may be repaid and reborrowed to but excluding
the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the lesser of (1) the Revolving
Loan Commitments then in effect and (2) the Borrowing Base as then in
effect.
38
<PAGE>
<PAGE>
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date shall
be in an aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount. Whenever Company desires that Lenders make
Revolving Loans it shall deliver to Agent a Notice of Borrowing no later than
10:00 A.M. (New York City time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or on the proposed
Funding Date (in the case of a Base Rate Loan). The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount and type of Loans requested, (iii) in the case of any Loans made on the
Restatement Date, that such Loans shall be Base Rate Loans, (iv) whether
such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and
(v) in the case of any Loans requested to be made as Eurodollar Rate
Loans, the initial Interest Period requested therefor. Term Loans and
Revolving Loans may be continued as or converted into Base Rate
Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing, Company may give
Agent telephonic notice by the required time of any proposed borrowing under
this subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Agent on or before the
applicable Funding Date.
Neither Agent nor any Lender shall incur any liability to Company in
acting upon any telephonic notice referred to above that Agent believes in good
faith to have been given by a duly authorized officer or other person authorized
to borrow on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B, and upon funding of Loans by Lenders in accordance with this
Agreement pursuant to any such telephonic notice Company shall have effected
Loans hereunder.
Company shall notify Agent prior to the funding of any Loans in the
event that any of the matters to which Company is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this Agreement
shall be made by Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a
Revolving Loan requested hereunder nor shall the Revolving Loan Commitment of
any Lender be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Revolving Loan requested
hereunder. Promptly after receipt by Agent of a Notice of Borrowing pursuant to
subsection 2.1B (or telephonic notice in lieu thereof), Agent shall notify each
Lender of the proposed borrowing. Each Lender shall make the amount of its
Revolving Loan available to Agent not later than 12:00 Noon (New York City time)
on the applicable Funding Date, in same day funds in Dollars, at the Funding and
Payment Office.
39
<PAGE>
<PAGE>
Upon satisfaction or waiver of the conditions precedent
specified in subsections 3.2 (in the case of Revolving Loans made on the
Restatement Date) and 3.3 (in the case of all Revolving Loans), Agent shall make
the proceeds of such Revolving Loans available to Company on the applicable
Funding Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Revolving Loans received by Agent from Lenders to be
credited to the account of Company at such account as Company shall specify in
writing.
Unless Agent shall have been notified by any Lender prior to the
Funding Date for any Revolving Loans that such Lender does not intend to make
available to Agent the amount of such Lender's Revolving Loan requested on such
Funding Date, Agent may assume that such Lender has made such amount available
to Agent on such Funding Date and Agent may, in its sole discretion, but shall
not be obligated to, make available to Company a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made available to
Agent by such Lender, Agent shall be entitled to recover such corresponding
amount on demand from such Lender together with interest thereon, for each day
from such Funding Date until the date such amount is paid to Agent, at the
customary rate set by Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Agent's demand therefor, Agent shall
promptly notify Company and Company shall immediately pay such corresponding
amount to Agent together with interest thereon, for each day from such Funding
Date until the date such amount is paid to Agent, at the rate payable under this
Agreement for Base Rate Loans. Nothing in this subsection 2.1C shall be deemed
to relieve any Lender from its obligation to fulfill its Revolving Loan
Commitment hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Agent shall maintain, at its address referred to in
subsection 9.8, a register for the recordation of the names and
addresses of Lenders and the Revolving Loan Commitment and Loans of
each Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Agent shall record in the Register the Revolving Loan
Commitment and the Tranche A Term Loans, Tranche B Term Loans and
Revolving Loans from time to time of each Lender, and each repayment or
prepayment in respect of the principal amount of the Tranche A Term
Loans, Tranche B Term Loans or Revolving Loans of each Lender. Any such
recordation shall be conclusive and binding on Company and each Lender,
absent manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect any
Lender's Revolving Loan Commitment or Company's Obligations in respect
of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including the Notes held by such Lender) the amount of the Tranche A
Term Loans, Tranche B Term Loans and each Revolving Loan made by it and
each payment in respect thereof. Any such recordation shall
40
<PAGE>
<PAGE>
be conclusive and binding on Company, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Revolving Loan Commitment or
Company's Obligations in respect of any applicable Loans; and provided,
further that in the event of any inconsistency between the Register and
any Lender's records, the recordations in the Register shall govern.
(iv) Company, Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of
the corresponding Revolving Loan Commitments and Loans listed
therein for all purposes hereof, and no assignment or transfer
of any such Revolving Loan Commitment or Loan shall be effective,
in each case unless and until an Assignment Agreement effecting
the assignment or transfer thereof shall have been accepted by
Agent and recorded in the Register as provided in subsection 9.1B(ii).
Prior to such recordation, all amounts owed with respect to the
applicable Revolving Loan Commitment or Loan shall be
owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Revolving Loan
Commitments or Loans.
(v) Company hereby designates BTCo to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent BTCo
serves in such capacity, BTCo and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes
under subsection 9.3.
E. NOTES. Company shall execute and deliver on the Restatement Date to
each Lender (or to Agent for that Lender) (i) a Tranche A Term Note
substantially in the form of Exhibit III annexed hereto to evidence that
Lender's Tranche A Term Loan, in the principal amount of that Lender's Tranche A
Term Loan and with other appropriate insertions, (ii) a Tranche B Term Loan Note
substantially in the form of Exhibit IV annexed hereto to evidence that Lender's
Tranche B Term Loan, in the principal amount of that Lender's Tranche B Term
Loan and with other appropriate insertions, and (iii) a Revolving Note
substantially in the form of Exhibit V annexed hereto to evidence that Lender's
Revolving Loans, in the principal amount of that Lender's Revolv- ing Loan
Commitment and with other appropriate insertions.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. The applicable basis for determining the rate of
interest with respect to any Term Loan or any Revolving Loan shall be selected
by Company initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B, and the basis for determining the
interest rate with respect to any Term Loan or any Revolving Loan may be changed
from time to time pursuant to subsection 2.2D; provided that
41
<PAGE>
<PAGE>
Company may not select the Adjusted Eurodollar Rate until the earlier of (i) the
date the Agent advises Company that the Term Loans have been fully syndicated
and (ii) the date which is two months after the Restatement Date. If on any day
a Term Loan or Revolving Loan is outstanding with respect to which notice has
not been delivered to Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then
for that day that Loan shall bear interest determined by reference to the
Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Tranche A
Term Loans and the Revolving Loans shall bear interest through maturity as
follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate
plus the Applicable Margin in effect from time to time; or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin in effect from time
to time during the applicable Interest Period.
Subject to the provisions of subsections 2.2E and 2.7, the Tranche B
Term Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate
plus 2.25% per annum;
or
(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus 3.25% per annum.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a
42
<PAGE>
<PAGE>
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Tranche A Term Loans or the Tranche B Term Loans shall extend beyond
December 31, 2004, and no Interest Period with respect to any portion
of the Revolving Loans shall extend beyond the Revolving Loan
Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the
Tranche A Term Loans or Tranche B Term Loans shall extend beyond a date
on which Company is required to make a scheduled payment of principal
of the Tranche A Term Loans or Tranche B Term Loans, as the case may
be, unless the sum of (a) the aggregate principal amount of Tranche A
Term Loans or Tranche B Term Loans, as the case may be, that are Base
Rate Loans plus (b) the aggregate principal amount of Tranche A Term
Loans or Tranche B Term Loans, as the case may be, that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date equals
or exceeds the principal amount required to be paid on the Tranche A
Term Loans or Tranche B Term Loans, as the case may be, on such date;
(vii) there shall be no more than seven Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be deemed
to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Revolving Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such
Revolving Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Tranche A Term Loans, Tranche B Term Loans or Revolving Loans
equal to $1,000,000 and integral multiples of $500,000 in excess of that amount
from Loans bearing interest at a rate determined by reference to one basis to
Loans bearing interest at a rate determined by reference to an alternative basis
or (ii) upon the expiration of any Interest Period applicable to a Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $1,000,000 and
integral multiples of $500,000 in excess of
43
<PAGE>
<PAGE>
that amount as a Eurodollar Rate Loan; provided, however, that a Eurodollar
Rate Loan may only be converted into a Base Rate Loan on the expiration date
of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to Agent no
later than 10:00 A.M. (New York City time) at least one Business Day in advance
of the proposed conversion date (in the case of a conversion to a Base Rate
Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Business Day),
(ii) the amount and type of the Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the
requested Interest Period, and (v) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, that no Potential Event of Default or
Event of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, Company may give Agent
telephonic notice by the required time of any proposed conversion/continuation
under this subsection 2.2D; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Conversion/Continuation to Agent
on or before the proposed conversion/continuation date. Upon receipt of written
or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Agent shall promptly transmit such notice by telefacsimile or
telephone to each Lender.
Neither Agent nor any Lender shall incur any liability to Company in
acting upon any telephonic notice referred to above that Agent believes in good
faith to have been given by a duly authorized officer or other person authorized
to act on behalf of Company or for otherwise acting in good faith under this
subsection 2.2D, and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to any Loans in accordance with this
Agreement pursuant to any such telephonic notice Company shall have effected a
conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement
44
<PAGE>
<PAGE>
for Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed on
the basis of a 360-day year, for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Agent, for distribution
to each Lender in proportion to that Lender's Pro Rata Share of the Revolving
Loan Commitments, commitment fees for the period from and including the
Restatement Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over
the aggregate principal amount of outstanding Revolving Loans, multiplied by 1/2
of 1% per annum, such commitment fees to be calculated on the basis of a 360-day
year and the actual number of days elapsed and to be payable quarterly in
arrears on February 1, May 1, August 1 and November 1 of each year, commencing
on the first such date to occur after the Restatement Date, and on the Revolving
Loan Commitment Termination Date.
B. OTHER FEES. Company agrees to pay to Agent such other fees in the
amounts and at the times separately agreed upon between Company and Agent.
2.4 REPAYMENTS; PREPAYMENTS; REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF COLLATERAL
AND PAYMENTS UNDER GUARANTIES.
A. SCHEDULED PAYMENTS OF TERM LOANS.
(i) Scheduled Payments of Tranche A Term Loans. Company
shall make principal payments on the Tranche A Term Loans in
installments on the dates and in the amounts set forth below:
45
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
=======================================================================================
(A) (B)
SCHEDULED
PAYMENT REPAYMENT OF
DATE TRANCHE A TERM LOANS
=======================================================================================
<S> <C>
09/30/98 $1,000,000
- ---------------------------------------------------------------------------------------
12/31/98 $1,000,000
- ---------------------------------------------------------------------------------------
03/31/99 $2,500,000
- ---------------------------------------------------------------------------------------
06/30/99 $2,500,000
- ---------------------------------------------------------------------------------------
09/30/99 $2,500,000
- ---------------------------------------------------------------------------------------
12/31/99 $2,500,000
- ---------------------------------------------------------------------------------------
03/31/00 $3,000,000
- ---------------------------------------------------------------------------------------
06/30/00 $3,000,000
- ---------------------------------------------------------------------------------------
09/30/00 $3,000,000
- ---------------------------------------------------------------------------------------
12/31/00 $3,000,000
- ---------------------------------------------------------------------------------------
03/31/01 $3,000,000
- ---------------------------------------------------------------------------------------
06/30/01 $3,000,000
- ---------------------------------------------------------------------------------------
09/30/01 $3,000,000
- ---------------------------------------------------------------------------------------
12/31/01 $3,000,000
- ---------------------------------------------------------------------------------------
03/31/02 $3,250,000
- ---------------------------------------------------------------------------------------
06/30/02 $3,250,000
- ---------------------------------------------------------------------------------------
09/30/02 $3,250,000
- ---------------------------------------------------------------------------------------
12/31/02 $3,250,000
- ---------------------------------------------------------------------------------------
03/31/03 $3,500,000
- ---------------------------------------------------------------------------------------
06/30/03 $3,500,000
- ---------------------------------------------------------------------------------------
09/30/03 $3,500,000
- ---------------------------------------------------------------------------------------
12/31/03 $3,500,000
- ---------------------------------------------------------------------------------------
03/31/04 $3,500,000
- ---------------------------------------------------------------------------------------
06/30/04 $3,500,000
- ---------------------------------------------------------------------------------------
09/30/04 $3,500,000
- ---------------------------------------------------------------------------------------
</TABLE>
46
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
=======================================================================================
(A) (B)
SCHEDULED
PAYMENT REPAYMENT OF
DATE TRANCHE A TERM LOANS
=======================================================================================
<S> <C>
- ---------------------------------------------------------------------------------------
12/31/04 $3,500,000
- ---------------------------------------------------------------------------------------
TOTAL $77,000,000
=======================================================================================
</TABLE>
; provided that the scheduled installments of principal of the Tranche
A Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche A Term Loans in
accordance with subsection 2.4B(iv); and provided, further that the
Tranche A Term Loans and all other amounts owed hereunder with respect
to the Tranche A Term Loans shall be paid in full no later than
December 31, 2004, and the final installment payable by Company
in respect of the Tranche A Term Loans on such date shall be in an
amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Company under this
Agreement with respect to the Tranche A Term Loans.
(ii) Scheduled Payments of Tranche B Term Loans. Company
shall make principal payments on the Tranche B Term Loans in
installments on the dates and in the amounts set forth below:
<TABLE>
<CAPTION>
==========================================================================================
(A) (B)
Scheduled
Payment Repayment of
Date Tranche B Term Loans
==========================================================================================
<S> <C>
09/30/98 $250,000
- ------------------------------------------------------------------------------------------
12/31/98 $250,000
- ------------------------------------------------------------------------------------------
03/31/99 $250,000
- ------------------------------------------------------------------------------------------
06/30/99 $250,000
- ------------------------------------------------------------------------------------------
09/30/99 $250,000
- ------------------------------------------------------------------------------------------
12/31/99 $250,000
- ------------------------------------------------------------------------------------------
03/31/00 $250,000
- ------------------------------------------------------------------------------------------
06/30/00 $250,000
- ------------------------------------------------------------------------------------------
09/30/00 $250,000
- ------------------------------------------------------------------------------------------
12/31/00 $250,000
- ------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
=======================================================================================
(A) (B)
SCHEDULED
PAYMENT REPAYMENT OF
DATE TRANCHE A TERM LOANS
=======================================================================================
<S> <C>
- ------------------------------------------------------------------------------------------
03/31/01 $250,000
- ------------------------------------------------------------------------------------------
06/30/01 $250,000
- ------------------------------------------------------------------------------------------
09/30/01 $250,000
- ------------------------------------------------------------------------------------------
12/31/01 $250,000
- ------------------------------------------------------------------------------------------
03/31/02 $250,000
- ------------------------------------------------------------------------------------------
06/30/02 $250,000
- ------------------------------------------------------------------------------------------
09/30/02 $250,000
- ------------------------------------------------------------------------------------------
12/31/02 $250,000
- ------------------------------------------------------------------------------------------
03/31/03 $250,000
- ------------------------------------------------------------------------------------------
06/30/03 $250,000
- ------------------------------------------------------------------------------------------
09/30/03 $250,000
- ------------------------------------------------------------------------------------------
12/31/03 $250,000
- ------------------------------------------------------------------------------------------
03/31/04 $7,000,000
- ------------------------------------------------------------------------------------------
06/30/04 $7,000,000
- ------------------------------------------------------------------------------------------
09/30/04 $7,000,000
- ------------------------------------------------------------------------------------------
12/31/04 $7,317,000
- ------------------------------------------------------------------------------------------
TOTAL $33,817,000
==========================================================================================
</TABLE>
; provided that the scheduled installments of principal of the Tranche
B Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans in
accordance with subsection 2.4B(iv); and provided, further that the
Tranche B Term Loans and all other amounts owed hereunder with respect
to the Tranche B Term Loans shall be paid in full no later than
December 31, 2004, and the final installment payable by Company in
respect of the Tranche B Term Loans on such date shall be in an amount,
if such amount is different from that specified above, sufficient to
repay all amounts owing by Company under this Agreement with respect to
the Tranche B Term Loans.
48
<PAGE>
<PAGE>
B. PREPAYMENTS; REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base
Rate Loans, and three Business Days' prior written or telephonic
notice, in the case of Eurodollar Rate Loans, in each case given to
Agent by 12:00 Noon (New York City time) on the date required and, if
given by telephone, promptly confirmed in writing to Agent (which
original written or telephonic notice Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time
to time prepay any Tranche A Term Loans, Tranche B Term Loans or
Revolving Loans on any Business Day in whole or in part in an aggregate
minimum amount of $1,000,000 and integral multiples of $500,000 in
excess of that amount. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such notice
shall become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in
subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to
Agent (which original written or telephonic notice Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any time and
from time to time terminate in whole or permanently reduce in part,
without premium or penalty, the Revolving Loan Commitments in an amount
up to the amount by which the Revolving Loan Commitments exceed the
Total Utilization of Revolving Loan Commitments at the time of such
proposed termination or reduction; provided that any such partial
reduction of the Revolving Loan Commitments shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $500,000 in
excess of that amount. Company's notice to Agent shall designate the
date (which shall be a Business Day) of such termination or reduction
and the amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective on the
date specified in Company's notice and shall reduce the Revolving Loan
Commitment of each Lender proportionately to its Pro Rata Share of the
Revolving Loan Commitments.
(iii) Mandatory Prepayments; Mandatory Reductions of Revolving
Loan Commitments. The Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments to be applied as
set forth below or as more specifically provided in subsection
2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale
Proceeds. No later than the first Business Day following the
date of receipt by BCC or any of its Subsidiaries of any Net
Asset Sale Proceeds in respect of any Asset Sale, Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to
such Net Asset Sale Proceeds. Notwithstanding the foregoing,
Company shall not be required to make a prepayment pursuant to
this subsection 2.4B(iii)(a) (1) if the aggregate Net Asset
Sale Proceeds received (x) upon any single Asset Sale or
series of related Asset Sales are less than
49
<PAGE>
<PAGE>
$2,000,000 and (y) are less than $5,000,000 in the aggregate
for all Asset Sales since the Restatement Date (excluding for
purposes of calculating such $5,000,000 aggregate
amount any single Asset Sale or series of related
Asset Sales for which the Net Asset Sale Proceeds received
are less than $250,000) or (2) if the Net Asset Sale
Proceeds are deposited by Company in the Company
Collateral Account pending reinvestment of such Net
Asset Sale Proceeds in a Permitted Acquisition that shall be
consummated within 120 days of the receipt of such Net Asset
Sale Proceeds by BCC or any of its Subsidiaries; provided,
however, that the aggregate Net Asset Sale Proceeds which are
held in the Company Collateral Account as of any date of
determination shall not exceed $15,000,000; and provided
further that if within 120 days of BCC's or any of its
Subsidiary's receipt of any Net Asset Sale Proceeds, Company
has not applied all or any portion of such Net Asset Sale
Proceeds (such unapplied amount, the "UNAPPLIED AMOUNT") held
in the Company Collateral Account to a Permitted Acquisition
consummated within such 120 days, Agent shall, and Company
hereby authorizes Agent to, apply an amount of such Net Asset
Sale Proceeds held in the Company Collateral Account equal to
the Unapplied Amount to prepay the Loans and/or permanently
reduce the Revolving Loan Commitments.
(b) Prepayments and Reductions from Net
Insurance/Condemnation Proceeds. No later than the second
Business Day following the date of receipt by Agent or by BCC
or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds that are required to be applied to prepay the Loans
and/or reduce the Revolving Loan Commitments pursuant to the
provisions of subsection 5.4C, Company shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to the amount of such Net
Insurance/Condemnation Proceeds.
(c) Prepayments and Reductions Due to Reversion of
Surplus Assets of Pension Plans. On the date of return to BCC
or any of its Subsidiaries of any surplus assets of any
pension plan of BCC or any of its Subsidiaries, Company shall
prepay the Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount (such amount
being the "NET PENSION PROCEEDS") equal to 100% of such
returned surplus assets, net of transaction costs and expenses
incurred in obtaining such return, including incremental taxes
payable as a result thereof.
(d) Prepayments and Reductions Due to Issuance of
Equity Securities. No later than the first Business Day
following the date of receipt by Company at any time after the
Restatement Date of the Cash proceeds (any such proceeds, net
of underwriting discounts and commissions and other reasonable
costs and expenses associated therewith, including reasonable
legal fees and expenses, being "NET SECURITIES PROCEEDS") from
the issuance of any equity Securities of Company, Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to
such Net Securities Proceeds.
50
<PAGE>
<PAGE>
(e) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing
with Fiscal Year 1998), Company shall, no later than 100 days
after the end of such Fiscal Year, prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 50% of such Consolidated Excess Cash
Flow.
(f) Prepayments Upon Receipt of Capital Contributions
from BCC. Upon receipt by Company at any time after the
Acquisition Date of any capital contribution from BCC of the
Cash proceeds (any such proceeds, net of underwriting
discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees
and expenses, being "NET CONTRIBUTION PROCEEDS") from the
issuance of (i) any debt Securities of BCC, Company shall
prepay the Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount equal to such
capital contribution and (ii) any equity Securities of BCC
(other than equity Securities issued upon the exercise of
stock options (1) by directors, officers, employees or
independent contractors (other than Benedek) of BCC or any of
its Subsidiaries or (2) by Benedek to the extent the aggregate
amount of such proceeds from and including the Acquisition
Date do not exceed $2,000,000), Company shall prepay the
Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount to the extent
necessary such that, immediately after giving effect to such
prepayment, the pro forma Leverage Ratio shall be less than
or equal to 5.00:1.00.
(g) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction
of the Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(f), Company shall deliver to Agent an Officers'
Certificate demonstrating the calculation of the amount (the
"NET PROCEEDS AMOUNT") of the applicable Net Asset Sale
Proceeds or Net Insurance/Condemnation Proceeds, Net Pension
Proceeds, Net Securities Proceeds or Net Contribution Proceeds
(as such terms are defined in subsections 2.4B(iii)(c), (d)
and (f), respectively), or the applicable Consolidated Excess
Cash Flow, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officers'
Certificate, Company shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Revolving
Loan Commitments shall be permanently reduced) in an amount
equal to the amount of such excess, and Company shall
concurrently therewith deliver to Agent an Officers'
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
(h) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Company shall from time to time
prepay the Revolving Loans to the extent necessary so that the
Total Utilization of Revolving Loan Commitments shall
51
<PAGE>
<PAGE>
not at any time exceed the lesser of (A) the Revolving Loan
Commitments then in effect and (B) the Borrowing Base as then
in effect.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of
Loans and Order of Maturity. Any voluntary prepayments
pursuant to subsection 2.4B(i) shall be applied as specified
by Company in the applicable notice of prepayment; provided
that in the event Company fails to specify the Loans to which
any such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Revolving Loans to the full
extent thereof, and second to repay outstanding Term Loans to
the full extent thereof. Notwithstanding anything to the
contrary contained in the proceeding sentence, any voluntary
prepayments of the Term Loans pursuant to subsection 2.4B(i)
shall be applied to prepay the Tranche A Term Loans and the
Tranche B Term Loans on a pro rata basis (in accordance with
the respective outstanding principal amounts thereof) and to
reduce the scheduled installments of principal of the Tranche
A Term Loans and the Tranche B Term Loans set forth in
subsections 2.4A(i) and 2.4A(ii) on a pro rata basis.
(b) Application of Mandatory Prepayments by Type of
Loans. Any amount (the "APPLIED AMOUNT") required to be
applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(f) shall be applied first to prepay
the Term Loans to the full extent thereof, second, to the
extent of any remaining portion of the Applied Amount, to
prepay the Revolving Loans to the full extent thereof and to
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment, and third, to the extent of any
remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full
extent thereof. Notwithstanding the foregoing, upon the
occurrence and during the continuation of an Event of Default,
any Applied Amount shall be applied to prepay on a pro rata
basis the Term Loans and the Revolving Loans and to
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment of the Revolving Loans.
(c) Application of Mandatory Prepayments of Term
Loans to Tranche A Term Loans and Tranche B Term Loans and the
Scheduled Installments of Principal Thereof. Any mandatory
prepayments of the Term Loans pursuant to subsection 2.4B(iii)
shall be applied to prepay the Tranche A Term Loans and the
Tranche B Term Loans on a pro rata basis (in accordance with
the respective outstanding principal amounts thereof) and
shall be applied to reduce the scheduled installments of
principal of the Tranche A Term Loans or the Tranche B Term
Loans, as the case may be, set forth in subsection 2.4A(i) or
2.4A(ii), respectively, on a pro rata basis.
(d) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Tranche A Term Loans,
Tranche B Term Loans and Revolving
52
<PAGE>
<PAGE>
Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the
full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which
minimizes the amount of any payments required to be made by
Company pursuant to subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Agent not later than 12:00 Noon (New York City time) on
the date due at the Funding and Payment Office for the account of
Lenders; funds received by Agent after that time on such due date shall
be deemed to have been paid by Company on the next succeeding Business
Day.
(ii) Application of Payments to Principal and Interest. Except
as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied
to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders' respective Pro Rata Shares.
Agent shall promptly distribute to each Lender, at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request, its Pro Rata Share of
all such payments received by Agent and the commitment fees of such
Lender when received by Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii),
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share
of any Eurodollar Rate Loans, Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided
53
<PAGE>
<PAGE>
that the failure to make (or any error in the making of) a notation
of any Loan made under such Note shall not limit or otherwise
affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER GUARANTIES.
(i) Application of Proceeds of Collateral. Except as provided
in subsection 2.4B(iii)(a) with respect to prepayments from Net Asset
Sale Proceeds, all proceeds received by Agent in respect of any sale
of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Agent, be held by Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Agent against, the applicable
Secured Obligations (as defined in such Collateral Document) in the
following order of priority:
(a) To the payment of all costs and expenses of such
sale, collection or other realization, including reasonable
compensation to Agent and its agents and counsel, and all
other expenses, liabilities and advances made or incurred by
Agent in connection therewith, and all amounts for which Agent
is entitled to indemnification under such Collateral Document
and all advances made by Agent thereunder for the account
of the applicable Loan Party, and to the payment of all
costs and expenses paid or incurred by Agent in connection
with the exercise of any right or remedy under such
Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such
proceeds, to the payment of all other such Secured Obligations
for the ratable benefit of the holders thereof;
and
(c) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All
payments received by Agent under either Guaranty shall be applied
promptly from time to time by Agent in the following
order of priority:
(a) To the payment of the costs and expenses of any
collection or other realization under such Guaranty, including
reasonable compensation to Agent and its agents and counsel,
and all expenses, liabilities and advances made or incurred by
Agent in connection therewith, all in accordance with the
terms of this Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such
payments, to the payment of all other Guarantied Obligations
(as defined in such Guaranty) for the ratable
benefit of the holders thereof; and
54
<PAGE>
<PAGE>
(c) thereafter, to the extent of any excess such
payments, to the payment to BCC or License Sub or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(iii) Ratable Sharing of Proceeds of Collateral, BCC Guaranty
and License Sub Guaranty. Any and all amounts received by Agent in
connection with the enforcement of any of the Collateral Documents, the
BCC Guaranty or the License Sub Guaranty or in connection with a
distribution in a bankruptcy, insolvency or similar proceeding to be
applied against any of the Obligations hereunder shall be shared
ratably by all Lenders hereunder in accordance with their Pro Rata
Shares (as determined pursuant to clause (iv) of the definition of "Pro
Rata Share"; provided however, that for purposes of such calculation,
the Revolving Loan Exposure of each Lender shall be determined in
accordance with clause (ii) of the definition thereof whether or not
the Revolving Loan Commitments have terminated), irrespective of
whether the Obligations of all Lenders or only the Obligations of
Lenders having outstanding Term Loans are secured by the Collateral
with respect to which such amounts are received or guarantied by the
BCC Guaranty or the License Sub Guaranty.
2.5 USE OF PROCEEDS.
A. TERM LOANS. On the Acquisition Date, the proceeds of the Existing
AXELs were applied by Company to pay the cash component of the purchase price in
connection with the Acquisitions. Pursuant to Section 2.1A, the Existing AXELs
have been converted to Tranche A Term Loans and Tranche B Term Loans, in each
case in the aggregate principal amount set forth in subsection 2.1A(i) and
subsection 2.1A(ii), respectively.
B. REVOLVING LOANS. The proceeds of Revolving Loans made (i) prior to
the Restatement Date were applied by Company for working capital purposes, (ii)
on the Restatement Date shall be applied to pay fees incurred in connection with
the transactions contemplated by this Agreement and (iii) after the Restatement
Date shall be applied by Company for working capital purposes.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
55
<PAGE>
<PAGE>
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Company and each
Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Agent shall have determined (which determination shall be final and conclusive
and binding upon all parties hereto), on any Interest Rate Determination Date
with respect to any Eurodollar Rate Loans, that by reason of circumstances
affecting the interbank Eurodollar market adequate and fair means do not exist
for ascertaining the interest rate applicable to such Loans on the basis
provided for in the definition of Adjusted Eurodollar Rate, Agent shall on such
date give notice (by telefacsimile or by telephone confirmed in writing) to
Company and each Lender of such determination, whereupon (i) no Loans may be
made as, or converted to, Eurodollar Rate Loans until such time as Agent
notifies Company and Lenders that the circumstances giving rise to such notice
no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to the Loans in respect of
which such determination was made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Agent of such determination
(which notice Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice
of Borrowing or Notice of Conversion/
56
<PAGE>
<PAGE>
Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Agent of such rescission on the date on
which the Affected Lender gives notice of its determination as described above
(which notice of rescission Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate
Loans in accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment or other principal payment or
any conversion of any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Company, or (iv) as a consequence of any other
default by Company in the repayment of its Eurodollar Rate Loans when required
Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an
Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection
57
<PAGE>
<PAGE>
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the interbank Eurodollar
market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
58
<PAGE>
<PAGE>
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on
the overall net income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf
of Company or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of
payment.
(ii) Grossing-up of Payments. If Company or any other Person
is required by law to make any deduction or withholding on account of
any such Tax from any sum paid or payable by Company to Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on Company) for its own
account or (if that liability is imposed on Agent or such
Lender, as the case may be) on behalf of and in the name of
Agent or such Lender;
(c) the sum payable by Company in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
Agent or such Lender, as the case may be, receives on the due
date a net sum equal to what it would have received had no
such deduction, withholding or payment been required or made;
and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect at the
date of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
59
<PAGE>
<PAGE>
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Agent for transmission to Company, on or prior to the
Restatement Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Agent (each in
the reasonable exercise of its discretion), (1) two original
copies of Internal Revenue Service Form 1001 or 4224 (or any
successor forms), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of principal, interest, fees or other amounts payable under
any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (1)
above, a Certificate re Non-Bank Status together with
two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of interest payable under any of the Loan
Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Agent for
transmission to Company two new original copies of Internal
Revenue Service Form 1001 or 4224, or a Certificate re
Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) notify Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have
60
<PAGE>
<PAGE>
failed to satisfy the requirements of clause (a) or (b)(1) of
this subsection 2.7B(iii); provided that if such Lender shall
have satisfied the requirements of subsection 2.7B(iii)(a) on
the Restatement Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by the National Association of Insurance Commissioners,
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of the National
Association of Insurance Commissioners, any such governmental authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of, or with reference to, such Lender's Loans or Commitments or
other obligations hereunder with respect to the Loans to a level below that
which such Lender or such controlling corporation could have achieved but for
such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within
five Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Company (with a copy to Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.8 OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans of such Lender
through another lending office of such Lender, or (ii) take such other measures
as such Lender may deem reasonable, if as a result thereof the
61
<PAGE>
<PAGE>
circumstances which would cause such Lender to be an Affected Lender would
cease to exist or the additional amounts which would otherwise be required
to be paid to such Lender pursuant to subsection 2.7 would be materially
reduced and if, as determined by such Lender in its sole discretion,
the making, issuing, funding or maintaining of such Commitments or Loans
through such other lending office or in accordance with such other measures,
as the case may be, would not otherwise materially adversely affect such
Commitments or Loans or the interests of such Lender; provided that such
Lender will not be obligated to utilize such other lending office pursuant
to this subsection 2.8 unless Company agrees to pay all incremental
expenses incurred by such Lender as a result of utilizing such other
lending office as described in clause (i) above. A certificate as to the amount
of any such expenses payable by Company pursuant to this subsection 2.8 (setting
forth in reasonable detail the basis for requesting such amount) submitted by
such Lender to Company (with a copy to Agent) shall be conclusive absent
manifest error.
SECTION 3.
CONDITIONS TO EFFECTIVENESS; CONDITIONS TO LOANS
3.1 CONDITIONS TO EXISTING AXELS AND INITIAL REVOLVING LOANS.
On June 6, 1996 the conditions set forth in subsection 3.1 of the
Existing Credit Agreement were satisfied and the Existing AXELs and the initial
Revolving Loans were made.
3.2 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT, THE CONVERSION OF
EXISTING AXELS TO TERM LOANS AND THE MAKING OF REVOLVING LOANS ON THE
RESTATEMENT DATE.
The effectiveness of this Agreement and the obligations of Lenders to
convert the Existing AXELs to Term Loans and to make any Revolving Loans to be
made on the Restatement Date are, in addition to the conditions precedent
specified in subsection 3.3, subject to prior or concurrent satisfaction of the
following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Restatement Date, BCC and
Company shall, and shall cause each other Loan Party to, deliver to Lenders (or
to Agent for Lenders with sufficient originally executed copies, where
appropriate, for each Lender and its counsel) the following with respect to BCC,
Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Restatement Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Person, together with a good standing certificate
from the Secretary of State of its jurisdiction of incorporation and
each other state in which such Person is qualified as a foreign
corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent date prior
to the Restatement Date;
62
<PAGE>
<PAGE>
(ii) Copies of the Bylaws of such Person, certified as of
the Restatement Date by such Person's corporate secretary or an
assistant secretary;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of
the Loan Documents certified as of the Restatement Date by the
corporate secretary or an assistant secretary of such Person as being
in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officer
of such Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which
such Person is a party; and
(vi) Such other documents as Agent may reasonably request.
B. MASTER ASSIGNMENT AGREEMENT. On or before the Restatement Date,
each of BCC, Company, Existing Administrative Agent, the Existing Lenders and
the Lenders shall have executed and delivered the Master Assignment Agreement
and, pursuant to the terms thereof, the assignment and assumption transactions
contemplated thereby shall have occurred immediately prior to the effectiveness
of this Agreement.
C. CONVERSION OF EXISTING LOANS TO BASE RATE LOANS; PAYMENT OF BREAKAGE
COSTS, INTEREST AND FEES TO EXISTING LENDERS. On or before the Restatement Date,
(i) anything contained in the Existing Credit Agreement to the contrary
notwithstanding, Company shall have converted all Eurodollar Rate Loans (as
defined in the Existing Credit Agreement) outstanding under the Existing Credit
Agreement on the Business Day preceding the Restatement Date into Base Rate
Loans and, pursuant to the Master Assignment Agreement, shall have agreed to pay
to Existing Lenders such amounts as are payable pursuant to subsection 2.6D of
the Existing Credit Agreement in connection with such conversion, (ii) Company
shall have paid to Existing Administrative Agent, for distribution (as
appropriate) to Existing Lenders, all accrued and unpaid interest with respect
to all Existing Loans outstanding on the Restatement Date, (iii) Company shall
have paid to Existing Administrative Agent, for distribution (as appropriate) to
Existing Lenders that have not executed and delivered a waiver with respect to
such prepayment fees ("NONWAIVING LENDERS"), an amount equal to the amount of
prepayment fees that would have been paid by Company pursuant to subsection
2.4B(i)(b) of the Existing Credit Agreement with respect to the Nonwaiving
Lenders' Existing AXELs outstanding on the Restatement Date if the aggregate
amount of Existing AXELs outstanding on the Restatement Date had been prepaid
pursuant to subsection 2.4B(i)(a) of the Existing Credit Agreement on the
Restatement Date, and (iv) Company shall have paid to Existing Administrative
Agent, for distribution (as appropriate) to Existing Lenders, Arranging Agent
(as defined in the Existing Credit Agreement), and Existing Administrative Agent
all commitment fees and any other fees which are accrued and unpaid as of the
Restatement Date under subsection 2.3 of the Existing Credit Agreement.
63
<PAGE>
<PAGE>
D. NO MATERIAL ADVERSE CHANGE. Since December 31, 1996, no adverse
change, or development giving rise to a prospective adverse change, in or
affecting the general affairs, management, financial position, shareholders'
equity or results of operations of Company and its Subsidiaries which is, in the
sole opinion of Agent, material shall have occurred.
E. FCC LICENSES; COMPLIANCE WITH COMMUNICATIONS ACT; OTHER NECESSARY
GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF WAITING PERIODS, ETC.
(i) FCC Licenses. Each material FCC License with respect
to any of the Stations
shall be in full force and effect.
(ii) Compliance with Communications Act. Agent shall be
satisfied that the Stations are in compliance with the Communications
Act in all material respects.
(iii) Other Necessary Governmental Authorizations and
Consents. Company shall have obtained all other Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated
by the Loan Documents and the Related Agreements, and the continued
operation of the business conducted by Company and its Subsidiaries in
substantially the same manner as conducted prior to the consummation of
the transactions contemplated by the Loan Documents, and each of the
foregoing (including the FCC Licenses) shall be in full force and
effect, in each case other than those the failure to obtain or maintain
which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
F. MORTGAGE ASSIGNMENTS; MORTGAGE AMENDMENTS; POLICY ENDORSEMENTS;
ETC. Agent shall have received:
(i) Mortgage Assignments. Fully executed and notarized
Mortgage Assignments, duly executed and delivered by CIBC in proper
form for recording in all appropriate places in all applicable
jurisdictions, with respect to each of the existing Mortgages
encumbering the Real Property Assets listed in Schedule 3.2F annexed
hereto (each an "ACQUISITION DATE MORTGAGED PROPERTY" and,
collectively, the "ACQUISITION DATE MORTGAGED PROPERTIES");
(ii) Mortgage Amendments. Mortgage Amendments, fully executed
and notarized by or on behalf of Company, with respect to each of the
existing Mortgages encumbering the Acquisition Date Mortgaged
Properties located in Colorado, Texas, Michigan and Tazewell County,
Illinois, in proper form for recording in all appropriate places in
such jurisdictions;
(iii) Title Insurance Endorsements. (a) Endorsements (the
"TITLE ENDORSEMENTS") to the existing ALTA mortgagee title insurance
policies issued in respect of the Mortgages encumbering the Acquisition
Date Mortgaged Properties (the "EXISTING TITLE POLICIES"), which
endorsements shall be issued by the Title Company and shall amend the
Existing Title Policies to (1) name the Agent and any successor agents
as the insured party, and
64
<PAGE>
<PAGE>
(2) identifying the insured instrument as the applicable Mortgage,
as assigned to the Agent pursuant to the applicable Mortgage
Assignment and amended pursuant to the applicable Mortgage
Amendment, if any, 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 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 Assignments and Mortgage
Amendments in the appropriate real estate records; and
(iv) Matters Relating to Flood Hazard Properties. (a)
Evidence, in the form of a Standard Hazard Determination as
promulgated by the Federal Emergency Management Agency, as to whether
(1) any Acquisition Date Mortgaged Property is a Flood Hazard Property
and (2) the community in which any such Flood Hazard Property is
located is participating in the National Flood Insurance Program,
(b) if there are any such Flood Hazard Properties, Company's written
acknowledgement of receipt of written notification from Agent (1) as
to the existence of each such Flood Hazard Property and (2) as to
whether the community in which each such Flood Hazard Property is
located is participating in the National Flood Insurance Program,
and (c) in the event any such Flood Hazard Property is located
in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent required
under the applicable regulations of the Board of Governors of
the Federal Reserve System.
G. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the extent
not otherwise satisfied pursuant to subsection 3.2F, Agent shall have received
evidence satisfactory to it that each Loan Party shall have taken or caused to
be taken all such actions, executed and delivered or caused to be executed and
delivered all such agreements, documents and instruments, and made or caused to
be made all such filings and recordings (other than the filing or recording of
items described in clauses (iii) 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) Schedules to Collateral Documents. Delivery to Agent
of accurate and complete schedules to all of the applicable Collateral
Documents;
(ii) Stock Certificates and Instruments. 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 BCC Pledge Agreement and the Existing Company Pledge Agreement and
(b) all
65
<PAGE>
<PAGE>
promissory notes or other instruments (duly endorsed, where
appropriate, in a manner satisfactory to Agent) evidencing any
Collateral;
(iii) UCC Financing Statements and Fixture Filings. Delivery
to Agent of UCC financing statements and, where appropriate, fixture
filings (including, without limitation, assignments and amendments with
respect to UCC financing statements and fixture filings filed in
connection with the consummation of the transactions contemplated by
the Existing Credit Agreement), 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 Collateral
Documents; and
(iv) Existing Company Pledge Agreement. Company shall have
taken such actions and delivered such documents or instruments as
requested by Agent to evidence that the Term Loans are secured on an
equal and ratable basis with the Existing Senior Notes pursuant to the
Existing Company Pledge Agreement.
H. FINANCIAL STATEMENTS. On or before the Restatement Date, Agent
shall have received (i) the audited financial statements for (x) BCC and its
Subsidiaries and (y) Company and its Subsidiaries, in each case for the period
ended December 31, 1996 and (ii) unaudited financial statements for (x) BCC and
its Subsidiaries and (y) Company and its Subsidiaries, in each case for each of
the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997.
I. SOLVENCY CERTIFICATE. On the Restatement Date, BCC and Company
shall each have delivered to Agent an Officer's Certificate of the chief
financial officer of each of BCC and Company, dated the Restatement Date and in
form and substance satisfactory to Agent and with appropriate attachments
demonstrating in reasonable detail that, after giving effect to the consummation
of the transactions contemplated by the Loan Documents, including the
contemplated borrowings of the full amounts which will be available under the
Commitments, each of Company and its Subsidiaries and BCC and its Subsidiaries
on a consolidated basis will be Solvent.
J. EVIDENCE OF INSURANCE. Agent shall have received a certificate from
Company's insurance broker or other evidence satisfactory to each that all
insurance required to be maintained pursuant to subsection 5.4 are in full force
and effect, that Agent on behalf of Lenders has been named as additional insured
and/or loss payee thereunder to the extent required under subsection 5.4.
K. OPINIONS OF COUNSEL TO LOAN PARTIES AND FCC COUNSEL. Agent and its
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of (a) Shack & Siegel, P.C., counsel for Loan Parties
and (b) Covington & Burling, FCC counsel for Loan Parties, in each case in form
and substance reasonably satisfactory to Agent and its counsel, dated as of the
Restatement Date and setting forth substantially the matters in the opinions
designated in Exhibit VIII and Exhibit IX, respectively, annexed hereto and as
to such other matters
66
<PAGE>
<PAGE>
as Agent acting on behalf of Lenders may reasonably request, and (ii)
evidence satisfactory to Agent that Company has requested such
counsel to deliver such opinions to Lenders.
L. OPINIONS OF AGENT'S COUNSEL. Lenders shall have received originally
executed copies of one or more favorable written opinions of O'Melveny & Myers
LLP, counsel to Agent, dated as of the Restatement Date, substantially in the
form of Exhibit X annexed hereto and as to such other matters as Agent may
reasonably request.
M. AUDITOR'S LETTER. Agent shall have received an executed Auditor's
Letter in form and substance reasonably satisfactory to Agent.
N. COMPLIANCE CERTIFICATE. BCC and Company shall each have delivered
to Agent a pro forma Compliance Certificate, in form and substance satisfactory
to Agent and with appropriate attachments, demonstrating in reasonable detail
pro forma compliance (determined (i) as of September 30, 1997 and (ii) after
giving pro forma effect to the transactions contemplated by this Agreement to
occur on the Restatement Date) with the covenants contained in this Agreement
and the other Loan Documents.
O. FEES. Company shall have paid to Agent the fees payable on the
Restatement Date referred to in subsection 2.3 and all other compensation, fees,
costs and expenses due and payable hereunder or in connection herewith to Agent
on or prior to the Restatement Date.
P. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. BCC and
Company shall each have delivered to Agent an Officers' Certificate, in form and
substance satisfactory to Agent, to the effect that the representations and
warranties in Section 4 hereof are true, correct and complete in all material
respects on and as of the Restatement Date to the same extent as though made on
and as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that each of BCC and Company shall have performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Restatement Date except as otherwise disclosed to and agreed to in writing by
Agent and Requisite Lenders.
Q. EMPLOYMENT AGREEMENTS. Agent shall have received (i) a duly
executed copy of each of the Employment Agreements, and each such Employment
Agreement shall be in full force and effect and no term or condition thereof
shall have been amended, modified or waived since the Acquisition Date and (ii)
an Officer's Certificate from each of BCC and Company in form and substance
satisfactory to Agent to the effect set forth in clause (i) above.
R. RELATED AGREEMENTS. (i) Agent shall have received an executed or
conformed copy of each of the Related Agreements, (ii) the Related Agreements
shall be in full force and effect and no term or condition thereof shall have
been amended, modified or waived since the Acquisition Date, (iii) no Loan Party
shall have failed in any material respect to perform any material obligation or
covenant required by the Related Agreements to be performed or complied with by
it on or before the Restatement Date and (iv) Agent shall have received an
Officers' Certificate from each
67
<PAGE>
<PAGE>
of BCC and Company in form and substance satisfactory to Agent to the effect set
forth in clauses (i), (ii) and (iii) above.
S. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by 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.
3.3 CONDITIONS TO CONVERSION OF EXISTING AXELS TO TERM LOANS; CONDITIONS
TO ALL LOANS.
The conversion of the Existing AXELs to Term Loans on the Restatement
Date and the obligations of Lenders to make Revolving Loans on each Funding Date
are subject to the following further conditions precedent:
A. Agent shall have received before that Funding Date, in accordance
with the provisions of subsection 2.1B, an originally executed Notice of
Borrowing, in each case signed by the chief executive officer, the chief
financial officer or the treasurer of Company or by any executive officer
of Company designated by any of the above-described officers on behalf of
Company in a writing delivered to Agent.
B. As of the Restatement Date or that Funding Date, as the case
may be:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as of the Restatement Date or that Funding
Date, as the case may be, to the same extent as though made on and as
of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
the Restatement Date or that Funding Date, as the case may be;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain (a) the
conversion of the Existing AXELs to Term Loans on the Restatement Date
or (b) any Lender from making the Revolving Loans to be made by it on
that Funding Date, as the case may be;
(v) (a) the conversion of the Existing AXELs to Term Loans on
the Restatement Date or (b) the making of the Revolving Loans requested
on such Funding Date, as the case
68
<PAGE>
<PAGE>
may be, shall not violate any law including Regulation G, Regulation
T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of BCC or any of its Subsidiaries that has
not been disclosed by Company in writing to the extent required
pursuant to subsection 4.6 or 5.1(xi) prior to the making of the last
preceding Loans (or, in the case of (i) the conversion of the Existing
AXELs to Term Loans on the Restatement Date and (ii) the Revolving
Loans made on the Restatement Date, to Agent prior to the execution of
this Agreement), and there shall have occurred no development not so
disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event, in
the opinion of Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect; and no injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated by this Agreement, the
conversion of the Existing AXELs to Term Loans hereunder or the making
of the Revolving Loans hereunder.
SECTION 4.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement, convert the
Existing AXELs to Term Loans and make the Revolving Loans, each of BCC and
Company represents and warrants to each Lender, on the date of this Agreement
and on each Funding Date, that the following statements are true, correct and
complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS,
SUBSIDIARIES AND FCC AND STATION MATTERS.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 4.1A annexed hereto. Each
such Loan Party has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and Related
Agreements to which it is a party and to carry out the transactions contemplated
thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where the nature of the
assets located therein or the conduct of its business and operations make such
qualification necessary, except in jurisdictions where the failure to be so
qualified or in good standing has not had and will not have a Material Adverse
Effect.
69
<PAGE>
<PAGE>
C. CONDUCT OF BUSINESS. Loan Parties are engaged only in the
businesses permitted to be engaged in pursuant to subsection 6.13 and the Loan
Documents.
D. SUBSIDIARIES. All of the Subsidiaries of BCC as of the Restatement
Date are identified in Schedule 4.1A annexed hereto. The capital stock of BCC
and each of the Subsidiaries of BCC identified in Schedule 4.1A annexed hereto
is duly authorized, validly issued, fully paid and nonassessable and none of
such capital stock constitutes Margin Stock. Each of the Subsidiaries of BCC
identified in Schedule 4.1A annexed hereto is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation set forth therein, has all requisite corporate
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction where the nature of the
assets located therein or the conduct of its business and operations make such
qualification necessary, in each case except where failure to be so qualified or
in good standing or a lack of such corporate power and authority has not had and
will not have singly or in the aggregate a Material Adverse Effect. Schedule
4.1A annexed hereto correctly sets forth, as of the Restatement Date, the
ownership interest of BCC and Company in each of the Subsidiaries of BCC
identified therein.
E. FCC AND STATION MATTERS.
(i) Each of BCC and its Subsidiaries has all requisite power
and authority and FCC Licenses to own and operate its properties and to
carry on its businesses as now conducted and as proposed to be
conducted. Schedule 4.1E annexed hereto, as it may be supplemented
pursuant to subsection 5.1(ix), correctly describes each of the
Stations and sets forth all of the FCC Licenses of Company and its
Subsidiaries and correctly sets forth the termination date, if any, of
each such FCC License. A true, correct and complete copy of each
material FCC License has been made available to Agent. Each material
FCC License was duly and validly issued by the FCC pursuant to
procedures which comply in all material respects with all requirements
of applicable law. As of the initial funding under the Existing Credit
Agreement and at all times thereafter, BCC and its Subsidiaries have
the right to use all FCC Licenses required in the ordinary course of
business for all Stations, and each such FCC License is in full force
and effect. Each of BCC and its Subsidiaries has taken all material
actions and performed all of its material obligations that are
necessary to maintain all material FCC Licenses without adverse
modification or impairment. Except as shown on Schedule 4.1E, no event
has occurred which (i) results in, or after notice or lapse of time or
both would result in, revocation, suspension, adverse modification,
non-renewal, impairment, restriction or termination of or any order of
forfeiture with respect to, any material FCC License or (ii) materially
and adversely affects or could reasonably be expected in the future to
materially adversely affect any of the rights of BCC or any of its
Subsidiaries thereunder. Except as set forth on Schedule 4.1E, each FCC
License is held by License Sub. Except as set forth in Schedule 4.1E,
none of the FCC Licenses requires that any present stockholder,
director, officer or employee of BCC or any of its Subsidiaries remain
a stockholder or employee of such Person, or that any transfer of
control of such Person must be approved by any public or governmental
body other than the FCC.
70
<PAGE>
<PAGE>
(ii) Except as shown on Schedule 4.1E, neither BCC nor any of
its Subsidiaries is a party to or has knowledge of any investigation,
notice of apparent liability, violation, forfeiture or other order or
complaint issued by or before any court or regulatory body, including
the FCC, or of any other proceedings (other than proceedings relating
to the radio or television industries generally) which could in any
manner materially threaten or adversely affect the validity or
continued effectiveness of the FCC Licenses of any such Person. None of
BCC nor any of its Subsidiaries has any reason to believe that any
material FCC Licenses listed and described in Schedule 4.1E will not be
renewed in the ordinary course. Each of BCC and its Subsidiaries, as
applicable, (a) has duly filed in a timely manner all material filings,
reports, applications, documents, instruments and information required
to be filed by it under the Communication Act or pursuant to FCC
Regulations or requests of any regulatory body having jurisdiction over
any of its FCC Licenses, (b) has submitted to the FCC on a timely basis
all required equal employment opportunity reports, and (c) is in
compliance in all material respects with the Communications Act,
including all FCC Regulations relating to the broadcast of television
signals, all FCC Regulations concerning the limits on the duration of
advertising in children's programming and the recordkeeping obligations
relating to such advertising, the Children's Television Act and all FCC
Regulations promulgated thereunder and all equal employment
opportunity-related FCC Regulations. BCC and its Subsidiaries
maintain appropriate public files at the Stations in a manner that
complies in all material respects with all FCC Regulations.
(iii) None of the Facilities (including the transmitter and
tower sites owned or used by Company or any of its Subsidiaries)
violates in any material respect the provisions of any applicable
building codes, fire regulations, building restrictions or other
governmental ordinances, orders, or regulations and each such Facility
is zoned so as to permit the commercial uses intended by the owner or
occupier thereof and there are no outstanding variances or special use
permits materially affecting any of the Facilities or the uses thereof.
(iv) BCC and its Subsidiaries and the properties owned and/or
operated by them, including the Stations, are in compliance in all
material respects with all rules, regulations and policies of the
Federal Aviation Administration applicable to any of them.
(v) The operation of the Stations does not cause or result in
exposure to workers or the general public to levels of radio frequency
radiation in excess of the "Radio Frequency Protection Guidelines"
recommended in "American National Standard Safety Levels with Respect
to Human Exposure to Radio Frequency Electromagnetic Fields 300 Khz to
100 gHz" (ANSI C95.1-1982), issued by the American National Standards
Institute.
(vi) The Ownership Reports filed by BCC, Company and its
Subsidiaries with the FCC are true, correct and complete in all
material respects and there have been no changes in the ownership of
BCC, Company or any Subsidiary of Company since the filing of such
Ownership Reports other than as described in information filed with the
FCC and made available for examination by Agent pursuant to subsection
5.1(viii).
71
<PAGE>
<PAGE>
(vii) Each Station (except for KO2NQ-TV, Columbia, Missouri
and K11TB-TV, Jefferson City, Missouri, each of which is a low power
Station) has received a DTV channel allotment pursuant to the Sixth
Report and Order (MM Docket No. 87-268, FCC 97-115) released by the FCC
on April 21, 1997 (as such Report and Order may be revised or
supplemented from time to time by the FCC) that will permit each
Station to broadcast a high quality DTV signal, without significant
interference from or to other spectrum users. The number of television
households currently served by each Station to which such Station may
be unable to broadcast such DTV signal in accordance with such Report
and Order would not have a Material Adverse Effect.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents and the Related Agreements have been duly authorized by
all necessary corporate action on the part of each Loan Party that is a party
thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to any
Loan Party or any of their respective Subsidiaries, the Certificate or Articles
of Incorporation or Bylaws of BCC or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on any
Loan Party or any of their respective Subsidiaries, (ii) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of BCC or any of its Subsidiaries,
(iii) result in or require the creation or imposition of any Lien upon any
of the properties or assets of any Loan Party or any of their respective
Subsidiaries (other than any Liens created under any of the Loan Documents
in favor of Agent on behalf of Lenders and Liens permitted under
subsection 6.2A(iii)), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of
any Loan Party or any of their respective Subsidiaries, except for such
approvals or consents which will be obtained on or before the Acquisition
Date and disclosed in writing to Lenders.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body, other than filings required in connection with the perfection of security
interests granted pursuant to the Collateral Documents and filings required to
be made with the Securities and Exchange Commission in connection with the
Exchangeable Preferred Stock and Senior Subordinated Notes.
D. BINDING OBLIGATION. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium
72
<PAGE>
<PAGE>
or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. VALID ISSUANCE OF SELLER PREFERRED STOCK, EXCHANGEABLE PREFERRED
STOCK, WARRANTS AND SENIOR SUBORDINATED NOTES.
(i) Seller Preferred Stock, Exchangeable Preferred Stock and
Warrants. The Seller Preferred Stock, Exchangeable Preferred Stock and
Warrants sold on or before the Acquisition Date are duly and validly
issued, fully paid and nonassessable. No stockholder of BCC has or will
have any preemptive rights to subscribe for any additional equity
Securities of BCC, except that holders of the Warrants shall have the
right to exchange the Warrants for Class A Common Stock of BCC in
accordance with the terms thereof. The issuance and sale of such Seller
Preferred Stock, Exchangeable Preferred Stock and Warrants, have either
(a) been registered or qualified under applicable federal and state
securities laws or (b) are exempt therefrom.
(ii) Senior Subordinated Notes . BCC has the corporate power
and authority to issue the Senior Subordinated Notes. The Senior
Subordinated Notes are the legally valid and binding obligations of
BCC, enforceable against BCC in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability.
The subordination provisions of the Senior Subordinated Notes
are and will be enforceable against the holders thereof and the
Loans and all other monetary Obligations hereunder are and will
be within the definition of "Senior Debt" included in such
provisions. The Senior Subordinated Notes have either (a) been
registered or qualified under applicable federal and state securities
laws or (b) are exempt therefrom.
4.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of each of (x) BCC and its Subsidiaries and (y) Company and its
Subsidiaries, in each case as at December 31, 1996, and the related consolidated
statements of income, stockholders' equity and cash flows of each of (x) BCC and
its Subsidiaries and (y) Company and its Subsidiaries, in each case for the
Fiscal Year then ended, (ii) the unaudited consolidated balance sheet of each of
(x) BCC and its Subsidiaries and (y) Company and its Subsidiaries, in each case
as at March 31, 1997 and the related unaudited consolidated statements of
income, stockholders' equity and cash flows of each of (x) BCC and its
Subsidiaries and (y) Company and its Subsidiaries, in each case for the quarter
then ended, (iii) the unaudited consolidated balance sheet of each of (x) BCC
and its Subsidiaries and (y) Company and its Subsidiaries, in each case as at
June 30, 1997 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of each of (x) BCC and its Subsidiaries and
(y) Company and its Subsidiaries, in each case for the quarter then ended and
(iv) the unaudited consolidated balance sheet of each of (x) BCC and its
Subsidiaries and (y) Company and its Subsidiaries, in each case as at September
30, 1997 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of each of (x) BCC and its Subsidiaries and
(y) Company and its Subsidiaries, in each case for the quarter then ended. All
such statements
73
<PAGE>
<PAGE>
were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. Company does not (and will not
following the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment (other than such obligations under Program Contracts
which have not yet been reflected as accrued in accordance with GAAP) that is
not reflected in the foregoing financial statements or the notes thereto or on
Schedule 4.3 annexed hereto and which in any such case is material in relation
to the business, operations, properties, assets, condition (financial or
otherwise) or prospects of BCC or any of its Subsidiaries.
4.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1996, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither BCC nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by subsection
6.5.
4.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Loan Parties have (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other personal property),
all of their respective properties and assets reflected in the financial
statements referred to in subsection 4.3 or in the most recent financial
statements delivered pursuant to subsection 5.1, in each case except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under subsection 6.7. Except as permitted
by this Agreement, all such properties and assets are free and clear of Liens.
B. REAL PROPERTY. As of the Restatement Date, Schedule 4.5 annexed
hereto contains a true, accurate and complete list of (i) all fee properties and
(ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Property Asset of any Loan Party where the annual rental
payments thereunder are greater than $100,000, regardless of whether such Loan
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. Except as specified in
Schedule 4.5 annexed hereto, each agreement listed in clause (ii) of the
immediately preceding sentence is in full force and effect and neither BCC nor
Company has knowledge of any default that has occurred and is continuing
thereunder, and each such agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles and except in each case
where the default or the failure to be in full force and effect or enforceable
would not, individually or in the aggregate,
74
<PAGE>
<PAGE>
have a Material Adverse Effect. Company's good faith estimate of the fair
market value of each Acquisition Date Mortgaged Property is set forth
on Schedule 3.2F annexed hereto.
4.6 LITIGATION; ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of BCC or Company or any
Loan Party or any of its Subsidiaries) at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign (including any
Environmental Claims) that are pending or, to the knowledge of BCC or Company,
threatened against or affecting any Loan Party or any of its Subsidiaries or any
property of any Loan Party or any of its Subsidiaries and that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. No Loan Party or any of its Subsidiaries (i) is in violation of any
applicable laws (including Environmental Laws) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
or (ii) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, all tax returns and
reports of BCC and its Subsidiaries required to be filed by any of them have
been timely filed, and all taxes shown on such tax returns to be due and payable
and all assessments, fees and other governmental charges upon BCC and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid when due and payable.
Neither BCC nor Company knows of any proposed tax assessment against BCC or any
of its Subsidiaries which is not being actively contested by BCC, Company or
such Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. No Loan Party nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. All Material Contracts are in full force and effect and no material
defaults currently exist thereunder.
75
<PAGE>
<PAGE>
4.9 GOVERNMENTAL REGULATION.
No Loan Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
4.10 SECURITIES ACTIVITIES.
A. No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
6.2 or 6.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 7.2, will be Margin
Stock.
4.11 EMPLOYEE BENEFIT PLANS.
A. Each Loan Party and each of their respective ERISA Affiliates are in
material compliance with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all of their material obligations
under each Employee Benefit Plan. Each Employee Benefit Plan which is intended
to qualify under Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur
which would have a Material Adverse Effect.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth in Schedule 4.11 annexed hereto, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of any Loan Party or
any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $1,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Loan Parties
and their respective ERISA Affiliates for a complete withdrawal from such
Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
76
<PAGE>
<PAGE>
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $1,000,000.
4.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, and each of
BCC and Company, jointly and severally, hereby indemnifies Lenders against, and
agrees that it will hold Lenders harmless from, any claim, demand or liability
for any such broker's or finder's fees alleged to have been incurred in
connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.
4.13 ENVIRONMENTAL PROTECTION.
(i) Except as set forth on Schedule 4.13 annexed hereto, no
Loan Party nor any of its Subsidiaries nor any of their respective
Facilities or operations are subject to any outstanding written order,
consent decree or settlement agreement with any Person relating to (a)
any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity;
(ii) No Loan Party nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. 'SS' 9604) or any comparable state law;
(iii) There are no and, to BCC's and Company's knowledge,
have been no conditions, occurrences, or Hazardous Materials
Activities which could reasonably be expected to form the basis of an
Environmental Claim against any Loan Party or any of its Subsidiaries
that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect;
(iv) No Loan Party nor any of its Subsidiaries, nor, to BCC's
and Company's knowledge, any predecessor of any Loan Party has filed
any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and no Loan Party's
nor any of its Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous waste
(other than Hazardous Materials used in the ordinary course of
business, the use of which is immaterial and not reasonably likely to
materially adversely affect the Facilities or have a Material Adverse
Effect), as defined under 40 C.F.R. Parts 260-270 or any state
equivalent; and
(v) Compliance with all current or reasonably foreseeable
future requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 4.13 to the contrary, no
event or condition has occurred or is occurring with respect to any Loan Party
relating to any Environmental Law, any
77
<PAGE>
<PAGE>
Release of Hazardous Materials, or any Hazardous Materials Activity which
individually or in the aggregate has had or could reasonably be expected
to have a Material Adverse Effect.
4.14 EMPLOYEE MATTERS.
Except as set forth on Schedule 4.14 annexed hereto, no Loan Party nor
its Subsidiaries is party to any collective bargaining agreement and, to the
knowledge of BCC and Company, no union representative question exists with
respect to the employees of any Loan Party or its Subsidiaries. There is no
strike, work stoppage, slowdown, lockout or other labor dispute pending, or to
the knowledge of BCC and Company, threatened, involving any Loan Party or any of
its Subsidiaries that singly or in the aggregate could reasonably be expected to
have a Material Adverse Effect.
4.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
4.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 3.2F,
3.2G and 5.8 and (ii) the delivery to Agent of any Pledged Collateral not
delivered to Agent at the time of execution and delivery of the applicable
Collateral Document (all of which Pledged Collateral on the Restatement
Date will have been so delivered) are effective to create in favor of
Agent for the benefit of Lenders, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect
of any Collateral), a valid and perfected First Priority Lien on all of the
Collateral, and all filings and other actions necessary or desirable to perfect
and maintain the perfection and First Priority status of such Liens have been
duly made or taken and remain in full force and effect, other than the filing of
any UCC financing statements delivered to Agent for filing (but not yet filed)
and the periodic filing of UCC continuation statements in respect of UCC
financing statements filed by or on behalf of Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Agent pursuant to any of the
Collateral Documents or (ii) the exercise by Agent of any rights or remedies in
respect of any Collateral (whether specifically granted or created pursuant to
any of the Collateral Documents or created or provided for by applicable law),
except for filings or recordings contemplated by subsection 4.16A and except as
may be required, in connection with the disposition of any Pledged Collateral,
by laws generally affecting the offering and sale of securities or by the FCC.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed
in favor of Agent as contemplated by subsection 4.16A and in respect of Liens
permitted under subsection 6.2A(iii) hereof, no effective UCC financing
statement, fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording office.
78
<PAGE>
<PAGE>
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to Agent
by or on behalf of any Loan Party with respect to any of the Collateral (in each
case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects.
4.17 APPLICABLE LAW.
Each Loan Party and its Subsidiaries is in compliance with the
requirements of all applicable laws, rules, regulations, orders, applications,
reporting and licensing requirements of all governmental authorities (including
all Communications Regulatory Authorities) except for violations thereof which
could not reasonably be expected to have a Material Adverse Effect; and no Loan
Party nor any of its Subsidiaries is the subject of any outstanding citation
order or investigation by any Communications Regulatory Authority which could
reasonably be expected to have a Material Adverse Effect, and no such citation,
order or investigation (excluding any rule making proceeding of general
applicability) which could reasonably be expected to have a Material Adverse
Effect, to the knowledge of BCC and Company, is contemplated by any
Communications Regulatory Authority.
4.18 DISCLOSURE.
No representation or warranty of BCC or Company contained in the
Confidential Information Memorandum or in any Loan Document or Related Agreement
or in any other document, certificate or written statement furnished to Lenders
by or on behalf of BCC or Company for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to BCC or Company, in the case of any
document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Company to be reasonable and attainable at
the time made, it being recognized by Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. There are no facts known (or which should upon the reasonable exercise
of diligence be known) to BCC or Company (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been disclosed
herein or in such other documents, certificates and statements furnished to
Lenders for use in connection with the transactions contemplated hereby.
SECTION 5.
AFFIRMATIVE COVENANTS
Each of BCC and Company covenants and agrees that, so long as any of
the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations
79
<PAGE>
<PAGE>
(other than inchoate indemnification obligations with respect to claims, losses
or liabilities which have not yet arisen), unless Requisite Lenders shall
otherwise give prior written consent, each of BCC and Company shall perform,
and shall cause each of its Subsidiaries to perform, all covenants in this
Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
BCC will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Agent (with sufficient copies for each
Lender) for delivery to Lenders;
(i) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month (other than the last month
of each Fiscal Quarter) ending after the Restatement Date, the
consolidated profit and loss statements of BCC and its Subsidiaries and
of the Stations on a Station-by-Station basis for such month and for
the period from the beginning of the then current Fiscal Year to the
end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the Financial Plan for
the current Fiscal Year, to the extent prepared on a monthly basis, all
in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the profits
and losses for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each Fiscal Quarter, the
consolidated balance sheet of BCC and its Subsidiaries as at the end of
such Fiscal Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of BCC and its Subsidiaries and of
the Stations on a Station-by-Station basis for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year to
the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from
the Financial Plan for the current Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present, in all material respects, the financial condition
of BCC and its Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of BCC and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of BCC and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year
covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial
80
<PAGE>
<PAGE>
condition of BCC and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, (b) a narrative report describing the operations of BCC and
its Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Year, and (c) in the case of
such consolidated financial statements, a report thereon of McGladrey
& Pullen, LLP or other independent certified public accountants
of recognized national standing selected by Company and satisfactory
to Agent, which report shall be unqualified, shall express no doubts
about the ability of BCC and its Subsidiaries to continue as a going
concern, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated
financial position of BCC and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows
for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants
in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: (a) together with
each delivery of financial statements of BCC and its Subsidiaries
pursuant to subdivisions (i), (ii) and (iii) above, an Officers'
Certificate of Company stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of BCC and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at
the date of such Officers' Certificate, of any condition or event
that constitutes an Event of Default or Potential Event of Default,
or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Company has
taken, is taking and proposes to take with respect thereto; and
(b) together with each delivery of financial statements of BCC
and its Subsidiaries pursuant to subdivisions (ii) and (iii) above,
a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
with the restrictions contained in Section 6;
(v) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 4.3, the consolidated financial statements of BCC and its
Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or
(xiv) of this subsection 5.1 will differ in any material respect from
the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiv) of this subsection 5.1 following such change,
consolidated financial statements of BCC and its Subsidiaries for (y)
the current Fiscal Year to the effective date of such change and (z)
the two full Fiscal Years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiv) of this subsection 5.1 following
such change, a written statement of the chief accounting officer or
chief financial officer of Company setting forth the differences
(including any differences that would affect
81
<PAGE>
<PAGE>
any calculations relating to the financial covenants set forth in
subsection 6.6) which would have resulted if such financial
statements had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each delivery
of consolidated financial statements of BCC and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit examination has included a review of the terms
of this Agreement and the other Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of
Default or Potential Event of Default has come to their attention and,
if such a condition or event has come to their attention, specifying
the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain
knowledge of any such Event of Default or Potential Event of Default
that would not be disclosed in the course of their audit examination,
and (c) stating that based on their audit examination nothing has come
to their attention that causes them to believe either or both that the
information contained in the certificates delivered therewith pursuant
to subdivision (iv) above is not correct or that the matters set forth
in the Compliance Certificates delivered therewith pursuant to clause
(b) of subdivision (iv) above for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement;
(vii) Accountants' Reports: (a) promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports (other than any reports that are not material with respect to
either (x) BCC or any of its Subsidiaries or (y) any of the financial
statements of any of BCC or any of its Subsidiaries) submitted to
Company by independent certified public accountants in connection with
each annual, interim or special audit of the financial statements of
BCC and its Subsidiaries made by such accountants, including any
comment letter submitted by such accountants to management in
connection with their annual audit and (b) together with the first
delivery of consolidated financial statements of BCC and its
Subsidiaries pursuant to subdivision (iii) above following any change
in the independent certified public accountants of BCC and its
Subsidiaries, a letter acknowledged and agreed to by Company and such
new accountants addressed to Agent and Lenders, in substance similar to
the Auditor's Letter and otherwise in form and substance reasonably
satisfactory to Agent;
(viii) SEC Filings, FCC Filings and Press Releases: promptly
upon their becoming available, copies of (a) all financial statements,
reports, notices and proxy statements sent or made available generally
by BCC to its security holders or by any Subsidiary of BCC to its
security holders other than BCC or another Subsidiary of BCC, (b) all
regular and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any, filed by
BCC or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private
regulatory authority, (c) all press releases and other statements made
available generally by BCC or any of its Subsidiaries to the public
concerning material developments in the business of BCC or any of its
Subsidiaries, (d) any material non-routine correspondence or official
notices received by BCC or any of the other Loan Parties from any
Communications
82
<PAGE>
<PAGE>
Regulatory Authority, and (e) all material information filed by
any Loan Party with the FCC (including all Ownership Reports
and amendments or supplements to any Ownership Report);
(ix) FCC Licenses, etc.: promptly upon (a) receipt of notice
of (1) any forfeiture, non-renewal, cancellation, termination,
revocation, suspension, impairment or material modification of any
material FCC License held by BCC or any of its Subsidiaries, or any
notice of default or forfeiture with respect to any such FCC License,
or (2) any refusal by any governmental agency or authority (including
the FCC) to renew or extend any such FCC License, an Officers'
Certificate specifying the nature of such event, the period of
existence thereof, and what action BCC and its Subsidiaries are taking
and propose to take with respect thereto, and (b) any acquisition of
any Station, a written notice setting forth with respect to such
Station all of the data required to be set forth in Schedule 4.1E under
subsection 4.1E with respect to such Stations and the FCC Licenses
required in connection with the ownership and operation of such Station
(it being understood that such written notice shall be deemed to
supplement Schedule 4.1E annexed hereto for all purposes of this
Agreement);
(x) Events of Default, etc.: promptly upon any officer of BCC
or Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Agent) or taken any other action with respect to a claimed Event of
Default or Potential Event of Default, (b) that any Person has given
any notice to BCC or any of its Subsidiaries or taken any other action
with respect to a claimed default or event or condition of the type
referred to in subsection 7.2, (c) of any condition or event that would
be required to be disclosed in a current report filed by BCC with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6
of such Form as in effect on the date hereof) if BCC were required to
file such reports under the Exchange Act, (d) of any condition
or event that constitutes a breach or default by BCC or any of
its Subsidiaries with respect to any provision of the Existing
Senior Note Indenture, the Existing Senior Notes, the Senior
Subordinated Note Indenture, the Senior Subordinated Notes,
the Seller Preferred Certificate of Designation, the
Exchangeable Preferred Certificate of Designation, the Warrant
Agreement or the Warrants, or (e) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition, event
or change, or specifying the notice given or action taken by any such
Person and the nature of such claimed Event of Default, Potential Event
of Default, default, event or condition, and what action BCC has taken,
is taking and proposes to take with respect thereto;
(xi) Litigation or Other Proceedings: promptly upon any
officer of BCC obtaining knowledge of (a) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting BCC or any of its Subsidiaries or any
property of BCC or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by BCC to Lenders or
(b) any material development in any Proceeding that, in any case:
83
<PAGE>
<PAGE>
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to BCC or Company to enable Lenders and their
counsel to evaluate such matters;
(xii) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any material ERISA Event, a
written notice specifying the nature thereof, what action BCC, any of
its Subsidiaries or any of their respective ERISA Affiliates has taken,
is taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xiii) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by BCC, any of
its Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Agent shall reasonably request;
(xiv) Financial Plans: as soon as practicable and in any event
no later than 30 days after the beginning of each Fiscal Year, a
consolidated financial budget for such Fiscal Year and each Fiscal Year
thereafter through December 31, 2004 (the "FINANCIAL PLAN" for such
Fiscal Year), including (a) budgeted consolidated statements of income,
budgeted capital expenditures and Program Payments of BCC and its
Subsidiaries for such Fiscal Year, for each month of such Fiscal Year
and for each Fiscal Year after such Fiscal Year through December 31,
2004, in each case on a Station-by-Station basis, together with an
explanation of the assumptions on which such budget is based, and (b)
the amount of budgeted unallocated overhead for such Fiscal Year;
(xv) Insurance: as soon as practicable and in any event by the
last day of each Fiscal Year, a report in form and substance
satisfactory to Agent outlining all material insurance coverage
maintained as of the date of such report by BCC and its Subsidiaries
and all material insurance coverage planned to be maintained by BCC and
its Subsidiaries in the immediately succeeding Fiscal Year;
(xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of BCC or
Company;
(xvii) Material Contract: promptly, and in any event within
ten Business Days after any Material Contract (other than any Program
Contract) of BCC or any of its Subsidiaries
84
<PAGE>
<PAGE>
is terminated or amended in a manner that is materially adverse to BCC
or such Subsidiary, as the case may be, or any new Material Contract
(other than any Program Contract) is entered into, a written statement
describing such event with copies of such material amendments or new
contracts, and an explanation of any actions being taken with respect
thereto;
(xviii) UCC Search Report: as promptly as practicable after
the date of delivery to Agent of any UCC financing statement executed
by any Loan Party pursuant to subsection 3.2G(iii) or 5.8A, copies of
completed UCC searches evidencing the proper filing, recording and
indexing of all such UCC financing statement and listing all other
effective financing statements that name such Loan Party as debtor,
together with copies of all such other financing statements not
previously delivered to Agent by or on behalf of Company or such Loan
Party; and
(xix) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
5.2 CORPORATE EXISTENCE; BOARD OF DIRECTORS; ETC.
Except as permitted under subsection 6.7, BCC will, and will cause each
of its Subsidiaries to, at all times preserve and keep in full force and effect
its corporate existence and each of BCC and Company will maintain such number of
directors and elect any new members to its board of directors in such a manner
so as to insure that no "Change of Control" (as such term is defined in the
Existing Senior Note Indenture or the Senior Subordinated Note Indenture) occurs
and that no such "Change of Control" would occur in the event that the holders
of the Seller Preferred Stock and/or the Exchangeable Preferred Stock were to
become entitled to elect, and were to elect, additional directors as a result
of an event giving rise to such entitlement pursuant to any document relating
to the Senior Preferred Stock and the Exchangeable Preferred Stock.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. BCC will, and will cause each of its Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (i) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and (ii) in the case of a charge or claim which has or may become
a Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.
B. BCC will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than BCC or any of its Subsidiaries).
85
<PAGE>
<PAGE>
5.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. BCC will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of BCC and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.
B. INSURANCE. BCC or Company will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of BCC and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, BCC will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Agent in its commercially reasonable judgment. Each such policy
of insurance shall, (a) if applicable, name Agent for the benefit of Lenders
as an additional insured thereunder as its interests may appear and (b) in
the case of each business interruption and casualty insurance policy,
contain a lender's loss payable clause or endorsement, satisfactory in
form and substance to Agent, that names Agent for the benefit of Lenders as the
loss payee thereunder for any covered loss in excess of $250,000 and provides
for at least 30 days prior written notice to Agent of any modification or
cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Business Interruption Insurance. Upon receipt by BCC or
any of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/Condemnation Proceeds, (a) so long
as no Event of Default or Potential Event of Default shall have
occurred and be continuing, Company or such Subsidiary may retain and
apply such Net Insurance/Condemnation Proceeds for working capital
purposes, and (b) if an Event of Default or Potential Event of Default
shall have occurred and be continuing, Company shall apply an amount
equal to such Net Insurance/Condemnation Proceeds to prepay the Loans
(and/or the Revolving Loan Commitments shall be reduced) as provided
in subsection 2.4B(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
BCC or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds in excess of $250,000 other than from business interruption
insurance, (a) so long as no Event of Default or Potential
86
<PAGE>
<PAGE>
Event of Default shall have occurred and be continuing, Company shall,
or shall cause one or more of its Subsidiaries to, promptly and
diligently apply such Net Insurance/Condemnation Proceeds to pay or
reimburse the costs of repairing, restoring or replacing the assets in
respect of which such Net Insurance/Condemnation Proceeds were received
or, to the extent not so applied, to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b), and (b) if an Event of Default or
Potential Event of Default shall have occurred and be continuing,
Company shall apply an amount equal to such Net Insurance/Condemnation
Proceeds to prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) as provided in subsection 2.4B(iii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by Agent.
Upon receipt by Agent of any Net Insurance/Condemnation Proceeds as
loss payee, (a) if and to the extent Company would have been required
to apply such Net Insurance/Condemnation Proceeds (if it had received
them directly) to prepay the Loans and/or reduce the Revolving Loan
Commitments, Agent shall, and Company hereby authorizes Agent to, apply
such Net Insurance/Condemnation Proceeds to prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b), and (b) to the extent the foregoing clause (a)
does not apply and Company delivers written notice to Agent that it has
elected to use such Net Insurance/Condemnation Proceeds to repair,
restore or replace the assets in respect of which they were received,
Agent shall deliver such Net Insurance/Condemnation Proceeds to
Company, and Company shall, or shall cause one or more of its
Subsidiaries to, promptly apply such Net Insurance/Condemnation
Proceeds to the costs of repairing, restoring, or replacing the
assets in respect of which such Net Insurance/Condemnation
Proceeds were received.
5.5 INSPECTION RIGHTS; AUDITS OF ACCOUNTS RECEIVABLE; LENDER MEETING.
A. INSPECTION RIGHTS. BCC shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of BCC or of any of its Subsidiaries,
to inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that BCC or
Company may, if it so chooses, be present at or participate in any such
discussion), all upon reasonable notice and at such reasonable times during
normal business hours and as often as may reasonably be requested.
B. AUDITS OF ACCOUNTS RECEIVABLE. At any time that Revolving Loans are
outstanding, BCC shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by Agent, upon the request of Agent, to
conduct one audit of all Accounts Receivable of Loan Parties during each
twelve-month period after the Restatement Date, each such audit to be in scope
and substance satisfactory to Agent, all upon reasonable notice and at such
reasonable times during normal business hours as may reasonably be requested.
C. LENDER MEETING. BCC and Company will, upon the request of Agent or
Requisite Lenders, participate in a meeting of Agent and Lenders once during
each Fiscal Year to be held at Company's corporate offices (or at such other
location as may be agreed to by Company and Agent) at such time as may be agreed
to by Company and Agent.
87
<PAGE>
<PAGE>
5.6 COMPLIANCE WITH LAWS, ETC.; MAINTENANCE OF FCC LICENSES; ETC.
BCC shall comply, and shall cause each of its Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations and orders
(including all Environmental Laws) of any governmental authority (including any
Communications Regulatory Authority), including the Communications Act,
noncompliance with which could reasonably be expected to cause, individually or
in the aggregate a Material Adverse Effect. BCC shall obtain and maintain in
full force and effect, and cause each of its Subsidiaries to obtain and maintain
in full force and effect, all licenses (including the FCC Licenses), permits,
franchises, certifications or other Governmental Authorizations and approvals
necessary to own, acquire or dispose of their respective properties, to conduct
their respective businesses or to comply with the FCC's or any other
Communications Regulatory Authority's construction, operating and reporting
requirements, the violation of which or the failure to obtain or maintain which
could reasonably be expected to have a Material Adverse Effect.
5.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S ACTIONS
REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS AND
VIOLATIONS OF ENVIRONMENTAL LAWS.
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Company agrees that Agent
may, from time to time and in its reasonable discretion, (i) retain, at
Company's expense, an independent professional consultant to review any
environmental audits, investigations, analyses and reports relating to Hazardous
Materials prepared by or for Company and (ii) in the event (a) Agent reasonably
believes that Company has breached any representation or warranty in subsection
4.13 or that there has been a material violation of Environmental Laws at any
Facility or by Company or any of its Subsidiaries at any other location
or (b) an Event of Default has occurred and is continuing, conduct its
own investigation of any Facility; provided that, in the case of any
Facility no longer owned, leased, operated or used by Company or any of its
Subsidiaries, Company shall only be obligated to use commercially reasonable
efforts to obtain permission for Agent's professional consultant to conduct an
investigation of such Facility. For purposes of conducting such a review and/or
investigation, Company hereby grants to Agent and its agents, employees,
consultants and contractors the right, upon reasonable notice to Company, to
enter into or onto any Facilities currently owned, leased, operated or used by
Company or any of its Subsidiaries and to perform such tests on such property
(including taking samples of soil, groundwater and suspected asbestos-containing
materials) as are reasonably necessary in connection therewith. Any such
investigation of any Facility shall be conducted, unless otherwise agreed to by
Company and Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. Company and Agent hereby acknowledge and agree that any report of
any investigation conducted at the request of Agent pursuant to this subsection
5.7A will be obtained and shall be used by Agent and Lenders for the purposes of
Lenders' internal credit decisions, to monitor and police the Loans and to
protect Lenders' security interests, if any, created by the Loan Documents.
Agent agrees to deliver a copy of any such report to Company with the
understanding that Company acknowledges and agrees that (1) it will indemnify
and hold harmless Agent and each Lender from any costs, losses or liabilities
relating to Company's use of or reliance on such report, (2) neither Agent nor
any Lender makes any representation or warranty with respect to such report,
88
<PAGE>
<PAGE>
and (3) by delivering such report to Company, neither Agent nor any Lender is
requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
B. ENVIRONMENTAL DISCLOSURE. Company will deliver to Agent and
Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or
with respect to any Environmental Claims which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, (b) any remedial action taken by Company
or any other Person in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (2) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect, and (c)
Company's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be subject to any material restrictions
on the ownership, occupancy, transferability or use thereof under any
Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect, (b) any Release required
to be reported to any federal, state or local governmental or
regulatory agency, and (c) any request for information from any
governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for
any Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (1) expose
Company or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (2) affect the ability of
Company or any of its Subsidiaries to maintain in full force and effect
all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (b) any proposed
action to be taken by Company or any of its Subsidiaries to commence
manufacturing or other industrial operations or to modify current
operations in a manner that could reasonably be expected to subject
Company or any
89
<PAGE>
<PAGE>
of its Subsidiaries to any material additional obligations or
requirements under any Environmental Laws.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Agent in relation to any matters disclosed pursuant to
this subsection 5.7.
C. COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Company shall promptly undertake, and shall cause each of
its Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal, remediation or
other response actions necessary to remove, remediate, clean up or
abate any Hazardous Materials Activity on, under or about any Facility
that is in violation of any Environmental Laws or that presents a
material risk of giving rise to an Environmental Claim. In the event
Company or any of its Subsidiaries undertakes any such action with
respect to any Hazardous Materials, Company or such Subsidiary shall
conduct and complete such action in compliance with all applicable
Environmental Laws and in accordance with the policies, orders and
directives of all federal, state and local governmental authorities
except when, and only to the extent that, Company's or such
Subsidiary's liability with respect to such Hazardous Materials
Activity is being contested in good faith by Company or such
Subsidiary.
(ii) Actions with Respect to Environmental Claims and
Violations of Environmen- tal Laws. Company shall promptly take, and
shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any material violation of applicable
Environmental Laws by Company or its Subsidiaries and (ii) make an
appropriate response to any Environmental Claim against Company or any
of its Subsidiaries and discharge any obligations it may have to any
Person thereunder where failure to do so could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
5.8 MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
A. ADDITIONAL MORTGAGES, ETC. From and after the Acquisition Date, in
the event that Company acquires any Material Fee Property (other than a Material
Fee Property acquired with purchase money Indebtedness permitted under
subsection 6.1(viii)) or any Material Leasehold Property, excluding any such
Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor, where Company is unable to obtain such lessor's consent (any
such non- excluded Real Property Asset being an "ADDITIONAL MORTGAGED
PROPERTY"), Company shall deliver to Agent, as soon as practicable after such
Person acquires such Additional Mortgaged Property, the following:
(i) Additional Mortgage. A fully executed and notarized
Mortgage (an "ADDITIONAL MORTGAGE"), in proper form for recording in
all appropriate places in all
90
<PAGE>
<PAGE>
applicable jurisdictions, encumbering the interest of Company in such
Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel
to Company, in form and substance satisfactory to Agent and its
counsel, as to the due authorization, execution and delivery by Company
of such Additional Mortgage and such other matters as Agent may
reasonably request, and (b) if required by Agent, an opinion of counsel
(which counsel shall be reasonably satisfactory to Agent) in the state
in which such Additional Mortgaged Property is located with respect to
the enforceability of such Additional Mortgage and such other matters
(including any matters governed by the laws of such state regarding
personal property security interests in respect of any Collateral) as
Agent may reasonably request, such local counsel opinion to be
substantially in the form of the opinions delivered pursuant to
subsection 3.1H(ii) of the Existing Credit Agreement, in each case in
form and substance reasonably satisfactory to Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold
Interest. In the case of an Additional Mortgaged Property consisting of
a Material Leasehold Property, (a) a Landlord Consent and Estoppel and
(b) evidence that such Material Leasehold Property is a Recorded
Leasehold Interest or the appropriate duly executed documents for
recording to make it a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Agent, an ALTA
mortgagee title insurance policy or an unconditional commitment
therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the Title Company
with respect to such Additional Mortgaged Property, in an amount
satisfactory to Agent, insuring fee simple title to, or a valid
leasehold interest in, such Additional Mortgaged Property vested in
Company and assuring Agent that such Additional Mortgage creates a
valid and enforceable First Priority mortgage Lien on such Additional
Mortgaged Property, subject only to a standard survey exception, which
Additional Mortgage Policy (1) shall, if requested by Agent,
include an endorsement for mechanics' liens for future advances
under this Agreement and for any other matters reasonably
requested by Agent and (2) shall provide for affirmative
insurance and such reinsurance as Agent may reasonably request,
all of the foregoing in form and substance reasonably satisfactory
to Agent; and (b) evidence satisfactory to Agent that Company
has (i) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the
issuance of the Additional Mortgage Policy and (ii) paid to the Title
Company or to the appropriate governmental authorities all expenses and
premiums of the Title Company in connection with the issuance of the
Additional Mortgage Policy and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with
recording the Additional Mortgage in the appropriate real estate
records;
(v) Title Report. If no Additional Mortgage Policy is required
with respect to such Additional Mortgaged Property, a title report
issued by the Title Company with respect thereto, dated not more than
30 days prior to the date such Additional Mortgage is to be recorded
and satisfactory in form and substance to Agent;
91
<PAGE>
<PAGE>
(vi) Copies of Documents Relating to Title Exceptions. If
requested by Agent, copies of all recorded documents listed as
exceptions to title or otherwise referred to in the Additional
Mortgage Policy or title report delivered pursuant to clause (v) or
(vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to (1) whether such Additional Mortgaged
Property is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if such
Additional Mortgaged Property is a Flood Hazard Property, Company's
written acknowledgement of receipt of written notification from Agent
(1) that such Additional Mortgaged Property is a Flood Hazard Property
and (2) as to whether the community in which such Flood Hazard Property
is located is participating in the National Flood Insurance Program,
and (c) in the event such Additional Mortgaged Property is a Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, evidence that Company has obtained
flood insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors of
the Federal Reserve System; and
(viii) Environmental Audit. If required by Agent, reports and
other information, in form, scope and substance satisfactory to Agent
and prepared by environmental consultants satisfactory to Agent,
concerning any environmental hazards or liabilities to which Company or
any of its Subsidiaries may be subject with respect to such Additional
Mortgaged Property.
B. REAL ESTATE APPRAISALS. If required by applicable laws or
regulations as determined by Agent, Company shall permit an independent real
estate appraiser satisfactory to Agent, upon reasonable notice, to visit and
inspect any Additional Mortgaged Property for the purpose of preparing an
appraisal of such Additional Mortgaged Property satisfying the requirements of
any applicable laws and regulations (in each case to the extent required under
such laws and regulations as determined by Agent in its discretion).
5.9 MAINTENANCE OF NETWORK AFFILIATIONS.
Company shall cause each Station (other than any of the Satellite
Stations) to maintain a Network Affiliation at all times.
5.10 OWNERSHIP REPORTS.
Company shall file Ownership Reports for any Station acquired after the
Restatement Date (reflecting such acquisition by Company) with the FCC within a
period of 30 days after the date of consummation of such acquisition.
5.11 DETERMINATION OF BORROWING BASE.
A. Company shall deliver a Borrowing Base Certificate to Agent (i) at
any time that Revolving Loans are outstanding, upon the request of Agent, (ii)
together with each delivery to
92
<PAGE>
<PAGE>
Agent of a Notice of Borrowing requesting Revolving Loans, and (iii) at any
time any Revolving Loans are outstanding, as soon as available and in any
event no later than 30 days after the end of each month. Each such Borrowing
Base Certificate shall be dated such date as may be requested by Agent from
time to time or, in the case of clause (iii), as of the last day of such month.
B. The Accounts Receivable shown on each Borrowing Base Certificate
shall conform to the requirements set forth in the definition of Borrowing Base,
and shall be Company's exclusive property and shall not be subject to any Lien
(other than Liens created under the Collateral Documents and Permitted
Encumbrances).
C. Company will, and will cause each of its Subsidiaries to, keep
proper books of record and account in which full, true and correct entries in
conformity with sound business practices shall be made of all dealings and
transactions in relation to its business and activities (including all dealings
and transactions with respect to the Collateral covered by the Collateral
Documents and Accounts Receivable). Company agrees to furnish to Agent any
information which it may reasonably request regarding the determination and
calculation of the Borrowing Base, including correct and complete copies of any
invoices, underlying agreements, instruments, or other documents and the
identity of all obligors.
5.12 FUTURE CAPITAL CONTRIBUTIONS; CASH AND CASH EQUIVALENTS OF BCC.
A. Upon receipt by BCC of any Cash proceeds (any such proceeds net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses) from the
issuance of any debt or equity Securities of BCC, BCC shall contribute such net
Cash proceeds to Company as a contribution to capital (provided that if BCC
receives any capital stock as a result of such contribution it shall be common
stock) to be used by Company in accordance with subsection 2.4B(iii)(f);
provided that the foregoing shall not apply to proceeds received by BCC upon the
exercise of stock options (i) by directors, officers, employees or independent
contractors (other than Benedek) of BCC or its Subsidiaries or (ii) by Benedek
to the extent the aggregate amount of such proceeds from and including the
Acquisition Date does not exceed $2,000,000.
B. BCC shall maintain all Cash and Cash Equivalents owned by it
in the Collateral Account in accordance with the terms of the Collateral Account
Agreement.
5.13 LIEN SEARCHES AND UCC TERMINATION STATEMENTS.
Within (a) 45 days of the Restatement Date, Company shall deliver to
Agent the results of a search conducted at least 21 days after the Restatement
Date by a Person satisfactory to Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which may
have been made with respect to any personal or mixed property of any Loan Party,
together with copies of all such filings disclosed by such search (other than
any filings in favor of Agent, for the benefit of Lenders), and (b) within 60
days of the Restatement Date, Company shall deliver to Agent UCC termination
statements duly executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements
93
<PAGE>
<PAGE>
or fixture filings disclosed in such search (other than any such financing
statements or fixture filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement).
5.14 COMPANY COLLATERAL ACCOUNT AGREEMENT.
Within 20 days of the Restatement Date , Company shall execute and
deliver to Agent the Company Collateral Account Agreement.
SECTION 6.
COMPANY'S NEGATIVE COVENANTS
Each of BCC and Company covenants and agrees that, so long as any of
the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen), unless Requisite Lenders shall otherwise give prior written consent,
each of BCC and Company shall perform, and shall cause each of its Subsidiaries,
as applicable, to perform, all covenants in this Section 6.
6.1 INDEBTEDNESS.
BCC shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Company may become and remain liable with respect to
Contingent Obligations permitted by subsection 6.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Subject to the limitation contained in subsection
6.1(viii)(c), Company may become and remain liable with respect to
Indebtedness in respect of Capital Leases;
(iv) Company may remain liable with respect to
Indebtedness described in Schedule 6.1 annexed hereto;
(v) Company may become and remain liable with respect to
Program Obligations and deferred employee compensation;
(vi) Company may remain liable with respect to
Indebtedness evidenced by the Existing Senior Notes;
94
<PAGE>
<PAGE>
(vii) BCC may become and remain liable with respect to
Indebtedness evidenced by the Senior Subordinated Notes (and original
issue discount accredit in accordance with the terms thereof); and
(viii) Company may become and remain liable with respect to
(x) Indebtedness, the proceeds of which are used within 180 days of the
incurrence thereof to purchase assets in the ordinary course of
business; provided that (a) the assets purchased with the proceeds of
such Indebtedness are (i) property or equipment relating to the
Stations or the corporate headquarters of Company, (ii) equipment
necessary to convert the Stations from analog transmission to digital
transmission or (iii) real property related to the Stations or
improvements related to the Stations on real property related to the
Stations, and (b) at least 75% of the purchase price of such assets is
provided by the proceeds of such Indebtedness and (y) Indebtedness
assumed by Company in compliance with subsection 6.7(vi) or subsection
6.7(x); provided that, notwithstanding anything to the contrary
contained herein, the aggregate principal amount of such Indebtedness
permitted pursuant to this subsection 6.1(viii) outstanding at any time
plus the aggregate amount of outstanding Indebtedness of Company with
respect to Capital Leases shall not exceed $20,000,000.
6.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. BCC shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of BCC or any of its Subsidiaries, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit the filing of,
or permit to remain in effect, any financing statement or other similar notice
of any Lien with respect to any such property, asset, income or profits under
the Uniform Commercial Code of any State or under any similar recording or
notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 6.2 annexed hereto; and
(iv) Liens securing Indebtedness permitted pursuant to
subsection 6.1(viii) provided that such Liens relate solely to the
assets financed with such Indebtedness.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If BCC or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 6.2A.
95
<PAGE>
<PAGE>
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither BCC nor
any of its Subsidiaries shall enter into any agreement (other than the Senior
Subordinated Note Indenture or any other agreement prohibiting only the creation
of Liens securing Subordinated Indebtedness) prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein, BCC will not, and will not permit any
of its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's capital stock owned by Company or any other Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (iii) make loans or advances to
Company or any other Subsidiary of Company, or (iv) transfer any of its property
or assets to Company or any other Subsidiary of Company except as provided in
the Existing Senior Note Indenture and the Senior Subordinated Note Indenture.
6.3 INVESTMENTS; JOINT VENTURES.
BCC shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) BCC and Company may make and own Investments in Cash
Equivalents, subject, in the case of BCC, to compliance with the terms
of subsection 5.12;
(ii) Company may continue to own the Investments owned by it
as of the Acquisition Date in License Sub;
(iii) BCC may continue to own the Investments owned by it in
Company as of the Acquisition Date;
(iv) Company may make Consolidated Capital Expenditures
permitted by subsection 6.8;
(v) Subject to the limitations contained in subsection
6.7(viii), Company may make LMA Capital Expenditures;
(vi) Company may continue to own the Investments owned by it
and described in Schedule 6.3 annexed hereto;
(vii) Company may make and own Investments consisting of
promissory notes or other Securities received in connection with Asset
Sales permitted under subsection 6.7(v) limited to an amount not in
excess of 10% of the total sales price of the assets sold in such Asset
Sale;
96
<PAGE>
<PAGE>
(viii) Company may make and own loans to employees to fund the
exercise price of options to purchase stock of BCC; provided that the
aggregate amount of such loans outstanding at any one time shall not
exceed $5,000,000;
(ix) Intentionally Omitted;
(x) Company may make Investments (in addition to the
Investments set forth on Schedule 6.3 annexed hereto) in Joint Ventures
and Special Purpose Subsidiaries in each case which are principally
engaged in one or more Media Businesses in an aggregate amount during
the term of this Agreement not to exceed $10,000,000 (including, for
purposes of calculation of such amount, all Investments made pursuant
to this subsection 6.3(x) regardless of whether such Investments were
made pursuant to clause (a), (b) or (c) of this subsection 6.3(x)) less
the aggregate amount paid by Company and BCC for the repurchase of any
Existing Senior Notes and Senior Subordinated Notes under subsection
6.5(ii) during the term of this Agreement, (b) at any time that the
Leverage Ratio is less than or equal to 4.50:1.00, Company may make
Investments (in addition to the Investments set forth on Schedule 6.3
annexed hereto) in Joint Ventures and Special Purpose Subsidiaries in
each case which are principally engaged in one or more Media Businesses
in an aggregate amount during the term of this Agreement not to exceed
$15,000,000 (including, for purposes of calculation of such amount, all
Investments made pursuant to this subsection 6.3(x) regardless of
whether such Investments were made pursuant to clause (a), (b) or (c)
of this subsection 6.3(x)) less the aggregate amount paid by Company
and BCC for the repurchase of any Existing Senior Notes and Senior
Subordinated Notes under subsection 6.5(ii) during the term of this
Agreement, and (c) at any time that the Leverage Ratio is less than or
equal to 4.00:1.00, Company may make Investments (in addition to the
Investments set forth on Schedule 6.3 annexed hereto) in Joint Ventures
and Special Purpose Subsidiaries which are principally engaged in one
or more Media Businesses in an aggregate amount during the term of this
Agreement not to exceed $20,000,000 (including, for purposes of
calculation of such amount, all Investments made pursuant to this
subsection 6.3(x) regardless of whether such Investments were made
pursuant to clause (a), (b) or (c) of this subsection 6.3(x)) less the
aggregate amount paid by Company and BCC for the repurchase of any
Existing Senior Notes and Senior Subordinated Notes under subsection
6.5(ii) during the term of this Agreement; provided that Company may
continue to own Investments made by it in Special Purpose Subsidiaries
in compliance with this subsection 6.3(x) if such Special Purpose
Subsidiaries in which such Investments were made continue to be
principally engaged in one or more Media Businesses; provided, further,
that Company may continue to own Investments made by it in Joint
Ventures in compliance with this subsection 6.3(x); and
(xi) Company may make Investments in connection with a
Permitted Acquisition in the stock or other equity interests of an
entity owning the Television Station Asset Group being acquired;
provided that immediately following the consummation of such
acquisition, such entity is merged with and into Company with Company
being the surviving corporation.
97
<PAGE>
<PAGE>
6.4 CONTINGENT OBLIGATIONS.
BCC shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) License Sub may become and remain liable with respect to
Contingent Obligations in respect of the License Sub Guaranty and the
Existing Senior Note Indenture;
(ii) BCC may become and remain liable with respect to the BCC
Guaranty;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements; and
(iv) Company may remain liable with respect to Contingent
Obligations described in Schedule 6.4 annexed hereto.
6.5 RESTRICTED JUNIOR PAYMENTS.
BCC shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, except:
(i) BCC may make regularly scheduled payments of interest in
respect of Senior Subordinated Notes after May 15, 2001, required to be
paid, in accordance with the terms of, and only to the extent required
by, and subject to the subordination provisions contained in, the
Senior Subordinated Note Indenture;
(ii) At any time the Leverage Ratio is less than or equal to
(a) 5.00:1.00, BCC or Company may repurchase Existing Senior Notes
and/or Senior Subordinated Notes in an aggregate amount paid by Company
and BCC to repurchase Existing Senior Notes and Senior Subordinated
Notes during the term of this Agreement not to exceed $10,000,000
(including, for purposes of calculation of such amount, all repurchases
made pursuant to this subsection 6.5(ii) whether such repurchases were
made pursuant to clause (a), (b) or (c) of this subsection 6.5(ii))
less the aggregate amount of Investments made pursuant to subsection
6.3(x) during the term of this Agreement, (b) 4.50:1.00, BCC or Company
may repurchase Existing Senior Notes and/or Senior Subordinated Notes
in an aggregate amount paid by Company and BCC to repurchase Existing
Senior Notes and Senior Subordinated Notes during the term of this
Agreement not to exceed $15,000,000 (including, for purposes of
calculation of such amount, all repurchases made pursuant to this
subsection 6.5(ii) whether such repurchases were made pursuant to
clause (a), (b) or (c) of this subsection 6.5(ii)) less the aggregate
amount of Investments made pursuant to subsection 6.3(x) during the
term of this Agreement and (c) 4.00:1.00, BCC or Company may repurchase
Existing Senior Notes and/or Senior Subordinated Notes in an aggregate
amount paid by Company and BCC to repurchase Existing Senior Notes
and Senior Subordinated Notes during the term of this Agreement
not to exceed $20,000,000 (including, for purposes of calculation
of such amount, all repurchases made pursuant to this
subsection 6.5(ii) whether such repurchases were made
pursuant to clause (a), (b) or (c) of this subsection 6.5(ii)) less the
aggregate
98
<PAGE>
<PAGE>
amount of Investments made pursuant to subsection 6.3(x)
during the term of this Agreement; provided that, in each case, BCC and
Company shall have delivered to Agent at least one Business Day prior
to such repurchase an Officer's Certificate of each of BCC and Company
with appropriate attachments and otherwise in form and substance
satisfactory to Agent (x) demonstrating that on a pro forma basis
(determined as of the date of the most recent financial statements
delivered pursuant to subsection 6.1 and after giving effect to such
repurchase of Existing Senior Notes and/or Senior Subordinated Notes),
BCC and its Subsidiaries shall be in compliance with all of the
covenants hereunder and (y) certifying that, immediately prior to such
repurchase, no Event of Default or Potential Event of Default shall
have occurred and be continuing;
(iii) Intentionally Omitted;
(iv) BCC may, with respect to each period for which Company
qualifies as an S Corporation under the Code or any similar provision
of state law make cash distributions of Tax Amounts to Benedek;
provided that prior to any such distribution (a) Agent has received an
Officers' Certificate certifying that Company qualified as an S
Corporation for such period under the Code or in the states for which
distributions are being made and Company's most recent audited
financial statements reflect that company was treated as an S
Corporation for the applicable period, (b) Benedek shall have entered
into a written agreement with BCC in form and substance satisfactory to
Agent providing that if any amount distributed to Benedek pursuant to
this clause (iv) is later determined to have been, as a result of a
change in law or the failure of Company to effect or maintain a valid S
Corporation election or otherwise, in excess of the amount permitted to
be distributed or paid under this clause (iv), such excess shall be
refunded to Company at least five Business Days prior to the next due
date of individual estimated income tax payments and (c) Company shall
have requested and received any excess payments required to be refunded
by Benedek pursuant to the agreement referenced in clause (b) above;
(v) Company may make Cash dividends or Cash distributions to
BCC; and
(vi) BCC or Company may redeem or repurchase Warrants in an
amount not exceeding the Unutilized Compensation Amount as of the date
of such redemption or repurchase.
6.6 FINANCIAL COVENANTS.
A. MINIMUM CASH INTEREST COVERAGE RATIO. BCC and Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Cash
Interest Expense for any four-Fiscal Quarter period ending during any of the
periods set forth below to be less than the correlative ratio indicated:
99
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
=======================================================================================
MINIMUM
PERIOD CASH INTEREST
COVERAGE RATIO
=======================================================================================
<S> <C>
Restatement Date through 12/30/98 1.50:1.00
- ---------------------------------------------------------------------------------------
12/31/98 through 06/29/99 1.80:1.00
- ---------------------------------------------------------------------------------------
06/30/99 through 12/30/99 1.85:1.00
- ---------------------------------------------------------------------------------------
12/31/99 through 06/29/00 1.90:1.00
- ---------------------------------------------------------------------------------------
06/30/00 through 12/30/00 2.05:1.00
- ---------------------------------------------------------------------------------------
Thereafter 2.25:1.00
=======================================================================================
</TABLE>
B. MAXIMUM LEVERAGE RATIO. BCC and Company shall not permit the
Leverage Ratio as of the last day of any Fiscal Quarter ending during any of the
periods set forth below to exceed the correlative ratio indicated:
<TABLE>
<CAPTION>
=======================================================================================
MAXIMUM
PERIOD LEVERAGE RATIO
=======================================================================================
<S> <C>
Restatement Date through 06/29/97 6.00:1.00
- ---------------------------------------------------------------------------------------
06/30/98 through 12/30/98 5.75:1.00
- ---------------------------------------------------------------------------------------
12/31/98 through 06/29/99 5.10:1.00
- ---------------------------------------------------------------------------------------
06/30/99 through 12/30/99 4.85:1.00
- ---------------------------------------------------------------------------------------
12/31/99 through 06/29/00 4.65:1.00
- ---------------------------------------------------------------------------------------
06/30/00 through 12/30/00 4.25:1.00
- ---------------------------------------------------------------------------------------
Thereafter 3.75:1.00
=======================================================================================
</TABLE>
C. MINIMUM CONSOLIDATED ADJUSTED EBITDA. BCC and Company shall not
permit Consolidated Adjusted EBITDA for any Fiscal Year set forth below to be
less than the correlative amount indicated; provided, however, that following an
Asset Sale of a Television Station Asset Group permitted under subsection
6.7(v), each of the minimum Consolidated Adjusted EBITDA amounts set forth below
shall be adjusted downward by an amount equal to the portion of Consolidated
Adjusted EBITDA attributable to such Television Station Asset Group during the
four-Fiscal Quarter period most recently ended prior to such Asset Sale:
100
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
========================================================================
MINIMUM
FISCAL CONSOLIDATED ADJUSTED
YEAR EBITDA
========================================================================
<S> <C>
1997 $43,500,000
- ------------------------------------------------------------------------
1998 $50,000,000
- ------------------------------------------------------------------------
1999 $52,000,000
- ------------------------------------------------------------------------
2000 $59,000,000
- ------------------------------------------------------------------------
2001 $60,500,000
- ------------------------------------------------------------------------
2002 and each
year thereafter $68,000,000
========================================================================
</TABLE>
D. CERTAIN CALCULATIONS. With respect to calculations of Consolidated
Adjusted EBITDA for purposes of the definitions of "Leverage Ratio", following
an Asset Sale of a Television Station Asset Group in accordance with subsection
6.7(v) or a Permitted Acquisition in accordance with subsection 6.7(xi), such
calculations shall be made on a pro forma basis as if such Asset Sale or
Permitted Acquisition occurred on the first day of the applicable four-Fiscal
Quarter period, all such calculations to be in form and substance satisfactory
to Agent.
6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
BCC shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of BCC or any of its Subsidiaries, or
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any Person or
any division or line of business of any Person, or enter into any LMA or make
any LMA Capital Expenditures, or permit any Special Purpose Subsidiary to enter
into any LMA or make any acquisition (including a Permitted Special Purpose
Acquisition), except:
(i) [ INTENTIONALLY OMITTED ];
(ii) Company may make Consolidated Capital Expenditures
permitted under subsection 6.8 and Investments permitted under
subsection 6.3;
(iii) Company may dispose of obsolete, worn out or surplus
property or other assets reasonably determined by Company as no longer
useful or necessary to the operation of the business in the ordinary
course of business;
101
<PAGE>
<PAGE>
(iv) Company may enter into leases as the lessor or sublessor
in the ordinary course of business as long as such leases do not
materially interfere with the operation of the Stations or the conduct
of business of Company or result in a material diminution in the value
of any Collateral as security for the Obligations;
(v) subject to subsection 6.12, Company may make Asset Sales
of a Television Station Asset Group; provided that (a) the
consideration received for such assets shall be in an amount at least
equal to the fair market value thereof and in no event less than the
product of (1) eight multiplied by (2) that portion of Consolidated
Adjusted EBITDA (excluding any allocation of corporate overhead
expenses) for the most recently ended four-Fiscal Quarter period of
Company attributable to the assets subject to such Asset Sale (the
"MINIMUM AMOUNT"); (b) the cash consideration received shall be equal
to the greater of the Minimum Amount and 90% of the total consideration
received; (c) the Net Asset Sale Proceeds shall be applied as required
by subsection 2.4B(iii)(a); (d) on a pro forma basis, after giving
effect to such Asset Sale and related prepayment hereunder, Company
shall be in compliance with all of the covenants hereunder as evidenced
in an Officers' Certificate delivered to Agent, and Agent shall have
received evidence reasonably satisfactory to it that Company will be in
compliance with all of the covenants hereunder through the end of the
next full Fiscal Year following any such Asset Sale; (e) the assets
subject to such Asset Sales in any Fiscal Year did not generate more
than 10% of Consolidated Adjusted EBITDA as of the most recently ended
four-Fiscal Quarter period prior to the sale; and (f) the sum of each
of the percentages of Consolidated Adjusted EBITDA generated by the
assets subject to each such Asset Sale occurring during the period from
the Restatement Date through the date of determination, as computed
according to the foregoing clause (e), shall not exceed 25%;
(vi) Company may sell or exchange Satellite Stations; provided
that the Board of Directors of Company shall have determined that the
consideration received by Company in such sale or exchange is at least
equal to the sum of the fair market value of the Satellite Station and
any additional consideration paid by Company in such sale or exchange,
and Company shall have delivered an Officer's Certificate to Agent to
such effect; provided further that any Cash received by Company in
connection with such sale or exchange shall be deemed to be "Net Asset
Sale Proceeds" received in an Asset Sale and shall be applied as
required by subsection 2.4B(iii)(a); provided still further that
neither BCC nor any of its Subsidiaries shall incur or assume any
Indebtedness in connection with such sale or exchange other than
Indebtedness assumed by Company in connection with any such exchange
that was incurred by the Person with whom such Satellite Station was
exchanged (x) solely with respect to the purchase by such Person of
particular assets that are included in such exchange, (y) in the
ordinary course of business of such Person and (z) not in anticipation
of or in connection with such exchange;
(vii) Company may enter into Permitted LMAs and Third Party
Permitted LMAs;
(viii) Company may make LMA Capital Expenditures; provided
that (a) no Event of Default or Potential Event of Default shall have
occurred and be continuing, (b) no Revolving Loans shall be
outstanding, (c) with respect to any LMA Capital Expenditures in
102
<PAGE>
<PAGE>
excess of $1,000,000 in the aggregate, Company shall have delivered to
Agent an Officers' Certificate, in form and substance reasonably
satisfactory to Agent, demonstrating that BCC and its
Subsidiaries, on a pro forma basis after giving effect to the LMA
Capital Expenditure, shall be in compliance with all of the
covenants hereunder, (d) any assets acquired pursuant to the
LMA Capital Expenditure (other than assets subject to a
Lien permitted under subsection 6.2A(iv)) shall be subject to a First
Priority Lien of Agent pursuant to the Collateral Documents and (e) the
aggregate amount of all LMA Capital Expenditures shall not exceed
$20,000,000 less the sum of (x) the aggregate principal amount of any
Existing Senior Notes and Senior Subordinated Notes repurchased under
subsection 6.5(ii) plus (y) the aggregate amount of Investments made by
Company under subsection 6.3(x);
(ix) any Special Purpose Subsidiary may make Permitted Special
Purpose Acquisitions and enter into Permitted LMAs; provided, however,
that (a) prior to entering into any Permitted LMA, Company and such
Special Purpose Subsidiary shall have entered into an agreement
providing for a fair and reasonable allocation of any shared overhead
expenses with respect to such Permitted LMA, which agreement shall be
in form and substance satisfactory to Agent and (b) together with each
delivery of financial statements of BCC and its Subsidiaries pursuant
to subsections 5.1(ii) and 5.1(iii), Company shall provide to Agent an
accounting in reasonable detail of the allocation of shared overhead
expenses for the Fiscal Quarter most recently ended; and
(x) Company may swap or exchange one or more Owned Television
Station Asset Groups for one or more other Television Station Asset
Groups; provided that (u) Company shall deliver to Agent a Compliance
Certificate with any necessary attachments (in each case prepared after
giving effect to such acquisition), in form and substance satisfactory
to Agent, demonstrating that BCC and its Subsidiaries, after giving
effect to such swap or exchange, shall be in pro forma compliance with
all of the covenants contained in this Agreement and in the other Loan
Documents through and including December 31, 2004, (v) Agent, on behalf
of Lenders, shall have received a First Priority Lien on all real and
personal property acquired by Company in such swap or exchange and
Agent shall have received originally executed copies of a written
opinion of counsel to Company in form and substance satisfactory to
Agent and its counsel as to such matters (other than an opinion as to
priority), and (w) Agent shall have received originally executed copies
of a favorable written opinion from FCC counsel to Company, in form and
substance satisfactory to Agent and its counsel, addressing such
matters as Agent, acting on behalf of Lenders, may reasonably request,
(x) the FCC Consents shall have been obtained with respect to any
Station being swapped or exchanged, and either (i) such FCC Consents
shall have become Final Orders or (ii) if they shall not have become
Final Orders, Agent shall not have notified Company that it has
determined, in its sole discretion, that there is a reasonable basis
for concluding that any such FCC Consent may not become a Final Order
in due course, (y) the Board of Directors of Company shall have
determined that the consideration received by Company in such swap or
exchange
103
<PAGE>
<PAGE>
is at least equal to the sum of the fair market value of
the Owned Television Station Asset Groups and any additional
consideration paid by Company in such swap or exchange, and Company
shall have delivered an Officer's Certificate to Agent to such effect
and (z) Agent, in its reasonable discretion, shall have determined
that such swap or exchange is fair and reasonable; provided further
that any Cash received by Company in connection with such swap
or exchange shall be deemed to be "Net Asset Sale Proceeds"
received in an Asset Sale and shall be applied as required
by subsection 2.4B(iii)(a); provided still further neither BCC
nor any of its Subsidiaries shall incur or assume any Indebtedness in
connection with such swap or exchange other than any Indebtedness
assumed by Company in connection with any such swap or exchange that
was incurred by the Person with whom such Owned Television Asset Groups
were swapped or exchanged (x) solely with respect to the purchase by
such Person of particular assets that are included in such swap or
exchange, (y) in the ordinary course of business of such Person and (z)
not in anticipation of or in connection with such swap or exchange;
(xi) Company may make Permitted Acquisitions with an aggregate
purchase price less than or equal to $25,000,000; provided that (w)
Company shall deliver to Agent a Compliance Certificate with any
necessary attachments (in each case prepared after giving effect to
such acquisition), in form and substance satisfactory to Agent,
demonstrating that BCC and its Subsidiaries, after giving effect to
such Permitted Acquisition, shall be in pro forma compliance with all
of the covenants contained in this Agreement and in the other Loan
Documents through and including December 31, 2004, (x) Agent, on behalf
of Lenders, shall have received a First Priority Lien on all real and
personal property acquired by Company in such acquisition and Agent
shall have received originally executed copies of a written opinion of
counsel to Company in form and substance satisfactory to Agent and its
counsel as to such matters (other than an opinion as to priority), and
(y) Agent shall have received originally executed copies of a favorable
written opinion from FCC counsel to Company, in form and substance
satisfactory to Agent and its counsel, addressing such matters as
Agent, acting on behalf of Lenders, may reasonably request, and (z) the
FCC Consents shall have been obtained with respect to any Station being
acquired, and either (i) such FCC Consents shall have become Final
Orders or (ii) if they shall not have become Final Orders, Agent shall
not have notified Company that it has determined, in its sole
discretion, that there is a reasonable basis for concluding that any
such FCC Consent may not become a Final Order in due course.
(xii) if Company is required by the FCC to divest itself of
either its Rockford, Illinois or Madison, Wisconsin Station in order to
comply with the FCC's duopoly rules, Company may apply for temporary
relief from such requirement through the transfer of the FCC Licenses
pertaining to either of such Stations and the assets related thereto to
a grantor trust (a "TRUST") and if (x) the FCC approves such transfer
to the Trust and (y) the trustee under the Trust is reasonably
acceptable to Agent, Company may assign the FCC Licenses pertaining to
such Station and the assets related thereto to the Trust; provided that
(w) with respect to the assets so transferred other than the FCC
Licenses, Company shall either cause such assets to be transferred
subject to the First Priority Lien in favor of the Agent pursuant to
Company Tangible Assets Security Agreement or Company Acquired Assets
Security Agreement, as the case may be, or if so requested by the Agent
cause the trustee under the
Trust to grant a First Priority Lien on such Assets to the Agent as
collateral security for the Obligations pursuant to documentation
substantially similar to Company Tangible Assets Security Agreement or
Company Acquired Assets Security Agreement, as the case may be, and
otherwise reasonably acceptable to the Agent, (x) with respect to the
FCC Licenses
104
<PAGE>
<PAGE>
pertaining to such Station, Company shall transfer such
FCC Licenses to a corporation or limited liability company wholly-owned
by the trustee under the Trust and shall cause the trustee under the
Trust to grant a First Priority Lien on all of the outstanding capital
stock or other equity interests in such entity to The Bank of New York
as collateral security for the Existing Senior Notes and the
Obligations pursuant to the Existing Company Pledge Agreement or
documentation substantially similar thereto and otherwise reasonably
acceptable to the Agent, (y) Company shall cause the trust agreement
pursuant to which the Trust is created to provide that all cash
generated by such Station be transferred promptly to Company except for
such cash as may required to be retained by the Trust for working
capital purposes, and (z) for all purposes of this Agreement, the Trust
shall be considered a Subsidiary of Company.
6.8 CONSOLIDATED CAPITAL EXPENDITURES.
BCC shall not, and shall not permit its Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any period indicated below, in an
aggregate amount in excess of the corresponding amount (the "MAXIMUM
CONSOLIDATED CAPITAL EXPENDITURES AMOUNT") set forth below opposite such period;
provided that the Maximum Consolidated Capital Expenditures Amount for any such
period shall be increased by an amount equal to (i) the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous period over
the actual amount of Consolidated Capital Expenditures for such previous period
and/or, (ii) at Company's option, a portion of the amount of Maximum
Consolidated Capital Expenditures Amount for the immediately succeeding period
(which, to the extent of such increase shall reduce the amount of the Maximum
Consolidated Capital Expenditure Amount for such succeeding period); provided
that in no event shall (a) the amount of any increase to the Maximum
Consolidated Capital Expenditures Amount pursuant to the foregoing clause (i) in
any period exceed 50% of the Maximum Consolidated Capital Expenditures Amount
for the previous period and (b) the amount of any increase to the Maximum
Consolidated Capital Expenditures Amount pursuant to the foregoing clause (ii)
in any period exceed 50% of the Maximum Consolidated Capital Expenditures Amount
for the immediately succeeding period.
<TABLE>
<CAPTION>
==================================================================================
FISCAL YEAR (OR OTHER MAXIMUM CONSOLIDATED
SPECIFIED PERIOD) CAPITAL EXPENDITURES
==================================================================================
<S> <C>
- ----------------------------------------------------------------------------------
1998 $9,000,000
- ----------------------------------------------------------------------------------
1999 $9,000,000
- ----------------------------------------------------------------------------------
2000 $9,000,000
- ----------------------------------------------------------------------------------
2001 $10,000,000
- ----------------------------------------------------------------------------------
2002 $11,500,000
- ----------------------------------------------------------------------------------
2003 and each
year thereafter $8,500,000
==================================================================================
</TABLE>
105
<PAGE>
<PAGE>
6.9 SALES AND LEASE-BACKS.
BCC shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease.
6.10 SALE OR DISCOUNT OF RECEIVABLES.
BCC shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or Accounts Receivable.
6.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
BCC shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of BCC,
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to BCC or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between BCC or Company and any of their respective wholly owned
Subsidiaries or between any of BCC's wholly owned Subsidiaries or between any of
Company's wholly owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of BCC or Company and its Subsidiaries, (iii)
annual cash compensation to Benedek in a dollar amount (the "COMPENSATION
LIMIT") not exceeding (a) in Fiscal Year 1997, $1,100,000 and (b) in
each Fiscal Year thereafter, 110% of the Compensation Limit for the prior Fiscal
Year or (iv) loans or advances made to directors, officers, employees or
independent contractors to fund the exercise price of options to purchase stock
of BCC or its Subsidiaries or for moving, entertainment, travel expenses,
drawing accounts and similar expenditures made in the ordinary course of
business.
6.12 DISPOSAL OF SUBSIDIARY STOCK.
BCC and Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except (a) to qualify directors
if required by applicable law and (b) as contemplated by the Collateral
Documents; or
106
<PAGE>
<PAGE>
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to BCC, Company or another
wholly-owned Subsidiary of Company (other than License Sub), or to
qualify directors if required by applicable law.
6.13 CONDUCT OF BUSINESS.
From and after the Restatement Date, Company shall not engage, and
shall not permit any of its Subsidiaries to engage, in any business other than
(i) the businesses engaged in by Company and its Subsidiaries on the Restatement
Date and similar or related businesses and (ii) such other lines of business as
may be consented to by Requisite Lenders. License Sub shall engage in no
business other than the holding of FCC Licenses and the performance of its
obligations under the License Sub Guaranty and its guaranty of the Existing
Senior Notes and shall own no material assets other than FCC Licenses. None of
Company nor any Subsidiary of Company other than License Sub shall own any FCC
License other than as set forth on Schedule 4.1E annexed hereto. BCC shall
engage in no business and have no assets other than (i) owning the stock of
Company, (ii) the issuance of and activities related to the maintenance and
servicing of the Seller Preferred Stock, the Exchangeable Preferred Stock and
Warrants and the Senior Subordinated Notes as permitted hereunder, including
performing its obligations as a reporting company under the Securities Act and
the Exchange Act, (iii) the performance of its obligations under the BCC
Guaranty and (iv) the receipt of Cash dividends or Cash distributions from
Company in accordance with the provisions hereof.
6.14 AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS; PAYMENTS ON
EXISTING SENIOR NOTES; DESIGNATION OF "DESIGNATED SENIOR DEBT".
A. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Neither BCC nor
any of its Subsidiaries will agree to any amendment to, request any waiver of
(other than a waiver for which no fee is paid and no other concessions or
considerations are granted by BCC or Company), or waive any of their respective
rights under, any of the Related Agreements (other than any amendment or waiver
described in the next succeeding sentence) without in each case obtaining the
prior written consent of Agent and Requisite Lenders to such amendment, request
or waiver. Notwithstanding the foregoing, BCC and its Subsidiaries may agree to
amend or waive any provisions of the Related Agreements (i) to cure any
ambiguity, to correct or supplement any provision therein which may be defective
or inconsistent with any other provision therein, or (ii) to comply with the
Trust Indenture Act of 1939, as amended, or (iii) to make modifications of a
technical or clarifying nature or which are no less favorable to the Lenders, in
the reasonable opinion of Agent and Requisite Lenders, than the provisions of
the Related Agreements as in effect on the Acquisition Date (for the purposes of
this subsection 6.14, any amendment, modification or change which would extend
the maturity or reduce the amount of any payment of principal on the Existing
Senior Notes or the Subordinated Indebtedness or which would reduce the rate or
extend the date for payment of interest thereon, provided that no fee is payable
in connection therewith, shall be deemed to be an amendment, modification or
change that is no less favorable to the Lenders).
107
<PAGE>
<PAGE>
B. PAYMENTS ON EXISTING SENIOR NOTES. Except as permitted by subsection
6.5(ii), neither BCC nor any of its Subsidiaries shall make any prepayments,
redemptions or repurchases of the Existing Senior Notes without the prior
written consent of Agent and Requisite Lenders. Neither BCC nor any of its
Subsidiaries will defease, or make any payments the effect of which is to
defease (whether pursuant to the defeasance provisions of the Existing Senior
Notes or otherwise), the Existing Senior Notes, in whole or in part, without in
each case obtaining the prior written consent of Agent and Requisite Lenders.
C. DESIGNATION OF "DESIGNATED SENIOR DEBT". Neither BCC nor Company
shall designate any Indebtedness (other than the Obligations and the Existing
Senior Notes) as "Designated Senior Debt", as defined in the Senior Subordinated
Note Indenture, for purposes of the Senior Subordinated Note Indenture without
the prior written consent of Agent.
6.15 FISCAL YEAR.
Neither BCC nor any of its Subsidiaries shall change its Fiscal
Year-end from December 31.
6.16 LIMITATION ON CREATION OF SUBSIDIARIES.
BCC will not, and will not permit any of its Subsidiaries to,
establish, create or acquire any new Subsidiary other than a Special Purpose
Subsidiary; provided BCC will not establish, create or acquire a direct Special
Purpose Subsidiary.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; or failure by Company
to pay any interest on any Loan or any fee or any other amount due under
this Agreement within three Business Days after the date due; or
7.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of BCC or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
7.1) or Contingent Obligations with an aggregate principal amount of $1,000,000
or more beyond the end of any grace period provided therefor; or (ii) breach or
default by BCC or any of its Subsidiaries with respect to any other material
term of (a) one or more items of Indebtedness or Contingent Obligations in the
aggregate principal amount referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default
108
<PAGE>
<PAGE>
is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
7.3 BREACH OF CERTAIN COVENANTS.
Failure of BCC or any of its Subsidiaries to perform or comply with any
term or condition contained in subsection 2.5 or 5.2 or Section 6 of this
Agreement; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
any Loan Party or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by any Loan Party or any of its
Subsidiaries in writing pursuant hereto or thereto or pursuant to a request of
Agent or Lenders made pursuant hereto or pursuant to the Collateral Documents
shall be false in any material respect on the date as of which made; or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 7, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from Agent or
any Lender of such default; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of BCC or any of its Subsidiaries in an involuntary
case under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against BCC or any of its Subsidiaries under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over BCC or any of its Subsidiaries, or over
all or a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of BCC or any of its Subsidiaries for all or a substantial
part of its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of BCC or
any of its Subsidiaries, and any such event described in this clause (ii) shall
continue for 60 days unless dismissed, bonded or discharged; or
109
<PAGE>
<PAGE>
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) BCC or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or BCC or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) BCC or any of its Subsidiaries
shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Board of Directors
of BCC or any of its Subsidiaries (or any committee thereof) shall adopt any
resolution or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving in the aggregate at any time an amount in excess of $1,000,000 shall
be entered or filed against BCC or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
7.9 DISSOLUTION.
Any order, judgment or decree shall be entered against BCC or any of
its Subsidiaries decreeing the dissolution or split up of BCC or that Subsidiary
and such order shall remain undischarged or unstayed for a period in excess of
30 days; or
7.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
BCC, any of its Subsidiaries or any of their respective ERISA Affiliates in
excess of $1,000,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $1,000,000; or
7.11 MATERIAL ADVERSE EFFECT.
Any event or change shall occur that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect; or
110
<PAGE>
<PAGE>
7.12 CHANGE IN EXECUTIVE OFFICERS OF COMPANY.
Either Benedek or K. James Yager, or any successor to either Person
satisfactory to Requisite Lenders hereunder, shall cease, for any reason
whatsoever, to continuously perform their respective present duties as executive
officers of Company, without a successor satisfactory to Requisite Lenders in
their reasonable discretion having commenced to perform the duties of such
executive officer within 120 days after such cessation; or
7.13 CHANGE IN CONTROL.
(i) BCC shall cease to own 100% of the capital stock of Company, (ii)
Benedek or his estate or family members or trusts for the benefit of his family
members shall cease to have a presently exercisable right to vote at least 51%
of all issued and outstanding equity Securities of BCC entitled (without regard
to the occurrence of any contingency) to vote for the election of members of the
Board of Directors of BCC, (iii) Benedek or his estate or family members or
trusts for the benefit of his family members shall cease to beneficially own at
least 51% of the economic value of BCC, (iv) a "Change of Control" under the
Existing Senior Note Indenture or under the Senior Subordinated Note Indenture
shall occur or (v) Company shall cease to own 100% of the capital stock of
License Sub; or
7.14 FCC LICENSES.
Any material FCC License shall be cancelled, terminated, rescinded,
revoked, suspended, impaired, otherwise finally denied renewal, or otherwise
modified in any material adverse respect, or shall be renewed on terms that
materially and adversely affect the economic or commercial value or usefulness
thereof; or any material FCC License shall cease to be in full force and effect;
or the grant of any material FCC License shall have been stayed, vacated or
reversed, or modified in any material adverse respect by judicial or
administrative proceedings; or any administrative law judge or other
representative of the FCC shall have issued an initial decision in any
non-comparative license renewal, license revocation or any comparative (multiple
applicant) proceeding to the effect that any material FCC License should be
revoked or not be renewed; or any other proceeding shall have been instituted by
or shall have been commenced before any court, the FCC or any other regulatory
body that could reasonably be expected to result in (i) cancellation,
termination, rescission, revocation, material impairment, suspension or denial
of renewal of a material FCC License, or (ii) a modification of a material FCC
License in a material adverse respect or a renewal thereof on terms that
materially and adversely affect the economic or commercial value or usefulness
thereof; or
7.15 INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any Guaranty
for any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared by a court of competent jurisdiction to be null and void,
(ii) any Collateral Document shall cease to be in full force and effect (other
than by reason of a release of Collateral thereunder in accordance with
111
<PAGE>
<PAGE>
the terms hereof or thereof, the satisfaction in full of the Obligations or any
other termination of such Collateral Document in accordance with the terms
hereof or thereof) or shall be declared null and void by a court of competent
jurisdiction, or Agent shall not have or shall cease to have a valid and
perfected First Priority Lien in any Collateral purported to be covered thereby,
in each case for any reason other than the failure of Agent or any Lender to
take any action within its control, or (iii) any Loan Party shall contest the
validity or enforceability of any Loan Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Loan Document to which it is a party; or
7.16 SUBORDINATED INDEBTEDNESS.
BCC or any of its Subsidiaries shall fail to comply with the
subordination provisions contained in the Senior Subordinated Note Indenture or
any other agreement governing Subordinated Indebtedness;
THEN (i) upon the occurrence of any Event of Default described in subsection 7.6
or 7.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans and (b) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by Company, and the obligation of
each Lender to make any Loan hereunder shall thereupon terminate, and (ii) upon
the occurrence and during the continuation of any other Event of Default, Agent
shall, upon the written request or with the written consent of Requisite
Lenders, by written notice to Company, declare all or any portion of the amounts
described in clauses (a) and (b) above to be, and the same shall forthwith
become, immediately due and payable, and the obligation of each Lender to make
any Loan hereunder shall thereupon terminate.
Notwithstanding anything contained in the preceding paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 9.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to
rescind or annul any acceleration hereunder or to preclude Agent or Lenders
from exercising any of the rights or remedies available to them
under any of the Loan Documents, even if the conditions set forth in this
paragraph are met.
112
<PAGE>
<PAGE>
SECTION 8.
AGENT
8.1 APPOINTMENT.
A. APPOINTMENT OF AGENT. BTCo is hereby appointed Agent hereunder, and
each Lender hereby authorizes Agent to act as its agent in accordance with the
terms of this Agreement and the other Loan Documents. Agent hereby agrees to act
upon the express conditions contained in this Agreement and the other Loan
Documents, as applicable. The provisions of this Section 8 are solely for the
benefit of Agent and Lenders and Company shall have no rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for Company or any of its
Subsidiaries. Agent, without consent of or notice to any party hereto, may
assign any and all of its rights or obligations hereunder to any of its
Affiliates.
B. RESIGNATION OF CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY,
AS EXISTING COLLATERAL AGENT AND EXISTING ADMINISTRATIVE AGENT. Effective
simultaneously with the effectiveness of this Agreement, Canadian Imperial Bank
of Commerce, New York Agency resigned as Existing Collateral Agent and Existing
Administrative Agent. From and after the Restatement Date, any reference
contained in any of the Loan Documents (including, without limitation, in any of
the Mortgages) to (x) "Collateral Agent" shall be deemed to be a reference to
Agent (solely in its capacity as Agent and not in any other capacity) as the
successor to Existing Collateral Agent solely in its capacity as Existing
Collateral Agent and not in any other capacity and (y) "Administrative Agent"
shall be deemed to be a reference to Agent (solely in its capacity as Agent and
not in any other capacity) as successor to the Existing Administrative Agent
solely in its capacity as Existing Administrative Agent and not in any other
capacity. Accordingly, Agent is hereby vested with all the rights, powers,
privileges and duties of Existing Collateral Agent and Existing Administrative
Agent, subject, however, to the immunities, indemnities and other benefits of
Section 8 of the Existing Credit Agreement and this Section 8.
C. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Agent appoint an additional individual or institution as a
separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually
as a "SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL
COLLATERAL AGENTS").
In the event that Agent appoints a Supplemental Collateral Agent with
respect to any Collateral, (i) each and every right, power, privilege or duty
expressed or intended by this
113
<PAGE>
<PAGE>
Agreement or any of the other Loan Documents to be exercised by or vested
in or conveyed to Agent with respect to such Collateral shall be
exercisable by and vest in such Supplemental Collateral Agent to the
extent, and only to the extent, necessary to enable such Supplemental Collateral
Agent to exercise such rights, powers and privileges with respect to such
Collateral and to perform such duties with respect to such Collateral, and every
covenant and obligation contained in the Loan Documents and necessary to the
exercise or performance thereof by such Supplemental Collateral Agent shall run
to and be enforceable by either Agent or such Supplemental Collateral Agent, and
(ii) the provisions of this Section 8 and of subsections 9.2 and 9.3 that refer
to Agent shall inure to the benefit of such Supplemental Collateral Agent and
all references therein to Agent shall be deemed to be references to Agent and/or
such Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Agent for more
fully and certainly vesting in and confirming to him or it such rights, powers,
privileges and duties, Company shall, or shall cause such Loan Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by Agent. In case any Supplemental Collateral Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Collateral Agent, to
the extent permitted by law, shall vest in and be exercised by Agent until the
appointment of a new Supplemental Collateral Agent.
8.2 POWERS AND DUTIES; GENERAL IMMUNITY.
A. POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Loan Documents as are specifically
delegated or granted to Agent by the terms hereof and thereof, together with
such powers, rights and remedies as are reasonably incidental thereto. Agent
shall have only those duties and responsibilities that are expressly specified
in this Agreement and the other Loan Documents. Agent may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees. Agent shall not have, by reason of this Agreement or any of the other
Loan Documents, a fiduciary relationship in respect of any Lender; and nothing
in this Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement or any of the other Loan Documents except as expressly
set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Agent to Lenders or by or on behalf of
Company to Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
114
<PAGE>
<PAGE>
of Default or Potential Event of Default. Without limitation of the other
provisions of this Section 8, Agent shall not be responsible to BCC, Company,
any Lender or any other Person for any action, omission, fact or circumstance
occurring prior to Agent's appointment as Agent hereunder.
C. EXCULPATORY PROVISIONS. Neither Agent nor any of its officers,
directors, partners, employees or agents shall be liable to Lenders for any
action taken or omitted by Agent under or in connection with any of the Loan
Documents except to the extent caused by Agent's gross negligence or willful
misconduct. Agent shall be entitled to refrain from any act or the taking of any
action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
Agent shall have received instructions in respect thereof from Requisite Lenders
(or such other Lenders as may be required to give such instructions under
subsection 9.6) and, upon receipt of such instructions from Requisite Lenders
(or such other Lenders, as the case may be), Agent shall be entitled to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Agent shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Company and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or (where so instructed)
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 9.6).
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, Agent in its individual capacity as a Lender hereunder. With
respect to its participation in the Loans, Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity. Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with Company or any
of its Affiliates as if it were not performing the duties specified herein, and
may accept fees and other consideration from Company for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
8.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans hereunder and that
it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. Agent shall not have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
115
<PAGE>
<PAGE>
thereafter, and Agent shall not have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
8.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Agent, to the extent Agent shall not have been reimbursed by Company,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against Agent in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Loan
Documents or otherwise in its capacity as Agent in any way relating to or
arising out of this Agreement or the other Loan Documents; provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. Subject to the
proviso to the immediately preceding sentence, if any indemnity furnished to
Agent for any purpose shall, in the opinion of Agent, be insufficient or become
impaired, Agent may call for additional indemnity and cease, or not commence, to
do the acts indemnified against until such additional indemnity is furnished.
8.5 SUCCESSOR AGENT.
Agent may resign at any time by giving 30 days' prior written notice
thereof to Lenders and Company. Upon any such notice of resignation, Requisite
Lenders shall have the right, upon five Business Days' notice to Company, to
appoint a successor Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 8 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
8.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes (i) Agent, on behalf of and for
the benefit of Lenders, to enter into each Collateral Document as secured party
and to be the agent for and representative of Lenders under each Guaranty, and
each Lender agrees to be bound by the terms of each Collateral Document and
Guaranty; provided that Agent shall not (i) enter into or consent to any
material amendment, modification, termination or waiver of any provision
contained in any Collateral Document or Guaranty or (ii) release any Collateral
(except as otherwise expressly permitted or required pursuant to the terms of
this Agreement or the applicable Collateral Document), in each case without the
prior consent of Requisite Lenders (or, if required pursuant to subsection 9.6,
Supermajority Lenders). Each Lender having Term Loans hereunder hereby
authorizes Agent to execute and deliver, on behalf of and for the benefit of
such Lenders, an acknowledgment to the Existing Company Pledge Agreement
as required by Section 18 thereof. In the event Collateral is sold in an
Asset Sale permitted hereunder or otherwise consented to by Requisite
Lenders, Agent may, without further consent or authorization from Lenders,
release the
116
<PAGE>
<PAGE>
Liens granted under the Collateral Documents on the Collateral that is
the subject of such Asset Sale concurrently with the consummation
of such Asset Sale; provided that Agent shall have received
(i) reasonable, and in any event not less than 30 days', prior written
notice of such Asset Sale from Company; provided that with respect to any Asset
Sales being consummated on the Restatement Date, Company shall have provided 2
days prior written notice of such Asset Sale; (ii) an Officers' Certificate (1)
certifying that no Event of Default or Potential Event of Default shall have
occurred and be continuing as of the date of such release of Collateral, (2)
setting forth a detailed description of the Collateral subject to such Asset
Sale, and (3) certifying such Asset Sale is permitted under this Agreement and
that all conditions precedent to such Asset Sale under this Agreement have been
met; and (iii) all Net Cash Proceeds of Asset Sale required to be applied to
repay Obligations under this Agreement. Upon payment in full of all of the
Obligations (other than inchoate indemnification obligations with respect to
claims, losses or liabilities which have not yet arisen) and termination of the
Commitments, Agent shall release the Liens on such Collateral granted pursuant
to the Collateral Documents. Upon any release of Collateral pursuant to the
foregoing, Agent shall, at Company's expense, execute and deliver such documents
(without recourse or representation or warranty) as reasonably requested to
evidence such release. Notwithstanding anything herein to the contrary, upon the
occurrence and during the continuation of an Event of Default, for purposes of
any decisions relating to (including decisions relating to exercising or
refraining from exercising remedies under the Collateral Documents), or taking
any actions with respect to, the Collateral Documents or the Collateral,
"Requisite Lenders" shall mean the holders of 51% or more of the aggregate
Tranche A Term Loan Exposure of all Lenders plus the aggregate Tranche B Term
Loan Exposure of all Lenders plus the aggregate Revolving Loan Exposure of all
Lenders. Agent shall exercise or refrain from exercising remedies under the
Collateral Documents in accordance with the directions of Requisite Lenders;
provided, however, that Lenders acknowledge and agree that, with respect to the
Collateral that is shared on an equal and ratable basis with the holders of the
Existing Senior Notes, decisions relating to the exercise and manner of exercise
of remedies are to be made by Agent at the direction of "Requisite Obligees" (as
defined in the applicable Collateral Document) and, therefore, Requisite Lenders
may give directions to Agent with respect to the exercise of remedies but may
not hold a sufficient amount of secured obligations to constitute Requisite
Obligees under the applicable Collateral Document, in which case Agent shall
follow the directions of Requisite Obligees. Anything contained in any of the
Loan Documents to the contrary notwithstanding, Company, Agent and each Lender
hereby agree that (x) no Lender shall have any right individually to realize
upon any of the Collateral under any Collateral Document or to enforce any
Guaranty, it being understood and agreed that all powers, rights and remedies
under the Collateral Documents and the Guaranties may be exercised solely by
Agent for the benefit of Lenders in accordance with the terms thereof, and (y)
in the event of a foreclosure by Agent on any of the Collateral pursuant to a
public or private sale, Agent or any Lender may be the purchaser of any or all
of such Collateral at any such sale and Agent, as agent for and representative
of Lenders (but not any Lender or Lenders in its or their respective individual
capacities unless Requisite Lenders shall otherwise agree in writing) shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Obligations as a credit on account of the
purchase price for any collateral payable by Agent at such sale.
117
<PAGE>
<PAGE>
SECTION 9.
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
A. GENERAL. Subject to subsection 9.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans made by it or any other interest herein or in any other
Obligations owed to it; provided that no such sale, assignment, transfer or
participation shall, without the consent of Company, require Company to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; and provided, further that no such sale, assignment or
transfer described in clause (i) above shall be effective unless and until an
Assignment Agreement effecting such sale, assignment or transfer shall have been
accepted by Agent and recorded in the Register as provided in subsection
9.1B(ii). Except as otherwise provided in this subsection 9.1, no Lender shall,
as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of its Commitments or the Loans or the other
Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan or
other Obligation may (a) be assigned in any amount to another Lender,
or to an Affiliate of the assigning Lender or another Lender, with the
giving of notice to Company and Agent or (b) be assigned in an
aggregate amount of not less than $5,000,000 (or such lesser amount as
shall constitute the aggregate amount of the Commitments, Loans and
other Obligations of the assigning Lender) to any other Eligible
Assignee (treating any two or more investment funds that invest in
commercial loans and that are managed or advised by the same investment
advisor or by an Affiliate of such investment advisor as a single
Eligible Assignee) with the consent of Agent (which consent shall not
be unreasonably withheld or delayed). To the extent of any such
assignment in accordance with either clause (a) or (b) above, the
assigning Lender shall be relieved of its obligations with respect to
its Commitments, Loans or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute and deliver
to Agent, for its acceptance and recording in the Register, an
Assignment Agreement, together with a processing and recordation fee of
$3,500 and such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
Agent pursuant to subsection 2.7B(iii)(a). Upon such execution,
delivery, acceptance and recordation, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder
and (z) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to
such Assignment Agreement, relinquish its rights (other than any rights
which survive the termination of this Agreement under subsection 9.9B)
and
118
<PAGE>
<PAGE>
be released from its obligations under this Agreement (and, in the
case of an Assignment Agreement covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto). The Commitments
hereunder shall be modified to reflect the Commitment of such
assignee and any remaining Commitment of such assigning Lender
and, if any such assignment occurs after the issuance of the Notes
hereunder, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Agent for cancellation,
and thereupon new Notes shall be issued to the assignee and to the
assigning Lender, substantially in the form of Exhibit III, Exhibit IV
or Exhibit V annexed hereto, as the case may be, with appropriate
insertions, to reflect the new Commitments and/or outstanding Tranche A
Term Loans and/or Tranche B Term Loans, as the case may be, of the
assignee and the assigning Lender.
(ii) Acceptance by Agent; Recordation in Register. Upon its
receipt of an Assignment Agreement executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with
the processing and recordation fee referred to in subsection 9.1B(i)
and any forms, certificates or other evidence with respect to United
States federal income tax withholding matters that such assignee may be
required to deliver to Agent pursuant to subsection 2.7B(iii)(a), Agent
shall, if Agent has consented to the assignment evidenced thereby (to
the extent such consent is required pursuant to subsection 9.1B(i)),
(a) accept such Assignment Agreement by executing a counterpart thereof
as provided therein (which acceptance shall evidence any required
consent of Agent to such assignment), (b) record the information
contained therein in the Register, and (c) give prompt notice thereof
to Company. Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
9.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any Loan allocated to such
participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation, and all amounts
payable by Company hereunder (including amounts payable to such Lender pursuant
to subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 9.4 and 9.5, (a) any participation will give
rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS AND FUND TRUSTEES. In addition
to the assignments and participations permitted under the foregoing provisions
of this subsection 9.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender, and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and with the consent of Agent any Lender
which is an investment fund may pledge all or any portion of its Notes or Loans
to its trustee in support of its obligations to such trustee; provided that (i)
no Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any such assignment and pledge and (ii) in
no event shall
119
<PAGE>
<PAGE>
such Federal Reserve Bank or trustee be considered to be a "Lender" or be
entitled to require the assigning Lender to take or omit to take any action
hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 9.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 9.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
9.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of Agent in connection with the preparation of the Loan
Documents and any consents, amendments, waivers or other modifications thereto;
(ii) all the costs of furnishing all opinions by counsel for Company (including
any opinions requested by Lenders as to any legal matters arising hereunder) and
of Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Agent (including allocated costs of
internal counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Agent on behalf of Lenders pursuant to any
Collateral Document, including filing and recording fees, expenses and taxes,
stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Agent and of counsel
providing any opinions that Agent or Requisite Lenders may request in respect of
the Collateral Documents or the Liens created pursuant thereto; (v) all the
actual costs and reasonable expenses (including the reasonable fees, expenses
and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Agent or its counsel) of obtaining and reviewing any environmental audits or
reports provided for under subsection 5.7 and any audits or reports provided for
under subsection 5.5B with respect to Accounts Receivable of Company and its
Subsidiaries; (vi) all the actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any consultants, advisors and
agents employed or retained by Agent or its counsel) in connection with the
custody or preservation of any of the Collateral; (vii) all other actual and
reasonable costs and expenses incurred by Agent in connection with the
syndication of the Commitments and the negotiation,
120
<PAGE>
<PAGE>
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Agent and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranties)
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings. As long as no Event of
Default shall have occurred and be continuing, Company shall not be responsible
for expenses incurred by Lenders to attend Lender meetings or exercise
inspection rights pursuant to subsection 5.5.
9.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 9.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agent and Lenders, and the officers, directors,
partners, employees, agents, trustees and affiliates of any of Agent and Lenders
and each of their respective affiliates (collectively called the "INDEMNITEES"),
from and against any and all Indemnified Liabilities (as hereinafter defined);
provided that Company shall not have any obligation to any Indemnitee hereunder
with respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise from the gross negligence or willful misconduct of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Related
Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or any enforcement of any of the Loan Documents (including any
sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranties)), (ii) any commitment letter delivered by Agent
or any Lender to Company with respect to the credit facilities provided
hereunder, or (iii) any Environmental Claim or any Hazardous Materials Activity
relating to or
121
<PAGE>
<PAGE>
arising from, directly or indirectly, any past or present activity, operation,
land ownership, or practice of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 9.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
9.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by BCC and Company at any time
or from time to time subject to the consent of Agent, without notice to BCC or
Company or to any other Person (other than Agent), any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts),
including deposits in the Collateral Account and the Company Collateral Account,
and any other Indebtedness at any time held or owing by that Lender to or for
the credit or the account of BCC or Company against and on account of the
obligations and liabilities of BCC or Company to that Lender under this
Agreement and the other Loan Documents, including all claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not (i) that Lender shall have made any
demand hereunder or (ii) the principal of or the interest on the Loans or any
other amounts due hereunder shall have become due and payable pursuant to
Section 7 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Each of BCC and Company hereby further assigns, pledges
and grants to Agent and each Lender a security interest in all deposits and
accounts maintained with Agent or such Lender as security for the Obligations.
9.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Agent and each other Lender of
the receipt of such payment and (ii) apply a portion of such payment to purchase
participations or other similar interests (which it shall be deemed to have
purchased from each seller of a participation or such other interest
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion
122
<PAGE>
<PAGE>
to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations or such other interests shall be returned to such purchasing
Lender ratably to the extent of such recovery, but without interest. Company
expressly consents to the foregoing arrangement and agrees that any holder of a
participation or such other interest so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by Company to that holder with respect thereto as fully as if that
holder were owed the amount of the participation or such other interest held by
that holder.
9.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by any Loan
Party therefrom, shall in any event be effective without the written concurrence
of Requisite Lenders; provided that any such amendment, modification,
termination, waiver or consent which: increases the amount of any of the
Commitments or reduces the principal amount of any of the Loans; changes in any
manner the definition of "Pro Rata Share" or the definition of "Supermajority
Lenders" or the definition of "Requisite Lenders" (it being understood that (i)
with the consent of Requisite Lenders, additional extensions of credit pursuant
to this Agreement may be included in the determination of "Requisite Lenders" on
substantially the same basis as the Term Loans, the Revolving Loan Commitments
and Revolving Loans are included on the Restatement Date and (ii) with the
consent of Supermajority Lenders, additional extensions of credit pursuant to
this Agreement may be included in the determination of "Supermajority Lenders"
on substantially the same basis as the Term Loans, the Revolving Loan
Commitments and the Revolving Loans are included on the Restatement Date);
changes in any manner any provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of all Lenders; postpones the
scheduled final maturity date (but not the date of any scheduled installment of
principal or prepayment) of any of the Loans; postpones the date on which any
interest or any fees are payable; decreases the interest rate borne by any of
the Loans (other than any waiver of any increase in the interest rate applicable
to any of the Loans pursuant to subsection 2.2E) or the amount of any fees
payable hereunder; increases the maximum duration of Interest Periods permitted
hereunder; releases BCC from its obligations under the BCC Guaranty or releases
License Sub from its obligations under the License Sub Guaranty, in each case
other than in accordance with the terms of the Loan Documents; or changes in any
manner the provisions contained in subsection 7.1 or this subsection 9.6 shall
be effective only if evidenced by a writing signed by or on behalf of all
Lenders. In addition, (i) any amendment, modification, termination or waiver of
any of the provisions contained in Section 3 shall be effective only if
evidenced by a writing signed by or on behalf of Agent and Requisite Lenders,
(ii) no amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification, termination or waiver
of any provision of Section 8 or of any other provision of this Agreement which,
by its terms, expressly requires the approval or concurrence of Agent shall be
effective without the written concurrence of Agent, (iv) no amendment,
modification, termination or waiver of any provision of this Agreement or the
Collateral Documents and no consent to any departure by any Loan Party therefrom
which has the effect of releasing any material portion of the Collateral (other
than as permitted in accordance with the express provisions of subsection 8.6 or
the Collateral
123
<PAGE>
<PAGE>
Documents) or changing any scheduled installment of principal, shall be
effective without the written concurrence of Supermajority Lenders; provided
that any amendment, modification, termination or waiver of any provision of
subsection 2.4 which has the effect of postponing or reducing the aggregate
scheduled installments of principal applicable to Tranche A Term Loans or
Tranche B Term Loans (each being a "CLASS") in a manner that is proportionately
greater than the corresponding postponement or reduction applicable to the other
Class shall not be effective without the written concurrence of the holders of
75% of each Class. Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given.
No notice to or demand on Company in any case shall entitle Company to any other
or further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 9.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by BCC and Company, on BCC and Company.
Notwithstanding anything herein to the contrary, if any Lender fails to fund
any Loan required to be funded by such Lender hereunder, the aggregate Tranche
A Term Loan Exposure, Tranche B Term Loan Exposure and Revolving Loan Exposure
of such Lender shall not be counted for purposes of determining "Requisite
Lenders" or "Supermajority Lenders" or the percentage of a Class required to
approve any amendment, modification, termination or waiver of any provision of
this Agreement.
9.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
9.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Agent shall not be effective
until received. For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature pages hereof or (i) as
to BCC, Company and Agent, such other address as shall be designated by such
Person in a written notice delivered to the other parties hereto and (ii) as to
each other party, such other address as shall be designated by such party in a
written notice delivered to Agent.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
124
<PAGE>
<PAGE>
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 9.2, 9.3
and 9.4 and the agreements of Lenders set forth in subsections 8.2C, 8.4 and 9.5
shall survive the payment of the Loans and the termination of this Agreement.
9.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Agent or any Lender in the exercise
of any power, right or privilege hereunder or under any other Loan Document
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing under
this Agreement and the other Loan Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
9.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Agent nor any Lender shall be under any obligation to marshal
any assets in favor of Company or any other party or against or in payment of
any or all of the Obligations. To the extent that Company makes a payment or
payments to Agent or Lenders (or to Agent for the benefit of Lenders), or Agent
or Lenders enforce any security interests or exercise their rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
9.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
9.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
125
<PAGE>
<PAGE>
9.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
9.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
9.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 9.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
9.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BCC OR COMPANY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH OF BCC AND COMPANY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO BCC OR COMPANY, AS APPLICABLE, AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 9.8; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BCC OR COMPANY IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT LENDERS RETAIN THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST BCC OR COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT THE PROVISIONS OF THIS SUBSECTION 9.17 RELATING TO JURISDICTION AND VENUE
SHALL BE BINDING AND ENFORCEABLE TO THE
126
<PAGE>
<PAGE>
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
9.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP OR OTHER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter
of this transaction, including contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in
their related future dealings. Each party hereto further warrants and represents
that it has reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 9.18 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the
event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
9.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process or
disclosures required by the National Association of Insurance Commissioners;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further, that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
127
<PAGE>
<PAGE>
9.20 MAXIMUM AMOUNT.
A. It is the intention of Company and Lenders to conform strictly to
the usury and similar laws relating to interest from time to time in force, and
all agreements between Company, Agent and Lenders, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever, whether by acceleration of maturity
hereof or otherwise, shall the amount paid or agreed to be paid in the aggregate
to Lenders or to Agent on behalf of Lenders as interest hereunder or under the
other Loan Documents or in any other security agreement given to secure the
Obligations, or in any other document evidencing, securing or pertaining to the
indebtedness evidenced hereby or thereby, exceed the maximum amount permissible
under applicable usury or such other laws (the "MAXIMUM AMOUNT"). If under any
circumstances whatsoever fulfillment of any provision hereof, or of any of the
other Loan Documents, at the time performance of such provision shall be due,
shall involve exceeding the Maximum Amount, then, ipso facto, the obligation to
be fulfilled shall be reduced to the Maximum Amount. For the purposes of
calculating the actual amount of interest paid and/or payable hereunder in
respect of laws pertaining to usury or such other laws, all sums paid or agreed
to be paid to Lenders for the use, forbearance or detention of the indebtedness
of Company evidenced hereby, outstanding from time to time shall, to the extent
permitted by applicable law, be amortized, pro rated, allocated and spread from
the date of disbursement of the proceeds of the Loans until payment in full of
all of such indebtedness, so that the actual rate of interest on account of such
indebtedness is uniform throughout the term hereof. The terms and provisions of
this subsection shall control and supersede every other provision of all
agreements between Company, Agent and Lenders.
B. If under any circumstances Lenders shall receive an amount which
would exceed the Maximum Amount, such amount shall be deemed a payment in
reduction of the principal amount of the Loans and shall be treated as a
voluntary prepayment under subsection 2.4B(i), and shall be so applied in
accordance with subsection 2.4B(iv) hereof, or if such amount exceeds the unpaid
balance of the Loans and any other indebtedness of Company in favor of Lenders,
the excess shall be deemed to have been a payment made by mistake and shall be
refunded to Company.
9.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Agent of written or telephonic notification of such execution and authorization
of delivery thereof.
[Remainder of page intentionally left blank]
128
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY AND BCC:
BENEDEK BROADCASTING CORPORATION,
a Delaware corporation
By:
-------------------------------------
Ronald L. Lindwall
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
BENEDEK COMMUNICATIONS CORPORATION,
a Delaware corporation
By:
-----------------------------------
Ronald L. Lindwall
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
Notice Address:
Benedek Broadcasting Corporation
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
AGENTS AND LENDERS:
BANKERS TRUST COMPANY,
individually and as Agent
By:
--------------------------------
Name:
Title:
Notice Address:
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY,
as a Lender
By:
---------------------------------
Name:
Title:
Notice Address:
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: David Barras/Mark Boyle
Telecopy: (414) 299-7124
S-3
<PAGE>
<PAGE>
PILGRIM AMERICA PRIME RATE
TRUST,
as a Lender
By:
-----------------------------------
Name:
Title:
Notice Address:
Pilgrim America Prime Rate Trust
Two Renaissance Square
40 North Central Avenue, Suite 1200
Phoenix, AZ 85004-3444
Attention: Melina Dempsey/Bill Nutting
Telecopy: (602) 417-8321
with a copy to:
State Street BankLand Trust Company
Alternative Structures Unit
Boston, MA.
Attention: Wayne Elpin
Ref: Pilgrim America Prime Rate Trust
Telecopy: (617) 664-5366
S-4
<PAGE>
<PAGE>
PRIME INCOME TRUST,
as a Lender
By:
---------------------------------
Name:
Title:
Notice Address:
Dean Witter-Prime Income Trust
2 World Trade Center, 72nd Floor
New York, New York 10048
Attention: L. Pistecchia
Telecopy: (212) 392-5435
S-5
<PAGE>
<PAGE>
KZH HOLDING CORPORATION III
as a Lender
By: Chancellor LGT Senior Secured Management, Inc.,
as Portfolio Advisor
By:
-------------------------------------------------
Name:
Title:
Notice Address:
Chancellor LGT Secured Management, Inc.
1166 Avenue of the Americas, 27th Floor
New York, New York 10036
Attention: Stephen M. Alfieri
Telecopy: (212) 278-9619
S-6
<PAGE>
<PAGE>
SENIOR DEBT PORTFOLIO,
as a Lender
By:
------------------------------------
Boston Management and Research
as Investment Advisor
Notice Address:
24 Federal Street, 6th Floor
Boston, MA 02110
Attention: Juliana Riley
Telecopy: (617) 348-0115
S-7
<PAGE>
<PAGE>
MORGAN STANLEY SENIOR FUNDING, INC.
as a Lender
By:
----------------------------------
Name:
Title:
Notice Address:
Morgan Stanley Senior Funding, Inc.
1585 Broadway, 10th Floor
New York, New York 10036
Attention: James Morgan
Telecopy: (212) 761-0592
S-8
<PAGE>
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE
as a Lender
By:
--------------------------------
Name:
Title:
Notice Address:
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: William Swenson
Telecopy: (212) 856-3799
With a copy to:
Canadian Imperial Bank of Commerce
2 Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, GA 30339
Attention: Elayne Fudge
Telecopy: (770) 319-4955
S-9
<PAGE>
<PAGE>
VAN KAMPEN CLO I, LIMITED
as a Lender
By:
----------------------------------
Name:
Title:
Notice Address:
Van Kampen American Capital
One Parkview Plaza
Oakbrook Terrace, IL 60181
Attention: Jeffrey Maillet
Telecopy: (630) 684-6384, 6385
S-10
<PAGE>
<PAGE>
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
as a Lender
By:
----------------------------------
Name:
Title:
Notice Address:
Van Kampen American Capital
One Parkview Plaza
Oakbrook Terrace, IL 60181
Attention: Bill Murphy
Telecopy: (630) 684-6470/6741
S-11
<PAGE>
<PAGE>
EXHIBIT 10.9
EXECUTION
AMENDED AND RESTATED BCC GUARANTY
THIS AMENDED AND RESTATED GUARANTY is entered into as of December 17,
1997 by BENEDEK COMMUNICATIONS CORPORATION, a Delaware corporation
("GUARANTOR"), in favor of and for the benefit of BANKERS TRUST COMPANY
("BANKERS"), as agent for and representative of (in such capacity herein called
"AGENT") the Beneficiaries (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Benedek Broadcasting Corporation, a Delaware corporation and wholly
owned subsidiary of Guarantor ("COMPANY"), and Guarantor have entered into an
Amended and Restated Credit Agreement dated as of December 17, 1997 (said
Amended and Restated Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "AMENDED CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Guarantor, Company, the financial
institutions listed therein as Lenders ("LENDERS"), and Bankers Trust Company,
as Agent, which Amended Credit Agreement amends and restates that certain Credit
Agreement, dated as of June 6, 1996 (said Credit Agreement, as heretofore
amended, supplemented or otherwise modified, being the "EXISTING CREDIT
AGREEMENT"), with the financial institutions listed therein, Pearl Street L.P.,
as Arranging Agent, Goldman, Sachs & Co., as Syndication Agent, and Canadian
Imperial Bank of Commerce, New York Agency ("CIBC"), as Administrative Agent and
Collateral Agent, pursuant to which Lenders have made certain commitments,
subject to the terms and conditions set forth in the Amended Credit Agreement,
to, among other things, convert and continue certain credit facilities,
including the Term Loans initially extended as AXELs to Company pursuant to the
Existing Credit Agreement and it is desired that such obligations be guarantied
hereunder.
B. Company has entered into that certain Indenture, dated as of March 1,
1995 (said Indenture, as amended, supplemented, or otherwise modified from time
to time, being the "EXISTING SENIOR NOTE INDENTURE") with Benedek Broadcasting
Company, L.L.C., a Delaware limited liability company and subsidiary of Company
("LICENSE SUB"), and The Bank of New York, as trustee (the "SENIOR NOTE
TRUSTEE"), pursuant to which Company has issued $135,000,000 aggregate principal
amount of 11-7/8% Senior Secured Notes due 2005 (the "EXISTING SENIOR NOTES"),
and it is desired that such obligations be guarantied hereunder.
<PAGE>
<PAGE>
C. Company may from time to time hereafter enter into one or more
Interest Rate Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS")
with or one or more Lenders or Affiliates of Lenders (in such capacity,
collectively, "INTEREST RATE EXCHANGERS") in accordance with the terms of the
Amended Credit Agreement, and it is desired that the obligations of Company
under the Lender Interest Rate Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof (all such obligations being the "INTEREST RATE OBLIGATIONS")
be guarantied hereunder.
D. As a condition precedent to the Existing Credit Agreement, Guarantor
executed and delivered that certain BCC Guaranty dated as of June 6, 1996
("EXISTING BCC GUARANTY") in favor of CIBC, in its capacity as agent of and
representative for the Beneficiaries (as defined in the Existing BCC Guaranty).
E. It is a condition precedent to the execution and delivery of the
Amended Credit Agreement by Lenders that Guarantor amend and restate the
Existing BCC Guaranty to guaranty the Company's Obligations under the Amended
Credit Agreement and under the other Loan Documents.
F. Guarantor is willing irrevocably and unconditionally to amend and
restate the Existing BCC Guaranty to guaranty all obligations of Company under
the Amended Credit Agreement and other Loan Documents, the Existing Senior Notes
and any Lender Interest Rate Agreements and to otherwise modify the Existing BCC
Guaranty as provided herein.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Agent to enter into the Amended Credit Agreement
and to make Loans and other extensions of credit thereunder, Guarantor hereby
agrees as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
As used in this Guaranty, the following terms shall have the following
meanings unless the context otherwise requires:
"BENEFICIARIES" means Agent, Lenders, any Interest Rate
Exchangers and the holders of the Existing Senior Notes (the
"NOTEHOLDERS").
"EVENT OF DEFAULT" means (i) an Event of Default as defined under
the Amended Credit Agreement or under the Existing Senior Note Indenture
or (ii) the occurrence of an Early Termination Date (as defined in a
Master Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement
2
<PAGE>
<PAGE>
in the form prepared by the International Swap and Derivatives
Association Inc. or a similar event under any similar swap agreement)
under any Lender Interest Rate Agreement.
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term in
subsection 2.1.
"GUARANTY" means this Guaranty, dated as of December 17, 1997, as
it may be amended, supplemented or otherwise modified from time to time.
"LICENSE SUB GUARANTY" means, collectively, (a) the guaranty by
License Sub of the Existing Senior Notes set forth in Article 10 of the
Existing Senior Note Indenture and (b) the License Sub Guaranty (as
defined in the Amended Credit Agreement), as each may be amended,
supplemented or otherwise modified from time to time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means
payment in full of the Guarantied Obligations (other than inchoate
indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen), including without limitation all
principal, interest, costs, fees and expenses (including, without
limitation, reasonable legal fees and expenses) of Beneficiaries as
required under the Loan Documents, the Existing Senior Note Indenture
and the Lender Interest Rate Agreements.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Guaranty unless otherwise specifically
provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Amended Credit Agreement, the terms, conditions and provisions
of this Guaranty shall prevail.
SECTION 2.
THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS.
Guarantor hereby irrevocably and unconditionally guaranties, as primary
obligor and not merely as surety, the due and punctual payment in full of all
Guarantied Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code,
3
<PAGE>
<PAGE>
11 U.S.C. 'SS' 362(a)). The term "GUARANTIED OBLIGATIONS" is used herein in its
most comprehensive sense and includes:
(a) any and all obligations and liabilities of every nature of
Company and any and all Interest Rate Obligations, in each case now or
hereafter made, incurred or created, whether absolute or contingent,
liquidated or unliquidated, whether due or not due, and however arising
under or in connection with (i) the Amended Credit Agreement, the Notes
and all other Loan Documents, (ii) the Existing Senior Note Indenture
and the Existing Senior Notes and (iii) the Lender Interest Rate
Agreements, whether for principal or interest, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities
that are paid, to the extent all or any part of such payment is avoided
or recovered directly or indirectly from Agent or any Beneficiary as a
preference, fraudulent transfer or otherwise and all obligations of
every nature of Guarantor under this Guaranty, including those arising
under successive borrowing transactions under the Amended Credit
Agreement which shall either continue the Obligations of Company or from
time to time renew them after they have been satisfied and including
interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on any Guarantied Obligations,
whether or not a claim is allowed against Company for such interest in
the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 CONTRIBUTION BY GUARANTOR.
Guarantor under this Guaranty and License Sub under the License Sub
Guaranty, together desire to allocate among themselves (collectively, the
"CONTRIBUTING GUARANTORS"), in a fair and equitable manner, their obligations
arising under this Guaranty and the License Sub Guaranty. Accordingly, in the
event any payment or distribution is made on any date by Guarantor under this
Guaranty or License Sub under the License Sub Guaranty (each of Guarantor and
License Sub being a "FUNDING GUARANTOR") that exceeds its Fair Share (as defined
below) as of such date, that Funding Guarantor shall be entitled to a
contribution from the other Contributing Guarantor in the amount of such other
Contributing Guarantor's Fair Share Shortfall (as defined below) as of such
date, with the result that all such contributions will cause each Contributing
Guarantor's Aggregate Payments (as defined below) to equal its Fair Share as of
such date. "FAIR SHARE" means, with respect to a Contributing Guarantor as of
any date of determination, an amount equal to (a) the ratio of (i) the Fair
Share Contribution Amount (as defined below) with respect to such Contributing
Guarantor to (ii) the aggregate of the Fair Share Contribution Amounts with
respect to all Contributing Guarantors multiplied by (b) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty and the License Sub Guaranty in respect of the obligations guarantied.
"FAIR SHARE
4
<PAGE>
<PAGE>
SHORTFALL" means, with respect to a Contributing Guarantor as of any date of
determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty or the License Sub Guaranty, as
applicable, that would not render its obligations hereunder or thereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any applicable provisions of comparable
state law; provided that, solely for purposes of calculating the "Fair Share
Contribution Amount" with respect to any Contributing Guarantor for purposes of
this subsection 2.2, any assets or liabilities of such Contributing Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder or under any similar
section of the License Sub Guaranty shall not be considered as assets or
liabilities of such Contributing Guarantor. "AGGREGATE PAYMENTS" means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (1) the aggregate amount of all payments and distributions made on or
before such date by such Contributing Guarantor in respect of this Guaranty or
the License Sub Guaranty, as applicable (including, without limitation, in
respect of this subsection 2.2 or any similar section of the License Sub
Guaranty), minus (2) the aggregate amount of all payments received on or before
such date by such Contributing Guarantor from the other Contributing Guarantor
as contributions under this subsection 2.2 or any similar section of the License
Sub Guaranty. The amounts payable as contributions hereunder and under any
similar section of the License Sub Guaranty shall be determined as of the date
on which the related payment or distribution is made by the applicable Funding
Guarantor. The allocation among Contributing Guarantors of their obligations as
set forth in this subsection 2.2 and any similar section of the License Sub
Guaranty shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder or under the License Sub Guaranty. License Sub
is a third party beneficiary to the contribution agreement set forth in this
subsection 2.2.
2.3 PAYMENT BY GUARANTOR; APPLICATION OF PAYMENTS.
(a) Guarantor hereby agrees, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against Guarantor by virtue hereof, that upon the failure of Company to pay any
of the Guarantied Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. 'SS'
362(a)), Guarantor will upon demand pay, or cause to be paid, in cash, to Agent
for the ratable benefit of Beneficiaries, an amount equal to the sum of the
unpaid principal amount of all Guarantied Obligations then due as aforesaid,
accrued and unpaid interest on such Guarantied Obligations (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on such Guarantied Obligations, whether
or not a claim is allowed against Company
5
<PAGE>
<PAGE>
for such interest in the related bankruptcy proceeding) and all other Guarantied
Obligations then owed to Beneficiaries as aforesaid.
(b) All such payments received by Agent under this Guaranty shall be
applied promptly from time to time:
FIRST: To the payment of all costs and expenses incurred by Agent
in connection with the failure of Company to pay the Guarantied
Obligations when and as due, including all compensation due to Agent and
its agents and counsel, and all other expenses, liabilities, and
advances made or incurred by Agent in connection therewith, and all
amounts for which Agent is entitled to indemnification hereunder and all
advances made by Agent for the account of Company, and to the payment of
all costs and expenses paid or incurred by Agent in connection with the
exercise of any right or remedy hereunder, all in accordance with
Section 2.8 of this Guaranty;
SECOND: To the payment of interest due and payable on, and fees,
if any, with respect to the Guarantied Obligations on an equal and
ratable basis;
THIRD: To the payment of the unpaid principal amount due and
payable on all Guarantied Obligations on an equal and ratable basis;
FOURTH: To the payment of all other amounts due and payable with
respect to the Guarantied Obligations on an equal and ratable basis; and
FIFTH: To the payment to or upon the order of Guarantor, or to
whosever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
(c) Payments by Agent to Lenders in respect of Obligations shall be made
to Agent for distribution to Lenders in accordance with the Amended Credit
Agreement; any payments in respect of any Interest Rate Obligations shall be
made as directed by the Interest Rate Exchanger to which such Interest Rate
Obligations are owed; and any payments in respect of any obligations of Grantor
under the Existing Senior Note Indenture and the Existing Senior Notes shall be
made to the Senior Note Trustee for the benefit of the Noteholders.
2.4 LIABILITY OF GUARANTOR ABSOLUTE.
Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Guarantied Obligations. In furtherance
of the foregoing and without limiting the generality thereof, Guarantor agrees
as follows:
6
<PAGE>
<PAGE>
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Agent may enforce this Guaranty upon the occurrence of an
Event of Default notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of such Event
of Default.
(c) The obligations of Guarantor hereunder are independent of the
obligations of Company under the Loan Documents, the Existing Senior
Note Indenture, the Existing Senior Notes or the Lender Interest Rate
Agreements and the obligations of any other guarantor (including License
Sub under the License Sub Guaranty) of the obligations of Company under
the Loan Documents, the Existing Senior Note Indenture, the Existing
Senior Notes or the Lender Interest Rate Agreements, and a separate
action or actions may be brought and prosecuted against Guarantor
whether or not any action is brought against Company or any of such
other guarantors and whether or not Company is joined in any such action
or actions.
(d) Guarantor's payment of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the
foregoing, if Agent is awarded a judgment in any suit brought to enforce
Guarantor's covenant to pay a portion of the Guarantied Obligations,
such judgment shall not be deemed to release Guarantor from its covenant
to pay the portion of the Guarantied Obligations that is not the subject
of such suit.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of Guarantor's
liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the
time, place, manner or terms of payment of the Guarantied Obligations,
(ii) settle, compromise, release or discharge, or accept or refuse any
offer of performance with respect to, or substitutions for, the
Guarantied Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty
or the Guarantied Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties (including the License Sub
Guaranty) of the Guarantied Obligations, or any other obligation of any
Person with respect to the Guarantied Obligations; (v) enforce and apply
any security now or hereafter held by or for the benefit of such
Beneficiary in respect of this Guaranty or the Guarantied Obligations
and direct the order or manner of sale thereof, or exercise any other
right or remedy that such Beneficiary may have against any such
security, in each case as such Beneficiary in its discretion may
determine consistent with the
7
<PAGE>
<PAGE>
Loan Documents, Existing Senior Note Indenture and the applicable Lender
Interest Rate Agreement, the Indenture and any applicable security
agreement, including foreclosure on any such security pursuant to one or
more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of Guarantor against Company or any
security for the Guarantied Obligations; and (vi) exercise any other
rights available to it under the Loan Documents, the Existing Senior
Note Indenture or the Lender Interest Rate Agreements.
(f) This Guaranty and the obligations of Guarantor hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following,
whether or not Guarantor shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of
court, by operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy (whether arising
under the Loan Documents, the Existing Senior Note Indenture, the
Existing Senior Notes or the Lender Interest Rate Agreements, at law, in
equity or otherwise) with respect to the Guarantied Obligations or any
agreement relating thereto, or with respect to the License Sub Guaranty
or any other guaranty of or security for the payment of the Guarantied
Obligations; (ii) any rescission, waiver, amendment or modification of,
or any consent to departure from, any of the terms or provisions
(including without limitation provisions relating to events of default)
of the Amended Credit Agreement, any of the other Loan Documents, the
Existing Senior Note Indenture, the Existing Senior Notes, any of the
Lender Interest Rate Agreements or any agreement or instrument executed
pursuant thereto, or of the License Sub Guaranty or any other guaranty
or security for the Guarantied Obligations, in each case whether or not
in accordance with the terms of the Amended Credit Agreement or such
Loan Document, the Existing Senior Note Indenture, the Existing Senior
Notes, such Lender Interest Rate Agreement or any agreement relating to
the License Sub Guaranty or such other guaranty or security; (iii) the
Guarantied Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect; (iv)
the application of payments received from any source (other than
payments received pursuant to the other Loan Documents, the Existing
Senior Note Indenture, the Existing Senior Notes or any of the Lender
Interest Rate Agreements or from the proceeds of any security for the
Guarantied Obligations, except to the extent such security also serves
as collateral for indebtedness other than the Guarantied Obligations) to
the payment of indebtedness other than the Guarantied Obligations, even
though any Beneficiary might have elected to apply such payment to any
part or all of the Guarantied Obligations; (v) any Beneficiary's consent
to the change, reorganization or termination of the corporate structure
or existence of Company or any of its Subsidiaries and to any
corresponding restructuring of the Guarantied Obligations;
8
<PAGE>
<PAGE>
(vi) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Guarantied
Obligations; (vii) any defenses, set-offs or counterclaims which Company
may allege or assert against any Beneficiary in respect of the
Guarantied Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute
of limitations, accord and satisfaction and usury; and (viii) any other
act or thing or omission, or delay to do any other act or thing, which
may or might in any manner or to any extent vary the risk of Guarantor
as an obligor in respect of the Guarantied Obligations.
2.5 WAIVERS BY GUARANTOR.
Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by Guarantor, to (i) proceed against Company, any
other guarantor (including License Sub) of the Guarantied Obligations or
any other Person, (ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit
on the books of any Beneficiary in favor of Company or any other Person,
or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of Company from any cause other than payment in full of
the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions
in the administration of the Guarantied Obligations, except behavior
which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor's obligations
hereunder, (ii) the benefit of any statute of limitations affecting
Guarantor's liability hereunder or the enforcement hereof, (iii) any
rights to set-offs, recoupments and counterclaims, and (iv) promptness,
diligence and any requirement that any Beneficiary protect, secure,
perfect or insure any security interest or lien or any property subject
thereto;
9
<PAGE>
<PAGE>
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Amended Credit
Agreement, the Existing Senior Note Indenture, the Lender Interest Rate
Agreements or any agreement or instrument related thereto, notices of
any renewal, extension or modification of the Guarantied Obligations or
any agreement related thereto, notices of any extension of credit to
Company and notices of any of the matters referred to in subsection 2.4
and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties,
or which may conflict with the terms of this Guaranty.
2.6 GUARANTOR'S RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
Until the Guarantied Obligations shall have been paid in full and the
Commitments shall have terminated, Guarantor hereby waives any claim, right or
remedy, direct or indirect, that Guarantor now has or may hereafter have against
Company or any of its assets in connection with this Guaranty or the performance
by Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that Guarantor now has or may hereafter have
against Company, (b) any right to enforce, or to participate in, any claim,
right or remedy that any Beneficiary now has or may hereafter have against
Company, and (c) any benefit of, and any right to participate in, any collateral
or security now or hereafter held by any Beneficiary. In addition, until the
Guarantied Obligations shall have been paid in full and the Commitments shall
have terminated, Guarantor shall withhold exercise of any right of contribution
Guarantor may have against any other guarantor of the Guarantied Obligations
(including without limitation any such right of contribution under the License
Sub Guaranty as contemplated by subsection 2.2). Guarantor further agrees that,
to the extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification Guarantor
may have against Company or against any collateral or security, and any rights
of contribution Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against Company,
to all right, title and interest any Beneficiary may have in any such collateral
or security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guarantied Obligations shall not have been paid in full, such amount
shall be held in trust for Agent on behalf of Beneficiaries and shall forthwith
be paid over to Agent for the benefit of Beneficiaries to be credited and
applied against the Guarantied Obligations, whether matured or unmatured, in
accordance with the terms hereof.
10
<PAGE>
<PAGE>
2.7 SUBORDINATION OF OTHER OBLIGATIONS.
Any indebtedness of Company now or hereafter held by Guarantor is hereby
subordinated in right of payment to the Guarantied Obligations, and any such
indebtedness of Company to Guarantor collected or received by Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for Agent
on behalf of Beneficiaries and shall forthwith be paid over to Agent for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of Guarantor under any other provision of this Guaranty.
2.8 EXPENSES.
Guarantor agrees to pay, or cause to be paid, on demand, and to save
Beneficiaries harmless against liability for, any and all costs and expenses
(including fees and disbursements of counsel and allocated costs of internal
counsel) incurred or expended by any Beneficiary in connection with the
enforcement of or preservation of any rights under this Guaranty.
2.9 CONTINUING GUARANTY; TERMINATION OF GUARANTY.
This Guaranty is a continuing guaranty and shall remain in effect until
all of the Guarantied Obligations under the Amended Credit Agreement shall have
been paid in full and the Commitments thereunder shall have terminated.
Guarantor hereby irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guarantied Obligations. This Guaranty may
be terminated by Agent at any time at the direction of Lenders in accordance
with the terms of the Amended Credit Agreement. The Noteholders hereby agree, by
their acceptance of the benefits of this Guaranty, that this Guaranty may be
terminated by Agent pursuant to this Section 2.9 without the consent or the
approval of any Noteholder.
2.10 AUTHORITY OF GUARANTOR OR COMPANY.
It is not necessary for any Beneficiary to inquire into the capacity or
powers of Guarantor or Company or the officers, directors or any agents acting
or purporting to act on behalf of any of them.
2.11 FINANCIAL CONDITION OF COMPANY.
Any Loans may be granted to Company or continued from time to time, and
any Lender Interest Rate Agreements may be entered into from time to time, in
each case without notice to or authorization from Guarantor regardless of the
financial or other condition of Company at the time of any such grant or
continuation or at the time such Lender Interest Rate Agreement is entered into,
as the case may be. No Beneficiary shall have any obligation to disclose or
discuss with Guarantor its assessment, or Guarantor's assessment, of the
financial condition of Company. Guarantor has adequate means to
11
<PAGE>
<PAGE>
obtain information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents, the Existing Senior Note Indenture, the Existing Senior Notes and the
Lender Interest Rate Agreements and Guarantor assumes the responsibility for
being and keeping informed of the financial condition of Company and of all
circumstances bearing upon the risk of nonpayment of the Guarantied Obligations.
Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary
to disclose any matter, fact or thing relating to the business, operations or
conditions of Company now known or hereafter known by any Beneficiary.
2.12 RIGHTS CUMULATIVE.
The rights, powers and remedies given to Beneficiaries by this Guaranty
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Beneficiaries by virtue of any statute or rule of law or
in any of the other Loan Documents, the Existing Senior Note Indenture, any of
the Lender Interest Rate Agreements or any agreement between Guarantor and any
Beneficiary or Beneficiaries or between Company and any Beneficiary or
Beneficiaries. Any forbearance or failure to exercise, and any delay by any
Beneficiary in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or remedy.
2.13 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.
(a) So long as any Guarantied Obligations remain outstanding, Guarantor
shall not, without the prior written consent of Agent acting pursuant to the
directions of Requisite Lenders, commence or join with any other Person in
commencing any bankruptcy, reorganization or insolvency proceedings of or
against Company. The obligations of Guarantor under this Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by any
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or by any
defense which Company may have by reason of the order, decree or decision of any
court or administrative body resulting from any such proceeding.
(b) Guarantor acknowledges and agrees that any interest on any portion
of the Guarantied Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantor and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantor pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Company of any
portion of such Guarantied Obligations. Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Agent, or allow
12
<PAGE>
<PAGE>
the claim of Agent in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations
are paid by Company, the obligations of Guarantor hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty.
2.14 SET OFF.
In addition to any other rights any Beneficiary may have under law or in
equity, if after the occurrence and during the continuation of an Event of
Default any amount shall at any time be due and owing by Guarantor to any
Beneficiary under this Guaranty, such Beneficiary is authorized at any time or
from time to time, subject to the consent of Agent, without notice (any such
notice being hereby expressly waived) other than to Agent, to set off and to
appropriate and to apply any and all deposits (general or special, including but
not limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness of such Beneficiary owing to
Guarantor and any other property of Guarantor held by any Beneficiary to or for
the credit or the account of Guarantor against and on account of the Guarantied
Obligations and liabilities of Guarantor to any Beneficiary under this Guaranty.
SECTION 3.
MISCELLANEOUS
3.1 SURVIVAL OF WARRANTIES.
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Guaranty and the other Loan Documents and the
Lender Interest Rate Agreements and any increase in the Commitments under the
Amended Credit Agreement.
3.2 NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until received.
For purposes hereof the address of each party shall be as set forth under such
party's name on
13
<PAGE>
<PAGE>
the signature pages hereof or of the Amended Credit Agreement or such other
address as shall be designated by such party in a written notice delivered to
the other party hereto.
3.3 SEVERABILITY.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
3.4 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Guaranty, and no consent to any departure by Guarantor therefrom, shall in
any event be effective without the written concurrence of Agent and, in the case
of any such amendment or modification, Guarantor. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given. Agent may execute amendments and waivers to this
Guaranty if directed to do so in writing by Requisite Lenders or Supermajority
Lenders as required in accordance with the terms of the Amended Credit
Agreement. The Noteholders hereby agree, by acceptance by the benefits of this
Guaranty, that no consent or approval of any Noteholder shall be required for
any such amendment or waiver as long as, after giving effect to such amendment
or waiver, the Existing Senior Notes continue to be guaranteed on an equal and
ratable basis with the Obligations under the Amended Credit Agreement under this
Guaranty.
3.5 HEADINGS.
Section and subsection headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
3.6 APPLICABLE LAW.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND
BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
3.7 SUCCESSORS AND ASSIGNS.
This Guaranty is a continuing guaranty and shall be binding upon
Guarantor and its successors and assigns. This Guaranty shall inure to the
benefit of Beneficiaries and their respective successors and assigns. Guarantor
shall not assign this Guaranty or any of the
14
<PAGE>
<PAGE>
rights or obligations of Guarantor hereunder without the prior written consent
of Agent at the direction of required Lenders in accordance with the Amended
Credit Agreement. Any Beneficiary may, without notice or consent, assign its
interest in this Guaranty in whole or in part. The terms and provisions of this
Guaranty shall inure to the benefit of any transferee or assignee of any Loan,
and in the event of such transfer or assignment the rights and privileges herein
conferred upon such Beneficiary shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
3.8 NO OTHER WRITING.
This writing is intended by Guarantor and Beneficiaries as the final
expression of this Guaranty and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade usage, and no parol
evidence of any nature, shall be used to supplement or modify any terms of this
Guaranty. There are no conditions to the full effectiveness of this Guaranty.
3.9 FURTHER ASSURANCES.
At any time or from time to time, upon the request of Agent, Guarantor
shall execute and deliver such further documents and do such other acts and
things as Agent may reasonably request in order to effect fully the purposes of
this Guaranty.
3.10 AGENT.
(a) Agent has been appointed to act as Agent hereunder by Lenders under
the Amended Credit Agreement. The Noteholders and the Interest Rate Exchangers,
by their acceptance of the benefits hereunder, hereby appoint Agent to act as
Agent hereunder in accordance with the provisions of Section 8 of the Amended
Credit Agreement, including without limitation the provisions of subsection 8.2
of the Amended Credit Agreement, and the Noteholders and the Interest Rate
Exchangers further hereby agree to indemnify Agent on a ratable basis in
accordance with subsection 8.4 of the Amended Credit Agreement. Agent shall be
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and to take or refrain from
taking any action, solely in accordance with this Guaranty and the Amended
Credit Agreement; provided that Agent shall exercise, or refrain from
exercising, any remedies hereunder in accordance with the directions of
Requisite Lenders. Each Beneficiary, by acceptance of the benefits of this
Guaranty, hereby agrees that no Beneficiary shall have any liability to any
other Beneficiary for any such direction by Requisite Lenders. In furtherance of
the foregoing provisions of this subsection 3.10, each Beneficiary, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to enforce this Guaranty, it being understood and agreed by
Beneficiaries that all rights and remedies hereunder may be exercised solely by
Agent, for the benefit of the Beneficiaries, in accordance with the terms of
this subsection 3.10.
15
<PAGE>
<PAGE>
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute notice of
resignation as Agent under this Guaranty; and appointment of a successor Agent
pursuant to subsection 8.5 of the Amended Credit Agreement shall also constitute
appointment of a successor Agent under this Guaranty. Upon the acceptance of any
appointment as Agent under subsection 8.5 of the Amended Credit Agreement by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent under this Guaranty, and the retiring or removed Agent under this
Guaranty shall promptly (i) transfer to such successor Agent all sums held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Agent under this Guaranty, and (ii) take such other actions as may be necessary
or appropriate in connection with the assignment to such successor Agent of the
rights created hereunder, whereupon such retiring or removed Agent shall be
discharged from its duties and obligations under this Guaranty. After any
retiring or removed Agent's resignation or removal hereunder as Agent, the
provisions of this Guaranty shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Guaranty while it was Agent hereunder.
[Remainder of page intentionally left blank]
16
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
BENEDEK COMMUNICATIONS
CORPORATION
By
--------------------------------
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
EXHIBIT 10.10
EXECUTION
AMENDED AND RESTATED LICENSE SUB GUARANTY
THIS AMENDED AND RESTATED GUARANTY is entered into as of December 17,
1997 by BENEDEK LICENSE CORPORATION, a Delaware Corporation ("GUARANTOR"), in
favor of and for the benefit of BANKERS TRUST COMPANY ("BANKERS"), as agent for
and representative of (in such capacity herein called "AGENT") the Beneficiaries
(as hereinafter defined).
PRELIMINARY STATEMENTS
A. Benedek Broadcasting Corporation, a Delaware corporation ("COMPANY"),
of which Guarantor is a wholly owned subsidiary, has entered into that certain
Amended and Restated Credit Agreement dated as of December 17, 1997 (said
Amended and Restated Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "AMENDED CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Benedek Communications
Corporation, Company, the financial institutions listed therein as Lenders
("LENDERS"), and Bankers, as Agent, which Amended Credit Agreement amends and
restates that certain Credit Agreement, dated as of June 6, 1996 (said Credit
Agreement, as heretofore amended, supplemented or otherwise modified, being the
"EXISTING CREDIT AGREEMENT"), with the financial institutions listed therein,
Pearl Street L.P., as Arranging Agent, Goldman, Sachs & Co., as Syndication
Agent, and Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent and Collateral Agent.
B. As a condition precedent to the Existing Credit Agreement, Guarantor
guaranteed the obligations of Company under the Existing Credit Agreement in
respect of the AXELs (as defined in the Existing Credit Agreement) pursuant to
that certain License Sub Guaranty dated as of June 6, 1996 ("EXISTING LICENSE
SUB GUARANTY").
C. Pursuant to the Existing Senior Note Indenture, License Sub may
guarantee indebtedness incurred by Company which constitutes "Permitted Pari
Passu Debt" (as defined in the Existing Senior Note Indenture), and the Term
Loans constitute Permitted Pari Passu Debt.
D. It is a condition precedent to the execution and delivery of the
Amended Credit Agreement by Lenders of the Amended Credit Agreement that
Guarantor amend and restate the Existing License Sub Guaranty to guaranty
Company's obligations under the Amended Credit Agreement in respect of the Term
Loans.
<PAGE>
<PAGE>
E. Guarantor is willing irrevocably and unconditionally to amend and
restate the Existing License Sub Guaranty to guaranty such obligations of
Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Agent to enter into the Amended Credit Agreement
and to make Loans and other extensions of credit thereunder, Guarantor hereby
agrees as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
As used in this Guaranty, the following terms shall have the following
meanings unless the context otherwise requires:
"BENEFICIARIES" means Agent and Term Loan Lenders.
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term
in subsection 2.1.
"GUARANTY" means this Amended and Restated License Sub Guaranty,
dated as of December 17, 1997, as it may be amended, supplemented or
otherwise modified from time to time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means
payment in full of the Guarantied Obligations (other than inchoate
indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen), including without limitation all
principal, interest, costs, fees and expenses (including, without
limitation, reasonable legal fees and expenses) of Beneficiaries as
required under the Loan Documents.
"TERM LOAN LENDERS" means Lenders holding outstanding Term Loans.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Guaranty unless otherwise specifically
provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Amended Credit Agreement, the terms, conditions and provisions
of this Guaranty shall prevail.
2
<PAGE>
<PAGE>
SECTION 2.
THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS.
Subject to the provisions of subsection 2.2(a), Guarantor hereby
irrevocably and unconditionally guaranties, as primary obligor and not merely as
surety, the due and punctual payment in full of all Guarantied Obligations when
the same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. 'SS' 362(a)). The term "GUARANTIED OBLIGATIONS"
is used herein in its most comprehensive sense and includes:
(a) any and all Obligations of Company, in each case now or
hereafter made, incurred or created, whether absolute or contingent,
liquidated or unliquidated, whether due or not due, and however arising
under or in connection with the Term Loans under the Amended Credit
Agreement and the Term Loan Notes, whether for principal or interest,
fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished
and later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from
Agent or any Beneficiary as a preference, fraudulent transfer or
otherwise and all obligations of every nature of Guarantor under this
Guaranty, and including interest which, but for the filing of a petition
in bankruptcy with respect to Company, would have accrued on any
Guarantied Obligations, whether or not a claim is allowed against
Company for such interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 LIMITATION ON AMOUNT OF GUARANTY; CONTRIBUTION BY GUARANTORS.
(a) Anything contained in this Guaranty to the contrary notwithstanding,
if any Fraudulent Transfer Law (as hereinafter defined) is determined by a court
of competent jurisdiction to be applicable to the obligations of Guarantor under
this Guaranty, the obligations of Guarantor hereunder shall be limited to a
maximum aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "FRAUDULENT
TRANSFER LAWS"), in each case after giving effect to all other liabilities of
Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of Guarantor in
respect of intercompany indebtedness to Company or other affiliates of Company
to the extent that such indebtedness would be discharged in an amount equal to
the amount paid by Guarantor hereunder) and after giving effect as
3
<PAGE>
<PAGE>
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of Guarantor pursuant to applicable law or
pursuant to the terms of any agreement (including without limitation any such
right of contribution under subsection 2.2(b), or under the BCC Guaranty as
contemplated by subsection 2.2(b)).
(b) Guarantor under this Guaranty and BCC under the BCC Guaranty
together desire to allocate among themselves (collectively, the "CONTRIBUTING
GUARANTORS"), in a fair and equitable manner, their obligations arising under
this Guaranty and the BCC Guaranty. Accordingly, in the event any payment or
distribution is made on any date by Guarantor under this Guaranty or BCC under
the BCC Guaranty (each of Guarantor and BCC being a "FUNDING GUARANTOR") that
exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor shall be entitled to a contribution from the other Contributing
Guarantor in the amount of such other Contributing Guarantor's Fair Share
Shortfall (as defined below) as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments (as
defined below) to equal its Fair Share as of such date. "FAIR SHARE" means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined below)
with respect to such Contributing Guarantor to (y) the aggregate of the Adjusted
Maximum Amounts with respect to all Contributing Guarantors multiplied by (ii)
the aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty and the BCC Guaranty in respect of the
obligations guarantied. "FAIR SHARE SHORTFALL" means, with respect to a
Contributing Guarantor as of any date of determination, the excess, if any, of
the Fair Share of such Contributing Guarantor over the Aggregate Payments of
such Contributing Guarantor. "ADJUSTED MAXIMUM AMOUNT" means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Guaranty or
the BCC Guaranty, as applicable, determined as of such date, in the case of
Guarantor, in accordance with subsection 2.2(a); provided that, solely for
purposes of calculating the "Adjusted Maximum Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2(b), any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder or under subsection 2.2 of the BCC Guaranty shall not be
considered as assets or liabilities of such Contributing Guarantor. "AGGREGATE
PAYMENTS" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the aggregate amount of all payments and
distributions made on or before such date by such Contributing Guarantor in
respect of this Guaranty or the BCC Guaranty, as applicable (including, without
limitation, in respect of this subsection 2.2(b) or subsection 2.2 of the BCC
Guaranty) minus (ii) the aggregate amount of all payments received on or before
such date by such Contributing Guarantor from the other Contributing Guarantor
as contributions under this subsection 2.2(b) or subsection 2.2 of the BCC
Guaranty. The amounts payable as contributions hereunder and under subsection
2.2 of the BCC Guaranty shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. The
allocation among Contributing Guarantors of their obligations as set forth in
this subsection
4
<PAGE>
<PAGE>
2.2(b) and subsection 2.2 of the BCC Guaranty shall not be construed in any way
to limit the liability of any Contributing Guarantor hereunder or under the BCC
Guaranty. BCC is a third party beneficiary to the contribution agreement set
forth in this subsection 2.2(b). For purposes of this Section 2.2(b) only, each
reference to "this Guaranty" means, collectively, this Guaranty and the guaranty
by License Sub of the Existing Senior Notes pursuant to Article 10 of the
Existing Senior Note Indenture.
2.3 PAYMENT BY GUARANTOR; APPLICATION OF PAYMENTS.
Subject to the provisions of subsection 2.2(a), Guarantor hereby agrees,
in furtherance of the foregoing and not in limitation of any other right which
any Beneficiary may have at law or in equity against Guarantor by virtue hereof,
that upon the failure of Company to pay any of the Guarantied Obligations when
and as the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. 'SS' 362(a)), Guarantor will upon
demand pay, or cause to be paid, in cash, to Agent for the ratable benefit of
Beneficiaries, an amount equal to the sum of the unpaid principal amount of all
Guarantied Obligations then due as aforesaid, accrued and unpaid interest on
such Guarantied Obligations (including, without limitation, interest which, but
for the filing of a petition in bankruptcy with respect to Company, would have
accrued on such Guarantied Obligations, whether or not a claim is allowed
against Company for such interest in the related bankruptcy proceeding) and all
other Guarantied Obligations then owed to Beneficiaries as aforesaid. All such
payments shall be applied promptly from time to time by Agent as provided in
subsection 2.4D(ii) of the Amended Credit Agreement.
2.4 LIABILITY OF GUARANTOR ABSOLUTE.
Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Guarantied Obligations. In furtherance
of the foregoing and without limiting the generality thereof, Guarantor agrees
as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Agent may enforce this Guaranty upon the occurrence of an
Event of Default notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of such Event
of Default.
(c) The obligations of Guarantor hereunder are independent of the
obligations of Company under the Loan Documents, and the obligations of
any other guarantor (including BCC) of the obligations of Company under
the Loan Documents, and a separate action or actions may be brought and
prosecuted against
5
<PAGE>
<PAGE>
Guarantor whether or not any action is brought against Company or any of
such other guarantors and whether or not Company is joined in any such
action or actions.
(d) Guarantor's payment of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the
foregoing, if Agent is awarded a judgment in any suit brought to enforce
Guarantor's covenant to pay a portion of the Guarantied Obligations,
such judgment shall not be deemed to release Guarantor from its covenant
to pay the portion of the Guarantied Obligations that is not the subject
of such suit.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of Guarantor's
liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the
time, place, manner or terms of payment of the Guarantied Obligations,
(ii) settle, compromise, release or discharge, or accept or refuse any
offer of performance with respect to, or substitutions for, the
Guarantied Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty
or the Guarantied Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied
Obligations, or any other obligation of any Person (including any other
Guarantor) with respect to the Guarantied Obligations; (v) enforce and
apply any security now or hereafter held by or for the benefit of such
Beneficiary in respect of this Guaranty or the Guarantied Obligations
and direct the order or manner of sale thereof, or exercise any other
right or remedy that such Beneficiary may have against any such
security, in each case as such Beneficiary in its discretion may
determine consistent with the Credit Agreement and any applicable
security agreement, including foreclosure on any such security pursuant
to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such
action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of Guarantor against Company or any
security for the Guarantied Obligations; and (vi) exercise any other
rights available to it under the Loan Documents.
(f) This Guaranty and the obligations of Guarantor hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following,
whether or not Guarantor shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce or agreement or
election not
6
<PAGE>
<PAGE>
to assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any
claim or demand or any right, power or remedy (whether arising under the
Loan Documents, at law, in equity or otherwise) with respect to the
Guarantied Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the
Guarantied Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events
of default) of the Amended Credit Agreement, any of the other Loan
Documents, or any agreement or instrument executed pursuant thereto, or
of any other guaranty or security for the Guarantied Obligations, in
each case whether or not in accordance with the terms of the Amended
Credit Agreement or such Loan Document or any agreement relating to such
other guaranty or security; (iii) the Guarantied Obligations, or any
agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of
payments received from any source (other than payments received pursuant
to the other Loan Documents or from the proceeds of any security for the
Guarantied Obligations, except to the extent such security also serves
as collateral for indebtedness other than the Guarantied Obligations) to
the payment of indebtedness other than the Guarantied Obligations, even
though any Beneficiary might have elected to apply such payment to any
part or all of the Guarantied Obligations; (v) any Beneficiary's consent
to the change, reorganization or termination of the corporate structure
or existence of Company or any of its Subsidiaries and to any
corresponding restructuring of the Guarantied Obligations; (vi) any
failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guarantied Obligations,
including but not limited to failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and (viii) any other act or thing or omission,
or delay to do any other act or thing, which may or might in any manner
or to any extent vary the risk of Guarantor as an obligor in respect of
the Guarantied Obligations.
2.5 WAIVERS BY GUARANTOR.
Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by Guarantor, to (i) proceed against Company, any
other guarantor (including BCC) of the Guarantied Obligations or any
other Person, (ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit
on the books of any Beneficiary in favor of Company or any other Person,
or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever;
7
<PAGE>
<PAGE>
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of Company from any cause other than payment in full of
the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions
in the administration of the Guarantied Obligations, except behavior
which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor's obligations
hereunder, (ii) the benefit of any statute of limitations affecting
Guarantor's liability hereunder or the enforcement hereof, (iii) any
rights to set-offs, recoupments and counterclaims, and (iv) promptness,
diligence and any requirement that any Beneficiary protect, secure,
perfect or insure any security interest or lien or any property subject
thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit
Agreement or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Guarantied Obligations or any
agreement related thereto, notices of any extension of credit to Company
and notices of any of the matters referred to in subsection 2.4 and any
right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties,
or which may conflict with the terms of this Guaranty.
2.6 GUARANTOR'S RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.
Until the Guarantied Obligations shall have been paid in full, Guarantor
hereby waives any claim, right or remedy, direct or indirect, that Guarantor now
has or may hereafter have against Company or any of its assets in connection
with this Guaranty or the performance by Guarantor of its obligations hereunder,
in each case whether such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise and including without
limitation (a) any right of subrogation, reimbursement or indemnification that
Guarantor now has or may hereafter have against Company, (b) any right to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now
8
<PAGE>
<PAGE>
has or may hereafter have against Company, and (c) any benefit of, and any right
to participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guarantied Obligations shall have been paid
in full, Guarantor shall withhold exercise of any right of contribution
Guarantor may have against any other guarantor of the Guarantied Obligations
(including without limitation any such right of contribution under subsection
2.2(b) or under the BCC Guaranty as contemplated by subsection 2.2(b)).
Guarantor further agrees that, to the extent the waiver or agreement to withhold
the exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification Guarantor may have against Company or against any collateral
or security, and any rights of contribution Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights any Beneficiary
may have against Company, to all right, title and interest any Beneficiary may
have in any such collateral or security, and to any right any Beneficiary may
have against such other guarantor. If any amount shall be paid to Guarantor on
account of any such subrogation, reimbursement, indemnification or contribution
rights at any time when all Guarantied Obligations shall not have been paid in
full, such amount shall be held in trust for Agent on behalf of Beneficiaries
and shall forthwith be paid over to Agent for the benefit of Beneficiaries to be
credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
2.7 SUBORDINATION OF OTHER OBLIGATIONS.
Any indebtedness of Company now or hereafter held by Guarantor is hereby
subordinated in right of payment to the Guarantied Obligations, and any such
indebtedness of Company to Guarantor collected or received by Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for Agent
on behalf of Beneficiaries and shall forthwith be paid over to Agent for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of Guarantor under any other provision of this Guaranty.
2.8 EXPENSES.
Guarantor agrees to pay, or cause to be paid, on demand, and to save
Beneficiaries harmless against liability for, any and all costs and expenses
(including fees and disbursements of counsel and allocated costs of internal
counsel) incurred or expended by any Beneficiary in connection with the
enforcement of or preservation of any rights under this Guaranty.
2.9 CONTINUING GUARANTY; TERMINATION OF GUARANTY.
This Guaranty is a continuing guaranty and shall remain in effect until
all of the Guarantied Obligations shall have been paid in full. Guarantor hereby
irrevocably waives
9
<PAGE>
<PAGE>
any right to revoke this Guaranty as to future transactions giving rise to any
Guarantied Obligations.
2.10 AUTHORITY OF GUARANTOR OR COMPANY.
It is not necessary for any Beneficiary to inquire into the capacity or
powers of Guarantor or Company or the officers, directors or any agents acting
or purporting to act on behalf of any of them.
2.11 FINANCIAL CONDITION OF COMPANY.
Any Loans may be granted to Company or continued from time to time
without notice to or authorization from Guarantor regardless of the financial or
other condition of Company at the time of any such grant or continuation. No
Beneficiary shall have any obligation to disclose or discuss with Guarantor its
assessment, or Guarantor's assessment, of the financial condition of Company.
Guarantor has adequate means to obtain information from Company on a continuing
basis concerning the financial condition of Company and its ability to perform
its obligations under the Loan Documents, and Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Guarantor hereby waives and relinquishes any duty on the
part of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Company now known or hereafter known by
any Beneficiary.
2.12 RIGHTS CUMULATIVE.
The rights, powers and remedies given to Beneficiaries by this Guaranty
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Beneficiaries by virtue of any statute or rule of law or
in any of the other Loan Documents, or any agreement between Guarantor and any
Beneficiary or Beneficiaries or between Company and any Beneficiary or
Beneficiaries. Any forbearance or failure to exercise, and any delay by any
Beneficiary in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or remedy.
2.13 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.
(a) So long as any Guarantied Obligations remain outstanding, Guarantor
shall not, without the prior written consent of Agent acting pursuant to the
instructions of Requisite Obligees (as defined in subsection 3.12), commence or
join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Company. The obligations of Guarantor under
this Guaranty shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Company or by any defense which Company may have by reason of the
10
<PAGE>
<PAGE>
order, decree or decision of any court or administrative body resulting from any
such proceeding.
(b) Guarantor acknowledges and agrees that any interest on any portion
of the Guarantied Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantor and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantor pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Company of any
portion of such Guarantied Obligations. Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Agent, or allow the claim of Agent in respect
of, any such interest accruing after the date on which such proceeding is
commenced.
(c) In the event that all or any portion of the Guarantied Obligations
are paid by Company, the obligations of Guarantor hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty.
2.14 SET OFF.
In addition to any other rights any Beneficiary may have under law or in
equity, if after the occurrence and during the continuation of an Event of
Default any amount shall at any time be due and owing by Guarantor to any
Beneficiary under this Guaranty, such Beneficiary is authorized at any time or
from time to time, subject to the consent of Agent, without notice (any such
notice being hereby expressly waived) other than to Agent, to set off and to
appropriate and to apply any and all deposits (general or special, including but
not limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness of such Beneficiary owing to
Guarantor and any other property of Guarantor held by any Beneficiary to or for
the credit or the account of Guarantor against and on account of the Guarantied
Obligations and liabilities of Guarantor to any Beneficiary under this Guaranty.
11
<PAGE>
<PAGE>
SECTION 3.
MISCELLANEOUS
3.1 SURVIVAL OF WARRANTIES.
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Guaranty and the other Loan Documents and any
increase in the Commitments under the Amended Credit Agreement.
3.2 NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until received.
For purposes hereof the address of each party shall be as set forth under such
party's name on the signature pages hereof or of the Amended Credit Agreement or
such other address as shall be designated by such party in a written notice
delivered to the other party hereto.
3.3 SEVERABILITY.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
3.4 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Guaranty, and no consent to any departure by Guarantor therefrom, shall in
any event be effective without the written concurrence of Agent and, in the case
of any such amendment or modification, Guarantor. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.
3.5 HEADINGS.
Section and subsection headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
12
<PAGE>
<PAGE>
3.6 APPLICABLE LAW.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND
BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
3.7 SUCCESSORS AND ASSIGNS.
This Guaranty is a continuing guaranty and shall be binding upon
Guarantor and its respective successors and assigns. This Guaranty shall inure
to the benefit of Beneficiaries and their respective successors and assigns.
Guarantor shall not assign this Guaranty or any of the rights or obligations of
Guarantor hereunder without the prior written consent of all Lenders. Any
Beneficiary may, without notice or consent, assign its interest in this Guaranty
in whole or in part. The terms and provisions of this Guaranty shall inure to
the benefit of any transferee or assignee of any Term Loan, and in the event of
such transfer or assignment the rights and privileges herein conferred upon such
Beneficiary shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof.
3.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY
OF NEW YORK. BY EXECUTING AND DELIVERING THIS GUARANTY, GUARANTOR, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO GUARANTOR AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SUBSECTION 3.2; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GUARANTOR
IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT BENEFICIARIES RETAIN THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI)
AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO JURISDICTION AND
VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
13
<PAGE>
<PAGE>
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1402 OR OTHERWISE.
3.9 WAIVER OF TRIAL BY JURY.
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, EACH
BENEFICIARY EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The
scope of this waiver is intended to be all encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Guarantor and, by
its acceptance of the benefits hereof, each Beneficiary, each (a) acknowledges
that this waiver is a material inducement for Guarantor and Beneficiaries to
enter into a business relationship, that Guarantor and Beneficiaries have
already relied on this waiver in entering into this Guaranty or accepting the
benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings and (b) further warrants and
represents that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED BY COLLATERAL
AGENT AND GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. In the event of
litigation, this Guaranty may be filed as a written consent to a trial by the
court.
3.10 NO OTHER WRITING.
This writing is intended by Guarantor and Beneficiaries as the final
expression of this Guaranty and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade usage, and no parol
evidence of any nature, shall be used to supplement or modify any terms of this
Guaranty. There are no conditions to the full effectiveness of this Guaranty.
3.11 FURTHER ASSURANCES.
At any time or from time to time, upon the request of Agent, Guarantor
shall execute and deliver such further documents and do such other acts and
things as Agent may reasonably request in order to effect fully the purposes of
this Guaranty.
14
<PAGE>
<PAGE>
3.12 AGENT.
(a) Agent has been appointed to act as Agent hereunder by Term Lenders
under the Amended Credit Agreement. Agent shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Amended Credit Agreement; provided that
Agent shall exercise, or refrain from exercising, any remedies hereunder in
accordance with the instructions of Requisite Obligees. "REQUISITE OBLIGEES"
means holders of 51% or more in aggregate principal amount of the outstanding
Term Loans.
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute notice of
resignation as Agent under this Guaranty; and appointment of a successor Agent
pursuant to subsection 8.5 of the Amended Credit Agreement shall also constitute
appointment of a successor Agent under this Guaranty. Upon the acceptance of any
appointment as Agent under subsection 8.5 of the Amended Credit Agreement by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent under this Guaranty, and the retiring or removed Agent under this
Guaranty shall promptly (i) transfer to such successor Agent all sums held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Agent under this Guaranty, and (ii) take such other actions as may be necessary
or appropriate in connection with the assignment to such successor Agent of the
rights created hereunder, whereupon such retiring or removed Agent shall be
discharged from its duties and obligations under this Guaranty. After any
retiring or removed Agent's resignation or removal hereunder as Agent, the
provisions of this Guaranty shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Guaranty while it was Agent hereunder.
[Remainder of page intentionally left blank]
15
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
BENEDEK LICENSE CORPORATION
By
-------------------------------
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
c/o Benedek Broadcasting Corporation
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
EXHIBIT 10.11
EXECUTION
AMENDED AND RESTATED BCC PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (this "AGREEMENT") is dated
as of December 17, 1997 and entered into by and between BENEDEK COMMUNICATIONS
CORPORATION, a Delaware corporation ("PLEDGOR"), and BANKERS TRUST COMPANY
("BANKERS"), as agent for and representative of (in such capacity herein called
"AGENT") Secured Parties referred to below.
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of the shares of stock (the
"PLEDGED SHARES") described in Schedule I annexed hereto and issued by the
corporations named therein.
B. Benedek Broadcasting Corporation, a Delaware corporation ("COMPANY"),
and Pledgor have entered into an Amended and Restated Credit Agreement dated as
of December 17, 1997 (said Amended and Restated Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "AMENDED CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
Pledgor, Company, the financial institutions listed therein as Lenders
("LENDERS"), and Bankers Trust Company, as Agent, which Amended Credit Agreement
amends and restates that certain Credit Agreement, dated as of June 6, 1996
(said Credit Agreement, as heretofore amended, supplemented or otherwise
modified, being the "EXISTING CREDIT AGREEMENT"), with the financial
institutions listed therein, Pearl Street L.P., as Arranging Agent, Goldman,
Sachs & Co., as Syndication Agent, and Canadian Imperial Bank of Commerce, New
York Agency ("CIBC"), as Administrative Agent and Collateral Agent, pursuant to
which Lenders have made certain commitments, subject to the terms and conditions
set forth in the Amended Credit Agreement, to, among other things, convert and
continue certain credit facilities, including the Term Loans initially extended
as AXELs to Company pursuant to the Existing Credit Agreement.
C. Company has entered into that certain Indenture, dated as of March 1,
1995 (said Indenture, as amended, supplemented, or otherwise modified from time
to time, being the "EXISTING SENIOR NOTE INDENTURE"), with Benedek Broadcasting
Company, L.L.C., a Delaware limited liability company and subsidiary of Company,
and The Bank of New York, as trustee (the "SENIOR NOTE TRUSTEE"), pursuant to
which Company has issued $135,000,000 aggregate principal amount of 11-7/8%
Senior Secured Notes due 2005 (the "EXISTING SENIOR NOTES").
<PAGE>
<PAGE>
D. Company may from time to time enter into one or more Interest Rate
Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS") with or one or
more Lenders or Affiliates of Lenders (in such capacity, collectively, "INTEREST
RATE EXCHANGERS") in accordance with the terms of the Amended Credit Agreement.
E. Pledgor has executed and delivered that certain Guaranty, dated as of
December 17, 1997 (said Guaranty, as it may hereafter be amended, supplemented
or otherwise modified from time to time, being the "AMENDED BCC GUARANTY"), in
favor of Agent for the benefit of (i) Agent and Lenders, (ii) the holders of the
Existing Senior Notes ("NOTEHOLDERS") and (iii) any Interest Rate Exchangers
(each of Agent, Lenders, Noteholders and Interest Rate Exchangers is hereinafter
referred to as a "SECURED PARTY" and collectively, as "SECURED PARTIES"),
pursuant to which Pledgor has guarantied the prompt payment and performance when
due of all obligations of Company under the Amended Credit Agreement, the Notes
and the other Loan Documents, under the Existing Senior Note Indenture and the
Existing Senior Notes, and under the Lender Interest Rate Agreements (including
without limitation the obligation of Company to make payments thereunder in the
event of early termination thereof) and which amends that certain BCC Guaranty,
executed by Pledgor, dated as of June 6, 1996 (the "EXISTING BCC GUARANTY") in
favor of CIBC, as agent for and representative of Beneficiaries (as defined in
the Existing BCC Guaranty).
F. The obligations of Pledgor under the Existing BCC Guaranty have been
secured by security interests granted pursuant to that certain BCC Pledge
Agreement dated as of June 6, 1996 (the "EXISTING BCC PLEDGE AGREEMENT") in
favor of CIBC, in its capacity as agent for and representative of Secured
Parties (as defined in the Existing BCC Pledge Agreement).
G. It is a condition precedent to the execution and delivery of the
Amended Credit Agreement by Lenders that Pledgor shall have amended and restated
the Existing BCC Pledge Agreement to modify the provisions thereof as provided
herein.
H. Pledgor desires to amend and restate the Existing BCC Pledge
Agreement in order to confirm the continuation of, and to pledge and grant
security interests in all of the Pledged Collateral (as hereinafter defined) in
favor of Agent, on behalf of the Secured Parties, as security for Pledgor's
performance of its obligations under the Amended BCC Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to convert and continue the Loans initially made pursuant to the
Existing Credit Agreement and to make other extensions of credit under the
Amended Credit Agreement and to induce Interest Rate Exchangers to enter into
the Lender Interest Rate Agreements, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Pledgor hereby agrees with Agent as follows:
2
<PAGE>
<PAGE>
SECTION 1. PLEDGE OF SECURITY.
Pledgor hereby pledges and assigns to Agent, and hereby grants to Agent
a security interest in, all of Pledgor's right, title and interest in and to the
following (the "PLEDGED COLLATERAL"):
(a) the Pledged Shares and the certificates representing the
Pledged Shares and any interest of Pledgor in the entries on the books
of any financial intermediary pertaining to the Pledged Shares, and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock of the issuer of the Pledged Shares from time to time acquired by
Pledgor in any manner (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such additional shares, securities,
warrants, options or other rights; and
(c) to the extent not covered by clauses (a) and (b) above, all
proceeds of any or all of the foregoing Pledged Collateral. For purposes
of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Pledged Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without limitation, proceeds of
any indemnity or guaranty payable to Pledgor or Agent from time to time
with respect to any of the Pledged Collateral.
The foregoing assignment, pledge and grant of security interest confirms
the assignment, pledge and grant of a first priority interest in the Pledged
Collateral assigned, pledged and granted pursuant to the Existing BCC Pledge
Agreement and continues in all respects the assignment, pledge and grant in the
Existing BCC Pledge Agreement with respect to the Pledged Collateral without in
any way causing an interruption in the continuity from such original assignment,
pledge and grant.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Pledged Collateral is collateral
security for, the prompt payment or performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including the payment of amounts that would become due but for the
operation of the automatic stay under Section
3
<PAGE>
<PAGE>
362(a) of the Bankruptcy Code, 11 U.S.C. 'SS'362(a)), of all obligations and
liabilities of every nature of Pledgor now or hereafter existing under or
arising out of or in connection with the Guaranty and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Company,
would accrue on such obligations, whether or not a claim is allowed against
Company for such interest in the related bankruptcy proceeding), payments for
early termination of Lender Interest Rate Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Agent or any Secured Party as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Pledgor now or hereafter existing under this Agreement (all such
obligations of Pledgor being the "SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL.
All certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of Agent pursuant
hereto and shall be in suitable form for transfer by delivery or, as applicable,
shall be accompanied by Pledgor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Agent. Upon the occurrence and during the continuation of an
Event of Default (as defined under the Amended Credit Agreement or under the
Existing Senior Note Indenture) or the occurrence of an Early Termination Date
(as defined in a Master Agreement or an Interest Rate Swap Agreement or Interest
Rate and Currency Exchange Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Lender Interest Rate Agreement (any such occurrence being
an "EVENT OF DEFAULT" for purposes of this Agreement), Agent shall have the
right, without notice to Pledgor, to transfer to or to register in the name of
Agent or any of its nominees any or all of the Pledged Collateral, subject only
to the revocable rights specified in Section 7(a). In addition, Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Pledgor represents and warrants as follows:
(a) DUE AUTHORIZATION, ETC. OF PLEDGED COLLATERAL. All of the
Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable.
4
<PAGE>
<PAGE>
(b) DESCRIPTION OF PLEDGED COLLATERAL. The Pledged Shares
constitute all of the issued and outstanding shares of stock of the
issuer thereof, and there are no outstanding warrants, options or other
rights to purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Shares.
(c) OWNERSHIP OF PLEDGED COLLATERAL. Pledgor is the legal, record
and beneficial owner of the Pledged Collateral free and clear of any
Lien except for the security interest created by this Agreement.
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED COLLATERAL; ETC.
Pledgor shall:
(a) not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral, or (ii) create or suffer to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security
interest under this Agreement;
(b) (i) cause the issuer of Pledged Shares not to issue any stock
or other securities in addition to or in substitution for the Pledged
Shares issued by the issuer, except to Pledgor and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional shares of stock or other securities of
the issuer of the Pledged Shares;
(c) promptly deliver to Agent all written notices received by it
with respect to the Pledged Collateral; and
(d) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged
Collateral, except to the extent the validity thereof is being contested
in good faith; provided that Pledgor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior to
the date of any proposed sale under any judgement, writ or warrant of
attachment entered or filed against Pledgor or any of the Pledged
Collateral as a result of the failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Agent
may request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Pledged
5
<PAGE>
<PAGE>
Collateral. Without limiting the generality of the foregoing, Pledgor will: (i)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Agent may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby and (ii) at Agent's
request, appear in and defend any action or proceeding that may affect Pledgor's
title to or Agent's security interest in all or any part of the Pledged
Collateral.
(b) Pledgor further agrees that it will, upon obtaining any additional
shares of stock or other securities required to be pledged hereunder as provided
in Section 5(b), promptly (and in any event within five Business Days) deliver
to Agent a Pledge Amendment, duly executed by Pledgor, in substantially the form
of Schedule II annexed hereto (a "PLEDGE AMENDMENT"), in respect of the
additional Pledged Shares to be pledged pursuant to this Agreement. Pledgor
hereby authorizes Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Shares listed on any Pledge Amendment delivered to Agent
shall for all purposes hereunder be considered Pledged Collateral; provided that
the failure of Pledgor to execute a Pledge Amendment with respect to any
additional Pledged Shares pledged pursuant to this Agreement shall not impair
the security interest of Agent therein or otherwise adversely affect the rights
and remedies of Agent hereunder with respect thereto.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) PLEDGOR'S RIGHTS. So long as no Event of Default shall have
occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this
Agreement, the Existing Senior Note Indenture or the Amended Credit
Agreement; provided, however, that Pledgor shall not exercise or refrain
from exercising any such right if Agent shall have notified Pledgor
that, in Agent's judgment, such action would have a material adverse
effect on the value of the Pledged Collateral or any part thereof; and
provided, further, that Pledgor shall give Agent at least five Business
Days' prior written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
It is understood, however, that neither (1) the voting by Pledgor of any
Pledged Shares for or Pledgor's consent to the election of directors at
a regularly scheduled annual or other meeting of stockholders or with
respect to incidental matters at any such meeting nor (2) Pledgor's
consent to or approval of any action otherwise permitted under this
Agreement, the Existing Senior Note Indenture and the Amended Credit
Agreement shall be deemed inconsistent with the terms of this Agreement,
the Existing Senior Note Indenture or the Amended Credit Agreement
within the meaning of this Section 7(a)(i), and no notice of any such
voting or consent need be given to Agent;
6
<PAGE>
<PAGE>
(ii) Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends paid in respect of the Pledged Collateral; provided, however,
that any and all
(1) dividends paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange
for, any Pledged Collateral,
(2) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a
partial or total liquidation or dissolution or in connection with
a reduction of capital, capital surplus or paid-in-surplus, and
(3) cash paid, payable or otherwise distributed in respect
of principal or in redemption of or in exchange for any Pledged
Collateral,
shall be, and shall forthwith be delivered to Agent to hold as, Pledged
Collateral and shall, if received by Pledgor, be received in trust for
the benefit of Agent, be segregated from the other property or funds of
Pledgor and be forthwith delivered to Agent as Pledged Collateral in the
same form as so received (with all necessary endorsements); and
(iii) Agent shall promptly execute and deliver (or cause to be
executed and delivered) to Pledgor all such proxies, dividend payment
orders and other instruments as Pledgor may from time to time reasonably
request for the purpose of enabling Pledgor to exercise the voting and
other consensual rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends which it is authorized
to receive and retain pursuant to paragraph (ii) above.
(b) AGENT'S RIGHTS. Upon the occurrence and during the
continuation of an Event of Default:
(i) upon written notice from Agent to Pledgor, all rights of
Pledgor to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in Agent
who shall thereupon have the sole right to exercise such voting and
other consensual rights (subject, however, to the prior approval of the
FCC to the extent required by law);
(ii) all rights of Pledgor to receive the dividends which it
would otherwise be authorized to receive and retain pursuant to Section
7(a)(ii) shall cease, and all such rights shall thereupon become vested
in Agent who shall thereupon have the sole right to receive and hold as
Pledged Collateral such dividends; and
7
<PAGE>
<PAGE>
(iii) all dividends which are received by Pledgor contrary to the
provisions of paragraph (ii) of this Section 7(b) shall be received in
trust for the benefit of Agent, shall be segregated from other funds of
Pledgor and shall forthwith be paid over to Agent as Pledged Collateral
in the same form as so received (with any necessary endorsements).
(c) IRREVOCABLE PROXY. In order to permit Agent to exercise the voting
and other consensual rights which it may be entitled to exercise pursuant to
Section 7(b)(i) and to receive all dividends and other distributions which it
may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii) (subject,
however, to the prior approval of the FCC to the extent required by law), (i)
Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Agent all such proxies, dividend payment orders and other
instruments as Agent may from time to time reasonably request and (ii) without
limiting the effect of the immediately preceding clause (i), Pledgor hereby
grants to Agent an IRREVOCABLE PROXY to vote the Pledged Shares and to exercise
all other rights, powers, privileges and remedies to which a holder of the
Pledged Shares would be entitled (including, without limitation, giving or
withholding written consents of shareholders, calling special meetings of
shareholders and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Shares on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Shares or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen).
(d) FCC CONSENTS. Agent acknowledges that after the occurrence of an
Event of Default, all requisite consents of the FCC must be obtained prior to
the exercise by Agent or any Secured Party and/or a purchaser, at a public or
private sale, of any rights as an owner of the Pledged Collateral.
SECTION 8. AGENT APPOINTED ATTORNEY-IN-FACT.
Pledgor hereby irrevocably appoints Agent as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of
Pledgor, Agent or otherwise, from time to time in Agent's discretion to take any
action and to execute any instrument that Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including without limitation:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of Pledgor;
(b) upon the occurrence and during the continuation of an Event
of Default, to ask, demand, collect, sue for, recover, compound, receive
and give
8
<PAGE>
<PAGE>
acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
(c) upon the occurrence and during the continuation of an Event
of Default, to receive, endorse and collect any instruments made payable
to Pledgor representing any dividend or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge
for the same;
(d) upon the occurrence and during the continuation of an Event
of Default, to file, or cause to be filed, to the extent permitted by
law, such applications for approval and to take all other and further
actions required to obtain any approvals or consents from the FCC
required for the exercise of any right or remedy hereunder; and
(e) upon the occurrence and during the continuation of an Event
of Default, to file any claims or take any action or institute any
proceedings that Agent may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the
rights of Agent with respect to any of the Pledged Collateral.
SECTION 9. AGENT MAY PERFORM.
If Pledgor fails to perform any agreement contained herein, Agent may
itself perform, or cause performance of, such agreement, and the expenses of
Agent incurred in connection therewith shall be payable by Pledgor under Section
14(b).
SECTION 10. STANDARD OF CARE.
(a) The powers conferred on Agent hereunder are solely to protect its
interest in the Pledged Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, Agent shall have no duty as to any
Pledged Collateral, it being understood that Agent shall have no responsibility
for (i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Pledged
Collateral, whether or not Agent has or is deemed to have knowledge of such
matters, (ii) taking any necessary steps (other than steps taken in accordance
with the standard of care set forth above to maintain possession of the Pledged
Collateral) to preserve rights against any parties with respect to any Pledged
Collateral, (iii) taking any necessary steps to collect or realize upon the
Secured Obligations or any guarantee therefor, or any part thereof, or any of
the Pledged Collateral, or (iv) initiating any action to protect the Pledged
Collateral against the possibility of a decline in market value. Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
Pledged Collateral in its possession if
9
<PAGE>
<PAGE>
such Pledged Collateral is accorded treatment substantially equal to that which
Agent accords its own property consisting of negotiable securities.
(b) Neither Agent nor any Secured Party shall be liable to Pledgor (i)
for any loss or damage sustained by it, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral that may
occur as a result of, in connection with or that is an any way related to (1)
any exercise by Agent or any Secured Party of any right or remedy under this
Agreement or (2) any other act of or failure to act by Agent or any Secured
Party, except to the extent that the same shall be determined by a final
judgment of a court of competent jurisdiction that is final and not subject to
review on appeal, to be the result of acts or omissions on the part of Agent or
such Secured Party constituting gross negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY PLEDGOR AGAINST AGENT, ANY SECURED PARTY OR
THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS
FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR DUTY
IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND PLEDGOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing, Agent
may exercise in respect of the Pledged Collateral, in addition to all other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party on default under the Uniform Commercial
Code as in effect in any relevant jurisdiction (the "CODE") (whether or not the
Code applies to the affected Pledged Collateral), and Agent may also in its sole
discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange or broker's board or at any of Agent's offices or elsewhere, for
cash, on credit or for future delivery, at such time or times and at such price
or prices and upon such other terms as Agent may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the Pledged
Collateral; provided that notwithstanding the foregoing, to the extent required
by law, any Pledged Collateral shall be offered for sale in accordance with
Section 11(c) below. Agent or any Secured Party may be the purchaser of any or
all of the Pledged Collateral at any such sale and Agent, as agent for and
representative of Secured Parties (but not any Secured Party or Secured Parties
in its or their respective individual capacities unless Requisite Lenders shall
otherwise agree
10
<PAGE>
<PAGE>
in writing), shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Pledged
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Pledged
Collateral payable by Agent at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Pledgor, and Pledgor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to Pledgor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been given. Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Pledgor hereby waives
any claims against Agent arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if Agent accepts
the first offer received and does not offer such Pledged Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Pledged
Collateral are insufficient to pay all the Secured Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen), Pledgor shall be liable for the
deficiency and the fees of any attorneys employed by Agent to collect such
deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions contained
in the Securities Act and applicable state securities laws, Agent may be
compelled, with respect to any sale of all or any part of the Pledged Collateral
conducted without prior registration or qualification of such Pledged Collateral
under the Securities Act and/or such state securities laws, to limit purchasers
to those who will agree, among other things, to acquire the Pledged Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, Pledgor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
Agent shall have no obligation to engage in public sales and no obligation to
delay the sale of any Pledged Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities laws,
even if such issuer would, or should, agree to so register it.
(c) If Agent determines to exercise its right to sell any or all of the
Pledged Collateral, upon written request, Pledgor shall and shall cause the
issuer of any Pledged Shares to be sold hereunder from time to time to furnish
to Agent all such information as Agent may request in order to determine the
number of shares and other instruments included in the Pledged Collateral which
may be sold by Agent in exempt transactions under
11
<PAGE>
<PAGE>
the Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect. Pledgor
agrees to do, or cause to be done, all such other acts and things as may be
necessary to make any sale or sales (whether private or public) of all or any
part of the Pledged Collateral valid and binding and in compliance with
applicable law, including, without limitation, filing, or causing to be filed,
such applications for approval as may be required by the FCC or any other
governmental authority.
(d) Notwithstanding anything to the contrary set forth herein, Agent, on
behalf of Secured Parties, agrees that to the extent prior FCC approval is
required pursuant to the Communications Act for (i) the operation and
effectiveness of any grant, right or remedy hereunder or under the other Loan
Documents or the Existing Senior Note Indenture or (ii) taking any action that
may be taken by Agent hereunder or under the other Loan Documents or the
Existing Senior Note Indenture, such grant, right, remedy or action will be
subject to such prior FCC approval having been obtained by or in favor of Agent,
on behalf of Secured Parties (and Pledgor will use its best efforts to obtain
any such approval as promptly as possible). Pledgor agrees that, upon the
occurrence and during the continuation of an Event of Default and at Agent's
request, Pledgor will, and will cause its Subsidiaries to, immediately file, or
cause to be filed, such applications for approval and shall take all other
further actions required by Agent to obtain such Governmental Authorizations as
are necessary to transfer ownership and control to Agent on behalf of Secured
Parties, or their successors or assigns, of the FCC Licenses held by it or its
Subsidiaries, or its interest in any Person holding any such FCC License. To
enforce the provisions of this Section 11(d), Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver shall be instructed to seek from the FCC an involuntary transfer of
control of any FCC License for the purpose of seeking a bona fide purchaser to
whom control will ultimately be transferred. Pledgor hereby agrees to authorize,
and to cause each of its Subsidiaries to authorize, such an involuntary transfer
of control upon the request of the receiver so appointed, and, if Pledgor shall
refuse to authorize or cause any of its Subsidiaries so to authorize the
transfer, its approval may be required by the court. Upon the occurrence and
during the continuation of an Event of Default, Pledgor shall further use its
best efforts to assist in obtaining approval of the FCC, if required, for any
action or transactions contemplated by this Agreement or the other Loan
Documents or the Existing Senior Note Indenture, including, without limitation,
preparation, execution and filing with the FCC of the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
FCC License or transfer of control necessary or appropriate under FCC
Regulations for approval of the transfer or assignment of any portion of the
Collateral, together with any FCC License or other authorization. Pledgor
acknowledges that the assignment or transfer of FCC Licenses is integral to the
Secured Parties' realization of value for the Collateral, that there is no
adequate remedy at law for failure by Pledgor to comply with the provisions of
this Section 11(d) and that such failure would not be adequately compensable in
damages, and therefore agrees that the agreements contained in this Section
11(d) may be specifically enforced.
12
<PAGE>
<PAGE>
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Documents or the Existing Senior Note Indenture, none of Agent
nor any Secured Party shall, without first obtaining the approval of the FCC,
take any action pursuant to this Agreement, the Amended Credit Agreement, or any
other Loan Document or the Existing Senior Note Indenture which would constitute
or result in any acquisition or transfer of ownership of Pledgor or its assets,
assignment of any FCC License or any change of control of Pledgor or any other
Person if such assignment, acquisition, transfer or change in control would
require, under existing law (including FCC Regulations), the prior approval of
the FCC.
SECTION 12. DECISIONS RELATING TO EXERCISE OF REMEDIES.
Agent shall exercise, or refrain from exercising, any remedy provided
for in Section 11 in accordance with the directions of Requisite Lenders. Each
Secured Party, by acceptance of the benefits of this Agreement, hereby agrees
that no Secured Party shall have any liability to any other Secured Party for
any such direction by Requisite Lenders. Agent shall give prompt notice to all
Secured Parties of actions taken pursuant to the instructions of Requisite
Lenders; provided, however, that the failure to give any such notice shall not
impair the right of Agent to take any such action or the validity or
enforceability under this Agreement of the action so taken. Agent may at any
time request directions from Requisite Lenders with respect to any course of
action or other matter relating to this Agreement. In furtherance of the
foregoing provisions of this Section 12, each Secured Party, by its acceptance
of the benefits hereof, agrees that it shall have no right individually to
enforce this Agreement, it being understood and agreed by Secured Parties that
all rights and remedies hereunder may be exercised solely by Agent, for the
benefit of Secured Parties in accordance with the terms of this Section 12.
SECTION 13. APPLICATION OF PROCEEDS.
(a) Except as expressly provided elsewhere in this Agreement, all
proceeds received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Pledged Collateral may, in the
discretion of Agent, be held by Agent as collateral for, and/or then, or at any
time thereafter, applied in full or in part by Agent against, the Secured
Obligations in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including all compensation due to Agent
and its agents and counsel, and all other expenses, liabilities, and
advances made or incurred by Agent in connection therewith, and all
amounts for which Agent is entitled to indemnification hereunder and all
advances made by Agent hereunder for the account of Pledgor, and to the
payment of all costs and expenses paid or incurred by Agent in
connection with the exercise of any right or remedy hereunder, all in
accordance with Section 14;
13
<PAGE>
<PAGE>
SECOND: To the payment of interest on and fees, if any, with
respect to the Secured Obligations on an equal and ratable basis;
THIRD: To the payment of the unpaid principal amount of all
Secured Obligations on an equal and ratable basis;
FOURTH: To the payment of all other amounts due with respect to,
the Secured Obligations on an equal and ratable basis; and
FIFTH: To the payment to or upon the order of Pledgor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
(b) Payments by Agent to Lenders in respect of Obligations shall be made
to Agent for distribution to Lenders in accordance with the Amended Credit
Agreement; any payments in respect of any obligations of Grantor under Lender
Interest Rate Agreements shall be made as directed by the Interest Rate
Exchanger to which such obligations are owed; and any payments in respect of any
obligations of Grantor under the Existing Senior Note Indenture and the Existing
Senior Notes shall be made to the Senior Note Trustee for the benefit of the
Noteholders.
SECTION 14. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Agent and each Secured Party from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Agent's or such Secured Party's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Agent upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Agent may incur in connection with (i) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (ii) the exercise or
enforcement of any of the rights of Agent hereunder, or (iii) the failure by
Pledgor to perform or observe any of the provisions hereof.
(c) The obligations of Pledgor under this Section 14 shall survive the
termination of this Agreement and the discharge of Pledgor's other obligations
under this Agreement.
14
<PAGE>
<PAGE>
SECTION 15. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (a) remain in full force and effect until the
payment in full of the Secured Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen) existing under or arising out of or in connection with the Amended
Credit Agreement and the other Loan Documents and the cancellation or
termination of the Commitments, (b) be binding upon Pledgor, its successors and
assigns, and (c) inure, together with the rights and remedies of Agent
hereunder, to the benefit of Agent and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Noteholder may
assign or otherwise transfer any Existing Senior Notes held by it to any other
Person and, subject to the provisions of subsection 9.1 of the Amended Credit
Agreement, any Lender may assign or otherwise transfer any Loans held by it to
any other Person, and in each case such other Person shall thereupon become
vested with all the benefits in respect thereof granted to the Noteholders or
Lenders, respectively, herein or otherwise. Upon the payment in full of all
Secured Obligations (other than inchoate indemnification obligations with
respect to claims, losses or liabilities which have not yet arisen) existing
under or arising out of or in connection with the Amended Credit Agreement and
the other Loan Documents and the cancellation or termination of the Commitments,
the security interest granted hereby shall terminate and all rights to the
Pledged Collateral shall revert to Pledgor. Upon any such termination Agent
will, at Pledgor's expense, execute and deliver to Pledgor such documents as
Pledgor shall reasonably request to evidence such termination and Pledgor shall
be entitled to the return, upon its request and at its expense, against receipt
and without recourse to Agent, of such of the Pledged Collateral as shall not
have been sold or otherwise applied pursuant to the terms hereof.
SECTION 16. AGENT.
(a) Agent has been appointed to act as Agent hereunder by Lenders under
the Amended Credit Agreement. The Noteholders and the Interest Rate Exchangers,
by their acceptance of the benefits hereunder, hereby appoint Agent to act as
Agent hereunder in accordance with the provisions of Section 8 of the Amended
Credit Agreement, including without limitation the provisions of subsection 8.2
of the Amended Credit Agreement, and the Noteholders and the Interest Rate
Exchangers further hereby agree to indemnify Agent on a ratable basis in
accordance with subsection 8.4 of the Amended Credit Agreement. Agent shall be
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and to take or refrain from
taking any action, solely in accordance with this Agreement and the Amended
Credit Agreement; provided that Agent shall exercise, or refrain from
exercising, any remedies hereunder in accordance with the directions of
Requisite Lenders.
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the
15
<PAGE>
<PAGE>
Amended Credit Agreement shall also constitute notice of resignation as Agent
under this Agreement; and appointment of a successor Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute appointment
of a successor Agent under this Agreement. Upon the acceptance of any
appointment as Agent under subsection 8.5 of the Amended Credit Agreement by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent under this Agreement, and the retiring or removed Agent under this
Agreement shall promptly (i) transfer to such successor Agent all sums,
securities and other items of Pledged Collateral held hereunder, together with
all records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Agent under this Agreement, and (ii)
execute and deliver to such successor Agent such amendments to financing
statements, and take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Agent of the security interests
created hereunder, whereupon such retiring or removed Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Agent, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Agent hereunder.
SECTION 17. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Pledgor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Agent
and, in the case of any such amendment or modification, by Pledgor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. Agent may execute amendments and
waivers to this Agreement if directed to do so in writing by Requisite Lenders
or Supermajority Lenders as required in accordance with the terms of the Amended
Credit Agreement. The Noteholders hereby agree, by acceptance of the benefits of
this Agreement, that no consent or approval of any Noteholder shall be required
for any such amendment or waiver as long as, after giving effect to such
amendment or waiver, the Existing Senior Notes continue to be secured on an
equal and ratable basis with the Obligations under the Amended Credit Agreement
secured under this Agreement.
SECTION 18. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until received.
For purposes hereof the address of each party shall be as set forth under such
party's name on
16
<PAGE>
<PAGE>
the signature pages hereof or of the Amended Credit Agreement or such other
address as shall be designated by such party in a written notice delivered to
the other party hereto.
SECTION 19. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 20. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 21. GOVERNING LAW; TERMS.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Amended Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
17
<PAGE>
<PAGE>
[Remainder of page intentionally left blank]
18
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Pledgor and Agent have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BENEDEK COMMUNICATIONS
CORPORATION
By:
-------------------------------
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
BANKERS TRUST COMPANY,
as Agent
By:
------------------------------
Name:
Title:
Notice Address:
One Bankers Trust Plaza
130 Liberty Plaza
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
SCHEDULE I
TO THE BCC AMENDED AND RESTATED PLEDGE AGREEMENT
Attached to and forming a part of the Amended and Restated Pledge
Agreement dated as of December 17, 1997 between Benedek Communications
Corporation, as Pledgor, and Bankers Trust Company, as Agent.
<TABLE>
<CAPTION>
========================================================================================================
CLASS OF STOCK PAR NUMBER OF
STOCK ISSUER STOCK CERTIFICATE NOS. VALUE SHARES
========================================================================================================
<S> <C> <C> <C> <C>
Benedek Broadcasting common 14 None 147.85
Corporation
- --------------------------------------------------------------------------------------------------------
Benedek Broadcasting common 15 None 1
Corporation
========================================================================================================
</TABLE>
I-1
<PAGE>
<PAGE>
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, [199_][200_], is delivered
pursuant to Section 6(b) of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Amended and Restated BCC Pledge Agreement dated as of December 17, 1997, between
the undersigned and Bankers Trust Company, as Agent (the "PLEDGE AGREEMENT",
capitalized terms defined therein being used herein as therein defined), and
that the Pledged Shares listed on this Pledge Amendment shall be deemed to be
part of the Pledged Shares and shall become part of the Pledged Collateral and
shall secure all Secured Obligations.
BENEDEK COMMUNICATIONS
CORPORATION
By:
-------------------------------
Name:
Title:
<TABLE>
<CAPTION>
========================================================================================================
CLASS OF STOCK PAR NUMBER OF
STOCK ISSUER STOCK CERTIFICATE NOS. VALUE SHARES
========================================================================================================
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
========================================================================================================
</TABLE>
II-1
<PAGE>
<PAGE>
EXHIBIT 10.12
EXECUTION
AMENDED AND RESTATED BCC SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "AGREEMENT") is dated
as of December 17, 1997 and entered into by and between BENEDEK COMMUNICATIONS
CORPORATION, a Delaware corporation ("GRANTOR"), and BANKERS TRUST COMPANY
("BANKERS"), as agent for and representative of (in such capacity herein called
"AGENT") Secured Parties referred to below.
PRELIMINARY STATEMENTS
A. Benedek Broadcasting Corporation, a Delaware corporation ("COMPANY"),
and Grantor have entered into an Amended and Restated Credit Agreement dated as
of December 17, 1997 (said Amended and Restated Credit Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "AMENDED CREDIT AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
Grantor, Company, the financial institutions listed therein as Lenders, and
Bankers, as Agent, which Amended Credit Agreement amends and restates that
certain Credit Agreement, dated as of June 6, 1996 (said Amended and Restated
Credit Agreement, as heretofore amended, supplemented or otherwise modified,
being the "EXISTING CREDIT AGREEMENT"), with the financial institutions listed
therein, Pearl Street L.P., as Arranging Agent, Goldman, Sachs & Co., as
Syndication Agent, and Canadian Imperial Bank of Commerce, New York Agency
("CIBC"), as Administrative Agent and Collateral Agent, pursuant to which
Lenders have made certain commitments, subject to the terms and conditions set
forth in the Amended Credit Agreement, to, among other things, convert and
continue certain credit facilities, including the Term Loans initially extended
as AXELs to Company pursuant to the Existing Credit Agreement.
B. Company has entered into that certain Indenture, dated as of March 1,
1995 (said Indenture, as amended, supplemented, or otherwise modified from time
to time, being the "EXISTING SENIOR NOTE INDENTURE"), with Benedek Broadcasting
Company, L.L.C., a Delaware limited liability company and subsidiary of Company,
and The Bank of New York, as trustee, pursuant to which Company has issued
$135,000,000 aggregate principal amount of 11-7/8% Senior Secured Notes due 2005
(the "EXISTING SENIOR NOTES").
C. Company may heretofore have entered into and may from time to time
hereafter enter into one or more Interest Rate Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with or one or more Lenders or Affiliates of
Lenders (in such capacity, collectively, "INTEREST RATE EXCHANGERS") in
accordance with the terms of the Amended Credit Agreement.
<PAGE>
<PAGE>
D. Grantor has executed and delivered that certain Guaranty, dated as of
December 17, 1997 (said Guaranty, as it may hereafter be amended, supplemented
or otherwise modified from time to time, being the "AMENDED BCC GUARANTY"), in
favor of Agent for the benefit of (i) Agent and Lenders, (ii) the holders of the
Existing Senior Notes and (iii) any Interest Rate Exchangers (each of Agent,
Lenders and Interest Rate Exchangers is hereinafter referred to as a "SECURED
PARTY" and collectively, as "SECURED PARTIES"), pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Company under the Amended Credit Agreement, the Notes and the other Loan
Documents, under the Existing Senior Note Indenture and the Existing Senior
Notes, and under the Lender Interest Rate Agreements (including without
limitation the obligation of Company to make payments thereunder in the event of
early termination thereof) and which amends that certain BCC Guaranty, executed
by Grantor, dated as of June 6, 1996 (the "EXISTING BCC GUARANTY") in favor of
CIBC, as agent of and representative for Beneficiaries (as defined in the
Existing BCC Guaranty).
E. The obligations of Grantor under the Existing BCC Guaranty with
respect to Company's obligations under the Existing Credit Agreement, the Notes
(as defined in the Existing Credit Agreement) and other Loan Documents (as
defined in the Existing Credit Agreement) have been secured by security
interests granted pursuant to that certain BCC Security Agreement dated as of
June 6, 1996 (the "EXISTING BCC SECURITY AGREEMENT") in favor of CIBC, in its
capacity as agent for and representative of Secured Parties (as defined in the
Existing BCC Security Agreement).
F. It is a condition precedent to the execution and delivery of the
Amended Credit Agreement by Lenders that Grantor secure its obligations under
the Amended BCC Guaranty with respect to Company's obligations under the Amended
Credit Agreement, the Notes and other Loan Documents and under the Lender
Interest Rate Agreements by executing and delivering this Agreement amending and
restating the Existing BCC Security Agreement in its entirety as provided
herein. It is specifically intended that this Agreement not secure Grantor's
obligations under the Guaranty with respect to Company's obligations under the
Existing Senior Notes or Existing Senior Note Indenture.
G. Grantor desires to amend and restate the Existing BCC Security
Agreement in order to confirm the continuation of, and to assign and grant
security interests in all of the Collateral (as hereinafter defined) in favor of
Agent, on behalf of the Secured Parties, as security for Grantor's performance
of its obligations under the Amended BCC Guaranty with respect to the Company's
obligations under the Amended Credit Agreement, the Notes and the other Loan
Documents and under the Lender Interest Rate Agreements.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to convert and continue the Loans initially made pursuant to the
Existing Credit Agreement and to make other extensions of credit in each case
under the Amended Credit Agreement and to induce Interest Rate Exchangers to
enter into the Lender Interest Rate Agreements, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby agrees with Agent as follows:
2
<PAGE>
<PAGE>
SECTION 1. GRANT OF SECURITY.
Grantor hereby assigns to Agent, and hereby grants to Agent a security
interest in, all of Grantor's right, title and interest in and to the following,
in each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"COLLATERAL"):
(a) all equipment in all of its forms, all parts thereof and all
accessions thereto (any and all such equipment, parts and accessions
being the "EQUIPMENT");
(b) all inventory in all of its forms (including, but not limited
to, (i) all goods held by Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw
materials, work in process, finished goods, and materials used or
consumed in the manufacture, packing, shipping, advertising, selling,
leasing, furnishing or production of such inventory or otherwise used or
consumed in Grantor's business, (iii) all goods in which Grantor had an
interest in mass or a joint or other interest or right of any kind, and
(iv) all goods which are returned to or repossessed by Grantor) and all
accessions thereto and products thereof (all such inventory, accessions
and products being the "INVENTORY") and all negotiable documents of
title (including without limitation warehouse receipts, dock receipts
and bills of lading) issued by any Person covering any Inventory (any
such negotiable document of title being a "NEGOTIABLE DOCUMENT OF
TITLE");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any
kind and all rights in, to and under all security agreements, leases and
other contracts securing or otherwise relating to any such accounts,
contract rights, chattel paper, documents, instruments, general
intangibles or other obligations (any and all such accounts, contract
rights, chattel paper, documents, instruments, general intangibles and
other obligations being the "ACCOUNTS", and any and all such security
agreements, leases and other contracts being the "RELATED CONTRACTS");
(d) all agreements and contracts to which Grantor is a party, as
each such agreement may be amended, supplemented or otherwise modified
from time to time (said agreements, as so amended, supplemented or
otherwise modified, being referred to herein individually as an
"ASSIGNED AGREEMENT" and collectively as the "ASSIGNED AGREEMENTS"),
including without limitation (i) all rights of Grantor to receive moneys
due or to become due under or pursuant to the Assigned Agreements, (ii)
all rights of Grantor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to the Assigned Agreements, (iii) all
claims of Grantor for damages arising out of any breach of or default
under the Assigned Agreements, and (iv) all rights of Grantor to
terminate, amend, supplement, modify or exercise rights or options under
the Assigned Agreements, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder;
3
<PAGE>
<PAGE>
(e) all deposit accounts of Grantor, including without
limitation, the Collateral Account;
(f) all trademarks, tradenames, tradesecrets, business names,
patents, patent applications, licenses, copyrights, registrations and
franchise rights, and all goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including without limitation
tax refunds, rights to payment or performance, choses in action and
judgments taken on any rights or claims included in the Collateral);
(h) all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products
thereof;
(i) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon; and
(j) all proceeds, products, rents and profits of or from any and
all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Agent is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral. For purposes of this Agreement, the term
"PROCEEDS" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
The foregoing assignment and grant of security interest confirms the
assignment and grant of a first priority interest in the Collateral pledged and
granted pursuant to the Existing BCC Security Agreement and continues in all
respects the assignment and grant in the Existing BCC Security Agreement with
respect to the Collateral without in any way causing an interruption in the
continuity from such original assignment, pledge and grant.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
'SS'362(a)), of all obligations and liabilities of every nature of Grantor now
or hereafter existing under or arising out of or in connection with the Guaranty
(and all extensions or renewals thereof) with respect to the obligations of
4
<PAGE>
<PAGE>
Company under the Amended Credit Agreement, the Notes and the other Loan
Documents and under the Lender Interest Rate Agreements (it being understood
that the Grantor's obligation under the Amended Credit Agreement and the other
Loan Documents do not include any obligation with respect to excluding Grantor's
obligations under the Guaranty with respect to Company's obligations under the
Existing Senior Notes and the Existing Senior Note Indenture), whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), payments for early termination of Lender
Interest Rate Agreements, fees, expenses, indemnities or otherwise, whether
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later increased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Agent or any Secured Party as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of Grantor
now or hereafter existing under this Agreement (all such obligations of Grantor
being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE.
Anything contained herein to the contrary notwithstanding, (a) Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Agent of any of its rights hereunder shall not
release Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (c) Agent shall not have any
obligation or liability under any contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Agent be obligated to perform
any of the obligations or duties of Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Amended Credit Agreement.
(b) LOCATION OF EQUIPMENT AND INVENTORY. All of the Equipment and
Inventory is, as of the date hereof, located at places specified in
Schedule I annexed hereto.
5
<PAGE>
<PAGE>
(c) OFFICE LOCATIONS; OTHER NAMES. The chief place of business,
the chief executive office and the office where Grantor keeps its
records regarding the Accounts and all originals of all chattel paper
that evidence Accounts is, and has been for the four month period
preceding the date hereof, located at [Stewart Square, Suite 210, 308
West State Street, Rockford, Illinois 61107]. Grantor has not in the
past done, and does not now do, business under any other name (including
any trade-name or fictitious business name).
(d) DELIVERY OF CERTAIN COLLATERAL. All notes and other
instruments (excluding checks) comprising any and all items of
Collateral have been delivered to Agent duly endorsed and accompanied by
duly executed instruments of transfer or assignment in blank.
(e) PERFECTION. This Agreement, together with the filing of UCC
financing statements describing the Collateral with the filing offices
indicated on Schedule II annexed hereto, UCC-3 assignments to existing
financing statements and UCC-3 amendments to existing financing
statements, if any, creates a valid, perfected and, except for Liens
permitted pursuant to the Amended Credit Agreement, first priority
security interest in all Collateral in which a security interest may be
perfected by the filing of a financing statement, securing the payment
of the Secured Obligations.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Agent
may request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Grantor will: (i) at the request of Agent, mark
conspicuously each item of chattel paper included in the Accounts, each Related
Contract and, at the request of Agent, each of its records pertaining to the
Collateral, with a legend, in form and substance satisfactory to Agent,
indicating that such Collateral is subject to the security interest granted
hereby, (ii) at the request of Agent, deliver and pledge to Agent hereunder all
promissory notes and other instruments (including checks) and all original
counterparts of chattel paper constituting Collateral, duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Agent, (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Agent may request, in order to
perfect and preserve the security interests granted or purported to be granted
hereby, (iv) upon request of Agent, promptly after the acquisition by Grantor of
any item of Equipment which is covered by a certificate of title under a statute
of any jurisdiction under the law of which indication of a security interest on
such certificate is required as a condition of perfection thereof, execute and
file with the registrar of motor vehicles or other appropriate authority in such
6
<PAGE>
<PAGE>
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (v) within 30 days after the end of each calendar quarter, deliver to
Agent copies of all such applications or other documents filed during such
calendar quarter and all such certificates of title issued during such calendar
quarter and, if requested by Agent, indicating the security interest created
hereunder in the items of Equipment covered thereby, (vi) at any reasonable
time, upon request by Agent, exhibit the Collateral to and allow inspection of
the Collateral by Agent, or persons designated by Agent, and (vii) at Agent's
request, appear in and defend any action or proceeding that may affect Grantor's
title to or Agent's security interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of Grantor. Grantor agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
signed by Grantor shall be sufficient as a financing statement and may be filed
as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Agent may reasonably request, all
in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTOR.
Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Agent of any change in Grantor's name, identity or
corporate structure within 15 days of such change;
(c) give Agent 30 days' prior written notice of any change in
Grantor's chief place of business, chief executive office or residence
or the office where Grantor keeps its records regarding the Accounts and
all originals of all chattel paper that evidence Accounts;
(d) if Agent gives value to enable Grantor to acquire rights in
or the use of any Collateral, use such value for such purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof is being contested
in good faith; provided that Grantor shall in any event pay
7
<PAGE>
<PAGE>
such taxes, assessments, charges, levies or claims not later than five
days prior to the date of any proposed sale under any judgement, writ or
warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.
Grantor shall:
(a) keep the Equipment and Inventory at the places therefor
specified on Schedule I annexed hereto or, upon 30 days' prior written
notice to Agent, at such other places in jurisdictions where all action
that may be necessary or desirable, or that Agent may request, in order
to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Agent to exercise and enforce its rights
and remedies hereunder, with respect to such Equipment and Inventory
shall have been taken;
(b) cause the Equipment to be maintained and preserved in the
same condition, repair and working order as when new, ordinary wear and
tear excepted, and in accordance with Grantor's past practices, and
shall forthwith make or cause to be made all repairs, replacements and
other improvements in connection therewith that are necessary or
desirable to such end. Grantor shall promptly furnish to Agent a
statement respecting any material loss or damage to any of the
Equipment;
(c) keep correct and accurate records of the Inventory, itemizing
and describing the kind, type and quantity of Inventory, Grantor's cost
therefor and (where applicable) the current list prices for the
Inventory;
(d) if any Inventory is in possession or control of any of
Grantor's agents or processors and in any event upon the occurrence of
an Event of Default (as defined in the Amended Credit Agreement) or the
occurrence of an Early Termination Date (as defined in a Master
Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any
similar swap agreement) under any Lender Interest Rate Agreement (either
such occurrence being an "EVENT OF DEFAULT" for purposes of this
Agreement), instruct such agent or processor to hold all such Inventory
for the account of Agent and subject to the instructions of Agent; and
(e) promptly upon the issuance and delivery to Grantor of any
Negotiable Document of Title, deliver such Negotiable Document of Title
to Agent.
8
<PAGE>
<PAGE>
SECTION 8. INSURANCE.
Grantor shall, at its own expense, maintain insurance with respect to
the Equipment and Inventory in accordance with the terms of the Amended Credit
Agreement.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED CONTRACTS.
(a) Grantor shall keep its chief place of business and chief executive
office and the office where it keeps its records concerning the Accounts and
Related Contracts, and all originals of all chattel paper that evidence
Accounts, at the location therefor specified in Section 4 or, upon 30 days'
prior written notice to Agent, at such other location in a jurisdiction where
all action that may be necessary or desirable, or that Agent may request, in
order to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Agent to exercise and enforce its rights and
remedies hereunder, with respect to such Accounts and Related Contracts shall
have been taken. Grantor will hold and preserve such records and chattel paper
and will permit representatives of Agent at any time during normal business
hours to inspect and make abstracts from such records and chattel paper, and
Grantor agrees to render to Agent, at Grantor's cost and expense, such clerical
and other assistance as may be reasonably requested with regard thereto.
Promptly upon the request of Agent, Grantor shall deliver to Agent complete and
correct copies of each Related Contract.
(b) Grantor shall, for not less than 5 years from the date on which such
Account arose, maintain (i) complete records of each Account, including records
of all payments received, credits granted and merchandise returned, and (ii) all
documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
Grantor under the Accounts and Related Contracts. In connection with such
collections, Grantor may take such action as Grantor may deem necessary or
advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Agent shall have the right at any time, upon
the occurrence and during the continuation of an Event of Default or a Potential
Event of Default and upon written notice to Grantor of its intention to do so,
to notify the account debtors or obligors under any Accounts of the assignment
of such Accounts to Agent and to direct such account debtors or obligors to make
payment of all amounts due or to become due to Grantor thereunder directly to
Agent, to notify each Person maintaining a lockbox or similar arrangement to
which account debtors or obligors under any Accounts have been directed to make
payment to remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox or other
arrangement directly to Agent and, upon such notification and at the expense of
Grantor, to enforce collection of any such Accounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as Grantor might have done. After receipt by Grantor of the notice from
Agent referred
9
<PAGE>
<PAGE>
to in the proviso to the preceding sentence, (i) all amounts and proceeds
(including checks and other instruments) received by Grantor in respect of the
Accounts and the Related Contracts shall be received in trust for the benefit of
Agent hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Agent in the same form as so received (with
any necessary endorsement) to be held as cash Collateral and applied as provided
by Section 15, and (ii) Grantor shall not adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon.
SECTION 10. TRANSFERS AND OTHER LIENS.
Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Amended
Credit Agreement; or
(b) except for the security interest created by this Agreement,
create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any
Person.
SECTION 11. AGENT APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Agent as Grantor's attorney-in-fact,
with full authority in the place and stead of Grantor and in the name of
Grantor, Agent or otherwise, from time to time in Agent's discretion to take any
action and to execute any instrument that Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including without limitation:
(a) to obtain and adjust insurance required to be maintained by
Grantor or paid to Agent pursuant to Section 8;
(b) upon the occurrence and during the continuation of an Event
of Default, to ask for, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuation of an Event
of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a)
and (b) above;
(d) upon the occurrence and during the continuation of an Event
of Default, to file any claims or take any action or institute any
proceedings that Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Agent with respect to any of the Collateral;
10
<PAGE>
<PAGE>
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Amended Credit Agreement) levied
or placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by Agent in its sole discretion, any such payments made by
Agent to become obligations of Grantor to Agent, due and payable
immediately without demand;
(f) upon the occurrence and during the continuation of an Event
of Default, to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and
other documents relating to the Collateral;
(g) upon the occurrence and during the continuation of an Event
of Default, to file, or cause to be filed, to the extent permitted by
law, such applications for approval and to take all other and further
actions required to obtain any approvals or consents from the FCC
required for the exercise of any right or remedy hereunder; and
(h) upon the occurrence and during the continuation of an Event
of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Agent were the absolute owner thereof for all
purposes, and to do, at Agent's option and Grantor's expense, at any
time or from time to time, all acts and things that Agent deems
necessary to protect, preserve or realize upon the Collateral and
Agent's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 12. AGENT MAY PERFORM.
If Grantor fails to perform any agreement contained herein, Agent may
itself perform, or cause performance of, such agreement, and the expenses of
Agent incurred in connection therewith shall be payable by Grantor under Section
16(b).
SECTION 13. STANDARD OF CARE.
(a) The powers conferred on Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such
11
<PAGE>
<PAGE>
Collateral is accorded treatment substantially equal to that which Agent accords
its own property.
(b) Neither Agent nor any Secured Party shall be liable to Grantor (i)
for any loss or damage sustained by it, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral that may
occur as a result of, in connection with or that is an any way related to (1)
any exercise by Agent or any Secured Party of any right or remedy under this
Agreement or (2) any other act of or failure to act by Agent or any Secured
Party, except to the extent that the same shall be determined by a final
judgment of a court of competent jurisdiction that is final and not subject to
review on appeal, to be the result of acts or omissions on the part of Agent or
such Secured Party constituting gross negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY GRANTOR AGAINST AGENT, ANY SECURED PARTY OR
THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS
FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR DUTY
IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND GRANTOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
SECTION 14. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing, Agent
may exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the Uniform Commercial Code as in
effect in any relevant jurisdiction (the "CODE") (whether or not the Code
applies to the affected Collateral), and also may (i) require Grantor to, and
Grantor hereby agrees that it will at its expense and upon request of Agent
forthwith, assemble all or part of the Collateral as directed by Agent and make
it available to Agent at a place to be designated by Agent that is reasonably
convenient to both parties, (ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (iii)
prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent Agent deems appropriate, (iv) take possession of
Grantor's premises or place custodians in exclusive control thereof, remain on
such premises and use the same and any of Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, and (v) without notice
except as specified below, sell
12
<PAGE>
<PAGE>
the Collateral or any part thereof in one or more parcels at public or private
sale, at any of Agent's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Agent may deem commercially reasonable. Agent or any Secured Party may
be the purchaser of any or all of the Collateral at any such sale and Agent, as
agent for and representative of Secured Parties (but not any Secured Party or
Secured Parties in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Agent at such sale. Each purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of Grantor, and Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Grantor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Grantor hereby waives any
claims against Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Agent accepts the first
offer received and does not offer such Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen), Grantor shall be liable for the deficiency and the fees of any
attorneys employed by Agent to collect such deficiency.
(b) Notwithstanding anything to the contrary set forth herein, Agent, on
behalf of Secured Parties, agrees that to the extent prior FCC approval is
required pursuant to the Communications Act for (i) the operation and
effectiveness of any grant, right or remedy hereunder or under the other Loan
Documents or (ii) taking any action that may be taken by Agent hereunder or
under the other Loan Documents, such grant, right, remedy or action will be
subject to such prior FCC approval having been obtained by or in favor of Agent,
on behalf of Secured Parties (and Grantor will use its best efforts to obtain
any such approval as promptly as possible). Grantor agrees that, upon the
occurrence and during the continuation of an Event of Default and at Agent's
request, Grantor will, and will cause its Subsidiaries to, immediately file, or
cause to be filed, such applications for approval and shall take all other
further actions required by Agent to obtain such Governmental Authorizations as
are necessary to transfer ownership and control to Agent on behalf of Secured
Parties, or their successors or assigns, of the FCC Licenses held by it or its
Subsidiaries, or its interest in any Person holding any such FCC License. To
enforce the provisions of this Section 14(b), Agent is empowered to request the
appointment of a receiver from any court
13
<PAGE>
<PAGE>
of competent jurisdiction. Such receiver shall be instructed to seek from the
FCC an involuntary transfer of control of any FCC License for the purpose of
seeking a bona fide purchaser to whom control will ultimately be transferred.
Grantor hereby agrees to authorize, and to cause each of its Subsidiaries to
authorize, such an involuntary transfer of control upon the request of the
receiver so appointed, and, if Grantor shall refuse to authorize or cause any of
its Subsidiaries so to authorize the transfer, its approval may be required by
the court. Upon the occurrence and during the continuation of an Event of
Default, Grantor shall further use its best efforts to assist in obtaining
approval of the FCC, if required, for any action or transactions contemplated by
this Agreement or the other Loan Documents, including, without limitation,
preparation, execution and filing with the FCC of the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
FCC License or transfer of control necessary or appropriate under FCC
Regulations for approval of the transfer or assignment of any portion of the
Collateral, together with any FCC License or other authorization. Grantor
acknowledges that the assignment or transfer of FCC Licenses is integral to the
Secured Parties' realization of value for the Collateral, that there is no
adequate remedy at law for failure by Grantor to comply with the provisions of
this Section 14(b) and that such failure would not be adequately compensable in
damages, and therefore agrees that the agreements contained in this Section
14(b) may be specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Documents, none of Agent nor any Secured Party shall, without
first obtaining the approval of the FCC, take any action pursuant to this
Agreement, the Amended Credit Agreement or any other Loan Document which would
constitute or result in any acquisition or transfer of ownership of Grantor or
its assets, assignment of any FCC License or any change of control of Grantor or
any other Person if such assignment, acquisition, transfer or change in control
would require, under existing law (including FCC Regulations), the prior
approval of the FCC.
SECTION 15. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Amended Credit Agreement.
SECTION 16. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Agent and each Secured Party from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or
14
<PAGE>
<PAGE>
liabilities result from Agent's or such Secured Party's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Agent upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Agent may incur in connection with (i) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (ii) the exercise or enforcement of any
of the rights of Agent hereunder, or (iii) the failure by Grantor to perform or
observe any of the provisions hereof.
(c) The obligations of Grantor under this Section 16 shall survive the
termination of this Agreement and the discharge of Grantor's other obligations
under this Agreement.
SECTION 17. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen)
existing under or arising out of or in connection with the Amended Credit
Agreement and the other Loan Documents and the cancellation or termination of
the Commitments, (b) be binding upon Grantor, its successors and assigns, and
(c) inure, together with the rights and remedies of Agent hereunder, to the
benefit of Agent and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsection 9.1 of the Amended Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and in each case
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations (other than inchoate indemnification obligations with
respect to claims, losses or liabilities which have not yet arisen) and the
cancellation or termination of the Commitments, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to Grantor.
Upon any such termination Agent will, at Grantor's expense, execute and deliver
to Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 18. AGENT.
(a) Agent has been appointed to act as Agent hereunder by Lenders under
the Amended Credit Agreement. The Interest Rate Exchangers, by their acceptance
of the benefits hereunder, hereby appoint Agent to act as Agent hereunder in
accordance with the provisions of Section 8 of the Amended Credit Agreement,
including without limitation the provisions of subsection 8.2 of the Amended
Credit Agreement, and the Interest Rate Exchangers further hereby agree to
indemnify Agent on a ratable basis in accordance with subsection 8.4 of the
Amended Credit Agreement. Agent shall be obligated, and shall have
15
<PAGE>
<PAGE>
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action,
solely in accordance with this Agreement and the Amended Credit Agreement.
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute notice of
resignation as Agent under this Agreement; and appointment of a successor Agent
pursuant to subsection 8.5 of the Amended Credit Agreement shall also constitute
appointment of a successor Agent under this Agreement. Upon the acceptance of
any appointment as Agent under subsection 8.5 of the Amended Credit Agreement by
a successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent under this Agreement, and the retiring or removed Agent under this
Agreement shall promptly (i) transfer to such successor Agent all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Agent under this Agreement, and (ii)
execute and deliver to such successor Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Agent of the security interests
created hereunder, whereupon such retiring or removed Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Agent, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Agent hereunder.
SECTION 19. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Agent
and, in the case of any such amendment or modification, by Grantor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. Agent may execute amendments and
waivers to this Agreement if directed to do so in writing by Requisite Lenders
or Supermajority Lenders as required in accordance with the terms of the Amended
Credit Agreement.
SECTION 20. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and
16
<PAGE>
<PAGE>
properly addressed; provided that notices to Agent shall not be effective until
received. For purposes hereof the address of each party shall be as set forth
under such party's name on the signature pages hereof or of the Amended Credit
Agreement or such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 21. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 22. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 23. GOVERNING LAW; TERMS.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Amended Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 24. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
17
<PAGE>
<PAGE>
[Remainder of page intentionally left blank]
18
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Grantor and Agent have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
BENEDEK COMMUNICATIONS
CORPORATION
By
-------------------------------
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
BANKERS TRUST COMPANY,
as Agent
By
--------------------------------
Name:
Title:
Notice Address:
One Bankers Trust Plaza
130 Liberty Plaza
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
EXHIBIT 10.13
EXECUTION
AMENDED AND RESTATED ACCOUNTS RECEIVABLE SECURITY AGREEMENT
THIS AMENDED AND RESTATED ACCOUNTS RECEIVABLE SECURITY AGREEMENT (this
"AGREEMENT") is dated as of December 17, 1997 and entered into by and between
BENEDEK BROADCASTING CORPORATION, a Delaware corporation ("GRANTOR"), and
BANKERS TRUST COMPANY ("BANKERS"), as agent for and representative of (in such
capacity herein called "AGENT") the financial institutions ("LENDERS") party to
the Credit Agreement referred to below.
PRELIMINARY STATEMENTS
A. Benedek Communications Corporation and Grantor have entered into an
Amended and Restated Credit Agreement dated as of December 17, 1997 (said
Amended and Restated Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "AMENDED CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Benedek Communications
Corporation, Grantor, the financial institutions listed therein as Lenders, and
Bankers, as Agent, which Amended Credit Agreement amends and restates that
certain Credit Agreement, dated as of June 6, 1996 (said Credit Agreement, as
heretofore amended, supplemented or otherwise modified, being the "EXISTING
CREDIT AGREEMENT"), with the financial institutions listed therein, Pearl Street
L.P., as Arranging Agent, Goldman, Sachs & Co., as Syndication Agent, and
Canadian Imperial Bank of Commerce, New York Agency, as Administrative Agent and
Collateral Agent, pursuant to which Lenders have made commitments, subject to
the terms and conditions set forth in the Amended Credit Agreement, to, among
other things, convert and continue certain credit facilities, including the Term
Loans initially extended as AXELs to Grantor pursuant to the Existing Credit
Agreement.
B. Grantor has entered into that certain Indenture, dated as of March
1, 1995 (said Indenture, as amended, supplemented or otherwise modified from
time to time, being the "EXISTING SENIOR NOTE INDENTURE"), with Benedek
Broadcasting Company, L.L.C., a Delaware limited liability company and
subsidiary of Grantor, and The Bank of New York, as trustee, pursuant to which
Grantor has issued $135,000,000 aggregate principal amount of the 11-7/8% Senior
Secured Notes due 2005. The Existing Senior Note Indenture permits Grantor to
incur indebtedness under a bank credit agreement in an amount not to exceed the
greater of $5 million and 75% of the book value of
<PAGE>
<PAGE>
accounts receivable of Grantor and its Subsidiaries and to grant first priority
Liens on its accounts receivable to secure such indebtedne'SS'
C. Grantor may heretofore have entered and may from time to time
hereafter enter into one or more Interest Rate Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with or one or more Lenders or Affiliates of
Lenders (in such capacity, collectively, "INTEREST RATE EXCHANGERS") in
accordance with the terms of the Amended Credit Agreement.
D. As a condition precedent to the Existing Credit Agreement, Grantor
executed and delivered that certain Accounts Receivable Security Agreement dated
as of June 6, 1996 (the "EXISTING ACCOUNTS RECEIVABLE SECURITY AGREEMENT") in
favor of CIBC, in its capacity as collateral agent under the Existing Credit
Agreement.
E. The obligations of Grantor under the Existing Credit Agreement have
been secured by security interests granted pursuant the Existing Accounts
Receivable Security Agreement.
F. It is a condition precedent to the execution and delivery of the
Amended Credit Agreement by Lenders that Grantor shall have amended and restated
the Existing Accounts Receivable Security Agreement to modify the provisions
thereof as provided herein.
G. Grantor desires to amend and restate the Existing Accounts
Receivable Security Agreement in order to confirm the continuation of, and to
pledge and grant security interests in all of the Collateral (as hereinafter
defined) in favor of Agent, on behalf of Agent, Lenders and Interest Rate
Exchangers, as security for Grantor's performance of its obligations under the
Credit Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to convert and continue the Loans initially made pursuant to the
Existing Credit Agreement and to make other extensions of credit in each case
under the Amended Credit Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby agrees with Agent as follows:
SECTION 1. GRANT OF SECURITY.
Grantor hereby assigns to Agent, and hereby grants to Agent a security
interest in, all of Grantor's right, title and interest in and to the following,
in each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"COLLATERAL"):
2
<PAGE>
<PAGE>
(a) all accounts, chattel paper, instruments, and other rights
and obligations of any kind arising out of accounts receivable of
Grantor, but excluding any of such accounts, chattel paper, instruments
and other obligations to the extent they constitute rights of Grantor
to receive moneys due or to become due under or proceeds of "Assigned
Agreements" as defined in the Existing Company Pledge Agreement (any
and all such accounts, chattel paper, instruments and other obligations
being the "ACCOUNTS");
(b) all agreements and contracts to which Grantor is a party
as of the date hereof or becomes a party after the date hereof relating
to the sale of advertising time by Grantor or the Stations, as each
such agreement may be amended, supplemented or otherwise modified from
time to time (said agreements, as so amended, supplemented or otherwise
modified, being referred to herein individually as an "ASSIGNED
ADVERTISING AGREEMENT" and collectively as the "ASSIGNED ADVERTISING
AGREEMENTS"), including without limitation (i) all rights of Grantor to
receive moneys due or to become due under or pursuant to the Assigned
Advertising Agreements, (ii) all rights of Grantor to receive proceeds
of any insurance, indemnity, warranty, guaranty or security with
respect to the Assigned Advertising Agreements, (iii) all claims of
Grantor for damages arising out of any breach of or default under the
Assigned Advertising Agreements, and (iv) all rights of Grantor to
terminate, amend, supplement, modify or exercise rights or options
under the Assigned Advertising Agreements, to perform thereun- der and
to compel performance and otherwise exercise all remedies thereunder;
(c) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Accounts or Assigned Advertising Agreements or are otherwise necessary
or helpful in the collection thereof or realization thereupon; and
(d) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Agent is the
loss payee thereof), any indemnity, warranty or guaranty, payable by
reason of loss or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "proceeds"
includes whatever is receivable or received when Collateral or proceeds
are sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.
The foregoing assignment and grant of security interest confirms the
assignment, and grant of a first priority interest in the Collateral granted
pursuant to the Existing Accounts Receivable Security Agreement and continues in
all respects the assignment and grant in the Existing Accounts Receivable
Security Agreement with respect to the Collateral without in any way causing an
interruption in the continuity from such original assignment and grant.
3
<PAGE>
<PAGE>
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
'SS'362(a)), of all obligations and liabilities of every nature of Grantor now
or hereafter existing under or arising out of or in connection with the Amended
Credit Agreement and the other Loan Documents and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to Grantor,
would accrue on such obligations), fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Agent or any Lender as a preference, fraudulent
transfer or otherwise and all obligations of every nature of Grantor now or
hereafter existing under this Agreement (all such obligations of Grantor being
the "SECURED OBLIGATIONS"); provided that the aggregate amount of Secured
Obligations secured hereunder shall not at any time exceed the greater of (i)
$5,000,000 and (ii) 75% of the book value of the accounts receivable of Grantor.
SECTION 3. GRANTOR REMAINS LIABLE.
Anything contained herein to the contrary notwithstanding, (a) Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Agent of any of its rights hereunder shall not
release Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (c) Agent shall not have any
obligation or liability under any contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Agent be obligated to perform
any of the obligations or duties of Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Amended Credit Agreement.
4
<PAGE>
<PAGE>
(b) OFFICE LOCATIONS; OTHER NAMES. The chief place of
business, the chief executive office and the office where Grantor keeps
its records regarding the Collateral and all originals of all chattel
paper that evidence Collateral is, and has been for the four-month
period preceding the date hereof, as set forth on Schedule I annexed
hereto and Grantor has not in the past done, and does not now do,
business under any other name (including any trade-name or fictitious
business name) except as specified on Schedule I annexed hereto.
(c) DELIVERY OF CERTAIN COLLATERAL. All notes and other
instruments (excluding checks) comprising any and all items of
Collateral have been, or with respect to Collateral acquired after the
date hereof and chattel paper requested by Agent pursuant to Section
5(a)(ii) will be, delivered to Agent duly endorsed and accompanied by
duly executed instruments of transfer or assignment in blank.
(d) PERFECTION. This Agreement, together with the filing of
UCC financing statements describing the Collateral with the filing
offices indicated on Schedule II annexed hereto, UCC-3 assignments to
existing financing statements and UCC-3 amendments to existing
financing statements, if any, creates a valid, perfected and, except
for Liens permitted pursuant to the Amended Credit Agreement, first
priority security interest in all Collateral in which a security
interest may be perfected by the filing of a financing statement,
securing the payment of the Secured Obligations.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Agent
may request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Grantor will: (i) at the request of Agent, mark
conspicuously each item of chattel paper included in the Accounts, each Assigned
Advertising Agreement and, at the request of Agent, each of its records
pertaining to the Collateral, with a legend, in form and substance satisfactory
to Agent, indicating that such Collateral is subject to the security interest
granted hereby, (ii) at the request of Agent, deliver and pledge to Agent
hereunder all promissory notes and other instruments (including checks) and all
original counterparts of chattel paper constituting Collateral, duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to Agent, (iii) execute and file such financing
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Agent may request, in order to
perfect and preserve the security interests granted or purported to be granted
hereby, (iv) at any reasonable time, upon request by Agent, exhibit the
Collateral to and allow inspection of the Collateral by Agent, or persons
designated by Agent, and (v) at
5
<PAGE>
<PAGE>
Agent's request, appear in and defend any action or proceeding that may affect
Grantor's title to or Agent's security interest in all or any part of the
Collateral.
(b) Grantor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of Grantor. Grantor agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
signed by Grantor shall be sufficient as a financing statement and may be filed
as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Agent may reasonably request, all
in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTOR.
Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering
the Collateral;
(b) notify Agent of any change in Grantor's name, identity or
corporate structure within 15 days of such change;
(c) keep its chief place of business and chief executive
office and the office where it keeps its records concerning the
Collateral and all originals of all chattel paper that evidence
Accounts at the location therefor specified in subsection 4(b) hereof,
or, upon 30 days' prior written notice to Agent, at such other location
in a jurisdiction where all action that may be necessary or desirable,
or that Agent may request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Agent
to exercise and enforce its rights and remedies hereunder, with respect
to the Collateral shall have been taken. Grantor will hold and preserve
such records and chattel paper and will permit representatives of Agent
at any time during normal business hours to inspect and make abstracts
from such records and chattel paper, and Grantor agrees to render to
Agent, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto;
(d) if Agent gives value to enable Grantor to acquire rights
in or the use of any Collateral, use such value for such purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including
6
<PAGE>
<PAGE>
claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good
faith; provided that Grantor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior
to the date of any proposed sale under any judgement, writ or warrant
of attachment entered or filed against Grantor or any of the Collateral
as a result of the failure to make such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS.
(a) Grantor shall, for not less than 5 years from the date on which
such Account arose, maintain (i) complete records of each Account, including
records of all payments received and credits granted, and (ii) all documentation
relating thereto.
(b) Except as otherwise provided in this subsection (c), Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
Grantor under the Accounts. In connection with such collections, Grantor may
take such action as Grantor may deem necessary or advisable to enforce
collection of amounts due or to become due under the Accounts; provided,
however, that Agent shall have the right at any time, upon the occurrence and
during the continuation of an Event of Default and upon written notice to
Grantor of its intention to do so, to notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to Agent and to direct
such account debtors or obligors to make payment of all amounts due or to become
due to Grantor thereunder directly to Agent, to notify each Person maintaining a
lockbox or similar arrangement to which account debtors or obligors under any
Accounts have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to Agent and, upon such
notification and at the expense of Grantor, to enforce collection of any such
Accounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as Grantor might have done. After receipt
by Grantor of the notice from Agent referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including checks and other instruments)
received by Grantor in respect of the Accounts shall be received in trust for
the benefit of Agent hereunder, shall be segregated from other funds of Grantor
and shall be forthwith paid over or delivered to Agent in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 14, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any Account, or release wholly or partly any
account debtor or obligor thereof, or allow any credit or discount thereon.
SECTION 8. SPECIAL PROVISIONS WITH RESPECT TO ASSIGNED ADVERTISING AGREEMENTS.
(a) Grantor shall at its expense perform and observe all material terms
and provisions of the Assigned Advertising Agreements to be performed or
observed by it,
7
<PAGE>
<PAGE>
maintain the Assigned Advertising Agreements in full force and effect, and
enforce the Assigned Advertising Agreements in accordance with their terms.
(b) Grantor shall not cancel, terminate, amend or otherwise modify any
of the Assigned Advertising Agreements, consent to or accept any cancellation or
termination thereof, give any consent, waiver or approval thereunder, or take
any other action in connection therewith except to the extent such cancellation,
termination, amendment, modification, consent, waiver, approval or other action
would not have a Material Adverse Effect.
SECTION 9. TRANSFERS AND OTHER LIENS.
Grantor shall not:
(a) except as permitted by the Amended Credit Agreement, sell,
assign (by operation of law or otherwise) or otherwise dispose of any
of the Collateral; or
(b) except for the security interest created by this
Agreement, create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure the indebtedness of other obligations
of any Person.
SECTION 10. AGENT APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Agent as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Agent or otherwise, from time to time in Agent's discretion
to take any action and to execute any instrument that Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including without
limitation:
(a) upon the occurrence and during the continuation of an
Event of Default, to ask for, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;
(b) upon the occurrence and during the continuation of an
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (a)
above;
(c) upon the occurrence and during the continuation of an
Event of Default, to file any claims or take any action or institute
any proceedings that Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Agent with respect to any of the Collateral;
8
<PAGE>
<PAGE>
(d) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Amended Credit Agreement) levied
or placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by Agent in its sole discretion, any such payments made by
Agent to become obligations of Grantor to Agent, due and payable
immediately without demand;
(e) upon the occurrence and during the continuation of an
Event of Default, to sign and endorse any invoices, drafts against
debtors, assignments, verifications and notices in connection with the
Accounts and other documents relating to the Collateral;
(f) upon the occurrence and during the continuation of an
Event of Default, to file, or cause to be filed, to the extent
permitted by law, such applications for approval and to take all other
and further actions required to obtain any approvals or consents from
the FCC required for the exercise of any right or remedy hereunder; and
(g) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Agent were the absolute owner thereof
for all purposes, and to do, at Agent's option and Grantor's expense,
at any time or from time to time, all acts and things that Agent deems
necessary to protect, preserve or realize upon the Collateral and
Agent's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 11. AGENT MAY PERFORM.
If Grantor fails to perform any agreement contained herein, Agent may
itself perform, or cause performance of, such agreement, and the expenses of
Agent incurred in connection therewith shall be payable by Grantor under Section
15(b).
SECTION 12. STANDARD OF CARE.
(a) The powers conferred on Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral
9
<PAGE>
<PAGE>
in its possession if such Collateral is accorded treatment substantially equal
to that which Agent accords its own property.
(b) Neither Agent nor any Lender shall be liable to Grantor (i) for any
loss or damage sustained by it, or (ii) for any loss, damage, depreciation or
other diminution in the value of any of the Collateral that may occur as a
result of, in connection with or that is an any way related to (1) any exercise
by Agent or any Lender of any right or remedy under this Agreement or (2) any
other act of or failure to act by Agent or any Lender, except to the extent that
the same shall be determined by a final judgment of a court of competent
jurisdiction that is final and not subject to review on appeal, to be the result
of acts or omissions on the part of Agent or such Lender constituting gross
negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY GRANTOR AGAINST AGENT, ANY LENDER OR THEIR
RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS FOR
ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR DUTY
IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND GRANTOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
SECTION 13. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing,
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "CODE") (whether or not the Code
applies to the affected Collateral), and also may (i) require Grantor to, and
Grantor hereby agrees that it will at its expense and upon request of Agent
forthwith, assemble all or part of the Collateral as directed by Agent and make
it available to Agent at a place to be designated by Agent that is reasonably
convenient to both parties, (ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (iii)
prior to the disposition of the Collateral, store or process, the Collateral or
otherwise prepare the Collateral for disposition in any manner to the extent
Agent deems appropriate, (iv) take possession of Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and use the
same and any of Grantor's equipment for the purpose of taking any actions
described in the preceding clause (iii) and collecting any Secured Obligation,
and (v) without notice except as specified below, sell the Collateral or any
part thereof in one
10
<PAGE>
<PAGE>
or more parcels at public or private sale, at any of Agent's offices or
elsewhere, for cash, on credit or for future delivery, at such time or times and
at such price or prices and upon such other terms as Agent may deem commercially
reasonable. Agent or any Lender may be the purchaser of any or all of the
Collateral at any such sale and Agent, as agent for and representative of
Lenders (but not any Lender or Lenders in its or their respective individual
capacities unless Requisite Lenders shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by Agent at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of Grantor, and Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Grantor hereby waives any claims against Agent arising by reason of the fact
that the price at which any Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if
Agent accepts the first offer received and does not offer such Collateral to
more than one offeree. If the proceeds of any sale or other disposition of the
Collateral are insufficient to pay all the Secured Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen), Grantor shall be liable for the
deficiency and the fees of any attorneys employed by Agent to collect such
deficiency.
(b) Notwithstanding anything to the contrary set forth herein, Agent,
on behalf of Lenders, agrees that to the extent prior FCC approval is required
pursuant to the Communications Act for (i) the operation and effectiveness of
any grant, right or remedy hereunder or under the other Loan Documents or (ii)
taking any action that may be taken by Agent hereunder or under the other Loan
Documents, such grant, right, remedy or action will be subject to such prior FCC
approval having been obtained by or in favor of Agent, on behalf of Lenders (and
Grantor will use its best efforts to obtain any such approval as promptly as
possible). Grantor agrees that, upon the occurrence and during the continuation
of an Event of Default and at Agent's request, Grantor will, and will cause its
Subsidiaries to, immediately file, or cause to be filed, such applications for
approval and shall take all other further actions required by Agent to obtain
such Governmental Authorizations as are necessary to transfer ownership and
control to Agent on behalf of Lenders, or their successors or assigns, of the
FCC Licenses held by it or its Subsidiaries, or its interest in any Person
holding any such FCC License. To enforce the provisions of this Section 13(b),
Agent is empowered to request the appoint-
11
<PAGE>
<PAGE>
ment of a receiver from any court of competent jurisdiction. Such receiver shall
be instructed to seek from the FCC an involuntary transfer of control of any FCC
License for the purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. Grantor hereby agrees to authorize, and to cause each
of its Subsidiaries to authorize, such an involuntary transfer of control upon
the request of the receiver so appointed, and, if Grantor shall refuse to
authorize or cause any of its Subsidiaries so to authorize the transfer, its
approval may be required by the court. Upon the occurrence and during the
continuation of an Event of Default, Grantor shall further use its best efforts
to assist in obtaining approval of the FCC, if required, for any action or
transactions contemplated by this Agreement or the other Loan Documents,
including, without limitation, preparation, execution and filing with the FCC of
the assignor's or transferor's portion of any application or applications for
consent to the assignment of any FCC License or transfer of control necessary or
appropriate under FCC Regulations for approval of the transfer or assignment of
any portion of the Collateral, together with any FCC License or other
authorization. Grantor acknowledges that the assignment or transfer of FCC
Licenses is integral to Lenders' realization of value for the Collateral, that
there is no adequate remedy at law for failure by Grantor to comply with the
provisions of this Section 13(b) and that such failure would not be adequately
compensa- ble in damages, and therefore agrees that the agreements contained in
this Section 13(b) may be specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Document, none of Agent nor any Lender shall, without first
obtaining the approval of the FCC, take any action pursuant to this Agreement,
the Amended Credit Agreement or any other Loan Document which would constitute
or result in any acquisition or transfer of ownership of Grantor or its assets,
assignment of any FCC License or any change of control of Grantor or any other
Person if such assignment, acquisition, transfer or change of control would
require, under existing law (including FCC Regulations), the prior approval of
the FCC.
SECTION 14. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Amended Credit Agreement.
SECTION 15. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Agent and each Lender from and against
any and all claims, losses and liabilities in any way relating to, growing out
of or resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or
12
<PAGE>
<PAGE>
liabilities result from Agent's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Agent upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Agent may incur in connection with (i) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (ii) the exercise or enforcement of any
of the rights of Agent hereunder, or (iii) the failure by Grantor to perform or
observe any of the provisions hereof.
(c) The obligations of Grantor under this Section 15 shall survive the
termination of this Agreement and the discharge of Grantor's other obligations
under this Agreement.
SECTION 16. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen) and the
cancellation or termination of the Commitments, (b) be binding upon Grantor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Agent hereunder, to the benefit of Agent and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 9.1 of the Amended Credit Agreement, any
Lender may assign or otherwise transfer any Loans held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the
payment in full of all Secured Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen) and the cancellation or termination of the Commitments, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Grantor. Upon any such termination Agent will, at Grantor's expense,
execute and deliver to Grantor such documents as Grantor shall reasonably
request to evidence such termination.
SECTION 17. AGENT.
(a) Agent has been appointed to act as Agent hereunder by Lenders.
Agent shall be obligated, and shall have the right hereunder, to make demands,
to give notices, to exercise or refrain from exercising any rights, and to take
or refrain from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement and the
Amended Credit Agreement.
13
<PAGE>
<PAGE>
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute notice of
resignation as Agent under this Agreement; and appointment of a successor Agent
pursuant to subsection 8.5 of the Amended Credit Agreement shall also constitute
appointment of a successor Agent under this Agreement. Upon the acceptance of
any appointment as Agent under subsection 8.5 of the Amended Credit Agreement by
a successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent under this Agreement, and the retiring or removed Agent under this
Agreement shall promptly (i) transfer to such successor Agent all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Agent under this Agreement, and (ii)
execute and deliver to such successor Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Agent of the security interests
created hereunder, whereupon such retiring or removed Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Agent, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Agent hereunder.
SECTION 18. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Agent
and, in the case of any such amendment or modification, by Grantor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
SECTION 19. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until received.
For purposes hereof the address of each party shall be as set forth under such
party's name on the signature pages hereof or of the Amended Credit Agreement or
such other address as shall be designated by such party in a written notice
delivered to the other party hereto.
14
<PAGE>
<PAGE>
SECTION 20. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 21. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 22. GOVERNING LAW; TERMS.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Amended Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
15
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Grantor and Agent have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
BENEDEK BROADCASTING
CORPORATION
By:
-----------------------------
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
BANKERS TRUST COMPANY,
as Agent
By:
-----------------------------
Name:
Title:
Notice Address:
One Bankers Trust Plaza
130 Liberty Plaza
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
EXHIBIT 10.14
EXECUTION
AMENDED AND RESTATED ACQUIRED ASSETS SECURITY AGREEMENT
THIS AMENDED AND RESTATED ACQUIRED ASSETS SECURITY AGREEMENT (this
"AGREEMENT") is dated as of December 17, 1997 and entered into by and between
BENEDEK BROADCASTING CORPORATION, a Delaware corporation ("GRANTOR"), and
BANKERS TRUST COMPANY ("BANKERS"), as agent for and representative of (in such
capacity herein called "AGENT") the Term Loan Lenders referred to below.
PRELIMINARY STATEMENTS
A. Benedek Communications Corporation and Grantor have entered into an
Amended and Restated Credit Agreement dated as of December 17, 1997 (said
Amended and Restated Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "AMENDED CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Benedek Communications
Corporation, Grantor, the financial institutions listed therein as Lenders, and
Bankers Trust Company, as Agent, which Amended Credit Agreement amends and
restates that certain Credit Agreement, dated as of June 6, 1996 (said Credit
Agreement, as heretofore amended, supplemented or otherwise modified, being the
"EXISTING CREDIT AGREEMENT"), with the financial institutions listed therein,
Pearl Street L.P., as Arranging Agent, Goldman, Sachs & Co., as Syndication
Agent, and Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent and Collateral Agent, pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the
Amended Credit Agreement, to, among other thing, convert and continue certain
credit facilities, including the Term Loans initially extended as AXELs to
Grantor pursuant to the Existing Credit Agreement.
B. Grantor has entered into that certain Indenture, dated as of March
1, 1995 (said Indenture, as amended, supplemented or otherwise modified from
time to time, being the "EXISTING SENIOR NOTE INDENTURE"), with Benedek
Broadcasting Company, L.L.C., a Delaware limited liability company and
subsidiary of Grantor, and The Bank of New York, as trustee, pursuant to which
Grantor has issued $135,000,000 aggregate principal amount of 11-7/8% Senior
Secured Notes due 2005.
C. The proceeds of the AXELs (as defined in the Existing Credit
Agreement) were used to fund the cash portion of the purchase price of the
Acquired Stations. Pursuant to the Amended Credit Agreement, the outstanding
AXELs (as defined int he Existing Credit Agreement) were converted to, and
continued as, Term Loans. Since the AXELs
<PAGE>
<PAGE>
(as defined in the Existing Credit Agreement) constituted indebtedness issued to
finance the purchase of property and assets, Grantor was permitted pursuant to
the terms of the Existing Senior Note Indenture to grant the AXEL Lenders (as
defined in the Existing Credit Agreement) a first priority security interest in
the assets acquired.
D. As a condition precedent to the Existing Credit Agreement, Grantor
executed and delivered that certain Acquired Assets Security Agreement dated as
of June 6, 1996 (the "EXISTING ACQUIRED ASSETS SECURITY AGREEMENT") in favor of
CIBC, in its capacity as collateral agent pursuant to the Existing Credit
Agreement.
E. It is a condition precedent to the Lenders execution and delivery of
the Amended Credit Agreement and conversion of the AXELs (as defined in the
Existing Credit Agreement) into, and continuation of, the Term Loans that
Grantor shall have (i) granted the security interests contemplated by this
Agreement in favor of Agent for the benefit of Lenders holding outstanding Term
Loans (each of such Lenders being an "TERM LOAN LENDER" and collectively, the
"TERM LOAN LENDERS") and (ii) undertaken the obligations contemplated by this
Agreement. It is a further condition precedent to the conversion of the AXELs
(as defined in the Existing Credit Agreement) into, and continuation of, the
Term Loans Lenders execution and delivery of the Amended Credit Agreement that
Grantor shall have amended and restated the Existing Acquired Assets Security
Agreement to modify the provisions thereof as provided herein.
F. Grantor desires to amend and restate the Existing Acquired Assets
Security Agreement in order to confirm the continuation of, and to grant
security interests in all of the Collateral (as hereinafter defined) in favor of
Agent, on behalf of Agent and Lenders, as security for Grantor's performance of
its obligations under the Credit Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to convert and continue the Loans initially made pursuant to the
Existing Credit Agreement and to make other extensions of credit in each case
under the Amended Credit Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby agrees with Agent as follows:
SECTION 1. GRANT OF SECURITY.
Grantor hereby assigns to Agent, and hereby grants to Agent a security
interest in, all of Grantor's right, title and interest in and to the following,
in each case in which Grantor had an interest as of the consummation of the
Acquisitions and after giving effect thereto and wherever the same may be
located (the "COLLATERAL"):
(a) all equipment in all of its forms, all parts thereof and
all accessions thereto held by or used in connection with the operation
of, or relating to, the Ac-
2
<PAGE>
<PAGE>
quired Stations (any and all such equipment, parts and accessions being
the "EQUIPMENT");
(b) all inventory held by, used in connection with the
operation of, or relating to, the Acquired Stations in all of its forms
(including, but not limited to, (i) all goods held by Grantor for sale
or lease or to be furnished under contracts of service or so leased or
furnished, (ii) all raw materials, work in process, finished goods, and
materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in Grantor's business, (iii)
all goods in which Grantor had an interest in mass or a joint or other
interest or right of any kind, and (iv) all goods which are returned to
or repossessed by Grantor) and all accessions thereto and products
thereof (all such inventory, accessions and products being the
"INVENTORY") and all negotiable documents of title (including without
limitation warehouse receipts, dock receipts and bills of lading)
issued by any Person covering any Inventory (any such negotiable
document of title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all plant fixtures, business fixtures and other fixtures
and storage and office facilities used in connection with the operation
of, or relating to, the Acquired Stations and all accessions thereto
and products thereof;
(d) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon; and
(e) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Agent is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral. For purposes of this Agreement, the term
"PROCEEDS" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
For purposes of this Section 1, "ACQUIRED STATIONS" means each of the
television broadcast stations acquired by Grantor listed on Schedule I annexed
hereto.
The foregoing assignment and grant of security interest confirms the
assignment and grant of a first priority interest in the Collateral granted
pursuant to the Existing Acquired Assets Security Agreement and continues in all
respects the assignment and grant in the Existing Acquired Assets Security
Agreement with respect to the Collateral without in any way causing an
interruption in the continuity from such original assignment and grant.
3
<PAGE>
<PAGE>
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
'SS'362(a)), of all obligations and liabilities of every nature of Grantor now
or hereafter existing under or arising out of or in connection with the Term
Loans under the Amended Credit Agreement and the Term Loan Notes, and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in bankruptcy
with respect to Grantor, would accrue on such obligations), fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Agent or any Term Loan Lender
as a preference, fraudulent transfer or otherwise and all obligations of every
nature of Grantor now or hereafter existing under this Agreement (all such
obligations of Grantor being the "SECURED OBLIGATIONS").
SECTION 3. REPRESENTATIONS AND WARRANTIES.
Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Amended Credit Agreement.
(b) LOCATION OF EQUIPMENT AND INVENTORY. All of the Equipment
and Inventory is, as of the date hereof, located at the places
specified in Schedule II annexed hereto.
(c) OFFICE LOCATIONS; OTHER NAMES. The chief place of
business, the chief executive office and the office where Grantor keeps
its records regarding the Collateral is, and has been for the
four-month period preceding the date hereof, as set forth on Schedule
III annexed hereto. Grantor has not in the past done, and does not now
do, business under any other name (including any trade-name or
fictitious business name) except as specified on Schedule III annexed
hereto.
4
<PAGE>
<PAGE>
(d) PERFECTION. This Agreement, together with the filing of
UCC financing statements describing the Collateral with the filing
offices indicated on Schedule IV annexed hereto, creates a valid,
perfected and, except for Liens permitted pursuant to the Amended
Credit Agreement, first priority security interest in all Collateral in
which a security interest may be perfected by the filing of a financing
statement, securing the payment of the Secured Obligations.
SECTION 4. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Agent
may request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Grantor will: (i) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Agent may
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (ii) at any reasonable time, upon request by
Agent, exhibit the Collateral to and allow inspection of the Collateral by
Agent, or persons designated by Agent, and (iii) at Agent's request, appear in
and defend any action or proceeding that may affect Grantor's title to or
Agent's security interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of Grantor. Grantor agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
signed by Grantor shall be sufficient as a financing statement and may be filed
as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Agent may reasonably request, all
in reasonable detail.
SECTION 5. CERTAIN COVENANTS OF GRANTOR.
Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering
the Collateral;
5
<PAGE>
<PAGE>
(b) notify Agent of any change in Grantor's name, identity or
corporate structure within 15 days of such change;
(c) keep its chief place of business, chief executive office
or residence, the office where Grantor keeps its records regarding the
Collateral and the places where Equipment and Inventory are kept at the
locations therefor specified in Section 3 hereof, or upon 30 days'
prior written notice to Agent, at such other places in jurisdictions
where all action that may be necessary or desirable, or that Agent may
request, in order to perfect and protect any security interest granted
or purported to be granted hereby, or to enable Agent to exercise and
enforce its rights and remedies hereunder, with respect to the
Collateral shall have been taken;
(d) if Agent gives value to enable Grantor to acquire rights
in or the use of any Collateral, use such value for such purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Grantor shall in any event pay
such taxes, assessments, charges, levies or claims not later than five
days prior to the date of any proposed sale under any judgement, writ
or warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment.
SECTION 6. INSURANCE.
Grantor shall, at its own expense, maintain insurance with respect to
the Equipment and Inventory in accordance with the terms of the Amended Credit
Agreement.
SECTION 7. TRANSFERS AND OTHER LIENS.
Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the
Amended Credit Agreement; or
(b) except for the security interest created by this
Agreement, create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure the indebtedness or other obligations
of any Person.
6
<PAGE>
<PAGE>
SECTION 8. AGENT APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Agent as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Agent or otherwise, from time to time in Agent's discretion
to take any action and to execute any instrument that Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including without
limitation:
(a) to obtain and adjust insurance required to be maintained
by Grantor or paid to Agent pursuant to Section 6;
(b) upon the occurrence and during the continuation of an
Event of Default, to ask for, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuation of an
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a)
and (b) above;
(d) upon the occurrence and during the continuation of an
Event of Default, to file any claims or take any action or institute
any proceedings that Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Agent with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under the Amended Credit Agreement or this Agreement) levied
or placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by Agent in its sole discretion, any such payments made by
Agent to become obligations of Grantor to Agent, due and payable
immediately without demand;
(f) upon the occurrence and during the continuation of an
Event of Default, to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
Accounts and other documents relating to the Collateral;
(g) upon the occurrence and during the continuation of an
Event of Default, to file, or cause to be filed, to the extent
permitted by law, such applications for approval and to take all other
and further actions required to obtain any approvals or consents from
the FCC required for the exercise of any right or remedy hereunder; and
7
<PAGE>
<PAGE>
(h) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Agent were the absolute owner thereof
for all purposes, and to do, at Agent's option and Grantor's expense,
at any time or from time to time, all acts and things that Agent deems
necessary to protect, preserve or realize upon the Collateral and
Agent's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 9. AGENT MAY PERFORM.
If Grantor fails to perform any agreement contained herein, Agent may
itself perform, or cause performance of, such agreement, and the expenses of
Agent incurred in connection therewith shall be payable by Grantor under Section
12(b).
SECTION 10. STANDARD OF CARE.
(a) The powers conferred on Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which Agent
accords its own property.
(b) Neither Agent nor any Term Loan Lender shall be liable to Grantor
(i) for any loss or damage sustained by it, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral that may
occur as a result of, in connection with or that is an any way related to (1)
any exercise by Agent or any Term Loan Lender of any right or remedy under this
Agreement or (2) any other act of or failure to act by Agent or any Term Loan
Lender, except to the extent that the same shall be determined by a final
judgment of a court of competent jurisdiction that is final and not subject to
review on appeal, to be the result of acts or omissions on the part of Agent or
such Term Loan Lender constituting gross negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY GRANTOR AGAINST AGENT, ANY TERM LOAN LENDER
OR THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR
AGENTS FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
BREACH OR WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT,
TORT OR
8
<PAGE>
<PAGE>
DUTY IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO
THE TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND GRANTOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing,
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "CODE") (whether or not the Code
applies to the affected Collateral), and also may (i) require Grantor to, and
Grantor hereby agrees that it will at its expense and upon request of Agent
forthwith, assemble all or part of the Collateral as directed by Agent and make
it available to Agent at a place to be designated by Agent that is reasonably
convenient to both parties, (ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (iii)
prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent Agent deems appropriate, (iv) take possession of
Grantor's premises or place custodians in exclusive control thereof, remain on
such premises and use the same and any of Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, and (v) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of Agent's offices or elsewhere,
for cash, on credit or for future delivery, at such time or times and at such
price or prices and upon such other terms as Agent may deem commercially
reasonable. Agent or any Term Loan Lender may be the purchaser of any or all of
the Collateral at any such sale and Agent, as agent for and representative of
Term Loan Lenders (but not any Term Loan Lender or Term Loan Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Grantor,
and Grantor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
9
<PAGE>
<PAGE>
reasonable notification. Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Grantor hereby waives any claims against
Agent arising by reason of the fact that the price at which any Collateral may
have been sold at such a private sale was less than the price which might have
been obtained at a public sale, even if Agent accepts the first offer received
and does not offer such Collateral to more than one offeree. If the proceeds of
any sale or other disposition of the Collateral are insufficient to pay all the
Secured Obligations (other than inchoate indemnification obligations with
respect to claims, losses or liabilities which have not yet arisen), Grantor
shall be liable for the deficiency and the fees of any attorneys employed by
Agent to collect such deficiency.
(b) Notwithstanding anything to the contrary set forth herein, Agent,
on behalf of Term Loan Lenders, agrees that to the extent prior FCC approval is
required pursuant to the Communications Act for (i) the operation and
effectiveness of any grant, right or remedy hereunder or under the other Loan
Documents or (ii) taking any action that may be taken by Agent hereunder or
under the other Loan Documents, such grant, right, remedy or action will be
subject to such prior FCC approval having been obtained by or in favor of Agent,
on behalf of Term Loan Lenders (and Grantor will use its best efforts to obtain
any such approval as promptly as possible). Grantor agrees that, upon the
occurrence and during the continuation of an Event of Default and at Agent's
request, Grantor will, and will cause its Subsidiaries to, immediately file, or
cause to be filed, such applications for approval and shall take all other
further actions required by Agent to obtain such Governmental Authorizations as
are necessary to transfer ownership and control to Agent on behalf of Term Loan
Lenders, or their successors or assigns, of the FCC Licenses held by it or its
Subsidiaries, or its interest in any Person holding any such FCC License. To
enforce the provisions of this Section 11(b), Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver shall be instructed to seek from the FCC an involuntary transfer of
control of any FCC License for the purpose of seeking a bona fide purchaser to
whom control will ultimately be transferred. Grantor hereby agrees to authorize,
and to cause each of its Subsidiaries to authorize, such an involuntary transfer
of control upon the request of the receiver so appointed, and, if Grantor shall
refuse to authorize or cause any of its Subsidiaries so to authorize the
transfer, its approval may be required by the court. Upon the occurrence and
during the continuation of an Event of Default, Grantor shall further use its
best efforts to assist in obtaining approval of the FCC, if required, for any
action or transactions contemplated by this Agreement or other Loan Documents,
including, without limitation, preparation, execution and filing with the FCC of
the assignor's or transferor's portion of any application or applications for
consent to the assignment of any FCC License or transfer of control necessary or
appropriate under FCC Regulations for approval of the transfer or assignment of
any portion of the Collateral, together with any FCC License or other
authorization. Grantor acknowledges that the assignment or transfer of FCC
Licenses is integral to the Term Loan Lenders' realization of value for the
Collateral, that there is no adequate remedy at law for failure by Grantor
10
<PAGE>
<PAGE>
to comply with the provisions of this Section 11(b) and that such failure would
not be adequately compensable in damages, and therefore agrees that the
agreements contained in this Section 11(b) may be specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Document, none of Agent nor any Term Loan Lender shall, without
first obtaining the approval of the FCC, take any action pursuant to this
Agreement, the Amended Credit Agreement or any other Loan Document which would
constitute or result in any acquisition or transfer of ownership of Grantor or
its assets, assignment of any FCC License or any change of control of Grantor or
any other Person if such assignment, acquisition, transfer or change in control
would require, under existing law (including FCC Regulations), the prior
approval of the FCC.
SECTION 12. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Agent and each Term Loan Lender from
and against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Agent's or such Term Loan Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Agent upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Agent may incur in connection with (i) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (ii) the exercise or enforcement of any
of the rights of Agent hereunder, or (iii) the failure by Grantor to perform or
observe any of the provisions hereof.
(c) The obligations of Grantor under this Section 12 shall survive the
termination of this Agreement and the discharge of Grantor's other obligations
under this Agreement.
SECTION 13. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Amended Credit Agreement.
11
<PAGE>
<PAGE>
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen), (b) be
binding upon Grantor, its successors and assigns, and (c) inure, together with
the rights and remedies of Agent hereunder, to the benefit of Agent and its
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), but subject to the provisions of subsection 9.1 of the
Amended Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Lenders herein or
otherwise. Upon the payment in full of all Secured Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen), the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to Grantor. Upon
any such termination Agent will, at Grantor's expense, execute and deliver to
Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 15. AGENT.
(a) Agent has been appointed to act as Agent hereunder by Term Loan
Lenders. Agent shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action (including, without limitation, the
release or substitution of Collateral), solely in accordance with this Agreement
and the Amended Credit Agreement.
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute notice of
resignation as Agent under this Agreement; and appointment of a successor Agent
pursuant to subsection 8.5 of the Amended Credit Agreement shall also constitute
appointment of a successor Agent under this Agreement. Upon the acceptance of
any appointment as Agent under subsection 8.5 of the Amended Credit Agreement by
a successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent under this Agreement, and the retiring or removed Agent under this
Agreement shall promptly (i) transfer to such successor Agent all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Agent under this Agreement, and (ii)
execute and deliver to such successor Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Agent of the security interests
created hereunder, whereupon such retiring or removed Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's
12
<PAGE>
<PAGE>
resignation or removal hereunder as Agent, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Agent hereunder.
SECTION 16. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Agent
and, in the case of any such amendment or modification, by Grantor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
SECTION 17. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until received.
For purposes hereof the address of each party shall be as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other party
hereto.
SECTION 18. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 19. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
13
<PAGE>
<PAGE>
SECTION 20. GOVERNING LAW; TERMS.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Amended Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 21. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
14
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Grantor and Agent have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
BENEDEK BROADCASTING
CORPORATION
By:
------------------------------
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
BANKERS TRUST COMPANY,
as Agent
By:
-----------------------------
Name:
Title:
Notice Address:
One Bankers Trust Plaza
130 Liberty Plaza
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
EXHIBIT 10.15
EXECUTION
AMENDED AND RESTATED TANGIBLE ASSETS SECURITY AGREEMENT
THIS AMENDED AND RESTATED TANGIBLE ASSETS SECURITY AGREEMENT (this
"Agreement") is dated as of December 17, 1997 and entered into by and between
BENEDEK BROADCASTING CORPORATION, a Delaware corporation ("Grantor"), and
BANKERS TRUST COMPANY ("Bankers"), as agent for and representative of (in such
capacity herein called "Agent") Secured Parties referred to below.
PRELIMINARY STATEMENTS
A. Benedek Communications Corporation and Grantor have entered into an
Amended and Restated Credit Agreement dated as of December 17, 1997 (said
Amended and Restated Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "Amended Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Benedek Communications
Corporation, Grantor, the financial institutions listed therein as Lenders
("Lenders"), and Bankers Trust Company, as Agent, which Amended Credit Agreement
amends and restates that certain Credit Agreement, dated as of June 6, 1996
(said Credit Agreement, as heretofore amended, supplemented or otherwise
modified, being the "Existing Credit Agreement"), with the financial
institutions listed therein, Pearl Street L.P., as Arranging Agent, Goldman,
Sachs & Co., as Syndication Agent, and Canadian Imperial Bank of Commerce, New
York Agency ("CIBC"), as Administrative Agent and Collateral Agent, pursuant to
which Lenders have made certain commitments, subject to the terms and conditions
set forth in the Amended Credit Agreement, to, among other things, convert and
continue certain credit facilities, including the Term Loans initially extended
as AXELs to Grantor pursuant to the Existing Credit Agreement.
B. Grantor has entered into that certain Indenture, dated as of March
1, 1995 (said Indenture, as amended, supplemented or otherwise modified from
time to time, being the "Existing Senior Note Indenture"), with Benedek
Broadcasting Company, L.L.C., a Delaware limited liability company and
subsidiary of Grantor, and The Bank of New York, as trustee (the "Senior Note
Trustee"), pursuant to which Grantor has issued $135,000,000 aggregate principal
amount of 11-7/8% Senior Secured Notes due 2005 (the "Existing Senior Notes"),
and it is a requirement under the Existing Senior Note Indenture that Grantor
secure such obligations equally and ratably with its other obligations secured
hereby.
C. Grantor may heretofore have entered into and may from time to time
hereafter enter into one or more Interest Rate Agreements (collectively, the
"Lender
<PAGE>
<PAGE>
Interest Rate Agreements") with one or more Lenders or Affiliates of Lenders (in
such capacity, collectively, "Interest Rate Exchangers") in accordance with the
terms of the Amended Credit Agreement, and it is desired that the obligations of
Grantor under the Lender Interest Rate Agreements, including without limitation
the obligation of Grantor to make payments thereunder in the event of early
termination thereof, together with all obligations of Grantor under the Amended
Credit Agreement and the other Loan Documents, be secured hereunder.
D. As a condition precedent to the Existing Credit Agreement, Grantor
executed and delivered that certain Tangible Assets Security Agreement dated as
of June 6, 1996 (the "Existing Tangible Assets Security Agreement") in favor of
CIBC, in its capacity as agent for and representative of the Secured Parties (as
defined in such Existing Tangible Assets Security Agreement).
E. The obligations of Grantor under the Existing Credit Agreement, the
Existing Senior Note Indenture, and the Existing Senior Notes have been secured
by security interests granted pursuant the Existing Tangible Assets Security
Agreement.
F. It is a condition precedent to the execution and delivery of the
Amended and Restated Credit Agreement by Lenders execution and delivery of the
Amended Credit Agreement that Grantor shall have amended and restated the
Existing Acquired Tangible Assets Security Agreement to modify the provisions
thereof as provided herein.
G. Grantor desires to amend and restate the Existing Tangible Assets
Security Agreement in order to confirm the continuation of, and to grant
security interests in all of the Collateral (as hereinafter defined) in favor of
Agent, on behalf of the Secured Parties (as hereinafter defined), as security
for Grantor's performance of its obligations under the Amended Credit Agreement,
the other Loan Documents, the Existing Senior Note Indenture and the Existing
Senior Notes.
H. Agent is willing to act as agent hereunder for the benefit of (i)
Agent, (ii) Lenders, (iii) the Senior Note Trustee, (iv) the holders of the
Existing Senior Notes (the "Noteholders"), and (v) Interest Rate Exchangers
(each of Agent, Lenders, the Senior Note Trustee, the Noteholders and Interest
Rate Exchangers is hereinafter referred to as a "Secured Party" and
collectively, as "Secured Parties").
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to convert and continue the Loans initially made pursuant to the
Existing Credit Agreement and to make other extensions of credit under the
Amended Credit Agreement and to induce Interest Rate Exchangers to enter into
the Lender Interest Rate Agreements, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Grantor hereby agrees with Agent as follows:
2
<PAGE>
<PAGE>
SECTION 1. Grant of Security.
Grantor hereby assigns to Agent, and hereby grants to Agent a security
interest in, all of Grantor's right, title and interest in and to the following,
in each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located, but
excluding any of the following to the extent it constitutes "Collateral" as
defined in the Company Acquired Assets Security Agreement (the "Collateral"):
(a) all equipment in all of its forms, all parts thereof and
all accessions thereto (any and all such equipment, parts and
accessions being the "Equipment");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or to be
furnished under contracts of service or so leased or furnished, (ii)
all raw materials, work in process, finished goods, and materials used
or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in Grantor's business, (iii) all goods in
which Grantor had an interest in mass or a joint or other interest or
right of any kind, and (iv) all goods which are returned to or
repossessed by Grantor) and all accessions thereto and products
thereof (all such inventory, accessions and products being the
"Inventory") and all negotiable documents of title (including without
limitation warehouse receipts, dock receipts and bills of lading)
issued by any Person covering any Inventory (any such negotiable
document of title being a "Negotiable Document of Title");
(c) all deposit accounts of Grantor;
(d) all plant fixtures, business fixtures and other fixtures
and storage and office facilities, and all accessions thereto and
products thereof;
(e) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon; and
(f) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Agent is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
3
<PAGE>
<PAGE>
The foregoing assignment and grant of security interest confirms the
assignment and grant of a first priority interest in the Collateral granted
pursuant to the Existing Tangible Assets Security Agreement and continues in all
respects the assignment and grant in the Existing Tangible Assets Security
Agreement with respect to the Collateral without in any way causing an
interruption in the continuity from such original assignment and grant.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
'SS'362(a)), of all obligations and liabilities of every nature of Grantor now
or hereafter existing under or arising out of or in connection with (i) the
Amended Credit Agreement, the Notes and all other Loan Documents, (ii) the
Existing Senior Note Indenture and the Existing Senior Notes, and (iii) the
Lender Interest Rate Agreements, and all extensions or renewals thereof, whether
for principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Grantor, would accrue on such
obligations), payments for early termination of Lender Interest Rate Agreements,
fees, expenses, indemnities or otherwise, whether voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Agent or any
Secured Party as a preference, fraudulent transfer or otherwise and all
obligations of every nature of Grantor now or hereafter existing under this
Agreement (all such obligations of Grantor being the "Secured Obligations").
SECTION 3. Grantor Remains Liable.
Anything contained herein to the contrary notwithstanding, (a) Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Agent of any of its rights hereunder shall not
release Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (c) Agent shall not have any
obligation or liability under any contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Agent be obligated to perform
any of the obligations or duties of Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
4
<PAGE>
<PAGE>
SECTION 4. Representations and Warranties.
Grantor represents and warrants as follows:
(a) Ownership of Collateral. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Amended Credit Agreement.
(b) Location of Equipment and Inventory. All of the Equipment
and Inventory is, as of the date hereof, located at certain of the
places specified in Schedule I annexed hereto.
(c) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor keeps
its records regarding the Collateral is, and has been for the
four-month period preceding the date hereof, as set forth on Schedule
II annexed hereto. Grantor has not in the past done, and does not now
do, business under any other name (including any trade-name or
fictitious business name) except as specified on Schedule II annexed
hereto.
(d) Perfection. This Agreement, together with the filing of
UCC financing statements describing the Collateral with the filing
offices indicated on Schedule III annexed hereto, creates a valid,
perfected and, except for Liens permitted pursuant to the Amended
Credit Agreement, first priority security interest in all Collateral in
which a security interest may be perfected by the filing of a financing
statement, securing the payment of the Secured Obligations.
SECTION 5. Further Assurances.
(a) Grantor agrees that from time to time, at the expense of Grantor,
Grantor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Agent
may request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Grantor will: (i) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Agent may
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (ii) at Agent's request, promptly after the
acquisition by Grantor of any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is required as a condition
of perfection thereof, execute and file with the registrar of motor vehicles or
other appropriate authority in such jurisdiction an application or other
document requesting the notation or other indication of the security interest
created hereunder on such certificate of title,
5
<PAGE>
<PAGE>
(iii) within 30 days after the end of each calendar quarter, deliver to Agent
copies of all such applications or other documents filed during such calendar
quarter and copies of all such certificates of title issued during such calendar
quarter indicating the security interest created hereunder in the items of
Equipment covered thereby, (iv) at any reasonable time, upon request by Agent,
exhibit the Collateral to and allow inspection of the Collateral by Agent, or
persons designated by Agent, and (v) at Agent's request, appear in and defend
any action or proceeding that may affect Grantor's title to or Agent's security
interest in all or any part of the Collateral.
(b) Grantor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of Grantor. Grantor agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
signed by Grantor shall be sufficient as a financing statement and may be filed
as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Agent may reasonably request, all
in reasonable detail.
SECTION 6. Certain Covenants of Grantor.
Grantor shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any
applicable statute, regulation or ordinance or any policy of insurance
covering the Collateral;
(b) notify Agent of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) keep its chief place of business and chief executive
office, the office where it keeps its records concerning Collateral,
and its Equipment and Inventory at the locations therefor specified in
Section 4 hereof, or, upon 30 days' prior written notice to Agent, at
such other locations in jurisdictions where all action that may be
necessary or desirable, or that Agent may request, in order to perfect
and protect any security interest granted or purported to be granted
hereby, or to enable Agent to exercise and enforce its rights and
remedies hereunder, with respect to the Collateral shall have been
taken. Grantor will hold and preserve such records and will permit
representatives of Agent at any time during normal business hours to
inspect and make abstracts from such records, and Grantor agrees to
render to Agent, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto;
6
<PAGE>
<PAGE>
(d) if Agent gives value to enable Grantor to acquire rights
in or the use of any Collateral, use such value for such purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being
contested in good faith; provided that Grantor shall in any event pay
such taxes, assessments, charges, levies or claims not later than five
days prior to the date of any proposed sale under any judgement, writ
or warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment.
SECTION 7. Insurance.
Grantor shall, at its own expense, maintain insurance with respect to
the Equipment and Inventory in accordance with the terms of the Amended Credit
Agreement.
SECTION 8. Transfers, Other Liens and Release of Collateral.
(a) Grantor shall not:
(i) except as permitted by the Amended Credit Agreement,
sell, assign (by operation of law or otherwise) or otherwise dispose
of any of the Collateral; or
(ii) except for the security interest created by this
Agreement, create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure the indebtedness or other obligations
of any Person.
(b) In the event Collateral is sold in an Asset Sale permitted under
the Amended Credit Agreement, Agent may release the Liens granted hereunder on
the Collateral that is the subject of such Asset Sale in accordance with the
provisions of the Amended Credit Agreement. The Noteholders hereby agree, by
their acceptance of the benefits of this Agreement, that the Agent may release
Collateral in accordance with this Section 8(b) and the Amended Credit Agreement
without the consent or approval of any Noteholder.
SECTION 9. Agent Appointed Attorney-in-Fact.
Grantor hereby irrevocably appoints Agent as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Agent or otherwise, from time to time in Agent's discretion
to take any action and to execute any instrument that Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including without
limitation:
7
<PAGE>
<PAGE>
(a) to obtain and adjust insurance required to be maintained
by Grantor or paid to Agent pursuant to Section 7;
(b) upon the occurrence and during the continuation of an
Event of Default, to ask for, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuation of an
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a)
and (b) above;
(d) upon the occurrence and during the continuation of an
Event of Default, to file any claims or take any action or institute
any proceedings that Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Agent with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under (i) this Agreement or the Amended Credit Agreement and
(ii) the Existing Senior Note Indenture) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by Agent
in its sole discretion, any such payments made by Agent to become
obligations of Grantor to Agent, due and payable immediately without
demand;
(f) upon the occurrence and during the continuation of an
Event of Default, to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
documents relating to the Collateral;
(g) upon the occurrence and during the continuation of an
Event of Default, to file, or cause to be filed, to the extent
permitted by law, such applications for approval and to take all other
and further actions required to obtain any approvals or consents from
the FCC required for the exercise of any right or remedy hereunder; and
(h) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though Agent were the absolute owner thereof
for all purposes, and to do, at Agent's option and Grantor's expense,
at any time or from time to time, all acts and things that Agent deems
necessary to protect, preserve or realize upon the Collateral and
Agent's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
8
<PAGE>
<PAGE>
SECTION 10. Agent May Perform.
If Grantor fails to perform any agreement contained herein, Agent may
itself perform, or cause performance of, such agreement, and the expenses of
Agent incurred in connection therewith shall be payable by Grantor under Section
15(b).
SECTION 11. Standard of Care.
(a) The powers conferred on Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which Agent
accords its own property.
(b) Neither Agent nor any Secured Party shall be liable to Grantor (i)
for any loss or damage sustained by it, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral that may
occur as a result of, in connection with or that is an any way related to (1)
any exercise by Agent or any Secured Party of any right or remedy under this
Agreement or (2) any other act of or failure to act by Agent or any Secured
Party, except to the extent that the same shall be determined by a final
judgment of a court of competent jurisdiction that is final and not subject to
review on appeal, to be the result of acts or omissions on the part of Agent or
such Secured Party constituting gross negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY GRANTOR AGAINST AGENT, ANY SECURED PARTY OR
THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS
FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR DUTY
IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND GRANTOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
9
<PAGE>
<PAGE>
SECTION 12. Remedies.
(a) If any Event of Default shall have occurred and be continuing,
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Collateral), and also may (i) require Grantor to, and
Grantor hereby agrees that it will at its expense and upon request of Agent
forthwith, assemble all or part of the Collateral as directed by Agent and make
it available to Agent at a place to be designated by Agent that is reasonably
convenient to both parties, (ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (iii)
prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent Agent deems appropriate, (iv) take possession of
Grantor's premises or place custodians in exclusive control thereof, remain on
such premises and use the same and any of Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, and (v) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of Agent's offices or elsewhere,
for cash, on credit or for future delivery, at such time or times and at such
price or prices and upon such other terms as Agent may deem commercially
reasonable. Agent or any Secured Party may be the purchaser of any or all of the
Collateral at any such sale and Agent, as agent for and representative of
Secured Parties (but not any Secured Party or Secured Parties in its or their
respective individual capacities unless Requisite Obligees (as defined in
Section 13) shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Agent at such sale. Each purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of Grantor, and Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Grantor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Grantor hereby waives any
claims against Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Agent accepts the first
offer received and does not offer such Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations (other than inchoate indemnification
obligations with respect to claims, losses
10
<PAGE>
<PAGE>
or liabilities which have not yet arisen), Grantor shall be liable for the
deficiency and the fees of any attorneys employed by Agent to collect such
deficiency.
(b) Notwithstanding anything to the contrary set forth herein, Agent,
on behalf of Secured Parties, agrees that to the extent prior FCC approval is
required pursuant to the Communications Act for (i) the operation and
effectiveness of any grant, right or remedy hereunder or under the other Loan
Documents or the Existing Senior Note Indenture or (ii) taking any action that
may be taken by Agent hereunder or under the other Loan Documents or the
Existing Senior Note Indenture, such grant, right, remedy or action will be
subject to such prior FCC approval having been obtained by or in favor of Agent,
on behalf of Secured Parties (and Grantor will use its best efforts to obtain
any such approval as promptly as possible). Grantor agrees that, upon the
occurrence and during the continuation of an Event of Default and at Agent's
request, Grantor will, and will cause its Subsidiaries to, immediately file, or
cause to be filed, such applications for approval and shall take all other
further actions required by Agent to obtain such Governmental Authorizations as
are necessary to transfer ownership and control to Agent on behalf of Secured
Parties, or their respective successors or assigns, of the FCC Licenses held by
it or its Subsidiaries, or its interest in any Person holding any such FCC
License. To enforce the provisions of this Section 12(b), Agent is empowered to
request the appointment of a receiver from any court of competent jurisdiction.
Such receiver shall be instructed to seek from the FCC an involuntary transfer
of control of any FCC License for the purpose of seeking a bona fide purchaser
to whom control will ultimately be transferred. Grantor hereby agrees to
authorize, and to cause each of its Subsidiaries to authorize, such an
involuntary transfer of control upon the request of the receiver so appointed,
and, if Grantor shall refuse to authorize or cause any of its Subsidiaries so to
authorize the transfer, its approval may be required by the court. Upon the
occurrence and during the continuation of an Event of Default, Grantor shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Agreement or the
other Loan Documents or the Existing Senior Note Indenture, including, without
limitation, preparation, execution and filing with the FCC of the assignor's or
transferor's portion of any application or applications for consent to the
assignment of any FCC License or transfer of control necessary or appropriate
under FCC Regulations for approval of the transfer or assignment of any portion
of the Collateral, together with any FCC License or other authorization. Grantor
acknowledges that the assignment or transfer of FCC Licenses is integral to the
Secured Parties' realization of value for the Collateral, that there is no
adequate remedy at law for failure by Grantor to comply with the provisions of
this Section 12(b) and that such failure would not be adequately compensable in
damages, and therefore agrees that the agreements contained in this Section
12(b) may be specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Documents or the Existing Senior Note Indenture, none of Agent
nor any Secured Party shall, without first obtaining the approval of the FCC,
take any action pursuant to this Agreement, the Amended Credit Agreement, or any
other Loan Document or the Existing Senior Note Indenture which would constitute
or result in any acquisition or transfer of
11
<PAGE>
<PAGE>
ownership of Grantor or its assets, assignment of any FCC License or any change
of control of Grantor or any other Person if such assignment, acquisition,
transfer or change in control would require, under existing law (including FCC
Regulations), the prior approval of the FCC.
SECTION 13. Decisions Relating to Exercise of Remedies.
Agent shall exercise, or refrain from exercising, any remedy provided
for in Section 12 in accordance with the directions of Requisite Obligees. For
purposes of this Agreement "Requisite Obligees" means (i) with respect to the
decision of whether to exercise or refrain from exercising any remedy, either
(a) the Senior Note Trustee acting on behalf of the holders of the Existing
Senior Notes in accordance with the terms of the Existing Senior Note Indenture
or (b) the Agent acting on behalf of the Lenders in accordance with the terms of
the Amended Credit Agreement and (ii) with respect to the manner of exercising
any remedy, the holders of a majority in aggregate principal amount of the
Secured Obligations. For purposes of the definition of "Requisite Obligees" set
forth herein, (i) the Senior Note Trustee shall be deemed to hold or represent,
and shall be entitled to vote and give notice and directions to Agent with
respect to, the outstanding Existing Senior Notes in accordance with the
provisions of the Existing Senior Note Indenture and (ii) the Agent under the
Amended Credit Agreement shall be entitled to vote and give notice and
directions to Agent with respect to Obligations outstanding under the Amended
Credit Agreement in accordance with the terms of the Amended Credit Agreement.
SECTION 14. Application of Proceeds.
(a) Except as expressly provided elsewhere in this Agreement, all
proceeds received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
Agent, be held by Agent as Collateral for, and/or then, or at any time
thereafter, applied in full or in part by Agent against, the Secured Obligations
in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including all compensation due to
Agent and its agents and counsel, and all other expenses, liabilities,
and advances made or incurred by Agent in connection therewith, and all
amounts for which Agent is entitled to indemnification hereunder and
all advances made by Agent hereunder for the account of Grantor, and to
the payment of all costs and expenses paid or incurred by Agent in
connection with the exercise of any right or remedy hereunder, all in
accordance with subsection 9.2 of the Amended Credit Agreement;
SECOND: To the payment of interest on and fees, if any,
with respect to the Secured Obligations on an equal and ratable basis;
12
<PAGE>
<PAGE>
THIRD: To the payment of the unpaid principal amount of all
Secured Obligations on an equal and ratable basis;
FOURTH: To the payment of all other amounts due with respect
to the Secured Obligations on an equal and ratable basis; and
FIFTH: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
(b) Payments by Agent to Lenders in respect of Obligations shall be
made to Agent for distribution to Lenders in accordance with the Amended Credit
Agreement; any payments in respect of any obligations of Grantor under Lender
Interest Rate Agreements shall be made as directed by the Interest Rate
Exchanger to which such obligations are owed; and any payments in respect of any
obligations of Grantor under the Existing Senior Note Indenture and the Existing
Senior Notes shall be made to the Senior Note Trustee for the benefit of the
Noteholders.
SECTION 15. Indemnity and Expenses.
(a) Grantor agrees to indemnify Agent and each Secured Party from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
Agent's or such Secured Party's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Agent upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Agent may incur in connection with (i) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (ii) the exercise or enforcement of any
of the rights of Agent hereunder, or (iii) the failure by Grantor to perform or
observe any of the provisions hereof.
(c) The obligations of Grantor in this Section 15 shall survive the
termination of this Agreement and the discharge of Grantor's other obligations
under this Agreement, the Lender Interest Rate Agreements, the Amended Credit
Agreement, the other Loan Documents and the Existing Senior Note Indenture.
SECTION 16. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of all the Secured Obligations
13
<PAGE>
<PAGE>
(other than inchoate indemnification obligations with respect to claims, losses
or liabilities which have not yet arisen) existing under or arising out of or in
connection with the Amended Credit Agreement and the other Loan Documents and
the cancellation or termination of the Commitments, (b) be binding upon Grantor,
its successors and assigns, and (c) inure, together with the rights and remedies
of Agent hereunder, to the benefit of Agent and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any holder
of Existing Senior Notes may assign or otherwise transfer any Existing Senior
Notes held by it to any other Person, and, subject to the provisions of
subsection 9.1 of the Amended Credit Agreement, any Lender may assign or
otherwise transfer any Loans held by it to any other Person, and in each case
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to the holders of the Existing Senior Notes or Lenders,
respectively, herein or otherwise. Upon the payment in full of all Secured
Obligations (other than inchoate indemnification obligations with respect to
claims, losses or liabilities which have not yet arisen) existing under or
arising out of or in connection with the Amended Credit Agreement and the other
Loan Documents and the cancellation or termination of the Commitments, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination Agent will, at
Grantor's expense, execute and deliver to Grantor such documents as Grantor
shall reasonably request to evidence such termination.
SECTION 17. Agent.
(a) Agent has been appointed to act as Agent hereunder by Lenders under
the Amended Credit Agreement. The Noteholders and Interest Rate Exchangers, by
their acceptance of the benefits hereunder, hereby appoint Agent to act as Agent
hereunder in accordance with the provisions of Section 8 of the Amended Credit
Agreement, including without limitation the provisions of subsection 8.2 of the
Amended Credit Agreement, and the Noteholders and the Interest Rate Exchangers
further hereby agree to indemnify Agent on a ratable basis in accordance with
subsection 8.4 of the Amended Credit Agreement. Agent shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of
Collateral), solely in accordance with this Agreement and the Amended Credit
Agreement; provided that Agent shall exercise, or refrain from exercising, any
remedies hereunder in accordance with the directions of Requisite Obligees.
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute notice of
resignation as Agent under this Agreement; and appointment of a successor Agent
pursuant to subsection 8.5 of the Amended Credit Agreement shall also constitute
appointment of a successor Agent under this Agreement. Upon the acceptance of
any appointment as Agent under subsection 8.5 of the Amended Credit Agreement by
a successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties
14
<PAGE>
<PAGE>
of the retiring or removed Agent under this Agreement, and the retiring or
removed Agent under this Agreement shall promptly (i) transfer to such successor
Agent all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Agent under this
Agreement, and (ii) execute and deliver to such successor Agent such amendments
to financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Agent of the
security interests created hereunder, whereupon such retiring or removed Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring or removed Agent's resignation or removal hereunder as Agent, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Agent hereunder.
SECTION 18. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Agent
and, in the case of any such amendment or modification, by Grantor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. Agent may execute amendments and
waivers to this Agreement if directed to do so in writing by Requisite Lenders
or Supermajority Lenders as required in accordance with the terms of the Amended
Credit Agreement. The Noteholders hereby agree, by acceptance of the benefits of
this Agreement, that no consent or approval of any Noteholder shall be required
for any such amendment or waiver as long as, after giving effect to such
amendment or waiver, the Existing Senior Notes continue to be secured on an
equal and ratable basis with the Obligations under the Amended Credit Agreement
secured under this Agreement.
SECTION 19. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until received.
For purposes hereof the address of each party shall be as set forth under such
party's name on the signature pages hereof or of the Amended Credit Agreement or
such other address as shall be designated by such party in a written notice
delivered to the other party hereto.
15
<PAGE>
<PAGE>
SECTION 20. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 21. Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 22. Governing Law; Terms.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Amended Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 23. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
16
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Grantor and Agent have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
BENEDEK BROADCASTING CORPORATION
By:
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
BANKERS TRUST COMPANY,
as Agent
By:
Name:
Title:
Notice Address:
One Bankers Trust Plaza
130 Liberty Plaza
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
EXHIBIT 10.16
AMENDED AND RESTATED COLLATERAL ACCOUNT AGREEMENT
THIS AMENDED AND RESTATED COLLATERAL ACCOUNT AGREEMENT (this
"AGREEMENT") is dated as of December 17, 1997 and entered into by and between
BENEDEK COMMUNICATIONS CORPORATION, a Delaware corporation ("PLEDGOR"), and
BANKERS TRUST COMPANY ("BANKERS"), as agent for and representative of (in such
capacity herein called "AGENT") Secured Parties referred to below.
PRELIMINARY STATEMENTS
A. Benedek Broadcasting Corporation, a Delaware corporation and wholly
owned subsidiary of Pledgor ("COMPANY"), and Pledgor have entered into an
Amended and Restated Credit Agreement dated as of December 17, 1997 (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "AMENDED CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
with the financial institutions listed therein as Lenders ("LENDERS"), and
Bankers, as Agent, which Amended Credit Agreement amends and restates that
certain Credit Agreement, dated as of June 6, 1996 (said Credit Agreement, as
heretofore amended, supplemented or otherwise modified, being the "EXISTING
CREDIT AGREEMENT"), with the financial institutions listed therein, Pearl Street
L.P., as Arranging Agent, Goldman, Sachs & Co., as Syndication Agent, and
Canadian Imperial Bank of Commerce, New York Agency ("CIBC"), as Administrative
Agent and Collateral Agent, pursuant to which Amended Credit Agreement Lenders
have made certain commitments, subject to the terms and conditions set forth in
the Amended Credit Agreement, to, among other things, convert and continue
certain credit facilities initially extended as AXELs to Company pursuant to the
Existing Credit Agreement.
B. Company has entered into that certain Indenture, dated as of March 1,
1995 (said Indenture, as amended, supplemented, or otherwise modified from time
to time, being the "EXISTING SENIOR NOTE INDENTURE"), with Benedek Broadcasting
Company, L.L.C., a Delaware limited liability company and subsidiary of Company,
and The Bank of New York, as trustee, pursuant to which Company has issued
$135,000,000 aggregate principal amount of 11-7/8% Senior Secured Notes due 2005
(the "EXISTING SENIOR NOTES").
C. Company may from time to time hereafter enter into one or more
Interest Rate Agreements (collectively, the "LENDER INTEREST RATE AGREEMENTS")
with or one or more Lenders or Affiliates of Lenders (in such capacity,
collectively, "INTEREST RATE EXCHANGERS") in accordance with the terms of the
Amended Credit Agreement.
<PAGE>
<PAGE>
D. Pledgor has executed and delivered that certain Amended and Restated
BCC Guaranty, dated as of December 17, 1997 (said Amended and Restated BCC
Guaranty, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "GUARANTY"), in favor of Agent for the benefit of
(i) Agent and Lenders, (ii) the holders of the Existing Senior Notes
("NOTEHOLDERS") and (iii) any Interest Rate Exchangers (each of Agent, Lenders
and Interest Rate Exchangers is hereinafter referred to as a "SECURED PARTY" and
collectively, as "SECURED PARTIES"), pursuant to which Pledgor has guarantied
the prompt payment and performance when due of all obligations of Company under
the Amended Credit Agreement, the Notes and the other Loan Documents, under the
Existing Senior Note Indenture and the Existing Senior Notes, and under the
Lender Interest Rate Agreements (including without limitation the obligation of
Company to make payments thereunder in the event of early termination thereof).
E. As a condition precedent to the Existing Credit Agreement, Pledgor
executed and delivered that certain Collateral Account Agreement dated as of
June 6, 1996 (the "EXISTING COLLATERAL ACCOUNT AGREEMENT") in favor of CIBC, as
agent for and representative of Secured Parties (as defined in the Existing
Collateral Account Agreement).
F. It is a condition precedent to the execution and delivery of the
Amended Credit Agreement by Lenders that Pledgor secure its obligations under
the Guaranty with respect to Company's obligations under the Amended Credit
Agreement, the Notes and the other Loan Documents and under the Lender Interest
Rate Agreements by executing and delivering this Agreement for the purpose of
amending and restating the Existing Collateral Account Agreement in its entirety
as provided herein. It is specifically intended that this Agreement not secure
Pledgor's obligations under the Guaranty with respect to Company's obligations
under the Existing Senior Notes or Existing Senior Note Indenture.
G. Pledgor desires to amend and restate the Existing Collateral Account
Agreement in order to confirm the continuation of, and to pledge, assign and
grant security interests in all of the Collateral (as hereinafter defined) in
favor of Agent, on behalf of the Secured Parties, as security for Pledgor's
performance of its obligations under the Guaranty with respect to Company's
obligations under the Amended Credit Agreement, the Notes and the other Loan
Documents and the Lender Interest Rate Agreements.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to convert and continue the Loans initially made pursuant to the
Existing Credit Agreement and to make other extensions of credit, in each case
under the Amended Credit Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Pledgor hereby agrees with Agent as follows:
2
<PAGE>
<PAGE>
SECTION 1. CERTAIN DEFINITIONS.
The following terms used in this Agreement shall have the following
meanings:
"COLLATERAL" means (i) the Collateral Account, (ii) all amounts
on deposit from time to time in the Collateral Account, (iii) all Investments,
including all securities (whether certificated or uncertificated), instruments,
accounts, general intangibles, and deposits representing any Investments, (iv)
all interest, dividends, cash, instruments, securities and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Collateral, and (v) to the extent not covered by
clauses (i) through (iv) above, all proceeds of any or all of the foregoing
Collateral.
"COLLATERAL ACCOUNT" means the restricted deposit account
established and maintained by Agent pursuant to Section 2(a).
"EVENT OF DEFAULT" means (i) an Event of Default (as defined
under the Credit Agreement) or (ii) the occurrence of an Early Termination Date
(as defined in a Master Agreement or an Interest Rate Swap Agreement or Interest
Rate and Currency Exchange Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Lender Interest Rate Agreement.
"INVESTMENTS" means those investments, if any, made by Agent
pursuant to Section 5.
"PERMITTED INVESTMENTS" means, as at any date of determination,
(i) marketable securities (a) issued or directly and unconditionally guaranteed
as to interest and principal by the United States Government or (b) issued by
any agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within 60 days
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than 60 days from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within 60
days after such date and issued or accepted by any Lender or by any commercial
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types
3
<PAGE>
<PAGE>
of investments referred to in clauses (i), (ii) and (iii) above, (b) has net
assets of not less than $500,000,000, and (c) has the highest rating obtainable
from either S&P or Moody's.
"SECURED OBLIGATIONS" means all obligations and liabilities of
every nature of Pledgor now or hereafter existing under or arising out of or in
connection with the Guaranty (and all extensions or renewals thereof) with
respect to the obligations of Company under the Amended Credit Agreement, the
Notes and the other Loan Documents and under the Lender Interest Rate Agreements
(but excluding Pledgor's obligations under the Guaranty with respect to the
obligations of Company under the Existing Senior Notes and Existing Senior Note
Indenture), whether for principal, interest (including interest that, but for
the filing of a petition in bankruptcy with respect to Company, would accrue on
such obligations whether or not a claim is allowed against Company for such
interest in the related bankruptcy proceeding), payments for early termination
of Lender Interest Rate Agreements, reimbursement of amounts drawn under Letters
of Credit, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Agent or any Secured Party as a preference, fraudulent transfer
or otherwise, and all obligations of every nature of Pledgor now or hereafter
existing under this Agreement.
SECTION 2. ESTABLISHMENT AND OPERATION OF COLLATERAL ACCOUNT.
(a) Agent is hereby authorized to establish and maintain at its
office at _____________________, as a blocked account in the name of Agent and,
except as provided in Section 2(b) hereof under the sole dominion and control of
Agent, a restricted deposit account designated as "Benedek Communications
Corporation Collateral Account".
(b) So long as no Event of Default shall have occurred and be
continuing, Pledgor shall have free access to the Collateral Account and full
right of withdrawal thereunder and to direct the investment of amounts therein
in accordance with Section 6 hereof, subject at all times to the rules and
regulations of Agent and to all applicable laws.
(c) All amounts at any time held in the Collateral Account shall
be beneficially owned by Pledgor but shall be held in the name of Agent
hereunder, for the benefit of Secured Parties, as collateral security for the
Secured Obligations upon the terms and conditions set forth herein. Upon the
occurrence and during the continuance of an Event of Default, Pledgor shall have
no right to withdraw, transfer or otherwise receive any funds deposited into the
Collateral Account.
(d) Anything contained herein to the contrary notwithstanding,
the Collateral Account shall be subject to such applicable laws, and such
applicable regulations
4
<PAGE>
<PAGE>
of the Board of Governors of the Federal Reserve System and of any other
appropriate banking or governmental authority, as may now or hereafter be in
effect.
SECTION 3. DEPOSITS OF CASH COLLATERAL.
In accordance with subsection 5.12 of the Credit Agreement, Pledgor
shall maintain all of its Cash and Cash Equivalents in the Collateral Account.
All deposits of funds in the Collateral Account shall be made by wire transfer
(or, if applicable, by intra-bank transfer from another account of Pledgor) of
immediately available funds, in each case addressed as follows:
Account No.:
ABA No.:
Reference:
Attention:
SECTION 4. PLEDGE OF SECURITY FOR SECURED OBLIGATIONS. Pledgor
hereby pledges and assigns to Agent, and hereby grants to Agent a security
interest in, all of Pledgor's right, title and interest in and to the Collateral
as collateral security for the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. 'SS' 362(a)), of all Secured Obligations.
SECTION 5. INVESTMENT OF AMOUNTS IN THE COLLATERAL ACCOUNT.
Cash held by Secured Party in the Collateral Account shall not be
invested or reinvested except as provided in this Section 5.
(a) So long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, any funds on deposit in the Collateral Account
shall be invested by Agent in its own name, in accordance with and upon receipt
by Agent from time to time of written instructions from Pledgor, in Permitted
Investments. Upon the occurrence and during the continuance of an Event of
Default or Potential Event of Default, Pledgor's right to instruct Agent with
respect to such investment or reinvestment shall terminate without further
notice to Pledgor.
(b) Agent is hereby authorized to sell, and shall sell, all or any
designated part of the securities constituting part of the Collateral (i) so
long as no Event of Default or Potential Event of Default shall have occurred
and be continuing, upon receipt of written instructions from Pledgor or (ii) in
any event if such sale is necessary to permit Agent to perform its duties
hereunder. Agent shall have no responsibility for any loss resulting from a
fluctuation in interest rates or otherwise. Any interest received in respect of
securities
5
<PAGE>
<PAGE>
constituting part of the Collateral and the net proceeds of the sale or payment
of any such securities shall be held in the Collateral Account by Secured Party
pending investment thereof pursuant to Section 5(a).
SECTION 6. REPRESENTATIONS AND WARRANTIES. Pledgor represents and
warrants as follows:
(a) Ownership of Collateral. Pledgor is (or at the time of
transfer thereof to Agent will be) the legal and beneficial owner of the
Collateral from time to time transferred by Pledgor to Agent, free and clear of
any Lien except for the security interest created by this Agreement and the BCC
Security Agreement.
(b) Perfection. The pledge and assignment of the Collateral
pursuant to this Agreement creates a valid and perfected First Priority security
interest in the Collateral, securing the payment of the Secured Obligations.
(c) Other Information. All information heretofore, herein or
hereafter supplied to Agent by or on behalf of Pledgor with respect to the
Collateral is accurate and complete in all respects.
SECTION 7. FURTHER ASSURANCES.
Pledgor agrees that from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Agent
may request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Pledgor will: (a) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Agent may
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby and (b) at Agent's request, appear in and defend
any action or proceeding that may affect Pledgor's beneficial title to or
Agent's security interest in all or any part of the Collateral.
SECTION 8. TRANSFERS AND OTHER LIENS.
Pledgor agrees that it will not (a) sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral or (b) create or suffer
to exist any Lien upon or with respect to any of the Collateral, except for the
security interest under this Agreement and the BCC Security Agreement.
6
<PAGE>
<PAGE>
SECTION 9. AGENT APPOINTED ATTORNEY-IN-FACT.
Pledgor hereby irrevocably appoints Agent as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of
Pledgor, Agent or otherwise, from time to time in Agent's discretion to take any
action and to execute any instrument that Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including without limitation:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Collateral without the
signature of Pledgor to the extent permitted by applicable law;
(b) upon the occurrence and during the continuation of an Event of
Default, to file, or cause to be filed, to the extent permitted by law, such
applications for approval and to take all other and further actions required to
obtain any approvals or consents from the FCC required for the exercise of any
right or remedy hereunder; and
(c) to receive, endorse and collect any instruments or other Investments
made payable to Pledgor representing any dividend, principal or interest payment
or other distribution in respect of the Collateral or any part thereof and to
give full discharge for the same.
SECTION 10. AGENT MAY PERFORM.
If Pledgor fails to perform any agreement contained herein, Agent may
itself perform, or cause performance of, such agreement, and the expenses of
Agent incurred in connection therewith shall be payable by Pledgor under Section
14.
SECTION 11. STANDARD OF CARE.
(a) The powers conferred on Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Agent shall have no duty as to any Collateral, it being understood
that Agent shall have no responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Collateral, whether or not Agent has or is deemed to
have knowledge of such matters, (ii) taking any necessary steps (other than
steps taken in accordance with the standard of care set forth above to maintain
possession of the Collateral) to preserve rights against any parties with
respect to any Collateral, (iii) taking any necessary steps to collect or
realize upon the Secured Obligations or any guarantee therefor, or any part
thereof, or any of the Collateral, (iv) initiating any action to protect
7
<PAGE>
<PAGE>
the Collateral against the possibility of a decline in market value, (v) any
loss resulting from Investments made, held or sold pursuant to Section 5, except
for a loss resulting from Agent's gross negligence or willful misconduct in
complying with Section 5, or (vi) determining (1) the correctness of any
statement or calculation made by Pledgor in any written or telex (tested or
otherwise) instructions or (2) whether any deposit in the Collateral Account is
proper. Agent shall be deemed to have exercised reasonable care in the custody
and preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Agent accords its own property of
like kind.
(b) Neither Agent nor any Secured Party shall be liable to Pledgor (i)
for any loss or damage sustained by it, or (ii) for any loss, damage,
depreciation or other diminution in the value of any of the Collateral that may
occur as a result of, in connection with or that is an any way related to (1)
any exercise by Agent or any Secured Party of any right or remedy under this
Agreement or (2) any other act of or failure to act by Agent or any Secured
Party, except to the extent that the same shall be determined by a final
judgment of a court of competent jurisdiction that is final and not subject to
review on appeal, to be the result of acts or omissions on the part of Agent or
such Secured Party constituting gross negligence or willful misconduct.
(c) NO CLAIM MAY BE MADE BY PLEDGOR AGAINST AGENT, ANY SECURED PARTY OR
THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS
FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR DUTY
IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND PLEDGOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS
FAVOR.
SECTION 12. REMEDIES.
(a) If an Event of Default shall have occurred and be continuing, Agent
may (i) sell any of the Collateral, (ii) transfer any or all of the Collateral
to an account established in the name of Agent (whether at Agent or otherwise),
or (iii) register title to any Collateral in the name of Agent or one of its
nominees or agents, without reference to any interest of Pledgor.
(b) If an Event of Default shall have occurred and be continuing, Agent
may exercise in respect of the Collateral, in addition to all other rights and
remedies otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform
8
<PAGE>
<PAGE>
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Collateral), and Agent may also in its
sole discretion, without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange or broker's board or at any of Agent's offices or elsewhere, for cash,
on credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Agent may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the
Collateral. Agent or any Secured Party may be the purchaser of any or all of the
Collateral at any such sale and Agent, as agent for and representative of
Secured Parties (but not any Secured Party or Secured Parties in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Agent at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Pledgor, and Pledgor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Pledgor hereby agrees that the Collateral is of a type customarily sold on
recognized markets and, accordingly, that no notice to any Person is required
prior to any sale of any of the Collateral pursuant to the terms of this
Agreement; provided that, without prejudice to the foregoing, Pledgor agrees
that, to the extent notice of any such sale shall be required by law, at least
ten days' notice to Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
(c) Notwithstanding anything to the contrary set forth herein, Agent, on
behalf of Secured Parties, agrees that to the extent prior FCC approval is
required pursuant to the Communications Act for (i) the operation and
effectiveness of any grant, right or remedy hereunder or under the other Loan
Documents or (ii) taking any action that may be taken by Agent hereunder or
under the other Loan Documents, such grant, right, remedy or action will be
subject to such prior FCC approval having been obtained by or in favor of Agent,
on behalf of Secured Parties (and Pledgor will use its best efforts to obtain
any such approval as promptly as possible). Pledgor agrees that, upon the
occurrence and during the continuation of an Event of Default and at Agent's
request, Pledgor will, and will cause its Subsidiaries to, immediately file, or
cause to be filed, such applications for approval and shall take all other
further actions required by Agent to obtain such Governmental Authorizations as
are necessary to transfer ownership and control to Agent on behalf of Secured
Parties, or their successors or assigns, of the FCC Licenses held by it or its
Subsidiaries, or its interest in any Person holding any such FCC License. To
enforce the provisions of this Section 12(c), Agent is empowered to request the
appointment of a receiver from any court
9
<PAGE>
<PAGE>
of competent jurisdiction. Such receiver shall be instructed to seek from the
FCC an involuntary transfer of control of any FCC License for the purpose of
seeking a bona fide purchaser to whom control will ultimately be transferred.
Pledgor hereby agrees to authorize, and to cause each of its Subsidiaries to
authorize, such an involuntary transfer of control upon the request of the
receiver so appointed, and, if Pledgor shall refuse to authorize or cause any of
its Subsidiaries so to authorize the transfer, its approval may be required by
the court. Upon the occurrence and during the continuation of an Event of
Default, Pledgor shall further use its best efforts to assist in obtaining
approval of the FCC, if required, for any action or transactions contemplated by
this Agreement or the other Loan Documents, including, without limitation,
preparation, execution and filing with the FCC of the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
FCC License or transfer of control necessary or appropriate under FCC
Regulations for approval of the transfer or assignment of any portion of the
Collateral, together with any FCC License or other authorization. Pledgor
acknowledges that the assignment or transfer of FCC Licenses is integral to the
Secured Parties' realization of value for the Collateral, that there is no
adequate remedy at law for failure by Pledgor to comply with the provisions of
this Section 12(c) and that such failure would not be adequately compensable in
damages, and therefore agrees that the agreements contained in this Section
12(c) may be specifically enforced.
Notwithstanding anything to the contrary contained in this Agreement or
any other Loan Documents, none of Agent nor any Secured Party shall, without
first obtaining the approval of the FCC, take any action pursuant to this
Agreement, the Amended Credit Agreement or any other Loan Document which would
constitute or result in any acquisition or transfer of ownership of Pledgor or
its assets, assignment of any FCC License or any change of control of Pledgor or
any other Person if such assignment, acquisition, transfer or change in control
would require, under existing law (including FCC Regulations), the prior
approval of the FCC.
SECTION 13. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Amended Credit Agreement.
SECTION 14. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Agent and each Secured Party from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or
10
<PAGE>
<PAGE>
liabilities result from Agent's or such Secured Party's gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Agent upon demand the amount of any and all
costs and expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Agent may incur in connection with (i) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (ii) the exercise or enforcement of any
of the rights of Agent hereunder, or (iii) the failure by Pledgor to perform or
observe any of the provisions hereof.
(c) The obligations of Pledgor under this Section 14 shall survive the
termination of this Agreement and the discharge of Pledgor's other obligations
under this Agreement.
SECTION 15. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen) and the
cancellation or termination of the Commitments, (b) be binding upon Pledgor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Agent hereunder, to the benefit of Agent and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 9.1 of the Amended Credit Agreement, any
Lender may assign or otherwise transfer any Loans held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the
payment in full of all Secured Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen) and the cancellation or termination of the Commitments, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Pledgor. Upon any such termination Agent shall, at Pledgor's expense,
execute and deliver to Pledgor such documents as Pledgor shall reasonably
request to evidence such termination and Pledgor shall be entitled to the
return, upon its request and at its expense, against receipt and without
recourse to Agent, of such of the Collateral as shall not have been otherwise
applied pursuant to the terms hereof.
SECTION 16. AGENT.
(a) Agent has been appointed to act as Agent hereunder by Lenders under
the Amended Credit Agreement. The Interest Rate Exchangers, by their acceptance
of the benefits hereunder, hereby appoint Agent to act as Agent hereunder in
accordance with the provisions of Section 8 of the Amended Credit Agreement,
including without limitation, the provisions of subsection 8.2 of the Amended
Credit Agreement, and the Interest Rate
11
<PAGE>
<PAGE>
Exchangers further hereby agree to indemnify Agent on a ratable basis in
accordance with subsection 8.4 of the Amended Credit Agreement. Agent shall be
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and to take or refrain from
taking any action, solely in accordance with this Agreement and the Amended
Credit Agreement.
(b) Agent shall at all times be the same Person that is Agent under the
Amended Credit Agreement. Written notice of resignation by Agent pursuant to
subsection 8.5 of the Amended Credit Agreement shall also constitute notice of
resignation as Agent under this Agreement; and appointment of a successor Agent
pursuant to subsection 8.5 of the Amended Credit Agreement shall also constitute
appointment of a successor Agent under this Agreement. Upon the acceptance of
any appointment as Agent under subsection 8.5 of the Amended Credit Agreement by
a successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent under this Agreement, and the retiring or removed Agent under this
Agreement shall promptly (i) transfer to such successor Agent all sums held by
Agent hereunder (which shall be deposited in a new Collateral Account
established and maintained by such successor Agent), together with all records
and other documents necessary or appropriate in connection with the performance
of the duties of the successor Agent under this Agreement, and (ii) execute and
deliver to such successor Agent such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Agent of the security interests created
hereunder, whereupon such retiring or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was Agent hereunder.
SECTION 17. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Pledgor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Agent
and, in the case of any such amendment or modification, by Pledgor. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
SECTION 18. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and
12
<PAGE>
<PAGE>
properly addressed; provided that notices to Agent shall not be effective until
received. For purposes hereof the address of each party shall be as set forth
under such party's name on the signature pages hereof or of the Amended Credit
Agreement or such other address as shall be designated by such party in a
written notice delivered to the other party hereto.
SECTION 19. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 20. HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 21. GOVERNING LAW; TERMS.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Amended Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and
13
<PAGE>
<PAGE>
attached to a single counterpart so that all signature pages are physically
attached to the same document.
[Remainder of page intentionally left blank]
14
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Pledgor and Agent have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
BENEDEK COMMUNICATIONS
CORPORATION
By:
------------------------------
Ronald L. Lindwall
Senior VP-Finance, CFO
Treasurer and Secretary
Notice Address:
c/o Benedek Broadcasting Corporation
100 Park Avenue
Rockford, Illinois 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-1
<PAGE>
<PAGE>
BANKERS TRUST COMPANY,
as Agent
By:
---------------------------
Name:
Title:
Notice Address:
One Bankers Trust Plaza
130 Liberty Plaza
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
Exhibit 10.17
EXECUTION
MASTER ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("AGREEMENT") is dated as of December
19, 1997 (the "ASSIGNMENT DATE") and entered into by and among BENEDEK
COMMUNICATIONS CORPORATION, a Delaware corporation ("BCC"), BENEDEK BROADCASTING
CORPORATION, a Delaware corporation ("COMPANY"), CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY ("CIBC-NYA"), as Administrative Agent and Collateral
Agent under the Existing Credit Agreement (as defined below) (the "EXISTING
AGENT"), and THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(individually referred to as a "LENDER" and collectively as "LENDERS").
WHEREAS, BCC and Company have entered into that certain Credit
Agreement dated as of June 6, 1996, as amended by that certain Limited Waiver
and First Amendment to Credit Agreement dated as of October 31, 1996 and that
certain Limited Waiver and Second Amendment to Credit Agreement dated as of
February 28, 1997 (said Credit Agreement, as so amended, being referred to
herein as the "EXISTING CREDIT AGREEMENT"; capitalized terms used herein without
definition being used herein with the meanings assigned to such terms in the
Existing Credit Agreement) with the Lenders listed on Annex A hereto (sometimes
referred to herein individually as an "EXISTING LENDER" and collectively as
"EXISTING LENDERS"), Pearl Street L.P., as Arranging Agent, Goldman, Sachs &
Co., as Syndication Agent, and the Existing Agent.
WHEREAS, BCC and Company have entered into that certain Amended
and Restated Credit Agreement dated as of December 17, 1997 (the "NEW CREDIT
AGREEMENT") with the Lenders listed on Annex B hereto (sometimes referred to
herein individually as a "NEW LENDER" and collectively as "NEW LENDERS") and
Bankers Trust Company, as Agent, pursuant to which New Lenders have agreed,
subject to the terms and conditions set forth in the New Credit Agreement, to
amend and restate the Existing Credit Agreement for the purpose of, among other
things, converting (i) all of the outstanding AXELs Series A and a portion of
the outstanding AXELs Series B into Tranche A Term Loans (such term being used
herein as defined in the New Credit Agreement) and (ii) a portion of the
outstanding AXELs Series B into Tranche B Term Loans (such term being used
herein as defined in the New Credit Agreement) on the Assignment Date;
WHEREAS, the New Credit Agreement contemplates that, as
conditions precedent to the effectiveness of the New Credit Agreement,
notwithstanding anything contained in the Existing Credit Agreement to the
contrary, (i) Company shall have converted all Eurodollar Rate Loans outstanding
under the Existing Credit Agreement on or before the Business Day preceding the
Assignment Date into Base Rate Loans and, pursuant to this Agreement, shall have
agreed to pay to Existing Lenders such amounts (the "CONVERSION COMPENSATION")
as are payable pursuant to subsection 2.6D of the Existing
<PAGE>
<PAGE>
Credit Agreement in connection with such conversion, in each case, to the extent
the applicable Existing Lenders shall have notified Existing Agent and Company
on or after the Assignment Date of the amounts of any Conversion Compensation so
payable (the transactions described in this clause (i) being, collectively, the
"CONVERSION TRANSACTIONS"), (ii) Company shall have paid to Existing Agent, for
distribution (as appropriate) (a) to Existing Lenders, all accrued and unpaid
interest with respect to all Loans outstanding on the Assignment Date, (b) to
Existing Agent, Arranging Agent and/or Existing Lenders, all commitment fees and
any other fees which are accrued and unpaid as of the Assignment Date under
subsection 2.3 of the Existing Credit Agreement, (iii) Company shall have paid
to Existing Agent, for distribution (as appropriate) to Existing Lenders that
have not executed and delivered a waiver with respect to such prepayment fees
("NONWAIVING LENDERS"), an amount equal to the amount of prepayment fees that
would have been paid by Company pursuant to subsection 2.4B(i)(b) of the
Existing Credit Agreement with respect to the Nonwaiving Lenders' AXELs
outstanding on the Assignment Date pursuant to subsection 2.4B(i)(b) of the
Existing Credit Agreement if the aggregate amount of AXELs outstanding on the
Assignment Date had been prepaid pursuant to subsection 2.4B(i)(a) of the
Existing Credit Agreement on the Assignment Date (the transactions described in
the foregoing clauses (ii) and (iii) being, collectively, the "OTHER PAYMENT
TRANSACTIONS"), and (iv) the assignment and assumption transactions contemplated
by this Agreement shall have been consummated; and
WHEREAS, in order to effect a reallocation among all New Lenders
of Existing Lenders' AXELs Series A, AXELs Series B and Revolving Loans
outstanding on the Assignment Date in a manner which coincides with (i) the
amount of AXELs Series A, AXELs Series B and Revolving Loans intended to be
outstanding to each New Lender on the Assignment Date immediately prior to the
effectiveness of the New Credit Agreement and (ii) the amount of "Tranche A Term
Loans", "Tranche B Term Loans" and "Revolving Loans" (as such term is defined in
the New Credit Agreement) intended to be outstanding to each New Lender under
the New Credit Agreement on the Assignment Date (simultaneously with the
effectiveness of the New Credit Agreement but prior to any borrowings under the
New Credit Agreement on the Assignment Date), the parties hereto desire that the
assignment and assumption transactions hereinafter set forth be consummated
immediately after the consummation of the Conversion Transactions and the Other
Payment Transactions and immediately prior to the effectiveness of the New
Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
SECTION 1. Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings:
2
<PAGE>
<PAGE>
"ASSIGNED AXEL SERIES A SHARE" means, with respect to each
Assignor AXEL Series A Lender, the amount of such Lender's AXEL Series A
identified as such Lender's Assigned AXEL Series A Share in Part A of Schedule I
annexed hereto.
"ASSIGNED AXEL SERIES B SHARE" means, with respect to each
Assignor AXEL Series B Lender, the amount of such Lender's AXEL Series B
identified as such Lender's Assigned AXEL Series B Share in Part A of Schedule
II annexed hereto.
"ASSIGNED REVOLVING SHARE" means, with respect to each Assignor
Revolving Lender, the aggregate amount of such Lender's Revolving Loan
Commitment identified as such Lender's Assigned Revolving Share in Part A of
Schedule III annexed hereto, and any Revolving Loans outstanding thereunder on
the date hereof.
"ASSIGNEE AXEL SERIES A LENDER" means each Lender listed in Part
B of Schedule I annexed hereto.
"ASSIGNEE AXEL SERIES B LENDER" means each Lender listed in Part
B of Schedule II annexed hereto.
"ASSIGNEE REVOLVING LENDER" means each Lender listed in Part B of
Schedule III annexed hereto.
"ASSIGNOR AXEL SERIES A LENDER" means each Lender listed in Part
A of Schedule I annexed hereto.
"ASSIGNOR AXEL SERIES B LENDER" means each Lender listed in Part
A of Schedule II annexed hereto.
"ASSIGNOR REVOLVING LENDER" means each Lender listed in Part A of
Schedule III annexed hereto.
"ASSUMED AXEL SERIES A PERCENTAGE" means, with respect to each
Assignee AXEL Series A Lender, the percentage identified as such Lender's
Assumed AXEL Series A Percentage in Part B of Schedule I annexed hereto.
"ASSUMED AXEL SERIES B PERCENTAGE" means, with respect to each
Assignee AXEL Series B Lender, the percentage identified as such Lender's
Assumed AXEL Series B Percentage in Part B of Schedule II annexed hereto.
"ASSUMED REVOLVING PERCENTAGE" means, with respect to each
Assignee Revolving Lender, the percentage identified as such Lender's Assumed
Revolving Percentage in Part B of Schedule III annexed hereto.
3
<PAGE>
<PAGE>
SECTION 2. ASSIGNMENT AND ASSUMPTION.
A. AXELS SERIES A. (i) Each Assignor AXEL Series A Lender,
severally and not jointly, hereby sells and assigns to each Assignee AXEL Series
A Lender, without recourse and without representation or warranty (other than as
expressly provided herein), such Assignee AXEL Series A Lender's Assumed AXEL
Series A Percentage of all of such Assignor AXEL Series A Lender's rights and
obligations arising under the Loan Documents with respect to its Assigned AXEL
Series A Share, including, without limitation, (a) all such rights with respect
to the AXEL Series A made and maintained by such Assignor AXEL Series A Lender
pursuant to subsection 2.1A(i) of the Existing Credit Agreement, (b) all claims
of such Assignor AXEL Series A Lender against persons who may in the future
become or are now liable for repayment of such Assignor AXEL Series A Lender's
AXEL Series A or reimbursement of expenses incurred by such Assignor AXEL Series
A Lender on account of such AXEL Series A and (c) all amounts received by such
Assignor AXEL Series A Lender on account of such AXEL Series A, whether from the
Company, from the sale or other disposition of the Collateral pledged pursuant
to the Collateral Documents, from others who are now or may in the future become
obligated to such Assignor AXEL Series A Lender with respect to some or all of
the amounts owing on such AXEL Series A, or from any other source, including
without limitation, recovery from litigation. In consideration of the foregoing
assignment, each Assignee AXEL Series A Lender shall pay to each Assignor AXEL
Series A Lender, in accordance with the provisions of Section 2A(iii) hereof, an
amount equal to such Assignee AXEL Series A Lender's Assumed AXEL Series A
Percentage multiplied by such Assignor AXEL Series A Lender's Assigned AXEL
Series A Share (such amount being the "AXEL SERIES A CONSIDERATION" payable by
such Assignee AXEL Series A Lender to such Assignor AXEL Series A Lender).
(ii) Each Assignee AXEL Series A Lender hereby assumes from each
Assignor AXEL Series A Lender, and, as between such Assignor AXEL Series A
Lender and Assignee AXEL Series A Lender, such Assignor AXEL Series A Lender is
hereby expressly and absolutely released from, such Assignee AXEL Series A
Lender's Assumed AXEL Series A Percentage of all of such Assignor AXEL Series A
Lender's obligations arising under the Loan Documents relating to its Assigned
AXEL Series A Share, including, without limitation, all obligations with respect
to any AXELs Series A made and/or maintained pursuant to the Existing Credit
Agreement.
(iii) Each Assignee AXEL Series A Lender agrees to pay to
Existing Agent, for distribution (as appropriate) to each Assignor AXEL Series A
Lender, an amount equal to the aggregate AXEL Series A Consideration owed by
such Assignee AXEL Series A Lender to all Assignor AXEL Series A Lenders as set
forth in Part B of Schedule I annexed hereto, in same day funds not later than
12:00 Noon (New York time) on the Assignment Date. Existing Agent shall
distribute to each Assignor AXEL Series A Lender an amount in same day funds on
the Assignment Date equal to the amount of such Assignor AXEL Series A Lender's
respective share of such proceeds. As a result of the payment by each Assignee
AXEL Series A Lender to each Assignor AXEL Series A Lender of the AXEL Series A
Consideration payable by such Assignee AXEL Series A Lender to such Assignor
AXEL
4
<PAGE>
<PAGE>
Series A Lender, each Assignor AXEL Series A Lender shall be entitled to receive
an aggregate amount of AXEL Series A Consideration equal to such Assignor AXEL
Series A Lender's Assigned AXEL Series A Share as set forth in Part A of
Schedule I annexed hereto.
B. AXELS SERIES B. (i) Each Assignor AXEL Series B Lender,
severally and not jointly, hereby sells and assigns to each Assignee AXEL Series
B Lender, without recourse and without representation or warranty (other than as
expressly provided herein), such Assignee AXEL Series B Lender's Assumed AXEL
Series B Percentage of all of such Assignor AXEL Series B Lender's rights and
obligations arising under the Loan Documents with respect to its Assigned AXEL
Series B Share, including, without limitation, (a) all such rights with respect
to the AXEL Series B made and maintained by such Assignor AXEL Series B Lender
pursuant to subsection 2.1A(ii) of the Existing Credit Agreement, (b) all claims
of such Assignor AXEL Series B Lender against persons who may in the future
become or are now liable for repayment of such Assignor AXEL Series B Lender's
AXEL Series B or reimbursement of expenses incurred by such Assignor AXEL Series
B Lender on account of such AXEL Series B and (c) all amounts received by such
Assignor AXEL Series B Lender on account of such AXEL Series B, whether from the
Company, from the sale or other disposition of the Collateral pledged pursuant
to the Collateral Documents, from others who are now or may in the future become
obligated to such Assignor AXEL Series B Lender with respect to some or all of
the amount owing on such AXEL Series B, or from any other source, including,
without limitation, recovery from litigation. In consideration of the foregoing
assignment, each Assignee AXEL Series B Lender shall pay to each Assignor AXEL
Series B Lender, in accordance with the provisions of Section 2B(iii) hereof, an
amount equal to such Assignee AXEL Series B Lender's Assumed AXEL Series B
Percentage multiplied by such Assignor AXEL Series B Lender's Assigned AXEL
Series B Share (such amount being the "AXEL SERIES B CONSIDERATION" payable by
such Assignee AXEL Series B Lender to such Assignor AXEL Series B Lender).
(ii) Each Assignee AXEL Series B Lender hereby assumes from each
Assignor AXEL Series B Lender, and, as between such Assignor AXEL Series B
Lender and Assignee AXEL Series B Lender, such Assignor AXEL Series B Lender is
hereby expressly and absolutely released from, such Assignee AXEL Series B
Lender's Assumed AXEL Series B Percentage of all of such Assignor AXEL Series B
Lender's obligations arising under the Loan Documents relating to its Assigned
AXEL Series B Share, including, without limitation, all obligations with respect
to any AXELs Series B made and/or maintained pursuant to the Existing Credit
Agreement.
(iii) Each Assignee AXEL Series B Lender agrees to pay to
Existing Agent, for distribution (as appropriate) to each Assignor AXEL Series B
Lender, an amount equal to the aggregate AXEL Series B Consideration owed by
such Assignee AXEL Series B Lender to all Assignor AXEL Series B Lenders as set
forth in Part B of Schedule II annexed hereto, in same day funds not later than
12:00 Noon (New York time) on the Assignment Date. Existing Agent shall
distribute to each Assignor AXEL Series B Lender an amount in same day funds on
the Assignment Date equal to the amount of such Assignor AXEL Series B
5
<PAGE>
<PAGE>
Lender's respective share of such proceeds. As a result of the payment by each
Assignee AXEL Series B Lender to each Assignor AXEL Series B Lender of the AXEL
Series B Consideration payable by such Assignee AXEL Series B Lender to such
Assignor AXEL Series B Lender, each Assignor AXEL Series B Lender shall be
entitled to receive an aggregate amount of AXEL Series B Consideration equal to
such Assignor AXEL Series B Lender's Assigned AXEL Series B Share as set forth
in Part A of Schedule II annexed hereto.
C. REVOLVING LOANS. (i) Each Assignor Revolving Lender, severally
and not jointly, hereby sells and assigns to each Assignee Revolving Lender,
without recourse and without representation or warranty (other than as expressly
provided herein), such Assignee Revolving Lender's Assumed Revolving Percentage
of all of such Assignor Revolving Lender's rights and obligations arising under
the Loan Documents with respect to its Assigned Revolving Share, including,
without limitation, (a) all such rights with respect to Revolving Loans made and
to be made by such Assignor Revolving Lender pursuant to subsection 2.1A(iii) of
the Existing Credit Agreement, (b) all claims of such Assignor Revolving Lender
against persons who may in the future become or are now liable for repayment of
such Assignor Revolving Lender's Revolving Loans or reimbursement of expenses
incurred by such Assignor Revolving Lender on account of such Revolving Loans
and (c) all amounts received by such Assignor Revolving Lender on account of
such Revolving Loans, whether from the Company, from the sale or other
disposition of the Collateral pledged pursuant to the Collateral Documents, from
others who are now or may in the future become obligated to such Assignor
Revolving Lender with respect to some or all of the amounts owing on such
Revolving Loans, or from any other source, including, without limitation,
recovery from litigation. In consideration of the foregoing assignment, each
Assignee Revolving Lender shall pay to each Assignor Revolving Lender, in
accordance with the provisions of Section 2C(iii) hereof, an amount equal to
such Assignee Revolving Lender's Assumed Revolving Percentage multiplied by such
Assignor Revolving Lender's Assigned Revolving Share to the extent it consists
of outstanding Revolving Loans on the date hereof (such amount being the
"REVOLVING CONSIDERATION" payable by such Assignee Revolving Lender to such
Assignor Revolving Lender).
(ii) Each Assignee Revolving Lender hereby assumes from each
Assignor Revolving Lender, and, as between such Assignor Revolving Lender and
Assignee Revolving Lender, such Assignor Revolving Lender is hereby expressly
and absolutely released from, such Assignee Revolving Lender's Assumed Revolving
Percentage of all such Assignor Revolving Lender's obligations arising under the
Loan Documents relating to its Assigned Revolving Share, including without
limitation, all obligations with respect to any Revolving Loans made, to be made
and/or maintained pursuant to the Existing Credit Agreement.
(iii) Each Assignee Revolving Lender agrees to pay to Existing
Agent, for distribution (as appropriate) to each Assignor Revolving Lender, an
amount equal to the aggregate Revolving Consideration owed by such Assignee
Revolving Lender to all Assignor Revolving Lenders as set forth in Part B of
Schedule III annexed hereto, in same day funds not later than 12:00 Noon (New
York time) on the Assignment Date. Existing Agent shall
6
<PAGE>
<PAGE>
distribute to each Assignor Revolving Lender an amount in same day funds on the
Assignment Date equal to the amount of such Assignor Revolving Lender's
respective share of such proceeds. As a result of the payment by each Assignee
Revolving Lender to each Assignor Revolving Lender of the Revolving
Consideration payable by such Assignee Revolving Lender to such Assignor
Revolving Lender, each Assignor Revolving Lender shall be entitled to receive an
aggregate amount of Revolving Consideration equal to such Assignor Revolving
Lender's Assigned Revolving Share to the extent it consists of outstanding
Revolving Loans on the date hereof as set forth in Part A of Schedule III
annexed hereto.
(iv) Each Assignor Revolving Lender and Assignee Revolving Lender
hereby agrees that the assignment and assumption transactions effected pursuant
to this Agreement with respect to the Assigned Revolving Share of any Assignor
Revolving Lender shall pertain to such Assignor Revolving Lender's outstanding
Revolving Loans made to Company in proportion to the relative outstanding
principal amounts of such Assignor Revolving Lender's outstanding Revolving
Loans made to Company.
D. LENDERS' OUTSTANDING LOANS AND COMMITMENTS BEFORE AND AFTER
ASSIGNMENTS. Each Lender hereby agrees that Schedule IV annexed hereto sets
forth the amount of the outstanding AXELs Series A, AXELs Series B and Revolving
Loans of each Lender and the amount of the Revolving Loan Commitment of each
Lender, in each case before and after giving effect to the assignments and
assumptions described above but prior to the effectiveness of the New Credit
Agreement.
E. NEW LENDERS' OUTSTANDING LOANS AND COMMITMENTS AFTER
ASSIGNMENTS. Each New Lender hereby agrees that Schedule V annexed hereto sets
forth the amount of the outstanding Tranche A Term Loans, Tranche B Term Loans
and Revolving Loans (as defined in the New Credit Agreement) of each New Lender
and of the Revolving Loan Commitments (as defined in the New Credit Agreement)
of each New Lender, in each case after giving effect to the assignments and
assumptions described above and simultaneously with the effectiveness of the New
Credit Agreement but without giving effect to any borrowings under the New
Credit Agreement.
SECTION 3. ASSIGNORS NOT RESPONSIBLE FOR CERTAIN MATTERS.
A. Each Assignee AXEL Series A Lender, Assignee AXEL Series B
Lender and Assignee Revolving Lender (each an "ASSIGNEE") represents and
warrants that it has become a party hereto solely in reliance upon its own
independent investigation of the financial and other circumstances surrounding
Company, the Collateral, the Loans and all aspects of the transactions evidenced
by or referred to in the Loan Documents, or has otherwise satisfied itself with
respect thereto, and that it is not relying upon any representation, warranty or
statement (except any such representation, warranty or statement expressly set
forth in this Agreement) of any Assignor AXEL Series A Lender, Assignor AXEL
Series B Lender or Assignor Revolving Lender (each an "ASSIGNOR") in connection
with the assignment effected by this Agreement. Each Assignee further
acknowledges that it
7
<PAGE>
<PAGE>
will, independently and without reliance upon any Assignor and based upon such
Assignee's review of such documents and information as such Assignee deems
appropriate at the time, continue to make its own credit decisions in connection
with the assignment effected by this Assignment. Each Assignor shall have no
duty or responsibility either initially or on a continuing basis to make any
such investigation or any such appraisal on behalf of any Assignee or to provide
any Assignee with any credit or other information with respect thereto.
B. Each Assignee represents and warrants to each Assignor that it
has experience and expertise in the making of loans such as the Loans; that it
has acquired its interests in the Loans and the Commitments hereunder for its
own account and not with any present intention of selling all or any portion of
such interest other than as permitted by the Existing Credit Agreement; and that
it has received, reviewed and approved copies of all Loan Documents.
C. No Assignor shall be responsible to any Assignee for the
execution, effectiveness, accuracy, completeness, legal effect, genuineness,
validity, enforceability, collectibility or sufficiency of any of the Loan
Documents or for any representations, warranties, recitals or statements made
therein or in any written or oral statements or in any financial or other
statements, instruments, reports, certificates or any other documents made or
furnished or made available by any Assignor to any Assignee or by or on behalf
of Company to any Assignor or any Assignee in connection with the Loan Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of Company or any other person liable for the payment of any
Loans or the value of the Collateral or any other matter. No Assignor shall be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Loans or as to the
existence or possible existence of any Event of Default or Potential Event of
Default.
D. Each Assignor hereby represents and warrants to each Assignee
that, at the time of each assignment described above, (i) such Assignor will be
the present holder of its AXEL Series A Note, AXEL Series B Note and/or
Revolving Notes issued by Company, as the case may be, (ii) such Assignor's
Assigned AXEL Series A Share, Assigned AXEL Series B Share and/or Assigned
Revolving Share, as the case may be, will not have been, other than with respect
to the assignments contemplated by this Agreement, assigned, charged, pledged or
otherwise encumbered and (iii) such Assignor is the legal and beneficial owner
of such Assignor's Assigned AXEL Series A Share, Assigned AXEL Series B Share
and/or Assigned Revolving Share, as the case may be, free and clear of any
adverse claim.
E. Each party to this Agreement represents and warrants to the
other parties to this Agreement that it has full power and authority to enter
into this Agreement and to perform its obligations under this Agreement in
accordance with the provisions of this Agreement, that this Agreement has been
duly authorized, executed and delivered by such party and that this Agreement
constitutes a legal, valid and binding obligation of such party,
8
<PAGE>
<PAGE>
enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general equitable principles.
SECTION 4. NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication required or permitted to be given hereunder shall be in
writing addressed to the parties at their respective addresses set forth
opposite their respective names on the signature pages hereto and shall be
deemed to have been properly given only if telecopied, telexed, hand-delivered,
sent by an overnight mail or messenger service, or sent by first-class mail,
postage prepaid and so addressed, and shall be deemed to have been given on the
day it is received (if telecopied, telexed or hand-delivered), on the first
business day after it is sent (if sent by an overnight mail or messenger
service), or on the third business day after it is sent (if sent by first-class
mail); by giving notice as provided above, any party may designate a different
address for notices, statements, demands, consents, approvals or other
communications intended for it.
SECTION 5. CERTAIN PAYMENTS.
Company hereby agrees to pay (i) each Existing Lender the amount
of the Conversion Compensation, if any, which such Existing Lender notifies
Existing Agent and Company on or after the Assignment Date to be payable in
connection with the Conversion Transactions promptly after receipt of such
notice (ii) to Existing Agent, for distribution (as appropriate) to Arranging
Agent, Existing Agent and/or Existing Lenders, as the case may be, the amounts
payable with respect to the Other Payment Transactions on or before the
Assignment Date. Notwithstanding anything in this Agreement or implied by law to
the contrary, the obligation of Company set forth in this Section 5 shall
survive the consummation of the assignment and assumption transactions
contemplated by this Agreement and the effectiveness of the New Credit
Agreement.
SECTION 6. CERTAIN CONSENTS AND WAIVERS.
A. Existing Agent and Company hereby (i) acknowledge and consent
to the assignment to and assumption by each Assignee of each Assignor's rights
and obligations with respect to the Loans and Commitments effected pursuant to
the foregoing Assignment Agreement and (ii) agree that, for all purposes of the
Loan Documents, each Lender shall, after giving effect to such assignments and
assumptions, be deemed to be a Lender having the Commitments and outstanding
Loans reflected for such Lender on Schedule IV (Post- Assignment) annexed
hereto. Existing Agent hereby waives the payment of any processing and
recordation fees in connection with the assignment and assumption transactions
contemplated by this Agreement.
B. Each of Existing Agent, BCC, Company and Lenders hereby (i)
acknowledges and agrees that, notwithstanding anything to the contrary contained
in the
9
<PAGE>
<PAGE>
Existing Credit Agreement, Company may convert any Eurodollar Rate Loans
outstanding on the Assignment Date, on the third Business Day preceding the
Assignment Date, on the second Business Day preceding the Assignment Date or on
the Business Day immediately preceding the Assignment Date to Base Rate Loans;
provided that Company shall pay to Existing Lenders any Conversion Compensation
with respect thereto in accordance with Section 5 hereof and (ii)
notwithstanding anything to the contrary contained in the Existing Credit
Agreement or any of the other Loan Documents, waives any requirement of prior
written notice with respect to Existing Agent's resignation as Administrative
Agent and Collateral Agent under the Existing Credit Agreement pursuant to that
certain Assignment of Loan Documents and Resignation of Canadian Imperial Bank
of Commerce, New York Agency, as Administrative Agent and Collateral Agent, such
resignation to be effective simultaneously with the effectiveness of the New
Credit Agreement, and hereby acknowledges and consents to such resignation.
SECTION 7. MISCELLANEOUS PROVISIONS.
A. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated except by an instrument in writing signed by
the party against whom enforcement of such change, waiver, discharge or
termination is sought.
B. Titles and headings of sections in this Agreement are for
convenience of reference only and shall not be used to define or limit the
provisions hereof.
C. All of the terms, covenants and conditions herein contained
shall inure to the benefit of and be binding upon the parties hereto, and their
respective successors and assigns.
D. Every provision of this Agreement is intended to be severable.
If any term or provision hereof is declared by a court of competent jurisdiction
to be illegal, invalid or unenforceable for any reason whatsoever, such
illegality, invalidity or unenforceability shall not affect the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable, and to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.
E. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original, but all of which taken together
shall constitute but one and the same agreement. The signature pages of all
counterparts of this Agreement may be detached and attached to a single
counterpart of this Agreement so that all signature pages are physically
attached to the same document.
F. This Agreement shall become effective upon (i) the execution
of a counterpart hereof by each of the parties hereto and receipt by Company and
Bankers Trust Company, as Agent under the New Credit Agreement of written or
telephonic notification of such execution and authorization of delivery thereof
and (ii) the satisfaction of all conditions precedent set forth in subsection
3.2 of the New Credit Agreement, including, without
10
<PAGE>
<PAGE>
limitation, the consummation of the Conversion Transactions and the Other
Payment Transactions but excluding, however, the conditions set forth in (i)
subsection 3.2B of the New Credit Agreement with respect to the consummation of
the assignment and assumption transactions contemplated by this Agreement and
(ii) subsection 3.20 of the New Credit Agreement.
G. THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
11
<PAGE>
<PAGE>
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY,
as Administrative Agent and
Collateral Agent under the
Existing Credit Agreement
By:
----------------------------
Managing Director
Notice Address:
Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, NY 10017
Attention: Colleen C. Risorto
Telecopy: (212) 856-3558
Telephone: (212) 856-3774
With a copy to:
Attention: Arlene Tellerman
Telecopy: (212) 856-3763
Telephone: (212) 856-3695
S-1
<PAGE>
<PAGE>
LENDERS:
BANKERS TRUST COMPANY
By:
----------------------------
Name:
Title:
Notice Address:
Bankers Trust Company
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Gregory Shefrin
Telecopy: (212) 250-7218
S-2
<PAGE>
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS
L.P.
By:
--------------------------------
Authorized Signatory
Notice Address:
Goldman, Sachs Credit Partners L.P.
35 Broad Street
New York, New York 10004
Attention: Stephen King
Telecopy: (212) 902-3000
S-3
<PAGE>
<PAGE>
CIBC INC.
By:
---------------------------
Managing Director
Notice Address:
Canadian Imperial Bank of Commerce,
New York Agency
425 Lexington Avenue
New York, NY 10017
Attention: Colleen C. Risorto
Telecopy: (212) 856-3558
Telephone: (212) 856-3774
With a copy to:
Attention: Arlene Tellerman
Telecopy: (212) 856-3763
Telephone: (212) 856-3695
S-4
<PAGE>
<PAGE>
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By:
-------------------------------
Name:
Title:
Notice Address:
Banque Francaise Du Commerce
Exterieur
645 Fifth Avenue
New York, New York 10022
Attention: Rick Kammler
Telecopy: (212) 872-5045
S-5
<PAGE>
<PAGE>
DLJ CAPITAL FUNDING, INC.
By:
------------------------------
Name:
Title:
Notice Address:
DLJ Capital Funding, Inc.
277 Park Avenue
10th Floor
New York, New York 10172
Attention: Jennifer Patrickakos
Telecopy: (212) 892-6031
S-6
<PAGE>
<PAGE>
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
-----------------------------
Name:
Title:
Notice Address:
Massachusetts Mutual Life Insurance Co.
1295 State Street
Springfield, MA 01111
Attention: John Wheeler
Telecopy: (413) 744-6127
S-7
<PAGE>
<PAGE>
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By:
-------------------------------
Name:
Title:
Notice Address:
Merrill Lynch Asset Management
800 Scudders Mill Road, Area 1B
Plainsboro, NJ 08536
Attention: J. Matteo
Telecopy: (609) 282-2756
S-8
<PAGE>
<PAGE>
METROPOLITAN LIFE INSURANCE
COMPANY
By:
------------------------------
Name:
Title:
Notice Address:
Metropolitan Life Insurance Company
3344 Madison Avenue
Convent Station, NJ 07961
Attention: James R. Dingler
Telecopy: (201) 254-3050
S-9
<PAGE>
<PAGE>
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By:
------------------------------
Name:
Title:
Notice Address:
The Northwestern Mutual Life
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: David A. Barras/Mark Boyle
Telecopy: 414) 299-7124
With a copy to:
Nance Kinney
Telephone: (414) 299-1679
Telecopy: (414) 299-5714
S-10
<PAGE>
<PAGE>
PILGRIM AMERICA PRIME RATE
TRUST
By:
------------------------------
Name:
Title:
Notice Address:
Pilgrim America Prime Rate Trust
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, AZ 85004-3444
Attention: Melina Dempsey/Bill Nutting
Telecopy: (602) 417-8321
With a copy to:
State Street Bank and Trust Company
Alternative Structures Unit
Boston, MA
Attention: Wayne Elpus
Ref: Pilgrim America Prime Rate Trust
Telecopy: (617) 664-5291
S-11
<PAGE>
<PAGE>
PRIME INCOME TRUST
By:
------------------------------
Name:
Title:
Notice Address:
Dean Witter-Prime Income Trust
2 World Trade Center, 72nd Floor
New York, New York 10048
Attention: Louis Pistecchia
Telecopy: (212) 392-5345
S-12
<PAGE>
<PAGE>
INTENTIONALLY OMITTED
S-13
<PAGE>
<PAGE>
KZH HOLDING CORPORATION III
By:
------------------------------
Name:
Title:
Notice Address:
KZH Holding Corporation III
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Telecopy: (212) 946-7776
S-14
<PAGE>
<PAGE>
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
as Investment Advisor
By:
------------------------------
Name:
Title:
Notice Address:
Eaton Vance Senior Debt Portfolio
24 Federal Street, 6th Floor
Boston, MA 02110
Attention: Juliana Riley
Telecopy: (617) 348-0115
S-15
<PAGE>
<PAGE>
STRATA FUNDING LTD.
By:
------------------------------
Name:
Title:
Notice Address:
Chancellor LGT Senior Secured
Management, Inc.
1166 Avenue of the Americas
27th Floor
New York, New York 10036
Attention: Stephen M. Altieri
Telecopy: (212) 278-9619
S-16
<PAGE>
<PAGE>
VAN KAMPEN CLO I LTD.
By:
------------------------------
Name:
Title:
Notice Address:
Van Kampen America Capital Prime
Rate Income Trust
One Park View Plaza
Oakbrook Terrace, IL 60181
Attention: Brian Murphy
Telecopy: (630) 684-6740
with a copy to:
State Street Bank & Trust
Corporate Trust Department
P.O. Box 778
Boston, MA 02102
Attention: Sean Emerson
Telecopy: (617) 664-5366
S-17
<PAGE>
<PAGE>
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By:
------------------------------
Name:
Title:
Notice Address:
Van Kampen America Capital Prime
Rate Income Trust
One Park View Plaza
Oakbrook Terrace, IL 60181
Attention: Brian Murphy
Telecopy: (630) 684-6740
with a copy to:
State Street Bank & Trust
Corporate Trust Department
P.O. Box 778
Boston, MA 02102
Attention: Sean Emerson
Telecopy: (617) 664-5366
S-18
<PAGE>
<PAGE>
MORGAN STANLEY SENIOR FUNDING,
INC.
By:
------------------------------
Name:
Title:
Notice Address:
Morgan Stanley Senior Funding, Inc.
1585 Broadway, 10th Floor
New York, New York 10036
Attention: James Morgan
Telecopy: (212) 761-0592
S-19
<PAGE>
<PAGE>
BCC AND COMPANY:
BENEDEK BROADCASTING
CORPORATION
By:
------------------------------
Name:
Title:
Notice Address:
Benedek Broadcasting Corporation
100 Park Avenue
Rockford, IL 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-20
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS
CORPORATION
By:
------------------------------
Name:
Title:
Notice Address:
Benedek Broadcasting Corporation
100 Park Avenue
Rockford, IL 61101
Attention: A. Richard Benedek
Telecopy: (815) 987-5335
with a copy to:
Shack & Siegel, P.C.
530 Fifth Avenue
New York, New York 10036
Attention: Paul S. Goodman, Esq.
Telecopy: (212) 730-1964
S-21
<PAGE>
<PAGE>
CANADIAN IMPERIAL BANK OF COMMERCE
By:
------------------------------
Name:
Title:
Notice Address:
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, New York 10017
Attention: William Swenson
Telecopy: (212) 856-3799
With a copy to:
Canadian Imperial Bank of Commerce
2 Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, GA 30339
Attention: Elayne Fudge
Telecopy : (770) 319-4955
S-22
<PAGE>
<PAGE>
EXHIBIT 21
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION SUBSIDIARIES
Benedek Broadcasting Corporation, a Delaware corporation, is a wholly-owned
subsidiary of Benedek Communications Corporation.
Benedek License Corporation, a Delaware corporation, is a wholly-owned
subsidiary of Benedek Broadcasting Corporation.
<PAGE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use of our report dated February 7, 1998 on the
consolidated financial statements of Benedek Communications Corporation and
Subsidiaries and Benedek Broadcasting Corporation and Subsidiary, and Benedek
License Corporation and the consolidated supplemental schedule II included in
or made a part of its Annual Report on Form 10-K for the year ended December
31, 1997 filed with the Securities and Exchange Commission. We also consent to
the reference to our firm under the caption 'Selected Consolidated Financial
Data' in such Annual Report.
/s/ MCGLADREY & PULLEN, LLP
Rockford, Illinois
March 27, 1998
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 1017522
<NAME> BENEDEK COMMUNICATIONS CORPORATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,648,155
<SECURITIES> 0
<RECEIVABLES> 25,475,891
<ALLOWANCES> 471,651
<INVENTORY> 0
<CURRENT-ASSETS> 36,912,325
<PP&E> 131,993,910
<DEPRECIATION> 58,182,994
<TOTAL-ASSETS> 468,493,897
<CURRENT-LIABILITIES> 34,400,422
<BONDS> 357,436,304
124,556,720
0
<COMMON> 70,300
<OTHER-SE> (94,978,099)
<TOTAL-LIABILITY-AND-EQUITY> 468,493,897
<SALES> 141,859,234
<TOTAL-REVENUES> 145,566,299
<CGS> 18,493,729
<TOTAL-COSTS> 18,493,729
<OTHER-EXPENSES> 114,938,024
<LOSS-PROVISION> 231,479
<INTEREST-EXPENSE> 48,240,099
<INCOME-PRETAX> (36,337,032)
<INCOME-TAX> (12,027,418)
<INCOME-CONTINUING> (24,309,614)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,309,614)
<EPS-PRIMARY> (6.17)
<EPS-DILUTED> (6.17)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 923027
<NAME> BENEDEK BROADCASTING CORPORATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,647,055
<SECURITIES> 0
<RECEIVABLES> 25,475,891
<ALLOWANCES> 471,651
<INVENTORY> 0
<CURRENT-ASSETS> 36,912,325
<PP&E> 131,993,910
<DEPRECIATION> 58,182,994
<TOTAL-ASSETS> 465,523,004
<CURRENT-LIABILITIES> 34,400,422
<BONDS> 247,114,057
0
0
<COMMON> 1,046,500
<OTHER-SE> 127,503,794
<TOTAL-LIABILITY-AND-EQUITY> 465,523,004
<SALES> 141,859,234
<TOTAL-REVENUES> 145,566,299
<CGS> 18,493,729
<TOTAL-COSTS> 18,493,729
<OTHER-EXPENSES> 114,938,024
<LOSS-PROVISION> 231,479
<INTEREST-EXPENSE> 34,217,850
<INCOME-PRETAX> (22,314,783)
<INCOME-TAX> (6,392,418)
<INCOME-CONTINUING> (15,922,365)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,922,365)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<PAGE>
