<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
-------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- --------------
Commission File Number 1-13452
-------
PAXSON COMMUNICATIONS CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-3212788
------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
601 CLEARWATER PARK ROAD
WEST PALM BEACH, FLORIDA 33401
------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (407) 659-4122
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934
during the proceeding 12 months (or for shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common and preferred stock, as of August 11, 1995:
CLASS OF STOCK NUMBER OF SHARES
---------------------------- ----------------
COMMON STOCK-CLASS A, $0.001
PAR VALUE PER SHARE --------------------- 26,148,026
COMMON STOCK-CLASS B, $0.001
PAR VALUE PER SHARE --------------------- 8,311,639
REDEEMABLE CUMULATIVE SENIOR
PREFERRED STOCK, $0.001 PAR VALUE --------- 2,000
REDEEMABLE CUMULATIVE SERIES B
PREFERRED STOCK, $0.001 PAR VALUE --------- 714.286
REDEEMABLE CUMULATIVE JUNIOR
PREFERRED STOCK, $0.001 PAR VALUE --------- 33,000
<PAGE> 2
PAXSON COMMUNICATIONS CORPORATION
INDEX
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Page
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994 3-4
Consolidated Statements of Operations
Six Months Ended June 30, 1995
and June 30, 1994 5
Consolidated Statements of Operations
Three Months Ended June 30, 1995
and June 30, 1994 6
Consolidated Statements of Changes in
Common Stockholders' Equity 7
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995
and June 30, 1994 8-9
Notes to Consolidated Financial Statements 10-11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12-17
Part II - Other Information
Item 1. Legal Proceedings 18-20
Item 2. Changes in Securities 18-20
Item 3. Defaults upon Senior Securities 18-20
Item 4. Submission of Matters to a Vote of
Security Holders 18-20
Item 5. Other Information 18-20
Item 6. Exhibits and Reports on Form 8-K 18-20
Signatures 21
</TABLE>
2
<PAGE> 3
PAXSON COMMUNICATIONS CORPORATION
Consolidated Balance Sheets
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
June 30, December 31,
1995 1994
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,409,187 $ 21,571,658
Accounts receivable, less allowance
for doubtful accounts of $687,516 and
$556,950 respectively 13,011,251 13,569,198
Related party notes receivable 2,250,000 1,750,000
Prepaid expenses and other current assets 1,392,830 1,579,954
Current deferred income taxes 194,940 194,940
Current program rights 1,243,746 1,980,000
------------ ------------
Total current assets 24,251,954 38,895,750
Property and equipment, net 66,647,658 45,350,430
Intangible assets, net 81,572,496 53,350,967
Other assets, net 20,037,439 13,078,346
Related party notes receivable 2,250,000 1,750,000
Program rights, net 204,084 244,888
------------ ------------
Total assets $194,963,631 $152,670,381
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 3,458,161 $ 5,123,691
Current portion of program rights payable 970,316 986,562
Current portion of long-term debt 11,976,975 6,393,415
------------ ------------
Total current liabilities 16,405,452 12,503,668
Program rights payable 348,989 562,770
Long-term debt 120,300,853 76,013,542
Deferred income taxes 834,941 1,474,940
Minority interest -- 1,217,314
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
3
<PAGE> 4
PAXSON COMMUNICATIONS CORPORATION
Consolidated Balance Sheets (continued)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Redeemable Cumulative Compounding Senior
preferred stock, $0.001 par value; 15%
dividend rate per annum, 2,000 shares
authorized, issued and outstanding 15,276,065 14,060,054
Redeemable Class A & B common stock warrants 2,040,199 1,735,979
Redeemable Cumulative Compounding Series B
preferred stock, $0.001 par value;
15% dividend rate per annum, 714.286 shares
authorized, issued and outstanding 1,802,919 1,274,671
Redeemable Cumulative Compounding Junior
preferred stock, $0.001 par value; 12%
dividend rate per annum, 33,000 shares
authorized, issued and outstanding 29,165,660 26,808,053
Class A common stock, $0.001 par value; one
vote per share; 150,000,000 shares authorized,
26,137,026 shares issued and outstanding 26,137 26,042
Class B common stock, $0.001 par value; ten
votes per share, 30,000,000 shares authorized,
8,311,639 shares issued and outstanding 8,312 8,312
Class C common stock, $0.001 par value; non-
voting; 12,500,000 shares authorized, 0 shares
issued and outstanding -- --
Class C common stock warrants 5,338,952 5,338,952
Stock subscription notes receivable (76,833) (77,666)
Additional paid-in capital 21,847,552 20,647,647
Accumulated deficit (18,355,567) (8,923,897)
Commitments and contingencies
Total liabilities and stockholders' equity $194,963,631 $152,670,381
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
4
<PAGE> 5
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
For the Six Months
Ended June 30,
1995 1994
(Unaudited)
<S> <C> <C>
Revenue:
Local and national advertising $40,454,900 $19,715,590
Retail and other 2,497,723 996,325
Trade 1,403,725 801,846
----------- -----------
Total revenue 44,356,348 21,513,761
Operating expenses:
Direct 11,554,850 6,277,662
Programming 5,940,066 2,995,697
Sales and promotion 4,473,186 2,417,421
Technical 2,147,289 863,373
General and administrative 9,989,674 4,801,749
Trade 1,193,843 1,012,316
Time brokerage agreement fees 549,947 225,000
Sports rights fees 1,019,355 --
Program rights amortization 777,057 --
Depreciation and amortization 8,054,256 5,265,913
----------- -----------
Total operating expenses 45,699,523 23,859,131
----------- -----------
Income (loss)from operations (1,343,175) (2,345,370)
Other income (expense):
Interest expense, net (4,308,646) (1,390,715)
Other income, net (13,763) 223,084
----------- -----------
Loss before income tax benefit (5,665,584) (3,513,001)
Income tax benefit 640,000 1,396,000
----------- -----------
Net loss (5,025,584) (2,117,001)
Dividends and accretion on preferred stock
and common stock warrants (4,406,086) (1,587,058)
----------- -----------
Net loss attributable to common stock and
common stock equivalents $(9,431,670) $(3,704,059)
=========== ===========
Pro forma net loss per share $ (.15) $ (.06)
Dividends and accretion on preferred stock
and common stock warrants per share (.12) (.05)
----------- -----------
Pro forma net loss attributable to common
stock and common stock equivalents per share $ (.27) $ (.11)
=========== ===========
Pro forma weighted average shares outstanding
primary & fully diluted 34,401,282 32,506,032
=========== ===========
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
5
<PAGE> 6
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
For the Three Months
Ended June 30,
1995 1994
(Unaudited)
<S> <C> <C>
Revenue:
Local and national advertising $ 21,971,676 $ 11,174,281
Retail and other 1,006,757 559,037
Trade 758,212 415,285
------------- -------------
Total revenue 23,736,645 12,148,603
Operating expenses:
Direct 5,920,695 3,397,770
Programming 2,813,262 1,596,419
Sales and promotion 2,293,673 1,234,622
Technical 1,168,083 479,840
General and administrative 5,331,824 2,818,396
Trade 722,302 516,837
Time brokerage agreement fees 310,899 225,000
Sports rights fees (22,227) --
Program rights amortization 425,222 --
Depreciation and amortization 4,269,627 2,855,767
------------- -------------
Total operating expenses 23,233,360 13,124,651
------------- -------------
Income (loss)from operations 503,285 (976,048)
Other income (expense):
Interest expense, net (2,514,487) (782,351)
Other income, net (81,398) 44,023
------------- -------------
Loss before income tax benefit (2,092,600) (1,714,376)
Income tax benefit 320,000 1,396,000
------------- -------------
Net loss (1,772,600) (318,376)
Dividends and accretion on preferred stock
and common stock warrants (2,215,134) (803,254)
------------- -------------
Net loss attributable to common stock and
common stock equivalents $ (3,987,734) $ (1,121,630)
============= =============
Pro forma net loss per share $ (.05) $ (.01)
Dividends and accretion on preferred stock
and common stock warrants per share (.07) (.02)
------------- -------------
Pro forma net loss attributable to common
stock and common stock equivalents per share $ (.12) $ (.03)
============= =============
Pro forma weighted average shares outstanding
primary & fully diluted 34,448,665 32,506,032
============= =============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
6
<PAGE> 7
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Changes in Common Stockholders' Equity
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Stock
Common Stock Common Subscription
--------------------------------------- Common Stock Notes
Class A Class B Class C Stock Warrants Receivable
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1993 $ 1
RECAPITALIZATION OF
COMMON STOCK $ 15,791 $ 5,264 (1)
STOCK ISSUED FOR
ANG ACQUISITION 1,570 277 $(77,666)
NET PROCEEDS FORM ISSUANCE OF
COMMON STOCK WARRANTS $5,338,952
DIVIDENDS ON REDEEMABLE
PREFERRED STOCK
ACCRETION ON REDEEMABLE
SECURITIES
NET LOSS
STOCK DIVIDEND 8,681 2,771
----------- ----------- --------- ----------- ---------- --------
BALANCE AT DECEMBER 31, 1994 26,042 8,312 0 0 5,338,952 (77,666)
STOCK ISSUED FOR COOKEVILLE
ACQUISITION (UNAUDITED) 95
NOTE REPAYMENT (UNAUDITED) 833
DIVIDENDS ON REDEEMABLE
PREFERRED STOCK (UNAUDITED)
ACCRETION ON REDEEMABLE
SECURITIES (UNAUDITED)
NET LOSS
(UNAUDITED)
----------- ----------- --------- ----------- ---------- --------
BALANCE AT JUNE 30, 1995
(UNAUDITED) $ 26,137 $ 8,312 $ 0 $ 0 $5,338,952 $(76,833)
=========== =========== ========= =========== ========== ========
<CAPTION>
Additional
Paid-in Accumulated
Capital Deficit
<S> <C> <C>
BALANCE AT DECEMBER 31, 1993 $16,895,623 $ (776,367)
RECAPITALIZATION OF
COMMON STOCK (21,054)
STOCK ISSUED FOR
ANG ACQUISITION 3,784,530
NET PROCEEDS FORM ISSUANCE OF
COMMON STOCK WARRANTS
DIVIDENDS ON REDEEMABLE
PREFERRED STOCK (2,216,137)
ACCRETION ON REDEEMABLE
SECURITIES (1,169,319)
NET LOSS (4,762,074)
STOCK DIVIDEND (11,452)
----------- ------------
BALANCE AT DECEMBER 31, 1994 20,647,647 (8,923,897)
STOCK ISSUED FOR COOKEVILLE
ACQUISITION (UNAUDITED) 1,199,905
NOTE REPAYMENT (UNAUDITED)
DIVIDENDS ON REDEEMABLE
PREFERRED STOCK(UNAUDITED) (3,465,829)
ACCRETION ON REDEEMABLE
SECURITIES (UNAUDITED) (940,257)
NET LOSS (UNAUDITED) (5,025,584)
----------- ------------
BALANCE AT JUNE 30, 1995
(UNAUDITED) $21,847,552 $(18,355,567)
=========== ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
7
<PAGE> 8
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1995 1994
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (5,025,584) $ (2,117,001)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 8,054,256 5,265,913
Program rights amortization 777,057 --
Provision for doubtful accounts 325,294 119,938
Income tax benefit (640,000) (1,396,000)
Minority interest in net loss -- (86,667)
Decrease (increase) in accounts receivable 232,653 178,857
Decrease (increase) in prepaid expenses and
other current assets 187,121 (250,182)
Increase in intangible assets -- --
Decrease (increase) in other assets (2,454,459) 77,094
Increase (decrease) in accounts payable and
accrued liabilities (1,665,530) 920,994
------------ ------------
Net cash provided by (used in) operating
activities (209,192) 2,712,946
------------ ------------
Cash flows for investing activities:
Acquisitions of broadcasting properties (45,110,012) (12,646,293)
Deposits on broadcasting properties (2,392,000) (3,500,000)
Increase in related party note receivable (500,000) --
Purchases of property and equipment (9,589,477) (1,485,143)
------------ ------------
Net cash used for investing activities (57,591,489) (17,631,436)
------------ ------------
Cash flows from financing activities:
Increase in related party note payable -- 7,700,000
Proceeds from long-term debt 49,980,000 3,000,000
Payments of loan origination costs (5,002,634) --
Payments of long-term debt (109,129) (400,731)
Payments for program rights (230,027) --
------------ ------------
Net cash provided by financing activities 44,638,210 10,299,269
------------ ------------
Decrease in cash and cash equivalents (13,162,471) (4,619,221)
------------ ------------
Cash and cash equivalents at beginning of period 21,571,658 7,019,747
------------ ------------
Cash and cash equivalents at end of period $ 8,409,187 $ 2,400,526
============ ============
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
8
<PAGE> 9
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1995 1994
(Unaudited)
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid for interest $ 4,249,482 $1,244,212
=========== ==========
Cash paid for income taxes $ -- $ --
=========== ==========
Non-cash operating and financing activities:
Issuance of common stock for Cookeville
partner buyout $ 1,200,000 $ --
=========== ==========
Dividends on redeemable preferred stock $ 3,465,829 $1,046,425
=========== ==========
Accretion on redeemable securities $ 940,257 $ 540,633
=========== ==========
Trade revenue $ 1,403,725 $ 801,846
=========== ==========
Trade expense $ 1,193,843 $1,012,316
=========== ==========
</TABLE>
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
9
<PAGE> 10
PAXSON COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
Paxson Communications Corporation's (the "Company") financial information
contained in the financial statements and notes thereto as of June 30, 1995 and
for the six month and three month periods ended June 30, 1995 and 1994, are
unaudited. In the opinion of management, all adjustments necessary for the fair
presentation of such financial information have been included. These
adjustments are of a normal recurring nature. There have been no significant
changes in accounting policies, nor has the composition of accounts
substantially changed since the period ended December 31, 1994, except to
reflect the operations of acquisitions discussed below and the reclassification
of related party notes receivable amounts to long term assets. This
reclassification is in anticipation of pending revisions of certain station
ownership regulation restrictions that could allow the Company's subsequent
acquisition of the underlying stations.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These financial statements, footnotes, and
discussions should be read in conjunction with the December 31, 1994 financial
statements and related footnotes and discussions contained in the Company's
form 10-K, filed with the Securities and Exchange Commission on March 31, 1995,
form 10-Q filed on May 12, 1995, the definitive proxy statement filed by the
Company on May 4, 1995 for the annual meeting of stock holders held June 1,
1995 and the forms 8-K and 8-K/A filed on June 1, 1995 and July 31, 1995,
respectively.
Pro Forma Financial Information
The following represents the unaudited pro forma results of operations as if
the acquisitions and time brokerage agreements described in Item 2 of Part I
had been completed at the beginning of 1995 and 1994, after giving effect to
certain adjustments, including increased depreciation and amortization of
property and equipment and intangible assets and interest expense for
acquisition debt. These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which would have been achieved had these acquisitions been completed as of
these dates, nor are the results indicative of the Company's future results of
operations.
10
<PAGE> 11
Pro Forma Financial Information - continued
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1995 1994
(Unaudited)
<S> <C> <C>
Revenues $ 47,940,297 $ 36,274,055
============ ============
Broadcast cash flow $ 12,039,367 $ 6,031,268
============ ============
Income (loss) from operations $ (3,133,929) $ (9,035,647)
============ ============
Net loss $(12,796,811) $(16,110,543)
============ ============
Net loss per share attributable to common
stock and common stock equivalents $ (.37) $ (.50)
============ ============
Pro forma weighted average shares
outstanding primary and fully diluted 34,401,282 32,506,032
============ ============
</TABLE>
<TABLE>
<CAPTION>
For the Three Months
Ended June 30,
1995 1994
(Unaudited)
<S> <C> <C>
Revenues $ 24,600,296 $ 18,117,067
============ ============
Broadcast cash flow $ 7,379,542 $ 3,893,901
============ ============
Income (loss) from operations $ (542,560) $ (4,269,002)
============ ============
Net loss $ (5,739,400) $ (7,526,177)
============ ============
Net loss per share attributable to common
stock and common stock equivalents $ (.17) $ (.23)
============ ============
Pro forma weighted average shares
outstanding primary and fully diluted 34,448,665 32,506,032
============ ============
</TABLE>
"Broadcast cash flow" is defined as Income (loss) from operations plus non-cash
expenses and non-broadcasting operating results, less scheduled broadcast rights
payments and non-cash revenues. The Company has included broadcast cash flow
data because such data is commonly used as a measure of performance for
broadcast companies and is also used by investors to measure the Company's
ability to service debt. Broadcast cash flow is not, and should not be used as
an indicator or alternative to operating income, net income or cash flow as
reflected in the Consolidated Financial Statements as it is not a measure of
financial performance under generally accepted accounting principles.
11
<PAGE> 12
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's growth since its inception in 1991 has primarily been due to the
acquisitions of or management of radio stations, television stations, and radio
networks, as well as the subsequent improvement of these operations. Certain of
the Company's radio and television stations were and continue to be operated
under time brokerage agreements for various periods. Under time brokerage
agreements, the stations' operating revenues and expenses are controlled by the
Company and are consolidated in the financial statements. The following table
discloses the date of acquisition and, where applicable, the date of
commencement of management under time brokerage agreements for each of the
Company's radio and television properties:
<TABLE>
<CAPTION>
DATE OF COMMENCEMENT DATE
STATION MARKET ACQUISITION OF BROKERAGE AGREEMENT
------- ------ ----------- ----------------------
<S> <C> <C> <C>
WROO(FM) Jacksonville September 1991
WNZS(AM) Jacksonville May 1993
WHPT(FM) Tampa/St. Petersburg November 1991
WHNZ(AM) Tampa/St. Petersburg November 1991
WZTA(AM) Miami/Ft. Lauderdale April 1992
WINZ(AM) Miami/Ft. Lauderdale April 1992
WWNZ(AM) Orlando April 1992
WMGF(FM) Orlando May 1993
WJRR(FM) Orlando May 1993
WPLA(FM) Jacksonville May 1993
WZNZ(AM) Jacksonville May 1993
WLVE(FM) Miami/Ft. Lauderdale April 1993
WGSQ(FM) Cookeville, TN April 1994
WPTN(AM) Cookeville, TN April 1994
WTLK(TV-14) Atlanta July 1994 April 1994
WCTD(TV-35) Miami Option April 1994
WPBF(TV-25) Palm Beach July 1994
WNZE(AM) Tampa/St. Petersburg February 1995 August 1994
WFCT(TV-66) Tampa/St. Petersburg Option August 1994
WWZN(AM) Orlando December 1994
WIRB(TV-56) Orlando December 1994
WTGI(TV-61) Philadelphia February 1995
KTFH(TV-49) Houston July 1995 March 1995
WTWS(TV-26) Hartford/New Haven March 1995
WSJT(FM) Tampa/St. Petersburg March 1995
WGOT(TV-60) Boston May 1995
KZKI(TV-30) Los Angeles May 1995
KLXV(TV-65) San Francisco June 1995
WFTL(AM) Miami/Ft. Lauderdale June 1995
</TABLE>
12
<PAGE> 13
In May 1995 the Company acquired WGOT(TV-60), serving the Boston, Massachusetts
market, for approximately $3 million and KZKI(TV-30), serving the Los Angeles,
California market, for approximately $18 million. In June 1995 the Company
aquired KLXV(TV-65) for approximately $5 million, serving the San Francisco,
California market and WFTL(AM), serving the Miami/Ft. Lauderdale, Florida
market, for approximately $2 million. The Company also acquired KTFH(TV-49),
serving the Houston, Texas market, in July 1995 for approximately $7.9 million.
RESULTS OF OPERATIONS
The following tables set forth, for the periods indicated, selected financial
information as a percentage of revenues and the period-to-period changes in
such information.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30,
1995 1994 % CHANGE
---- ---- --------
<S> <C> <C> <C>
Revenues 100.0% 100.0%
Operating Expenses:
Direct 26.1% 29.2% -10.6%
Programming 13.4 13.9 -3.6
Sales and promotion 10.1 11.2 -9.8
Technical 4.8 4.0 20.0
General and administrative 22.5 22.3 0.9
Trade 2.7 4.7 -42.6
Time brokerage agreement fees 1.2 1.0 20.0
Sport rights fees 2.3 0.0 100.0
Program rights amortization 1.8 0.0 100.0
Depreciation and amortization 18.2 24.5 -25.7
----- ----- ------
Total operating expenses 103.1 110.8 -6.9
----- ----- ------
Income (loss) from operations -3.1 -10.8 -71.2
Other income (expense);
Interest expense, net -9.7 -6.5 49.2
Other income (expense) net 0.0 1.0 -100.0
Loss before income tax benefit -12.8 -16.3 -21.4
Income tax benefit 1.4 6.5 -78.5
----- ----- ------
Net loss -11.4% -9.8% 16.4%
===== ===== ======
</TABLE>
13
<PAGE> 14
RESULTS OF OPERATIONS - CONTINUED
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JUNE 30,
1995 1994 % CHANGE
---- ---- --------
<S> <C> <C> <C>
Revenues 100.0% 100.0%
Operating Expenses:
Direct 24.9% 28.0% -11.1%
Programming 11.9 13.1 -9.2
Sales and promotion 9.7 10.2 -4.9
Technical 4.9 3.9 25.6
General and administrative 22.5 23.2 -3.0
Trade 3.0 4.3 -30.2
Time brokerage agreement fees 1.3 1.9 -31.6
Sport rights fees -0.1 0.0 -100.0
Program rights amortization 1.8 0.0 100.0
Depreciation and amortization 18.0 23.5 -23.4
----- ----- ------
Total operating expenses 97.1 108.1 -9.4
----- ----- ------
Income (loss) from operations 2.1 -8.1 125.8
----- ----- ------
Other income (expense);
Interest expense, net -10.6 -6.4 65.6
Other income (expense) net -0.3 0.4 -173.7
----- ----- ------
Loss before income tax benefit -8.8 -14.1 -37.5
----- ----- ------
Income tax benefit 1.3 11.5 -88.7
----- ----- ------
Net loss -7.5% -2.6% -188.8%
===== ===== ======
</TABLE>
14
<PAGE> 15
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Consolidated revenues for the six months ended June 30, 1995 increased 107% (or
$22.9 million) to $44.4 million from $21.5 million for the six months ended
June 30, 1994. This increase was primarily due to the acquisition of WPBF
(TV-25) on July 1, 1994 and the additional television acquisitions and time
brokerage operations discussed above.
Operating expenses for the six months ended June 30, 1995 increased 91% (or
$21.8 million) to $45.7 million from $23.9 million for the six months ended
June 30, 1994. The increase was primarily due to the costs of operating these
newly acquired television stations, direct expenses such as commissions which
rise in proportion to revenues, higher corporate overhead and higher
depreciation and amortization related to assets acquired.
Broadcast cash flow for the six months ended June 30, 1995 increased 150% (or
$6.6 million) to $11 million, from $4.4 million for the six months ended June
30, 1994. The increase in broadcasting cash flow was a direct result of
acquisitions and improved performance of existing properties.
Net interest expense for the six months ended June 30, 1995 increased to $5.7
million from $3.5 million for the six months ended June 30, 1994, an increase
of 63% primarily due to a greater level of long-term debt throughout the period
and higher borrowing rates. As a result of acquisitions, at June 30, 1995,
long-term debt was $132 million, or 277% higher than the $35 million
outstanding a year prior.
The Company recognized $640,000 of income tax benefit which resulted primarily
from the 1995 net loss and reversal of deferred taxes associated with the
1993 tax provision resulting from the change in tax status.
THREE MONTHS ENDED JUNE 30, 1995 AND 1994
Consolidated revenues for the three months ended June 30, 1995 increased 96%
(or $11.6 million) to $23.7 million from $12.1 million for the three months
ended June 30, 1994. This increase was primarily due to the acquisition of WPBF
(TV-25) on July 1, 1994 and the additional television acquisitions and time
brokerage operations discussed above.
Operating expenses for the three months ended June 30, 1995 increased 77% (or
$10.1 million) to $23.2 million from $13.1 million for the three months ended
June 30, 1994. The increase was primarily due to the costs of operating these
newly acquired television stations, direct expenses such as commissions which
rise in proportion to revenues, higher corporate overhead and higher
depreciation and amortization related to assets acquired.
Broadcast cash flow for the three months ended June 30, 1995 increased 154% (or
$4.3 million) to $7.1 million, from $2.8 million for the three months ended
June 30, 1994. The increase in broadcast cash flow was a direct result of
acquisitions and improved performance of existing properties.
Net interest expense for the three months ended June 30, 1995 increased to $2.5
million from $.7 million for the three months ended June 30, 1994, an increase
of 257% primarily due to a greater level of long-term debt throughout the
period and higher borrowing rates. As a result of acquisitions, at June
15
<PAGE> 16
30, 1995, long-term debt was $132 million, or 277% higher than the $35 million
outstanding a year prior.
The Company recognized $320,000 of income tax benefit which resulted primarily
from the 1995 net loss and reversal of deferred taxes associated with the 1993
tax provision resulting from the change in tax status.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at June 30, 1995 and December 31, 1994 was $7.8
million and 26.4 million, respectively, and the ratio of current assets to
current liabilities was 1.48:1 and 3.11:1, on such dates respectively. Working
capital decreased primarily due to acquisitions previously discussed, and an
increase in the current portion of long-term debt.
Cash provided by (used in) operations of $(.2) million and $2.7 million for the
six months ended June 30, 1995 and 1994, respectively, reflect the improvement
in operating results of existing properties, acquisitions and time brokerage
properties net of increased interest expense and increases in other assets.
Cash used for investing activities primarily reflects the acquisitions of
WTGI(TV-61), WTWS(TV-26), WGOT(TV-60), KZKI(TV-30), KLXV(TV-65), WSJT(FM),
WFTL(AM) and purchases of equipment for these and existing properties. Cash
provided by financing activities primarily reflects the proceeds from
borrowings of long-term debt. In addition the Compnay advanced $500,000 to The
Christian Network, Inc. during the second quarter under a demand note bearing
interest at prime rate.
Non-cash activity relates to reciprocal trade advertising revenue and expense,
as well as dividends and accretion on the preferred stock and common stock
warrants.
The Company has two senior debt facilities of $150 million and $75
million. The $150 million facility is secured by the assets of WPBF(TV-25) and
the Company's radio networks and stations. The credit terms require
amortization of principal over a seven-year period with the first payment due
September 30, 1995, and interest payable quarterly at a floating rate
(presently LIBOR plus 2.5%). As of June 30, 1995, approximately $90 million has
been drawn under this facility. On August 4, 1995 $17 million was borrowed
under this facility in conjunction with the Whitehead Media, Inc. ("Whitehead")
loan discussed below.
On May 17, 1995 the Company closed on a $75 million senior debt
facility. This facility is secured by substantially all the assets of the
Company's television subsidiaries, with the exception of WPBF(TV-25) and
WFCT(TV-66). The facility matures on May 17, 1997 and may be extended for an
additional year under certain conditions. As of June 30, 1995 approximately $39
million was outstanding under this facility. On July 3, 1995 an additional $8.5
million was drawn down under this facility in conjunction with the acquisition
of KTFH(TV-49) discussed below.
The Company believes that cash flow from operations will be sufficient
to make scheduled interest payments under the existing credit facilities and
meet working capital requirements for its mature properties. The Company
periodically evalutes its credit facillities. Currently, the Company is
negotiating new financings that could result in the retirement of one or more
if its two existng senior credit facilities and increase the Company's
borrowing capabilities for additional acquisitions and other purposes. Such
financings could result in the Company writing off prior to December 31, 1995
up to approximately $11 million in loan origination costs relating to its two
existing senior credit facilities.
16
<PAGE> 17
ACQUISITION COMMITTMENTS
The Company has agreements to purchase significant assets of the following
television stations all of which are subject to various conditions, including
the receipt of regulatory approvals:
<TABLE>
<CAPTION>
PURCHASE
STATION MARKET SERVED PRICE
------- ------------- -----
<S> <C> <C>
KTFH(TV-49) Houston, TX (1) $ 7,900,000
Channel 68 Dallas, TX (2) $ 2,000,000
WHKE(TV-55) Milwaukee, WI (4) $ 2,550,000
WIRB(TV-56) Orlando, FL (3)(4) $ 3,800,000
KUBD(TV-59) Denver, CO (4) $ 6,500,000
WOAC(TV-67) Cleveland, OH (5) $ 6,600,000
WTJC(TV-26) Dayton, OH (4) $ 3,500,000
WYVN(TV-60) Washington, DC(2) $ 1,900,000
</TABLE>
(1) Station acquired on July 3, 1995.
(2) Stations not currently on the air. The Company estimates spending
$2,000,000 in build-out costs for each station before broadcasting can
begin in Dallas and Washington, respectively.
(3) Operated under a time brokerage agreement since December 27, 1994.
(4) Station licenses will be owned by The Christian Network, Inc. with the
Company guaranteeing payment of the purchase price. The Company plans
to enter into time brokerage agreements and acquire certain real and
personal tangible assets of the stations.
(5) Station license will be owned by Whitehead with the Company
guaranteeing payment of the purchase price. The Company plans to enter
into a time brokerage agreement and acquire certain real and personal
tangible assets of the station.
In September 1994, the Company entered into an agreement with Whitehead
in which the Company agreed to lend $18.0 million to purchase WTVX(TV-34), West
Palm Beach, Florida. On August 4, 1995 the Company funded the loan, Whitehead
completed the acquisition of WTVX(TV-34) and the Company began operating the
station under a time brokerage agreement.
17
<PAGE> 18
PAXSON COMMUNICATIONS CORPORATION
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
No material legal proceedings are pending to which the Company, or any of its
property, is subject. To the knowledge of the Company, no such legal
proceedings are contemplated by any governmental authority.
Items 2-3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's Annual Meeting of Shareholders was held on June 1, 1995. At the
meeting, all seven of the Company's existing directors were re-elected for one
year terms. Proposals to amend the Certificates of Designation with respect to
the Company's 15% Cumulative Compounding Redeemable Preferred Stock (the "15%
Preferred Proposal") and Series B 15% Cumulative Compounding Redeemable
Preferred Stock (the "Series B Preferred Proposal") to conform the provisions
of such Certificates of Designation with the Company's contractual obligations
with the holder's of the preferred stock governed by such Certificates of
Designation were approved. In addition, the Company's proposal to change its
name from "Paxson Communications Corp." to "Paxson Communications Corporation"
was approved. The appointment of Price Waterhouse LLP as the Company's
independent certified public accountants was also ratified.
The number of votes cast for, cast against and withheld, as well as the number
of broker nonvotes with respect to the election of five of the directors is set
forth below:
<TABLE>
<CAPTION>
Director For Withheld Broker Nonvotes
-------- --- -------- ---------------
<S> <C> <C> <C>
Lowell W. Paxson 108,478,692 271 422,464
James B. Bocock 108,478,613 350 422,464
Arthur D. Tek 108,478,613 350 422,464
J. Patrick Michaels, Jr. 108,478,613 350 422,464
S. William Scott 108,478,613 350 422,464
</TABLE>
There were no votes cast against the election of the above 5 directors.
Pursuant to the Company's certificate of incorporation, the election of two
directors, Micheal J. Marocco and John A. Kornreich, was only voted on by the
holders of the Company's 2000 outstanding shares of 15% Cumulative Compounding
Redeemable Preferred Stock. All such 2000 shares were cast in favor of such
two directors.
18
<PAGE> 19
The number of votes cast for, cast against and abstaining as well as the number
of broker nonvotes with respect to the remaining four matters voted upon at the
meeting is set forth below:
<TABLE>
<CAPTION>
For Against Abstain Broker Nonvotes
--- ------- ------- ---------------
<S> <C> <C> <C> <C>
15% Preferred Proposal 108,338,993 190 540 561,704
Series B Preferred
Proposal 108,338,993 151 579 561,704
Name Change 108,478,606 52 305 422,464
Accountant Appointment 108,338,769 36 158 422,464
</TABLE>
Item 5. Other Matters. Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) List of Exhibits:
EXHIBIT NO. DESCRIPTION
10.1 Asset Purchase Agreement, dated January 31, 1995, between Gary A.
Rosen in his capacity as Bankruptcy Trustee for Flying A
Communications, Inc. and Paxson Communications Corp.
10.2 Real Estate Sale and Purchase Agreement, dated as of May 18, 1995, by
and between F&M Bank - Martinsburg and Paxson Communications of
Washington-60, Inc.
10.3 Asset Purchase Agreement, dated as of June 1, 1995, by and between
Channel 26 of Dayton, Inc. and Video Mall Communications, Inc. for
Television Station WTJC-TV, Springfield, Ohio
10.4 Asset Purchase Agreement, dated as of May 23, 1995, by and among
Whitehead Media, Inc., Morton J. Kent and Canton, Inc. for Television
Station WOAC(TV) Canton, Ohio
10.5 Credit Agreement, dated as of May 17, 1995, among Paxson
Communications Television, Inc. and Merrill Lynch Capital Corporation,
As Arranger and Syndication Agent, and Canadian Imperial Bank of
Commerce, New York Agency, As Administrative Agent and Collateral
Agent
10.6 Loan Agreement, dated as of September 22, 1994, among Paxson
Communications Corp. and Whitehead Media Inc.
10.7 Amendment to Loan Agreement, dated October 3, 1994, among Paxson
Communications Corp. and Whitehead Media Inc.
10.8 Second Amendment to Loan Agreement, dated August 4, 1995, among Paxson
Communications Corporation and Whitehead Media Inc.
27 Financial Data Schedule (for SEC use only)
19
<PAGE> 20
(b) Reports on Form 8-K.
Form 8-K Current Report filed June 1, 1995 in conjunction with the May
17, 1995 acquisitions of KZKI(TV-30) and WGOT(TV-60).
Form 8-K/A Amendment to Current Report filed July 31, 1995 to file
acquisition financial statements and pro forma financial information
for the acquisitions of KZKI(TV-30) and WGOT(TV-60).
20
<PAGE> 21
PAXSON COMMUNICATIONS CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 11, 1995 By: /s/ James B. Bocock
----------------------
James B. Bocock
President and Chief
Operating Officer, Director
Date: August 11, 1995 By: /s/ Arthur D. Tek
-------------------
Arthur D. Tek
Vice President, Chief
Financial Officer, Director
21
<PAGE> 1
EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made an entered
into this 31st day of January, 1995, by and between Gary A. Rosen, in his
capacity as Bankruptcy Trustee for Flying A Communications, Inc., a corporation
and general partner of Flying A Communications Limited Partnership, Debtor
("Seller"), and Paxson Communications Corporation, a Delaware corporation
("Buyer").
W I T N E S S E T H
WHEREAS, Seller has been appointed by the United States Bankruptcy
Court for the Norther District of West Virginia (the "Court") as the trustee of
the business and assets of Flying A Communications Limited Partnership,
permittee and operator of Station WYVN(TV), Martinsburg, West Virginia (the
"Station");
WHEREAS, Buyer desires to acquire and Seller desires to sell to Buyer
all property associated with the Station in Seller's possession and to secure
an assignment of the Station permit and other authorizations issued by the
Federal Communications Commission ("FCC") for the operation of the Station
(hereinafter referred to as "FCC Authorizations");
WHEREAS, the Court has, by Order dated January 30, 1995, approved the
sale of Station from Seller to Buyer; and
WHEREAS, the FCC Authorizations may not be assigned to Buyer without
the prior written consent of the FCC;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties intending to be legally bound agree as follows:
1. Definitions. Unless otherwise stated in this Agreement,
the following terms shall have the following meanings:
1.1. "Assignment Application" refers to the application
that Seller and Buyer will jointly file with the FCC requesting its written
consent to the assignment of FCC Authorizations from Seller to Buyer;
1.2. "Modification Application" refers to the application
that Seller filed on January 18, 1995 to extend the completion date of the
Station's construction permit beyond January 22, 1995;
1.3. "Closing Date" means:
1.3.1. At 10:00 a.m. on the fifth business day
following the date upon which the FCC's grant of both the Assignment
Application and the Modification Application become "Final Orders" as defined
in Paragraph 1.5; or
<PAGE> 2
1.3.2. At such time as the parties agree to close on
the sale after the FCC grants the Assignment Application and Modification
Application;
1.4. "Closing Place" means the offices of Gary A. Rose,
One Church Street, Suite 802, Rockville, Maryland 20850, or such other place
as the parties may mutually agree to in writing; and
1.5. "Final Order" means that the Commission's grant of
this consent and approval of the Assignment Application and Modification
Application are no longer subject to reversal, stay, injunction or set aside,
whether by FCC staff action or protest by the public, and with respect to which
no timely request for stay, reconsideration, review, rehearing or notice of
appeal are pending and as to which the time for filing any such request,
petition or notice of appeal, or for review by the FCC on its motion, has
expired.
2. Assets to be Conveyed. Subject to the terms and upon
satisfaction of the conditions included in this Agreement, on the Closing Date,
at the Closing Place, Seller will sell, assign, convey, transfer and deliver to
Buyer its instruments of conveyance in form reasonably satisfactory to Buyer
and Buyer shall purchase and accept the assignment of the following
(collectively, the "Station's Assets"):
2.1 The FCC Authorizations as listed in Exhibit A,
including all of Seller's right, title and interest in and to the call letters
"WYVN";
2.2 All of the fixed and tangible personal property
listed in Exhibit B;
2.3 Such files, records and logs that pertain to the
operation of the Station and that are in Seller's possession.
3. Purchase Price and Method of Payment.
3.1 Purchase Price. The aggregate Purchase Price (the
"Purchase Price") to be paid to Seller by Buyer hereunder shall be Four Hundred
and Twenty-Five Thousand Dollars ($425,000);
3.2 Method of Payment. The Purchase Price shall be
paid by Buyer to Seller at Closing, at the direction of Seller, either in cash,
cashier's check or wire transfer of federal funds.
4. Representations and Warranties of Seller. Buyer understands
that the property being sold and conveyed under this Agreement is distressed
property which, with the exception of the FCC Authorizations, is the subject of
a bankruptcy proceeding in the Court. Buyer acknowledges that the Station is
dark and has not been in operation since April, 1994. The Seller's knowledge
and understanding of the conditions and extent of the Station's Assets arises
only by virtue of its appointment in the proceeding as trustee of the Station.
Accordingly, the
- 2 -
<PAGE> 3
Seller, as the trustee, makes only the following representations and
warranties:
4.1. Appointment in Capacity. Seller represents that he
has been appointed to his office pursuant to an Order issued by the Court on
April 11, 1994; since that date, Seller has, at all times, served as trustee of
the Station's Assets and Seller, as trustee, with the approval of the Court and
the FCC, can take such actions as he deems appropriate with regards to the
disposition of the Station's Assets.
4.2. Authorization. All necessary action to duly approve
the execution, deliver and performance of this Agreement and the consummation
of the transactions contemplated hereby has been taken by Seller pursuant to
the Court's Order and this Agreement constitutes a valid and binding agreement
of Seller enforceable in accordance with its terms.
4.2.1. Seller, as trustee, is the permittee of the
Station as reflected in the Commission's June 17, 1994 Public Notice announcing
grant of the application assigning the WYVN construction permit from David H.
Sevasten, former trustee, to Seller and is fully qualified to sell the Station
to Buyer; a copy of such authorization (FCC Form 732) is set forth at Exhibit
C.
4.2.2. The Seller will validly hold the FCC
Authorizations shown in Exhibit A. Seller shall not, prior to Closing, cause
or permit, by any act or failure to act, the FCC Authorizations to expire or to
be revoked, suspended, or modified or take any action that could cause the FCC
to institute proceedings for the suspension, revocation or adverse modification
of the FCC Authorizations.
4.2.3. The FCC was duly notified by letter dated
April 7, 1994 that the Station had suspended broadcast operations.
4.2.4. Because Station currently has no employees
and no advertising contracts, Buyer is not obligated to assume any liability
whatsoever arising from the employment of the Station's employees and is hereby
held harmless with respect to the performance of any advertising or other
contracts entered into prior to the Closing Date.
4.3 Condition of Assets. The Station's Assets,
notwithstanding anything herein to the contrary, are being sold and conveyed
what, where and "as is" on the Closing Date, and, except for the warranty set
forth in this section, Seller hereby disclaims all expressed and implied
warranties with respect to the Station's Assets and disclaims all warranties of
title, merchantability and fitness for any particular purpose with respect to
the Station's Assets.
4.4 Litigation. No judgement is issued or
outstanding against Seller, nor is any litigation, action, suit, judgment,
proceeding or investigation pending or outstanding before any form, court or
governmental body, department or agency of any kind, to which Seller is a
party, which has the stated purpose or the probably effect of enjoining or
preventing the consummation of this Agreement or the transactions contemplated
hereby or to recover damages
- 3 -
<PAGE> 4
by reason thereof, which questions the validity of any action taken or to be
taken pursuant to or in conjunction with this Agreement, or which would prevent
Seller from consummating the transactions contemplated hereunder. In the event
of the commencement of any such proceeding against Seller, Seller shall use its
reasonable and best efforts to effect removal or dismissal thereof within 30
days.
5. Buyer's Representations and Warranties. Buyer represents
and warrants to Seller as follows:
5.1. Organization and Standing. The Buyer is now
and on the Closing Date will be duly constituted validly existing corporation
under the laws of the State of Delaware. Buyer has all necessary power to
enter and perform this Agreement. Buyer is fully qualified, to the best of its
knowledge, under FCC regulations to own and operate the Station.
5.2 Authorization. All necessary action to duly approve
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby has been taken by Buyer and this
Agreement constitutes a valid and binding agreement to Buyer enforceable in
accordance with its terms.
5.3 Qualifications of Buyer. Buyer, to the best of
Buyer's knowledge, is legally and financially qualified to be the assignee of
the FCC Authorizations and its is not engaged in any proceedings with the FCC
which would prevent the sale contemplated herein.
5.4 Litigation. No judgement is issued or
outstanding against Buyer nor is any litigation, action, suit, judgment,
proceeding or investigation pending or outstanding before any forum, court or
governmental body, department or agency of any kind, or to the knowledge of
Buyer threatened, to which Buyer is a party, which has the stated purpose or
the probable effect of enjoining or preventing the consummation of this
Agreement or the transactions contemplated hereby or to recover damages by
reason thereof, which questions the validity of any action taken or to be taken
pursuant to or in conjunction with this Agreement, or which would prevent Buyer
from being qualified to be the assignee of Station's FCC Authorizations or from
consummating the transactions contemplated hereunder. In the event that the
commencement of any such proceeding against Buyer, Buyer shall use its
reasonable and best efforts to effect removal or dismissal thereof within 30
days.
5.5 Absence of Restrictions. The execution, delivery and
consummation of this Agreement by Buyer do not conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default
under, any agreements, instruments, laws or regulations to which it is subject.
6. Covenants of Parties. Seller agrees on the Closing Date to
transfer, convey, assign and deliver to Buyer the Station's Assets free and
clear of all liens, claims, obligations and liabilities, including, without
limitation, the claims of any creditors in the pending Chapter 7 bankruptcy
proceeding before the Court, and Buyer agrees to deliver the Purchase Price to
- 4 -
<PAGE> 5
Seller. Buyer shall have no further obligation to assume or undertake to pay,
discharge or perform any other obligation or liability of the Station except as
specifically set forth herein.
7. Application for Commission Consent and Approval. Buyer and
Seller shall cooperate in the preparation and filing of an Assignment
Application as soon as practicable, but in no event later than ten business
days after the date of this Agreement. The parties will take all steps as may
be necessary or proper to prosecute the Assignment Application to a favorable
conclusion. Each party shall bear its own costs except that the Commission
filing fee for the Assignment Application shall be solely at the Buyer's
expense.
8. Time for Commission Consent.
8.1 In the event that the Commission has not granted the
Assignment Application, or if such grant has not become a Final Order, by
January 15, 1996, either Buyer or Seller may thereafter terminate this
Agreement upon five business days written to the other party, provided that the
party desiring to terminate this Agreement is not in default in any manner
under the Agreement and has not delayed FCC action on the Assignment
Application. In the event of a termination of this Agreement pursuant to this
section, each party shall be released from all obligations and liabilities
under this Agreement.
8.2 The parties by mutual agreement shall extend the
deadline for FCC consent for additional 60 day periods if they reasonably
determine, in good faith, that the need for extensions is caused by the FCC's
need for additional time in which to complete its review.
9. Conditions Precedent to Parties' Obligations. The
obligations of the Seller and Buyer to consummate the transactions contemplated
hereby are subject to the fulfillment, prior to an at the Closing Date, of each
of the following conditions, none of which may be waived:
9.1. FCC Approval. The FCC shall have given its written
consent to the Assignment Application and such consent shall have become a
Final Order.
9.2 Court Approval. The Court shall have entered an
order giving its approval to the sale of the Station's assets.
10. Conditions Precedent to Buyer's Obligations. The
obligation of Buyer to consummate the transaction contemplated hereby is
subject to Seller's representations and warranties set forth in Section 4
hereof, being true and correct in all material respects to the best of his
knowledge.
10.1. Representations and Warranties. The representations
and warranties of Seller included in this Agreement shall be true and correct
in all material respects at and as of the Closing date; and
- 5 -
<PAGE> 6
10.2. Performance. Seller shall have in all material
respects performed and complied with all covenants, warranties, agreements and
conditions required by this Agreement to be performed or complied with prior to
and at the Closing Date.
10.3. Closing Documents. The due execution and
delivery of all Closing documents by Seller.
10.4. Litigation. No litigation or governmental
investigation or proceeding of any kind shall be pending as of the Closing Date
against the Seller or the Station which would have a material adverse effect on
the Station's Assets or the business or operations of the Station after
Closing.
10.5. FCC Approval. The FCC shall have consented to the
assignment of the FCC Authorizations from Seller to Buyer without any material
adverse modifications of the terms of any such FCC Authorizations and such
consent shall have become a Final Order.
11. Conditions Precedent to Seller's Obligations. The
obligation of Seller to consummate the transaction contemplated hereby is
subject to the fulfillment, prior to an at the Closing Date, of each of the
following conditions, which may be waived at the sole discretion of Seller by
an expressed written waiver:
11.1. Representations and Warranties. The representations
and warranties of Buyer included in this Agreement shall be true and correct in
all material respects at and as of the Closing Date; and
11.2. Performance. Buyer shall have in all material
respects performed and complied with all covenants, warranties, agreements and
conditions required by this Agreement to be performed or complied with prior to
and at the Closing Date, including without limitation, Buyer's delivery to
Seller of the Purchase Price as required by Section 3.
12. Expenses. All expenses incurred in connection with this
transaction shall be born by the party incurring the expense, except as
provided in Section 7 hereof.
13. Finders, Consultants and Brokers. Seller hereby
represents and warrants to Buyer that he has retained the services of Pat
Clausen to broker this transaction and that Buyer will not be responsible for
payment of his fees in connection with the transactions contemplated by this
Agreement.
14. Notices. All notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be deemed
duly give if sent by overnight mail or delivery service, address as follows:
(a) If to Seller: Gary A. Rosen, Esq.
One Church Street
- 6 -
<PAGE> 7
Suite 802
Rockville, MD 20850
(b) If to Buyer: Paxson Communications Corporation
ATTN: William L. Watson, General
Counsel
601 Clearwater Park Road
West Palm Beach, Florida 33401
or any such other addresses as the parties may, from time to time, designate in
writing.
15. Benefit and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
16. Other Documents. The parties shall execute such other
documents as may be necessary and desirable for the implementation and
consummation of this Agreement.
17. Exhibits. The exhibits attached to this Agreement shall
be deemed part of this Agreement and incorporated herein, where applicable, as
if fully set forth therein.
18. Construction. This Agreement shall be governed, construed
and enforced in accordance with the laws of the State of West Virginia.
19. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature of each counterpart were
upon the same instrument.
20. Headings. The headings of the sections of this
Agreement are inserted as a matter of convenience and for references purposes
only and in no respect define, limit or describe the scope of this Agreement or
the intent of any section hereof.
21. Entire Agreement; Amendment. This Agreement and the
Exhibits hereto represent the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof, supersede all prior
negotiations between the parties and can be amended, supplemented or changed
only by an agreement in writing which makes specific reference to this
Agreement, or any amendment delivered pursuant hereto, as the case may be, and
which is signed by the party against whom enforcement of such amendment,
supplement or modification is sought.
22. Survival of Covenants, Representations and Warranties.
All representations, warranties and covenants included in this Agreement shall
survive the Closing Date until the entry of a Final Order in court of competent
jurisdiction discharging the Seller as trustee from his duties. All payment
obligations shall survive the Closing Date until those obligations are fully
and completely discharged.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed
- 7 -
<PAGE> 8
by the duly authorized representatives on the day and year first above written.
SELLER:
FLYING A COMMUNICATIONS LIMITED
PARTNERSHIP, DEBTOR
By: /s/ Gary A. Rosen
------------------------------------
Gary A. Rosen, Trustee
BUYER:
PAXSON COMMUNICATIONS CORPORATION
By: /s/ Lowell W. Paxson
------------------------------------
- 8 -
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
MORTON J. KENT
By: /s/ Morton J. Kent
---------------------------------
Name:
-------------------------------
CANTON, INC.
By: /s/ Morton J. Kent
---------------------------------
Name:
-------------------------------
Title: Chairman
------------------------------
WHITEHEAD MEDIA, INC.
By: /s/ Eddie L. Whitehead
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Name: Eddie L. Whitehead
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Title: President
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FOR PURPOSES OF SECTION 11.12 HEREOF:
PAXSON COMMUNICATIONS CORP.
By: /s/ Lowell W. Paxson
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Name:
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Title:
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EXHIBIT 10.2
REAL ESTATE SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made as of this 18th day of May, 1995, by and
between F&M BANK - MARTINSBURG, (hereinafter referred to as "Seller"), and
PAXSON COMMUNICATIONS OF WASHINGTON-60, INC., a Florida corporation
(hereinafter referred to as "Purchaser").
WHEREAS, by Order entered January 30, 1995 in the matter of In Re
Flying A Communications, Inc., Debtor in Bankruptcy Case No. 92-31171-LEF
(hereinafter referred to as the "Order"), the United States Bankruptcy Court
for the Northern District of West Virginia approved a proposed sale of certain
assets of the Debtor's estate by the Chapter 7 Trustee, Gary Rosen (hereinafter
referred to as "Trustee") to Purchaser; and,
WHEREAS, the Order provided for the sale by Seller to Purchaser of
certain real estate hereinafter described for the total net sum of $625,000.00
incident to the sale of other assets of the Debtor's estate.
NOW THEREFORE THIS AGREEMENT does WITNESSETH that Seller and Purchaser
hereby agree as follows:
1. THE PROPERTY: Seller agrees to sell and Purchaser agrees to
buy that certain real estate, with improvements located in Berkeley County,
West Virginia with legal description as set forth in the attached Exhibit A
(hereinafter referred to as the "Property").
AND BEING the same property as was conveyed to F&M Bank - Martinsburg,
by that certain deed dated April 1, 1994, and recorded in the Office of the
Clerk of the County Commission, Berkeley County, West Virginia in Deed Book 526
at Page 327.
2. SETTLEMENT: The parties covenant and agree that the
settlement for the sale and conveyance of the Property as hereinabove
described, shall be held at the law offices
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of Seller's attorneys, in Berkeley County, West Virginia or at such other place
as Seller and Purchaser may agree, as soon as reasonably practicable within
five (5) business days of the closing of the assignment of the construction
permit to Purchaser by Trustee.
3. PURCHASE PRICE: Purchaser shall pay to the Seller the total
net sum of SIX HUNDRED TWENTY-FIVE THOUSAND and 00/100 DOLLARS ($625,000.00),
for the Property hereinabove described. The Purchase Price shall be paid as
follows:
a. Purchaser shall allow Seller to take possession of
and treat as an earnest money deposit $50,000.00 of the $500,000.00 in account
no. 15145714 currently existing at Seller upon the execution of this Agreement
by both Seller and Purchaser (the "Deposit") and Seller shall wire transfer the
remaining $450,000.00 plus accrued interest to Purchaser upon written
instructions. Such deposit shall be held by Seller in an interest bearing
account until settlement upon the Property, at which time such Deposit and all
interest thereon shall be delivered to the settlement agent and applied against
sums otherwise due from Purchaser, unless otherwise forfeited or refunded in
accordance with the terms of this Agreement.
b. The balance of the Purchase Price shall be paid by
the Purchaser in cash (Cashier's/Certified check) or wire transfer of
immediately available funds, at settlement.
4. CONTINGENCIES: Purchaser's obligations under this Agreement
are expressly contingent upon the Trustee obtaining the consent and approval of
the Federal Communications Commission ("FCC") for the transfer to Purchaser of
the construction permit formerly granted to Flying A Communications, Inc. as
described in the Order and successfully closing the transaction. Purchaser
agrees to forthwith request Trustee to make application for said consent and
approval and to cause the Trustee to make application for said consent and
approval and to
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cause the Trustee to diligently pursue the same, and Purchaser agrees to take
all necessary steps within its power to obtain said consent and approval as
soon as possible. If the sale is not consummated on or before July 15, 1995
(the "Closing Deadline"), then and in that event, Seller or Purchaser may
declare the Purchase Agreement terminated, unless the applications filed with
the FCC by Purchaser or the Trustee, or both, are being actively processed by
the FCC, in which case the Closing Deadline shall be extended to the earlier of
the date which is 30 days after the FCC approval is obtained or January 15,
1996; upon which the Deposit shall be immediately returned to Purchaser and
thereafter neither Purchaser nor Seller shall have any further obligation nor
liability hereunder.
5. POSSESSION: Possession of the Property shall be granted
upon closing.
6. RISK OF LOSS PRIOR TO SETTLEMENT: Until execution and
deliver of the deed, the risk of loss or damage to the Property, or any
portions thereof, by fire or other casualty, is assumed by the Seller.
7. TRANSFER OF TITLE: At settlement, Seller shall deliver
to Purchaser a general warranty deed, conveying good and marketable title to
the Property, insurable by a reputable title insurance company, subject only to
the following:
a. The lien of Berkeley County property taxes for 1995
and subsequent years.
b. Easements and right-of-ways for utilities services,
distribution and transmission of record and in existence, which do not render
title unmarketable.
c. Reservations, easements, covenants and restrictions
of record, which do not render title unmarketable and are listed on Exhibit B
attached hereto and by this reference made a part hereof.
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Within four days after the effective date of this Agreement, Purchaser
shall order an examination of title to the Property. If the title report
reveals that the title is not in the condition as required herein, Purchaser
shall within two weeks of the date of receipt thereof, notify Seller in writing
of such title defects disclosed by the title report. Seller shall
expeditiously commence and diligently pursue curing such matters and the
correction of such matters by Seller shall be a condition precedent to
Purchaser's obligation to close hereunder, and closing settlement hereunder
shall be postponed as reasonably necessary to allow for such cure by Seller.
If Seller notifies Purchaser that it cannot correct all such title defects,
then after receipt of such notice, Purchaser shall notify Seller in writing
that Purchaser either (i) waives the title matters complained of or (ii)
terminates this Purchase Agreement, in which event the Deposit shall be
immediately returned to Purchaser and thereafter neither Purchaser nor Seller
shall have any further obligation or liability hereunder.
After the effective date of this Agreement, Seller agrees not to
mortgage or encumber the Property or execute any easements, covenants,
conditions or restrictions with respect to the Property or to seek any zoning
changes or other government approvals with respect to the Property, without the
express written consent of Purchaser, which consent shall not be unreasonably
withheld.
8. ADJUSTMENTS AT SETTLEMENT: Property taxes and any
public charges assessed on an annual or special basis against the Property for
the year in which settlement occurs shall be apportioned between Seller and
Purchaser to the date of settlement. Seller shall pay any and all property
taxes, utility charges, meter deposits, and any and all other costs of
ownership of the Property due and owing up to and including the date of
settlement.
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9. COSTS OF SETTLEMENT: Seller shall pay for deed
preparation, transfer tax stamps and the fees of Seller's counsel. Purchaser
shall pay for all survey/test costs, title examination fees and title insurance
premiums, recording costs, and the fees of Purchaser's counsel.
10. DEFAULT: In the event of Purchaser's default of the
terms and conditions of this Agreement, Seller shall have the right to declare
a forfeiture of the Deposit as liquidated damages whereupon Purchaser and
Seller shall be thereafter relieved of further liability hereunder, at law or
in equity.
In the event of Seller's default of the terms and conditions of this
Agreement, Purchaser shall have the right to demand a refund of the Deposit and
other than as provided in Paragraph 7 hereof, to pursue all other legal or
equitable remedies.
11. ASSIGNABILITY: The rights and privileges acquired upon
execution of this Agreement by the Parties hereto shall not be assignable to
third parties; provided, however that Purchaser may assign this Agreement to a
wholly owned subsidiary corporation.
12. ENVIRONMENTAL: Seller warrants unto the Purchaser that
Seller through his agents and employees, during the time Seller has owned the
property, has not (a) placed upon the Property for the purpose of storage,
treatment or disposal any hazardous wastes as defined in the West Virginia
Hazardous Waste Management Act, West Virginia Code Section 2-5E-20, and under
the Federal Comprehensive Environmental Response, Compensation and Liability
Act of 1986, 42 U.S.C. Section 9601, et seq., as amended; or (b) placed upon
the Property any underground storage tank or tanks which are regulated under
the provisions of the West Virginia Underground Storage Tank Act, West Virginia
Code Section 20-5H-19.
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13. CONDEMNATION: IF, at or prior to the time of settlement,
the Property or any portions thereof shall be condemned or taken pursuant to
any governmental or other power of eminent domain, or if any written notice of
any such taking or condemnation is issued, or proceedings instituted by any
governmental authority having the power of eminent domain, then and in any of
such events, the Purchaser shall have the right to either (i) terminate this
Contract by giving the Seller written notice to that effect, whereupon the
Deposit paid hereunder shall be returned to Purchaser and both Purchaser and
Seller shall thereafter be relieved of further liability hereunder, at law or
in equity, or (ii) proceed to settlement with no reduction in the purchaser
price, in which case Purchaser shall receive at settlement all condemnation
awards paid to Seller subsequent to the date of this Agreement for any part of
the Property, together with an absolute assignment of Seller's right and
interest as an owner in any unpaid condemnation awards to be made with respect
to the Property. If Seller has knowledge of any pending or threatened
condemnation proceedings or actions or any notices thereof affecting the
Property, Seller will promptly advise Purchaser in writing of the matters of
facts relating thereto.
14. CONDITION OF THE PROPERTY: Seller and Purchaser
acknowledge that the Property, its improvements and appurtenances are being
sold "as is" with no warranty or representation express or implied as the
condition of the Property or its fitness for any particular use, except as
contained in this Agreement or the Deed. Seller covenants that it has
conducted or has been give opportunity to conduct any and all inspections of
the Property material to its purchase and intended use and accepts the Property
"as is" with no reliance by Purchaser upon any written or oral representation
by the Seller as to the condition of the Property, except as
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<PAGE> 7
contained in this Agreement.
15. SUCCESSORS IN INTEREST: This Agreement shall be binding upon
and inure to the benefit of the respective successors in interest of the
parties hereto.
16. WARRANTIES OF THE PARTIES: Seller does hereby represent
and warrant as follows: (i) that Seller is the sole owner, both
equitable and legal, of the Property herein described; (ii) that F&M Bank -
Martinsburg is a West Virginia banking corporation, duly organized and
existing, and in good standing under the laws of the State of West Virginia;
and (iii) that the execution and deliver of this Agreement by the undersigned
on behalf of the Banking Corporation, has been duly authorized by its Board of
Directors.
Purchaser does hereby represent and warrant as follows: (i) that
Paxson Communications of Washington-60, Inc. is a corporation, duly organized
and existing, and in good standing under the laws of the State of Florida; and
(ii) that the execution and delivery of this Agreement by the undersigned on
behalf of the Purchaser, has been duly authorized by its Board of Directors.
17. COMPLETE AGREEMENT: It is understood and agreed that
this Agreement contains all of the terms and conditions of the Agreement
reached by the parties and that neither the Seller nor Purchaser shall be bound
by any oral representations and agreements; it is further agreed and understood
that no terms or conditions of this Agreement can be modified except by an
agreement in writing executed by the Seller and Purchaser.
18. NOTICES: Notices to the Seller pursuant to the
provisions of this Agreement shall be sufficient as sent by certified or
registered mail, postage prepaid, addressed to:
F&M Bank - Martinsburg
301 West Burke Street
P.O. Box 928
Martinsburg, West Virginia 25401
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and notices to the Purchaser pursuant to the provisions of this Agreement shall
be sufficient if sent by certified or registered mail, postage prepaid,
addressed to:
Paxson Communications of Washington-60, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
or to such other respective addresses as the parties may designate in writing
from time to time and served pursuant to the provisions of this paragraph.
Notice shall be deemed to have been given upon deposit of the same in the
United States mail.
19. APPLICABLE LAW: This Agreement shall be governed by and
construed in accordance with the applicable laws of the State of West Virginia.
20. HEARINGS: The paragraph headings contained in this
Agreement are inserted solely as a matter of convenience and for reference and
in no way define, limit or describe the scope or intent of any provisions of
this Agreement.
IN WITNESS THEREOF, the parties hereto have signed, sealed and
delivered these presents as their own free act and deed.
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SELLER: F&M Bank - Martinsburg
/s/ C. William Hammod May 17, 1995
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By: President/CEO Date
PURCHASER: Paxson Communications of Washington-60, Inc.
/s/ Lowell W. Paxson May 18, 1995
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By: Date
</TABLE>
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<PAGE> 1
EXHIBIT 10.3
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CHANNEL 26 OF DAYTON, INC.
AND
VIDEO MALL COMMUNICATIONS, INC.
FOR
TELEVISION STATION WTJC-TV,
SPRINGFIELD, OHIO
JUNE 1, 1995
<PAGE> 2
TABLE OF CONTENTS
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Manner of Determining Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Employees and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1 Organization, Standing and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.16 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.17 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.18 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.5 Notice Regarding Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.6 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.7 State Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.8 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.9 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.10 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(f) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(g) Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Covenants and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(d) FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Closing Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Transfer Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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(c) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Licenses, Contracts, Business Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(g) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Upset Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Casualty Termination Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.4 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.12 Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
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<PAGE> 7
LIST OF SCHEDULES
Schedule 2.2 -- Excluded Property
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Assumed Contracts
Schedule 3.9 -- Intangibles
Schedule 3.10 -- Insurance Policies
Schedule 3.12 -- Employee Matters
Schedule 3.14 -- Litigation Matters
Schedule 6.10 -- Noncompetition Agreement
Schedule 9.3 -- Escrow Agreement
Schedule 8.2(f) -- Form of Opinions of Seller's Counsel
Schedule 8.3(d) -- Form of Opinion of Buyer's Counsel
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<PAGE> 8
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of June 1, 1995, by and
between Channel 26 of Dayton, Inc., a Florida corporation ("Buyer"), and Video
Mall Communications, Inc., an Ohio corporation ("Seller").
RECITALS
A. Seller is the licensee of and owns and operates television
station WTJC-TV, Springfield, Ohio (the "Station"), pursuant to licenses issued
by the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller has a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising and/or programming time on the Station prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are to be assumed by Buyer upon its purchase of the Station, (ii) all
Contracts entered into by Seller in the ordinary course of business which
comply with the provisions of Section 5.3 hereof; and (iii) any other Contracts
entered into by Seller between the date of this Agreement and the Closing Date
that Buyer agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
<PAGE> 9
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are entered into by Seller between the date of
this Agreement and the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
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<PAGE> 10
"Permitted Liens" means liens for taxes not yet due and payable.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means Seller's interests in real property, leaseholds
and subleaseholds, purchase options, easements, licenses, rights to access, and
rights of way, and all buildings and other improvements thereon, which are used
or useful in the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by the Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and deliver to Buyer on the Closing Date, and Buyer agrees to purchase,
and accept all of the Assets and property interests owned by Seller or in which
Seller has a property interest which are used or useful in connection with the
conduct of the business or operations of the Station, (but excluding all
vehicles) together with any additions thereto between the date of this
Agreement and the Closing Date, but excluding the assets described in Section
2.2, free and clear of any claims, liabilities, security interests, mortgages,
liens, pledges, conditions, charges, or encumbrances of any nature whatsoever
(except for Permitted Liens), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, including the goodwill of
the Station, if any;
(f) All proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams,
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<PAGE> 11
blueprints, and schematics, including filings with the FCC relating to the
business and operation of the Station, which belong to Seller and is within its
possession and control;
(g) All choses in action of Seller relating to
the Station that are assignable to Buyer as provided herein;
(h) All records required by the FCC to be kept by
the Station and copies of all other books and records which belong to Seller
and are within its possession and control relating to the business or
operations of the Station (exclusive of corporate, financial and accounting
records), including executed copies of the Assumed Contracts; and
(i) The Accounts Receivable.
2.2 Excluded Assets. The Assets shall exclude the following
assets.
(a) Seller's cash on hand as of the Closing and
all other cash in any of Seller's bank or savings accounts; any insurance
policies, letters of credit, or other similar items and cash surrender value in
regard thereto; and any stocks, bonds, certificates of deposit and similar
securities or other investments;
(b) All corporate and accounting records of
Seller and copies of all other books and records relating to the business and
operations of the Station;
(c) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets shall be
THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000), adjusted as provided
below:
(a) Prorations. The Purchase Price shall be
increased or decreased as required to effectuate the proration of expenses as
of 11:59 p.m. local time, on the day prior to the Closing Date. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Asset under this Agreement which shall be governed by Section
11.1 hereof) and similar prepaid and deferred items, shall be prorated between
Buyer and Seller in accordance with the principle that Seller shall be
responsible for all expenses, costs, and liabilities allocable to the period
prior to the Closing Date, and Buyer shall be responsible for all expenses,
costs, and obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts not included
in the Assumed Contracts including specifically
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<PAGE> 12
all cash program licensing agreements and any other obligation or liability not
being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any
adjustments will, insofar as feasible, be determined and paid on the Closing
Date, with final settlement and payment by the appropriate party occurring no
later than ninety (90) days after the Closing Date or such other date as the
parties shall mutually agree upon.
2.4 Payment of Purchase Price. The Purchase Price shall be paid
by Buyer to Seller as follows: At the Closing, Buyer shall pay to Seller the
sum of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000), adjusted as
provided above, by wire transfer of same-day funds pursuant to wire
instructions which shall be delivered by Seller to Buyer, at least two days
prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of the Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date and those relating to the period
prior to the Closing which Buyer agrees to assume pursuant to the prorations
and adjustments. Buyer shall not assume any other obligations or liabilities
of Seller, including (i) any obligations or liabilities under any Contract not
included in the Assumed Contracts, (ii) any obligations or liabilities under
the Assumed Contracts relating to the period prior to the Closing Date, (iii)
any claims or pending litigation or proceedings relating to the operation of
the Station prior to the Closing, (iv) any obligations or liabilities arising
under agreements entered into other than in the ordinary course of business,
(v) any obligation to any employee of the Station for severance benefits,
vacation time, or sick leave accrued prior to the Closing Date, except that
Buyer shall reimburse Seller for the amounts paid by Seller as of the Closing
Date in respect of such obligations, provided that the amount of such
reimbursement shall not exceed, in the aggregate, Five Thousand Dollars
($5,000), or (vi) any obligations or liabilities caused by, arising out of, or
resulting from any action or omission of Seller prior to the Closing, and all
such obligations and liabilities shall remain and be the obligations and
liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing and Authority. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Ohio. Seller has all requisite power and authority (i) to own, lease,
and use the Assets as now owned, leased, and used, (ii) to conduct the business
operations of the Station as now conducted, and (iii) to
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<PAGE> 13
execute and deliver this Agreement and the documents contemplated hereby, and
to perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Seller hereunder and thereunder. Seller is not
a participant of any joint venture or partnership with any person or entity
with respect to any part of the operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid, and binding
obligation of Seller, enforceable against it in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally, and by
judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, the performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent
of any third party; (ii) will not conflict with the Certificate of
Incorporation or Bylaws of Seller, (iii) will not conflict with, result in a
breach of, or constitute a default under, any law, judgment, order, ordinance,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality in a proceeding involving Seller; (iv) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Seller is a party or by which Seller may be bound; and (v) will not
create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. To the best of Seller's knowledge, (i)
Schedule 3.4 includes a true and complete list of the material Licenses; (ii)
Seller has delivered to Buyer true and complete copies of the Licenses listed
on such Schedule (including any amendment and other modifications thereto),
(iii) the Licenses have been validly issued, and Seller is the authorized legal
holder thereof, (iv) the Licenses listed on Schedule 3.4 comprise all of the
material licenses, permits, and other authorizations required from any
governmental or regulatory authority for the lawful conduct of the business and
operations of the Station in the manner and to the full extent they are now
conducted, (v) none of the Licenses is subject to any restriction or condition
that would limit the full operation of the Station as now operated, (vi) the
Licenses are in full force and effect, in all material respects, and the
conduct of the business and operations of the Station is in material accordance
therewith, and (vii) Seller has no reason to believe that any of the Licenses
would not be renewed by the FCC or other granting authority in the ordinary
course.
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<PAGE> 14
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein (including street address, legal description, owner,
and use and the location of all improvements thereon). The Real Property
listed on Schedule 3.5 comprises all real property interests necessary to
conduct the business and operations of the Station as now conducted. With
respect to each leasehold or subleasehold interest included in the Real
Property being conveyed under this Agreement, so long as Seller fulfills its
obligations under the lease therefor, Seller has enforceable rights to
nondisturbance and quiet enjoyment, and no third party holds any interest in
the leased premises with the right to foreclose upon Seller's leasehold or
subleasehold interest. All towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. Except as described on Schedule 3.5 and except for
such matters that could not reasonably be expected to have a material adverse
effect on the business or operations of the Station, to the best of Seller's
knowledge, all Real Property (including the improvements thereon) is in good
condition and repair consistent with its present use and ordinary wear and
tear, and such use complies with the terms of the FCC Licenses, all rules and
regulations of the FCC and generally accepted standards of good engineering
practice. All Real Property (including all improvements thereon) (i) is
available for immediate use consistent with the conduct of the business and
present operations of the Station, and (ii) complies in all material respects
with all applicable building or zoning codes and the regulations of any
governmental authority having jurisdiction. Seller has full legal and
practical access to the Real Property. All easements, rights-of-way, and real
property licenses relating to the Real Property have been properly recorded in
the appropriate public recording offices.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of inventory and spare parts that are not currently used in the operation of
the Station and the tangible personal property used to conduct the business and
operations of the Station as now conducted exclusive of motor vehicles. Except
as described in Schedule 3.6, Seller owns and has good title to each item of
Tangible Personal Property, and none of the Tangible Personal Property owned by
Seller is subject to any security interest, mortgage, pledge, conditional sales
agreement, or other lien or encumbrance, except Permitted Liens. Each material
item of Tangible Personal Property (other than items of inventory and spare
parts that are not currently used in the operation of the Station) is available
for immediate use in the business and operations of the Station except as
indicated on Schedule 3.6. To the best of Seller's knowledge, all items of
transmitting and studio equipment included in the Tangible Personal Property
will permit the Station to operate in accordance with the terms of the FCC
Licenses and the rules and regulations of the FCC, and with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
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3.7 Contracts. Schedule 3.7 is a true and complete list of all
Assumed Contracts except contracts with advertisers for the sale of advertising
time on the Station for cash at prevailing rates and which have not been
prepaid and which may be canceled by the Station without penalty on not more
than ninety days' notice. Seller has delivered to Buyer true and complete
copies of all written Assumed Contracts, true and complete memoranda of all
material oral Assumed Contracts (including any amendments and other
modifications to such Assumed Contracts), and a schedule summarizing Seller's
obligations under trade and barter agreements relating to the Station. To the
best of Seller's knowledge, all of the Assumed Contracts are in full force and
effect, and are valid, binding, and enforceable in accordance with their terms
and there is not under any Assumed Contract any default by any party thereto or
any event that, after notice or lapse of time or both, could constitute a
default. Except for the need to obtain the Consents listed in Schedule 3.3,
Seller has full legal power and authority to assign its rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability, or continuation of any
of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided in Section 6.1
and the other Consents described in Schedule 3.3, to the best of Seller's
knowledge, no consent, approval, permit, or authorization of, or declaration to
or filing with any governmental or regulatory authority, or any other third
party is required (i) to consummate this Agreement and the transactions
contemplated hereby, (ii) to permit Seller to assign or transfer the Assets to
Buyer, or (iii) to enable Buyer to conduct the business and operations of the
Station in essentially the same manner as such business and operations are now
conducted.
3.9 Intangibles. To the best of Seller's knowledge, Schedule 3.9
is a true and complete list of all material Intangibles (exclusive of those
listed in Schedule 3.4), all of which, are valid and in good standing and
uncontested. Seller has delivered to Buyer copies of all documents
establishing or evidencing all intangibles. Seller is not, to the best of its
knowledge, infringing upon or otherwise acting adversely to any trademarks,
trade names, service marks, service names, copyright, patents, patent
applications, know-how, methods, or processes owned by any other person or
persons, and, there is no claim or action pending, or threatened, with respect
thereto. To the best of Seller's knowledge, the Intangibles listed on Schedule
3.9 comprise all intangible property interests used to conduct the business and
operations of the Station as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.10 are in full
force and effect.
3.11 Reports. To the best of Seller's knowledge, all returns,
reports, and statements that the Station is currently required to file with the
FCC or place in its Public File or file with any other governmental agency have
been filed, and all reporting
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requirements of the FCC and other governmental authorities having jurisdiction
over Seller and the Station have been complied with in all material respects
and all of such returns, reports, and statements are substantially complete and
correct as filed.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12 contains a
true and complete list of all employees of the Station, their job description,
date of hire, salary and amount and date of last salary increase. Schedule
3.12 also contains a true and complete list as of the date of this Agreement of
all employee benefit plans or arrangements applicable to the employees of the
Station and all fixed or contingent liabilities or obligations of Seller with
respect to any person now or formerly employed by Seller at the Station,
including pension or thrift plans, individual or supplemental pension or
accrued compensation arrangements, contributions to hospitalization or other
health or life insurance programs, incentive plans, bonus arrangements, and
vacation, sick leave, disability and termination arrangements or policies,
including workers' compensation policies, and a description of all fixed or
contingent liabilities or obligations of Seller with respect to any person now
or formerly employed at the Station or any person now or formerly retained as
an independent contractor at the Station. Seller has furnished Buyer with true
and complete copies of all employee handbooks, employee rules and regulations,
and summary plan descriptions of the written plans and arrangements listed in
Schedule 3.12, and with descriptions, in writing, of the unwritten plans and
arrangements listed in Schedule 3.12. At Buyer's request, Seller will furnish
Buyer with true and complete copies of all applicable plan documents, trust
documents, and insurance contracts with respect to the plans and arrangements
listed on Schedule 3.12. All employee benefits and welfare plans or
arrangements listed in Schedule 3.12 were established and have been executed,
managed and administered in accordance with the Internal Revenue Code of 1986,
as amended, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all other laws. Seller is not aware of the existence of any
governmental audit or examination of any of such plans or arrangements or of
any facts which would lead it to believe that any such audit or examination is
pending or threatened. No action, suit, or claim with respect to any of such
plans or arrangements (other than routine claims for benefits) is pending or,
to the knowledge of Seller, threatened, and Seller possesses no knowledge of
any facts which could give rise to any such action, suit or claim.
(b) Labor Relations. Seller is not a party to or subject
to any collective bargaining agreements with respect to the Station. Seller
has no written or oral contracts of employment with any employee of the
Station, other than those listed in Schedule 3.7. Seller has complied in all
material respects with all laws, rules, and regulations relating to the
employment of labor, including those related to wages, hours, collective
bargaining, occupational safety, discrimination, and the payment of social
security and other payroll related taxes, and it has not received any notice
alleging that it has failed to comply in any
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material respect with any such laws, rules, or regulations. No controversies,
disputes, or proceedings are pending or, to the best of its knowledge,
threatened, between it and any employee (singly or collectively) of the
Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To the best of
Seller's knowledge, there is no union campaign being conducted to solicit cards
from employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
(c) Liabilities. Seller has no liability of any kind to
or in respect of any employee benefit plan, including withdrawal liability
under Section 4201 of ERISA. Seller has not incurred any accumulated funding
deficiency within the meaning of ERISA or Section 4971 of the Internal Revenue
Code. Seller has not failed to make any required contributions to any employee
benefit plan. The Pension Benefit Guaranty Corporation has not asserted that
Seller has incurred any liability in connection with any such plan. No lien
has been attached and no person has threatened to attach a lien on any property
of Seller as a result of a failure to comply with ERISA.
3.13 Taxes. To the best of the Seller's knowledge, (i) Seller has
filed or caused to be filed all federal income tax returns and all other
federal, state, county, local, or city tax returns which are required to be
filed, and it has paid or caused to be paid all taxes shown on those returns or
on any tax assessment received by it to the extent that such taxes have become
due, and (ii) there are no governmental investigations or other legal,
administrative, or tax proceedings pursuant to which Seller is or could be made
liable for any taxes, penalties, interest, or other charges, the liability for
which could extend to Buyer as transferee of the business of the Station, and
no event has occurred that could impose on Buyer any transferee liability for
any taxes, penalties, or interest due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, and except as set
forth on Schedule 3.14, to the best of Seller's knowledge, there is no claim,
legal action, counterclaim, nor any order, decree or judgment, in progress or
pending, or to the knowledge of Seller threatened, against or relating to
Seller with respect to its ownership or operation of the Station or otherwise
relating to the Assets or the business or operations of the Station, nor does
Seller know or have reason to be aware of any basis for the same. In
particular, but without limiting the generality of the foregoing, and except as
forth on Schedule 3.14, to the best of Seller's knowledge, there are no
applications, complaints or proceedings pending or, to the best of its
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the radio
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii)
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before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters.
(a) Seller has complied in all material respects with all
laws, rules, and regulations of all federal, state, and local governments (and
all agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis related to the past or present
operations, properties, or facilities of Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning release or threatened release of hazardous substances, public health
and safety, or pollution or protection of the environment.
(c) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and Seller has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property
or facility in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership and operation
of the Station (and there is no basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against Seller giving rise to any such liability) under any law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) In connection with its ownership or operation of the
Station, Seller has obtained and been in material compliance with all of the
terms and conditions of all permits, licenses, and other authorizations which
are required under, and has complied in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees,
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stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(f) To the best of Seller's knowledge and except as
otherwise indicated in studies or reports supplied to Buyer by Seller, all
properties and equipment used in the business of the Station are and have been
free of asbestos and asbestos-related products, PCB's, dioxins, and Extremely
Hazardous Substances (as defined in Section 302 of the Emergency Planning and
Community Right-to-Know Act).
(g) No pollutant, contaminant, or chemical, industrial,
hazardous, or toxic material or waste has ever been manufactured, buried,
stored, spilled, leaked, discharged, emitted, or released by Seller in
connection with its ownership and operation of the Station or, to the best of
Seller's knowledge, after due investigation, by any other party on any Real
Property.
3.16 Compliance with Laws. To the best Seller's knowledge, Seller
has complied in all material respects with the Licenses and all federal, state,
and local laws, rules, regulations, and ordinances applicable or relating to
the ownership and operation of the Station. To the best of Seller's knowledge,
neither the ownership or use of the properties of the Station nor the conduct
of the business or operations of the Station conflicts with the rights of any
other person or entity.
3.17 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will
knowingly contain any untrue statement of a material fact.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and at Closing will be duly qualified to conduct business as a
foreign corporation in the State of Ohio. Buyer has all requisite power and
authority to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder and thereunder.
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4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the documents contemplated hereby (with or without the giving of notice,
the lapse of time, or both): (i) do not require the consent of any third party;
(ii) will not conflict with the Certificate of Incorporation or Bylaws of
Buyer; (iii) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, injunction, decree, rule, regulation,
or ruling of any court or governmental instrumentality; (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Buyer is a party or by which Buyer may be bound, such that Buyer could
not acquire the Assets or operate the Station.
4.4 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will
knowingly contain any untrue statement of a material fact.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as amended, and the rules, regulations
and policies of the FCC. Buyer know of no fact that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC
disqualify Buyer as a assignee of the FCC Licenses or as the owner and operator
of the Station.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5.
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5.2 Compensation. Seller shall not materially increase the
compensation, bonuses, or other benefits payable or to be payable to any person
employed in connection with the conduct of the business or operations of the
Station, except in accordance with past practices.
5.3 Contracts. Seller will not enter into any contract or
commitment which is not terminable on 90-days notice relating to the Station or
the Assets, or amend or terminate any Contract (or waive any material right
thereunder), or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness) that will be binding on
Buyer after Closing, except for cash time sales agreements made in the ordinary
course of business and other contracts or commitments involving less than
$5,000. Prior to the Closing Date, Seller shall deliver to Buyer a list of all
Contracts entered into between the date of this Agreement and the Closing Date,
together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the material Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date, (ii) liens for current taxes
not yet due and payable, and (iii) mechanics' liens and other similar liens,
which shall be removed prior to the Closing Date either by payment or posting
an appropriate indemnity bond.
5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked, suspended, or modified, or take any action that could cause the FCC or
any other governmental authority to institute proceedings for the suspension,
revocation, or adverse modification of any of the Licenses. Seller shall not
fail to prosecute with due diligence any applications to any governmental
authority in connection with the operation of the Station.
5.7 Rights. Seller shall not knowingly waive any material right
relating to the Station or any of the Assets.
5.8 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its material obligations under this Agreement or that
could hinder or delay the consummation of the transactions contemplated by this
Agreement.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access during normal business
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hours to the Assets and to all other properties, equipment, books, records,
Contracts, and documents relating to the Station for the purpose of audit and
inspection, including inspections relating to environmental and engineering
matters, and will furnish or cause to be furnished to Buyer or its authorized
representatives all material information with respect to the affairs and
business of the Station that Buyer may reasonably request (including any
operations reports produced with respect to the affairs and business of the
Station).
5.10 Maintenance of Assets. Seller shall maintain all of the
Assets in their current existing condition (ordinary wear and tear and casualty
loss excepted), and use, operate, and maintain all of the Assets in a
reasonable manner. Seller shall maintain inventories of spare parts and
expendable supplies at levels consistent with past practices.
5.11 Insurance. Seller shall maintain substantially the same
insurance coverage provided by the existing insurance policies on the Station
and the Assets.
5.12 Consents. Seller shall obtain the Consents described in
Section 8.2(b), without any material change in the terms or conditions of any
Contract or License as in effect on the date of this Agreement. Seller shall
advise Buyer of any communications it receives concerning the Consents and of
any conditions proposed, considered, or requested for any of the Consents.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing
of any material developments of which Seller has actual knowledge with respect
to the business or operations of the Station, and of any material change in any
of the information contained in Seller's representations and warranties
contained in Section 3 of this Agreement.
5.15 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.16 Preservation of Business. Seller shall operate the Station in
the ordinary course of business consistent with its past practices.
5.17 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
5.18 Indebtedness. Seller shall not incur, create, assume or
permit to exist any Indebtedness, except (i) existing indebtedness to be
satisfied at or prior to the Closing, (ii)
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unsecured trade accounts payable and other unsecured current Indebtedness
incurred in the ordinary course of business between the date hereof and the
Closing Date (but excluding any Indebtedness for borrowed money) ("Trade
Indebtedness") and (iii) Indebtedness for taxes arising between the date hereof
and the Closing Date; provided, however, that the aggregate amount of Trade
Indebtedness incurred between the date hereof and the Closing Date shall not
exceed Twenty Five Thousand Dollars ($25,000).
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
application as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by the party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any requests
for reconsideration or judicial review of the FCC Consent. If the Closing
shall not have occurred for any reason within the original effective period of
the FCC Consent, and neither party shall have terminated this Agreement under
Section 9, the parties shall jointly request an extension of the effective
period of the FCC Consent. No extension of the FCC Consent shall limit the
exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of the Seller until the Closing.
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing. If any damage or
destruction of the Assets or any other event occurs which prevents in any
material respect signal transmission by the Station in the normal and usual
manner and Seller is unable to restore or replace the Assets so that such
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conditions are cured and normal and usual transmission is resumed in all
material respects before the Closing Date, Seller shall send Buyer written
notice of such event (a "Casualty Notice"), which notice shall contain an
estimate, in Seller's reasonable judgment, of the costs to repair or replace
the damaged or destroyed Assets, as well as the amount of any credit or refund
Seller will offer Buyer due to the inadequacy of Seller's insurance proceeds to
restore or place the Assets in all material respects. Within five (5) days
after its receipt of a Casualty Notice, Buyer may, by written notice to seller
(a "Casualty Termination Notice"), elect to terminate the Agreement and receive
a refund of the Escrow Deposit and interest earned thereon, and neither party
shall thereafter have any liability to the other hereunder. In the event that
Buyer does not give Seller a timely and unconditional Casualty Termination
Notice, then Buyer shall, proceed to close this Agreement and complete the
restoration and replacement of such damaged Assets and Seller shall deliver to
Buyer all insurance proceeds received in connection with such damage or
destruction of the Assets; provided, however, that Buyer will receive a credit
or refund at Closing for any funds it provides to the extent such credit or
refund based on Seller's reasonable estimate of the repair or replacement cost
is set forth in a Casualty Notice from Seller.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. Except as
provided in this Paragraph each party will refrain from disclosing any such
information to any third party. If this Agreement is terminated, each party
will return to the other party all copies of all documents and other all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Notice Regarding Employees. Buyer shall notify Seller no
later than seven days prior to the Closing of those employees of the Station
that Buyer intends to offer to employ following the Closing; provided, however,
that neither this Section 6.5 nor Buyer's delivery of the notice contemplated
hereby shall be deemed to create any obligation on the part of Buyer to offer
to employ or employ any employee of the Station.
6.6 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable commercial efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Buyer shall have no obligation (i)
to expend funds to obtain
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any of the Consents or (ii) to agree to any adverse change in any License or
Assumed Contract to obtain a Consent required with respect thereto.
6.7 State Tax Filings. Seller shall continue to file Ohio sales
tax returns with respect to the Station in accordance with Seller's past
practices.
6.8 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of four (4) years from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of four (4) years from the Closing Date any books and records relating to the
Assets that are included in the Assets.
6.9 Broker. Each of Buyer and Seller represents and warrants that
neither it nor any person or entity acting on its behalf has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement.
6.10 Noncompetition Agreement. At Closing, Buyer, Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6.10 and Seventy
Thousand Dollars ($70,000) of the Purchase Price shall be allocated to the
covenants of Seller.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all respects with all material covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer
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under Section 6.1 hereof, Seller shall have complied with any material
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all material Licenses and there shall not have been any modification
of any material License that could have an adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any material License. All FCC Licenses are material Licenses.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing, there shall have been no material adverse change in the assets
or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct or business of the Station.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all material covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
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<PAGE> 27
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than December 5, 1995. If Buyer fails to
specify the date for Closing pursuant to the preceding sentence prior to the
fifth business day after the date upon which the FCC Consent becomes a Final
Order, the Closing shall take place on the tenth business day after the date
upon which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, 1255 23rd Street, N.W, Suite 500,
Washington, D.C. 20037, or such other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for Permitted Liens.
(b) Estoppel Certificate. Estoppel Certificate of the
Lessor of the leasehold interests listed in Schedule 3.5.
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Certificates. A certificate, dated as of the Closing
Date, executed by Seller certifying (1) that the material representations and
warranties of Seller contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date;
and (2) that Seller has in all material respects performed and complied with
all of its material obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date.
Such additional certificates and confirmations to Buyer's lenders as Buyer may
reasonably request in connection with obtaining financing for the performance
of its payment obligations hereunder.
- 20 -
<PAGE> 28
(e) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses and Assumed Contracts;
(f) Opinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(f)
hereto.
(g) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.10 duly executed by Seller.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase price as provided in
Section 2.4(a);
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its President, certifying (1)
that the representations and warranties of Buyer contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.10, duly executed by Buyer and the payment
of the portion of the Purchase Price allocated thereto.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written notice to Buyer, upon the occurrence of any
of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
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<PAGE> 29
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment not caused by Seller,
decree, or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by December 31, 1996.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, not caused by Buyer,
decree, or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by December 31, 1996.
(d) Casualty Termination Notice. Buyer shall have given
a timely and unconditional Casualty Termination Notice to Seller pursuant to
Section 6.3 hereof.
9.3 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited with First Union National Bank
of Florida, as escrow agent (the "Escrow Agent"), the sum of Three Hundred
Thousand Dollars ($300,000) in accordance with an Escrow Agreement among Buyer,
Seller and the Escrow Agent in the form of Schedule 9.3. All funds deposited
with the Escrow Agent shall be held and disbursed in accordance with the terms
of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1 or Section 9.2 and Buyer is not in material breach of any provision of this
Agreement, all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, shall be disbursed to or at the direction of
Buyer.
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<PAGE> 30
(c) If this Agreement is terminated by Seller due to
Buyer's breach of this Agreement, then the amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent shall be disbursed by the
Escrow Agent to or at the direction of Seller.
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of any provision of this Agreement, the parties hereto shall not have any
further liability to each other with respect to the purchase and sale of the
Assets. If this Agreement is terminated by Seller due to Buyer's material
breach of any provision of this Agreement, then the payment to Seller pursuant
to Section 9.3(c) shall be liquidated damages and shall constitute full payment
and the exclusive remedy for any damages suffered by Seller by reason of
Buyer's material beach of this Agreement. Seller and Buyer agree in advance
that actual damages would be difficult to ascertain and that the amount of
Three Hundred Thousand ($300,000) is a fair and equitable amount to reimburse
Seller for damages sustained due to Buyer's material breach of this Agreement.
If prior to Closing, Seller is in material breach of its obligations under this
Agreement, Buyer's sole remedy shall be an action for specific performance of
this Agreement and Buyer expressly waives any right to pursue a claim for
monetary damages.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the closing for a period of
eighteen (18) months provided, however, that as to any representation or
warranty made by either the Buyer or Seller which the other party knows, or has
reason to believe, is not true as of the Closing Date, such representation or
warranty shall not survive the Closing. Until the Closing, Buyer and Seller
will immediately advise each other, in a detailed written notice, of any fact
or occurrence or any pending or threatened occurrence of which any of them
obtains knowledge and which (a) (if existing and known at the date of the
execution of this Agreement) would have been required to be set forth or
disclosed in or pursuant to this Agreement or a Schedule hereto, (b) (if
existing and known at any time prior to or at the Closing) would make the
performance by any party of a covenant contained in this Agreement impossible
or make that performance materially more difficult than in the absence of that
fact or occurrence, or (c) (if existing and known at the time of the Closing)
would cause a condition to any party's obligations under this Agreement not to
be fully satisfied.
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
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<PAGE> 31
(a) Subject to the proviso contained in the first
sentence of Section 10.1, any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or material omission or
nonfulfillment of any covenant by Seller contained in this Agreement or in any
certificate, document, or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages
contingent or otherwise resulting from the operation or ownership of the
Station prior to the Closing Date, including any liabilities arising under the
Licenses or the Assumed Contracts which relate to events occurring prior to the
Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Subject to the proviso contained in the first
sentence of Section 10.1, any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or material omission or
nonfulfillment of any covenant by Buyer contained in this Agreement or in any
certificate, Schedule, document, or instrument delivered to Seller under this
Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages
contingent or otherwise, resulting from the operation or ownership of the
Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
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<PAGE> 32
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within as soon
as practicable after written notice of such action, suit, or proceeding was
given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate int he defense of any third party claim, it shall be bound by the
results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary
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<PAGE> 33
damages alone would not be adequate to compensate Buyer for its injury. Buyer
shall therefore be entitled, as its sole and exclusive remedy, to obtain
specific performance of the terms of this Agreement. If any action is brought
by Buyer to enforce this Agreement, Seller shall waive the defense that there
is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of the fee payable to the FCC in connection with the
filing of the application for FCC Consent. Except as otherwise provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement, including all fees and expenses of counsel, accountants, agents, and
representatives, and each party shall be responsible for all fees or
commissions payable to any finder, broker, advisor, or similar person retained
by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration in
the District of Columbia by a panel of three arbitrators. Seller and Buyer
shall each designate one disinterested arbitrator, and the two arbitrators so
designated shall select the third arbitrator. Before undertaking to resolve
the dispute, each arbitrator shall be duly sworn faithfully and fairly to hear
and examine the matters in controversy and to make a just award according to
the best of his or her understanding. The arbitration hearing shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association. The written decision of a majority of the arbitrators
shall be final and binding on Seller and Buyer. The costs and expenses of the
arbitration proceeding shall be assessed between Seller and Buyer in a manner
to be decided by a majority of the arbitrators, and the assessment shall be set
forth in the decision and award of the arbitrators. Judgment on the award, if
it is not paid within thirty days, may be entered in any court having
jurisdiction over the matter. No action at law or suit in equity based upon
any claim arising out of or related to this Agreement shall be instituted in
any court by Seller or Buyer against the other except (i) an action to compel
arbitration pursuant to this Section, (ii) an action to enforce the award of
the arbitration panel rendered in accordance with this Section, or (iii) a suit
for specific performance pursuant to Section 10.5.
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<PAGE> 34
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Richard L. Woodby
13257 160th Avenue
Grand Haven, Michigan 49417
With a copy to: John S. Neely, Esquire
Miller & Miller
Suite 760
1990 M Street, N.W.
Washington, D.C. 20036
If to Buyer: James West
The Christian Network
18401 U.S. Highway 19 North
Clearwater, Florida 34624
With a copy to: John R. Feore, Jr., Esquire
Dow, Lohnes & Albertson
1255 23rd Street, N.W., Suite 500
Washington, D.C. 20037
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to a subsidiary or affiliated entity without seeking or obtaining
Seller's prior approval, in which event Buyer shall have no further obligation
hereunder. Upon any permitted assignment by Buyer or Seller in accordance with
this Section 11.4, all references to "Buyer" herein shall be deemed to be
references to Buyer's assignee and all references to "Seller" herein shall be
deemed to be references to Seller's assignee. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of
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<PAGE> 35
this Agreement, including, in the case of Seller, any additional bills of sale,
deeds, or other transfer documents that, including, in the case of Seller, any
additional bills of sale, deeds, or other transfer documents that, in the
reasonable opinion of Buyer, may be necessary to ensure, complete, and evidence
the full and effective transfer of the Assets to Buyer pursuant to this
Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
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<PAGE> 36
11.12 Guaranty. Paxson Communications Corp. shall guaranty the
Buyer's payment of the Purchase Price pursuant to Section 2.4 hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 37
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
BUYER: CHANNEL 26 OF DAYTON, INC.
By: /s/ James L. West
----------------------------------
Name: James L. West
--------------------------------
SELLER: VIDEO MALL COMMUNICATIONS, INC.
By: /s/ Richard L. Woodby
----------------------------------
Name: Richard L. Woodby
-------------------------------
Secretary/Treasurer
PAXSON COMMUNICATIONS CORP. PAXSON COMMUNICATIONS CORP.
[For purposes of Section
11.12 hereof]
By: /s/ Lowell W. Paxson
---------------------------------
Name:
--------------------------------
<PAGE> 1
EXHIBIT 10.4
ASSET PURCHASE AGREEMENT
BY AND AMONG
WHITEHEAD MEDIA, INC.
MORTON J. KENT
AND
CANTON, INC.
FOR
TELEVISION STATION WOAC(TV),
CANTON, OHIO
MAY 23, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . 2
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles" . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS. . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . 4
(a) Prorations . . . . . . . . . . . . . . . . 4
(b) Manner of Determining Adjustments . . . . . 5
2.4 Payment of Purchase Price . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . 6
3.1 Organization, Standing and Authority . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . 6
3.4 Governmental Licenses . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . 7
3.6 Title to and Condition of Tangible Personal
Property . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . 8
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . 9
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . 9
(a) Employees and Compensation . . . . . . . . 9
(b) Labor Relations . . . . . . . . . . . . . . 10
(c) Liabilities . . . . . . . . . . . . . . . . 10
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Claims and Legal Actions . . . . . . . . . . . . . . 10
3.15 Environmental Matters . . . . . . . . . . . . . . . 11
3.16 Compliance with Laws . . . . . . . . . . . . . . . . 11
3.17 Full Disclosure . . . . . . . . . . . . . . . . . . 11
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . . 11
4.1 Organization, Standing and Authority . . . . . . . . 11
4.2 Authorization and Binding Obligation . . . . . . . . 11
4.3 Absence of Conflicting Agreements . . . . . . . . . 12
4.4 Full Disclosure . . . . . . . . . . . . . . . . . . 12
4.5 Buyer Qualifications . . . . . . . . . . . . . . . . 12
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . 12
5.1 Generally . . . . . . . . . . . . . . . . . . . . . 12
5.2 Compensation . . . . . . . . . . . . . . . . . . . . 12
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . 13
5.4 Additional Program Obligations . . . . . . . . . . . 13
5.5 Disposition of Assets . . . . . . . . . . . . . . . 13
5.6 Encumbrances . . . . . . . . . . . . . . . . . . . . 13
5.7 Licenses . . . . . . . . . . . . . . . . . . . . . . 13
5.8 Rights . . . . . . . . . . . . . . . . . . . . . . . 14
5.9 No Inconsistent Action . . . . . . . . . . . . . . . 14
5.10 Access to Information . . . . . . . . . . . . . . . 14
5.11 Maintenance of Assets . . . . . . . . . . . . . . . 14
5.12 Insurance . . . . . . . . . . . . . . . . . . . . . 14
5.13 Consents . . . . . . . . . . . . . . . . . . . . . . 14
5.14 Books and Records . . . . . . . . . . . . . . . . . 15
5.15 Notification . . . . . . . . . . . . . . . . . . . . 15
5.16 Compliance with Laws . . . . . . . . . . . . . . . . 15
5.17 Preservation of Business . . . . . . . . . . . . . . 15
5.18 Personnel Recommendations . . . . . . . . . . . . . 15
5.19 Indebtedness . . . . . . . . . . . . . . . . . . . . 15
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . 15
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . 15
6.2 Control of the Station . . . . . . . . . . . . . . . 16
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
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<TABLE>
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6.4 Confidentiality . . . . . . . . . . . . . . . . . . 16
6.5 Environmental and Engineering Audit . . . . . . . . 16
6.6 Cooperation . . . . . . . . . . . . . . . . . . . . 17
6.7 State Tax Filings . . . . . . . . . . . . . . . . . 17
6.8 Access to Books and Records . . . . . . . . . . . . 17
6.9 Broker . . . . . . . . . . . . . . . . . . . . . . . 17
6.10 Noncompetition Agreement . . . . . . . . . . . . . . 17
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . 17
7.1 Conditions to Obligations of Buyer . . . . . . . . . 17
(a) Representations and Warranties . . . . . . 18
(b) Covenants and Conditions . . . . . . . . . 18
(c) Consents . . . . . . . . . . . . . . . . . 18
(d) FCC Consent . . . . . . . . . . . . . . . . 18
(e) Governmental Authorizations . . . . . . . . 18
(f) Deliveries . . . . . . . . . . . . . . . . 18
(g) Adverse Change . . . . . . . . . . . . . . 18
7.2 Conditions to Obligations of Seller . . . . . . . . 18
(a) Representations and Warranties . . . . . . 19
(b) Covenants and Conditions . . . . . . . . . 19
(c) Deliveries . . . . . . . . . . . . . . . . 19
(d) FCC Consent . . . . . . . . . . . . . . . . 19
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . 19
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . 19
(a) Closing Date . . . . . . . . . . . . . . . 19
(b) Closing Place . . . . . . . . . . . . . . . 19
</TABLE>
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8.2 Deliveries by Seller . . . . . . . . . . . . . . . . 19
(a) Transfer Documents . . . . . . . . . . . . 19
(b) Estoppel Certificate . . . . . . . . . . . 20
(c) Consents . . . . . . . . . . . . . . . . . 20
(d) Certificates . . . . . . . . . . . . . . . 20
(e) Licenses, Contracts, Business Records,
Etc. . . . . . . . . . . . . . . . . . . . 20
(f) Opinion of Counsel . . . . . . . . . . . . 20
(g) Noncompetition Agreement . . . . . . . . . 20
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . 20
(a) Purchase Price . . . . . . . . . . . . . . 20
(b) Assumption Agreements . . . . . . . . . . . 20
(c) Officer's Certificate . . . . . . . . . . . 20
(d) Opinion of Counsel . . . . . . . . . . . . 21
(e) Noncompetition Agreement . . . . . . . . . 21
SECTION 9. TERMINATION. . . . . . . . . . . . . . . . . . . . . 21
9.1 Termination by Seller . . . . . . . . . . . . . . . 21
(a) Conditions . . . . . . . . . . . . . . . . 21
(b) Judgments . . . . . . . . . . . . . . . . . 21
(c) Upset Date . . . . . . . . . . . . . . . . 21
9.2 Termination by Buyer . . . . . . . . . . . . . . . . 21
(a) Conditions . . . . . . . . . . . . . . . . 21
(b) Judgments . . . . . . . . . . . . . . . . . 21
(c) Upset Date . . . . . . . . . . . . . . . . 21
9.3 Escrow Deposit . . . . . . . . . . . . . . . . . . . 21
9.4 Rights on Termination . . . . . . . . . . . . . . . 22
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . 23
10.1 Representations and Warranties . . . . . . . . . . . 23
10.2 Indemnification by Seller . . . . . . . . . . . . . 23
10.3 Indemnification by Buyer . . . . . . . . . . . . . . 24
10.4 Procedure for Indemnification . . . . . . . . . . . 24
10.5 Specific Performance . . . . . . . . . . . . . . . . 25
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . 25
10.7 Limitations . . . . . . . . . . . . . . . . . . . . 25
SECTION 11. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 25
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . 25
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . 26
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . 26
11.4 Benefit and Binding Effect . . . . . . . . . . . . . 27
11.5 Further Assurances . . . . . . . . . . . . . . . . . 27
11.6 GOVERNING LAW . . . . . . . . . . . . . . . . . . . 27
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . 27
11.8 Gender and Number . . . . . . . . . . . . . . . . . 28
</TABLE>
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11.9 Entire Agreement . . . . . . . . . . . . . . . . . . 28
11.10 Waiver of Compliance; Consents . . . . . . . . . . . 28
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . 28
11.12 Guaranty. . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
- v -
<PAGE> 7
LIST OF SCHEDULES
Schedule 2.2 - Excluded Property
Schedule 3.1 - Joint Ventures
Schedule 3.3 - Consents
Schedule 3.4 - Licenses
Schedule 3.4A - Cable Carriage
Schedule 3.5 - Real Property
Schedule 3.6 - Tangible Personal Property
Schedule 3.7 - Assumed Contracts
Schedule 3.9 - Intangibles
Schedule 3.10 - Insurance Policies
Schedule 3.12 - EmployeeMatters
Schedule 3.14 - Litigation Matters
Schedule 6.10 - Noncompetition Agreement
Schedule 9.3 - Escrow Agreement
Schedule 8.2(f) - Form of Opinions of Seller's Counsel
Schedule 8.3(d) - Form of Opinion of Buyer's Counsel
- vi -
<PAGE> 8
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of May 23, 1995, by and
among Whitehead Media, Inc., a Delaware corporation ("Buyer"), Morton J. Kent,
FCC Licensee for Television Station WOAC-TV 67, and Canton, Inc., a Tennessee
corporation wholly owned by Morton J. Kent, authorized to and doing business in
the State of Ohio under the fictitious name of WOAC-TV 67 (collectively, the
"Seller").
RECITALS
A. Seller is the licensee of and owns and operates television
station WOAC(TV), Canton, Ohio (the "Station"), pursuant to licenses issued by
the Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer wishes to buy, substantially
all the assets that are owned by Seller or in which Seller has a transferable
interest and which are used or useful in the business or operations of the
Station, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for (i)
the sale of advertising and/or programming time on the Station and (2) the
lease of space on Seller's tower prior to the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1 and 2.2.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are to be assumed by Buyer upon its purchase of the Station, (ii) all
Contracts entered into by Seller in the ordinary course of business which
comply with the provisions of Section 5.3 hereof; and (iii) any other Contracts
entered into by Seller between the date of this Agreement and the Closing Date
that Buyer agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this
<PAGE> 9
Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the business or operations
of the Station, and (i) which are in effect on the date of this Agreement or
(ii) which are entered into by Seller between the date of this Agreement and
the Closing Date.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing) applied for, issued to, or owned
by Seller or under which Seller is licensed or franchised and which are used or
useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local government authorities to Seller in connection with the conduct
of the business or operations of the Station, together with any additions
thereto between the date of this Agreement and the Closing Date.
"Permitted Liens" means liens for taxes not yet due and payable.
"Purchase Price" means the purchase price specified in Section 2.3.
<PAGE> 10
"Real Property" means Seller's interests in real property, leaseholds
and subleaseholds, purchase options, easements, licenses, rights to access, and
rights of way, and all buildings and other improvements thereon, which are used
or useful in the business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
furniture, leasehold improvements, office equipment, plant, inventory, spare
parts, and other tangible personal property which is owned by the Seller or in
which Seller has an interest and which is used or useful in the conduct of the
business or operations of the Station, together with any additions thereto
between the date of this Agreement and the Closing Date, but excluding any
Tangible Personal Property consumed in the ordinary course of business between
the date hereof and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
assign and deliver to Buyer on the Closing Date, and Buyer agrees to purchase,
and accept all of the Assets and property interests owned by Seller or in which
Seller has a property interest which are used or useful in connection with the
conduct of the business or operations of the Station, (but excluding all
vehicles) together with any additions thereto between the date of this
Agreement and the Closing Date, but excluding the assets described in Section
2.2, free and clear of any claims, liabilities, security interests, mortgages,
liens, pledges, or encumbrances of any nature whatsoever (except for Permitted
Liens), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles, including the goodwill of
the Station, if any;
(f) All proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Station, which belong to
Seller and is within its possession and control;
(g) All choses in action of Seller relating to
the Station that are assignable to Buyer as provided herein except as set forth
in Schedule 2.2; and
(h) All records required by the FCC to be kept by
the Station and copies of all other books and records which belong to Seller
and are within its possession and control relating to the business or
operations of the Station (exclusive of corporate, financial, tax returns
<PAGE> 11
and accounting records), including executed copies of the Assumed Contracts;
and
(i) The Accounts Receivable as of 11:59 p.m.,
local time, on the day prior to the Closing Date ("Seller's Receivables").
2.2 Excluded Assets. The Assets shall exclude the following
assets.
(a) Seller's cash or cash equivalents on hand as
of the Closing and all other cash in any of Seller's bank or savings accounts;
any insurance policies, letters of credit, or other similar items and cash
surrender value in regard thereto; and any stocks, bonds, certificates of
deposit and similar securities or other investments;
(b) All corporate and accounting records of
Seller and copies of all other books and records relating to the business and
operations of the Station; and
(c) All property listed on Schedule 2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets shall be
SIX MILLION SIX HUNDRED THOUSAND DOLLARS ($6,600,000), plus the price of the
Accounts Receivable as determined in subsection (c) hereof, adjusted as
provided in subsections (a) and (b) below:
(a) Prorations. The Purchase Price shall be
increased or decreased as required to effectuate the proration of expenses as
of 11:59 p.m. local time, on the day prior to the Closing Date. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Asset under this Agreement which shall be governed by Section
11.1 hereof) and similar prepaid and deferred items, shall be prorated between
Buyer and Seller in accordance with the principle that Seller shall be
responsible for all expenses, costs, and liabilities allocable to the period
prior to the Closing Date, and Buyer shall be responsible for all expenses,
costs, and obligations allocable to the period on and after the Closing Date.
Notwithstanding the preceding sentence, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts not included
in the Assumed Contracts including specifically all cash program licensing
agreements and any other obligation or liability not being assumed by Buyer in
accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any
adjustments will, insofar as feasible, be determined and paid on the Closing
Date, with final settlement and payment by the appropriate party occurring no
later than ninety (90) days after the Closing Date or such other date as the
parties shall mutually agree upon.
(c) Accounts Receivable. Buyer shall purchase
the Accounts Receivable at Closing for the amount outstanding as of the Closing
less a two percent (2%) reserve, agency and representative commissions, if any,
and a fifteen percent (15%) discount. Seller shall pay any sales commissions
owed to its employees on the Accounts Receivable.
<PAGE> 12
2.4 Payment of Purchase Price. The Purchase Price shall be paid
by Buyer to Seller as follows: At the Closing, Buyer shall pay to Seller the
sum of SIX MILLION SIX HUNDRED THOUSAND DOLLARS ($6,600,000), plus the price of
the Accounts Receivable, adjusted as provided above, by wire transfer of
same-day funds pursuant to wire instructions which shall be delivered by Seller
to Buyer, at least two days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of the Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date and those relating to the period
prior to the Closing which Buyer agrees to assume pursuant to the prorations
and adjustments. Buyer shall not assume any other obligations or liabilities
of Seller, including (i) any obligations or liabilities under any Contract not
included in the Assumed Contracts, (ii) any obligations or liabilities under
the Assumed Contracts relating to the period prior to the Closing Date, (iii)
any claims or pending litigation or proceedings relating to the operation of
the Station prior to the Closing, (iv) any obligations or liabilities arising
under agreements entered into other than in the ordinary course of business,
(v) any obligation to any employee of the Station for severance benefits,
vacation time, or sick leave accrued prior to the Closing Date relating to any
employee of Seller who is not employed or offered employment by Buyer within
the 90-day adjustment period, or (vi) any obligations or liabilities caused by,
arising out of, or resulting from any action or omission of Seller prior to the
Closing, and all such obligations and liabilities shall remain and be the
obligations and liabilities solely of Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing and Authority. Morton J. Kent, an
individual, is the FCC Licensee for Television Station WOAC-TV 67, and Canton,
Inc. is a Tennessee corporation, wholly owned by Morton J. Kent, authorized to
and doing business in the State of Ohio under the fictitious name of WOAC-TV
67. Seller has all requisite power and authority (i) to own, lease, and use
the Assets as now owned, leased, and used, (ii) to conduct the business
operations of the Station as now conducted, and (iii) to execute and deliver
this Agreement and the documents contemplated hereby, and to perform and comply
with all of the terms, covenants, and conditions to be performed and complied
with by Seller hereunder and thereunder. Seller is not a participant of any
joint venture or partnership with any person or entity with respect to any part
of the operations of the Station or any of the Assets, except as disclosed on
Schedule 3.1.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement, the Escrow Agreement and
Noncompetition Agreement by Seller have been duly authorized by all necessary
individual and corporate actions on the part of Seller. This Agreement has
been duly executed and delivered by Seller and constitutes the legal, valid,
and binding obligation of Seller, enforceable against it in accordance with its
terms except as the enforceability of this Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable
<PAGE> 13
remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, the performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (i) do not require the consent
of any third party; (ii) will not conflict with, result in a breach of, or
constitute a default under, any law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental
instrumentality in a proceeding involving Seller; (iii) will not conflict with,
constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Seller is a party or by which Seller may be bound; (iv) will not conflict
with Canton, Inc.'s Articles of Incorporation or By-Laws; and (v) will not
create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. To the best of Seller's knowledge, (i)
Schedule 3.4 includes a true and complete list of the material Licenses; (ii)
Seller has delivered to Buyer true and complete copies of the Licenses listed
on such Schedule (including any amendment and other modifications thereto),
(iii) the Licenses have been validly issued, and Seller is the authorized legal
holder thereof, (iv) the Licenses listed on Schedule 3.4 comprise all of the
material licenses, permits, and other authorizations required from any
governmental or regulatory authority for the lawful conduct of the business and
operations of the Station in the manner and to the full extent they are now
conducted, (v) none of the Licenses is subject to any restriction or condition
that would limit the full operation of the Station as now operated, (vi) the
Licenses are in full force and effect, in all material respects, and the
conduct of the business and operations of the Station is in material accordance
therewith, and (vii) Seller has no reason to believe that any of the Licenses
would not be renewed by the FCC or other granting authority in the ordinary
course. Schedule 3.4A lists all cable systems carrying the Station together
with the name of the cable system and the reported number of cable subscribers
per system.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a description of all the Real Property and Seller's interests therein
(including street address, legal description, owner, and use and the location
of all improvements thereon). The Real Property listed on Schedule 3.5
comprises all real property interests necessary to conduct the business and
operations of the Station as now conducted. With respect to each leasehold or
subleasehold interest included in the Real Property being conveyed under this
Agreement, to the best of Seller's knowledge, so long as Seller fulfills its
obligations under the lease therefor, Seller has enforceable rights to
nondisturbance and quiet enjoyment, and no third party holds any interest in
the leased premises with the right to foreclose upon Seller's leasehold or
subleasehold interest. All towers, guy anchors, and buildings and other
improvements included in the Assets are located entirely on the Real Property
listed in Schedule 3.5. To the best of Seller's knowledge, all Real Property
(including the improvements thereon) is in good condition and repair consistent
with its present use, and such use complies with the terms of the FCC Licenses,
all rules and regulations of the FCC and generally accepted standards of good
engineering practice. All Real Property (including all improvements thereon)
(i) is available for immediate use in the conduct of the business and
operations of the Station, and (ii) complies in all material respects with all
applicable building or zoning codes and the regulations of
<PAGE> 14
any governmental authority having jurisdiction. Seller has full legal and
practical access to the Real Property. To the best of Seller's knowledge,
there are no easements or rights-of-way that interfere with Seller's use and
enjoyment of the Real Property as intended.
3.6 Title to and Condition of Tangible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property used to conduct the business and operations of
the Station as now conducted exclusive of motor vehicles. Except as described
in Schedule 3.6, Seller owns and has good title to each item of Tangible
Personal Property, and none of the Tangible Personal Property owned by Seller
is subject to any security interest, mortgage, pledge, conditional sales
agreement, or other lien or encumbrance, except Permitted Liens. Each item of
Tangible Personal Property is available for immediate use in the business and
operations of the Station. To the best of Seller's knowledge, all items of
transmitting and studio equipment included in the Tangible Personal Property
will permit the Station to operate in accordance with the terms of the FCC
Licenses and the rules and regulations of the FCC, and with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Assumed Contracts except contracts with advertisers for the sale of advertising
time on the Station for cash at prevailing rates and which have not been
prepaid and which may be canceled by the Station without penalty on not more
than ninety days' notice. Seller has delivered to Buyer true and complete
copies of all written Assumed Contracts, true and complete memoranda of all
material oral Assumed Contracts (including any amendments and other
modifications to such Assumed Contracts), and a schedule summarizing Seller's
obligations under trade and barter agreements relating to the Station. To the
best of Seller's knowledge, all of the Assumed Contracts are in full force and
effect, and are valid, binding, and enforceable in accordance with their terms
and there is not under any Assumed Contract any default by any party thereto or
any event that, after notice or lapse of time or both, could constitute a
default. Except for the need to obtain the Consents listed in Schedule 3.3,
Seller has full legal power and authority to assign its rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability, or continuation of any
of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided in Section 6.1
and the other Consents described in Schedule 3.3, to the best of Seller's
knowledge, no consent, approval, permit, or authorization of, or declaration to
or filing with any governmental or regulatory authority, or any other third
party is required (i) to consummate this Agreement and the transactions
contemplated hereby, (ii) to permit Seller to assign or transfer the Assets to
Buyer, or (iii) to enable Buyer to conduct the business and operations of the
Station in essentially the same manner as such business and operations are now
conducted.
3.9 Intangibles. To the best of Seller's knowledge, Schedule 3.9
is a true and complete list of all material Intangibles (exclusive of those
listed in Schedule 3.4), all of which, are valid and in good standing and
uncontested. Seller has delivered to Buyer copies of all documents
establishing or evidencing all intangibles. Seller is not, to the best of its
knowledge, infringing upon or otherwise acting adversely to any trademarks,
trade names, service marks, service names, copyright, patents, patent
applications, know-how, methods, or processes owned by any other
<PAGE> 15
person or persons, and, there is no claim or action pending, or threatened,
with respect thereto. To the best of Seller's knowledge, the Intangibles
listed on Schedule 3.9 comprise all intangible property interests used to
conduct the business and operations of the Station as now conducted.
3.10 Insurance. Schedule 3.10 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Station. All policies of insurance listed in Schedule 3.10 are in full
force and effect.
3.11 Reports. To the best of Seller's knowledge, all returns,
reports, and statements that the Station is currently required to file with the
FCC or place in its Public File or file with any other governmental agency have
been filed, and all reporting requirements of the FCC and other governmental
authorities having jurisdiction over Seller and the Station have been complied
with in all material respects and all of such returns, reports, and statements
are substantially complete and correct as filed.
3.12 Personnel.
(a) Employees and Compensation. Schedule 3.12 contains a
true and complete list of all employees of the Station, their job description,
date of hire, salary and amount and date of last salary increase. Schedule
3.12 also contains a true and complete list as of the date of this Agreement of
all employee benefit plans or arrangements applicable to the employees of the
Station and all fixed or contingent liabilities or obligations of Seller with
respect to any person now or formerly employed by Seller at the Station,
including pension or thrift plans, individual or supplemental pension or
accrued compensation arrangements, contributions to hospitalization or other
health or life insurance programs, incentive plans, bonus arrangements, and
vacation, sick leave, disability and termination arrangements or policies,
including workers' compensation policies, and a description of all fixed or
contingent liabilities or obligations of Seller with respect to any person now
or formerly employed at the Station or any person now or formerly retained as
an independent contractor at the Station. Seller has furnished Buyer with true
and complete copies of all employee handbooks, employee rules and regulations,
and summary plan descriptions of the written plans and arrangements listed in
Schedule 3.12, and with descriptions, in writing, of the unwritten plans and
arrangements listed in Schedule 3.12. At Buyer's request, Seller will furnish
Buyer with true and complete copies of all applicable plan documents, trust
documents, and insurance contracts with respect to the plans and arrangements
listed on Schedule 3.12. All employee benefits and welfare plans or
arrangements listed in Schedule 3.12 were established and have been executed,
managed and administered in accordance with the Internal Revenue Code of 1986,
as amended, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all other laws. Seller is not aware of the existence of any
governmental audit or examination of any of such plans or arrangements or of
any facts which would lead it to believe that any such audit or examination is
pending or threatened. No action, suit, or claim with respect to any of such
plans or arrangements (other than routine claims for benefits) is pending or,
to the knowledge of Seller, threatened, and Seller possesses no knowledge of
any facts which could give rise to any such action, suit or claim.
(b) Labor Relations. Seller is not a party to or subject
to any collective bargaining agreements with respect to the Station. Seller
has no written or oral contracts of
<PAGE> 16
employment with any employee of the Station, other than those listed in
Schedule 3.7. Seller has complied in all material respects with all laws,
rules, and regulations relating to the employment of labor, including those
related to wages, hours, collective bargaining, occupational safety,
discrimination, and the payment of social security and other payroll related
taxes, and it has not received any notice alleging that it has failed to comply
in any material respect with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of its
knowledge, threatened, between it and any employee (singly or collectively) of
the Station. No labor union or other collective bargaining unit represents or
claims to represent any of the employees of the Station. To the best of
Seller's knowledge, there is no union campaign being conducted to solicit cards
from employees to authorize a union to request a National Labor Relations Board
certification election with respect to any employees at the Station.
(c) Liabilities. Seller has no liability of any kind to
or in respect of any employee benefit plan, including withdrawal liability
under Section 4201 of ERISA. Seller has not incurred any accumulated funding
deficiency within the meaning of ERISA or Section 4971 of the Internal Revenue
Code. Seller has not failed to make any required contributions to any employee
benefit plan. The Pension Benefit Guaranty Corporation has not asserted that
Seller has incurred any liability in connection with any such plan. No lien
has been attached and no person has threatened to attach a lien on any property
of Seller as a result of a failure to comply with ERISA.
3.13 Taxes. To the best of the Seller's knowledge, there are no
governmental investigations or other legal, administrative, or tax proceedings
pursuant to which Seller is or could be made liable for any taxes, penalties,
interest, or other charges, the liability for which could extend to Buyer as
transferee of the business of the Station, and no event has occurred that could
impose on Buyer any transferee liability for any taxes, penalties, or interest
due or to become due from Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the broadcasting industry, and except as set
forth on Schedule 3.14, to the best of Seller's knowledge, there is no claim,
legal action, counterclaim, nor any order, decree or judgment, in progress or
pending, or to the knowledge of Seller threatened, against or relating to
Seller with respect to its ownership or operation of the Station or otherwise
relating to the Assets or the business or operations of the Station, nor does
Seller know or have reason to be aware of any basis for the same. In
particular, but without limiting the generality of the foregoing, and except as
forth on Schedule 3.14, to the best of Seller's knowledge, there are no
applications, complaints or proceedings pending or, to the best of its
knowledge, threatened (i) before the FCC relating to the business or operations
of the Station other than rule making proceedings which affect the radio
industry generally, (ii) before any federal or state agency relating to the
business or operations of the Station involving charges of illegal
discrimination under any federal or state employment laws or regulations, or
(iii) before any federal, state, or local agency relating to the business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.15 Environmental Matters. To the best of Seller's knowledge,
Seller has complied in all material respects with all applicable laws, rules
and regulations of all federal, state and local governments (and all agencies
thereof) concerning the environment, public health and safety, and
<PAGE> 17
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against Seller in connection with its ownership or operation of the Station
alleging any failure to comply in all material respects with any such law,
rule, or regulation.
3.16 Compliance with Laws. To the best Seller's knowledge, and
except as otherwise stated herein, Seller has complied in all material respects
with the Licenses and all federal, state, and local laws, rules, regulations,
and ordinances applicable or relating to the ownership and operation of the
Station. To the best of Seller's knowledge, neither the ownership or use of
the properties of the Station nor the conduct of the business or operations of
the Station conflicts with the rights of any other person or entity.
3.17 Full Disclosure. To the best of Seller's knowledge, no
representation or warranty made by Seller in this Agreement or in any
certificate, document, or other instrument furnished or to be furnished by
Seller pursuant hereto contains or will knowingly contain any untrue statement
of a material fact.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and at Closing will be duly qualified to conduct business as
a foreign corporation in the State of Ohio. Buyer has all requisite power and
authority to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement, the Escrow Agreement and
Noncompetition Agreement by Buyer have been duly authorized by all necessary
actions on the part of Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid, and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the documents contemplated hereby (with or without the giving of notice,
the lapse of time, or both): (i) do not require the consent of any third party;
(ii) will not conflict with the Certificate of Incorporation or Bylaws of
Buyer; (iii) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, injunction, decree, rule, regulation,
or ruling of any court or governmental instrumentality; (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Buyer is a party or by which Buyer may be bound, such that Buyer or any
affiliate of Buyer could not acquire the Assets
<PAGE> 18
or operate the Station.
4.4 Full Disclosure. To the best of Buyer's knowledge, no
representation or warranty made by Buyer in this Agreement or in any
certificate, document, or other instrument furnished or to be furnished by
Buyer pursuant hereto contains or will knowingly contain any untrue statement
of a material fact.
4.5 Buyer Qualifications. Buyer is legally, financially and
otherwise qualified to be the licensee of, acquire, own and operate the Station
under the Communications Act of 1934, as amended, and the rules, regulations
and policies of the FCC. Buyer knows of no fact that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC
disqualify Buyer as a assignee of the FCC Licenses or as the owner and operator
of the Station and Buyer shall take no action that would impact adversely on
such FCC approval.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5.
5.2 Compensation. Seller shall not materially increase the
compensation, bonuses, or other benefits payable or to be payable to any person
employed in connection with the conduct of the business or operations of the
Station, except (i) in accordance with past practices and (ii) for any
severance benefits for which Buyer will not be liable.
5.3 Contracts. Seller will not enter into any contract or
commitment which is not terminable on 90-days notice or will not terminate by
December 1, 1995, whichever is longer, relating to the Station or the Assets,
or amend or terminate any Contract (or waive any material right thereunder), or
incur any obligation (including obligations relating to the borrowing of money
or the guaranteeing of indebtedness) that will be binding on Buyer after
Closing, except for cash time sales agreements made in the ordinary course of
business and other contracts or commitments involving less than $5,000. Prior
to the Closing Date, Seller shall deliver to Buyer a list of all Contracts
entered into between the date of this Agreement and the Closing Date, together
with copies of such Contracts. With respect to the barter agreements
outstanding at the Closing, Buyer shall assume all such obligations and be
entitled to all benefits under the barter agreements provided that if the
amount owed to advertisers under such barter agreements less the amount of
goods and services that are owed to the Station pursuant to such agreements
exceeds $25,000, Seller shall reimburse Buyer at the Closing for the amount in
excess of $25,000.
5.4 Additional Program Obligations. Seller shall not enter into
new cash programming obligations without the prior written approval of Buyer
provided; however, that if the Closing has not occurred by August 31, 1995,
Seller may incur up to Thirty Thousand Dollars ($30,000) of additional cash
program obligations for the period subsequent to August 31, 1995, payable in
equal monthly installments from September through December, and Buyer shall
reimburse Seller for any
<PAGE> 19
outstanding cash programming obligations at the Closing up to a maximum of
Seventy Thousand Dollars ($70,000). Any additional amounts owed due to such
programming outstanding at the Closing shall be the sole obligation of Seller.
5.5 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the material Assets, except where no
longer used or useful in the business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.6 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
which shall be removed prior to the Closing Date, (ii) liens for current taxes
not yet due and payable, and (iii) mechanics' liens and other similar liens,
which shall be removed prior to the Closing Date either by payment or posting
an appropriate indemnity bond.
5.7 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses issued by the FCC to expire or to be
revoked, suspended, or modified, or take
<PAGE> 20
any action that could cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or adverse modification
of any of the Licenses. Seller shall not fail to prosecute with due diligence
any applications to any governmental authority in connection with the operation
of the Station.
5.8 Rights. Seller shall not knowingly waive any material right
relating to the Station or any of the Assets.
5.9 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its material obligations under this Agreement or that
could hinder or delay the consummation of the transactions contemplated by this
Agreement.
5.10 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access during normal business hours to the Assets and to all other
properties, equipment, books, records, Contracts, and documents relating to the
Station for the purpose of audit and inspection, including inspections incident
to the environmental study and the engineering study described in Section 6.6,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all material information with respect to the affairs and
business of the Station that Buyer may reasonably request (including any
operations reports produced with respect to the affairs and business of the
Station). Following the Closing, Buyer shall provide Seller with similar
access to all books, records and other information needed by Seller to file any
tax returns or otherwise carry out its obligations. No records relating to
operations of the Station prior to the Closing shall be destroyed without
providing Seller notice thereof and an opportunity for Seller to assume
possession of such documents.
5.11 Maintenance of Assets. Seller shall maintain all of the
Assets in good condition (ordinary wear and tear and casualty loss excepted),
and use, operate, and maintain all of the Assets in a reasonable manner and in
accordance with past practices. Seller shall maintain inventories of spare
parts and expendable supplies at levels consistent with past practices. Buyer
shall inspect the Assets prior to Closing and shall accept the Assets in their
then current condition except as may be excepted to at such time.
5.12 Insurance. Seller shall maintain substantially the same
insurance coverage provided by the existing insurance policies on the Station
and the Assets.
5.13 Consents. Seller shall obtain the Consents described in
Section 8.2(b), without any material change in the terms or conditions of any
Contract or License as in effect on the date of this Agreement. Seller shall
advise Buyer of any communications it receives concerning the Consents and of
any conditions proposed, considered, or requested for any of the Consents.
5.14 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.15 Notification. Seller shall promptly notify Buyer in writing
of any material developments of which Seller has actual knowledge with respect
to the business or operations of the Station, and of any material change in any
of the information contained in Seller's
<PAGE> 21
representations and warranties contained in Section 3 of this Agreement.
5.16 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
ownership and operation of the Station.
5.17 Preservation of Business. Seller shall operate the Station in
the ordinary course of business consistent with its past practices.
5.18 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
5.19 Indebtedness. Seller shall not incur, create, assume or
permit to exist any Indebtedness, except (i) unsecured trade accounts payable
and other unsecured current Indebtedness incurred in the ordinary course of
business between the date hereof and the Closing Date (but excluding any
Indebtedness for borrowed money) ("Trade Indebtedness") and (ii) Indebtedness
for taxes arising between the date hereof and the Closing Date.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within two (2) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their reasonable commercial efforts to obtain a grant of the
application as expeditiously as practicable. Each party agrees to comply with
any condition imposed on it by the FCC Consent, except that no party shall be
required to comply with a condition if (1) the condition was imposed on it as
the result of a circumstance the existence of which does not constitute a
breach by the party of any of its representations, warranties, or covenants
under this Agreement, and (2) compliance with the condition would have a
material adverse effect upon it. Buyer and Seller shall oppose any requests
for reconsideration or judicial review of the FCC Consent. If the Closing
shall not have occurred for any reason within the original effective period of
the FCC Consent, and neither party shall have terminated this Agreement under
Section 9, the parties shall jointly request an extension of the effective
period of the FCC Consent. No extension of the FCC Consent shall limit the
exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of the Seller until the Closing.
<PAGE> 22
6.3 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing. If any damage or
destruction of the Assets or any other event occurs which prevents in any
material respect signal transmission by the Station in the normal and usual
manner, Seller shall repair or replace such damage prior to Closing. If Seller
is unable to restore or replace the Assets so that such conditions are cured
and normal and usual transmission is resumed in all material respects before
the Closing Date, Buyer and Seller shall proceed to close this Agreement and
complete the restoration and replacement of such damaged Assets and Seller
shall deliver to Buyer all insurance proceeds received in connection with such
damage or destruction of the Assets. In the event the actual repair or
replacement cost is greater than Seller's insurance proceeds, Buyer shall be
entitled to immediate reimbursement from Seller for all such amounts.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. Except as
provided in this Paragraph each party will refrain from disclosing any such
information to any third party. If this Agreement is terminated, each party
will return to the other party all copies of all documents and other all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental and Engineering Audit. Buyer shall have
completed by the date of this Agreement at its expense (i) an environmental
Phase I study with respect to the Real Property, and (ii) an engineering review
of the Station's compliance with customary engineering practices and applicable
FCC rules, regulations, prescribed practice and technical standards. Seller
shall have provided to Buyer by the date of this Agreement a completed proof of
performance of the Station. In no event shall Seller have any liability to
Buyer following the Closing for any environmental matters.
6.6 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their reasonable commercial efforts to consummate
the transaction contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, Buyer shall have no obligation (i)
to expend funds to obtain any of the Consents or (ii) to agree to any adverse
change in any License or Assumed Contract to obtain a Consent required with
respect thereto.
6.7 State Tax Filings. Seller shall continue to file Ohio sales
tax returns with respect to the Station in accordance with Seller's past
practices and shall provide Buyer with documentation of such filings prior to
Closing.
6.8 Access to Books and Records. Seller shall provide Buyer
access and the right to
<PAGE> 23
copy for a period of four (4) years from the Closing Date any books and records
relating to the Assets but not included in the Assets. Buyer shall provide
Seller access and the right to copy for a period of four (4) years from the
Closing Date any books and records relating to the Assets that are included in
the Assets.
6.9 Broker. Each of Buyer and Seller represents and warrants that
neither it nor any person or entity acting on its behalf has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement, except for a commissions
payable by Seller to Kepper, Tupper & Fugatt, Inc. and Serafin Bros.
6.10 Noncompetition Agreement. At Closing, Buyer, Morton J. Kent,
David J. Kent, Donald B. Kent and Stephen D. Kent shall enter into a
Noncompetition Agreement in the form of Schedule 6.10 and One Hundred Thirty
Two Thousand Dollars ($132,000) of the Purchase Price shall be allocated to the
covenants of the four persons named above.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment or waiver by
Buyer prior to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All material
representations and warranties of Seller contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all material covenants,
agreements, and conditions required by this Agreement to be performed or
complied with by it prior to or on the Closing Date.
(c) Consents. All Consents listed on Schedule 3.3 shall
have been obtained and delivered to Buyer without any adverse change in the
terms or conditions of any agreement or any governmental license, permit, or
other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any material conditions that need not be
complied with by Buyer under Section 6.1 hereof, Seller shall have complied
with any material conditions imposed on it by the FCC Consent, and the FCC
Consent shall have become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all material Licenses and there shall not have been any modification
of any material License that could have an adverse effect on the Station or the
conduct of its business and operations. No proceeding shall be pending the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any material License. All FCC Licenses are material Licenses.
(f) Deliveries. Seller shall have made or stand willing
to make all the
<PAGE> 24
deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing, there shall have been no material adverse change in the assets
or properties of the Station, including any damage, destruction, or loss
affecting any assets used or useful in the conduct or business of the Station,
except for such damage or destruction being repaired or replaced pursuant to
Section 6.3 hereof.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
<PAGE> 25
(a) Representations and Warranties. All material
representations and warranties of Buyer contained in this Agreement shall be
true and complete in all material respects at and as of the Closing Date as
though made at and as of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all material covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any material conditions that need not be
complied with by Seller under Section 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days following the date
upon which the FCC Consent has become a Final Order. If Buyer fails to specify
the date for Closing pursuant to the preceding sentence prior to the fifth
business day after the date upon which the FCC Consent becomes a Final Order,
the Closing shall take place on the tenth business day after the date upon
which the FCC Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Witt, Gaither & Whitaker, P.C., 1100 American National Bank
Building, Chattanooga, Tennessee 37402-2608, or such other place that is agreed
upon by Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Subject to the provisions of
this Agreement, duly executed bills of sale, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations except for Permitted Liens.
(b) Estoppel Certificate. Estoppel Certificate of the
Lessor of the leasehold interests listed in Schedule 3.5.
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
<PAGE> 26
(d) Certificates. A certificate, dated as of the Closing
Date, executed by Seller certifying (1) that the material representations and
warranties of Seller contained in this Agreement are true and complete in all
material respects as of the Closing Date as though made on and as of that date;
and (2) that Seller has in all material respects performed and complied with
all of its material obligations, covenants, and agreements set forth in this
Agreement to be performed and complied with on or prior to the Closing Date.
Such additional certificates and confirmations to Buyer's lenders as Buyer may
reasonably request in connection with obtaining financing for the performance
of its payment obligations hereunder.
(e) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses and Assumed Contracts;
(f) Opinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(f)
hereto.
(g) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.10 duly executed by the parties specified
in Section 6.10 hereof.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel;
(a) Purchase Price. The Purchase Price as provided in
Section 2.4;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts arising on or
after the Closing Date;
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by its President, certifying (1)
that the representations and warranties of Buyer contained in this Agreement
are true and complete in all material respects as of the Closing Date as though
made on and as of that date, and (2) that Buyer has in all material respects
performed and complied with all of its obligations, covenants, and agreements
set forth in this Agreement to be performed and complied with on or prior to
the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto; and
(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.10, duly executed by Buyer and the payment
of the portion of the Purchase Price allocated thereto.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Assets abandoned, if Seller is not then
in material default, upon written
<PAGE> 27
notice to Buyer, upon the occurrence of any of the following:
(a) Conditions. If, on the date that would otherwise be
the Closing Date, any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment not caused by Seller,
decree, or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by February 1, 1996.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, not caused by Buyer,
decree, or order that would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by February 1, 1996.
9.3 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited with First Union National Bank
of Florida, as escrow agent (the "Escrow Agent"), the sum of Six Hundred Sixty
Thousand Dollars ($660,000) in accordance with an Escrow Agreement among Buyer,
Seller and the Escrow Agent in the form of Schedule 9.3. All funds deposited
with the Escrow Agent shall be held and disbursed in accordance with the terms
of the Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1 or Section 9.2 and Buyer is not in breach of any provision of this
Agreement, all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, shall be disbursed to or at the direction of
Buyer.
(c) If this Agreement is terminated by Seller due to
Buyer's breach of this Agreement, then the amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent shall be disbursed by the
Escrow Agent to or at the direction of Seller.
<PAGE> 28
(d) If the FCC refuses to give its Consent as provided
for in Section 6.1 hereof due to a breach by Buyer of its representations in
Section 4.5 hereof, all amounts held by the Escrow Agent pursuant to the Escrow
Agreement, including any interest or other proceeds from the investment of
funds held by the Escrow Agent, shall be disbursed to or at the direction of
Seller.
9.4 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in breach of any
provision of this Agreement, the parties hereto shall not have any further
liability to each other with respect to the purchase and sale of the Assets.
If this Agreement is terminated by Seller due to Buyer's breach of this
Agreement, then the payment to Seller pursuant to Section 9.3(c) shall be
liquidated damages and shall constitute full payment and the exclusive remedy
for any damages suffered by Seller by reason of Buyer's breach of this
Agreement. Seller and Buyer agree in advance that actual damages would be
difficult to ascertain and that the amount of Six Hundred Sixty Thousand
($660,000) is a fair and equitable amount to reimburse Seller for damages
sustained due to Buyer's breach of this Agreement. If prior to Closing, Seller
is in breach of its obligations under this Agreement, Buyer's sole remedy shall
be an action for specific performance of this Agreement and Buyer expressly
waives any right to pursue a claim for monetary damages.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the closing for a period of
twelve (12) months provided, however, that as to any representation or warranty
made by either the Buyer or Seller which the other party knows, or has reason
to believe, is not true as of the Closing Date, such representation or warranty
shall not survive the Closing. Until the Closing, Buyer and Seller will
immediately advise each other, in a detailed written notice, of any fact or
occurrence or any pending or threatened occurrence of which any of them obtains
knowledge and which (a) (if existing and known at the date of the execution of
this Agreement) would have been required to be set forth or disclosed in or
pursuant to this Agreement or a Schedule hereto, (b) (if existing and known at
any time prior to or at the Closing) would make the performance by any party of
a covenant contained in this Agreement impossible or make that performance
materially more difficult than in the absence of that fact or occurrence, or
(c) (if existing and known at the time of the Closing) would cause a condition
to any party's obligations under this Agreement not to be fully satisfied.
10.2 Indemnification by Seller. Seller hereby agrees to indemnify
and hold Buyer harmless against and with respect to, and shall reimburse Buyer
for:
(a) Subject to the proviso contained in the first
sentence of Section 10.1 and the limitation set forth in Section 10.6 below,
any and all losses, liabilities, or damages resulting from any untrue
representation, breach of warranty, or material omission or nonfulfillment of
any covenant by Seller contained in this Agreement or in any certificate,
document, or instrument delivered to Buyer under this Agreement.
<PAGE> 29
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any and all losses, liabilities, or damages
contingent or otherwise resulting from the operation or ownership of the
Station prior to the Closing Date, including any liabilities arising under the
Licenses or the Assumed Contracts which relate to events occurring prior to the
Closing Date.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Buyer hereby agrees to indemnify
and hold Seller harmless against and with respect to, and shall reimburse
Seller for:
(a) Subject to the proviso contained in the first
sentence of Section 10.1, any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or material omission or
nonfulfillment of any covenant by Buyer contained in this Agreement or in any
certificate, Schedule, document, or instrument delivered to Seller under this
Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages
contingent or otherwise, resulting from the operation or ownership of the
Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within as soon
as practicable after written notice of such action, suit, or proceeding was
given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such
<PAGE> 30
investigation of the claim as the Indemnifying Party deems necessary or
desirable. For the purposes of such investigation, the Claimant agrees to make
available to the Indemnifying Party and/or its authorized representatives the
information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnifying Party agree at or prior to the expiration of the
thirty-day period (or any mutually agreed upon extension thereof) to the
validity and amount of such claim, the Indemnifying Party shall immediately pay
to the Claimant the full amount of the claim. If the Claimant and the
Indemnifying Party do not agree within the thirty-day period (or any mutually
agreed upon extension thereof), the Claimant may seek appropriate remedy at law
or equity or under the arbitration provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party subject to reimbursement for
reasonable actual out-of-pocket expenses incurred by the Claimant as the result
of a request by the Indemnifying Party. If the Indemnifying Party elects to
assume control of the defense of any third-party claim, the Claimant shall have
the right to participate in the defense of such claim at its own expense. If
the Indemnifying Party does not elect to assume control or otherwise
participate int he defense of any third party claim, both parties shall be
bound by the results obtained by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, as its sole and exclusive
remedy, to obtain specific performance of the terms of this Agreement. If any
action is brought by Buyer to enforce this Agreement, Seller shall waive the
defense that there is an adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
10.7 Limitations. Seller's indemnification obligations pursuant to
Section 10.2 hereof shall be limited to One Million Dollars ($1,000,000).
SECTION 11. MISCELLANEOUS
<PAGE> 31
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax, if any, arising in connection with the conveyance of the Assets
by Seller to Buyer pursuant to this Agreement shall be paid by Seller to the
extent of Seller's book value of the Assets. Buyer shall pay the fee payable
to the FCC in connection with the filing of the application for FCC Consent.
Except as otherwise provided in this Agreement, each party shall pay its own
expenses incurred in connection with the authorization, preparation, execution,
and performance of this Agreement, including all fees and expenses of counsel,
accountants, agents, and representatives, and each party shall be responsible
for all fees or commissions payable to any finder, broker, advisor, or similar
person retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration in
Atlanta, Georgia by an arbitrator. Seller and Buyer shall each designate one
disinterested arbitrator, and the two arbitrators so designated shall select
the arbitrator. Before undertaking to resolve the dispute, the arbitrator
shall be duly sworn faithfully and fairly to hear and examine the matters in
controversy and to make a just award according to the best of his or her
understanding. The arbitration hearing shall be conducted in accordance with
the commercial arbitration rules of the American Arbitration Association. The
written decision of the arbitrator shall be final and binding on Seller and
Buyer. The costs and expenses of the arbitration proceeding shall be assessed
between Seller and Buyer in a manner to be decided by a majority of the
arbitrators, and the assessment shall be set forth in the decision and award of
the arbitrator. Judgment on the award, if it is not paid within thirty days,
may be entered in any court having jurisdiction over the matter. No action at
law or suit in equity based upon any claim arising out of or related to this
Agreement shall be instituted in any court by Seller or Buyer against the other
except (i) an action to compel arbitration pursuant to this Section, (ii) an
action to enforce the award of the arbitration panel rendered in accordance
with this Section, (iii) a suit for specific performance pursuant to Section
10.5, or (iv) an appeal of any decision of the arbitrator, as provided by law.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Mr. Morton J. Kent
c/o TE Properties, Inc.
715 Georgia Avenue
Chattanooga, TN 37402
With a copy to: John W. Murrey, III
Witt, Gaither & Whitaker
734 Market Street, Suite 1100
Chattanooga, TN 37402
<PAGE> 32
If to Buyer: Mr. Eddie L. Whitehead
Whitehead Media, Inc.
12144 Classic Drive
Coral Springs, FL 33071
With a copy to: John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1255 23rd Street, N.W.
Washington, D.C. 20037
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement to a wholly-owned subsidiary or commonly controlled affiliate without
seeking or obtaining Seller's prior approval, in which event Buyer shall have
no further obligation hereunder. Upon any permitted assignment by Buyer or
Seller in accordance with this Section 11.4, all references to "Buyer" herein
shall be deemed to be references to Buyer's assignee and all references to
"Seller" herein shall be deemed to be references to Seller's assignee. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
including, in the case of Seller, any additional bills of sale, deeds, or other
transfer documents that, in the reasonable opinion of Buyer, may be necessary
to ensure, complete, and evidence the full and effective transfer of the Assets
to Buyer pursuant to this Agreement.
11.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
<PAGE> 33
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Guaranty. Paxson Communications Corp. ("PCC"), a stockholder
in Buyer, hereby guarantees Buyer's performance of its obligations pursuant to
the terms of this Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
MORTON J. KENT
By: /s/ Morton J. Kent
---------------------------------
Name:
-------------------------------
CANTON, INC.
By: /s/ Morton J. Kent
---------------------------------
Name:
-------------------------------
Title: Chairman
------------------------------
WHITEHEAD MEDIA, INC.
By: /s/ Eddie L. Whitehead
---------------------------------
Name: Eddie L. Whitehead
-------------------------------
Title: President
------------------------------
FOR PURPOSES OF SECTION 11.12 HEREOF:
PAXSON COMMUNICATIONS CORP.
By: /s/ Lowell W. Paxson
---------------------------------
Name:
-------------------------------
Title:
------------------------------
<PAGE> 1
EXHIBIT 10.5
CREDIT AGREEMENT
Among
PAXSON COMMUNICATIONS TELEVISION, INC.
and
MERRILL LYNCH CAPITAL CORPORATION,
As Arranger and Syndication Agent,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY,
As Administrative Agent
and Collateral Agent,
and
THE LENDING INSTITUTIONS LISTED HEREIN
____________________
Dated as of May 17, 1995
____________________
$75,000,000
<PAGE> 2
TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit; Extension of
Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Minimum Amount of Each Borrowing;
Maximum Number of Borrowings . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.05 Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.06 Conversions/Continuations . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.10 Special Provisions Governing
LIBOR Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.11 Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.12 Total Commitments; Limitations on
Outstanding Loan Amounts . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.13 Extension of Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.14 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.01 Voluntary Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . 16
2.02 Termination of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.03 Commitment Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3. Payments; Commitment Reductions . . . . . . . . . . . . . . . . . . . . . . . 17
3.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.02 Mandatory Prepayments; Commitment
Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.03 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.04 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.05 Net Payments; Tax Certificates . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 4. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.01 Conditions Precedent to Initial Loans . . . . . . . . . . . . . . . . . . . . 22
(a) Credit Documents; Revolving Notes . . . . . . . . . . . . . . . . . . 22
(b) Officer's Solvency Certificate . . . . . . . . . . . . . . . . . . . 22
(c) Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Financial Statements, Etc. . . . . . . . . . . . . . . . . . . . . . 23
(e) Mortgaged Real Property and Real
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(f) Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . 26
(g) Capital and Organizational
Structure, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(h) Corporate Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 27
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(i) Organizational Documentation, Etc. . . . . . . . . . . . . . . . . . 27
(j) Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . 28
(k) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(l) Payment of Certain Fees . . . . . . . . . . . . . . . . . . . . . . . 28
(m) Transaction Documents . . . . . . . . . . . . . . . . . . . . . . . . 28
(n) Consummation of Preapproved
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(o) Tax Sharing, Management, Consulting
and Employment Agreements and
Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(p) Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(q) Consummation of Contribution . . . . . . . . . . . . . . . . . . . . 30
(r) Equity Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(s) Outstanding Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(t) Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(u) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . 30
(v) Certain Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 31
(w) Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . 31
(x) Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(y) Other Documents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 31
4.02 Conditions Precedent to Acquisition
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Officers' Certificates . . . . . . . . . . . . . . . . . . . . . . . 32
(c) Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 33
(d) Mortgaged Real Property and Real
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(e) Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . 33
(f) Corporate Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 34
(g) Organizational Documentation, Etc. . . . . . . . . . . . . . . . . . 34
(h) Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . 34
(i) Pro Forma Covenant Compliance . . . . . . . . . . . . . . . . . . . . 34
(j) Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(k) Acquisition Documents; Acquisitions . . . . . . . . . . . . . . . . . 36
(l) Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(m) Total Debt to Total Capitalization
Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.03 Conditions Precedent to Loans for Future
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(a) Transaction Structure; Due Diligence . . . . . . . . . . . . . . . . 37
(b) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . 38
(c) Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . 38
(d) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 38
(e) Other Documents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 38
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4.04 Conditions Precedent to All Loans . . . . . . . . . . . . . . . . . . . . . . 39
(a) Notice of Borrowing; Officers'
Certificate; Interest Rate Certificate . . . . . . . . . . . . . . 39
(b) No Material Adverse Effect, Etc. . . . . . . . . . . . . . . . . . . 39
(c) No Default; Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.05 Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.06 Conditions for the Benefit of the Agents
and the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5. Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . 40
5.01 Corporate Status; Governmental Consents . . . . . . . . . . . . . . . . . . . 41
5.02 Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . 41
5.03 No Conflicts; No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.05 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.06 Governmental Approvals, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 44
5.07 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.08 True and Complete Disclosure; No Material
Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5.09 Financial Condition; Financial Statements;
Fiscal Year End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.10 Representations and Warranties in Other
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.11 Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.12 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.14 Subsidiaries; Other Ventures . . . . . . . . . . . . . . . . . . . . . . . . 43
5.15 Patents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.16 Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.17 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.18 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.19 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.20 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.21 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.22 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.23 Broker's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.24 Disaster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.26 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.27 LMA Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.28 FCC Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.29 Programming Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.30 Material Contracts; No Burdensome
Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.31 Management Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
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SECTION 6. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(a) Annual Financial Information . . . . . . . . . . . . . . . . . . . . . 57
(b) Quarterly Financial Information . . . . . . . . . . . . . . . . . . . 57
(c) Monthly Financial Information . . . . . . . . . . . . . . . . . . . . 58
(d) Accountants' Review . . . . . . . . . . . . . . . . . . . . . . . . . 58
(e) Yearly Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(f) Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . 59
(g) Management Letters . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(h) Investor Information; SEC Filings . . . . . . . . . . . . . . . . . . 59
(i) Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . 59
(j) Litigation Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(k) Insurance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(l) Amendments to Indebtedness . . . . . . . . . . . . . . . . . . . . . . 61
(m) Financial Plans; Revised Projected
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 61
(n) FCC Proceedings, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 61
(o) Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(p) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.02 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . 62
6.03 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . 63
6.04 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.05 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.06 Governmental Consents and Governmental
Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.07 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.08 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.09 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . 65
6.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.11 Preservation of Status as Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.12 Performance and Enforcement Under Certain
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.13 Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.14 Pledge of Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . 66
6.15 Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.16 Environmental Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.17 Interest Rate Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.18 Additional Loan Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.19 Broadcast Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.20 Corporate Separateness . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.21 Landlord Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 7. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7.01 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7.02 Amendments or Waivers of Certain Documents . . . . . . . . . . . . . . . . . 71
7.03 Liens and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.04 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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7.05 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.06 Advances, Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . 76
7.07 Prepayments of Existing Debt of the Borrower
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.08 Dividends, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
7.09 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
7.10 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(a) Minimum Total Interest Coverage Ratio . . . . . . . . . . . . . . . . 81
(b) Minimum Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . 81
(c) Maximum Total Debt Leverage Ratio . . . . . . . . . . . . . . . . . . 81
(d) Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.11 Restriction on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.12 Restriction on Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . 83
7.13 Sale and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.14 Limitation on Other Restrictions on
Amendment of Credit Documents . . . . . . . . . . . . . . . . . . . . . . . 83
7.15 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . 83
7.16 Issuance or Disposal of Subsidiary Stock . . . . . . . . . . . . . . . . . . 83
7.17 Restriction on Fundamental Changes; Asset
Sales and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.18 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 8. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.02 Representations, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
8.04 Default Under Other Agreements . . . . . . . . . . . . . . . . . . . . . . . 87
8.05 Bankruptcy, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
8.06 ERISA Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.07 Judgments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
8.08 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.09 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.10 Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.11 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.12 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
8.13 Parent Group Equity Event . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.14 Broadcast Licenses and Consents . . . . . . . . . . . . . . . . . . . . . . . 91
8.15 LMAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
8.16 Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
8.17 Environmental Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
8.18 Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 9. Definitions; Rules of Construction . . . . . . . . . . . . . . . . . . . . . 93
9.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.02 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
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SECTION 10. The Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
10.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
10.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
10.03 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
10.04 Reliance by the Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
10.05 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
10.06 Non-Reliance on the Agents and Other Lenders . . . . . . . . . . . . . . . . 141
10.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
10.08 The Agents in Their Respective Individual
Capacities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
10.09 Resignation by Any of the Agents . . . . . . . . . . . . . . . . . . . . . . 143
10.10 Security Documents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 144
10.11 Determinations Pursuant to Security
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
10.12 Payee of Note Treated as Owner . . . . . . . . . . . . . . . . . . . . . . . 145
SECTION 11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
11.01 Payment of Expenses; Indemnification, Etc. . . . . . . . . . . . . . . . . . 145
11.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
11.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
11.04 Benefit of Agreement; Assignments;
Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
(a) Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
(b) Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
(c) Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
(d) Assignments to Federal Reserve Bank . . . . . . . . . . . . . . . . . 152
(e) Information to Transferees . . . . . . . . . . . . . . . . . . . . . . 152
(f) Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
11.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . 153
11.06 Payments Pro Rata; Ratable Sharing . . . . . . . . . . . . . . . . . . . . . 153
11.07 Accounting Principles; Calculations . . . . . . . . . . . . . . . . . . . . . 154
11.08 Governing Law; Submission to Jurisdiction;
Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
11.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
11.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
11.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
11.12 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
11.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
11.14 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
11.15 Independence of Representations,
Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 159
11.16 Severability; Modification to Conform to
Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
11.17 Obligations Several; Independent Nature
of Lenders' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
11.18 Prior Understandings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
11.19 Agent's or Lender's Consent . . . . . . . . . . . . . . . . . . . . . . . . . 160
11.20 Distribution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 160
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11.21 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
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ANNEXES
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<S> <C>
ANNEX I - Agents' Addresses
ANNEX II - Lenders' Addresses and Commitments
SCHEDULES
---------
SCHEDULE A-1 - Preapproved Stations
SCHEDULE A-2 - Preapproved Acquisition Documents
SCHEDULE A-3 - Preapproved Stations Acquired in the Initial Preapproved Acquisitions
SCHEDULE A-4 - Contributed Stations
SCHEDULE 4.01(d) - Financial Statements of Contributed Stations
and Preapproved Stations
SCHEDULE 5.03 - Conflicting Agreements
SCHEDULE 5.04 - Litigation
SCHEDULE 5.05 - Escrow Deposits for the Preapproved
Acquisitions and Future Acquisitions;
Acquisition Price and Additional Acquisition
Costs
SCHEDULE 5.06 - Certain Judgments, Orders, Injunctions and
Restraints
SCHEDULE 5.14A - Subsidiaries
SCHEDULE 5.14B - Other Ventures
SCHEDULE 5.17A - Liens
SCHEDULE 5.17B - Mortgaged Real Property
SCHEDULE 5.20 - Debt of the Borrower Group to Remain
Outstanding
SCHEDULE 5.21 - Environmental Matters
SCHEDULE 5.23 - Fees
SCHEDULE 5.27 - LMA Arrangements
SCHEDULE 5.28A - Broadcast Licenses
SCHEDULE 5.28B - Pending Applications, Complaints or
Proceedings
SCHEDULE 5.28C - Number of Cable Households for Initial
Stations
SCHEDULE 5.29 - Programming Obligations
SCHEDULE 5.30 - Material Contracts
SCHEDULE 5.31 - Management Agreements
SCHEDULE 6.21 - Certain Landlord Consent Matters
SCHEDULE 7.03 - Certain Permitted Encumbrances
SCHEDULE 7.06 - Investments Existing on the Initial Funding
Date
SCHEDULE 9.01(a) - Initial Adjusted EBITDA
SCHEDULE 9.01(b) - LMA Stations
SCHEDULE 9.01(c) - Parent Equity Documents
</TABLE>
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EXHIBITS
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EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Revolving Note
EXHIBIT C - Form of Notice of Conversion/Continuation
EXHIBIT D-1 - Form of Opinion of Holland & Knight, Special
Counsel for the Loan Parties
EXHIBIT D-2 - Form of Opinion of Anthony L. Morrison, General
Counsel for the Loan Parties
EXHIBIT D-3 - Form of Opinion of Cahill Gordon & Reindel,
Special Counsel for the Agents
EXHIBIT D-4 - Form of Local Counsel Opinion
EXHIBIT D-5 - Form of Opinion of Dow Lohnes & Albertson,
Special FCC and Special Counsel in connection
with the Initial Preapproved Acquisitions for
the Loan Parties
EXHIBIT E - Form of Acquisition Certificate
EXHIBIT F - Form of Borrower Securities Pledge Agreement
EXHIBIT G - Form of Borrower General Security Agreement
EXHIBIT H - [Intentionally Omitted]
EXHIBIT I-1 - Form of Compliance Certificate - Borrower
EXHIBIT I-2 - Form of Compliance Certificate - Parent
EXHIBIT J - Form of Interest Rate Certificate
EXHIBIT K-1 - Form of Mortgage
EXHIBIT K-2 - Form of Deed of Trust
EXHIBIT K-3 - Form of Leasehold Mortgage
EXHIBIT K-4 - Form of Leasehold Deed of Trust
EXHIBIT L-1 - Form of Officer's Solvency Certificate - Borrower
EXHIBIT L-2 - Form of Officer's Solvency Certificate - Parent
EXHIBIT M - Form of Parent Guarantee
EXHIBIT N - Form of Parent Securities Pledge Agreement
EXHIBIT O - Form of Subsidiary Guarantee
EXHIBIT P - [Intentionally Omitted]
EXHIBIT Q - Form of Subsidiary Securities Pledge Agreement
EXHIBIT R - Form of Subsidiary General Security Agreement
EXHIBIT S - Form of Assignment Agreement
EXHIBIT T - Form of Notice of Assignment
</TABLE>
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CREDIT AGREEMENT, dated as of May 17, 1995, among PAXSON
COMMUNICATIONS TELEVISION, INC., a Florida corporation (the "Borrower"), the
lending institutions listed in Annex II on the date hereof or that may become
parties hereto by virtue of assignments effected pursuant to Section 11.04
(each a "Lender" and, collectively, the "Lenders"), MERRILL LYNCH CAPITAL
CORPORATION ("Merrill Lynch") as arranger and as syndication agent for the
Lenders (in such capacity, the "Agent") and CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as administrative agent (in such capacity, the "Administrative
Agent") and collateral agent (in such capacity, the "Collateral Agent").
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 9.01 are used herein as so defined, and certain other terms shall be
construed in accordance with the rules of construction in Section 9.02.
W I T N E S S E T H :
WHEREAS, the Parent and the Borrower intend to acquire and
operate through the Borrower Group television stations in the United States;
WHEREAS, the Parent and the Borrower intend to acquire, or
provide programming to, through the Borrower Group (each, a "Preapproved
Acquisition" and, collectively, the "Preapproved Acquisitions") on and after
the Initial Funding Date each of the broadcast television stations listed on
Schedule A-1 (each, a "Preapproved Station" and, collectively, the "Preapproved
Stations") on the terms and subject to the conditions set forth in the
documents listed on Schedule A-2 (the "Preapproved Acquisition Documents");
WHEREAS, the Parent and the Borrower intend to acquire, or
provide programming to, on the Initial Funding Date (each, an "Initial
Preapproved Acquisition" and, collectively, the "Initial Preapproved
Acquisitions") through the Borrower Group each of the Preapproved Stations
listed on Schedule A-3 (each, an "Initial Preapproved Station" and,
collectively, the "Initial Preapproved Stations") on the terms and subject to
the conditions set forth in the Preapproved Acquisition Documents relating
thereto (the "Initial Preapproved Acquisition Documents");
WHEREAS, on or prior to the Initial Funding Date, the Parent
made a contribution (the "Contribution") to the equity of the Borrower in an
aggregate amount deemed equal to $26,550,000, by (i) causing each of the
Contributed Station Subsidiaries and the respective License Subsidiaries of
each Contributed Station to become direct or indirect Wholly Owned Subsidiaries
of the Borrower on or prior to the Initial Funding Date and, on the Initial
Funding Date, Subsidiary Guarantors and thereby causing the Borrower Group to
be the owner or programmer of each of the broadcast television
<PAGE> 12
-2-
stations listed on Schedule A-4 (each, a "Contributed Station" and,
collectively, the "Contributed Stations") and (ii) contributing an aggregate
amount deemed equal to $500,000, in the form of cash and the prepayment of
miscellaneous costs incurred in connection with the Preapproved Acquisitions
and the Contribution;
WHEREAS, after the Initial Funding Date, the Parent and the
Borrower intend to acquire through the Borrower Group television stations in
Future Acquisitions;
WHEREAS, each of the Parent and the Borrower desires that the
Lenders make Loans to the Borrower for the purpose of effecting the Preapproved
Acquisitions and, if additional amounts are available to be borrowed hereunder,
the Future Acquisitions, to pay related fees and expenses of the Contribution
and the Acquisitions and for general corporate purposes of the Borrower Group
(including the making of escrow deposits for Future Acquisitions to the extent
permitted hereby); and
WHEREAS, the Lenders are willing, upon the terms and subject
to the conditions set forth herein, to make Loans to the Borrower for the
account of the Borrower for the purposes set forth in the immediately preceding
recital;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit; Extension of Maturity
Date.
1.01 Commitments. Subject to and upon the terms and
conditions herein set forth, each Lender severally and not jointly agrees, at
any time and from time to time on and after the Initial Funding Date and prior
to the Commitment Termination Date, to make loans (each a "Loan" and,
collectively, the "Loans") to the Borrower. Loans (i) except as hereinafter
provided, shall, at the option of the Borrower, be Base Rate Loans or LIBOR
Loans; provided, however, that no LIBOR Loan may be made until after the
Syndication Date and (ii) may be repaid and reborrowed in accordance with the
provisions hereof.
1.02 Minimum Amount of Each Borrowing; Maximum Number of
Borrowings. The minimum aggregate principal amount of a Borrowing shall be
the Minimum Borrowing Amount (other than a Borrowing of Base Rate Loans in an
amount equal to all of the then available Total Commitments) and, if greater,
shall be in integral multiples of $100,000. More than one Borrowing may be
incurred on any date; provided, however, that at no time shall there be
outstanding more than five Borrowings of LIBOR Loans. The proviso in the
immediately preceding sentence shall not prevent a Borrowing of
<PAGE> 13
-3-
LIBOR Loans on any Acquisition Funding Date; provided, however, that upon the
expiration of the Interest Period applicable to such Borrowing, there shall be
outstanding no more than five Borrowings of LIBOR Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires that
the Lenders make Loans, it shall give the Administrative Agent at the
Administrative Agent's Office written notice (or telephonic notice promptly
followed by such written notice) of Borrowing (each a "Notice of Borrowing"),
substantially in the form of Exhibit A, not later than 10:00 A.M. on the date
that is three Business Days prior to the proposed date of such Borrowing (two
Business Days in the case of Base Rate Loans and one Business Day in the case
of the Initial Loans). Each Notice of Borrowing (a) shall be irrevocable, (b)
shall be deemed to be a representation and warranty by the Borrower that all
conditions precedent to such Borrowing have been or will be on the relevant
Funding Date satisfied and (c) shall specify (i) the aggregate principal amount
in Dollars of the Loans to be made pursuant to such Borrowing, (ii) the date of
Borrowing (which shall be a Business Day) and (iii) whether the respective
Borrowing shall consist of Base Rate Loans or LIBOR Loans and, if LIBOR Loans,
the Interest Period to be initially applicable thereto. The Administrative
Agent shall as promptly as practicable give each Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing, of
such Lender's Pro Rata Share thereof and of the other matters covered by the
Notice of Borrowing.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. on
the date specified in each Notice of Borrowing, each Lender will make available
to the Administrative Agent in New York its Pro Rata Share of each Borrowing
requested to be made on such date in the manner provided below.
(b) Each Lender shall make available all amounts it is to
fund under any Borrowing on or after the Initial Funding Date in immediately
available funds to the Administrative Agent to the account specified therefor
by the Administrative Agent or, if no account is so specified, at the
Administrative Agent's Office, and the Administrative Agent will make
available to the Borrower by depositing to the account specified therefor by
the Borrower or, if no account is so specified, to its account at the
Administrative Agent's Office the aggregate of the amounts so made available in
the type of funds received. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of any such Borrowing that such Lender
does not intend to make available to the Administrative Agent its portion of
the Borrowing or Borrowings to be made on such date, the Administrative Agent
may assume that such Lender has made such amount available to the
Administrative Agent
<PAGE> 14
-4-
on such date of Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made the same available to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the Federal Funds Rate or (y) if paid by the Borrower (and/or
one or more other Loan Parties), the then applicable rate of interest,
calculated in accordance with Section 1.08, for the Loans. The Administrative
Agent shall also be entitled to recover from any Lender an amount equal to any
other losses incurred by the Administrative Agent as a result of the failure of
such Lender to provide such amount as provided in this Agreement.
(c) Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its commitments hereunder or to prejudice any
rights which any Loan Party may have against any Lender as a result of any
default by such Lender hereunder.
1.05 Revolving Notes. The Borrower's obligation to pay the
principal of and interest on all the Loans made to it by each Lender shall be
evidenced by a promissory note (each, a "Revolving Note" and, collectively, the
"Revolving Notes") duly executed and delivered by the Borrower, substantially
in the form of Exhibit B, with blanks appropriately completed in conformity
herewith.
1.06 Conversions/Continuations. Subject to the provisions of
Section 1.10, the Borrower shall have the option (i) to convert on any Business
Day all or any part of its outstanding Base Rate Loans equal to at least the
Minimum Borrowing Amount and in integral multiples of $100,000 in excess of
such amount to LIBOR Loans, (ii) to convert on any Business Day all or any part
of its outstanding LIBOR Loans equal to at least the Minimum Borrowing Amount
and in integral multiples of $100,000 in excess of that amount to Base Rate
Loans; provided, however, that (a) except as otherwise provided in Section
1.10(b), LIBOR Loans may be converted into Base Rate Loans only on the last day
of an Interest Period
<PAGE> 15
-5-
applicable thereto, (b) no such partial conversion of LIBOR Loans shall reduce
the outstanding principal amount of LIBOR Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount (unless reduced to zero),
(c) a Loan may be continued as or converted into a LIBOR Loan only if no
Default or Event of Default is in existence on the date of conversion or
continuation, as the case may be and (d) no Loan shall be converted into a
LIBOR Loan until after the Syndication Date; or (iii) upon the expiration of
any Interest Period applicable to LIBOR Loans, to continue all or any portion
of such Loans equal to at least the Minimum Borrowing Amount and in integral
multiples of $100,000 in excess of that amount as LIBOR Loans (it being
understood that succeeding Interest Period(s) of such continued Loans shall
commence on the last day of the Interest Period of the Loans to be continued).
Each such conversion/continuation shall be effected by the Borrower by giving
the Administrative Agent at the Administrative Agent's Office written notice
(or telephonic notice promptly followed by such written notice) (each a "Notice
of Conversion/Continuation"), substantially in the form of Exhibit C, no later
than 10:00 A.M. on the date that is three Business Days prior to the proposed
date of conversion/continuation (one Business Day in the case of conversion
into Base Rate Loans), which shall specify the Loans to be so converted or
continued, the Type of Loans to be converted into, the proposed
conversion/continuation date, and, if to be converted into or continued as
LIBOR Loans, the requested Interest Period or Interest Periods to be applicable
thereto. The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed conversion or continuation affecting any of
such Lender's Loans. Notwithstanding the foregoing or the provisions of
Section 1.09, if a Default or Event of Default is in existence at the time any
Interest Period in respect of any Borrowing of LIBOR Loans is to expire, such
Loans may not be continued as LIBOR Loans but instead shall be automatically
converted on the last day of such Interest Period into Base Rate Loans. If no
Notice of Conversion/Continuation has been duly delivered with respect to a
LIBOR Loan on or before 10:00 A.M. on the third Business Day prior to the last
day of the Interest Period applicable thereto, such LIBOR Loan shall be
automatically converted into a Base Rate Loan.
Except as provided in Section 1.10, a Notice of
Conversion/Continuation for conversion into or continuation of LIBOR Loans or
for conversion to Base Rate Loans shall be irrevocable.
The giving to the Administrative Agent of a Notice of
Conversion/Continuation shall be deemed to be a representation by the Borrower
on the date of such Notice of Conversion/Continuation that no Default or Event
of Default has occurred and is continuing under any Credit Document.
<PAGE> 16
-6-
1.07 Pro Rata Borrowings. All Borrowings under this
Agreement shall be funded by the Lenders in an amount equal to their respective
Pro Rata Shares on the basis of their respective Commitments. No Lender shall
be responsible for any default by any other Lender in its obligation to make
Loans hereunder and each Lender shall be obligated to make the Loans provided
to be made by it hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Loan made to it from the date
made to the date repaid at the rates per annum set forth below:
(i) if a Base Rate Loan, then at the sum of the Base Rate
in effect from time to time plus the Applicable Borrowing Margin then
in effect from time to time; or
(ii) if a LIBOR Loan, then at the sum of the LIBOR Rate
applicable to such LIBOR Loan plus the Applicable Borrowing Margin
then in effect from time to time.
Subject to the terms and conditions of this Agreement, the Borrower shall be
entitled to determine, at the time a Notice of Borrowing is given pursuant to
Section 1.03 or a Notice of Conversion/Continuation is given pursuant to
Section 1.06, whether Loans under any Borrowing shall be Base Rate Loans or
LIBOR Loans.
(b) The Applicable Borrowing Margin shall be (A) prior to
August 15, 1995 (the "Three Month Date"), that set forth in clauses A and B, as
applicable, of the definition of Applicable Borrowing Margin and (B) on and
after the Three Month Date, that determined pursuant to clauses C and D of the
definition of Applicable Borrowing Margin based on the Total Debt Leverage
Ratio set forth in the Interest Rate Certificate (or Acquisition Certificate,
as the case may be) most recently delivered to the Administrative Agent and
shall be effective upon such delivery, unless reasonably objected to by the
Requisite Lenders or the Administrative Agent within five Business Days of
receipt thereof. An Interest Rate Certificate (or Acquisition Certificate, as
the case may be) which has been so objected to and is either not resubmitted
within five days of such objection or, if resubmitted, is reasonably objected
to again within five days of receipt of such resubmission shall be deemed not
to have been timely delivered. Upon resolution of the Interest Rate
Certificate (or Acquisition Certificate, as the case may be) that was objected
to and timely resubmitted (and not further objected to), the Applicable
Borrowing Margin shall be adjusted retroactively as of the date of original
delivery of such Interest Rate Certificate (or Acquisition
<PAGE> 17
-7-
Certificate, as the case may be). Notwithstanding the foregoing, if an
Interest Rate Certificate (or Acquisition Certificate, as the case may be) is
not, or is deemed (pursuant to the second sentence of this Section 1.08(b)) not
to have been, timely delivered and the Total Debt Leverage Ratio as certified
in the Interest Rate Certificate (or Acquisition Certificate, as the case may
be) is greater than the Total Debt Leverage Ratio as certified in the Interest
Rate Certificate (or Acquisition Certificate, as the case may be) last
delivered to and accepted by the Administrative Agent, the change in the
Applicable Borrowing Margin shall be effective upon the date such Interest Rate
Certificate (or Acquisition Certificate, as the case may be) was required to
have been delivered pursuant to Section 6.17; provided, however, that the
foregoing clause shall not limit any rights of any of the Agents or Lenders
under any other provision hereof.
(c) 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), on the date
on which each installment thereof shall become due and payable and at maturity
(whether at stated maturity, by acceleration or otherwise).
(d) All computations of interest hereunder shall be made
in accordance with Section 11.07(c).
(e) The Administrative Agent, upon determining the
interest rate for any Borrowing of LIBOR Loans for any Interest Period, shall
promptly notify the Borrower and the Lenders thereof. Such determination
shall, absent manifest error, be final, conclusive and binding upon all parties
hereto.
1.09 Interest Periods. At the time the Borrower gives a
Notice of Borrowing or Notice of Conversion/Continuation in respect of the
making of, conversion into, or continuation of, a Borrowing of LIBOR Loans, it
shall have the right to elect, by giving the Administrative Agent written
notice (or telephonic notice promptly confirmed in writing), the Interest
Period applicable to such Borrowing, which Interest Period shall, at the option
of the Borrower, be a one-, three-, six- or, if available, twelve-month period.
Notwithstanding anything to the contrary contained above:
(a) all LIBOR Loans comprising a Borrowing shall have the
same Interest Period;
(b) the initial Interest Period for any Borrowing of
LIBOR Loans shall commence on the date of such Borrowing (including
the date of any conversion from a Borrowing of Base
<PAGE> 18
-8-
Rate Loans), and each Interest Period occurring thereafter (including
continuations thereof) in respect of such Borrowing shall commence on
the date on which the next preceding Interest Period expires;
(c) if any Interest Period relating to a Borrowing of
LIBOR Loans begins on a date for which there is no numerically
corresponding date in the calendar month in which such Interest Period
ends, such Interest Period shall end on the last Business Day of such
calendar month;
(d) if any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; provided, however, that if any
Interest Period in respect of a LIBOR Loan would otherwise expire on a
day which is not a Business Day but is a day of the month after which
no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;
(e) no Interest Period shall extend beyond the Maturity
Date; and
(f) no Interest Period shall extend beyond the Scheduled
Maturity Date unless and until the Extension Option has been exercised
and is in effect.
1.10 Special Provisions Governing LIBOR Loans.
Notwithstanding the other provisions of this Agreement, the following
provisions shall govern with respect to LIBOR Loans as to the matters covered:
(a) On an Interest Rate Determination Date, the
Administrative Agent shall determine (which determination shall,
absent manifest error, be final, conclusive and binding upon all
parties hereto) the interest rate which shall apply to the LIBOR 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 the Borrower and to each Lender.
(b) In the event that (x) in the case of clause (i) below,
the Administrative Agent or (y) in the case of clause (ii) or (iii)
below, any Lender shall have determined (which determination made in
good faith shall, absent manifest error, be final, conclusive and
binding upon all parties hereto):
(i) on any Interest Rate Determination Date that,
by reason of any changes arising on or after March 24,
<PAGE> 19
-9-
1995 affecting United States money markets or the London
interbank Eurodollar market, (I) quotations of interest rates
for the relevant deposits are not being provided in the
relevant amounts or for the relevant maturities for purposes
of determining the rate of interest for such Loans under this
Agreement; or (II) the rates of interest referred to in the
definition of "LIBOR Base Rate", on the basis of which the
rate of interest on any LIBOR Loans for such period is
determined, do not accurately reflect the cost to the Lenders
of making or maintaining such LIBOR Loans for such period; or
(III) adequate and fair means do not exist for ascertaining
the LIBOR Base Rate in accordance with the definition thereof;
(ii) at any time that such Lender shall incur
increased costs or reductions in the amounts received or
receivable hereunder with respect to any LIBOR Loan or its
obligation to make LIBOR Loans because of (x) any change since
March 24, 1995 (including changes proposed or published prior
to March 24, 1995) in any applicable law, governmental rule,
regulation, guideline, request or order, whether or not having
the force of law, or in the interpretation or administration
thereof and including the introduction of any new law or
governmental rule, regulation, guideline or order, such as,
for example, but not limited to: (A) a change in the basis of
taxation of payments to any Lender of the principal of or
interest on the Revolving Notes or any other amounts payable
hereunder or under the Revolving Notes (except for changes in
the rate of tax on, or determined by reference to, the overall
income (whether net or gross income) of a Lender pursuant to
the income tax laws of the United States or of the
jurisdiction where such Lender is incorporated or the
jurisdiction where such Lender's lending office is located) or
(B) a change in official reserve requirements or compulsory
loan assessment, special deposit or similar requirement
relating to any extensions of credit or other assets of, or
any deposits with or other liabilities of, any office of such
Lender, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the
LIBOR Rate relating to such Loans) or (y) other circumstances
arising after March 24, 1995 affecting such Lender, the London
interbank Eurodollar market, or the position of such Lender in
such market; or
(iii) at any time that the making or continuance of
any LIBOR Loan has become unlawful under, or would be
inconsistent with compliance by such Lender in good faith
<PAGE> 20
-10-
with, any law, governmental rule, regulation, guideline or
order (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful), or has
become impracticable as a result of a contingency occurring
after March 24, 1995 which materially and adversely affects
the London interbank Eurodollar market;
then, and in any such event, the Administrative Agent in the case of
clause (i) above or such Lender in the case of clause (ii) or (iii)
above shall on such date give notice (by telephone confirmed in
writing) to the Borrower of the Loan affected and, in the case of
clause (ii) or (iii) to the Administrative Agent, of such
determination (which notice the Administrative Agent shall promptly
transmit to each of the other Lenders). Thereafter (x) in the case of
clause (i) above, until such time as the Administrative Agent notifies
the Borrower and the Lenders (which notice shall be delivered as soon
as practicable by the Administrative Agent) that the circumstances
giving rise to such notice by the Administrative Agent no longer
exist, LIBOR Loans shall no longer be available, any Notice of
Borrowing or Notice of Conversion/Continuation given by the Borrower
with respect to the borrowing of or conversion into or continuance of
LIBOR Loans which have not yet been effected shall be deemed rescinded
by the Borrower and all outstanding LIBOR Loans not prepaid on the
last day of the applicable Interest Period shall be automatically
converted into Base Rate Loans, (y) in the case of clause (ii) above,
the Borrower shall pay to such Lender, upon written demand therefor,
such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender
in its reasonable discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in
amounts receivable hereunder (a written notice as to the additional
amounts owed to such Lender, showing the basis for the calculation
thereof, submitted to the Borrower by such Lender shall, absent
manifest error, be final, conclusive and binding upon all parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall
take one of the actions specified in Section 1.10(c) as promptly as
possible and, in any event, within the time period required by law.
Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable with
respect to any period shall not constitute a waiver of such Lender's
right to demand compensation with respect to such period or any other
period; provided, however, that no Lender shall be entitled to
compensation under this Section 1.10(b) for any costs incurred or
reductions suffered with
<PAGE> 21
-11-
respect to any date unless it shall have notified the Borrower that it
will demand compensation for such costs or reductions not more than 90
days after the later of (i) such date and (ii) the date on which an
officer of such Lender responsible for the administration of such
Lender's Loans shall have become actually aware of such costs or
reductions.
(c) At any time that any LIBOR Loan is affected by the
circumstances described in Section 1.10(b)(ii) or (iii), the Borrower
may (and in the case of a LIBOR Loan affected by circumstances
described in Section 1.10(b)(iii) shall) either (I) if a Notice of
Borrowing or Notice of Conversion/Continuation has been given with
respect to the affected LIBOR Loan, cancel said Notice of Borrowing or
Notice of Conversion/Continuation by giving the Administrative Agent
telephonic notice (confirmed promptly in writing) thereof on the same
date that the Borrower was notified by a Lender pursuant to Section
1.10(b)(ii) or (iii), or (II) if the affected LIBOR Loan is then
outstanding, upon at least three Business Days' notice to the
Administrative Agent (or, if shorter, within the time period required
by law), require the affected Lender to convert each such LIBOR Loan
into a Base Rate Loan, or prepay such LIBOR Loan (which conversion or
prepayment, in the case of the circumstances described in Section
1.10(a)(iii), shall occur no later than the last day of the Interest
Period then applicable to such LIBOR Loan (or such earlier date as
shall be required by law)); provided, however, that if more than one
Lender is affected at any time pursuant to clause (I) or (II) of this
Section 1.10(c), then all affected Lenders must be treated the same
pursuant to this Section 1.10(c); provided, further, however, that the
Borrower shall compensate all such affected Lenders as set forth in
Section 1.10(e).
(d) Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 1.10(b)(ii) or (iii), it
will, if requested by the Borrower, to the extent not inconsistent
with such Lender's internal policies, use reasonable efforts to make,
fund or maintain the affected LIBOR Loans of such Lender through
another lending office of such Lender if as a result thereof the
additional moneys which would otherwise be required to be paid in
respect of such Loans pursuant to Section 1.10(b)(ii) would be
materially reduced or the illegality or other adverse circumstances
which would otherwise require prepayment of such Loans pursuant to
Section 1.10(b)(iii) would cease to exist, and if, as determined by
such Lender, in its reasonable discretion, the making, funding or
maintenance of such Loans through such other lending office would not
otherwise adversely affect such
<PAGE> 22
-12-
Loans or such Lender. The Borrower hereby agrees to pay all
reasonable expenses incurred by any Lender in utilizing another
lending office of such Lender pursuant to this Section 1.10(d).
Nothing in this Section 1.10(d) shall affect or postpone any of the
obligations of the Borrower or the right of any Lender elsewhere
herein.
(e) The Borrower shall compensate each Lender, upon
written request by that Lender (which request shall set forth the
basis for requesting such compensation), within 15 days of receipt of
such written request, for all losses (including loss of profit),
expenses and liabilities (including such factors as any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
LIBOR Loans and any loss sustained by that Lender in connection with
re-employment of such funds) which that Lender may sustain or incur or
to be sustained or incurred with respect to the Borrower's LIBOR
Loans: (i) if for any reason (other than a default or error by that
Lender) a Borrowing of any such LIBOR Loan does not occur on a date
specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation or in a telephonic request for borrowing,
conversion or continuation, or a successive Interest Period in respect
of any such LIBOR Loan does not commence after notice therefor is
given pursuant to Section 1.06 (whether or not withdrawn by the
Borrower or deemed withdrawn pursuant to Section 1.10(b)), (ii) if any
prepayment or repayment (whether voluntarily pursuant to Section 3.01,
as required by Section 3.02, by acceleration or otherwise) or
conversion of any of such Lender's LIBOR Loans occurs on a date which
is not the last day of the Interest Period applicable to that Loan,
(iii) if any prepayment or repayment of any such Lender's LIBOR Loans
is not made on any date specified in a notice of prepayment or
repayment given by the Borrower, or (iv) as a consequence of (x) any
other failure by the Borrower to repay such Lender's LIBOR Loans when
required by the terms of this Agreement or (y) any election made
pursuant to Section 1.10(c)(II). A certificate showing in reasonable
detail the amount of such losses, expenses and liabilities submitted
to the Borrower by such Lender shall, absent manifest error, be final,
conclusive and binding for all purposes.
(f) Any Lender may make, carry or transfer LIBOR Loans
at, to or for the account of any of its branch offices or the office
of an Affiliate of that Lender.
(g) Calculation of all amounts payable to a Lender under
this Section 1.10 shall be made as though that Lender had actually
funded its relevant LIBOR Loan through the purchase
<PAGE> 23
-13-
of a Eurodollar deposit bearing interest at the LIBOR Rate applicable
to such LIBOR Loan in an amount equal to the amount of the LIBOR 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; it being understood that each Lender may
fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 1.10.
(h) During the continuance of a Default or an Event of
Default, the Borrower may not elect to have a Loan made or maintained
as, or converted into, a LIBOR Loan after the expiration of any
Interest Period then in effect for that Loan.
(i) The protection of this Section 1.10 shall be
available to each Lender regardless of any possible contention of the
invalidity or inapplicability of any law, regulation or other
condition which shall give rise to any demand to such Lender for
compensation hereunder; provided, however, that a Lender's claim for
protection shall be made in good faith.
1.11 Capital Requirements. If, at any time or from time to
time after March 24, 1995, any Lender shall have determined that the adoption
or effectiveness of any applicable law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle Committee on
Lending Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards", or the adoption or
implementation of any legal requirement of any Governmental Authority regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency or authority charged with the interpretation or
administration thereof, or compliance by such Lender or such Lender's parent
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such Governmental Authority, central bank or
comparable agency or authority (including in each case any such change proposed
or published prior to March 24, 1995), has or would have the effect of reducing
the rate of return on the capital or assets of such Lender or such Lender's
parent as a consequence of such Lender's obligations hereunder to a level below
that which such Lender or such Lender's parent could have achieved but for such
adoption, effectiveness, compliance or change or as a consequence of an
increase in the amount of capital required to be maintained by such Lender
(including in each case with respect to any Lender's Commitment or any Loan),
such Lender
<PAGE> 24
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shall give prompt written notice thereof to the Borrower (with a copy to the
Administrative Agent), which notice shall set forth the basis of the
calculation of such additional amount as will compensate such Lender or such
Lender's parent, as the case may be, for such reduction, and the Borrower shall
pay to such Lender such additional amount within 15 days of receipt of such
notice. Failure on the part of any Lender to demand compensation for any
reduction in return on capital with respect to any period shall not constitute
a waiver of such Lender's right to demand compensation with respect to such
period or any other period; provided, however, that no Lender shall be entitled
to compensation under this Section 1.11 for any costs incurred or reductions
suffered with respect to any date unless it shall have notified the Borrower
that it will demand compensation for such reductions not more than 90 days
after the later of (i) such date and (ii) the date on which an officer of such
Lender responsible for the administration of such Lender's Loans shall have
become actually aware of such reductions. The protection of this Section 1.11
shall be available to each Lender regardless of any possible contention of the
invalidity or inapplicability of any law, regulation or other condition which
shall give rise to any demand to such Lender for compensation hereunder;
provided, however, that a Lender's claim for protection shall be made in good
faith.
1.12 Total Commitments; Limitations on Outstanding Loan
Amounts. The original amount of the Total Commitments is $75,000,000.
Anything contained in this Agreement to the contrary notwithstanding, (a) in no
event shall the aggregate principal amount of all Loans of any Lender at any
time exceed the Commitment in effect at such time of such Lender; and (b) in no
event shall the aggregate principal amount of all Loans from all Lenders at any
time exceed the Total Commitments in effect at such time.
1.13 Extension of Maturity Date. The Borrower may, in its
sole discretion, by written notice to the Agents and the Lenders not fewer than
60 days prior to the second anniversary of the Initial Funding Date (the
"Scheduled Maturity Date"), elect to extend the Maturity Date to the third
anniversary of the Initial Funding Date; provided, however, that such extension
shall be subject to (i) the payment to each Lender on the Scheduled Maturity
Date of a fee (in immediately available funds) equal to 1% of the sum of each
such Lender's total outstanding Loans and Unutilized Commitment and, (ii) the
Borrower, as of the Scheduled Maturity Date (giving effect to all Loans then
outstanding), being in compliance with all covenants set forth in the Credit
Documents and (iii) no Default or Event of Default having occurred and being
continuing at the Scheduled Maturity Date or arising from such extension (such
election effected in accordance with the foregoing, the "Extension Option").
<PAGE> 25
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1.14 Replacement of Lenders. (x) If any Lender becomes a
Defaulting Lender or (y) upon the occurrence of any event giving rise to the
operation of Section 1.10(b), 1.11 or 3.05 with respect to any Lender which
results in such Lender charging to the Borrower increased costs in excess of
those being generally charged by the other Lenders, the Borrower shall have the
right, if no Default or Event of Default then exists, to require such Lender
(the "Replaced Lender") to transfer and assign without recourse (in accordance
with and subject to the restrictions set forth in Section 11.04) all of the
interests, rights and obligations of the Replaced Lender hereunder to one or
more other Persons (collectively, the "Replacement Lender") reasonably
acceptable to the Agents; provided, however, that (i) at the time of any
replacement pursuant to this Section 1.14, the Replacement Lender shall pay to
the Replaced Lender an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Replaced Lender and (B) an amount equal to all accrued, but theretofore unpaid,
fees owing to the Replaced Lender pursuant to Section 2.03, (ii) all
obligations of the Borrower owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid), including pursuant to
Sections 1.10(b), 1.10(e), 1.11 and 3.05, shall be paid in full to such
Replaced Lender concurrently with such replacement and (iii) if the Borrower is
obligated at any one time to make payments to or indemnify more than one Lender
pursuant to Section 1.10, 1.11 or 3.05, all such Lenders shall be treated the
same pursuant to this Section 1.14. The assignment shall be effective upon the
payment of amounts referred to in clauses (i) and (ii) and the satisfaction of
the conditions set forth in Section 11.04(b).
SECTION 2. Commitments.
2.01 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) to the Administrative Agent at the Administrative Agent's Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), the Borrower shall have the right, without premium or penalty, to
terminate the unutilized portion of the Total Commitments in part or in whole;
provided, however, that (x) any such termination shall apply to
proportionately and permanently reduce the Commitment of each of the Lenders
and (y) any partial reduction pursuant to this Section 2.01 shall be in an
aggregate amount of at least $1,000,000 and in an integral multiple of $100,000
in excess of that amount; provided, further, that the Total Commitments shall
not be reduced pursuant to this Section 2.01 to an amount less than the
aggregate principal amount of Loans to be outstanding on the date of such
<PAGE> 26
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reduction after giving effect to any payments to be made on such date pursuant
to Section 3.
2.02 Termination of Commitments. The Total Commitments shall
terminate on the Commitment Termination Date.
2.03 Commitment Commission. The Borrower shall pay to the
Administrative Agent a commitment commission ("Commitment Commission") for the
account of each Lender for the period from the Allocation Date to the date the
Total Commitments have been terminated, computed at a rate equal to 0.5% per
annum of (x) prior to the Effective Date, $75,000,000, and (y) from and after
the Effective Date, the daily average Unutilized Commitment of such Lender.
Accrued Commitment Commission shall be due and payable in arrears (1) on the
Initial Funding Date and (2) on the last Business Day of each March, June,
September and December commencing June 30, 1995 and on the Commitment
Termination Date or such earlier date as the Total Commitments shall have been
terminated.
SECTION 3. Payments; Commitment Reductions.
3.01 Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole at any time or in part from time to time,
without premium or penalty, on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent at the Administrative Agent's
Office written notice (or telephonic notice promptly confirmed in writing) of
its intent to prepay the Loans, the amount of such prepayment and, in the case
of LIBOR Loans, the specific Borrowing or Borrowings pursuant to which such
Loans were made, which notice shall be given by the Borrower at least three
Business Days prior to the date of such prepayment and which notice shall
promptly be transmitted by the Administrative Agent to each of the Lenders;
(ii) each partial prepayment of any Borrowing shall be in an aggregate
principal amount of at least $1,000,000 and in integral multiples of $100,000
above that amount; provided, however, that no partial prepayment of a Borrowing
shall reduce the aggregate principal amount of outstanding Loans made pursuant
to such Borrowing to an amount less than the Minimum Borrowing Amount; (iii)
if LIBOR Loans are prepaid pursuant to this Section 3.01 other than on the last
day of an Interest Period applicable thereto, the Borrower shall pay to the
Lenders the amounts required by Section 1.10(e); and (iv) each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans.
<PAGE> 27
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3.02 Mandatory Prepayments; Commitment Reductions.
A. Requirements. The Borrower shall prepay the
outstanding principal amount of the Loans as set forth in Section 3.02B(a):
(a) on any date on which the aggregate outstanding
principal amount of Loans (after giving effect to any other repayments
or prepayments on such date) exceeds the Total Commitments (after
giving effect to any reduction of the Total Commitments to be effected
on such date), in the amount of such excess;
(b) on the date of receipt by the Borrower Group of any
Net Cash Proceeds or Net Financing Proceeds (other than any Net
Financing Proceeds from the Incurrence of Indebtedness pursuant to
Section 7.04), in an amount equal to such Net Cash Proceeds or Net
Financing Proceeds, as the case may be;
(c) beginning on March 31, 1996 and on March 31 of each
fiscal year of the Borrower thereafter, in an amount equal to 50% of
Excess Cash Flow of the Borrower for the fiscal year ended immediately
prior to such March 31 (Excess Cash Flow to be measured from the
Effective Date for purposes of calculating the amount of such
prepayment due March 31, 1996); and
(d) on the date required to be received by the Borrower
of any capital contribution by the Parent pursuant to Section
12C(2)(v) of the Parent Guarantee, in the amount of such capital
contribution.
B. Application. (a) Prepayments to be applied pursuant
to this Section 3.02B(a) shall be applied to prepay outstanding Loans pro rata.
(b) With respect to each prepayment of Loans required by
Section 3.02A, the Borrower may designate the specific Borrowing or Borrowings
which are to be prepaid; provided, however, that (i)(x) if LIBOR Loans are
designated for prepayment pursuant to this Section 3.02 other than on the last
day of an Interest Period applicable thereto, the Borrower shall pay to the
Lenders the amounts required by Section 1.10(e) and (y) if any prepayment of
LIBOR Loans made pursuant to a single Borrowing shall reduce the outstanding
Loans made pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount, such Borrowing shall immediately be converted into Base Rate
Loans; and (ii) each prepayment of any Loans made pursuant to a single
Borrowing shall be applied pro rata among such Loans. In the absence of a
designation by the Borrower,
<PAGE> 28
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the Administrative Agent shall, subject to the above, make such designation in
its sole discretion. All prepayments shall include payment of accrued interest
on the principal amount so prepaid, shall be applied to the payment of interest
before application to principal and shall include amounts payable, if any,
under Section 1.10(e).
C. Commitment Reductions. The Total Commitments shall
be permanently reduced on the date each prepayment is required pursuant to
Section 3.02A(b) or (c) by an amount equal to the amount of any such required
prepayment. Each such reduction of the Total Commitments shall be effected pro
rata with respect to the Commitment of each Lender.
3.03 Repayment. All of the Loans shall be repaid in full on
the Maturity Date.
3.04 Method and Place of Payment. (a) Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
to the Administrative Agent, for the ratable account of the Lenders entitled
thereto, not later than 1:00 P.M. on the date when due and shall be made in
immediately available funds in lawful money of the United States of America to
the account specified therefor by the Administrative Agent or, if no account
has been so specified, at the Administrative Agent's Office, it being
understood that written notice by the Borrower to the Administrative Agent to
make a payment from the funds in the Borrower's account at the Administrative
Agent's Office shall constitute the making of such payment to the extent of
such funds held in such account. The Administrative Agent will thereafter
cause to be distributed on the same day (if payment is actually received by the
Administrative Agent in New York prior to 1:00 P.M. on such day) funds for the
payment of principal or interest or fees ratably to the Lenders entitled to
receive any such payment in accordance with the terms of this Agreement. If
and to the extent that any such distribution shall not be so made by the
Administrative Agent in full on the same day (if payment is actually received
by the Administrative Agent prior to 1:00 P.M. on such day), the Administrative
Agent shall pay to each Lender its ratable amount thereof and each such Lender
shall be entitled to receive from the Administrative Agent, upon demand,
interest on such amount at the Federal Funds Rate for each day from the date
such amount is paid to the Administrative Agent until the date the
Administrative Agent pays such amount to such Lender.
(b) Any payment under this Agreement which is made by the
Borrower later than 1:00 P.M. on the date such payment is due shall, for
purposes of determining the amount of interest owing hereunder or amounts owing
under Section 1.10(e), be deemed to have
<PAGE> 29
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been made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension,
except that with respect to LIBOR Loans, if such next succeeding applicable
Business Day is not in the same month as the date on which such payment would
otherwise be due hereunder or under any Revolving Note, the due date with
respect thereto shall be the next preceding applicable Business Day.
3.05 Net Payments; Tax Certificates. (a) All payments by
any Loan Party under any Credit Document shall be made without set-off or
counterclaim and in such amounts as may be necessary in order that all such
payments (after deduction or withholding for or on account of any present or
future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any Governmental Authority, other than any tax on or measured by the
income (whether gross or net income) (collectively, "Taxes") of a Lender
pursuant to the income tax laws of the United States or of the jurisdiction
where such Lender is incorporated or the jurisdiction where such Lender's
lending office is located) shall not be less than the amounts otherwise
specified to be paid under any Credit Document. If any Loan Party is required
by law to make any deduction or withholding on account of Taxes from any
payment due under any Credit Document, then (i) such Loan Party shall timely
remit such Taxes to the Governmental Authority imposing the same and (ii) the
amount payable under such Credit Document will be increased to such amount
which, after deduction from such increased amount of all amounts required to be
deducted or withheld therefrom, will not be less than the amount otherwise due
and payable. Without prejudice to the foregoing, if any Lender, or any of the
Agents on its behalf, is required by law to make any payment on account of
Taxes, the Borrower shall, upon notification by such Lender or any of the
Agents, promptly indemnify such Person against such Taxes payable or incurred
in connection therewith computed in a manner consistent with the first sentence
of this Section 3.05. For purposes of this Section 3.05, the term "Taxes"
includes interest, penalties and expenses (including fees and expenses of
counsel) payable or incurred in connection therewith. The Borrower shall also
reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income of such Lender pursuant to the laws of
the jurisdiction in which the principal office or lending office of such Lender
is located, or under the laws of any political subdivision or taxing authority
of any such jurisdiction, as such Lender shall determine are or were payable by
such Lender, in respect of Taxes paid to or on behalf of such Lender pursuant
to this Section 3.05. A certificate showing in
<PAGE> 30
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reasonable detail the calculation of any additional amounts payable to a Lender
under this Section 3.05 submitted to the Borrower by such Lender shall, absent
manifest error, be final, conclusive and binding for all purposes upon all
parties hereto. With respect to each deduction or withholding for or on
account of any Taxes, the Borrower shall promptly furnish to each Lender such
certificates, receipts and other documents as may be required (in the judgment
of such Lender) to establish any tax credit to which such Lender may be
entitled.
(b) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to furnish to the Borrower and the
Administrative Agent, prior to the first interest payment date (or in the case
of any Person that becomes a Lender after the date hereof, prior to the first
interest payment date after such Person becomes a Lender), two copies of either
U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 or any successor forms thereto (wherein such Lender claims entitlement to
complete exemption from or reduced rate of U.S. federal withholding tax on
interest paid by the Borrower hereunder) and upon request of the Borrower to
provide to the Borrower and the Administrative Agent a new Form 4224 or Form
1001 or any successor form thereto if any previously delivered form is found to
be incomplete or incorrect in any material respect or upon the obsolescence of
any previously delivered form. Notwithstanding any other provision of this
Section 3.05(b), a Lender shall not be required to deliver any form pursuant to
this Section 3.05(b) that such Lender is not legally able to deliver.
(c) Notwithstanding anything in this Section 3.05 to the
contrary, the Borrower shall not be required to pay any amounts on account of
Taxes pursuant to this Section 3.05 to any Lender, or the Administrative Agent
on its behalf, to the extent that such amounts would not have been payable if
such Lender had furnished a form (properly and accurately completed in all
material respects) which it was otherwise required to furnish in accordance
with Section 3.05(b).
SECTION 4. Conditions Precedent.
4.01 Conditions Precedent to Initial Loans. The obligations
of the Lenders to make the Initial Loans to the Borrower hereunder are subject
to the satisfaction of each of the following conditions (in addition (but
without duplication) to each of the conditions precedent specified in Sections
4.02 and 4.04) on or prior to the Initial Funding Date:
<PAGE> 31
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(a) Credit Documents; Revolving Notes. (i) Each Credit
Document shall (x) be reasonably satisfactory to the Agents and the Lenders and
(y) have been duly authorized, executed and delivered by each of the Loan
Parties (to the extent a party thereto) and be in full force and effect on the
Initial Funding Date.
(ii) There shall have been delivered to the Administrative
Agent Revolving Notes executed by the Borrower to the order of each Lender in
the amount and maturity and as otherwise provided herein.
(b) Officer's Solvency Certificate. The Agents and the
Lenders shall have received on or prior to the Initial Funding Date, the
Officer's Solvency Certificate dated the Initial Funding Date and satisfactory
to the Agents and the Lenders, supporting the conclusions that, after giving
effect to (x) the Contribution, the Initial Loans and the consummation of the
Initial Preapproved Acquisitions and (y) the borrowing of $47,500,000 under
this Agreement and the consummation of the Contribution, the Initial
Preapproved Acquisitions and the other Preapproved Acquisitions, (I) the Parent
and its Subsidiaries will be Solvent and (II) the Borrower and its Subsidiaries
will be Solvent.
(c) Opinions of Counsel. The Agents shall have received
on the Initial Funding Date a written opinion or opinions addressed to the
Agents and each Lender from (i) Holland & Knight, special counsel for the Loan
Parties, in substantially the form of Exhibit D-1, (ii) Anthony L. Morrison,
general counsel for the Loan Parties, in substantially the form of Exhibit
D-2, (iii) Cahill Gordon & Reindel, special counsel to the Agents, in
substantially the form of Exhibit D-3, (iv) local counsel to the Borrower Group
in each jurisdiction in which Mortgaged Real Property or other Collateral is
located, in substantially the form of Exhibit D-4, and (v) Dow Lohnes &
Albertson, special FCC and special counsel in connection with the Initial
Preapproved Acquisitions for the Loan Parties, in substantially the form of
Exhibit D-5, each opinion to be dated the Initial Funding Date, reasonably
satisfactory to the Agents and the Lenders and covering such other matters and
including such changes as shall be reasonably requested by any of the Agents.
(d) Financial Statements, Etc. On or before the Initial
Funding Date, the Agents and the Lenders shall have received (x) with respect
to the Parent, the audited Financial Statements included in the Parent's Form
10-K for the fiscal year ended December 31, 1994 and the unaudited Financial
Statements included in the Parent's Form 10-Q for the fiscal quarter ended
March 31, 1995, in each case as filed with the SEC and (y) with respect to each
Contributed Station and each Preapproved Station, the
<PAGE> 32
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Financial Statements set forth opposite each such Station on Schedule 4.01(d).
On or before the Initial Funding Date, the Agents and the Lenders shall have
received (A) the Initial Projected Financial Statements and (B) projected
Financial Statements of the Parent (the "Parent Projected Financial
Statements") in form and substance satisfactory to the Agents. The Agents and
the Applicable Lenders shall be satisfied with all financial statements
delivered hereunder.
(e) Mortgaged Real Property and Real Property. The
Borrower shall have delivered, or caused to be delivered, to the Collateral
Agent, on behalf of the Lenders, the following documents and instruments with
respect to each Contributed Station, other than with respect to Real Properties
of such Contributed Station identified in Section 6.21:
(i) a Mortgage encumbering each Mortgaged Real Property
acquired in the Contribution and designated in Schedule 5.17B in favor
of the Collateral Agent, for the benefit of the Secured Parties, duly
executed and acknowledged by the Borrower Group member that is the
owner of or holder of the fee or leasehold interest constituting such
Mortgaged Real Property and otherwise in form for recording in the
recording office of each political subdivision or foreign jurisdiction
where each such Mortgaged Real Property is situated, together with
(x) such certificates, affidavits, questionnaires or returns as shall
be required or, in the reasonable opinion of the Collateral Agent,
desirable in connection with the recording or filing thereof to create
a Lien under applicable law, and (y) such UCC-1 financing statements
and other similar statements as are contemplated by the counsel
opinions described in Section 4.01(c)(iv) in respect of such Mortgage,
all of which shall be reasonably satisfactory to the Collateral Agent,
which Mortgage and financing statements and other instruments shall be
effective to create a Lien on such Mortgaged Real Property subject to
no other Liens other than Prior Liens;
(ii) with respect to each Mortgaged Real Property acquired in
the Contribution, such consents, approvals, amendments, estoppels,
tenant subordination agreements or other instruments as are necessary
to consummate the Contribution or as shall be deemed necessary by the
Collateral Agent in order for the owner or holder of the fee or
leasehold interest constituting such Mortgaged Real Property to grant
the Lien contemplated by the Mortgage with respect to such Mortgaged
Real Property;
<PAGE> 33
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(iii) (a) with respect to each Mortgage relating to a tower
or studio site owned by a Contributed Station, a policy (or commitment
to issue a policy) of title insurance insuring (or committing to
insure) the Lien of such Mortgage as a valid first priority Lien on
the real property and fixtures described therein in an amount
reasonably satisfactory to Collateral Agent and Agent, which policy
(or commitment) shall (1) be issued by the Title Company, (2) include
such reinsurance arrangements (with provisions for direct access) as
shall be reasonably acceptable to the Collateral Agent and the
Lenders, (3) have been supplemented by such endorsements (or where
such endorsements are not available, opinions of special counsel,
architects or other professionals acceptable to the Collateral Agent
to the extent that such opinions can be obtained at a cost which is
reasonable with respect to the value of the real property subject to
such Mortgage) as shall be reasonably requested by the Collateral
Agent and the Lenders (including, to the extent permitted by the laws,
regulations or practices of the jurisdiction in question, endorsements
on matters relating to usury, zoning, contiguity (if a Mortgaged Real
Property consists of more than one parcel), revolving credit, doing
business, lenders' non-imputation, first loss, last dollar, tie-in or
cluster coverage with respect to any group of Mortgages and so-called
comprehensive coverage over covenants and restrictions) and (4)
contain no exceptions to title other than Prior Liens and as otherwise
agreed to by the Collateral Agent on or prior to the Initial Funding
Date with respect to such Mortgaged Real Property and (b) with respect
to each Mortgage relating to a tower or studio site leased by a
Contributed Station, a title report to the extent available
identifying the ownership of such leasehold interest and the
encumbrances affecting such leasehold interest;
(iv) with respect to each owned Mortgaged Real Property
acquired in the Contribution, a Survey;
(v) with respect to each Mortgaged Real Property acquired in
the Contribution, policies or certificates of insurance as required by
the Mortgage relating thereto, which policies or certificates shall
comply with the insurance requirements contained in such Mortgage;
(vi) with respect to each Mortgaged Real Property acquired in
the Contribution, UCC, judgment and tax lien searches confirming that
the personal property comprising a part of such Mortgaged Real
Property is subject to no Liens other than Prior Liens;
<PAGE> 34
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(vii) with respect to each Mortgaged Real Property acquired
in the Contribution, such affidavits, certificates, information
(including financial data) and instruments of indemnification
(including a so-called "gap" indemnification) as shall be required to
induce the Title Company to issue the policies (or commitments) and
endorsements contemplated in subparagraph (iii) above;
(viii) evidence acceptable to the Collateral Agent of payment
by the Borrower of all title insurance premiums and related charges,
fees and taxes (including any and all recording fees and taxes),
charges, costs and expenses required for the recording of the
Mortgages relating to the Contributed Stations and issuance of the
title insurance policies and endorsements referred to in subparagraph
(iii) above; and
(ix) with respect to each Real Property or Mortgaged Real
Property acquired in the Contribution, copies of all Leases and
Subleases, all of which shall, to the extent they affect any Mortgaged
Real Property acquired in the Contribution, be subordinated to the
Lien of the Mortgage affecting such Mortgaged Real Property and shall
be otherwise reasonably satisfactory to the Collateral Agent.
(f) Security Documents. There shall have been delivered
to the Collateral Agent on or prior to the Initial Funding Date:
(i) all Pledged Shares (as defined in the Pledge Agreements)
and Intercompany Notes outstanding as of the Initial Funding Date,
together with executed and undated stock powers or assignments or
endorsements in blank;
(ii) evidence of the filing of (or of the making of
arrangements to file contemporaneously with the making of the Initial
Loans) appropriate UCC financing statements in each of the offices
where such filing is necessary or appropriate to grant to the
Collateral Agent a perfected first priority Lien on the Collateral to
which such Security Documents apply which Lien shall be superior to
and prior to the rights of all third persons and subject to no other
Liens (except, in each case, Prior Liens) and which Lien shall be
perfected upon the filing of the financing statements referred to
above;
(iii) certified copies of Requests for Information (Form
UCC-11 or the equivalent), equivalent reports or lien search reports
or other financing statements disclosed by such Requests for
Information, together with judgment and tax lien searches, which name
any Loan Party or any Person from whom
<PAGE> 35
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the Borrower Group is acquiring Collateral as debtor and which are
filed in those jurisdictions in which any of the Collateral is located
and the jurisdictions in which the principal place of business of each
of the Loan Parties and each Person from whom Collateral was or will
be acquired is located, none of which shall evidence Liens that
encumber the Collateral except for Prior Liens or Liens with respect
to which provision reasonably satisfactory to the Collateral Agent has
been made to effect their release on or prior to the Initial Funding
Date; and
(iv) to the extent reasonably practicable, agreements from
the respective landlords of such of the Real Property which is being
leased by the Borrower Group confirming that such landlords have
subordinated their landlord liens on Borrower's (or its Subsidiary's,
as applicable) personal property to the security interests held by the
Collateral Agent and that such landlords will provide the Collateral
Agent with reasonable access to such facilities to exercise, to the
extent permitted by law, the Collateral Agent's remedies pursuant to
the Security Documents.
(g) Capital and Organizational Structure, Etc. The
Agents and the Lenders shall be reasonably satisfied with the capital,
organizational (including composition and committee structure of the boards of
directors of the Borrower Group), management, ownership and legal structure of
the Loan Parties, taking into account the transactions contemplated by the
Transaction Documents.
(h) Corporate Proceedings. As of the Initial Funding
Date, all corporate and legal proceedings and all instruments and agreements in
connection with the transactions contemplated by the Transaction Documents to
occur on the Initial Funding Date shall be reasonably satisfactory to the
Agents and the Lenders, and the Agents shall have received all information and
copies of all certificates, documents and papers, including records of
corporate proceedings and Governmental Consents, if any, that any of the Agents
may have reasonably requested from any Loan Party in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
Governmental Authorities. Without limiting the foregoing, the Agents shall
have received (i) resolutions of the board of directors of each Loan Party
approving and authorizing the execution, delivery and full and timely
performance of each Transaction Document relating to the transactions to occur
on the Initial Funding Date and such actions as are contemplated hereby, which
resolutions shall be reasonably satisfactory to the Agents and certified as of
the Initial Funding Date by the corporate secretary or an assistant secretary
of such
<PAGE> 36
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Loan Party as being in full force and effect without amendment or waiver, and
(ii) signature and incumbency certificates of the corporate secretary or an
assistant secretary of each Loan Party with respect to each officer executing
instruments, documents or agreements in connection with the transactions to
occur on the Initial Funding Date.
(i) Organizational Documentation, Etc. The Lenders shall
have received, as to each Loan Party, (i) copies of the certificate of
incorporation of such Loan Party, and all amendments thereto, certified and
accompanied by a corporate and, if available, tax good standing certificate (or
reasonable equivalent thereof) from the secretary of state of the state of
incorporation of such Loan Party and corporate good standing certificates from
each jurisdiction in which such Loan Party is qualified to do business, each
dated as of a recent date prior to the Initial Funding Date, and (ii) the
bylaws of such Loan Party, certified as of the Initial Funding Date by its
corporate secretary or an assistant secretary. The provisions of the foregoing
shall be reasonably satisfactory to the Agents and the Lenders.
(j) Compliance with Law. The Agents and the Lenders
shall be reasonably satisfied that the consummation of the transactions to be
entered into in connection with the Contribution will not (i) violate any
applicable material law, statute, rule or regulation or (ii) conflict with, or
result in a default or event of default under any material agreement of any
Loan Party.
(k) Insurance. The Agents shall be reasonably satisfied
as to the insurance coverage of the Borrower Group.
(l) Payment of Certain Fees. The Parent and the Borrower
shall have paid (i) all fees payable to Merrill Lynch and CIBC pursuant to the
Fee Letters, (ii) a reasonable estimate of the fees and expenses of Cahill
Gordon & Reindel, special counsel for the Agents, and of each other counsel
(including Edwards & Angell and FCC counsel) for the Agents, in connection with
the preparation, negotiation, execution and delivery of the Credit Documents
and the closing of the transactions contemplated thereby and (iii) any other
fee or other payment due to the Agents under any Credit Document on or before
the Initial Funding Date.
(m) Transaction Documents. The Agents shall have
received on or prior to the Initial Funding Date all Transaction Documents
requested by them in writing prior to the Initial Funding Date which were not
delivered on the date of the Commitment Letter and the same shall be reasonably
satisfactory to the Agents and the Lenders.
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(n) Consummation of Preapproved Acquisition. On the
Initial Funding Date a Preapproved Acquisition shall be consummated pursuant to
the terms and conditions herein set forth contemporaneously with the making of
the Initial Loans.
(o) Tax Sharing, Management, Consulting and Employment
Agreements and Arrangements. The Agents shall be reasonably satisfied with all
tax sharing, management, executive employment and consulting agreements and
compensation arrangements (including bonus and stock options), employee or
management incentive plans and other consulting or management arrangements
(including the fees payable in connection therewith) to which any member of the
Borrower Group is or will be a party.
(p) Consents, Etc. (i) On or prior to the Initial
Funding Date, each Loan Party shall have obtained all Governmental Consents and
Third-Party Consents, if any, required to effect the Contribution, perform in a
full and timely manner all of their respective obligations under the Credit
Documents and the Contribution Documents and to own, operate or program, as the
case may be, the Contributed Stations; to the extent available in writing,
there shall have been furnished to the Agents and the Lenders evidence of such
Governmental Consents and Third-Party Consents; and all such Governmental
Consents and Third-Party Consents (whether or not theretofore obtained) shall
be reasonably satisfactory to the Agents and the Lenders and in full force and
effect on the Initial Funding Date.
(ii) Without limiting the generality of clause (i) of this
Section 4.01(p), on or before the Initial Funding Date, the Agents shall have
received reasonably satisfactory evidence that (x) a proper and complete
application to the FCC seeking transfer or assignment to the License
Subsidiaries of all Broadcast Licenses related to the Contributed Stations to
be owned as of the Initial Funding Date shall have been made and (y) FCC
approval of any pending FCC license applications (other than with respect to
any non-material licenses) related to the Contributed Stations shall have been
granted with the time period for any challenge thereto having expired (other
than such time period for challenge with respect to the pro forma transfer of
control of Paxson Atlanta License, Inc. to the Borrower Group, i.e., the
transfer of the Broadcast Licenses relating to station WTLK-TV, Rome, Georgia
(Channel 14)).
(iii) Without limiting the generality of clause (i) of this
Section 4.01(p), the FCC Consent to the transfer of the Broadcast Licenses of
the Contributed Stations (other than station WCTD (TV), Miami, Florida) to the
License Subsidiaries of the Contributed Station Subsidiaries shall (1) have
been obtained and
<PAGE> 38
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(2) as of the Initial Funding Date, not have been objected to or subject to any
petition, protest or other adverse proceeding, or (3) if so subject to any
petition, protest or other adverse proceeding, not have been reversed, stayed,
enjoined, set aside, annulled or suspended and the time for filing a request
for administrative or judicial relief with respect to such FCC Consent, 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, in the event of such filing or review sua sponte, such filing or
review sua sponte shall have been disposed of favorably to the grant of such
FCC Consent and the time for seeking further relief with respect thereto shall
have expired without any request for such further relief having been filed (any
FCC Consent obtained which shall meet the stipulations set forth in this
subclause (3) shall be referred to herein as having become a "Final Order").
(iv) The Broadcast Licenses acquired pursuant to the
Contribution shall have been transferred to the License Subsidiaries of the
Contributed Station Subsidiaries.
(q) Consummation of Contribution. On or prior to the
Initial Funding Date, the Contribution shall have been consummated on terms and
conditions and pursuant to documentation reasonably satisfactory to the Agents
and the Lenders.
(r) Equity Documents. As of the Initial Funding Date,
all material agreements (including stockholders' agreements and the Parent
Equity Documents) of the Borrower, the Parent or any of their respective
Subsidiaries relating to the terms and relative rights of their respective
capital stock shall be reasonably satisfactory to the Agents and the Lenders
and shall not have been modified, supplemented or amended in any respect since
the date of the Commitment Letter without the prior written consent of the
Agents and the Lenders; provided, however, that the Parent may file with
appropriate authorities certain amendments to the certificates of designation
relating to such preferred equity, forms of which have been previously
delivered to the Agents, all as contemplated by that certain Stockholders
Agreement dated as of December 22, 1994 by and among the Parent and the other
parties thereto.
(s) Outstanding Debt. The Borrower Group shall have no
Indebtedness outstanding on the Initial Funding Date, except the Existing Debt
of the Borrower Group or except as disclosed in writing to the Agents and the
Lenders.
(t) Other Documents. Prior to the Initial Funding Date,
the Agents and their counsel shall have reviewed all existing material
agreements of the Loan Parties and all material agreements
<PAGE> 39
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to which any Contributed Station Subsidiary may be bound after the
Contribution, and the same shall be reasonably satisfactory to the Agents and
the Lenders.
(u) Environmental Matters. On or prior to the Initial
Funding Date, the Borrower, at its sole cost and expense, shall have delivered
to the Agents: (x) a Phase I environmental audit report prepared in connection
with the properties owned or leased by the Contributed Stations and Preapproved
Stations for each parcel of real property to be acquired in, or to be leased
upon the consummation of, the Contribution or in any Preapproved Acquisition
and (y) properly completed environmental questionnaires for each parcel of real
property to be owned or leased after giving effect to the Contribution and the
Preapproved Acquisitions and if further investigation is, in the reasonable
opinion of the Agents, indicated or warranted by such Phase I audit reports or
such questionnaires, such further audits, inquiries, investigations and reports
as may be necessary or appropriate in response thereto, the scope and substance
of which shall be reasonably satisfactory to the Agents; said reports and
questionnaires to be conducted and prepared by Dames & Moore or such other
environmental engineering firm reasonably acceptable to the Agents. Any review
by the Agents of any matter concerning any environmental condition shall be at
the Borrower's sole cost and expense.
(v) Certain Liabilities. The Agents shall be reasonably
satisfied in all respects with the tax and litigation position and the
contingent tax and other liabilities of the Parent Group and the Borrower Group
and each of their plans with respect thereto.
(w) Performance of Agreements. Each Loan Party shall
have performed in all material respects all agreements required to be performed
on or prior to the Initial Funding Date, except (i) as disclosed in writing to
the Agents and the Lenders or (ii) where the failure of such performance would
not result in a Default or an Event of Default hereunder.
(x) Due Diligence. The Agents' and the Lenders' ongoing
due diligence investigation shall not have disclosed information, and neither
the Agents nor the Lenders shall have otherwise discovered information not
previously disclosed to them, that either the Agents or the Lenders reasonably
believe has had or could have a Company Material Adverse Effect or a Borrower
Material Adverse Effect or a Material Adverse Effect with respect to any entity
or assets (such assets to be considered as a whole) to be acquired pursuant to
the Contribution or the Initial Preapproved Acquisitions, or a material adverse
effect on the tax or accounting consequences of the transactions to be
consummated on the Initial Funding Date.
<PAGE> 40
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(y) Other Documents, Etc. On or before the Initial
Funding Date, the Agents shall have received copies of all other documents,
instruments, opinions and certificates as the Agents or the Lenders may
reasonably request in connection with the Contribution, the making of the
Initial Loans and the other transactions contemplated by the Transaction
Documents to be consummated on the Initial Funding Date or in connection with
any Preapproved Acquisition.
The acceptance of the proceeds of the Initial Loans shall
constitute a representation and warranty by each Loan Party to the Agents and
each of the Lenders that all of the conditions in this Section 4.01 have been
satisfied or, to the knowledge of the Borrower, waived in all material respects
(it being expressly understood that the foregoing shall not be construed to be
any representation or warranty by the Borrower as to the satisfaction of the
Lenders or the Agents with respect to any condition) as of the time of such
acceptance.
4.02 Conditions Precedent to Acquisition Loans. The
obligations of the Lenders to make any Loans to be made in connection with any
Acquisition ("Acquisition Loans") to the Borrower are subject to the
satisfaction of each of the following conditions (in addition (but without
duplication) to each of the conditions precedent specified in (x) with respect
to the making of the Initial Loans, Section 4.01 and (y) with respect to each
Borrowing, Section 4.04) on or prior to the Funding Date of such Acquisition
Loan (the "Acquisition Funding Date"):
(a) Credit Documents. To the extent not delivered on the
Initial Funding Date, each Credit Document entered into in connection with such
Acquisition shall (i) be reasonably satisfactory to the Agents and (ii) have
been duly authorized, executed and delivered by each of the parties thereto and
be in full force and effect on the relevant Acquisition Funding Date.
(b) Officers' Certificates. The Agents and the Lenders
shall have received on or prior to the relevant Acquisition Funding Date:
(i) an Acquisition Certificate based upon the Borrower
Test Period in respect of the relevant Acquisition Funding Date (which
shall be deemed a Determination Date), which Acquisition Certificate
shall give effect to the Acquisitions and Borrowings (and, in the case
of the Initial Funding Date, the Contribution) to be made on such
Acquisition Funding Date; and
<PAGE> 41
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(ii) an Officers' Certificate from the Borrower to the effect
that (x) the Borrower Group has performed (and, in the case of the
Initial Funding Date, an Officers' Certificate from the Parent to the
effect that the Parent Group has performed) in all material respects
all material agreements and covenants set forth in the Transaction
Documents to be performed on or prior to such Acquisition Funding
Date, except as otherwise described to and agreed to in writing by the
Agents and the Applicable Lenders and (y) the pro forma ratio of
Consolidated Total Debt of the Borrower to Total Capitalization of the
Borrower after giving effect to any Acquisition Loans to be made on
such Acquisition Funding Date does not exceed 3:4 (setting forth in
reasonable detail the calculations supporting such conclusion).
(c) Opinions of Counsel. The Agents shall have received
on the applicable Acquisition Funding Date such written opinion or opinions of
counsel as any of them may reasonably request with respect to any Additional
Loan Party and any Real Property or other property to be acquired in any
Acquisition (other than to the extent previously covered in the opinions
delivered on the Initial Funding Date pursuant to Section 4.01(c)), which
opinions shall be addressed to the Agents and each Lender, be dated such
Acquisition Funding Date, be reasonably satisfactory to the Agents and cover
such matters as are generally covered in the opinions set forth in clauses
(i)-(vi) of Section 4.01(c) and such other matters as shall be reasonably
requested by any of the Agents.
(d) Mortgaged Real Property and Real Property. The
Borrower shall have delivered, or caused to be delivered, to the Collateral
Agent, on behalf of the Lenders, on or prior to the relevant Acquisition
Funding Date with respect to each Station to be acquired in an Acquisition and
the Additional Loan Parties related thereto, all of the documents and
instruments specified in Section 4.01(e) (with references therein to the
Contribution or the Contributed Stations being deemed to be references to the
Acquisition to be consummated and the Station to be acquired on the relevant
Acquisition Funding Date), which documents and instruments shall meet the same
standards as set forth in Section 4.01(e) mutatis mutandis, and the foregoing
shall be reasonably satisfactory to the Agents.
(e) Security Documents. To the extent not effected on
the Initial Funding Date, there shall have been delivered to the Collateral
Agent on or prior to the relevant Acquisition Funding Date, with respect to
each Station to be acquired in an Acquisition and the Additional Loan Parties
related thereto, all of the documents and instruments specified in Section
4.01(f) (with references therein to (x) the Initial Funding Date being deemed
to
<PAGE> 42
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be references to the relevant Acquisition Funding Date and (y) the Initial
Loans being deemed to be references to the relevant Acquisition Loans), which
documents and instruments shall meet the same standards as set forth in Section
4.01(f) mutatis mutandis, and the foregoing shall be reasonably satisfactory to
the Agents.
(f) Corporate Proceedings. As of the relevant
Acquisition Funding Date (other than the Initial Funding Date), all corporate
and legal proceedings and all instruments and agreements in connection with the
transactions contemplated by the Transaction Documents in connection with the
relevant Acquisition shall be reasonably satisfactory to the Agents, and the
Agents shall have received (other than to the extent delivered on the Initial
Funding Date) all information and documents, certificates, resolutions and
papers specified in Section 4.01(h) (with references therein to the Initial
Funding Date being deemed to be references to the relevant Acquisition Funding
Date), which such documents, certificates, resolutions and papers shall meet
the same standards as set forth in Section 4.01(h) mutatis mutandis, and the
foregoing shall be reasonably satisfactory to the Agents.
(g) Organizational Documentation, Etc. To the extent not
previously obtained, the Lenders shall have received with respect to each Loan
Party that was not in existence on the Initial Funding Date or as to which such
documents were not delivered on the Initial Funding Date, which such Loan Party
will acquire, lease or operate as of the relevant Acquisition Funding Date any
property or assets to be acquired in connection with any Acquisition to occur
on such Acquisition Funding Date, the documents specified in Section 4.01(i)
(with references therein to the Initial Funding Date being deemed to be
references to the relevant Acquisition Funding Date) and the provisions thereof
shall be reasonably satisfactory to the Agents.
(h) Compliance with Law. The Applicable Lenders shall be
reasonably satisfied that the consummation of any Acquisition to occur on such
Acquisition Funding Date will not (i) violate any applicable material law,
statute, rule or regulation or (ii) conflict with, or result in a default or
event of default under any material agreement of any Loan Party.
(i) Pro Forma Covenant Compliance. The Borrower shall be
in pro forma compliance, after giving effect to the making of the relevant
Acquisition Loans (including the Initial Loans) and to the Acquisition to
occur on such Acquisition Funding Date (each, an "Applicable Acquisition"),
with the financial covenants set forth in Section 7.10(a) and (c) (with such
Acquisition Funding Date being deemed a Determination Date).
<PAGE> 43
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(j) Consents, Etc. (i) On or prior to the relevant
Acquisition Funding Date, each of the Loan Parties shall have obtained all
Governmental Consents and Third-Party Consents required to consummate each
Applicable Acquisition, to perform in a full and timely manner all of its
respective obligations under the Credit Documents entered into on such date
(other than the Initial Funding Date) and under all documents and instruments
relating to such Applicable Acquisition (the "Applicable Acquisition
Documents") and to own, operate or program, as the case may be, the Stations to
be acquired, or programmed beginning, on such date; to the extent available in
writing, there shall have been furnished to the Agents and the Lenders evidence
of such Governmental Consents and Third-Party Consents; and all such
Governmental Consents and Third-Party Consents (whether or not theretofore
obtained) shall be reasonably satisfactory to the Applicable Lenders and in
full force and effect on such Acquisition Funding Date.
(ii) Without limiting the generality of clause (i) of this
Section 4.02(j), on or before such Acquisition Funding Date, the Agents shall
have received reasonably satisfactory evidence of (w) a proper and complete
application to the FCC seeking transfer or assignment of all Broadcast Licenses
relating to the Applicable Acquisition, (x) disclosure to the FCC, in all
material respects, of all terms and conditions of the LMA Arrangements and any
other agreements or understandings between the Parent, the Borrower or any
Station Subsidiary and the licensee of a LMA Station, to the full extent, if
any, that such disclosure may be required by the rules and regulations of the
FCC or current practice or interpretation of the FCC staff (it being understood
that this condition shall not otherwise create any affirmative obligation of
the Parent, the Borrower or any License Subsidiary to make any disclosure to
the FCC which it reasonably believes to be outside the scope of current FCC
rules and regulations or current staff practice and interpretation) and (y) the
approval of any pending renewal applications for each Broadcast License
relating to each Station to be acquired or with respect to which with the
Borrower Group will enter into LMA Arrangements pursuant to the relevant
Applicable Acquisition being financed with the Applicable Acquisition Loan.
(iii) Without limiting the generality of clause (i) of this
Section 4.02(j), the FCC Consent to any transfer or assignment of the Broadcast
Licenses to be purchased pursuant to the Applicable Acquisition to be
consummated on such Acquisition Funding Date shall have been obtained and shall
have become a Final Order or the Agents and the Lenders shall have determined
in their absolute and sole discretion that there is no reasonable basis to
believe that such FCC Consent will not become a Final Order.
<PAGE> 44
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(iv) The Broadcast Licenses purchased pursuant to such
Acquisition shall be transferred to a License Subsidiary.
(k) Acquisition Documents; Acquisitions. On or prior to
the relevant Acquisition Funding Date:
(i) (x) none of the Applicable Acquisition Documents
shall have been amended in a manner that could, in the reasonable
judgment of the Applicable Lenders, be materially adverse to the
Agents or the Lenders; (y) each of the conditions to closing contained
in the Applicable Acquisition Documents shall have been satisfied in
all material respects (and not waived, except where the waiver could
not, in the reasonable judgment of the Applicable Lenders, be adverse
to the Agents or the Lenders) to the satisfaction of the Applicable
Lenders; and (z) each Loan Party shall have performed in all material
respects all covenants that it is required to perform under each
Applicable Acquisition Document.
(ii) The Loan Parties shall have used their respective best
efforts to cause each party to each Applicable Acquisition Document to
deliver to the Agents a certificate stating that (x) the Applicable
Acquisition has been duly approved by the board of directors or
similar governing entity of such party, (y) all actions necessary by
it to consummate the Applicable Acquisition have been taken and (z)
each such party will proceed to consummate the Applicable Acquisition
upon or immediately after the making of the Loans on such Acquisition
Funding Date.
(iii) Without duplication of documents delivered on the
Initial Funding Date, the Agents shall have received copies of all
certificates, documents and opinions delivered under the Applicable
Acquisition Documents in connection with the transactions contemplated
thereby and the Loan Parties shall have used their respective best
efforts to procure letters addressed to the Agents and the Lenders
stating that the Agents and the Lenders may rely on such certificates
and opinions as if they had been addressed to the Agents and the
Lenders.
(1) Due Diligence. The Agents' and the Lenders' ongoing
due diligence investigation shall not have disclosed information, and neither
the Agents nor the Lenders shall have otherwise discovered information not
previously disclosed to them, that either the Agents or the Lenders reasonably
believe has had or could have a Material Adverse Effect with respect to, other
than with respect to the Initial Preapproved Acquisitions, any entity or
<PAGE> 45
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assets (such assets to be considered as a whole) to be acquired in an
Acquisition, or a material adverse effect on the tax or accounting consequences
of the transactions to be consummated on the Applicable Acquisition Date.
(m) Total Debt to Total Capitalization Ratio. The pro
forma ratio of Consolidated Total Debt of the Borrower to Total Capitalization
of the Borrower after giving effect to any Acquisition Loans to be made on such
Acquisition Funding Date shall not exceed 3:4.
The acceptance of the proceeds of any Acquisition Loan shall
constitute a representation and warranty by each Loan Party to the Agents and
each of the Lenders that all of the conditions in this Section 4.02 have been
satisfied or, to the knowledge of the Borrower, waived in all material respects
(it being expressly understood that the foregoing shall not be construed to be
any representation or warranty by the Borrower as to the satisfaction of the
Lenders or the Agents with respect to any condition) as of the time of such
acceptance.
4.03 Conditions Precedent to Loans for Future
Acquisitions. The obligations of the Lenders to make any Loans to be made in
connection with any Future Acquisition to the Borrower hereunder are subject to
the satisfaction of each of the following conditions (in addition to each of
the conditions precedent specified in Sections 4.02 and 4.04) on or prior to
the relevant Acquisition Funding Date:
(a) Transaction Structure; Due Diligence. On or prior to
the relevant Acquisition Funding Date, the Applicable Lenders shall be
reasonably satisfied in their sole discretion with (A) all business, tax,
accounting, environmental and other structural, legal and regulatory matters
relating to the Future Acquisition to be consummated on such date and (B) a due
diligence investigation related to such Future Acquisition including
historical, pro forma and projected financial statements, synergies (if any),
programming agreements (if any), advertising contracts, joint-venture
agreements, license agreements and management letters.
(b) Environmental Matters. On or prior to the relevant
Acquisition Funding Date, the Borrower, at its sole cost and expense, shall
have delivered to the Agents: (x) a Phase I environmental audit report for
each parcel of real property to be acquired in or to be leased upon the
consummation of any Future Acquisition occurring on such date and (y) properly
completed environmental questionnaires for each parcel of real property to be
owned or leased in connection with such Future Acquisition and if
<PAGE> 46
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further investigation is indicated or warranted by such Phase I audit reports
or questionnaires, such further audits, inquiries, investigations and reports
as may be necessary or appropriate, the scope and substance of which shall be
reasonably satisfactory to the Applicable Lenders; said reports and
questionnaires to be conducted and prepared by Dames & Moore or another
mutually satisfactory nationally recognized firm of environmental engineers.
Any review by the Agents of any matter concerning any environmental condition
shall be at the Borrower's sole cost and expense.
(c) Acquisition Documents. On or prior to the relevant
Acquisition Funding Date, the Agents shall have received true, complete and
correct copies of all Applicable Acquisition Documents relating to the Future
Acquisition to be consummated on such date, and all other information,
documents and instruments relating to such Future Acquisition and the Station
to be acquired on such date as any of them may request, and the same shall be
reasonably satisfactory to the Applicable Lenders.
(d) Financial Statements. The Applicable Lenders shall
have received such financial statements for the Station to be acquired in such
Future Acquisition for such periods of time as may reasonably be required by
the Applicable Lenders and the same shall be reasonably satisfactory to the
Applicable Lenders.
(e) Other Documents, Etc. On or before the relevant
Acquisition Funding Date, the Agents shall have received copies of all other
documents, instruments, opinions and certificates as the Agents or any of the
Lenders may reasonably request. The Applicable Lenders shall be reasonably
satisfied with all other material matters relating to any Future Acquisition to
be consummated on such Acquisition Funding Date.
The acceptance of the proceeds of any Acquisition Loan made in
connection with a Future Acquisition shall constitute a representation and
warranty by each Loan Party to the Agents and each of the Lenders that all of
the conditions in this Section 4.03 have been satisfied or, to the knowledge of
the Borrower, waived in all material respects (it being expressly understood
that the foregoing shall not be construed to be any representation or warranty
by the Borrower as to the satisfaction of the Lenders or the Agents with
respect to any condition) as of the time of such acceptance.
4.04 Conditions Precedent to All Loans. The obligation of
the Lenders to make any Loan is subject, at the Funding Date for such Loan, to
the satisfaction of the following conditions:
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(a) Notice of Borrowing; Officers' Certificate; Interest
Rate Certificate. With respect to any Loan, the Administrative Agent shall
have received (i) in accordance with the provisions of Section 1.03, before any
Funding Date, an originally executed Notice of Borrowing signed by the chief
executive officer, the chief financial officer or the treasurer of the Borrower
or by any executive officer of the Borrower designated by any of the
above-described officers on behalf of the Borrower in writing delivered to the
Administrative Agent, (ii) an Officers' Certificate from the Borrower, dated
such Funding Date and satisfactory to the Agents, to the effect that the
applicable conditions in Section 4.04 and (x) in the case of the Initial Loans,
Sections 4.01 and 4.02 and (y) in the case of any Acquisition Loan, Section
4.02 and, if made in connection with a Future Acquisition, Section 4.03 (in
each case disregarding any reference therein that such conditions be deemed
satisfactory by the Agents or any Lender) have been satisfied or waived as of
such date and (iii) for any Borrowing to occur after the Three Month Date
(other than any Borrowing of Acquisition Loans), an Interest Rate Certificate.
(b) No Material Adverse Effect, Etc. No event or
condition shall have occurred, or would result from the Borrowing on the
relevant Funding Date and the use of the proceeds thereof, nor shall any
litigation, investigation, injunction or restraining order (excluding
litigation existing on the Initial Funding Date affecting the communications
industry generally) against any Loan Party or any entity or assets to be
acquired in the Contribution or any Acquisition be pending, entered or
threatened, that (x) has had or could reasonably be expected to have a Company
Material Adverse Effect or a Borrower Material Adverse Effect or a Material
Adverse Effect with respect to any entity or assets (such assets to be
considered as a whole to the extent they represent a business or business unit)
to be acquired in the Contribution or any Acquisition or (y) would restrain,
prevent or impose burdensome conditions with respect to any transaction
contemplated by the Transaction Documents to be consummated on such Funding
Date.
(c) No Default; Representations and Warranties. At each
Funding Date and also after giving effect to the Borrowings, any Acquisition
and the Contribution to be consummated on such Funding Date, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Documents in effect at such time
shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of such
Funding Date, unless such representation and warranty expressly indicates that
it is being made as of any other specific date in which case on and as of such
other date.
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The acceptance of the proceeds of any Loan shall constitute a
representation and warranty by each Loan Party to the Agents and each of the
Lenders that all of the applicable conditions specified in this Section 4.04
have been satisfied or, to the knowledge of the Borrower, waived in all
material respects (it being expressly understood that the foregoing shall not
be construed to be any representation or warranty by the Borrower as to the
satisfaction of the Lenders or the Agents with respect to any condition) as of
the time of such acceptance.
4.05 Delivery of Documents. All of the certificates, legal
opinions and other documents and papers referred to in Sections 4.01, 4.02, 4.03
and 4.04, unless otherwise specified, shall be delivered to each of the Agents
at their respective office (or such other location as may be specified by an
Agent) for the account of each of the Lenders and in sufficient counterparts for
each Lender and, except where specifically otherwise provided, shall be
reasonably satisfactory to the Agents, the Lenders or the Applicable Lenders, as
the case may be.
4.06 Conditions for the Benefit of the Agents and the Lenders.
The conditions set forth in this Section 4 are for the exclusive benefit of the
Lenders and the Agents and may be waived only pursuant to Section 11.12.
SECTION 5. Representations, Warranties and Agreements.
In order to induce the Lenders to enter into this Agreement and to make the
Loans provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders (with the execution and
delivery of this Agreement and the making of each Loan thereafter being deemed
to constitute a representation and warranty by the Borrower that the matters
specified in this Section 5 are true and correct in all material respects on
and as of the date hereof and as of the Funding Date for each such Loan unless
such representation and warranty expressly indicates that it is being made only
as of a specific date):
5.01 Corporate Status; Governmental Consents. (a) Each Loan
Party (i) is a duly organized and validly existing corporation in good standing
under the laws of the jurisdiction of its organization; and (ii) has duly
qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified or authorized would not have a Company Material Adverse
Effect or a Borrower Material Adverse Effect. Except as set forth in the
schedules to the Security Agreements, no member of the Borrower Group has,
since its incorporation or formation, as the
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case may be, been known by or used any other corporate, fictitious or trade
name.
(b) Each Loan Party holds all Governmental Consents
necessary to own and operate their respective properties (including the
transmitter and tower sites owned or used by the Borrower Group) in the manner
and for the purposes currently operated by such Person, except to the extent
that the failure to hold such Governmental Consents could not reasonably be
expected to have a Company Material Adverse Effect or a Borrower Material
Adverse Effect, and such operation, to the best of their knowledge, is in
compliance with applicable Governmental Requirements, including those relating
to zoning and environmental compliance, except those the failure to comply with
which could not reasonably be expected to have a Company Material Adverse
Effect or a Borrower Material Adverse Effect. There have been issued and
remain in full force and effect all certificates of occupancy or use or other
Governmental Consents currently required for the existing use and occupancy of
each Mortgaged Real Property, other than such certificates or Governmental
Consents the failure to have issued and remain in full force could not
reasonably be expected to have a Company Material Adverse Effect or Borrower
Material Adverse Effect.
5.02 Corporate Power and Authority. Each Loan Party has the
corporate or other organizational power and authority to execute and deliver,
and perform in a full and timely manner under, each Transaction Document to
which it is a party and has taken all necessary corporate and other action to
authorize the execution, delivery and performance of each Transaction Document
to which it is a party. Each Loan Party has duly executed and delivered each
Transaction Document to which it is a party and each such Transaction Document
constitutes the legal, valid and binding obligation of such Person, enforceable
in accordance with its terms, except as such enforceability 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.
5.03 No Conflicts; No Defaults. (a) The execution and
delivery of, and the full and timely performance by each member of the Borrower
Group under, each Transaction Document to which it is a party, and the full and
timely consummation of each of the transactions contemplated thereby (including
each Acquisition previously consummated or to be consummated as of any Funding
Date) (i) will not contravene any applicable provision of any law, statute,
rule, regulation, order, judgment, writ, injunction or decree of any
Governmental Authority, except where such event could not reasonably be
expected to have a Company Material Adverse
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Effect or a Borrower Material Adverse Effect, (ii) except as to matters set
forth on Schedule 5.03, will not conflict or be inconsistent with or result in
any breach of any of the material terms, covenants, conditions or provisions
of, or constitute a default (or an event or condition that would constitute a
default with the giving of notice or the passage of time, or both) under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of any Company pursuant to the terms of, any Contractual
Obligation to which any Company is a party or by which it or any of its
property or assets is bound or to which it may be subject, except where such
event could not reasonably be expected to have a Company Material Adverse
Effect or a Borrower Material Adverse Effect and (iii) will not violate any
provision of the charter or by-laws of any Company, except where such event
could not reasonably be expected to have a Company Material Adverse Effect or a
Borrower Material Adverse Effect.
(b) No Loan Party is in default with respect to any of its
Contractual Obligations which default could reasonably be expected to have a
Company Material Adverse Effect or a Borrower Material Adverse Effect, and no
event has occurred and, to the knowledge of the Loan Parties, no condition
exists which, with the giving of notice or the lapse of time or both, would,
singly or in the aggregate with any other event or condition, constitute such a
default.
(c) No event has occurred and no condition, to the knowledge
of the Loan Parties, exists which, singly or in the aggregate with any other
event or condition, would constitute a Default or an Event of Default. No Loan
Party is in violation of any material term of any of its charter instruments or
by-laws. No Loan Party is in violation of any Governmental Requirement
applicable to it or by which any such Loan Party or its property or assets may
be bound or affected which such violation could reasonably be expected to have
a Company Material Adverse Effect or a Borrower Material Adverse Effect.
5.04 Litigation. Except as set forth on Schedule 5.04 and
other Proceedings affecting the communications industry generally, there is no
Proceeding pending or, to each Loan Party's knowledge, threatened against or
affecting any Loan Party (or any Person that will be a Loan Party) or any of
their properties or assets or any property or assets to be conveyed in the
Contribution or to be acquired in any Acquisition on a Funding Date (i) that
could reasonably be expected to have a Company Material Adverse Effect or a
Borrower Material Adverse Effect or (ii) that would, singly or in the aggregate
with all such Proceedings, have a material adverse effect on the ability to
consummate any
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Acquisition to be consummated on any Funding Date or the Contribution. All
information provided by or on behalf of the Loan Parties to the Agents and the
Lenders with respect to Proceedings (collectively, the "Adverse Proceedings")
concerning the petitions challenging the FCC Consent to the assignment to the
Borrower Group of the Broadcast Licenses to operate station KZKI-TV of San
Bernardino, California and station WGOT-TV, Merrimack, New Hampshire is true,
accurate and complete. Neither of the Adverse Proceedings will result in or
give rise to any action by the FCC or any other Governmental Authority to
rescind the assignment to the Borrower Group of any such Broadcast Licenses or
a Borrower Material Adverse Effect. The existence of either of the Adverse
Proceedings will not have a material adverse effect on the fair market value or
the marketability, saleability, transferability or assignability of any of such
Broadcast Licenses.
5.05 Use of Proceeds. (a) The proceeds of all Loans to be
made to the Borrower hereunder shall be utilized (A) to pay: (i) the
Acquisition Price (net of any escrow deposits made with respect to any
Preapproved Acquisition as set forth on Schedule 5.05) and Additional
Acquisition Costs with respect to the consummation of each Preapproved
Acquisition and (ii) transaction fees and expenses in connection with the
Contribution, each Preapproved Acquisition and the Credit Documents; such
borrowings to fund the Preapproved Acquisitions shall not exceed $47,500,000;
and (B): (i) to pay the acquisition price (net of any escrow deposits made with
respect to any Future Acquisition, including as set forth on Schedule 5.05),
additional acquisition costs and transaction costs incurred in connection with
any Future Acquisition approved by the Applicable Lenders, as contemplated
hereunder, (ii) to pay the exercise price ("LMA Exercise Price") payable in
connection with the exercise of any option to purchase substantially all assets
(including all Broadcast Licenses) of any LMA Station and (iii) after such time
as the Contribution has been consummated and at least one Preapproved Station
has been acquired, for (x) general corporate purposes and capital expenditures
and (y) escrow deposits made in connection with any Future Acquisition, but only
to the extent permitted by Section 7.06.
(b) Neither the making of any Loan hereunder, nor the use
of the proceeds thereof, will violate or be inconsistent with the provisions of
any Margin Regulation or any other regulation of the Federal Reserve Board or
the provisions of Section 7 of the Exchange Act.
5.06 Governmental Approvals, Etc. Each of the Loan Parties
has all Governmental Consents and Third-Party Consents that are required to
authorize or are required in connection with (x) the execution and delivery of,
the full and timely performance
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under, or the consummation of any of the transactions contemplated by, any
Transaction Document or (y) the legality, validity, binding effect or
enforceability of any Transaction Document, except for (i) filings required in
connection with the perfection of the security interests granted pursuant to
the Credit Documents, (ii) the consent, approval or waiver, if any, required
from the FCC in connection with the enforcement of the Credit Documents, in
each case to the extent such enforcement may involve restrictions under the
Communications Act on foreign ownership of Broadcast Licenses or may be deemed
an assignment of any Broadcast License or may be deemed a "change of control"
under the Communications Act, (iii) the filing with the FCC, for notice
purposes only, of consummation notices and copies of the Credit Documents and
the Acquisition Documents required to be filed, (iv) any consent required under
the Communications Act with respect to any Acquisition that has not been and
will not be as of any Funding Date consummated and (v) such Governmental
Consents or Third-Party Consents the failure of which to have obtained could
not reasonably be expected to have a Company Material Adverse Effect or a
Borrower Material Adverse Effect. All applicable waiting periods have or,
prior to the time when required, will have, expired without, in all such cases,
any action being taken by any Governmental Authority that restrains, prevents,
imposes materially adverse conditions upon or unduly hinders the consummation
of the transactions contemplated by the Transaction Documents. Except as set
forth on Schedule 5.06, there does not exist any judgment, order, injunction or
other restraint issued or noticed by or filed with any Governmental Authority
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 any
Transaction Document, or the making of the Loans or the full and timely
performance by any Loan Party of any of its obligations under any Transaction
Document, other than any such judgment, order, injunction or restraint that
could not reasonably be expected to have a Company Material Adverse Effect or a
Borrower Material Adverse Effect.
5.07 Governmental Regulation. (a) No Company is, or will be
after giving effect to the transactions contemplated hereby, subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or to any Federal or state statute or regulation limiting its ability
to Incur Indebtedness as contemplated by any Credit Document.
(b) No Company is, or will be after giving effect to the
transactions contemplated hereby, an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940.
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5.08 True and Complete Disclosure; No Material Adverse
Effect. No representation or warranty of any Loan Party contained in any
Credit Document, any other Transaction Document or any other document,
certificate or written statement furnished to any Agent or to any Lender
through any Agent by or on behalf of any Loan Party in accordance with Section
11.20 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 necessary in order to make the statements contained therein not
misleading in light of the circumstances under which the same were made. The
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by the Loan Parties to
be reasonable at the time made, it being recognized by the 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 is no fact known (or which should upon the
reasonable exercise of diligence be known) to any of the Loan Parties (other
than matters of a general economic nature or affecting the communications
industry generally) that has had or could reasonably be expected to have a
Company Material Adverse Effect or a Borrower Material Adverse Effect and that
has not been disclosed herein or in such other documents, certificates and
statements furnished to the Lenders or the Agents for distribution to the
Lenders by any Loan Party for use in connection with the transactions
contemplated hereby.
5.09 Financial Condition; Financial Statements; Fiscal Year
End. (a) No Loan Party is entering into the arrangements contemplated by the
Credit Documents, or intends to make any transfer or incur any obligations
under any Credit Document, with actual intent to hinder, delay or defraud
either present or future creditors. On and as of each Funding Date, on a pro
forma basis after giving effect to the Contribution and to the Acquisitions
consummated on or prior to such date and to all Indebtedness Incurred and Liens
and Guarantees created or assumed, or to be created or assumed, by each Loan
Party on or prior to such date, each Loan Party is and will be Solvent.
(b) The Borrower and the Parent have delivered to the
Agents the Financial Statements described in Section 4.01(d) and all Financial
Statements and Exchange Act filings required to be delivered pursuant to
Section 6.01 and Section 11A of the Parent Guarantee. All such Financial
Statements and all financial statements in such Exchange Act filings (with
respect to any financial statements relating to the Preapproved Acquisitions
provided pursuant to Section 4.01(d), to the best of the Borrower's knowledge)
were prepared in accordance with GAAP, except in the
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case of interim financial statements for normal recurring year-end adjustments
and the absence of footnote disclosures. Such Financial Statements and all
financial statements in such Exchange Act filings present fairly the
consolidated financial position of the Persons, to the extent included therein,
to whom they pertain as at the respective dates thereof and the results of
operations and changes in the consolidated financial position of the Persons to
whom they pertain for each of the periods then ended.
(c) Except as reflected or reserved against in the
Financial Statements in accordance with, and to the extent required under,
GAAP and the notes thereto described in Section 5.09(b) or in the Financial
Statements most recently delivered pursuant to Section 6.01 or in the financial
statements in the Exchange Act filings most recently delivered pursuant to
Section 6.01 and Section 11A of the Parent Guarantee, there are no liabilities
or obligations with respect to any Loan Party of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) which could
reasonably be expected to have a Company Material Adverse Effect or a Borrower
Material Adverse Effect.
(d) The fiscal year of each Loan Party ends on December
31 for financial reporting purposes.
5.10 Representations and Warranties in Other Agreements.
Each of the representations and warranties of each Loan Party set forth in each
Transaction Document (other than this Agreement) and in any other instrument,
document or certificate delivered in connection therewith was and is true and
correct in all material respects at and as of the date made, and at and as of
each Funding Date to the extent any such representation or warranty is affirmed
as of such date.
5.11 Security Interests. The Security Documents, together
with each of the documents and instruments required to be delivered pursuant to
Section 4.01(f) and 4.02(e), as applicable, once executed, delivered and filed
in the applicable jurisdictions, create, as security for the obligations
purported to be secured thereby, a valid and enforceable perfected security
interest in and Lien in favor of the Collateral Agent on all Collateral,
superior to and prior to the rights of all third persons and subject to no
Liens other than Prior Liens. The mortgagor under each Mortgage has good and
marketable title to the Mortgaged Real Property free and clear of all Liens
other than Liens created by the applicable Mortgage, Prior Liens and Liens
permitted by the applicable Mortgage. The respective pledgor or assignor, as
the case may be, owns (or on and after the time it executes the respective
Security Document, will own) all Collateral (other than real property sub-
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ject to a Mortgage) covered by such Security Document free and clear of all
Liens, except Prior Liens, Liens created by the applicable Security Document
and Permitted Encumbrances. Other than as contemplated in Sections 4.01(e) and
(f) and 4.02(d) and (e), no filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings which shall have been made prior to the execution and
delivery thereof.
5.12 Tax Returns and Payments. (a) (i) Each Loan Party
(and, to each such Loan Party's knowledge, its predecessors, if any, for whose
tax liabilities such Person is liable) has timely filed all tax returns
required to be filed by it and has paid all material taxes and assessments
payable by it which have become due, other than those not yet delinquent and
(ii) no Loan Party knows of any proposed tax assessment against any Loan Party,
except, in each case, for (x) those contested in good faith by appropriate
proceedings promptly instituted and diligently conducted which proceedings have
the effect of staying the forfeiture of the property or asset subject to such
tax claims and for which adequate reserves have been established in accordance
with GAAP or (y) where the failure to so file, pay or reserve or such proposed
assessment could not reasonably be expected to have a Company Material Adverse
Effect or a Borrower Material Adverse Effect.
(b) There are no tax indemnity agreements or other
arrangements under which any Loan Party will have any obligation or liability,
either directly or indirectly, for taxes that are or may become payable in
respect of taxable periods prior to and including November 4, 1994 which could
reasonably be expected to have a Company Material Adverse Effect or a Borrower
Material Adverse Effect.
5.13 ERISA. (a) Each of the Loan Parties and each of their
respective ERISA Affiliates are in compliance in all material respects with all
applicable provisions and requirements of ERISA and the Code and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their material obligations under
each Employee Benefit Plan.
(b) No ERISA Events have occurred or are reasonably
expected to occur which individually or in the aggregate resulted in or might
reasonably be expected to result in (i) a material liability of any of the Loan
Parties or any of their respective ERISA Affiliates or (ii) the imposition of a
lien on the assets of any of the Loan Parties or any of their respective ERISA
Affiliates or a requirement for any of the Loan Parties or any of their
respective ERISA Affiliates to post a bond or other security.
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(c) As of the most recent valuation date for any Pension
Plan, the amount of Unfunded Benefit Liabilities individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans which have a negative Amount of Unfunded Benefit Liabilities)
does not exceed $0.
(d) The Loan Parties and each of their Subsidiaries and
each of the Foreign Plans are in compliance in all material respects with all
applicable laws and regulations with respect to the Foreign Plans and the terms
of the Foreign Plans, and all required contributions have been made to the
Foreign Plans. For purposes hereof, the term "Foreign Plans" shall mean any
employee benefit plan, program, policy, arrangement or agreement maintained or
contributed to by, or entered into with, a Loan Party or any Subsidiary of a
Loan party with respect to employees employed outside the United States.
5.14 Subsidiaries; Other Ventures. Schedule 5.14A lists
each Subsidiary of the Borrower as of the Initial Funding Date. Each
Subsidiary of the Borrower is a Wholly Owned Subsidiary of the Borrower.
Except as set forth in Schedule 5.14B, the Borrower Group is not engaged in any
joint venture or partnership with any other Person as of the Initial Funding
Date.
5.15 Patents, Etc. Each Loan Party has the right to use
all material patents, trademarks, servicemarks, trade names, copyrights,
licenses and similar "intellectual property rights" but not including the
Broadcast Licenses (collectively, "Licenses"), free from burdensome
restrictions, that are necessary for the operation of their respective
businesses as presently conducted and as proposed to be conducted, except to
the extent that such restrictions or the failure to have such Licenses could
not reasonably be expected to have a Company Material Adverse Effect or a
Borrower Material Adverse Effect. All of the Licenses are in full force and
effect, and each of such Persons is in compliance with the foregoing, without
any known conflict with the valid rights of others, except to the extent that
any failure to be in full force and effect or be in compliance could not
reasonably be expected to have a Company Material Adverse Effect or a Borrower
Material Adverse Effect. No event has occurred which permits, or after notice
or lapse of time or both would permit, the revocation or termination of any
Licenses or affect the rights of such Persons thereunder, except to the extent
that any such occurrence could not reasonably be expected to have a Company
Material Adverse Effect or a Borrower Material Adverse Effect.
5.16 Compliance with Laws, Etc. Each Loan Party is in
compliance with all laws and regulations, including Environmental Laws and
those relating to equal employment opportunity and
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employee safety, in all jurisdictions in which it is presently doing business,
except to the extent the failure to be in compliance could not reasonably be
expected to have a Company Material Adverse Effect or a Borrower Material
Adverse Effect.
5.17 Properties. (a) Each member of the Borrower Group
has good and (with respect to real property) marketable title to and beneficial
ownership of all of its properties reflected in the financial statements
referred to in Section 4.01 or most recently delivered pursuant to Section 6.01
(including financial statements contained in Exchange Act filings) or Section
11A of the Parent Guarantee, free and clear of all Liens, other than Prior
Liens, those Liens permitted by Section 7.03 and the Liens set forth on
Schedule 5.17A. Schedule 5.17A sets forth a true list of all Liens on the
property of the Borrower Group (including in respect of all Real Property and
other property to be acquired in any Initial Preapproved Acquisition and the
Contribution) as of the Initial Funding Date, other than Liens permitted by
Section 7.03.
(b) To the best of each Loan Party's knowledge, there has
not been issued any citation, violation or similar notice indicating that any
Real Property is not in compliance in all material respects with local codes or
ordinances relating to building or fire safety or structural soundness the
violation of which could reasonably be expected to have a Company Material
Adverse Effect or a Borrower Material Adverse Effect. Each Real Property is
suitable for its intended purposes and is served by such utilities as are
necessary or appropriate for the proper and efficient operation thereof and has
adequate access (by easement or otherwise) to public roads and public
transportation as is necessary for its intended use, except, in each case,
where the failure of such condition could not reasonably be expected to have a
Company Material Adverse Effect or a Borrower Material Adverse Effect.
(c) All items of transmitting and studio equipment
included in the Tangible Personal Property (i) have been maintained in a manner
consistent with generally accepted standards of good engineering practice and
(ii) will permit the Stations and any unit auxiliaries thereto to operate in
accordance with the terms of the Communications Act and with all other
applicable Governmental Requirements, except in each case, where the failure of
such condition could not reasonably be expected to have a Company Material
Adverse Effect or a Borrower Material Adverse Effect; provided, however, that
with respect to any such Tangible Personal Property to be acquired on the
Funding Date on which the representations and warranties in this Section
5.17(c) are being made, the foregoing representation and warranty shall be
limited as
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of such Funding Date (but not thereafter) to each Loan Party's knowledge.
(d) There are no actual or, to the knowledge of the Loan
Parties, threatened or alleged defaults of a material nature with respect to
any leases of real property under which any Loan Party is lessor or lessee,
except any such defaults which could not reasonably be expected to have a
Company Material Adverse Effect or a Borrower Material Adverse Effect.
Schedule 5.17B lists each Mortgaged Real Property of the Borrower Group as of
the Initial Funding Date.
5.18 Capital Stock. All issued and outstanding capital
stock of each Loan Party (other than the Parent) has been duly authorized,
issued and delivered and is fully paid, nonassessable and free of preemptive
rights. All requirements of the Securities Act have been complied with in
connection with the issuance of all capital stock of each Loan Party. The
Parent owns, beneficially and of record, all of the issued and outstanding
capital stock of the Borrower. The Borrower owns, beneficially and of record,
directly or indirectly, all of the issued and outstanding capital stock of each
of its direct and indirect Subsidiaries.
5.19 Labor Matters. No Loan Party has experienced any
strike, labor dispute, lockout, slowdown or work stoppage due to labor
disagreements which could reasonably be expected to have a Company Material
Adverse Effect or a Borrower Material Adverse Effect and, to the knowledge of
the Loan Parties, there is no such strike, dispute, lockout, slowdown or work
stoppage threatened against any Loan Party. No Loan Party has engaged in any
unfair labor practice.
5.20 Indebtedness. Set forth on Schedule 5.20 is a list
of all Indebtedness of the Borrower Group that will remain outstanding after
the Initial Funding Date (including all Indebtedness, if any, to be assumed in
connection with the Preapproved Acquisitions or the Contribution). The
Borrower has heretofore provided to the Agents true, correct and complete
copies of all documents relating to any one issue of such Indebtedness having
an aggregate principal amount that equals or exceeds $100,000. No instrument
or agreement governing any such Indebtedness contains any restrictions on the
Incurrence by any member of Borrower Group of additional Indebtedness or the
guarantee thereof by any member of the Borrower Group.
5.21 Environmental Matters. Except as set forth on
Schedule 5.21, or as could not reasonably be expected to have a Company
Material Adverse Effect or a Borrower Material Adverse
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Effect or subject any Agent or Lender to any material risk of damages or
liability:
(a) each of the Loan Parties and the Real Properties and
other real properties, properties and assets used in their respective
businesses are in compliance with Environmental Laws, which compliance includes
the possession of all licenses, permits, registrations and other governmental
authorizations (collectively, "Environmental Authorizations") required under
Environmental Laws, and compliance with the terms and conditions thereof, and
there are no circumstances of a nature which may materially prevent or
interfere with compliance in the future;
(b) there is no Environmental Notice that is (1) pending
or, to the knowledge of any Loan Party, threatened against any Company or (2)
pending or, to the knowledge of any Loan Party, threatened against any Person
whose liability for such Environmental Notice may have been retained or assumed
by or could reasonably be imputed or attributed by law or contract to any
Company;
(c) there are no past (known to any Loan Party with
respect to matters relating to Real Properties prior to the ownership or use
thereof by any Loan Party) or present actions, activities, circumstances,
conditions, events or incidents arising out of, based upon, resulting from or
relating to the operation, ownership or use of any Real Properties or other
real properties, properties or assets currently or formerly owned, operated,
leased or used by any Company (or any predecessor in interest of any of them),
including the emission, discharge, disposal or other release of any Hazardous
Material in or into the Environment, that (1) could reasonably be expected to
result in the incurrence of costs under Environmental Laws or (2) could
reasonably be expected to form the basis of any Environmental Notice against or
with respect to any Company, or against any Person whose liability for any
Environmental Notice may have been retained or assumed by or could be imputed
or attributed by law or contract to any Company;
(d) without in any way limiting the generality of the
foregoing, (1) there are and have been no underground storage tanks or other
storage receptacles, or related piping, located on, at or under any Real
Properties or other real properties or properties owned or operated by any
Company, (2) to the knowledge of the Loan Parties there are no and have been
no polychlorinated biphenyls ("PCBs") used or stored by any Company and (3)
there is no asbestos contained in or forming part of any building, building
component, structure or office space located on, at or under any Real
Properties or other real properties or properties owned or operated by any
Company; and
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(e) each Loan Party has given the Agents access to all
records and files in its possession or otherwise available to any of them
relating to actual or potential material compliance or material liability
issues of any Company under Environmental Laws, including all reports, studies,
analyses, tests or monitoring results pertaining to the existence of Hazardous
Materials or any other environmental concern relating to the Real Properties or
other properties or assets currently or formerly owned, operated, managed,
leased, used or controlled by any Company or otherwise concerning compliance
with or liability under Environmental Laws.
5.22 [Intentionally Omitted]
5.23 Broker's Fees. Except as set forth on Schedule 5.23, no
broker's or finder's fee or commission will be payable by any Loan Party with
respect to the offer, issue and sale of any Revolving Note or the Borrowing of
any Loan or the execution, delivery and performance of any Credit Document, and
the Borrower hereby agrees to indemnify the Lenders against and hold them
harmless from any claim, demand or liability for broker's or finder's fees
alleged to have been incurred in connection with (i) any such offer, issue and
sale (other than claims arising out of actions taken solely by any Lender with
respect thereto), or (ii) the Borrowing of any Loan or (iii) the execution,
delivery and performance of any Credit Document and any expenses, including
reasonable legal fees, arising in connection with any such claim, demand or
liability in respect of broker's or finder's fees. No other similar fees or
commissions will be payable by any Loan Party for any other services rendered
to any Loan Party ancillary to the transactions contemplated hereby.
5.24 Disaster. Neither the business nor the properties of
any Company have been affected by any fire, explosion, accident, or dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy or
other casualty (whether or not covered by insurance) which could reasonably be
expected to have a Company Material Adverse Effect or a Borrower Material
Adverse Effect.
5.25 Insurance. The Loan Parties have insurance policy
binders from financially sound and reputable insurers or maintain with such
insurers valid and collectible insurance with respect to their respective
assets and businesses which is required to be obtained and maintained by them
pursuant to Section 6.03.
5.26 [Intentionally Omitted]
5.27 LMA Arrangements. Schedule 5.27 correctly identifies
all of the LMA Documents of the Borrower Group as of the Initial Funding Date.
The execution, delivery and performance in
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accordance with the terms thereof of each such agreement complies with the
Communications Act except where noncompliance could not reasonably be expected
to have a Borrower Material Adverse Effect. No Loan Party is aware of any fact
or circumstance which would result in the termination or modification on
materially adverse terms of any LMA Document. All LMA Arrangements and all LMA
Documents are in full force and effect.
5.28 FCC Matters. (a) Schedule 5.28A correctly sets forth
all of the Broadcast Licenses held by the Borrower Group or licensees of
Preapproved and LMA Stations and correctly sets forth the expiration date, if
any, of each such Broadcast License. Each Broadcast License was duly and
validly issued by the FCC to the Borrower Group pursuant to procedures that
comply in all material respects with all applicable Governmental Requirements,
and no Loan Party has any knowledge of the occurrence of any event or the
existence of any condition that could reasonably be expected to lead to the
revocation or suspension of any such Broadcast License. The Broadcast Licenses
listed in Schedule 5.28A comprise all of the licenses, permits and other
authorizations required (other than for auxiliary broadcast stations and
receive-only earth stations) to be obtained from or granted by the FCC for the
lawful conduct and operation of the Stations in the manner and to the full
extent they are contemplated to be conducted, and none of such Broadcast
Licenses is subject to any restriction or condition that would limit, in any
material respect, such operation of such Stations. Each such Broadcast License
is in full force and effect and each holder thereof is in substantial
compliance therewith with no known conflict with the valid rights of others
that could reasonably be expected to have a Borrower Material Adverse Effect.
No event has occurred that permits, or after notice or lapse of time or both
would permit, the revocation, termination or materially adverse modification of
any such Broadcast License that could reasonably be expected to have a
Borrower Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries other than a License Subsidiary directly owns or holds any
Broadcast License. The Loan Parties have made all disclosures to the FCC in
all material respects of all terms and conditions of all LMA Documents and any
other agreements and understandings between any Loan Party and the licensee of
any LMA Station, to the full extent, if any, that such disclosure may be
required by the rules and regulations of the FCC or practice and
interpretations of the FCC staff. No Loan Party has any reason to believe that
any of the Broadcast Licenses listed on Schedule 5.28A will not be renewed In
the Ordinary Course. In connection with each Future Acquisition, Schedule
5.28A shall be updated in a manner reasonably satisfactory to the Agents with
respect to (and only with respect to) such Future Acquisition at and as of the
date of consummation of such Future Acquisition.
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(b) Each of the Loan Parties has duly filed in a timely
manner all material filings (including ownership and employment reports) that
are required to be filed by any of them under the Communications Act or in the
Stations' local public inspection files and are in all material respects in
compliance with all provisions of the Communications Act applicable to the Loan
Parties, including the rules and regulations of the FCC relating to the
broadcast of television signals or the operation of the Stations, except where
the failure to duly and timely file or be in compliance could not reasonably be
expected to have a Company Material Adverse Effect or a Borrower Material
Adverse Effect. All such reports and statements are substantially complete and
correct in all material respects as filed; and there have been no changes in
the ownership of any Loan Party or the Broadcast Licenses of the Borrower or
any License Subsidiary since the most recently filed ownership reports other
than as disclosed in writing to the Agents and the Lenders and other than as
would occur as a result of changes in public ownership.
(c) To the knowledge of the Loan Parties, except as
disclosed on Schedule 5.28B, there are no applications, complaints or
Proceedings pending or threatened (i) before the FCC relating to the business
or operations of the Stations or of the Parent other than rulemaking
proceedings which affect the radio or television industry generally, (ii)
before any Governmental Authority relating to the business or operations of the
Stations involving charges of illegal discrimination under any Federal or state
employment laws or regulations, or (iii) before any Governmental Authority
relating to the business or operations of the Stations involving zoning issues
under any Governmental Requirement, except for, in each such case, any such
event that could not reasonably be expected to have a Company Material Adverse
Effect or a Borrower Material Adverse Effect.
(d) Schedule 5.28C sets forth the true and correct
numbers of cable households, taken as a whole, covered as of the Initial
Funding Date by each of the Contributed Stations and, to the best of the
Borrower's knowledge based solely upon information provided by the sellers
under each Preapproved Acquisition Agreement, each Preapproved Station. In
connection with each Future Acquisition, Schedule 5.28C shall be updated in a
manner reasonably satisfactory to the Agents with respect to (and only with
respect to) such Future Acquisition at and as of the date of consummation of
such Future Acquisition to reflect, to the best of the Borrower's knowledge
based solely upon information provided by the seller under the Acquisition
Agreement related to such Future Acquisition, the true and correct number of
cable households as of the date of such Future Acquisition covered by such
Future Acquisition.
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5.29 Programming Obligations. The Borrower has heretofore
made available to the Agents and the Lenders information regarding all
Programming Obligations of the Stations, as set forth in Schedule 5.29, which
information is true, correct and complete in all material respects. There have
been no increases in the amount or change in nature or payment experience with
regard to such programming agreements that could reasonably be expected to have
a Borrower Material Adverse Effect.
5.30 Material Contracts; No Burdensome Restrictions. (a)
Except as set forth on Schedule 5.30, no Loan Party is a party to, or in any
manner obligated under, any contract, agreement or instrument under which a
default by any party thereto could reasonably be expected to have a Company
Material Adverse Effect or a Borrower Material Adverse Effect.
(b) No Contractual Obligation of any Loan Party has, or
insofar as any Loan Party may reasonably foresee could reasonably be expected
to have, a Company Material Adverse Effect or a Borrower Material Adverse
Effect.
5.31 Management Agreements. Except as set forth on Schedule
5.31, no member of the Borrower Group is a party to any management agreements
or similar arrangements for the provision of services to any other member of
the Borrower Group.
6. Affirmative Covenants. The Borrower covenants and agrees
that on the Initial Funding Date and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated and the Loans together
with interest, fees and all other Obligations incurred hereunder are paid in
full (it being understood that the Borrower shall cause each of its
Subsidiaries to observe and comply in a timely manner with each term and
provision of the covenants set forth in this Section 6):
6.1 Information Covenants. The Borrower shall furnish or
cause to be furnished to each Lender:
(a) Annual Financial Information. As soon as available
and in any event within 90 days after the close of each fiscal year of
the Borrower, the Financial Statements of the Borrower for such fiscal
year, setting forth comparative consolidated figures for the preceding
fiscal year (other than (i) in the case of the fiscal year of the
Borrower ending December 31, 1995, when no such comparative figures
shall be required and (ii) in the case of the fiscal year of the
Borrower ended December 31, 1996, when such comparative figures shall
be the second, third and fourth quarters of the Borrower for the
fiscal year ending December 31, 1995), and a report on such
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Financial Statements by independent certified public accountants of
recognized national standing, which accountants (if other than Price
Waterhouse LLP) shall be reasonably satisfactory to the Agents, which
report shall not be qualified as to the scope of audit or as to the
status of the Borrower Group as a going concern and shall state that
such Financial Statements present fairly in all material respects the
consolidated financial position of the Borrower Group as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP (except for such changes
with which such accountants concur) and that the examination by such
accountants was conducted in accordance with generally accepted
auditing standards. The first of such audited statements and the
related auditor's report shall be for the fiscal year ended December
31, 1995.
(b) Quarterly Financial Information. As soon as
available and in any event within 45 days after the close of each of
the first three (for fiscal 1995, second and third only) quarterly
accounting periods in each fiscal year of the Borrower, commencing
with the first fiscal quarter ending after the Initial Funding Date,
the Financial Statements of the Borrower for such quarterly period
and for the elapsed portion of the fiscal year ended with the last day
of such quarterly period, and in each case setting forth comparative
consolidated figures for the related periods in the prior fiscal year
(other than with respect to such information provided for fiscal 1995
quarterly periods), subject to normal year-end audit adjustments.
(c) Monthly Financial Information. As soon as
practicable and in any event within 30 days after the end of each
month, commencing with the first full month ending after the Initial
Funding Date, (i) copies of the monthly sales pacings reports and cash
flow reports for such month of each Station as furnished to the
Borrower by each Station and (ii) the consolidated and consolidating
balance sheet and income statement of the Borrower Group for such
fiscal month and for the period from the beginning of the then current
fiscal year to the end of such fiscal month, setting forth in
comparative form the corresponding periods of the prior fiscal year
(other than with respect to such information provided for fiscal 1995
monthly periods), subject to normal year-end audit adjustments.
(d) Accountants' Review. Together with each delivery of
Financial Statements pursuant to subsection (a) of this Section 6.01
above, a written statement by the independent
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public accountants of the Borrower giving the report thereon (i)
stating that their audit examination has included a review of the
terms of Sections 6, 7, 8 and 9 of this Agreement as they relate to
accounting matters, (ii) stating whether, in connection with their
audit examination, any condition or event that constitutes a Default
or 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, however, that such
accountants shall not be liable by reason of any failure to obtain
knowledge of any such Default or Event of Default that would not be
disclosed in the course of their audit examination, and (iii) stating
that based on their audit examination nothing has come to their
attention that causes them to believe that the information contained
in the Compliance Certificates delivered pursuant to Section 6.01(f)
for the fiscal year covered by their audit examination is not stated
in accordance with the terms of this Agreement.
(e) Yearly Budgets. Within 30 days after the end of each
fiscal year of the Borrower, budgets of the Borrower Group in
reasonable detail for each month of the following fiscal year, as
customarily prepared by management for its internal use, setting
forth, with appropriate discussion, the principal assumptions upon
which such budgets are based. Together with each delivery of
Financial Statements pursuant to Section 6.01(a), (b) and (c), a
comparison of the current year-to-date financial results against the
budgets required to be submitted pursuant to this subsection (e) shall
be presented.
(f) Compliance Certificate. Together with each delivery
of Financial Statements pursuant to Section 6.01(a) and (b), a
Compliance Certificate of the Borrower.
(g) Management Letters. Promptly upon receipt thereof, a
copy of each annual "management letter" submitted to the Borrower by
its independent accountants in connection with any annual audit made
by them of the books of any member of the Borrower Group.
(h) Investor Information; SEC Filings. Promptly upon
their becoming available, copies of all Financial Statements, reports,
notices and proxy statements sent or made available generally by any
member of the Borrower Group to its security holders (other than to
any other Loan Party), of all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any member
of the Borrower Group with any securities exchange or with the SEC,
and of all
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press releases and other statements made available generally by any
member of the Borrower Group to the public concerning material
developments in the business of any member of the Borrower Group. All
information provided pursuant to this Section 6.01(h) shall be subject
to ordinary and customary exceptions for information for which any
member of the Borrower Group is entitled to and is granted
confidential treatment by the SEC.
(i) Notice of Certain Events. Promptly upon any officer
of any member of the Borrower Group obtaining knowledge (w) of any
condition or event which constitutes a Default or Event of Default, or
becoming aware that any Lender has given any notice or taken any other
action with respect to a claimed Default or Event of Default under
this Agreement, (x) that any Person has given any notice to any
Company or taken any other action with respect to a claimed default
or event or condition of the type referred to in Section 8.04, (y) of
a material adverse change in the business, assets, liabilities
(contingent or otherwise), operations, condition (financial or
otherwise), solvency, prospects or material agreements of the Borrower
Group, taken as a whole, or the Parent and its Subsidiaries, taken as
a whole, as the case may be, or (z) of the occurrence of any event or
condition that would give rise to any Parent Group Equity Event, an
Officers' Certificate specifying the nature and period of existence of
any such condition or event, or specifying the notice given or action
taken by such holder or Person and the nature of such claimed Default,
Event of Default, event or condition, or material adverse change, and
what action the Borrower or the Parent has taken, is taking and
proposes to take with respect thereto.
(j) Litigation Reports. (i) Promptly upon any officer
of any member of the Borrower Group obtaining knowledge of (x) the
institution of, or written threat of, any Proceeding (or series of
Proceedings arising out of the same general allegations or
circumstances) against or affecting any Company or any property of any
Company not previously disclosed to the Lenders, which Proceeding or
series of Proceedings seeks recovery from (A) any Loan Party
aggregating $500,000 or more or (B) any Company which is not a Loan
Party aggregating $5,000,000 or more or (y) any dispute in respect of
or the institution of, or written threat of, any Proceeding in respect
of any Contractual Obligation of any Loan Party which could reasonably
be expected to have a Company Material Adverse Effect or a Borrower
Material Adverse Effect, notice thereof to the Agents and the Lenders
and, upon request, prompt notice of the status of any such Proceeding.
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(ii) In addition to the information described in clause (i)
above, such other information as may be reasonably available to the
members of the Borrower Group to enable the Lenders and their counsel
to evaluate such matters.
(k) Insurance Report. Within 30 days of the last day of
each fiscal year of the Borrower, a report reasonably satisfactory to
the Agents outlining all material insurance coverage maintained as of
the date of such report by the Borrower Group, and to the extent known
as of such date outlining all material insurance coverage planned to
be maintained by the Borrower Group in the subsequent fiscal year.
(l) Amendments to Indebtedness. To the extent reasonably
requested by any Lender, as soon as practicable and in any event
within ten days of the later of such request and the making of any
such amendment or waiver, copies of amendments or waivers with respect
to Indebtedness of the Borrower Group.
(m) Financial Plans; Revised Projected Financial
Statements. As soon as practicable after the end of any fiscal year
and in any event by the date that is 30 days after the delivery of the
Financial Statements referred to in subsection (a) of this Section
6.01, a consolidated plan, prepared in accordance with the Borrower's
normal accounting procedures (and which will represent management's
reasonable good faith estimate of projected performance during such
periods) applied on a consistent basis, for the next succeeding three
fiscal years of the Borrower Group, including (i) forecasted
consolidated Financial Statements of the Borrower Group for such
periods, (ii) such information with respect to each fiscal quarter in
the first year covered by such projected Financial Statements (such
financial projections provided pursuant to this clause (ii) and the
preceding clause (i), the "Annual Projected Financial Statements"),
(iii) the aggregate amount of forecasted Capital Expenditures of the
Borrower Group for such fiscal years, and (iv) forecasted compliance
with Sections 7.05 and 7.10. As soon as practicable, but in any event
not later than the fifteenth day prior to the consummation of any
Future Acquisition, the Borrower shall provide revised Financial
Statements of the type described in clauses (i) and (ii) of the
preceding sentence, or, if prior to the first date of delivery of the
Financial Statements required by this Section 6.01(m), the Initial
Projected Financial Statements, giving pro forma effect to such
transaction (the "Revised Projected Financial Statements").
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(n) FCC Proceedings, Etc. Promptly upon their becoming
available (i) a copy of all ownership reports filed with the FCC with
respect to any member of the Borrower Group, (ii) a copy of any order
or notice of the FCC or any other Governmental Authority or a court of
competent jurisdiction which relates to any Broadcast License or any
application therefor (other than orders or notices which affect the
television broadcast industry generally or which could not reasonably
be expected to have a Company Material Adverse Effect or a Borrower
Material Adverse Effect) or which refuses (or threatens to refuse)
renewal or extension of, or revokes, cancels, suspends or terminates
(or threatens to revoke, cancel, suspend or terminate), the authority
of any Loan Party to operate a Station (other than an LMA Station) or
of any other licensee to operate an LMA Station and with respect to
any such refusal, revocation, cancellation, suspension or termination,
written notice specifying the reasons for such revocation,
cancellation, termination or denial, the anticipated effect thereof,
and the actions, if any, being taken by the Parent, the Borrower or
any other licensee of an LMA Station to remedy the same, (iii) a copy
of any competing application filed with respect to any Broadcast
License or any application therefor of any Loan Party or any other
licensee of an LMA Station, (iv) a copy of any material citation,
notice of violation or order to show cause from the FCC directed to
the Parent or the Borrower Group or any other licensee of an LMA
Station or any complaint directed to the Parent or the Borrower Group
or any other licensee of an LMA Station to which the FCC has requested
an answer, (v) notice of any other action taken or threatened to be
taken by any Governmental Authority (including the FCC) which could
reasonably be expected to have a Company Material Adverse Effect or a
Borrower Material Adverse Effect, and (vi) a copy of all material
information required to be filed by any Loan Party in respect of the
business conducted by the Borrower Group with the FCC or any similar
Governmental Authority.
(o) Accounting Changes. Prior to the effectiveness
thereof, information relating to any proposed change in the accounting
treatment or reporting practices of the Borrower Group, the nature or
scope of which materially affects the calculation of any component of
any financial covenant, standard or term contained in this Agreement.
(p) Other. With reasonable promptness, such other
information and data with respect to the Borrower Group or any other
similar entity in which the Borrower Group has an investment as from
time to time may be reasonably requested by any Agent or any Lender.
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6.2 Books, Records and Inspections. Each member of the
Borrower Group shall keep true books of records and accounts in which full and
correct entries will be made of all its business transactions, and will reflect
in its Financial Statements adequate accruals and appropriations to reserves,
all in accordance with GAAP. Each member of the Borrower Group shall permit,
upon reasonable prior notice to the chief financial officer of the Borrower,
officers and designated representatives of any of the Agents or Lenders to
visit and inspect any of the properties or assets of any member of the Borrower
Group in whosesoever possession, and to examine the books of account of such
member of the Borrower Group and discuss the affairs, finances and accounts of
such member of the Borrower Group with, and be advised as to the same by, its
officers and independent accountants (in the presence of such officers), all at
such reasonable times and intervals and to such reasonable extent as any of the
Agents or Lenders may reasonably request.
6.3 Maintenance of Property; Insurance. (a) Except as
otherwise permitted hereunder or where the failure would not reasonably be
expected to have a Company Material Adverse Effect or a Borrower Material
Adverse Effect, each member of the Borrower Group shall maintain or cause to be
maintained in good repair, working order and condition (subject to normal wear
and tear) all properties used in its businesses (including each Mortgaged Real
Property and each Real Property) and in a manner consistent with generally
accepted standards of good engineering practice and from time to time shall
make or cause to be made all appropriate repairs, renewals and replacements
thereof and will maintain and renew as necessary all licenses, permits and
other clearances necessary to use and occupy such properties of such member of
the Borrower Group.
(b) Each member of the Borrower Group shall maintain or
cause to be maintained, with financially sound and reputable insurers,
insurance (including business interruption insurance) with respect to its
properties and business against loss or damage of the kinds customarily insured
against by corporations of established reputation engaged in the same or
similar businesses and similarly situated, of such types and in such amounts as
are customarily carried under similar circumstances by such other corporations
to the extent that such types and such amounts of insurance are available at
commercially reasonable rates. Each member of the Borrower Group shall
maintain such insurance as may be required to comply with each Security
Document and shall otherwise comply with all provisions of the Security
Documents relating to insurance. Each member of the Borrower Group shall
furnish to each Lender, upon reasonable request, information as to the
insurance carried.
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6.4 Payment of Taxes. Each member of the Borrower Group
shall pay and discharge all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which material penalties
attach thereto, and all lawful claims which, if unpaid, might become a Lien or
charge upon any of its properties or cause a failure or forfeiture of title
thereto; provided, however, that no member of the Borrower Group shall be
required to pay any such tax, assessment, charge, levy or claim that is being
contested in good faith and by proper proceedings promptly instituted and
diligently conducted if it has maintained adequate reserves with respect
thereto in accordance with GAAP and if such proceedings would stay any
forfeiture of any property or assets of such member of the Borrower Group.
6.5 Corporate Franchises. Each member of the Borrower Group
shall do, or cause to be done, all things necessary to preserve and keep in
full force and effect its respective existence, rights and authority, except
where such failure to keep in full force and effect such rights and authority
would not have a Borrower Material Adverse Effect.
6.6 Governmental Consents and Governmental Requirements.
Except where the failure to do so would not have a Borrower Material Adverse
Effect, each member of the Borrower Group shall (a) apply for, diligently
pursue and obtain or cause to be obtained, and thereafter maintain in full
force and effect, all Governmental Consents that shall now or hereafter be
necessary under any Governmental Requirement for (i) land use, public and
employee health and safety, pollution or protection of the environment, (ii)
the grant by any member of the Borrower Group of the security interests and
Liens granted by any of the Security Documents and for the validity and
enforceability thereof or for the perfection of and the exercise by the Agents
and Lenders of their rights and remedies thereunder and (iii) the operation of
the business of and ownership of the properties of such member of the Borrower
Group, (b) comply in all material respects at all times with all provisions of
all Governmental Consents and all other material agreements, licenses and
leases to which it is a party or of which it is a beneficiary and suffer no
loss or forfeiture thereof or thereunder and (c) comply in all material
respects at all times with all provisions of all other limitations,
restrictions, obligations, schedules, timetables and reporting requirements of
any Governmental Requirement. Each Mortgagor shall maintain in full force and
effect all certificates of occupancy or use and other Governmental Consents
necessary under any Governmental Requirements for the occupancy or use of its
Mortaged Real Property, except to the extent that the failure to do so could
not reasonably be expected to result in a Company Material Adverse
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Effect or a Borrower Material Adverse Effect. Each member of the Borrower
Group shall notify the Agents in the event of any, and provide the Agents with
a copy of all notices of, denial, suspension or revocation of any material
Governmental Consents.
6.7 ERISA. The Borrower shall furnish to the Agents and each
of the Lenders:
(a) promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action the Borrower or 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; and
(b) with reasonable promptness, copies of (i) each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by the Borrower or any of its Subsidiaries or any of
their respective ERISA Affiliates with the Internal Revenue Service
with respect to each Pension Plan, (ii) all notices received by the
Borrower or any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan sponsor or any governmental
agency concerning an ERISA Event, and (iii) such other documents or
governmental reports or filings relating to any Employee Benefit Plan
as any of the Agents shall reasonably request.
6.8 Performance of Obligations. Each member of the Borrower
Group shall perform in all material respects all of its obligations under the
terms of each mortgage, indenture, security agreement, other debt instrument
and material contract by which it is bound or to which it is a party, except
where such nonperformance would not have a Borrower Material Adverse Effect.
6.9 End of Fiscal Years; Fiscal Quarters. Each member of the
Borrower Group shall, for financial reporting purposes, maintain the accounting
periods maintained by it on the Initial Funding Date, consistent with the past
practice and procedures of such member of the Borrower Group.
6.10 Use of Proceeds. All proceeds of the Loans shall be
used as provided in Section 5.05.
6.11 Preservation of Status as Senior Indebtedness. Each
member of the Borrower Group shall promptly take all action reasonably
requested by any of the Agents at any time to protect, preserve and give effect
to the status of the Lenders and the
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Agents as the holders of senior indebtedness within the meaning of any
agreement or instrument relating to Subordinated Indebtedness of any member of
the Borrower Group.
6.12 Performance and Enforcement Under Certain Agreements.
Each member of the Borrower Group shall diligently and in good faith promptly
perform in all material respects all of its agreements and covenants under each
Transaction Document and each document and instrument related thereto or
delivered in connection with any thereof, in each case, to the extent
reasonably within its control. Subject to the provisions of the next sentence
and the last sentence of this Section 6.12, each member of the Borrower Group
shall (A) diligently and in good faith promptly pursue the performance of each
other party to each such document, and (B) diligently seek the enforcement of
all rights and remedies under each such document, except, in each case, where
the failure to do so could not reasonably be expected to have a Borrower
Material Adverse Effect. Each member of the Borrower Group shall confer with
the Agents, on behalf of the Lenders, in enforcing or waiving any material
rights of any member of the Borrower Group under any such document. The
foregoing shall not prevent any member of the Borrower Group from terminating
any Acquisition Document in accordance with the terms thereof prior to the
closing thereunder.
6.13 Lender Meeting. The Borrower shall participate in a
meeting of the Lenders once during each fiscal year (commencing with the 1995
fiscal year) to be held at a location and a time selected by the Borrower and
reasonably acceptable to the Agents and the Lenders.
6.14 Pledge of Additional Collateral. Promptly, and in any
event within 30 days, after the acquisition of any property or asset (other
than with the proceeds of Indebtedness permitted by Section 7.04(vii)) of the
type that would have constituted Collateral at the Initial Funding Date (the
"Additional Collateral"), each member of the Borrower Group shall take all
action necessary or desirable, including the filing of appropriate financing
statements under the provisions of the UCC or applicable Governmental
Requirements in each of the offices where such filing is necessary or
appropriate, to grant the Collateral Agent a perfected first priority Lien on
such property or asset (or comparable interest under foreign law in the case of
any foreign property or asset) pursuant to and to the full extent required by
the Security Documents and this Agreement. In the event that any member of the
Borrower Group acquires an interest in additional Real Property (other than
with the proceeds of Indebtedness permitted by Section 7.04(vii)), each member
of the Borrower Group shall take such actions and execute such documents as the
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Collateral Agent shall require to confirm the Lien of a Mortgage, if
applicable, or to create a new Mortgage (including satisfaction of the
conditions set forth in subsections (c)(iv)-(v), (e) and (f) of Section 4.01).
The costs of all actions taken by the parties in connection with the pledge of
Additional Collateral, including reasonable costs of counsel for the Lenders,
shall be for the account of the Borrower, which shall pay all sums due on
demand.
6.15 Security Interests. (a) Each member of the Borrower
Group shall perform any and all acts and execute any and all documents
(including the execution, amendment or supplementation of any financing
statement, continuation statement or other statement) for filing under the
provisions of the UCC and the rules and regulations thereunder, or any other
statute, rule or regulation of any applicable Federal, state or local
jurisdiction, including any filings in local real estate land record offices
and the United States Patent and Trademark Office, or the United States
Copyright Office, which are necessary or advisable, from time to time, in order
to grant, continue and maintain in favor of the Collateral Agent for the
benefit of the Lenders valid and perfected Liens on the Collateral, which Liens
shall be subject only to Prior Liens.
(b) Each member of the Borrower Group shall undertake to
deliver or cause to be delivered to the Collateral Agent from time to time such
other documentation, consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Collateral Agent as the Collateral
Agent shall deem reasonably necessary or advisable to perfect or maintain the
Liens for the benefit of the Lenders, including Liens on assets which are
required to become Collateral after the Initial Funding Date.
6.16 Environmental Events. (a) Each member of the Borrower
Group shall promptly give notice to the Agents upon becoming aware thereof (i)
of any violation of any Environmental Law by any Company, (ii) of any
Environmental Notice, inquiry, Proceeding, investigation or other action under
any Environmental Law with respect to any Company, including a request for
information or a notice of potential liability from any foreign, Federal, state
or local environmental agency or board or any other Person, or (iii) of the
discovery of the release other than in compliance with Environmental Laws of
any Hazardous Material at, on, under or from any of the Real Properties of any
Company in excess of reportable or allowable standards or levels under any
Environmental Law, or in a manner or amount which could reasonably be expected
to result in liability of any Company under any Environmental Law, in each case
which could reasonably be expected to have a Company Material Adverse Effect or
a Borrower Material
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Adverse Effect or subject any of the Agents or Lenders to any material risk of
liability, loss or damages.
(b) In the event of the presence of any Hazardous
Material on any of the Real Properties or any other properties or assets used
in the business of any Company, which presence is in violation of, or could
reasonably be expected to result in liability to any Company under, any
Environmental Law, in each case that could reasonably be expected to have a
Company Material Adverse Effect or a Borrower Material Adverse Effect or
subject any of the Agents or Lenders to any material risk of liability, loss or
damages, each member of the Borrower Group, upon discovery thereof, shall take
all reasonably necessary steps to initiate and expeditiously complete all
investigative, remedial, removal, response, corrective and other action to
mitigate and eliminate any such adverse effect, and shall keep the Agents
informed of their actions and the results.
(c) Each member of the Borrower Group shall provide the
Agents with copies of (i) all the closing or post-closing Environmental
Notifications without regard to materiality and (ii) any notice, submittal or
documentation provided by any member of the Borrower Group to any Person under
any Environmental Law if the matter that is the subject of the notice,
submittal or other documentation would have a Borrower Material Adverse Effect
or subject any of the Agents or Lenders to any material risk of liability, loss
or damages. Such Environmental Notifications notice, submittal or
documentation shall be provided to the Agents promptly and, in any event,
within five Business Days after such material is provided to such Person.
6.17 Interest Rate Certificate. The Borrower shall deliver
to the Administrative Agent an Interest Rate Certificate: (i) on each Funding
Date occurring on or after the Three Month Date (which, with respect to any
Acquisition Funding Date, shall be satisfied by delivery of an Acquisition
Certificate); (ii) on any day after the Three Month Date on which any Asset
Sale occurs (which Interest Rate Certificate shall give pro forma effect to
such Asset Sale as if it had occurred as of the first day of the Borrower Test
Period relating to such Interest Rate Certificate); (iii) on the Three Month
Date; and (iv) within 45 days after the end of each fiscal quarter of the
Borrower occurring after the Three Month Date, beginning with September 30,
1995.
6.18 Additional Loan Parties. In the event that (a) any
Acquisition is proposed to be made by the Borrower Group, or the assets of any
Acquisition are to be contributed to, any Subsidiary of the Borrower and such
Subsidiary is not a Loan Party immediately prior to the consummation of any
such Acquisition or (b) any Person
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becomes a Subsidiary of the Borrower after the Initial Funding Date (each such
Subsidiary referred to herein as an "Additional Loan Party" and collectively as
the "Additional Loan Parties"), then, on or before the consummation of any such
Acquisition or upon such Person becoming a Subsidiary of the Borrower (but in
any event prior to any capitalization (other than de minimis capitalization)
of, or contribution of assets to, such Subsidiary), as the case may be, the
Borrower shall cause such Subsidiary to execute and deliver all such
agreements, guarantees, pledges, assignments, documents and certificates
(including any amendments to the Credit Documents) as the Agents may reasonably
request and do such other acts and things as the Agents may reasonably request
in order to have such Subsidiary guarantee the Obligations, grant to the
Collateral Agent ratably on behalf of the Lenders, a duly perfected first
priority Lien (subject to no other Liens other than Prior Liens) on all real,
personal and mixed property of such Subsidiary to effect fully the purposes of
the Credit Documents and to provide for payment of the Obligations in
accordance with the terms of the Credit Documents. Without limiting the
generality of the foregoing, in such event, (i) such Additional Loan Party
shall execute and deliver to the Agents and the Lenders, as appropriate, (A) a
Subsidiary Guarantee (or become a party to the Subsidiary Guarantee) and
thereafter shall be a Guarantor for all purposes under the Credit Documents,
and (B) all Security Documents as the Agents or the Requisite Lenders may deem
necessary or appropriate.
6.19 Broadcast Licenses. (a) Except to the extent that the
failure to do so could not reasonably be expected to have a Company Material
Adverse Effect or a Borrower Material Adverse Effect, each member of the
Borrower Group shall use its best efforts to keep in full force and effect all
of the Broadcast Licenses of the Borrower Group. Each member of the Borrower
Group shall provide a copy of any notice of default under any Broadcast License
received by it or any of its Subsidiaries or with respect to which any such
member of the Borrower Group may have any knowledge (and, in the event of any
notice based on knowledge of such member of the Borrower Group, a brief
description of such default and the basis of such knowledge).
(b) The Borrower shall establish and maintain indirect
wholly owned License Subsidiaries for the purpose of holding the Broadcast
Licenses (exclusive of those relating to LMA Stations). Except as required by
the FCC from time to time, License Subsidiaries shall not own any material
assets other than the Broadcast Licenses. Each new Broadcast License issued by
the FCC (exclusive of those relating to LMA Stations) shall be issued to, and
held by, a License Subsidiary.
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6.20 Corporate Separateness. Each member of the Borrower
Group shall take all such actions as are necessary to keep the operations of
the Parent Group separate and apart from those of the Borrower Group, including
ensuring that all customary formalities regarding its corporate existence are
followed. No member of the Borrower Group shall make any payment in respect of
a liability of any member of the Parent Group, other than payments (i) in
respect of the Obligations, (ii) permitted by Section 7.08(iv) or (iii) of
allocable expenses of the Borrower Group for the collective corporate expenses
of the Parent to the extent permitted by this Agreement. No member of the
Borrower Group shall take any action, or conduct its affairs in a manner, which
is likely to result in the assets and liabilities of the Borrower Group being
substantively consolidated with those of the Parent Group or with those of the
Parent in a bankruptcy, reorganization or other insolvency proceeding.
6.21 Landlord Consents. The Borrower shall use reasonable
efforts to obtain from the landlord under each of the leases listed on Schedule
6.21 a landlord consent to a Mortgage in favor of Collateral Agent encumbering
such lease. The Borrower shall notify Collateral Agent upon its receipt of any
such landlord consent or upon its receipt of any notice from a landlord
indicating that such landlord refuses to grant its consent to a Mortgage. In
the event that any landlord shall consent to such a Mortgage, Borrower will
take all actions and execute such documents as the Collateral Agent shall
reasonably require to grant to the Collateral Agent a Mortgage Lien on such
leasehold estate, including, without limitation, satisfaction of the conditions
set forth in Sections 4.01(c) and 4.01(e). Borrower shall pay all costs and
expenses incurred by the parties in connection with the execution, delivery and
recording of any such Mortgage and the delivery of the other documents listed
in Sections 4.01(c) and 4.01(e).
SECTION 7. Negative Covenants. The Borrower covenants and
agrees that as of the Initial Funding Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated and the Loans
together with interest, fees and all other Obligations incurred hereunder and
under the other Credit Documents are paid in full (it being understood that the
Borrower shall cause each of its Subsidiaries to observe and comply in a timely
manner with each term and provision of the covenants set forth in this Section
7 to the extent applicable to such Subsidiary):
7.01 Conduct of Business. No member of the Borrower Group
shall (a) alter the character of its business from that conducted at the
Initial Funding Date, after giving effect to the
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consummation of the transactions to be consummated on the Initial Funding Date,
or engage in any business other than (i) the business engaged in by the
Borrower Group on the Initial Funding Date, and similar or related businesses,
and (ii) such other lines of business as may be consented to by the Agents and
the Requisite Lenders; provided, however, that only License Subsidiaries shall
directly own, operate or hold any Broadcast License, (b) except as permitted by
Section 7.15, cancel any material claim or debt, except for consideration In
the Ordinary Course or (c) enter into any management agreement with any Person,
except In the Ordinary Course or as otherwise permitted hereunder.
Notwithstanding anything to the contrary in this Agreement, including any
references to "Subsidiaries," (A) no member of the Borrower Group shall (i)
create or acquire any interest in any Person that would be a Subsidiary after
the Initial Funding Date other than (a) maintenance of its interests in its
respective Subsidiaries as of the Initial Funding Date and (b) in anticipation
of or pursuant to or to effect any Acquisition or (ii) operate, program, or
hold any interest in (including pursuant to LMA Arrangements), any television
or radio broadcast station, cable, microwave or other television signal
transmission system other than the ownership, operation or programming of the
Stations owned, acquired or programmed pursuant to the Contribution or any
Acquisition and (B) no License Subsidiary shall engage in any business or incur
any Indebtedness or other liabilities, other than the ownership of Broadcast
Licenses and the execution, delivery and performance of the Credit Documents
and all related documents to which it is a party and activities reasonably
necessary and related to the foregoing.
7.02 Amendments or Waivers of Certain Documents. After the
Effective Date, (a) no member of the Borrower Group shall, without the prior
written consent of the Requisite Lenders, which consents shall not be
unreasonably withheld, amend the terms of its certificate of incorporation or
bylaws or any agreement entered into by such member of the Borrower Group with
respect to its equity interests and (b) no member of the Borrower Group shall
amend or waive compliance with or consent to a departure from, or consent to
any action or failure to act under, any of the terms or provisions of any
Existing Debt of the Borrower Group or any Transaction Document or the Tax
Sharing Agreement or any other material contract, lease, license or agreement
of the Borrower Group, except in the case of each of clauses (a) and (b) of
this Section 7.02, to such extent as could not reasonably be expected to be,
individually or in the aggregate, materially adverse to the Borrower Group, the
Agents or the Lenders.
7.03 Liens and Related Matters. (a) No member of the
Borrower Group shall create, incur, assume or suffer to exist or
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remain in effect any Lien upon or with respect to any item constituting
Collateral now owned or hereafter acquired, or sell any such property or assets
subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets or assign any right to receive income or
profits, or file or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or notice
statute, except the Lien of the Security Document relating thereto, Prior Liens
applicable thereto and Liens expressly permitted by the applicable Security
Documents. No member of the Borrower Group shall create, incur, assume or
suffer to exist or remain in effect any Lien upon or with respect to any
property or assets of any member of the Borrower Group that does not constitute
Collateral, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets or assign any right to receive income or
profits, or file or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or notice
statute, except the following, which are herein collectively referred to as
"Permitted Encumbrances":
(i) the Liens set forth on Schedule 7.03A;
(ii) Liens in respect of purchase money Indebtedness
permitted by Section 7.04(vii) upon real or tangible personal property
acquired by the Borrower after the date hereof (other than any
Collateral or any property or asset which is required to be pledged by
the Borrower Group as Collateral pursuant to this Agreement and the
other Credit Documents); provided, however, that (1) the principal
amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost, (2) such Lien does not extend to or cover any other
property or asset (including the income or profit therefrom) of the
Borrower Group other than such item of property and (3) no portion of
the consideration for such property was funded from any Loan; and
(iii) Liens securing Capital Leases permitted by Section
7.11; provided, however, that the Liens in respect thereof do not
extend to or cover any other property or asset (including the income
or profit therefrom) of the Borrower Group other than the property or
asset (or the income or profit therefrom) leased under such Capital
Lease.
(b) If any member of the Borrower Group shall create or
assume any Lien upon any of its properties or assets, or on any income or
profits therefrom, whether now owned or hereafter acquired, other than Liens
permitted by the provisions of this
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Section 7.03, 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 or other obligation thereby secured as long as any such
Indebtedness or other obligation shall be secured; provided, however, that the
foregoing shall not be construed as a consent by the Requisite Lenders or any
Lender to any creation or assumption of any such Lien not permitted by the
provisions of this Section 7.03.
(c) Except with respect to (I) specific property
encumbered pursuant to a Lien permitted to be incurred pursuant to clauses (ii)
or (iii) of subsection (a) of this Section 7.03 or (II) specific property to be
sold pursuant to an executed agreement with respect to an Asset Sale
consummated in accordance with this Agreement, no member of the Borrower Group
shall enter into any agreement after the Initial Funding Date (other than the
Credit Documents) prohibiting or restricting in any manner (directly or
indirectly and including by way of covenant, representation or warranty or
event of default) (i) the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, (ii) any
Incurrence of any Indebtedness or Contingent Obligation, (iii) the sale,
disposition or pledge of any asset of the Borrower Group, except restrictions
in a Capital Lease or other purchase money financing agreement permitted
hereunder relating to the asset financed thereunder, (iv) any Investments of
the Borrower Group, (v) any Capital Expenditures by the Borrower Group, (vi)
any acquisition, merger or consolidation involving the Borrower Group or (vii)
any change in control of the Borrower Group.
(d) Neither the Borrower nor any of its Subsidiaries
shall create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind (whether arising by operation
of law, by agreement, by its articles of incorporation, bylaws or other
constituent documents of such Subsidiary, or otherwise) on the ability of any
Subsidiary of the Borrower to (i) pay dividends or make any other distribution
on any of such Subsidiary's capital stock, partnership interests or other
interests, as the case may be, owned by the Borrower Group, (ii) make loans or
advances to, or guarantee any Indebtedness or any other obligation of, the
Borrower Group or (iii) transfer any of its property or assets to the Borrower
Group, except: (1) restrictions pursuant to the Credit Documents; (2) legal
restrictions of general applicability under the corporation law of the state in
which such Subsidiary is incorporated (in the case of a Subsidiary which is a
corporation), and fraudulent conveyance or similar laws of general
applicability for the benefit of creditors of such Subsidiary generally; and
(3) legal restrictions of general
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applicability applying to the Borrower Group arising under the Communications
Act.
7.04 Indebtedness. No member of the Borrower Group shall
Incur, or suffer to exist or remain liable with respect to, any Indebtedness,
except:
(i) the Loans and the Guarantees;
(ii) Indebtedness owing by the Borrower to a Wholly Owned
Subsidiary of the Borrower or Indebtedness owing by a Wholly Owned
Subsidiary of the Borrower (other than any License Subsidiary) to the
Borrower or another Wholly Owned Subsidiary of the Borrower which is a
Subsidiary Guarantor; provided, however, that (x) any such member of
the Borrower Group's Indebtedness in excess of an aggregate principal
amount of $10,000 outstanding at any one time shall be evidenced by
Intercompany Notes which shall be pledged pursuant to a Pledge
Agreement and (y) such Indebtedness shall not be subordinate to any
other Indebtedness or other obligation of such Subsidiary other than
the Loans;
(iii) Existing Debt of the Borrower Group as in effect on the
date of this Agreement;
(iv) Indebtedness in respect of Capital Leases Incurred after
the date hereof; provided, however, that such Capital Leases are
permitted pursuant to Section 7.11;
(v) Contingent Obligations permitted to be Incurred under
Section 7.18;
(vi) guarantees by the Borrower of Indebtedness of any Wholly
Owned Subsidiary of the Borrower, which Indebtedness is Incurred in
accordance with this Section 7.04;
(vii) Indebtedness in an amount not to exceed at any time
$500,000 Incurred to finance the cost of acquisition of real or
tangible personal property; provided, however, that such Indebtedness
shall not exceed 100% of the cost of such property;
(viii) Indebtedness owing to any Person that is a Lender
under Interest Rate Agreements to the extent incurred to protect the
Borrower against fluctuations in interest rates on Loans hereunder;
and
(ix) Indebtedness Incurred to refinance (I) any Indebtedness
permitted under clause (iii), (iv) or (vii) of
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this Section 7.04 or (II) any Subordinated Indebtedness of the
Borrower; provided, however, that (1) the principal amount of any such
refinancing Indebtedness shall not exceed the principal amount of the
Indebtedness so refinanced as of the date of the proposed Incurrence
of the refinancing Indebtedness, (2) the refinancing Indebtedness
shall have a stated maturity date no earlier than, and a weighted
average life to maturity no less than, the Indebtedness being
refinanced as of the date of such proposed refinancing, (3) if the
existing Indebtedness is subordinated to the obligations of the
Borrower under the Credit Documents, then the refinancing Indebtedness
shall be at least as subordinated to the obligations of the Borrower
under the Credit Documents, (4) such refinancing Indebtedness shall be
secured only to the extent and with the assets securing the existing
Indebtedness, if at all, (5) the Borrower shall have given the Agents
notice a reasonable time in advance of such refinancing, (6) the
Indebtedness being refinanced shall be discharged contemporaneously
with the Incurrence of the refinancing Indebtedness and (7) after
giving effect to such Incurrence, no Default or Event of Default shall
have occurred and be continuing (it being expressly understood that
any Indebtedness Incurred to refinance any such existing Indebtedness
shall be included in the calculation of Consolidated Total Debt of the
Borrower (such calculation being made after giving effect to the
refinancing)).
7.05 Capital Expenditures. No member of the Borrower Group
shall make any Capital Expenditure for any purpose in any fiscal year of the
Borrower if the aggregate amount of all Capital Expenditures of the Borrower
Group for such fiscal year shall exceed the amount set forth below for such
fiscal year:
<TABLE>
<CAPTION>
Fiscal Year
ended December 31, Amount
----------------- ------
<S> <C>
1995 $1,500,000
1996 2,000,000
1997 1,500,000
1998 1,500,000
</TABLE>
; provided, however, that if the Borrower Group has made Capital Expenditures
in the immediately preceding fiscal year less than the maximum amount set forth
above for a fiscal year (the difference, the "Deficiency Amount"), the Borrower
Group may make Capital Expenditures for such fiscal year in an aggregate amount
not to exceed the sum of (a) the amount set forth above for such fiscal year
and (b) the lesser of (x) $500,000 and (y) the Deficiency Amount for the
immediately preceding fiscal year; provided,
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further, however, that (A) a Deficiency Amount may be carried over and expended
only in the next succeeding fiscal year and (B) for purposes of determining the
amount expended in any fiscal year, the Deficiency Amount shall be deemed
expended only after the amount set forth for such fiscal year in the table
above has been expended.
7.06 Advances, Investments and Loans. No member of the
Borrower Group shall make or own any Investment, except:
(i) Investments in Cash and Cash Equivalents;
(ii) receivables owing to any of them and advances to
customers and suppliers, in each case if created, acquired or made In
the Ordinary Course and payable or dischargeable in accordance with
customary trade terms;
(iii) Indebtedness Incurred in compliance with Section
7.04(ii) or (vi);
(iv) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising In the Ordinary Course;
(v) Investments arising as a result of Capital Expenditures
permitted under Section 7.05;
(vi) Investments arising from Barter Transactions; provided,
however, that no Barter Transaction giving rise to Investments may be
consummated (A) if (I) at the time of the proposed consummation
thereof any Default or Event of Default shall have occurred and be
continuing or would result therefrom or (II) after giving effect to
such Barter Transaction, the aggregate value of advertising sold
pursuant to all Barter Transactions for the Borrower Group for any
fiscal year shall exceed $250,000, and (B) unless all property
received by any Loan Party pursuant to any Barter Transaction
(including any Securities or other evidence of equity interests or
Indebtedness) shall be pledged and delivered to the Collateral Agent
(to the extent required by the Security Documents), on behalf of the
Lenders, unless otherwise consented to in writing by the Agents, as
"Collateral" under the appropriate Security Document;
(vii) Acquisitions to the extent consummated in accordance
with the terms of this Agreement (including the contribution to Wholly
Owned Subsidiaries of the Borrower of
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properties or assets acquired in such Acquisition to the extent
consummated in accordance with the structure of such transaction as
disclosed to the Lenders in connection with obtaining the consent of
the Applicable Lenders);
(viii) Investments in escrow deposits made in connection with
Future Acquisitions; provided, however, that no such Investment shall
be made if (A) the aggregate amount of such Investments outstanding
after giving effect to any proposed escrow deposit (net of any returns
thereof (other than due to purchase price adjustments) and the amount
of any such Investment upon the consummation of the related
Acquisition) would exceed (I) prior to such time as all of the
Preapproved Acquisitions have been consummated, the Escrow Deposit
Basket and (II) thereafter, $2,500,000 or (B) any Default or Event of
Default shall have occurred and be continuing at the time of such
Investment or would arise therefrom;
(ix) Investments existing on the Initial Funding Date as set
forth on Schedule 7.06 and as in effect on the Initial Funding Date;
(x) (A) Investments in capital stock of any Subsidiary of
the Borrower existing on the Initial Funding Date and that is a Loan
Party to the extent thereof as of the Initial Funding Date; and (B)
Investments in Subsidiaries created after the Initial Funding Date
with the prior written consent of the Requisite Lenders to the extent
permitted by the Requisite Lenders; and
(xi) additional Investments of a nature not contemplated by
the foregoing clauses (i) through (x); provided, however, that all
Investments made pursuant to this clause (xi) shall not exceed
$250,000 in the aggregate (each such Investment valued as of the date
made and excluding any appreciation thereof) at any time outstanding;
provided, further, however, that all Securities or other instruments
evidencing such Investments shall be pledged pursuant to the
appropriate Security Document.
7.07 Prepayments of Existing Debt of the Borrower Group. No
member of the Borrower Group shall make (or give any notice in respect of) any
voluntary or optional payment or prepayment or redemption or acquisition for
value of (including by way of depositing with any trustee with respect thereto
money or securities before such Indebtedness is due for the purpose of paying
such Indebtedness when due or prepaying such Indebtedness prior to its stated
maturity upon the occurrence of any event requiring such prepayment pursuant to
the terms of such
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Indebtedness) or exchange of any Existing Debt of the Borrower Group or any
Subordinated Indebtedness of the Borrower Group, except any refinancing thereof
with refinancing Indebtedness Incurred pursuant to Section 7.04(ix).
7.08 Dividends, Etc. No member of the Borrower Group shall
(i) declare or pay any dividends or return any capital to, its stockholders or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such (including pursuant to a merger or
consolidation of any member of the Borrower Group, but excluding any dividends
or other distributions payable solely in shares of its common stock), (ii)
redeem, retire, purchase or otherwise acquire or retire, for any consideration,
any shares of any class of any Company's capital stock now or hereafter
outstanding (or any warrants for or options or stock appreciation rights in
respect of any of such shares), (iii) except as permitted by Section 7.09,
make any loan, payment, contribution or other transfer of funds or other
property to any equity holder or to any Affiliate, (iv) make any payment of
Management Fees to any Affiliate of the Borrower or the Parent or make any
payment pursuant to any tax sharing or allocation agreement or arrangement
(including the Tax Sharing Agreement), (v) make any payment of any salary,
bonus or other form of compensation to any Person who is a significant
stockholder, Affiliate or executive officer of any Company to the extent that
such is otherwise not made In the Ordinary Course of the Borrower Group or (vi)
set aside any funds for any of the purposes set forth in the foregoing clauses
(i)-(v) (each of the foregoing, "Dividends"), except that, with respect to
clauses (ii)-(iv) below of this Section 7.08, so long as no Default or Event
of Default shall have occurred and be continuing or would arise therefrom:
(i) any Subsidiary of the Borrower may pay Dividends to its
parent corporation if such parent corporation is the Borrower or a
Wholly Owned Subsidiary of the Borrower;
(ii) the Borrower may pay cash Dividends to the Parent at any
time prior to March 31, 1996 in an amount not to exceed $500,000 in
the aggregate to fund start-up costs related to the execution of
Infomall Affiliation Agreements between the Parent or any Affiliate of
the Parent and multiple cable television system operators (the
"Infomall Basket");
(iii) the Borrower may pay cash Dividends to the Parent in
each fiscal year of the Borrower in an amount equal to the lesser of
(it being understood that the first such Dividend shall be permitted,
if at all, in fiscal 1996 based on Excess Cash Flow of the Borrower
for fiscal 1995): (A) 50% of Excess Cash Flow, if any, of the
Borrower for the immediately
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preceding fiscal year (the date of calculation of Excess Cash Flow for
each year being the "Excess Cash Flow Determination Date") and (B) the
greater of (x) $1,000,000 or (y) $2,000,000 if, with respect to this
clause (y), as of the last day of the most recent twelve-month period
ending after the relevant Excess Cash Flow Determination Date the
ratio of Consolidated Total Debt of the Borrower as of such day to
Consolidated EBITDA of the Borrower for such twelve-month period is
less than 4.0x as evidenced in an Officers' Certificate delivered to
the Agents; provided, however, that (1) the maximum amount of
dividends permitted to be made pursuant to this Section 7.08(iii) in
each fiscal year shall be reduced dollar-for-dollar by the amount of
any dividend made pursuant to the Infomall Basket until the full
amount thereof has been deducted from all Dividends permitted by this
Section 7.08(iii), (2) all Dividends made pursuant to this Section
7.08(iii) shall be used solely for corporate purposes of the Parent
and shall not be used to make any dividend, advance or distribution to
or for the benefit of the holders of the capital stock of the Parent
and (3) no Dividend permitted to be paid under this Section 7.08(iii)
shall be paid (I) prior to (x) the prepayment of the Loans as required
pursuant to Section 3.02A(c) and (y) the delivery of an Officers'
Certificate calculating Excess Cash Flow for the relevant prior fiscal
year as based upon the audited consolidated Financial Statements of
the Borrower delivered pursuant to Section 6.01(a) or (II) after the
end of the fiscal year in which such Dividend is permitted to be made;
and
(iv) the Borrower may make payments to the Parent pursuant to
the Tax Sharing Agreement as in effect from time to time in accordance
with the terms hereof and thereof.
7.09 Affiliate Transactions. (a) No member of the Borrower
Group shall (i) enter into, carry out or permit to exist any transaction or
series of transactions (including the purchase, sale, lease or exchange of any
property or asset or the rendering of any service), whether or not In the
Ordinary Course, with, or (ii) enter into, permit or suffer to exist or amend
any contract, agreement or arrangement with, any Affiliate of any Company
(each, an "Affiliate Transaction" and collectively, "Affiliate Transactions")
unless such transaction has been negotiated or such relationship will be
conducted in good faith and is on terms and conditions that are fair and
reasonable and no less favorable to such Loan Party than as such Loan Party
could reasonably obtain at the time in a comparable arm's-length transaction
with a Person other than such an Affiliate as determined by the board of
directors of such Loan Party and evidenced by a resolution of such
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board; provided, however, that (i) the aggregate amount of the value of all
Affiliate Transactions (other than Affiliate Transactions listed in Section
7.09(b)) shall not exceed $250,000 for any fiscal year of the Borrower and (ii)
the Borrower shall notify and receive the prior written consent of the Agents
and the Requisite Lenders prior to any such Loan Party's consummating or
agreeing to any Affiliate Transaction that requires any such Loan Party to make
any payments or purchase, sell, lease or exchange any property or render any
service during any calendar year the value of which is equal to or greater than
$100,000.
(b) Notwithstanding Section 7.09(a), the following shall
be permitted:
(i) Dividends otherwise permitted pursuant to the terms of
Section 7.08; and
(ii) the sale of advertising time by the Borrower Group to
Affiliates of the Borrower, which advertising time the Borrower has
determined, reasonably and In the Ordinary Course, to be "unsold
advertising time" to the extent that the value thereof in any fiscal
year of the Borrower does not exceed $250,000; provided, however, that
such transactions shall be consummated only if no Default or Event of
Default shall have occurred and be continuing at the time of the
proposed consummation of such transaction or would result therefrom.
7.10 Financial Covenants.
(a) Minimum Total Interest Coverage Ratio. The Borrower
shall not permit the ratio of (i) Adjusted Consolidated EBITDA for any Borrower
Test Period in respect of any Determination Date occurring on or after the
Initial Funding Date and prior to the Maturity Date to (ii) Consolidated
Interest Expense of the Borrower for the Borrower Test Period in respect of
such Determination Date to be less than 2.0:1.0.
(b) Minimum Fixed Charge Coverage Ratio. The Borrower
shall not permit the ratio of (i) Adjusted Consolidated EBITDA for any Borrower
Test Period in respect of any Determination Date occurring after June 30, 1995
and prior to the Maturity Date to (ii) Consolidated Fixed Charges of the
Borrower for the Borrower Test Period in respect of such Determination Date to
be less than (A) at any time prior to and including September 30, 1995, 1.3:1.0
and (B) after September 30, 1995, 1.5:1.0.
(c) Maximum Total Debt Leverage Ratio. The Borrower
shall not permit the Total Debt Leverage Ratio at any Determination
<PAGE> 87
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Date occurring during any period listed below to be more than the ratio set
forth below opposite the periods set forth below (each interim period set forth
below shall begin, other than the first period, on the last business day of the
month specified as the beginning of such period and shall end on the second to
last business day of the month specified as the end of such period):
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Initial Funding Date to the 15th Month After
the Initial Funding Date 6.00x
15th Month After the Initial Funding Date to
18th Month After the Initial Funding Date 5.75x
18th Month After the Initial Funding Date to
24th Month After the Initial Funding Date 5.50x
24th Month After the Initial Funding Date to
30th Month After the Initial Funding Date 5.00x
30th Month After the Initial Funding Date to
36th Month After the Initial Funding Date 4.50x
</TABLE>
For purposes of this Section 7.10(c), in connection with the delivery of an
Acquisition Certificate the Total Debt Leverage Ratio shall be calculated after
giving effect to any Indebtedness Incurred or to be Incurred by the Borrower
Group after the end of such Borrower Test Period and on or prior to such
Determination Date.
(d) Determination Date. For purposes of this Section
7.10, the Determination Date shall be (I) the Initial Funding Date, (II) the
last day of each fiscal quarter of the Borrower occurring after the Initial
Funding Date (beginning with the fiscal quarter ending June 30, 1995) and (III)
each Acquisition Funding Date.
7.11 Restriction on Leases. No member of the Borrower Group
shall become liable in any way, whether directly or by assignment or as a
guarantor or other surety, for the obligations of the lessee under any lease,
whether an Operating Lease or a Capital Lease, unless, immediately after giving
effect to the incurrence of liability with respect to such lease, the
Consolidated Rental Payments of the Borrower Group at the time in effect (x)
during the then current fiscal year of the Borrower shall not exceed the sum of
(i) $3,000,000 plus (ii) an additional amount for each Future Acquisition
consummated during the current fiscal year equal to the lesser of $25,000 per
month or the actual monthly lease obligations under the Operating Leases and
Capital
<PAGE> 88
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Leases entered into in connection with such Future Acquisition (the sum of (i)
and (ii), the "Base Amount") and (y) for future fiscal years an amount in
excess of the Base Amount satisfactory to the Agents.
7.12 Restriction on Tax Consolidation. No member of the
Borrower Group shall file or consent to the filing of any consolidated income
tax return with any Person other than the Borrower Group and the Parent Group
and pursuant to the Tax Sharing Agreement as in effect from time to time in
accordance with the terms hereof and thereof.
7.13 Sale and Lease-Backs. No member of the Borrower Group
shall become or thereafter remain liable as lessee or as guarantor or other
surety with respect to the lessee's obligations under any lease, whether an
Operating Lease or a Capital Lease, of any property (whether real or personal
or mixed) whether now owned or hereafter acquired, (i) which the Borrower Group
has sold or transferred or is to sell or transfer to any other Person or (ii)
which the Borrower Group intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by the
Borrower Group to any Person in connection with such lease, if in the case of
clause (i) or (ii) above, such sale and such lease are part of the same
transaction or a series of related transactions or such sale and such lease
occur within one year of each other or are with the same other Person.
7.14 Limitation on Other Restrictions on Amendment of Credit
Documents. No member of the Borrower Group shall enter into, suffer to exist
or become or remain subject to any agreement or instrument to which such member
of the Borrower Group is a party or by which any member of the Borrower Group
or any property of any member of the Borrower Group (now owned or hereafter
acquired) may be subject or bound, except for the Credit Documents, that would
prohibit or restrict in any manner (directly or indirectly and including by way
of covenant, representation or warranty or event of default), or require the
consent of any Person to, any amendment to, or waiver or consent to departure
from the terms of, any of the Credit Documents (it being expressly understood
that the Parent Equity Documents impose restrictions upon the ability of the
Parent to permit its Subsidiaries to effect certain transactions).
7.15 Sale or Discount of Receivables. No member of the
Borrower Group shall sell, with or without recourse, or discount, or otherwise
sell for less than the face value thereof, notes or accounts receivable, other
than in connection with trade discounts In the Ordinary Course or consistent
with past practice.
<PAGE> 89
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7.16 Issuance or Disposal of Subsidiary Stock. The Borrower
shall not: (a) issue, sell, assign, pledge or otherwise encumber or dispose
of any shares of capital stock, partnership interests, or other equity
securities of (or warrants, rights or options to acquire shares or other equity
securities of) any Subsidiary of the Borrower, except (i) to the Borrower or
any Wholly Owned Subsidiary of the Borrower, (ii) to qualify directors if
required by applicable law and (iii) the pledge thereof pursuant to the
Security Documents; or (b) permit any Subsidiary of the Borrower to issue,
sell, assign, pledge or otherwise encumber or dispose of any of their
respective or any of their respective Subsidiaries' shares of capital stock,
partnership interests, or other securities (or warrants, rights or options to
acquire any such shares or other securities), except (i) to the Borrower or a
Wholly Owned Subsidiary of the Borrower, (ii) to qualify directors if required
by applicable law and (iii) the pledge thereof pursuant to the Security
Documents.
7.17 Restriction on Fundamental Changes; Asset Sales and
Acquisitions. No member of the Borrower Group shall alter its corporate,
capital or legal structure or enter into any transaction of merger,
consolidation or other combination or engage in any other reorganization or
recapitalization, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or effect any Asset Sale or otherwise convey,
sell, lease, sub-lease, transfer or otherwise dispose of, in one transaction or
a series of transactions, all or any part of its business, property or assets
(including any of the capital stock or partnership interests held by such
Person in any of its Subsidiaries), whether now owned or hereafter acquired, or
acquire by purchase, lease or otherwise (in one transaction or a series of
related transactions) all or any part of the business, property or fixed assets
of, or stock or other evidence of beneficial ownership of, any Person (other
than pursuant to the Contribution and the Preapproved Acquisitions and
purchases or other acquisitions of inventory, leases, materials, property and
equipment In the Ordinary Course) or agree to do any of the foregoing at any
future time, except:
(i) the Borrower Group may from time to time make Asset Sales
having a cumulative aggregate fair market value not in excess of
$100,000 for each fiscal year; provided, however, that (x) the
consideration received shall be an amount at least equal to the fair
market value thereof; and (y) the sole consideration received shall be
Cash;
(ii) the Borrower Group may consummate any acquisition of any
television broadcast property, including any acquisition involving
the entering into LMA Arrangements (each such transaction, a "Future
Acquisition" and collectively, the
<PAGE> 90
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"Future Acquisitions" (it being expressly understood that none of the
Stations acquired or programmed pursuant to the Contribution or any
Preapproved Acquisition shall be deemed a Future Acquisition)), if (1)
the Agents and the Applicable Lenders shall have given their prior
written consent to the consummation of any such Future Acquisition;
(2) if such Future Acquisition is in a "Designated Market Area" (as
determined by Nielsen & Company in its then current publication of
ratings) ranked lower than 25, the percentage of the Borrower's
Consolidated EBITDA for the immediately preceding fiscal quarter for
which Financial Statements have been or should have been delivered
pursuant to Section 6.01(a) or (b) determined on a pro forma basis as
if such Acquisition occurred at the beginning of such fiscal quarter
attributable to such television broadcast property and all other
television broadcast properties of the Borrower Group in a Designated
Market Area ranked lower than 25 would not exceed 20%; (3) such
television broadcast property shall be determined by management of the
Borrower to have Projected Acquisition Cash Flow for the period
commencing on the date of such Future Acquisition through the Maturity
Date (as if the Extension Option had been effected) in an amount
reasonably satisfactory to the Agents and the Applicable Lenders; (4)
all real and personal property acquired in such Future Acquisition is
pledged to the Collateral Agent, for the benefit of the Secured
Parties, to secure all Obligations, pursuant to documents and
instruments satisfactory to the Agents and the Applicable Lenders
creating a valid and binding first priority security interest in such
real and tangible personal property, subject to no Liens other than as
expressly permitted by such documents and instruments; (5) no Default
or Event of Default shall have occurred and be continuing at the time
of such proposed Future Acquisition or would result therefrom
(including after giving effect to any Borrowing in connection
therewith); (6) the Borrower (for itself or on behalf of any of its
Subsidiaries) shall have notified the Agents and the Lenders of the
terms of such proposed Future Acquisition not later than 30 days
before the proposed date of consummation thereof and any material
changes in such terms promptly after notice thereof, and shall have
delivered, not later than 15 days before the proposed date of
consummation thereof, such other information about such Future
Acquisition as any of the Agents or any Lender may reasonably request
with respect to the matters described in this Section 7.07(ii); (7)
such proposed Future Acquisition shall be consummated pursuant to
documents and instruments (including acquisition or purchase
agreements) containing terms and conditions satisfactory to the
Applicable Lenders; and (8) the Applicable Lenders shall be reasonably
satisfied consistent with the standards applied
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with respect to Preapproved Acquisitions with all business, tax,
accounting, environmental and other structural, legal and regulatory
matters relating to the proposed Future Acquisition;
(iii) the Borrower Group may make Investments permitted by
Section 7.06 and may lease (as lessee) real or personal property to
the extent permitted by Section 7.11;
(iv) the Borrower Group may from time to time sell worn-out
or obsolete personal property of the Borrower Group In the Ordinary
Course of the Borrower Group;
(v) the Borrower Group may from time to time abandon any
personal property of the Borrower Group which is no longer useful in
the business of the Borrower Group and cannot be sold; and
(vi) the Borrower Group may make sales, transfers or other
dispositions of assets held for resale In the Ordinary Course or trade
in or replace assets In the Ordinary Course (it being expressly
understood that no Broadcast License may be sold, transferred or
conveyed pursuant to this clause (vi)).
7.18 Contingent Obligations. No member of the Borrower Group
shall create or become or be liable with respect to any Contingent Obligation,
except:
(i) Subsidiary Guarantees;
(ii) Contingent Obligations of the Borrower Group in respect
of Operating Leases to the extent permitted under Section 7.11;
(iii) Contingent Obligations of the Borrower arising from
guarantees of Indebtedness of any Wholly Owned Subsidiary of the
Borrower otherwise Incurred in accordance with Section 7.04; and
(iv) other Contingent Obligations not to exceed $100,000
outstanding at any one time.
SECTION 8. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"), whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any Governmental
Requirement:
<PAGE> 92
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8.01 Payments. The Borrower shall fail to pay (a) any
installment of principal of any Loan when due (other than any installment of
interest or fees), whether at stated maturity, by acceleration, by notice of
prepayment or otherwise, or (b) any interest on any Loan or any fees or any
other amount due under any Credit Document within two (2) Business Days after
the due date; or
8.02 Representations, Etc. Any representation, warranty,
certification or statement made in writing by any Loan Party herein or in any
other Credit Document or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto or in connection herewith or
therewith shall be incorrect or misleading in any material respect on the date
as of which made or deemed to be made; or
8.03 Covenants. Any Loan Party shall (a) fail to perform or
comply with any term, covenant or agreement contained in Section 3, 6.05, 6.10
or 7 of this Agreement or Section 11A(4), 11K or 12 of the Parent Guarantee,
(b) fail to perform or comply with any term, covenant or agreement contained in
Section 6.01(i) and such default shall continue unremedied for a period of 15
days from the date of such default, (c) fail to perform or comply with any
term, covenant or agreement contained in Section 6.03, 6.04, 6.06, 6.07, 6.11,
6.12, 6.14 or 6.15 of this Agreement or in Section 2.1, 2.4, 2.5 or 2.6 of any
Mortgage and such default shall continue unremedied for a period of 30 days
from the date of such default or (d) fail to perform or comply with any other
term, covenant or agreement contained in any Credit Document (other than those
referred to in Section 8.01 or 8.02 or clauses (a), (b) and (c) of this Section
8.03 or Section 8.12) and such default shall continue unremedied for a period
of 30 days or more after the earlier to occur of (x) notice to such defaulting
Loan Party by any of the Agents or the Requisite Lenders and (y) the date any
Loan Party otherwise obtains notice or knowledge thereof; or
8.04 Default Under Other Agreements. (a) The Parent, any
Material Subsidiary or any member of the Borrower Group (any such Company, a
"Section 8 Company") shall with respect to (I) any Indebtedness (other than (x)
Obligations, (y) intercompany debt between or among any of the Companies other
than any Indebtedness owing by the Parent Group to the Borrower Group or (z)
Contingent Obligations) having a principal amount in excess of $500,000
individually or in the aggregate ($5,000,000 in the case of the Parent or any
Material Subsidiary) or (II) any Contingent Obligation having a principal
amount in excess of $500,000 individually or in the aggregate ($5,000,000 in
the case of the Parent or any Material Subsidiary):
<PAGE> 93
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(i) default in any payment obligation in respect thereof
beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness or Contingent Obligation was
created; or
(ii) default in the observance or performance of any
agreement or condition relating to or contained in any instrument or
agreement evidencing, securing or relating to any such Indebtedness or
Contingent Obligation, or any other event shall occur or condition
exist, if the effect of such default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness or
Contingent Obligation (or a trustee or agent on behalf of such holder
or holders) to cause, any such Indebtedness or Contingent Obligation
to become due or to be redeemed or repurchased prior to its stated
maturity (or the stated maturity of any underlying obligation) or to
terminate any obligation to lend; or
(b) Any such Indebtedness or Contingent Obligation of any
Section 8 Company specified in Section 8.04(a) shall be declared to be due and
payable, or required to be paid prior to the stated maturity thereof, other
than by a regularly scheduled required prepayment or a prepayment in connection
with a refinancing thereof permitted by this Agreement or the Parent Guarantee
or in connection with any Asset Sale involving the assets securing any such
Indebtedness; or
8.05 Bankruptcy, Etc. (a) An involuntary case shall be
commenced against any Section 8 Company under any applicable bankruptcy,
insolvency or other 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 any Section 8 Company or over all or a substantial part of
the property of any Section 8 Company shall have been entered; or an interim
receiver, trustee or other custodian of any Section 8 Company for all or a
substantial part of the property of any Section 8 Company is involuntarily
appointed; or a warrant of attachment, execution or similar process shall be
issued against any substantial part of any Section 8 Company, and any such
event under this Section 8.05 continues undischarged, unbonded and unstayed for
a period of 60 days; or
(b) Any Section 8 Company shall have an order for relief
entered with respect to it or shall commence a voluntary case under the
Bankruptcy Code or any other applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to
<PAGE> 94
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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; any
Section 8 Company shall make any assignment for the benefit of creditors; or
any Section 8 Company shall fail or be unable, or admit in writing of its
inability, to pay its debts as such debts become due; or the board of directors
(or any committee thereof) of any Section 8 Company shall adopt any resolution
or otherwise authorize any corporate action to approve any of the foregoing; or
8.06 ERISA Events. There shall occur one or more ERISA
Events which individually or in the aggregate results in or could reasonably be
expected to result in liability of any of the Loan Parties or any of their
respective ERISA Affiliates in excess of $500,000; or there shall exist, as of
the most recent actuarial valuation date for any Pension Plan, an Amount of
Unfunded Benefit Liabilities, individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans which have
a negative Amount of Unfunded Benefit Liabilities), which exceeds $1,000,000;
or
8.07 Judgments, Etc. (i) Any money judgment, writ or warrant
of attachment, or similar process involving in any individual case a liability
in excess of $500,000 singly or in the aggregate (or $5,000,000 in the case of
the Parent or any Material Subsidiary) (in any case to the extent not fully
covered by insurance as to which such insurer has acknowledged coverage in
writing) shall be entered or filed against any Section 8 Company or any assets
of any Section 8 Company and shall remain undischarged, unvacated, unbonded or
unstayed, as the case may be, for a period of 30 days or more or in any event
later than five days prior to the date of any proposed sale thereunder or (ii)
any final non-monetary judgment shall be rendered against any Company that
would have a Company Material Adverse Effect or a Borrower Material Adverse
Effect if such judgment shall remain undischarged, unvacated or unstayed for a
period of 30 days or more; or
8.08 Change of Control. (i) The Borrower shall fail (for any
reason) to be a Wholly Owned Subsidiary of the Parent, or any Subsidiary of the
Borrower shall fail (for any reason) to be a Wholly Owned Subsidiary of the
Borrower; or (ii) Paxson and the Permitted Transferees shall fail (for any
reason) to (A) own, directly or indirectly, at least 35% (on a fully diluted
basis) of the issued and outstanding capital stock of the Parent, or (B) have
voting control, directly or indirectly, equal to at least 51% (on a fully
diluted basis) of the issued and outstanding capital stock of the Parent
entitled to vote in the election of the board of
<PAGE> 95
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directors of the Parent; or (iii) any Succession Event shall have occurred; or
8.09 Dissolution. Any order, judgment or decree shall be
entered against any Section 8 Company decreeing the dissolution, liquidation or
split-up of such Section 8 Company and such order shall remain undischarged or
unstayed for a period of 30 days or more; or
8.10 Obligations. Any material obligation of any Loan Party
under any Credit Document shall, for any reason other than the full
satisfaction thereof, not be or shall cease to be in full force and effect or
is, or is declared to be, null and void, or any Loan Party shall, or shall
purport to, terminate, revoke, repudiate, declare voidable or void, deny,
disaffirm or otherwise contest any Credit Document or any term or provision
thereof or any of its obligations or liabilities under any Credit Document; or
8.11 Collateral. Any Security Document (together with any
other security documents delivered or to be delivered thereunder) after
delivery thereof at any time shall cease to be in full force and effect or
shall for any reason fail to create or cease to maintain a valid and duly
perfected first priority security interest in and Lien upon any of the
Collateral (unless otherwise expressly permitted under Section 7.03) other than
to the extent solely as a result of the Agents or any Lender failing to take
any action within their control or as a result of a release of Collateral in
accordance with the terms hereof and thereof;
8.12 Guarantees. Any guarantor shall default in the due
performance or observance of any term, covenant or agreement (other than those
set forth in Section 8.03(a)) on its part to be performed or observed pursuant
to any Guarantee and such default shall continue unremedied for a period of 30
days or more after the earlier to occur of (x) notice to such defaulting
guarantor by any of the Agents or the Requisite Lenders and (y) the date such
guarantor otherwise obtains notice or knowledge thereof; or
8.13 Parent Group Equity Event. Any Parent Group Equity Event
shall occur; or
8.14 Broadcast Licenses and Consents. (a) Any Broadcast
License shall be suspended, cancelled, terminated or revoked for any reason; or
(b) Any Broadcast License shall be finally denied renewal
for any reason or renewed on terms which materially adversely affect the
economic or commercial value or usefulness thereof; or
<PAGE> 96
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(c) The Borrower or any of its Subsidiaries or any other
licensee of any LMA Station (other than pursuant to an assignment approved by
the FCC pursuant to a final order which assignment does not adversely affect
the LMA Arrangements in respect of such LMA Station) shall fail to be the
licensee under each of its respective Broadcast Licenses or otherwise fail to
have all material authorizations and licenses required to operate any Station
pursuant to such Broadcast Licenses, in each case the failure of which could
reasonably be expected to have a Borrower Material Adverse Effect; or
(d) Any Company shall fail to comply with the
requirements of the FCC Consents, if any, or the FCC Consents shall be
rescinded or shall no longer be in full force and effect (except to the extent
such FCC Consents expire after the consummation of the transfer or assignment
of the related Broadcast Licenses), or the effectiveness of any thereof shall
be stayed by the FCC or any judicial proceeding; or
(e) Any Station shall fail for any period of 60
consecutive days to maintain any broadcast signal without either material
interference or requiring the use of any equipment other than ordinary consumer
television antennae and receivers by households aggregating at least 80% of the
households normally able to receive such Station's broadcast signal without
either material interferences or the use of any equipment other than ordinary
consumer television antennae and receivers which failure could reasonably be
expected to have a Company Material Adverse Effect or a Borrower Material
Adverse Effect; or
8.15 LMAs. Except as results from the exercise by the
Borrower Group of an option to acquire any Station that is operated pursuant to
an LMA Arrangement, any LMA Document or Arrangement shall be terminated or
shall fail to be renewed for any reason or shall be amended other than in any
immaterial amendment or waiver or any amendment or waiver which is not
materially in any respect adverse to the Borrower Group taken as a whole or the
Lenders; or
8.16 Material Adverse Effect. Any event or condition having
a Company Material Adverse Effect or a Borrower Material Adverse Effect shall
occur or exist and such default shall not have been remedied or waived within
30 days after receipt by the Borrower or the Parent of notice from any Lender
or any of the Agents of such default; or
8.17 Environmental Events. Any one or more of the events or
conditions set forth in the following clauses (i) or (ii) shall have occurred
with respect to any Company or any Environmental Affiliate of any Company, and
such events or con-
<PAGE> 97
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ditions would have a Company Material Adverse Effect or a Borrower Material
Adverse Effect: (i) any past or present violation of any Environmental Law by
such Person which has not been cured to the satisfaction of the Requisite
Lenders, or (ii) the existence of any pending or threatened Environmental
Notice against any such Person, or existence of any past or present acts,
omissions, events or circumstances that could form the basis of any
Environmental Notice against any such Person; or
8.18 Insurance Coverage. There shall occur any lapse or
adverse change with respect to any material portion of the insurance coverage
of any member of the Borrower Group;
THEN, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent shall, upon the written request of
the Requisite Lenders, by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Agents or any
Lender to enforce its claims against any Loan Party, except as otherwise
specifically provided for in this Agreement (provided, however, that, if an
Event of Default specified in Section 8.05 shall occur, with respect to any
Loan Party, the result which would occur upon the giving of written notice by
the Agent as specified in clauses (A) and (B) below shall occur automatically
without the giving of any such notice): (A) declare the Total Commitments
terminated, whereupon the Commitment of each Lender shall forthwith terminate
immediately and any accrued and unpaid Commitment Commission shall forthwith
become due and payable without any other notice of any kind; or (B) declare the
principal of and accrued interest in respect of all Loans and all Obligations
owing under any Credit Document to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Loan Party; or (C) direct
the Collateral Agent to enforce any or all of the remedies created pursuant to
the Security Documents. Nevertheless, if at any time within 60 days after
acceleration of the maturity of the Loans, the Borrower shall pay all arrears
of interest and all payments on account of the principal which shall have
become due otherwise than by acceleration (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified in
this Agreement or the Notes) and all other fees or expenses then owed under the
Credit Documents and all Defaults and Events of Default (other than non-payment
of principal of and accrued interest on the Loans and the Notes due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 11.12, then the Requisite Lenders by written notice to the Borrower may
(in their absolute and sole discretion) rescind and annul the acceleration and
its consequences; but such action shall not affect any subsequent Default or
Event of Default or impair any
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right consequent thereto. The provisions of the immediately preceding sentence
are intended merely to bind the Lenders to a decision that may be made at the
election of the Requisite Lenders and are not intended to benefit any Loan
Party and do not grant any Loan Party the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met. If an Event of Default is cured or waived in accordance with
the terms of this Agreement, it ceases (but, if waived pursuant to the terms of
this Agreement, only to the extent of such waiver). Notwithstanding anything
to the contrary contained herein, the Agents agree that they shall not take any
action pursuant to this Agreement that would constitute or result in any
assignment of a Broadcast License or any change of control of the Borrower
Group if such assignment or change of control would require under then existing
law, including the Communications Act, the prior approval of the FCC without
first obtaining such prior approval of the FCC.
SECTION 9. Definitions; Rules of Construction.
9.01 Definitions. (a) As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires:
"Acquisitions" shall mean, at any time, the Initial
Preapproved Acquisitions, other Preapproved Acquisitions and all Future
Acquisitions then consummated, collectively; and "Acquisition" shall mean any
of them then consummated.
"Acquisition Certificate" of the Borrower shall mean a
certificate substantially in the form of Exhibit E delivered pursuant to
Section 4.02(b) demonstrating in reasonable detail compliance with Sections
7.05 and 7.10(a) and (c) and demonstrating in reasonable detail the Applicable
Borrowing Margin as of the relevant Funding Date.
"Acquisition Documents" shall mean collectively (A) the
Preapproved Acquisition Documents (including all related documents and
instruments and all schedules, annexes, appendices and exhibits to any thereof)
previously delivered to the Agents on or before the Initial Funding Date, and
(B) all agreements, documents and instruments (including all schedules,
annexes, appendices and exhibits to any thereof) relating to all Future
Acquisitions delivered to the Agents in connection with any Future Acquisition.
"Acquisition Price" shall mean, with respect to the
acquisition of any Preapproved Station by a Preapproved Station Subsidiary, the
amount specified as such on Schedule 5.05.
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"Additional Acquisition Costs" shall mean, with respect to the
Contributed Stations and the Preapproved Stations, the amount specified for
such Station as such on Schedule 5.05.
"Additional License Subsidiary" shall mean each of the special
purpose Wholly Owned Subsidiaries of the Borrower which, pursuant to Section
6.19, hold the Broadcast Licenses related to any Acquisition other than the
Initial Preapproved Acquisitions; and "Additional License Subsidiaries" shall
mean all such Subsidiaries collectively.
"Adjusted Consolidated EBITDA" shall mean, for any period, the
Consolidated EBITDA of the Borrower for such period after:
(A) adjusting to give effect to (i) in the case of any
calculation made pursuant to any Acquisition Certificate, any
Preapproved Acquisition occurring during such period or after the end
of such period and on or prior to the relevant Determination Date,
(ii) in any other case, any Preapproved Acquisition occurring during
such period (in the case of each of clauses (i) and (ii), such
adjustments to be made as if such transactions had occurred on the
first day of the relevant period and pursuant to the Adjustment
Requirements) and (iii) for any other Acquisition, such Acquisition
for the relevant period in such manner as may be satisfactory to the
Applicable Lenders;
(B) for any calculation of Adjusted Consolidated EBITDA
to be made prior to the Multiplier Termination Date, and in connection
with Section 7.10(c) and the determination of the Applicable Borrowing
Margin only, multiplying the Consolidated EBITDA of the Borrower for
the applicable Borrower Test Period by four (4); and
(C) adjusting for the period ended immediately prior to
the acquisition by the Houston Station Subsidiary or the Orlando
Station Subsidiary, respectively, of the Broadcast Licenses of the
Houston LMA Station or the Orlando LMA Station, respectively, upon
exercise of the respective related option agreement, by adding back
the amount of LMA payments made during the three-month period ended
immediately prior to such acquisition.
For purposes of calculating Adjusted Consolidated EBITDA at
any time prior to the first date on which Financial Statements of the Borrower
have been or should have been delivered pursuant to Section 6.01(b), such
calculation shall be based upon the Initial Adjusted EBITDA, adjusting to give
effect to any Preapproved
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Acquisitions occurring after the Initial Funding Date and on or prior to the
relevant Determination Date on a basis consistent with the parenthetical to
clauses (A)(i)-(ii) of the immediately preceding sentence.
"Adjustment Requirements" shall mean, with respect to any
adjustments to be made to any financial information, such adjustments that are
(i) reasonably satisfactory to the Agents and the Requisite Lenders and (ii)
determined based upon such documentation, financial statements and certificates
of financial officers and, if applicable, the independent public accountants of
the Borrower or the Parent, as the case may be (and (other than certificates)
of any other Person, if applicable in the case of any Acquisition), as are
reasonably satisfactory to the Agents and the Requisite Lenders.
"Administrative Agent" shall mean: (a) CIBC; (b) any other
office or agency of Canadian Imperial Bank of Commerce within the United States
of America of which the Lenders and the Borrower are notified and (i) to which
the rights and responsibilities of the Administrative Agent hereunder may be
transferred from time to time in accordance with Section 10 hereof or (ii)
which may, from time to time on behalf of CIBC or any such transferee, act
pursuant to the terms and conditions hereof as Administrative Agent for the
Lenders under this Agreement or any other Loan Document; or (c) such other
Lender or financial institution as shall have subsequently been appointed as
the successor Agent pursuant to Section 10.04.
"Administrative Agent's Fee Letter" shall mean that certain
fee letter between CIBC and the Parent dated March 24, 1995.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at 425 Lexington Avenue, New York, New York 10017,
or such other office in New York, New York as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Affiliate" shall mean, with respect to any Person (the
"Specified Person"), (a) any Person which directly or indirectly controls, or
is controlled by, or is under common control with, the Specified Person and (b)
any director or officer (or, in the case of a Person which is not a
corporation, any individual having analogous powers) of the Specified Person or
of a Person who is an Affiliate of the Specified Person within the meaning of
the preceding clause (a); provided, however, that none of Merrill Lynch, CIBC
or any Affiliate of Merrill Lynch or CIBC shall be deemed to be an Affiliate of
any Loan Party. For purposes of the
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preceding sentence, "control" of a Person shall mean (a) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by contract or otherwise, and (b) in any case shall include direct
or indirect ownership (beneficially or of record) of, or direct or indirect
power to vote, 20% or more of the outstanding shares of any class of capital
stock of such Person (or in the case of a Person that is not a corporation, 20%
or more of any class of equity interest).
"Agent" shall have the meaning assigned to that term in the
first paragraph of this Agreement and in Section 10.09.
"Agents" shall mean the Agent and the Administrative Agent,
collectively.
"Agent's Office" shall mean the office of the Agent located at
World Financial Center, North Tower, 250 Vesey Street, New York, New York
10281, or such other office in New York, New York as the Agent may hereafter
designate in writing as such to the other parties hereto.
"Agreement" shall mean this Credit Agreement.
"Amount of Unfunded Benefit Liability" shall mean, with
respect to any Pension Plan, the excess of (a) the current liability (as
defined in Section 412(1)(7) of the Code) with respect to such Pension Plan
over (b) the fair market value of the assets of such Pension Plan.
"Allocation Date" shall mean the date after the date of the
Commitment Letter and prior to the Effective Date established by Merrill Lynch
as the date of allocation of the commitments of Merrill Lynch and CIBC under
the Commitment Letter to the Lenders.
"Applicable Borrowing Margin" for any Loan shall mean:
A. prior to the Three Month Date, with respect to Base
Rate Loans:
(i) 2.25%; and
(ii) upon the occurrence and during the continuance of any
Event of Default under Section 8.01, 4.25%;
B. prior to the Three Month Date, with respect to LIBOR
Loans:
(i) 3.50%; and
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(ii) upon the occurrence and during the continuance of any
Event of Default under Section 8.01, 5.50%;
C. on and after the Three Month Date, with respect to
Base Rate Loans:
(i) if the Total Debt Leverage Ratio is:
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<TABLE>
<CAPTION>
Applicable
Borrowing
Ratio Margin
----- ----------
<S> <C>
greater than or equal to 5.5x
but less than or equal to 6.00x 2.25%
greater than or equal to 5.0x
but less than 5.5x 2.00
greater than or equal to 4.0x
but less than 5.0x 1.75
less than 4.0x 1.25;
</TABLE>
(ii) [Intentionally Omitted]; and
(iii) upon the occurrence and during the continuance of any
Event of Default under Section 8.01, the rate as determined in
accordance with clause C(i) above plus 2.0%; and
D. on and after the Three Month Date, with respect to
LIBOR Loans:
(i) if the Total Debt Leverage Ratio is:
<TABLE>
<CAPTION>
Applicable
Borrowing
Ratio Margin
----- ----------
<S> <C>
greater than or equal to 5.5x
but less than or equal to 6.00x 3.50%
greater than or equal to 5.0x
but less than 5.5x 3.25
greater than or equal to 4.0x
but less than 5.0x 3.00
less than 4.0x 2.50;
</TABLE>
(ii) [Intentionally Omitted]; and
(iii) upon the occurrence and during the continuance of any
Event of Default under Section 8.01, the rate as determined in
accordance with clause D(i) above plus 2.0%.
For purposes of determining the "Applicable Borrowing Margin" in connection
with the delivery of any Interest Rate Certificate or
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Acquisition Certificate, (1) the Determination Date (as used in the definition
of Total Debt Leverage Ratio) shall be the day such Interest Rate Certificate
or Acquisition Certificate is required to be delivered pursuant to Section 6.17
and (2) the Total Debt Leverage Ratio shall be that set forth in the Interest
Rate Certificate or Acquisition Certificate most recently delivered to the
Agents (including the applicable certificate being delivered as of any date of
required delivery) and not reasonably objected to by the Agents and after
giving effect to any Loans to be made in connection with the delivery of such
Interest Rate Certificate or Acquisition Certificate.
"Applicable Lenders" shall mean, (i) with respect to any
matter relating to the Initial Preapproved Acquisitions, all of the
Non-Defaulting Lenders, (ii) with respect to any matter relating to any Future
Acquisition or any Preapproved Acquisition other than the Initial Preapproved
Acquisitions, Non-Defaulting Lenders holding not less than 66-2/3% of the total
Loans then outstanding held by the Non-Defaulting Lenders and the Total
Unutilized Commitments held by the Non-Defaulting Lenders and (iii) with
respect to decisions involving the removal of any Agent pursuant to Section
10.09, Non-Defaulting Lenders (other than any Agent which is a Lender the
removal of which is being sought pursuant to Section 10.09) holding not less
than 66-2/3% of the total Loans then outstanding held by the Non-Defaulting
Lenders (other than any such Agent) and the Total Unutilized Commitments held
by the Non-Defaulting Lenders (other than any such Agent).
"Asset Sale" shall mean the sale, transfer or other
disposition, to the extent consummated after the Initial Funding Date, by any
member of the Borrower Group to any Person other than any other member of the
Borrower Group which is a Loan Party, of (i) any shares of stock of any
Subsidiary of the Borrower, (ii) substantially all of the assets of any
division or line of business of the Borrower Group or (iii) any other asset
(including any assets that do not constitute substantially all of the assets of
any division or line of business of the Borrower Group) of the Borrower Group
(other than, solely for purposes of Section 3.02A(b), (1) transactions included
in the definition of Net Financing Proceeds and (2) the trade-in or replacement
of assets by the Borrower Group In the Ordinary Course of the Borrower Group).
"Authorized Officer" shall mean any senior officer of the
Borrower or the Parent, as the case may be, designated as such in writing to
the Agents by the Borrower or the Parent, as the case may be, in each case
acceptable to the Agents.
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"Bankruptcy Code" shall mean Title 11 of the United States
Code entitled "Bankruptcy," as now and hereafter in effect.
"Barter Transaction" shall mean any sale of television
advertising time (other than In the Ordinary Course) by a Borrower to any
Person, other than an Affiliate of any Loan Party, which is paid for by such
Person other than in Cash or Cash Equivalents.
"Base Rate" shall mean, at any time, the fluctuating rate of
interest per annum equal to the greater of (a) the rate established by Canadian
Imperial Bank of Commerce from time to time at its office in New York City as
its "Base Rate" for commercial loans in Dollars, and (b) the Federal Funds Rate
plus 1.00%. The Base Rate is not necessarily intended to be the lowest rate of
interest determined by Canadian Imperial Bank of Commerce in connection with
extensions of credit.
"Base Rate Loan" shall mean each Loan bearing interest at the
rate provided in Section 1.08(a)(i).
"Borrower" shall have the meaning assigned to that term in the
introduction to this Agreement.
"Borrower Group" shall mean (i) the Borrower and its
Subsidiaries and (ii) any member of such group.
"Borrower Material Adverse Effect" shall mean a Material
Adverse Effect with respect to the Borrower.
"Borrower Pledge Agreement" shall mean the Borrower Securities
Pledge Agreement substantially in the form of Exhibit F, except for such
changes therein as shall have been approved by the Borrower, the Agents and the
Requisite Lenders.
"Borrower Security Agreement" shall mean the Borrower General
Security Agreement substantially in the form of Exhibit G, except for such
changes therein as shall have been approved by the Borrower, the Agents and the
Requisite Lenders.
"Borrower Test Period" shall mean, at any Determination Date:
A. That occurs prior to the Multiplier Termination Date:
(1) with respect to any regularly scheduled quarterly
Compliance Certificate or Interest Rate Certificate
required to be delivered pursuant to Section 6.01(f)
and 6.17(iv), respectively, the
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fiscal quarter of the Borrower ended on the last day
of the fiscal quarter relating to such Determination
Date;
(2) with respect to any Interest Rate Certificate which
is required to be delivered in connection with any
Non-Acquisition Loan Borrowing which in any event is
to occur on or after the first date on which
Financial Statements of the Borrower have been or
should have been delivered pursuant to Section
6.01(b), the fiscal quarter ended immediately prior
to the date of such Interest Rate Certificate for
which Financial Statements of the Borrower have been
or should have been delivered pursuant to Section
6.01(a)-(b);
(3) with respect to any Acquisition Certificate which is
required to be delivered under this Agreement
pursuant to Section 4.02(b)(i) prior to the first
date on which Financial Statements of the Borrower
have been or should have been delivered pursuant to
Section 6.01(b), the period on which the Initial
Adjusted EBITDA is based; and
(4) subject to the preceding clause (3), with respect to
any Acquisition Certificate delivered pursuant to
Section 4.02(b)(i) or any Interest Rate Certificate
delivered in connection with any Asset Sale pursuant
to Section 6.17(ii), the three-month period ended
immediately prior to the consummation of such
Acquisition or such Asset Sale, in each case for
which Financial Statements of the Borrower have been
or should have been delivered pursuant to Section
6.01(c).
B. That occurs on or after the Multiplier Termination
Date, the twelve consecutive month period ended on the last day of the
month ended immediately prior to such Determination Date for which
Financial Statements of the Borrower have been or should have been
delivered pursuant to Section 6.01(c).
"Borrowing" shall mean a group of Loans of a single Type made
(or converted or continued) by the Lenders on a single date and as to which a
single Interest Period is in effect.
"Broadcast Licenses" shall mean the material licenses, permits
and authorizations that are, as of any date of determination, required by the
FCC with respect to the operation of
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the Stations including those listed on Schedule 5.28A, and all modifications,
extensions and renewals thereof.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York (or with respect to any actions required
by any Loan Party, in the State of Florida) a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, LIBOR Loans, any day which is
a Business Day described in clause (i) and which is also a day for trading by
and between banks in Dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" of any Person shall mean, for any
period, the aggregate gross increase during that period, in the property, plant
or equipment reflected in the consolidated balance sheet of such Person and its
Subsidiaries, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets (i) to the extent financed
from insurance proceeds paid on account of the loss of or damage to the assets
being replaced or restored, (ii) with awards of compensation arising from the
taking by eminent domain or condemnation of the assets being replaced or (iii)
with the proceeds of any Purchase Price Adjustment Payments; provided, however,
that (x) Capital Expenditures shall in any event include the purchase price
paid in connection with the acquisition of any other Person (including through
the purchase of all of the capital stock or other ownership interests of such
Person or through merger or consolidation) to the extent allocable to property,
plant and equipment and (y) there shall be excluded from the calculation of
Capital Expenditures (A) any amount of acquisition costs (including any amount
allocated to capital expenditures) expended for (I) any Preapproved Acquisition
or (II) any Future Acquisition to the extent not in excess of the amount
approved by the Applicable Lenders for such Acquisition, (B) Additional
Acquisition Costs and (C) any expenditures made prior to the Initial Funding
Date.
"Capital Lease" of any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which is,
or is required to be, accounted for as a capital lease on the balance sheet of
that Person, together with any renewals of such leases (or entry into new
leases) on substantially similar terms.
"Capitalized Lease Obligations" of any Person shall mean all
obligations under Capital Leases of such Person or any of its
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Subsidiaries in each case taken at the amount thereof accounted for as
liabilities.
"Cash" shall mean money, currency or a credit balance in a
Deposit Account.
"Cash Collateral" shall mean all Cash and Cash Equivalents
held by the Collateral Agent under any of the Security Documents.
"Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United States of
America or issued by any agency thereof and backed by the full faith and credit
of the United States of America, in each case maturing within one year from the
date of acquisition thereof; (ii) marketable direct obligations issued by any
state of the United States of America or any local government of any such state
or any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, rated AA (or
better) by Standard & Poor's Corporation or Aa (or better) by Moody's Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition thereof, rated A-2 (or
better) by Standard & Poor's Corporation or rated P-2 (or better) by Moody's
Investors Service, Inc.; (iv) certificates of deposit, bankers' acceptances,
documented discount notes or commercial paper maturing within one year from the
date of acquisition thereof issued by any Lender or any commercial bank
organized under the laws of the United States of America or any state thereof
or the District of Columbia, in each case having combined capital and surplus
of not less than $100,000,000 and rated A or better by Standard & Poor's
Corporation or Moody's Investors Service, Inc.; and (v) money market funds
investing only in any of the securities described in clause (i), (ii), (iii),
or (iv) hereof.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
Destruction or Taking, the aggregate cash payments received by the Borrower
Group from such Asset Sale, Destruction or Taking.
"CIBC" shall mean Canadian Imperial Bank of Commerce, a
Canadian chartered bank acting through its New York Agency.
"CIBC Inc." shall mean CIBC Inc., a Delaware financing company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
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"Collateral" shall mean all of the Pledged Collateral, Pledged
Securities, Cash Collateral, Mortgaged Real Property and Additional Collateral.
"Collateral Agent" shall have the meaning assigned to that
term in the first paragraph of this Agreement.
"Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name on Annex II directly below the
column entitled "Commitment," as same may be reduced from time to time pursuant
to Section 2.01, Section 3.02 or Section 8 or pursuant to assignment pursuant
to Section 11.04.
"Commitment Letter" shall mean that certain commitment letter
among Merrill Lynch, CIBC, CIBC Inc. and the Parent dated March 24, 1995, and
the term sheet attached thereto and incorporated therein.
"Commitment Termination Date" shall mean the Business Day
immediately preceding the Maturity Date; provided, however, that if the
Borrower has elected to extend the Scheduled Maturity Date in accordance with
Section 1.13, the Commitment Termination Date shall not be until the earlier of
(x) the Scheduled Maturity Date, if the Extension Option is not effected due to
a failure to satisfy the conditions set forth in Section 1.13 or (y) the
Business Day immediately preceding the Maturity Date after the Extension Option
has been effected.
"Communications Act" shall mean the Communications Act of
1934, as amended (including the Cable Communications Policy Act of 1984 and the
Cable Television Consumer Protection and Competition Act of 1992), and all
rules and regulations of the FCC, in each case as from time to time in effect.
"Companies" shall mean the Borrower, the Parent and their
respective Subsidiaries, collectively; and "Company" shall mean any of them.
"Company Material Adverse Effect" shall mean a Material
Adverse Effect with respect to the Parent.
"Compliance Certificate" of the Borrower or the Parent shall
mean a certificate substantially in the form of Exhibit J-1 and Exhibit J-2,
executed by the chief financial officer, controller, chief accounting officer
or other Authorized Officer of the Borrower or the Parent, as the case may be,
delivered pursuant to Section 6.01(f) or Section 11A(2) of the Parent Guarantee
demonstrating in reasonable detail compliance with Sections 7.05
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and 7.10(a)-(c) and in the case of the Parent, Section 12C of the Parent
Guarantee.
"Confidential Memorandum" shall mean the Confidential
Memorandum, dated April 1995 and all written supplemental material thereto
prepared by, or on behalf of, the Borrower and the Parent and transmitted to
the Lenders prior to the Initial Funding Date.
"Consolidated Amortization Expense" for any Person shall mean,
for any period, the consolidated amortization expense, including Programming
Amortization Expense, of such Person for such period, determined on a
consolidated basis for such Person and its consolidated Subsidiaries.
"Consolidated Cash Interest Expense" shall mean, for any
period, for any Person, Consolidated Interest Expense of such Person, but
excluding, however, amortization of discount, deferred financing costs and
interest expense not payable in cash during such period.
"Consolidated Depreciation Expense" for any Person shall mean,
for any period, the consolidated depreciation expense of such Person for such
period, determined on a consolidated basis for such Person and its
Subsidiaries.
"Consolidated EBITDA" for any Person shall mean, for any
period, the difference between (A) the sum (without duplication) of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Tax Expense,
(iii) Consolidated Interest Charges, (iv) Consolidated Amortization Expense,
(v) Consolidated Depreciation Expense and (vi) without duplication other
non-cash items (other than non-cash interest) reducing Consolidated Net Income
for such period, other than any non-cash item for such period that requires
the accrual of or a reserve for cash charges for any future period (with
respect to clauses (ii) through (v), only to the extent that such amounts were
deducted in computing Consolidated Net Income) minus (B) the sum of the amounts
for such period of (i) interest income, (ii) all non-cash items increasing
Consolidated Net Income for such period, (iii) all cash payments during such
period relating to non-cash charges that were added back in determining
Consolidated EBITDA in any prior period and (iv) Programming Rights Payments,
all as determined on a consolidated basis for such Person and its Subsidiaries.
"Consolidated Fixed Charges" shall mean, for any period, for
any Person (i) scheduled principal payments on Indebtedness of such Person or
any of its Subsidiaries required to be made for such period and amortization of
discount or premium relating to any such Indebtedness for such period, whether
expensed or capitalized,
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(ii) Consolidated Cash Interest Expense of such Person for such period, (iii)
Capital Lease expense for such period for such Person and its consolidated
Subsidiaries, determined without duplication of items included in interest
expense, (iv) the aggregate amount of Capital Expenditures made during such
period by such Person and its Subsidiaries (excluding, with respect to the
Borrower, any amount expended during such period of any Additional Acquisition
Costs) and (v) income taxes paid or payable by such Person or any of its
Subsidiaries in respect of such period (other than, to the extent otherwise
included therein, current income tax expense attributable to gains from sales
of assets out of the ordinary course of business).
"Consolidated Interest Charges" for any period in respect of
any Person shall mean the aggregate amount of interest payable during such
period on any Indebtedness of such Person and its consolidated Subsidiaries
(including in respect of Capital Leases) giving effect to all Interest Rate
Agreements of such Person and its Subsidiaries, including any amortization of
Interest Rate Agreement costs and initial debt discount, zero coupon bond
interest and agent's and other regularly scheduled fees and charges in respect
of any such Indebtedness, and including all commissions, discounts and other
fees and charges in respect of any Indebtedness and fees and expenses in
respect of letters of credit and bankers' acceptances, all determined in
respect of any Person and its Subsidiaries on a consolidated basis after
eliminating all intercompany items.
"Consolidated Interest Expense" for any Person shall mean, for
any period, the Consolidated Interest Charges of such Person, adjusted to give
pro forma effect to any Indebtedness Incurred during such period in each case
as if such Indebtedness had been incurred on the first day of the relevant
period and assuming that such Indebtedness had borne an interest rate per annum
equal to the rate per annum in effect on such Indebtedness at the relevant
Determination Date.
"Consolidated Net Income" shall mean, for any period, for any
Person, the net income (loss) of such Person and its consolidated Subsidiaries
calculated in accordance with GAAP; provided, however, that there shall not be
included in such Consolidated Net Income: (i) any net income of any Person if
such Person is not a Subsidiary of the referent Person, except to the extent of
the aggregate amount of cash actually distributed by such Person during such
period to the referent Person or a Subsidiary of the referent Person as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Subsidiary of the referent Person, to the limitations
contained in clause (iii) below of this definition); (ii) any net income (loss)
of any Person
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acquired by the referent Person or a Subsidiary of the referent Person in a
"pooling of interests" transaction for any period prior to the date of such
acquisition; (iii) any net income (but not loss) of any Subsidiary of the
referent Person to the extent that such Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions by such Subsidiary, directly or indirectly, to the referent
Person; (iv) any after-tax gain (loss) realized upon the sale or other
disposition of any asset of the referent Person or its consolidated
Subsidiaries which is not sold or otherwise disposed of In the Ordinary Course
and any after-tax gain (loss) realized upon the sale or other disposition of
any capital stock of any Person; (v) any after-tax extraordinary gain and any
after-tax extraordinary loss and any income resulting from any write-up of any
asset; and (vi) the income (loss) from discontinued operations and the
cumulative effect of a change in accounting principles.
"Consolidated Rental Payments" shall mean, for any period, the
aggregate amount of all rents paid or to be incurred under all Capital Leases
and Operating Leases of the Borrower and its Subsidiaries as lessees (net of
sublease income).
"Consolidated Tax Expense" for any Person shall mean, for any
period, the consolidated tax expense of such Person for such period, determined
on a consolidated basis for such Person and its Subsidiaries.
"Consolidated Total Debt" shall mean, with respect to any
Person, on any date, without duplication, the aggregate outstanding principal
amount of Indebtedness of such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Contingent Obligations" shall mean, as to any Person, without
duplication, any obligation of such Person guaranteeing or expressly intended
to guarantee by its terms any Indebtedness, leases, dividends or other
obligations ("primary obligations") of any other Person (the "primary obligor")
in any manner, whether directly or indirectly, including any "keep-well" or
"make-well" agreement, guarantee of return on equity or other obligation of
such Person and including any obligation of such Person, whether or not
contingent, to (a) purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) advance or supply funds
(i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the
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primary obligor to make payment of such primary obligation or (d) otherwise
assure or hold harmless the owner of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection In the
Ordinary Course. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary obligation
in respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person reasonably and in good faith.
"Contractual Obligation", as applied to any Person, shall mean
any provision of any security issued by that Person, any provision of any
indenture, security agreement, mortgage, deed of trust or loan agreement and
any provision of any material contract, undertaking, agreement or other
instrument, in each case to which that Person is a party or by which it or any
of its properties or assets is bound or to which it or any of its properties is
subject.
"Contributed Station" and "Contributed Stations" shall have
the meanings assigned to those terms in the recitals hereto.
"Contributed Station Subsidiary" shall mean any of the
following Wholly Owned Subsidiaries of the Borrower (together with their
respective License Subsidiaries) that will, as of the Initial Funding Date, own
or operate a Contributed Station: Paxson Communications of Atlanta-14, Inc.;
Paxson Communications of New London-26, Inc. (Hartford); Paxson Communications
of Miami-35, Inc.; and Paxson Communications of Philadelphia-61, Inc.
"Contribution" shall have the meaning assigned to that term in
the recitals to this Agreement.
"Contribution Documents" shall mean all documents and
instruments (including purchase and sale agreements and LMA Documents) relating
to the Contributed Stations; and "Contribution Document" shall mean any of
them.
"Credit Documents" shall mean (i) this Agreement, (ii) each
Revolving Note, (iii) each Guarantee and (iv) each Security Document.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
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"Defaulting Lender" shall mean (i) any Lender that fails in
its obligation to fund any Loan pursuant to Section 1.04 on any Acquisition
Funding Date, or on any other Funding Date and such failure continues for five
Business Days; (ii) any Lender as to which any event of the type described in
Section 8.05 occurs (with all references in such Section to any Person being
deemed to be references to such Lender); or (iii) any Lender as to which any
Governmental Authority (including the OTS, RTC, FDIC, OCC or Federal Reserve
Board) directly or indirectly seizes, takes possession of or undertakes,
authorizes or orders similar action with respect to, or authorizes, or orders
the liquidation, dissolution, winding up, sale, transfer or other disposition
of, or takes steps or institutes proceedings or otherwise proceeds to
liquidate, dissolve, wind up, sell, transfer or otherwise dispose of, such
Lender or all or any part of such Lender's property or appoints or authorizes
or orders the appointment of a receiver, liquidator, sequestrator, trustee,
custodian, conservator or other officer or entity having similar powers over
such Lender or over all or any part of such Lender's property.
"Deposit Account" shall mean 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.
"Destruction" shall have the meaning assigned to that term in
the Mortgages.
"Determination Date" shall mean, as used in connection with
any certificate, report or calculation delivered or made hereunder, the date
(which shall be specified in such certificate, report or calculation) as of
which the determinations in such certificate, report or calculation are made.
"Dollars" shall mean United States Dollars.
"Employee Benefit Plan" shall mean any "employee benefit plan"
as defined in Section 3(3) of ERISA (i) which is, or, at any time within the
five calendar years immediately preceding the date hereof, was at any time,
maintained or contributed to by any of the Loan Parties or any Person which is
or was at such time an ERISA Affiliate of a Loan Party or (ii) with respect to
which any Loan Party retains any liability, including any potential joint and
several liability as a result of an affiliation with an ERISA Affiliate or a
party that would be an ERISA Affiliate except for the fact that affiliation
ceased more than five calendar years prior to the date hereof.
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"Environment" shall mean any surface water, ground water,
drinking water supply, land surface or subsurface strata, ambient air and
includes any indoor location.
"Environmental Affiliate" shall mean, with respect to any
Person, any other Person whose liability (contingent or otherwise) for any
Environmental Claim such Person has retained or assumed or otherwise is liable
for (by law, agreement or otherwise).
"Environmental Approvals" shall mean any Governmental Consent
pursuant to or required under any Environmental Law.
"Environmental Claim" shall mean, with respect to any Person,
any Proceeding, investigation, notice, claim, complaint, demand, request for
information or other communication (written or oral) by any other Person
(including to any Governmental Authority, citizens' group or present or former
employee of such Person) alleging, asserting or claiming any actual or
potential (a) violation of any Environmental Law, (b) liability under any
Environmental Law or (c) liability for investigatory, cleanup, remedial,
removal, response, abatement, closure and monitoring costs, natural resources
damages, property damages, personal injuries, fines or penalties arising out
of, based on or resulting from the presence, or release into the environment,
of any Hazardous Materials at any location, whether or not owned by such
Person.
"Environmental Laws" shall mean all Federal, state, local and
foreign laws, codes, regulations, ordinances, requirements, directives, orders,
common law, and administrative or judicial interpretations thereof that may be
enforced by any Governmental Authority or court, relating to pollution, the
protection of human health, the protection of the Environment, or the emission,
discharge, disposal or other release or threatened release of Hazardous
Material in or into the Environment.
"Environmental Notice" shall mean any notice or claim by any
Person alleging liability (including potential liability for investigatory
costs, cleanup costs, governmental costs, compliance costs or harm, injuries or
damages to any person, property, natural resources, or any fines or penalties)
arising out of, based upon, resulting from or relating to any Environmental
Law.
"Environmental Notifications" shall mean all necessary
notifications, registrations and filings required under Environmental Laws in
connection with this Agreement.
"Equipment" shall mean all of the Equipment (as defined in the
Borrower Security Agreement and each Subsidiary Security
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Agreement), secured by the Borrower Security Agreement and each Subsidiary
Security Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974. Section references to ERISA are to ERISA as in effect at the date of
this Agreement and any subsequent provisions of ERISA amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" of any Person shall mean any entity, whether
or not incorporated, which is under common control or would be considered a
single employer with such Person within the meaning of Section 414 of the Code
or within the meaning of Section 4001(b) of ERISA.
"ERISA Event" shall mean (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 Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Code) or
the failure to make by its due date a required installment under Section 412(m)
of the 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 any of the Loan Parties 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 Sections 4063 or 4064 of ERISA; (v) the institution by
the PBGC of proceedings to terminate any Pension Plan or to appoint a trustee
to administer a Pension Plan, or the occurrence of any event or condition which
could reasonably be expected 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 any of the Loan Parties 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 by any of the Loan Parties 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 any of the Loan Parties 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
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Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission
which could reasonably be expected to give rise to the imposition on any of the
Loan Parties or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Code or under Section 409 or
502(c), (i) or (l) or 4071 of ERISA in respect of any Employee Benefit Plan; or
(ix) the failure to make any payment or contribution to any Pension Plan or the
making of any amendment to any Pension Plan which could result in the
imposition of a lien or the posting of a bond or other security.
"Escrow Deposit Basket" shall mean, as of any date, the sum of
the amounts designated as escrow deposits set forth on Schedule 5.05 opposite
the name of each Preapproved Station that on or prior to such date has been
acquired in a Preapproved Acquisition.
"Excess Cash Flow" shall mean, without duplication, for any
Person for any period for which such amount is being determined, (i)
Consolidated EBITDA for such period after deducting the amount of any cash paid
during such period for taxes of such Person and its consolidated Subsidiaries
and any Consolidated Cash Interest Expense of such Person paid during such
period, plus (ii) any Purchase Price Adjustment Payments, minus (iii) any
amount of gain included in both (x) Consolidated Net Income and (y) either Net
Cash Proceeds or Net Financing Proceeds required to be applied to the
prepayment of the Loans pursuant to Section 3.02A(c), minus (iv) the aggregate
amount of Capital Expenditures of the Borrower Group that are paid other than
from (a) the proceeds of Borrowings in such period, (b) capital contributions
to the Borrower in such period or (c) the proceeds of Asset Sales not required
to be applied pursuant to Section 3.02A(b) to the prepayment of the Loans and
minus (v) Dividends paid pursuant to Section 7.08(ii) to the extent in
compliance therewith. Excess Cash Flow shall not be reduced by any permitted
escrow deposits made pursuant to Section 7.06(viii).
"Exchange Act" shall mean the United States Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder.
"Existing Debt of the Borrower Group" shall mean the
Indebtedness of the Borrower Group set forth on Schedule 5.20.
"FCAA" shall mean the Federal Clean Air Act.
"FCC" shall mean the Federal Communications Commission.
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"FCC Consent" shall mean any of the written actions by the FCC
approving the transfer or assignment in connection with the Contribution or any
Acquisition of the Broadcast Licenses relating to the Stations to the Borrower
Group.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Funds Rate" shall mean on any one day the weighted
average of the rate on overnight Federal funds transactions with members of the
Federal Reserve System only arranged by Federal funds brokers as published as
of such day by the Federal Reserve Bank of New York, or if not so published,
the average rate then used by three first class banks selected by the Agents in
extending overnight loans to other first class banks.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System.
"Fee Letters" shall mean the Administrative Agent's Fee Letter
and the Merrill Lynch Fee Letter collectively.
"Financial Statements" shall mean, with respect to any Person,
for any period, balance sheets of such Person as of the end of such period and
the related statements of operations, of stockholders' equity and of cash flows
for such period, each prepared in conformity with GAAP subject to, in the case
of Financial Statements not delivered pursuant to Section 6.01(a), footnotes
and ordinary year end adjustments; provided, however, that Financial Statements
of (i) the Parent shall be on a consolidated basis and (ii) the Borrower shall
be on a consolidated and a consolidating basis.
"Financing Proceeds" shall mean the Cash (other than Net Cash
Proceeds) received by the Borrower Group, directly or indirectly, from any
financing transaction of whatever kind or nature, including from any Incurrence
of Indebtedness (other than any Indebtedness Incurred pursuant to Section
7.04(vii) or (ix)), any mortgage or pledge of an asset or interest therein
(including a transaction which is the substantial equivalent of a mortgage or
pledge), from the sale of tax benefits, a lease to a third party and a pledge
of the lease payments due thereunder to secure Indebtedness, a joint venture
arrangement, an exchange of assets and a sale of the assets received in such
exchange, the refund of a cash deposit held by a vendor of an asset other than
In the Ordinary Course and consistent with past practice, or any other similar
arrangement or technique whereby the Borrower Group obtains Cash in respect of
an asset, net of direct costs associated therewith.
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"Funding Date" shall mean the date of the funding of any Loan.
"Future Station" shall mean a television station acquired,
including through LMA Arrangements, in a Future Acquisition.
"Future Station Subsidiary" shall mean any of the direct and
indirect Wholly Owned Subsidiaries of the Borrower (together with their related
License Subsidiaries) which may be established to acquire or operate a Future
Station.
"FWPCA" shall mean the Federal Water Pollution Control Act.
"General Security Agreements" shall mean and include, once
executed and delivered, the Borrower Security Agreement, the Subsidiary
Security Agreements and any other general security agreements delivered
pursuant to Section 6.14 or 6.15.
"Governmental Authority" shall mean any government or
political subdivision or any agency, authority, board, bureau, central bank,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic, or any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Governmental Consent" shall mean any material approval,
determination, order, consent, authorization, certificate, license, permit,
franchise, concession or validation of, or exemption or other action by, or
filing, recording or registration with, or notice to, any Governmental
Authority.
"Governmental Requirements" shall mean all legal requirements
in effect from time to time, including the common law and all Federal, state,
local and foreign laws, statutes, codes, acts, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, Governmental Consents, demand
letters, directions and requirements of all Governmental Authorities, officials
and officers, and all instruments of record, foreseen or unforeseen, ordinary
or extraordinary, including any change in any law or regulation or the
interpretation thereof by any Governmental Authority (whether or not having the
force of law), relating now or at any time heretofore or hereafter to the
business or operations of any Loan Party or to any of the property owned,
leased or used by any Loan Party, including the development, design,
construction, acquisition, start-up, ownership and operation and maintenance of
property.
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"Guarantees" shall mean and include, once executed and
delivered, each Subsidiary Guarantee and the Parent Guarantee.
"Guarantor" shall mean the Parent and each Subsidiary of the
Borrower which has executed and delivered a Subsidiary Guarantee.
"Hazardous Materials" shall mean any pollutant, contaminant,
hazardous or toxic substance, material, constituent or waste, asbestos or
asbestos containing material, petroleum or oil products, derivatives or
constituents (including crude oil and any fraction thereof) or other wastes,
chemicals, substances or materials subject to any Environmental Law.
"Houston LMA Station" shall mean KTFH, Channel 49 Conroe,
Texas.
"Houston Station Subsidiary" shall mean Paxson Communications
of Houston-49, Inc.
"In the Ordinary Course" shall mean, for any Person, in the
ordinary course of business of such Person and on ordinary business terms.
"Incur" shall mean, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have
meanings correlative to the foregoing).
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money whether short-term or
long-term and whether secured or unsecured, (ii) the deferred purchase price of
assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder and all obligations of such Person
under acceptances facilities, (iv) all Indebtedness of a second Person secured
by any Lien on any property owned by such first Person, whether or not such
Indebtedness has been assumed by such first Person, which, in the case of any
such Indebtedness which is non-recourse to the first Person, shall be limited
to the amount of the value of the property securing such Indebtedness, (v) all
Capitalized Lease Obligations of such Person, (vi) all obligations of such
Person to pay a specified purchase price for
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goods or services whether or not delivered or accepted, i.e., take-or-pay and
similar obligations, (vii) all obligations of such Person under Interest Rate
Agreements, (viii) all Contingent Obligations of such Person, (ix) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (x) all obligations of such Person upon which interest
charges are customarily paid, (xi) all obligations of such Person under
conditional sale or other title retention agreements relating to property
purchased by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property) and (xii) current obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of such Person or any warrants, rights or options to acquire such capital
stock (with redeemable preferred stock being valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends); provided, however, that Indebtedness shall not include trade
payables, accrued expenses, accrued dividends and accrued income taxes, in each
case arising In the Ordinary Course; provided, further, however, that for
purposes of Section 8.04, "Indebtedness" shall also include all Programming
Obligations of such Person.
"Initial Adjusted EBITDA" shall mean the amount set forth on
Schedule 9.01(a) which represents an amount agreed upon by the Borrower, the
Agents and the Applicable Lenders as representing the quarterly amount of cash
flow of the Initial Preapproved Stations and the Contributed Stations
calculated on a combined basis for the period immediately prior to the Initial
Funding Date after adjusting to give effect thereto to the Initial Preapproved
Acquisitions and the Contribution (such adjustments to be made pursuant to the
Adjustment Requirements).
"Initial Commitment" shall mean, with respect to each Lender,
the Commitment of such Lender on the Effective Date.
"Initial Funding Date" shall mean the date of the funding of
the Initial Loans, which shall be May 17, 1995.
"Initial Lender" shall mean a Lender that is an original
signatory to this Agreement.
"Initial Loans" shall mean the Loans made under this Agreement
on the Initial Funding Date.
"Initial Preapproved Acquisition" and "Initial Preapproved
Acquisitions" shall have the meanings assigned to those terms in the recitals
hereto.
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"Initial Preapproved Acquisition Documents" shall have the
meaning assigned to that term in the recitals hereto; and "Initial Preapproved
Acquisition Document" shall mean any such document.
"Initial Preapproved Station" and "Initial Preapproved
Stations" shall have the meanings assigned to those terms in the recitals
hereto.
"Initial Projected Financial Statements" shall mean pro forma
Financial Statements (other than balance sheets and statements of cash flow)
for the Borrower for each of the three fiscal years ending after the Initial
Funding Date, which shall be satisfactory in form and substance to the Agents.
"Intercompany Notes" shall mean demand promissory notes
reasonably satisfactory to the Agents evidencing intercompany Indebtedness of
any Wholly Owned Subsidiary of the Borrower to the Borrower (which shall be
unsubordinated senior obligations of such Subsidiary and pledged to the
Collateral Agent) or of the Borrower to any Wholly Owned Subsidiary of the
Borrower (which shall be subordinate to the Obligations on terms acceptable to
the Agents and pledged to the Collateral Agent).
"Interest Payment Date" shall mean, (i) with respect to any
LIBOR Loan, the last day of the Interest Period applicable thereto and, in the
case of any LIBOR Loan with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date for such LIBOR
Loan had successive Interest Periods of three months' duration been applicable
to such LIBOR Loan and, in addition, the date of any refinancing or conversion
of such LIBOR Loan, and (ii) with respect to any Base Rate Loan, each March 31,
June 30, September 30 and December 31.
"Interest Period" shall mean, with respect to any LIBOR Loan,
the interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate futures contract, interest rate option contract or other similar
agreement or arrangement to which the Borrower is a party.
"Interest Rate Certificate" shall mean an Officers'
Certificate substantially in the form of Exhibit J, setting forth (x) the ratio
described in clauses C(i) and D(i) of the definition of the term "Applicable
Borrowing Margin" and (y) financial information, consistent with that delivered
in a Compliance
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Certificate, necessary to support the determination of the ratio referred to in
clause (x) above.
"Interest Rate Determination Date" shall mean, with respect to
a LIBOR Loan, the date which is two Business Days prior to the commencement of
the Interest Period for such Loan.
"Investment" of any Person shall mean (i) any direct or
indirect purchase or other acquisition of any share of capital stock, evidence
of Indebtedness or other security issued by any other Person, (ii) any loan,
advance (other than advances to employees for travel expenses, drawing accounts
and similar expenditures extended In the Ordinary Course and consistent with
past practice) or extension of credit (other than accounts receivable created
In the Ordinary Course) to, or contribution to the capital of, any other
Person, including any guarantee of Indebtedness of any other Person and any
Joint Venture, (iii) any commitment or option to make an investment if, in the
case of an option, the consideration therefor exceeds $50,000 and (iv) any
capital contribution to any other Person; and any of the foregoing shall be
considered an Investment whether such investment is acquired by purchase,
exchange, issuance of stock or other securities, merger, reorganization or any
other method.
"Joint Venture" shall mean a joint venture, partnership or
other similar arrangement, whether in corporate, partnership or other legal
form.
"Lease" shall have the meaning assigned to that term in the
Mortgages.
"Lender" and "Lenders" shall have the meanings assigned to
those terms in the first paragraph of this Agreement and in Section 11.04.
"LIBOR Base Rate" shall mean, with respect to each day during
each Interest Period pertaining to any LIBOR Loans, the interest rate per annum
at which the Administrative Agent is offered deposits in Dollars at or about
10:00 A.M., two (2) Business Days prior to the beginning of such Interest
Period in the London interbank market for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of its portion of the LIBOR Loans to be outstanding
during such Interest Period.
"LIBOR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the LIBOR Rate in accordance with the provisions of
Section 1.08(a)(ii).
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"LIBOR Rate" shall mean, with respect to each day during each
Interest Period pertaining to a LIBOR Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward, if
necessary, to the nearest 1/16th of 1%):
LIBOR Base Rate
---------------
1.00 - LIBOR Reserve Requirements
"LIBOR Reserve Requirements" shall mean, for any day as
applied to a LIBOR Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including without limitation basic, supplemental, marginal and emergency
reserves) under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having jurisdiction with respect
thereto) prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D) maintained by a member bank of the
Federal Reserve System.
"License Subsidiary" shall mean a special purpose, direct
Wholly Owned Subsidiary of any Station Subsidiary established to hold the
Broadcast Licenses of the Station owned by such Station Subsidiary and any
Additional License Subsidiary which, pursuant to a Future Acquisition or
otherwise, becomes a holder of any Broadcast License relating to a Station; and
"License Subsidiaries" shall mean all such Subsidiaries collectively.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including those
created by, arising under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable
law) and any contingent or other agreement to provide any of the foregoing.
"LMA Arrangement" shall mean the contractual rights and
obligations of any Station Subsidiary with respect to the provision of
programming to an LMA Station operated by such Station Subsidiary as contained
in LMA Documents.
"LMA Documents" shall mean one or more agreements between a
Station Subsidiary and the owner of the FCC License of an LMA Station,
including any local marketing agreement, time brokerage
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agreement or similar arrangement, agreement or understanding or option
agreement to purchase the assets of any Station.
"LMA Station" shall mean each of the broadcast television
stations identified on Schedule 9.01(b) as being programmed by the Borrower or
its Subsidiaries pursuant to an LMA Arrangement; and "LMA Stations" shall mean
all such broadcast television stations collectively.
"Loan Party" shall mean each of (i) the Borrower, (ii) the
Parent and (iii) each Subsidiary of the Borrower that pledges any stock, grants
any Lien or issues any guarantee pursuant to any Credit Document; and "Loan
Parties" shall mean all such Persons collectively.
"Losses" of any Person shall mean the losses, liabilities,
claims (including those based upon negligence, strict or absolute liability and
liability in tort), damages, expenses, obligations, penalties, actions,
judgments, encumbrances, liens, penalties, fines, suits, costs or disbursements
of any kind or nature whatsoever (including reasonable fees and expenses of
counsel in connection with any Proceeding commenced or threatened, whether or
not such Person shall be designated a party thereto and whether or not such
Proceeding is initiated or brought by on behalf of any Loan Party) at any time
(including following the payment of the Obligations) incurred by, imposed on or
asserted against such Person.
"Management Fees" shall mean, collectively, all amounts
(including salary and bonuses) paid, payable, distributed or distributable by
any member of the Borrower Group to any Person pursuant to any management,
advisory or similar agreement or arrangement; provided, however, that
Management Fees shall not include reimbursement of expenses and payment of
reasonable allocable expenses (including accounting and legal services rendered
by independent professionals or internal counsel) that are In the Ordinary
Course with respect to the Borrower Group and consistent with past practice.
"Margin Regulation" shall mean any of Regulation G, Regulation
T, Regulation U and Regulation X of the Federal Reserve Board.
"Material Adverse Effect" shall mean, with respect to any
Person, (i) any material adverse effect with respect to the business, assets,
liabilities (contingent or otherwise), operations, condition (financial or
otherwise), solvency or prospects of such Person and its Subsidiaries, taken as
a whole, (ii) any material adverse effect on the ability of such Person or any
of its
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Subsidiaries to perform in any material respect its obligations under any
Credit Document, Contribution Document or Acquisition Document or to effect on
a timely basis the transactions contemplated by any Credit Document,
Contribution Document or Acquisition Document on the terms contemplated hereby
and thereby, (iii) any adverse effect on the legality, validity, binding effect
or enforceability of any Credit Document or the ability of any of the Agents or
Lenders to enforce any rights or remedies under or in connection with any
Credit Document or (iv) any material adverse effect on any Broadcast License.
In determining whether the occurrence of any individual event or the existence
of any individual condition would, or the failure of any individual event to
occur or any individual condition to exist would, have a Material Adverse
Effect, notwithstanding that the occurrence of such individual event or the
existence of such individual condition does not, or the failure to occur of
such individual event or such individual condition to exist does not, of itself
have such effect, a Material Adverse Effect shall be deemed to have occurred if
the cumulative effect of such event or condition or failure of event or
condition and all other then existing events or conditions and failures of
events or conditions would have a Material Adverse Effect.
"Material Subsidiary" shall mean, at any date of
determination, any Subsidiary of the Parent that is a member of the Parent
Group that, together with its Subsidiaries and each Defaulting Subsidiary (as
defined below), (i) for the most recent fiscal year of the Parent accounted for
more than 10% of the consolidated revenues of the Parent and its Subsidiaries
taken as a whole or (ii) as of the end of such fiscal year, was the owner of
more than 10% of the consolidated assets of the Parent and its Subsidiaries,
taken as a whole, all as set forth on the most recently available consolidated
financial statements of the Parent for such fiscal year prepared in conformity
with GAAP. "Defaulting Subsidiary" means any Subsidiary of the Parent that is
a member of the Parent Group with respect to which any event described in
Section 8.04, 8.05, 8.07 or 8.09 has occurred and is continuing, determined as
if the references to the words "Material Subsidiary" in each of Sections 8.04
and 8.05 were a reference to the words "Subsidiary of the Parent that is a
member of the Parent Group" therein.
"Maturity Date" shall mean the second anniversary of the
Initial Funding Date; provided, however, that if the Borrower has effected the
Extension Option, the Maturity Date shall be the third anniversary of the
Initial Funding Date.
"Merrill Lynch" shall have the meaning set forth in the first
paragraph of this Agreement.
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"Merrill Lynch Fee Letter" shall mean that certain fee letter
between Merrill Lynch and the Parent dated March 24, 1995.
"Minimum Borrowing Amount" shall mean $2,000,000.
"Mortgage" shall mean a mortgage (or deed of trust),
assignment of rents, security agreement and fixture filing or similar
instrument creating and evidencing a Lien on owned Mortgaged Real Property,
which shall be substantially in the form of Exhibit K-1 and Exhibit K-2 or a
leasehold mortgage (or deed of trust), assignment of rents, security agreement,
fixture filing or similar instrument creating and evidencing a Lien on leased
Mortgaged Real Property, which shall be substantially in the form of Exhibit
K-3 and Exhibit K-4, containing such schedules and including such additional
provisions and other deviations from such Exhibits as shall be necessary to
conform such document to applicable or local law or as shall be customary under
local law and made and which shall be dated the date of delivery thereof and
made by the owner of the Mortgaged Real Property described therein for the
benefit of the Collateral Agent, as mortgagee (grantee or beneficiary),
assignee and secured party.
"Mortgaged Real Property", shall mean each Real Property
designated on Schedule 5.17B, which shall be subject to a Mortgage and each
Real Property acquired after the date hereof, including in connection with any
Future Acquisition, and subject to a Mortgage.
"Mortgagor" shall have the meaning assigned to that term in
each Mortgage.
"Multiemployer Plan" shall mean a "multiemployer plan", as
defined in Section 3(37) of ERISA, (i) to which any of the Loan Parties or any
of their respective ERISA Affiliates is contributing, or at any time within the
five calendar years immediately preceding the date hereof has contributed, (ii)
to which any of the Loan Parties or any of their respective ERISA Affiliates
has, or, at any time within the five calendar years immediately preceding the
date hereof, has had, an obligation to contribute or (iii) with respect to
which any of the Loan Parties retains any liability, including any potential
joint and several liability as a result of an affiliation with an ERISA
Affiliate or a party that would be an ERISA Affiliate except for the fact the
affiliation ceased more than five calendar years prior to the date hereof.
"Multiplier Termination Date" shall mean the date on which
Financial Statements of the Borrower for the month ended May 31, 1996 have
been, or should have been, delivered pursuant to Section 6.01(c).
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"Net Award" shall have the meaning assigned to that term in
each Mortgage.
"Net Cash Proceeds" shall mean, with respect to any Asset
Sale, Taking or Destruction, the Cash Proceeds resulting therefrom net of (i)
direct expenses of sale (including reasonable broker's fees), (ii) the amount
of any Indebtedness required to be repaid upon any such event and (iii)
reasonable reserves established in accordance with GAAP for any retained
liabilities or in respect of indemnities; provided, however, that expenses
shall only include taxes to the extent that taxes are estimated to be payable
in the current year or in the next succeeding year with respect to the current
year as a result of such Asset Sale, Taking or Destruction; provided, further,
however, that Net Cash Proceeds shall not include any amounts or items included
in the definition of Financing Proceeds or Net Financing Proceeds (including in
any proviso appearing therein or exclusion therefrom).
"Net Financing Proceeds" shall mean Financing Proceeds, net of
taxes (including income taxes) currently paid or payable as a result thereof in
the current year or in the next succeeding year with respect to the current
year as a result of the transaction generating Net Financing Proceeds.
"Net Proceeds" shall have the meaning assigned to that term in
each Mortgage.
"Non-Acquisition Loan Borrowing" shall mean any Borrowing
which is made other than in connection with the consummation of an Acquisition.
"Non-Defaulting Lender" shall mean each Lender other than a
Defaulting Lender.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to any of the Agents or Lenders pursuant to the terms of any Credit
Document or secured by any of the Security Documents.
"OCC" shall mean the Office of the Comptroller of the Currency.
"Officers' Certificate" shall mean, 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 or any Assistant
Treasurer in their official (and not individual) capacities; provided, however,
that every Officers'
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Certificate with respect to the compliance with a condition precedent to the
making of any Loan hereunder shall include (i) a statement that the officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to enable
them to express an informed opinion as to whether or not such condition has
been complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"Officer's Solvency Certificate" shall mean the Officer's
Solvency Certificate in the form set forth as Exhibit L.
"Operating Lease" of any Person, shall mean any lease
(including leases which may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) by such Person as Lessee which is
not a Capital Lease; provided, however, that Operating Leases shall not include
LMA Arrangements.
"Orlando Station Subsidiary" shall mean Paxson Communications
of Orlando-56, Inc.
"Orlando LMA Station" shall mean WIRB, Channel 56 of
Melbourne, Florida.
"OTS" shall mean the Office of Thrift Supervision.
"Parent" shall mean Paxson Communications Corp., a Delaware
corporation.
"Parent Equity Documents" shall mean (x) each of the documents
and agreements listed on Schedule 9.01(c) and (y) the proposed Amended and
Restated Certificate of Designations of 15% Cumulative Compounding Redeemable
Preferred Stock of the Parent and the proposed Amended and Restated Certificate
of Designations of Series B 15% Cumulative Compounding Redeemable Preferred
Stock of the Parent, in each case under this clause (y), as set forth in the
Parent's Proxy Statement dated May 4, 1995.
"Parent Group" shall mean (i) the Parent and its Subsidiaries
other than any Subsidiary of the Parent that is a Loan Party and (ii) any
member of such group.
"Parent Group Equity Event" shall mean any Company redeeming
(other than due to the scheduled maturity thereof) any outstanding equity
securities of the Parent (including through a deposit of funds to effect the
termination of the rights of the
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holders thereof), or holders thereof exercising their right to require any
Company to redeem or repurchase any such equity securities, pursuant to any
contract, agreement or understanding between the Parent Group or any Affiliate
of the Parent Group and the holders of such equity securities, or any event or
condition under any contract, agreement or understanding governing any equity
securities of the Parent Group entitling the holders thereof to the redemption
or repurchase thereof (other than due to the scheduled maturity thereof).
"Parent Guarantee" shall mean the Parent Guarantee
substantially in the form of Exhibit M, except for such changes as shall have
been approved by the Parent, the Agents and the Requisite Lenders.
"Parent Pledge Agreement" shall mean the Parent Securities
Pledge Agreement substantially in the form of Exhibit N, except for such
changes therein as shall have been approved by the Parent, the Agents and the
Requisite Lenders.
"Parent Test Period" shall mean, at any Determination Date,
the four consecutive complete fiscal quarters of the Parent ended on or
immediately prior to such Determination Date for which financial statements are
available.
"Paxson" shall mean Lowell W. Paxson, the Chairman of the
Board of the Parent as of the Initial Funding Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation,
established pursuant to Section 4002 of ERISA.
"Pension Plan" shall mean any Employee Benefit Plan, other
than a Multiemployer Plan, which is subject to Section 412 of the code or
Section 302 of ERISA.
"Permitted Transferees" shall mean, with respect to Paxson,
(A) his spouse, members of his immediate family and/or any of his lineal
descendants and/or (B) any trust or similar entity all of the beneficiaries of
which are (x) Paxson or any of the Persons identified in the preceding clause
(A) or (y) Paxson or any entity described in this clause (B) all of the
beneficiaries of which are the Persons identified in the preceding clause (A).
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or
instrumentality thereof.
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"Pledge Agreements" shall mean and include, once executed and
delivered, the Parent Pledge Agreement, the Borrower Pledge Agreement, the
Subsidiary Pledge Agreement and any securities pledge agreements delivered
pursuant to Section 6.14 or 6.15.
"Pledged Collateral" shall mean all the Pledged Collateral as
defined in each of the General Security Agreements.
"Pledged Securities" shall mean all the Pledged Collateral as
defined in each of the Pledge Agreements.
"Preapproved Acquisition" and "Preapproved Acquisitions" shall
have the meanings assigned to those terms in the recitals hereto.
"Preapproved Acquisition Documents" shall have the meaning
assigned to that term in the recitals hereto; and "Preapproved Acquisition
Document" shall mean any of them.
"Preapproved Station" and "Preapproved Stations" shall have
the meanings assigned to those terms in the recitals hereto.
"Preapproved Station Subsidiary" shall mean any of the
following Wholly Owned Subsidiaries of the Borrower (together with their
respective License Subsidiaries): Paxson Communications of Boston-60, Inc.;
Paxson Communications of Houston-49, Inc.; Paxson Communications of Los
Angeles-30, Inc.; Paxson Communications of San Jose-65, Inc. (San Francisco);
and Paxson Communications of Orlando-56, Inc.
"Prior Liens" shall mean Liens which, pursuant to the
provisions of any Security Document, are or may be superior to the Lien of any
Security Document.
"Proceeding" shall mean any claim, action, judgment, suit,
hearing, governmental investigation, arbitration or proceeding, including by or
before any Governmental Authority.
"Program" shall mean any television series or other program
produced or distributed for television release (including any syndicated series
or other program regardless of its medium of initial exploitation), in each
case whether recorded on film, videotape, audiotape, cassette, cartridge, disc
or by any other means, method, process or device, whether now known or
hereafter developed.
"Program Contracts" shall mean all contracts for television
broadcast rights of Programs, including film, music and
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related audio rights and syndicated series exhibition rights acquired under
license agreements.
"Programming Amortization Expense" shall mean, for any Person,
as at any date of determination, total amortization expense of the Person or
any of its Subsidiaries for the most recently completed twelve consecutive
month period (three consecutive month period in the case of the Borrower prior
to the Multiplier Termination Date) which is directly attributable to
Programs, Program Rights or Program Contracts, determined on a consolidated
basis.
"Programming Obligations" shall mean at any date of
determination, all direct or indirect liabilities, contingent or otherwise,
with respect to Program Contracts, Programs, or Program Rights (including all
Program Rights Costs) of the Borrower Group, to the extent reflected on the
consolidated balance sheet and the notes thereto of the Borrower.
"Program Rights" shall mean any right whether arising under
Program Contracts or otherwise, to broadcast, sell, distribute, subdistribute,
exhibit, lease, sublease, license, sublicense or otherwise exploit Programs.
"Program Rights Costs" shall mean the maximum amount which the
Borrower Group or its or their co-venturers have furnished or have
contractually committed to furnish (to the extent such commitments shall be
reflected as an asset or liability on the consolidated balance sheet and the
notes thereto of the Borrower) toward the production or acquisition by the
Borrower Group or its or their co-ventures of any Program Rights with respect
to any Program.
"Programming Rights Payments" shall mean, as at any date of
determination, for any period, the aggregate cash payments scheduled to be made
by the Borrower Group for such period in respect of Programming Obligations,
determined on a consolidated basis.
"Projected Acquisition Cash Flow" shall mean the amount of
operating cash flow which, pursuant to projections of the management of the
Borrower reasonably satisfactory to the Agents and the Applicable Lenders
pursuant to Section 7.17, are expected to be realized from Future Acquisitions.
"Projected Financial Statements" shall mean, at any date, the
last to be delivered of the Initial Projected Financial Statements, the most
recently delivered Annual Projected Financial
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Statements or the most recently delivered Revised Projected Financial
Statements.
"Pro Rata Share" shall mean, with respect to each of the
Commitments of, or Obligations owed to, each Lender, the percentage determined
by dividing such Lender's Commitment or Obligation by all of the Lenders'
Commitments or all such Obligations owed to such Lenders, as such Pro Rata
Share may change from time to time as a result of assignments made pursuant to
Section 11.04(b); provided, however, that with respect to any Obligations or
amounts owing or potentially owing by any Lender, Pro Rata Share shall mean the
percentage determined by dividing such Lender's Commitment by the Total
Commitments of the Non-Defaulting Lenders.
"Purchase Price Adjustment Payment" shall mean any amount
received by the Borrower Group or the Parent Group after the Effective Date
under or pursuant to any of the Acquisition Documents or any of the acquisition
documents related to the Contributed Stations (other than indemnification
payments thereunder to the extent applied to replace, repair or restore any
assets or properties of the Borrower Group, or satisfying any claims made
against the Borrower Group).
"RCRA" shall mean the Resource, Conservation and Recovery Act.
"Real Property" shall mean all right, title and interest of
the Borrower Group (including any leasehold estate) in and to a parcel of real
property owned or operated by the Borrower Group together with, in each case,
all improvements and appurtenant fixtures, equipment, personal property,
easements and other property and rights incidental to the ownership, lease or
operation thereof.
"Regulation D" shall mean Regulation D of the Federal Reserve
Board.
"Requisite Lenders" shall mean Non-Defaulting Lenders holding
not less than a majority of the Total Commitments held by Non-Defaulting
Lenders, or if the Total Commitments have been terminated, Non-Defaulting
Lenders holding not less than a majority of the outstanding Loans held by
Non-Defaulting Lenders.
"RTC" shall mean the Resolution Trust Corporation.
"SEC" shall mean the Securities and Exchange Commission.
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"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act, as the same may be in effect from time to time.
"SEC Rule 144A" shall mean Rule 144A as promulgated under the
Securities Act, as the same may be in effect from time to time.
"Secured Parties" shall have the meaning specified in the
Security Documents.
"Securities" shall mean any stock, shares, voting trust
certificates, bonds, debentures, options, warrants, 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" shall mean the United States Securities Act
of 1933 and the rules and regulations promulgated thereunder.
"Security Documents" shall mean each of the Mortgages, the
Pledge Agreements, the General Security Agreements and any other documents
utilized to pledge as Collateral for the Obligations any other property or
assets of whatever kind or nature.
"Solvent" shall mean, with respect to any Person on a
particular date, that on such date, (a) the present fair salable value of the
property of such Person (valued as a going concern and pursuant to a sale
conducted by a diligent business person to an interested buyer who is willing
to purchase under ordinary selling conditions (to the extent such a willing
buyer may exist)) is greater than (i) the total amount of liabilities
(including contingent liabilities) of such Person and (ii) the amount that will
be required to pay the probable liability of such Person on its debts and
liabilities (including contingent liabilities) as they become absolute and
matured; and (b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities (including contingent liabilities) beyond such
Person's ability to pay as such debts and liabilities mature; and (c) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person's property would constitute
an unreasonably small capital; and "Solvency" shall have the meaning
correlative to the foregoing.
"Station" shall mean (i) each of the Contributed Stations and
each of the Initial Preapproved Stations, (ii) each other
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television station acquired pursuant to a Preapproved Acquisition or a Future
Acquisition and (iii) each LMA Station; and "Stations" shall mean all such
television stations collectively.
"Station Subsidiary" shall mean any Preapproved Station
Subsidiary, Contributed Station Subsidiary or Future Station Subsidiary.
"Sublease" shall have the meaning assigned to that term in the
Mortgages.
"Subordinated Indebtedness" shall mean, for any Person, all
Indebtedness of such Person which is, pursuant to its terms, expressly
subordinated in right of payment to any other Indebtedness of such Person.
"Subsidiary" shall mean, of any Person at any time, (a) any
corporation of which a majority (by number of shares or number of votes) of any
class of outstanding capital stock normally entitled to vote for the election
of one or more directors (regardless of any contingency which does or may
suspend or dilute the voting rights of such class) is at such time owned
directly or indirectly, beneficially or of record, by such Person or one or
more Subsidiaries of such Person; (b) any trust of which a majority of the
beneficial interest is at such time owned directly or indirectly, beneficially
or of record, by such Person or one or more Subsidiaries of such Person; and
(c) any partnership, joint venture or other entity of which ownership interests
having ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions are at such time owned directly or
indirectly, beneficially or of record, by, or which is otherwise controlled
directly, indirectly or through one or more intermediaries by, such Person or
one or more Subsidiaries of such Person.
"Subsidiary Guarantee" shall mean the Subsidiary Guarantee
substantially in the form of Exhibit O, except for such changes therein as
shall have been approved by the Borrower, the Agents and the Requisite Lenders.
"Subsidiary Guarantor" shall mean each of the Subsidiaries of
the Borrower set forth on Schedule 5.14A (including all License Subsidiaries)
and each other entity that becomes a Subsidiary of the Borrower.
"Subsidiary Pledge Agreement" shall mean the Subsidiary
Securities Pledge Agreement executed by each Subsidiary of the Borrower,
substantially in the form of Exhibit Q, except for such
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changes therein as shall have been approved by the Borrower, the Agents and the
Requisite Lenders.
"Subsidiary Security Agreement" shall mean a Subsidiary
General Security Agreement executed by each Subsidiary of the Borrower,
substantially in the form of Exhibit R, except for such changes therein as
shall have been approved by the Borrower, the Agents and the Requisite Lenders.
"Succession Event" shall be deemed to occur automatically and
without action or notice of any kind on any date (a "Six-Month Date") which is
six months after the date (such date being a "Vacancy Date") upon which (i)
Paxson dies or become incapacitated or (ii) Paxson or any Management-Approved
Successor or Independently-Approved Successor (as such terms are defined below
and including successive successors) ceases for any reason to be the chief
executive officer ultimately responsible for the management of the Parent
("Chief Executive Officer") if, in each case, on such Six-Month Date the board
of directors of the Parent (the "Board of Directors") has not appointed a
permanent successor Chief Executive Officer which is a Management-Approved
Successor or an Independently-Approved Successor. A "Management-Approved
Successor" means any individual who is appointed by the Board of Directors to
be the permanent Chief Executive Officer on a date which is not more than 120
days after the Vacancy Date in question and who has been approved in writing by
Marla Paxson and at least three individuals who are then Senior Executives (as
defined below). The "Senior Executives" are James B. Bocock, Dean Goodman,
John Jay Hoker and Arthur D. Tek; provided, however, that any one of them shall
cease to be a "Senior Executive" if and when he is no longer employed by the
Parent (and, if fewer than three of them are employed by the Parent, no
individual can become a Management-Approved Successor). An
"Independently-Approved Successor" means any individual who is selected by the
Board of Directors from a list of the three candidates identified by an
Independent Search Firm (as defined below), which three candidates may, but
need not, include individuals who are then management employees of the Parent.
An "Independent Search Firm" means an independent nationally recognized
executive search firm which is experienced in identifying employment candidates
in the field(s) of industry in which the Parent is then engaged and which has
been approved by a majority (and, in any event, not less than two) of the
members of the Board of Directors who are Non-Paxson Directors. "Non-Paxson
Directors" means each of the members of the Board of Directors who is not an
officer of the Parent or any of its Affiliates.
"Survey" shall mean a survey of any owned Mortgaged Real
Property (and all improvements thereon): (i) prepared by a
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surveyor or engineer licensed to perform surveys in the state where such
Mortgaged Real Property is located, (ii) dated (or redated) not earlier than
three months prior to the date of delivery thereof unless there shall have
occurred within three months prior to such date of delivery any exterior
construction on the site of such Mortgaged Real Property, in which event such
survey shall be dated (or redated) after the completion of such construction or
if such construction shall not have been completed as of such date of delivery,
not earlier than 20 days prior to such date of delivery, (iii) certified by the
surveyor to the Administrative Agent in a manner acceptable to the Requisite
Lenders and the Administrative Agent, (iv) locating all improvements, public
streets, and recorded easements appurtenant to, or affecting, such Mortgaged
Property and (v) complying in all respects with the minimum detail requirements
of the American Land Title Association as such requirements are in effect on
the date of preparation of such survey.
"Syndication Date" shall mean the date which is the fifth day
after the Initial Funding Date.
"Taking" shall have the meaning assigned to that term in each
Mortgage.
"Tangible Personal Property" shall mean all machinery,
equipment, tools, vehicles, furniture, leasehold improvements, office
equipment, plant, inventory, spare parts, and other tangible personal property
which is used or useful in the conduct of the business or operations of each
Station, together with any additions thereto between the date of this Agreement
and the applicable Funding Date.
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement
by and between the Parent and the Borrower dated as of May 17, 1995.
"Third-Party Consent" shall mean any material order, consent,
approval, license, permit, authorization or validation of, or filing, recording
or registration with, or notice to, or exemption or other action by any Person
other than any Loan Party or any Governmental Authority.
"Title Company" shall mean Lawyers Title Insurance Corporation
or such other title insurance or abstract company as shall be designated by the
Requisite Lenders.
"Total Capitalization" shall mean, for any Person, at any time
without duplication, the sum of Consolidated Total Debt of such Person at the
time outstanding, plus the total stockholders' equity as shown on a
consolidated balance sheet of such Person and
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its Subsidiaries prepared on a consolidated basis, after due allowance for
minority interests; provided, however, that with respect to the Borrower, total
stockholders' equity shall at all times be deemed to be not less than
$26,550,000.
"Total Commitments" shall mean the sum of the Commitments of
each of the Lenders.
"Total Debt Leverage Ratio" shall mean, at any Determination
Date, the ratio of Consolidated Total Debt of the Borrower as of such
Determination Date to Adjusted Consolidated EBITDA for the Borrower Test Period
in respect of such Determination Date.
"Total Unutilized Commitments" shall mean the sum of the total
Unutilized Commitment of each of the Lenders.
"Total Utilization of Commitments" shall mean, at any date of
determination, the aggregate principal amount of all Loans.
"Transaction Documents" shall mean the Acquisition Documents,
the Contribution Documents, the Credit Documents, the LMA Documents and the
Parent Equity Documents; and "Transaction Document" shall mean any of them.
"TSCA" shall mean the Toxic Substances Control Act.
"Type" shall mean a Base Rate Loan or a LIBOR Loan.
"UCC" shall mean the Uniform Commercial Code as in effect in
any applicable jurisdiction.
"Unutilized Commitment" for any Lender at any time shall mean,
from the date of execution and delivery of this Agreement and to the Initial
Funding Date, the Initial Commitment of such Lender and, on and after the
Initial Funding Date, the unutilized Commitment of such Lender.
"Wholly Owned Subsidiary" of any Person shall mean any
Subsidiary of such Person, but only if all of the capital stock or other
ownership interests in such Subsidiary, other than directors' or nominees'
qualifying shares, is owned directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier device,
telegraph or cable.
(b) In addition, the following terms will have the meanings
provided in the Sections set forth opposite such terms:
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<TABLE>
<CAPTION>
Defined Term Section
------------ -------
<S> <C>
Acquisition Funding Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
Acquisition Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.14
Additional Loan Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.18
Additional Loan Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.18
Affiliate Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09(a)
Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09(a)
Annual Projected Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 6.01(m)
Applicable Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02(i)
Applicable Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02(j)
Base Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
Commitment Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
Deficiency Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
Environmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.21(a)
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.10
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Excess Cash Flow Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . 7.08(iii)
Extension Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13
Final Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01(p)(iii)
Future Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.17(ii)
Future Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.17(ii)
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07
Indemnitees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
Infomall Basket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08(ii)
Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.15
LMA Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05(a)
Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(a)
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01(a)
Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
Notice of Conversion/Continuation . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06
Parent Projected Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 4.01(d)
PCBs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.21(d)
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03
Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04(f)
Replaced Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.14
Replacement Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.14
Revised Projected Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 6.01(m)
Revolving Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05(a)
Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05(a)
Scheduled Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13
SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.23
Section 8 Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.04
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05
Three Month Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08(b)
Transferee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04(e)
</TABLE>
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9.02 Rules of Construction. (a) In this Agreement and each
other Credit Document, unless the context clearly requires otherwise (or such
other Credit Document clearly provides otherwise), references to (i) the plural
include the singular, the singular the plural and the part the whole; (ii)
Persons include their respective permitted successors and assigns or, in the
case of governmental Persons, Persons succeeding to the relevant functions of
such Persons; (iii) agreements (including this Agreement) and other contractual
instruments include subsequent amendments, assignments, and other modifications
thereto, but only to the extent such amendments, assignments or other
modifications thereto are not prohibited by their terms or the terms of any
Credit Document; (iv) statutes and related regulations include any amendments
of same and any successor statutes and regulations; and (v) time shall be to
New York City time. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by such
Person.
(b) In this Agreement and each other Credit Document,
unless the context clearly requires otherwise (or such other Credit Document
clearly provides otherwise), (i) "amend" shall mean "amend, amend and restate,
supplement or modify"; and "amended" and "amendment" shall have meanings
correlative to the foregoing; (ii) in the computation of periods of time from a
specified date to a later specified date, "from" shall mean "from and
including"; "to" and "until" shall mean "to but excluding"; and "through" shall
mean "to and including"; (iii) "hereof," "herein" and "hereunder" (and similar
terms) in this Agreement or any other Credit Document refer to this Agreement
or such other Credit Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such other Credit Document; (iv)
"including" (and similar terms) shall mean "including without limitation" (and
similarly for similar terms); (v) with respect to the Loan Parties "knowledge"
or "aware" shall mean and include (A) the actual knowledge or awareness of the
Loan Parties (which shall include the actual knowledge and awareness of the
officers and directors of the Loan Parties) and (B) the knowledge or awareness
that a prudent business person would have obtained in the conduct of his
business after making reasonable inquiry and reasonable diligence with respect
to the particular matter in question; (vi) "or" has the inclusive meaning
represented by the phrase "and/or"; (vii) "property" and "assets" each shall
include all properties and assets of any kind or nature, tangible or
intangible, real, personal or mixed, now existing or hereafter acquired; (viii)
"satisfactory to" any of the Agents or Lenders shall mean in form, scope and
substance and on terms and conditions satisfactory
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to such Person; and (ix) references to "the date hereof" shall mean the date
first set forth above.
(c) In this Agreement unless the context clearly requires
otherwise, any reference to (i) an Annex, Exhibit or Schedule is to an Annex,
Exhibit or Schedule, as the case may be, attached to this Agreement and
constituting a part hereof, and (ii) a Section or other subdivision is to a
Section or such other subdivision of this Agreement.
(d) No doctrine of construction of ambiguities in
agreements or instruments against the interests of the party controlling the
drafting thereof shall apply to any Credit Document.
SECTION 10. The Agents.
10.01 Appointment. (a) Each Lender hereby irrevocably
designates and appoints Merrill Lynch as Agent (such term to include, for
purposes of this Section 10, the Agent acting in any other representative
capacity under any other Credit Document (other than as Administrative Agent or
Collateral Agent)) and Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent (such term to include, for purposes of this Section 10,
the Administrative Agent acting as Collateral Agent) of such Lender to act as
specified herein and in the other Credit Documents, and each such Lender hereby
irrevocably authorizes the Agents to take such action on its behalf under the
provisions of the Credit Documents and to exercise such powers and perform such
duties as are expressly delegated to the Agents by the terms of the Credit
Documents, together with such other powers as are reasonably incidental
thereto. Each Lender agrees that the rights and remedies granted to the Agents
under any Credit Document shall be exercised exclusively by the Agents and
that no Lender shall have any right individually to exercise any such right or
remedy, except to the extent, if any, expressly provided herein or therein.
(b) Notwithstanding any provision to the contrary
elsewhere in this Agreement or in any other Credit Document:
(i) None of the Agents shall have any duties or
responsibilities, except those expressly set forth in the Credit
Documents, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into any Credit
Document or otherwise exist against any of the Agents.
(ii) The duties and responsibilities of the Agents under
the Credit Documents shall be mechanical and administrative in
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nature, and none of the Agents shall have a fiduciary or trust
relationship with any Lender.
(iii) In performing its functions and duties under the
Credit Documents, each of the Agents shall act solely as agent of the
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
any Loan Party. The provisions of this Section 10 are solely for the
benefit of the Agents and the Lenders, and no Loan Party shall have
any rights as a third-party beneficiary of any of the provisions
hereof.
(iv) Neither the Agent nor the Administrative Agent shall
be under any obligation to take any action hereunder or under any
other Credit Document if the Agent or the Administrative Agent, as the
case may be, believes in good faith that taking such action may
conflict with any law or any provision of any Credit Document, or may
require the Agent or the Administrative Agent, as the case may be, to
qualify to do business in any jurisdiction where it is not then so
qualified.
10.02 Delegation of Duties. Each of the Agents may execute
any of its duties under any Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. All fees and expenses of such agents and
attorneys-in-fact shall be paid by the Borrower on demand. None of the Agents
shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 10.03.
10.03 Exculpatory Provisions. None of the Agents or any of
their respective officers, directors, employees, representatives, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any waiver, consent or
approval given or any action taken or omitted to be taken by such Person under
or in connection with any Credit Document or be responsible for the
consequences of any oversight or error in judgment by such Person whatsoever,
except to the extent that such action, omission, oversight or error in judgment
is determined by a court of competent jurisdiction in a final non-appealable
judgment to have resulted solely from such Person's own gross negligence or bad
faith, (ii) responsible in any manner to any Lender for the effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any other Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith
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or therewith furnished or made by any of the Agents to the Lenders or by or on
behalf of any Company or any of their respective officers to any of the Agents
or Lenders or (iii) required to inspect the properties, books or records of any
Company or otherwise to ascertain, inquire or give any notice as to (A) the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any Credit Document, (B) the business,
operations, condition (financial or otherwise) or prospects of any Company or
any other Person, (C) the use of the proceeds of the Loans or (D) except to the
extent set forth in Section 10.05, the existence or possible existence of any
Default or Event of Default.
10.04 Reliance by the Agents. Each of the Agents 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, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Loan Parties),
independent accountants and other experts selected by any of the Agents. If
any of the Agents requests instructions from the Lenders with respect to any
act or omission in connection with any Credit Document, it shall be fully
justified in failing or refusing to take any action under any Credit Document
unless and until and to the extent it shall have first received instructions
from the Requisite Lenders (or from the Applicable Lenders, if such Credit
Document so expressly requires) or it shall first be indemnified to its
satisfaction from time to time by the Lenders against any and all liability and
expense which may be incurred by, imposed on or asserted against it by reason
of taking or continuing to take any such action. Each of the Agents shall in
all cases be fully protected in acting, or in refraining from acting, under the
Credit Documents in accordance with a request (written or oral) of the
Requisite Lenders (or of the Applicable Lenders if such Credit Document so
expressly requires), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
10.05 Notice of Default. None of the Agents shall be deemed
to have knowledge of the occurrence of any Default or Event of Default, other
than a default in the payment of principal or interest on the Loans hereunder,
unless it has actually received written notice from a Lender or any Loan Party
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
or the Administrative Agent receives such a notice, the Agent or the
Administrative Agent, as the case may be, shall give prompt notice thereof to
the Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be
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reasonably directed by the Requisite Lenders; provided, however, that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
10.06 Non-Reliance on the Agents and Other Lenders. Each
Lender expressly acknowledges for the benefit of the Borrower and the Agents
that none of the Agents or their respective officers, directors, employees,
representatives, agents, attorneys-in-fact or Affiliates have made any
representations or warranties to it and that no act by any of the Agents
hereinafter taken, including any review of the affairs of any Company, shall be
deemed to constitute any representation or warranty by any of the Agents to any
Lender. Each Lender represents to each of the Agents that it has,
independently and without reliance upon any of the Agents or other Lenders, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Companies and made its own decision to make its Loans hereunder and enter into
this Agreement and the other agreements contemplated hereby. Each Lender also
represents that it will, independently and without reliance upon any of the
Agents or other Lenders, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Companies. Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Agents hereunder, none of the Agents shall have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, operations, assets, property, financial and other conditions,
prospects or creditworthiness of any Company which may come into the possession
of any of the Agents or any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates, and none of the Agents shall have any
responsibility for the accuracy of or the completeness of the information
provided to the Lenders.
10.07 Indemnification. Each Lender severally agrees to
indemnify each of the Agents in their respective capacities as such or in any
other representative capacity under any other Credit Document ratably according
to its Commitment, from and against any and all Losses of the Agents resulting
from, or arising out of, or in any way related to or by reason of, the
execution, delivery,
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performance, administration or enforcement of any Document, any documents
contemplated by or referred to herein or the transactions contemplated hereby
or thereby or any action taken or omitted to be taken by the Agents under or in
connection with any of the foregoing, but only to the extent that any of the
foregoing is not indefeasibly paid by the Loan Parties; provided, however, that
no Lender shall be liable to the Agent or the Administrative Agent for the
payment of any portion of such Losses to the extent determined by a court of
competent jurisdiction in a final non-appealable judgment to have resulted
solely from the gross negligence or bad faith of the Agent or the
Administrative Agent, as the case may be. If any indemnity furnished to either
the Agent or the Administrative Agent for any purpose shall, in the opinion of
the Agent or the Administrative Agent, as the case may be, be insufficient or
become impaired, the Agent or the Administrative Agent, as the case may be, may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished. The
agreements in this Section 10.07 shall survive the payment of all Obligations
and shall be in addition to and not in lieu of any other indemnification
agreements set forth in any Credit Document.
10.08 The Agents in Their Respective Individual Capacities.
The Agents and their respective Affiliates may make loans to, accept deposits
from and generally engage in any kind of banking, trust, financial advisory or
other business with any Company or any Affiliate of any Company as though the
Agents were not Agents hereunder and may accept fees and other consideration
from any Loan Party for services in connection with this Agreement and
otherwise without having to account for the same to the Lenders. With respect
to the Loans made by it and all Obligations owing to it, the Agent shall have
the same rights and powers under this Agreement as any Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall, unless the context clearly indicates otherwise, include the Agent in its
individual capacity.
10.09 Resignation by Any of the Agents. Subject to the
appointment and acceptance of a successor Agent or Administrative Agent as
provided below, the Agent or the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower and any of the Agent or the
Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to the Borrower and
the Agents and signed by the Applicable Lenders. Upon any such resignation or
notice of removal, the Requisite Lenders, in the case of any resignation and
the Applicable Lenders, in the case of any removal, shall have the right to
appoint a successor which shall be an incorporated bank or trust company or an
Affiliate of any such bank
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or trust Company, with, so long as no Default or Event of Default shall have
occurred and be continuing, the consent of the Borrower (which consent shall
not be unreasonably withheld or delayed). If no successor shall have been so
appointed and shall have accepted such appointment within 30 days after the
retiring or removed Agent or Administrative Agent gives notice of its
resignation or receives notice of its renewal, then the retiring or removed
Agent or Administrative Agent may, on behalf of the Lenders, appoint a
successor agent, so long as no Default or Event of Default shall have occurred
and be continuing, with the consent of the Borrower (which consent shall not be
unreasonably withheld), which shall be an incorporated bank or trust company or
an Affiliate of any such bank or trust company. Upon the acceptance of any
appointment as Agent or Administrative Agent hereunder by a successor, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent or Administrative Agent,
as the case may be, and the retiring or removed agent shall be discharged from
its duties and obligations hereunder. Upon such succession, the term "Agent"
or "Administrative Agent," as the case may be, shall include such successor.
After any Administrative Agent's resignation or removal hereunder, the
provisions of this Section and Section 11.01 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent or Administrative Agent, as the case may be.
10.10 Security Documents, Etc. Each Lender hereby authorizes
the Collateral Agent to enter into each of the Security Documents on behalf of
and for the benefit of such Lender and to take all action contemplated thereby
and hereby, including the release from time to time of Collateral secured
thereby. Any amendment to any Security Document shall be governed by Section
11.12. The Collateral Agent may assign its rights and obligations as
Collateral Agent under any of the Security Documents to which it is a party to
any direct or indirect Subsidiary of the Collateral Agent, or to any trustee,
which assignee, in each such case, shall be entitled to all the rights of the
Collateral Agent under the applicable Security Document and all the rights
hereunder of the Agent with respect to the applicable Security Document. The
provisions of this Section 10 shall apply to the Collateral Agent under each
Security Document (it being understood that references to "this Agreement" or
"hereunder" in this Section 10 shall be deemed to be references to the
respective Security Document).
10.11 Determinations Pursuant to Security Documents. In each
circumstance where, under any provision of the applicable Security Document,
the Collateral Agent shall have the right to grant or withhold any consent,
exercise any remedy, make any
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determination or direct any action by the Collateral Agent under such Security
Document, the Collateral Agent shall act in respect of such consent, exercise
of remedies, determination or action, as the case may be, only with the consent
of and at the direction of the Requisite Lenders; provided, however, that no
such consent of the Requisite Lenders shall be required with respect to any
consent, determination or other matter that is, in the Collateral Agent's
reasonable judgment, ministerial or administrative in nature; provided,
further, however, that the Collateral Agent is hereby authorized on behalf of
all of the Lenders, without the necessity of any further consent from any
Lender, from time to time so long as it is not actually aware of an Event of
Default then in existence, to release portions of the Collateral from the
security interests and Liens imposed by the applicable Security Documents in
connection with any dispositions of such portions of the Collateral permitted
by the terms of this Agreement. In each circumstance where any consent of or
direction from the Requisite Lenders is required, the Collateral Agent shall,
at the sole expense of the Borrower, send to the Lenders a notice setting forth
a description in reasonable detail of the matter as to which consent or
direction is requested and the Collateral Agent's proposed course of action
with respect thereto. In the event the Collateral Agent shall not have
received a response from any Lender within three Business Days after the date
of such notice, such Lender shall be deemed to have agreed to the course of
action proposed by the Collateral Agent.
10.12 Payee of Note Treated as Owner. Each of the Borrower
and the Agents may deem and treat the payee of any Revolving Note as the owner
thereof for all purposes hereof unless and until such Revolving Note has been
assigned in accordance with Section 11.04(b). Any request, authority or
consent of any Person who at the time of making such request or giving such
authority or consent is the holder of any Revolving Note shall be conclusive
and binding on any subsequent holder, transferee or assignee of that Revolving
Note or of any Revolving Note or Revolving Notes issued in exchange therefor.
SECTION 11. Miscellaneous.
11.01 Payment of Expenses; Indemnification, Etc. The
Borrower agrees, whether or not the transactions herein contemplated are
consummated:
(1) to pay promptly all (i) reasonable out-of-pocket
costs, fees and expenses of each of the Agents in connection with the
negotiation, preparation, execution, administration and delivery of
the Credit Documents and the documents and instruments referred to
therein and consummation of the transactions contemplated by the
Credit Documents, including
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audit fees, syndication expenses, both inside allocable and outside
counsel fees and disbursements (including the reasonable fees and
disbursements of each of Cahill Gordon & Reindel, Edwards & Angell,
FCC counsel to the Agents and each other special counsel to the
Agents), (ii) reasonable out-of-pocket expenses accrued prior to the
Initial Funding Date related to the provision of consulting services
by consultants engaged by the Borrower or the Parent at the request of
any Agent and approved by the Parent, (iii) reasonable out-of-pocket
costs, fees and expenses (including the reasonable fees and
disbursements of each of Cahill Gordon & Reindel, Edwards & Angell,
FCC counsel to the Agents and each other special counsel to the
Agents) of each of the Agents incurred in connection with (I) the
creation and perfection of Liens in favor of the Lenders pursuant to
any Credit Document, including filing and recording fees and expenses,
title insurance, fees and disbursements of counsel (including local
and foreign counsel) for providing such opinions as the Requisite
Lenders may request and (II) any amendment, waiver or consent relating
to any Credit Document, whether or not any such amendment, waiver or
consent is executed or becomes effective and (iv) out-of-pocket costs,
fees and expenses (including the reasonable fees of each of Cahill
Gordon & Reindel, Edwards & Angell, FCC counsel to the Agents and each
other special counsel to the Agents) of each of the Agents and each
Lender incurred in connection with the enforcement of any Obligations
of, or the collection of any payments due from, any Loan Party under
the Credit Documents to which it is party by reason of any Event of
Default or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the nature of a
"work-out" or of any insolvency or bankruptcy proceedings, or
otherwise;
(2) to pay, and hold each of the Lenders and Agents
harmless from and against, any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save
each of the Lenders and Agents, harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to
pay such taxes; and
(3) to indemnify each of the Lenders and Agents and their
respective officers, directors, employees, representatives, agents,
attorneys-in-fact and Affiliates and each other Person, if any,
controlling them or any of their Affiliates within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act
(each, an "Indemnitee" and collectively, the "Indemnitees") from and
hold each of them harmless against any and all Losses
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resulting from, arising out of, in any way related to or by reason of,
(i) the execution, delivery, performance, administration or
enforcement of any Transaction Document, (ii) the statements contained
in, the financing transactions contemplated by or the use by any
Company of the Commitment Letter, the Term Sheet (as defined in the
Commitment Letter), the Fee Letters, the Prior Letter Agreements (as
defined in the Commitment Letter) or the Prior Term Sheet (as defined
in the Commitment Letter), (iii) the Lenders' agreement to make the
Loans, (iv) the use or intended use of the proceeds of any Loans
hereunder or the use of any Collateral (including the exercise by any
of the Agents or Lenders of rights and remedies or any power of
attorney with respect thereto and any action or inaction of any of the
Agents or Lenders under any Security Document), (v) the consummation
of any other transactions contemplated in any Transaction Document
(including the Contribution or any Acquisition) or (vi) the
performance by the Administrative Agent of its duties under Section
11.04(b); provided, however, that neither the Borrower nor any other
Loan Party pursuant to any other Credit Document shall be liable under
this Section 11.01(c) to an Indemnitee to the extent any Loss arises
from the gross negligence or bad faith of such Indemnitee (treating
for this purpose only, any Lender and its officers, directors,
employees, representatives, agents, attorneys-in-fact and Affiliates
as a single Indemnitee and either of the Agents and its officers,
directors, employees, representatives, agents, attorneys-in-fact and
Affiliates as a single Indemnitee). Notwithstanding anything to the
contrary in the foregoing, it is expressly agreed and understood that
the Prior Letter Agreements and the Prior Term Sheet, including the
indemnification provisions thereof, and the indemnification provisions
of Section 6 of the Commitment Letter have terminated and are null,
void and without any effect whatsoever implied or express, and any and
all rights to indemnification, if any, by any Indemnitee hereunder
shall arise solely under the terms and conditions of this Agreement,
it being the intent of the parties that any claim for indemnification
by the Indemnitees with respect to any Losses arising out of or in
connection with, or relating to the Commitment Letter, Prior Letter
Agreements or Prior Term Sheet shall only be an indemnifiable claim
under this Agreement to the extent such claim is indemnifiable solely
under this Agreement without regard in any way to the existence of, or
terms and conditions contained in, Section 6 of the Commitment Letter,
the Prior Letter Agreements or the Prior Term Sheet.
To the extent that the undertaking to indemnify and hold
harmless set forth in this Section 11.01 is unenforceable
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because it is violative of any law or public policy or otherwise, the
Borrower 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 any of the Indemnitees.
The Borrower also agrees on its own behalf and on behalf of
the other Loan Parties that no Indemnitee shall have any liability
(whether direct or indirect, in contract or tort or otherwise) for any
Losses to any Loan Party or any Loan Party's security holders or
creditors resulting from, arising out of, in any way related to or by
reason of, any matter referred to in clauses (i)-(vi) of the first
paragraph of this Section 11.01(c), except to the extent that any Loss
arises from the gross negligence or bad faith of such Indemnitee.
In the event that any Indemnitee is requested or required to
appear as a witness in any Proceeding brought by or on behalf of or
against the Borrower or the Parent or any Affiliate of the Borrower or
the Parent in which such Indemnitee is not named as a defendant, the
Borrower agrees to reimburse each Indemnitee for all reasonable
out-of-pocket expenses and all reasonable allocable costs of in-house
legal counsel incurred by each Indemnitee in connection with such
Indemnitee's appearing and preparing to appear as such a witness,
including the reasonable fees and disbursements of each Indemnitee's
legal counsel.
The Borrower agrees on its own behalf and on behalf of each
other Loan Party that, without the prior written consent of the Agents
and the Requisite Lenders (not to be unreasonably withheld), no Loan
Party will settle, compromise or consent to the entry of any judgment
in any pending or threatened Proceeding in respect of which
indemnification could be sought under the indemnification provisions
of this Section 11.01 (whether or not any Indemnitee is an actual or
potential party to such Proceeding), unless such settlement,
compromise or consent includes an unconditional written release
reasonably satisfactory to the Agents and the Requisite Lenders of
each Indemnitee from all liability arising out of such Proceeding and
does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Indemnitee and
does not involve any payment of money or other value by any Indemnitee
or any injunctive relief or factual findings or stipulations binding
on any Indemnitee.
11.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during
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the continuance of any Event of Default, each Lender is hereby authorized by
the Borrower at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Loan Party or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate
and apply any and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other Indebtedness at any time held or owing by such Lender (including by
branches and agencies of such Lender wherever located) to or for the credit or
the account of any Loan Party against and on account of the Obligations and
liabilities of such Loan Party to such Lender under this Agreement or under any
other Credit Document, including all interests in Obligations of such Loan
Party purchased by such Lender pursuant to Section 11.06(b), and all other
claims of any nature or description arising out of or connected with any Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured. Notwithstanding the foregoing, any Lender
exercising any right to setoff hereunder shall promptly thereafter deliver to
the Agents and the Borrower a written notice thereof; provided, however, that
any failure to deliver such notice shall not, in any event, limit such Lender's
or any other Lender's setoff rights hereunder or otherwise.
11.03 Notices. (1) Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing and mailed, telegraphed, telexed, telecopied, cabled, sent by a
nationally recognized express courier or delivered by hand to the addresses set
forth on, with respect to the Lenders, Annex II and, with respect to the
Agents, Annex I; or, at such other address as shall be designated by any party
in a written notice to the other parties hereto as provided in this Section
11.03. All such notices and communications shall be effective at the earliest
to occur of receipt, three Business Days after deposit in the United States
mail, one Business Day after delivery to a nationally recognized express
courier, delivery to a telegraph or cable company and telephone confirmation of
receipt of telex or telecopier communication; provided, however, that notices
and communications to any of the Agents shall not be effective until actually
received by such Agent or Administrative Agent.
(2) Any Lender giving any notice to any Loan Party shall
simultaneously send a copy thereof to the Agents, and the Administrative Agent
shall promptly notify the other Lenders of the receipt by it of any such
notice.
(3) Each of the Lenders and Agents may rely on any notice
(whether or not such notice is made in a manner permitted or
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required by this Agreement or any other Credit Document) purportedly made by or
on behalf of any Loan Party, and none of the Agents or Lenders shall have any
duty to verify the identity or authority of any Person giving such notice.
11.04 Benefit of Agreement; Assignments; Participations.
(1) Benefit. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto, all future
holders of the Revolving Notes, and their respective successors and assigns;
provided, however, that no Loan Party may assign or transfer any of its rights,
interests or obligations under any Credit Document without the prior written
consent of each Lender except as specifically permitted by any such Credit
Document; provided, further, however, that the rights of each Lender to
transfer, assign or grant participations in its rights or obligations hereunder
shall be limited as set forth below in this Section 11.04.
(2) Assignments. Any Lender may at any time assign all
or any part of such Lender's Loans, Revolving Notes or Commitments, but only to
(x) its parent company, any Affiliate of such Lender or any other Lender or (y)
one or more commercial banks, financial institutions, "accredited investors" or
"qualified institutional buyers" (as defined in SEC Regulation D and SEC Rule
144A, respectively); provided, however, that (i) such assignment shall be made
pursuant to an Assignment Agreement substantially in the form of Exhibit S and
(ii) in the case of any assignment to a Person specified in clause (y), (A)
such assignment shall be made only with the prior written consents of each of
the Administrative Agent and the Borrower, which consents shall not be
unreasonably withheld or delayed; provided, however, that no consent of the
Borrower shall be required if any Default or Event of Default has occurred and
is continuing at the time of such assignment, and (B) if such assignment is for
less than all of such assigning Lender's remaining rights and obligations under
this Agreement and the other Credit Documents, (I) such assigning Lender shall
retain, after such assignment, a minimum principal amount of $5,000,000 of the
Commitments and (II) such assignment shall be in an aggregate principal amount
of not less than $5,000,000 of the Commitments.
To effect any assignment pursuant to this Section 11.04(b),
the assigning Lender shall deliver to the Administrative Agent and the
Borrower, (1) a written notice of assignment in the form of Exhibit T, (2) a
copy of any consents required by clause (ii)(A) above, (3) a copy of a properly
executed and delivered Assignment Agreement required by clause (i) above and
(4) if the assignee was not a Lender prior to the assignment, a fee of $3,500
in connection with the Administrative Agent's processing and
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recording of such assignment. Within one Business Day of receiving the
foregoing, the Administrative Agent shall record such assignment in the
Register and give notice of effectiveness thereof to the Borrower, the Agent
and each Lender. The assignment shall be deemed effective at the close of
business on the date of such recordation or such later date specified in the
Assignment Agreement as the Settlement Date. Upon such effectiveness, the
assignee shall become a "Lender" for all purposes of this Agreement and the
other Credit Documents and to the extent of such assignment, the assigning
Lender shall, except with respect to Sections 10.07 and 11.01 and, with respect
only to liabilities thereunder to such Lender that accrued or otherwise arose
by reason of circumstances or events prior to such assignment, Sections 1.10,
1.11 and 3.05, relinquish its rights and be relieved of its obligations
hereunder with respect to the Commitments, Revolving Notes or Loans being
assigned. Prior to such effectiveness, all amounts owing to the assigning
Lender with respect to such Loans shall remain owing by the Borrower to such
assigning Lender. If requested by the assignee Lender, the Borrower shall, at
the sole expense of the Borrower and in exchange for the Revolving Note being
assigned, issue one or more new Revolving Notes to the assignee in accordance
with the terms of the Revolving Notes being assigned.
(3) Participations. Any Lender may at any time transfer,
grant or sell participations in all or any part of such Lender's Loans,
Revolving Notes or Commitments to any Person; provided, however, that, except
as provided in the next sentence, (i) such Lender shall remain a "Lender" for
all purposes of this Agreement and the transferee of such participation shall
not constitute a Lender hereunder; (ii) the parties hereto shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Credit Documents; and (iii) no participant
(unless and only to the extent such participant is itself a Lender) shall be
entitled to require such Lender to take or refrain from taking action under
this Agreement or any other Credit Document, except that such Lender may agree
with such participant that such Lender will not, without such participant's
consent, agree to any amendment or waiver of this Agreement described in
Section 11.12(i)-(ii). Notwithstanding the foregoing, any such participant
shall be considered to be a "Lender" for purposes of Sections 1.10, 1.11, 3.05,
11.01, 11.02 and 11.06 with respect to its participation; provided, however,
that no participant shall be entitled to receive any greater amount pursuant to
Section 1.10, 1.11 or 3.05 than the transferor Lender would have been entitled
to receive in respect of the participation effected by such transferor Lender
had no participation occurred.
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(4) Assignments to Federal Reserve Bank. Nothing in this
Section 11.04 shall prevent or prohibit any Lender from pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank.
(5) Information to Transferees. The Borrower on its own
behalf and on behalf of each of its Subsidiaries authorizes each Lender to
disclose to any participant or assignee (each, a "Transferee") and any
prospective Transferee any and all financial information in such Lender's
possession concerning any such Loan Party which has been delivered to such
Lender by or on behalf of any such Loan Party pursuant to any Credit Document
or which has been delivered to such Lender by any such Loan Party in connection
with such Lender's credit evaluation of the Loan Parties prior to entering into
this Agreement; provided, however, that any information not publicly available
(i.e., through SEC filings, press releases, etc.) shall be deemed to be
designated by the Borrower to be material non-public information and such
Lender may so disclose such information only if such Transferee or prospective
Transferee agrees to hold such information confidential in accordance with the
provisions of Section 11.21. In addition, each of the Agents may furnish any
information concerning any Loan Party in such Agent's possession to any
Affiliate of such Agent. The Borrower shall and shall cause each of its
Subsidiaries to assist any Lender in effectuating any assignment or
participation pursuant to this Section 11.04 (including during syndication) in
whatever manner such Lender reasonably deems necessary, including the
participation in meetings with prospective Transferees.
(6) Register. The Administrative Agent shall maintain at
its address specified in Section 11.03 a copy of each Assignment Agreement
delivered to and accepted by it and a register in which it shall record the
names and addresses of the Lenders and the Commitment of, and principal amount
of the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Loan Parties, the Agents and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Loan Parties, the Agent or any Lender at any reasonable time and from to
time upon reasonable prior notice.
11.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of any of the Agents or Lenders in exercising any right, power or
privilege under any Credit Document and no course of dealing between any Loan
Party and any of the Agents or Lenders shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power, or privilege under
any Credit
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Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege under such Credit Document. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which any of the Agents or Lenders would otherwise have. No
notice to or demand on any Loan Party in any case shall entitle any Loan Party
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any of the Agents or Lenders to any other
or further action in any circumstances without notice or demand.
11.06 Payments Pro Rata; Ratable Sharing. (1) The
Administrative Agent agrees that promptly after its receipt of each payment
from or on behalf of any Loan Party in respect of any Obligations of such Loan
Party, it shall distribute such payment to the Lenders based upon their
respective Pro Rata Shares, if any, of the Obligations with respect to which
such payment was received.
(2) Each Lender and each subsequent holder by acceptance of a
Revolving Note agree among themselves that (i) with respect to all amounts
received by them which are applicable to the payment of principal of or
interest on the Revolving Notes and amounts payable in respect of Commitment
Commissions, equitable adjustment will be made so that, in effect, all such
amounts will be shared among the Lenders pro rata based on their respective
shares of the Obligations with respect to which such payment was received,
whether received by voluntary payment, by the exercise of the right of setoff
or banker's lien, by counterclaim or cross action or by the enforcement of any
or all of the Revolving Notes, (ii) if any of them shall exercise any right of
counterclaim, setoff, banker's lien or similar right with respect to amounts
owed by any Loan Party hereunder or under the Revolving Notes that Lender or
holder, as the case may be, shall apportion the amount recovered as a result of
the exercise of such right pro rata in accordance with each Lender's Pro Rata
Share, and (iii) if any of them shall thereby through the exercise of any right
of counterclaim, setoff, banker's lien 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 and
interest due with respect to the Revolving Notes held by the Lender or holder,
or any other amount payable hereunder which is greater than the proportion
received by any other holder of the Revolving Notes in respect of the aggregate
amount of principal and interest due with respect to the Revolving Notes held
by it or any other amount payable hereunder that Lender or that holder of the
Revolving Notes receiving such proportionately greater payments shall (y)
notify each other Lender and the Agent of such receipt and (z) purchase for
cash, without recourse or warranty, participations (which it shall be deemed to
have done
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simultaneously upon the receipt of such payment) in the Revolving Notes held by
the other holders so that all such recoveries of principal and interest with
respect to the Revolving Notes shall be proportionate to their respective Pro
Rata Shares; provided, however, that if all or part of such proportionately
greater payment received by such purchasing holder is thereafter recovered from
such holder, those purchases shall be rescinded and the purchase prices paid
for such participations shall be returned to that holder to the extent of such
recovery, but without interest. The Borrower expressly consents to the
foregoing arrangement.
11.07 Accounting Principles; Calculations. (1) As used
herein, "GAAP" shall mean generally accepted accounting principles in the
United States, applied on a basis consistent with the principles used in
preparing the Financial Statements of the Parent and its consolidated
Subsidiaries as of December 31, 1994 and for the fiscal year then ended.
(2) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters shall be
made, and all Financial Statements to be delivered pursuant to this Agreement
shall be prepared, in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
(3) All computations of interest and fees hereunder shall be
made on the actual number of days elapsed over a year of 365 days; provided,
however, that all computations of interest on LIBOR Loans shall be made on the
actual number of days elapsed over a year of 360 days.
11.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (1)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICT OF LAWS.
(2) ANY PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, THE BORROWER ON ITS OWN BEHALF AND ON BEHALF OF
EACH OTHER MEMBER OF THE BORROWER GROUP HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
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WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT. THE BORROWER ON ITS OWN
BEHALF AND ON BEHALF OF EACH OTHER MEMBER OF THE BORROWER GROUP FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE RESPECTIVE MEMBER OF THE BORROWER GROUP
AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 11.03, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER ON ITS OWN BEHALF AND ON
BEHALF OF EACH OTHER MEMBER OF THE BORROWER GROUP DESIGNATES AND APPOINTS CEA,
INC. 375 PARK AVENUE, NEW YORK, NEW YORK 10152 AND SUCH OTHER PERSONS AS MAY
HEREAFTER BE SELECTED BY THE BORROWER IRREVOCABLY AGREEING IN WRITING TO SERVE,
AS ITS AND SUCH LOAN PARTY'S AGENT TO RECEIVE ON SUCH LOAN PARTY'S BEHALF,
SERVICE OF ALL PROCESS IN ANY PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY THE BORROWER ON ITS OWN BEHALF AND ON BEHALF OF EACH
OTHER MEMBER OF THE BORROWER GROUP TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL
TO THE LOAN PARTY SO SERVED AT ITS ADDRESS PROVIDED IN SECTION 11.03 EXCEPT
THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED
BY THE BORROWER REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, THE BORROWER
HEREBY AGREES ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER MEMBER OF THE
BORROWER GROUP THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE AGENT OR
ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER
JURISDICTION.
(3) THE BORROWER ON ITS OWN BEHALF AND ON BEHALF OF EACH
OTHER LOAN PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
11.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same
instrument.
11.10 Effectiveness. This Agreement shall become effective
on the date (the "Effective Date") on which the Borrower and each of the
Lenders shall have signed a copy hereof (whether
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the same or different copies) and shall have delivered the same to the
Administrative Agent at the Administrative Agent's Office or, in the case of
the Lenders, shall have given to the Administrative Agent telephonic (confirmed
in writing), written, telex or telecopy notice (actually received) at such
office that the same has been signed and mailed to it. The Administrative
Agent will give the Borrower, the Parent and each Lender prompt written notice
of the Effective Date.
11.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
11.12 Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be amended, waived,
discharged or terminated unless such amendment, waiver, discharge or
termination is in writing signed by the Requisite Lenders; provided, however,
that no such amendment, waiver, discharge or termination shall, without the
prior written consent of each affected Non-Defaulting Lender and the Agents:
(i) extend the scheduled final maturity (which expressly shall not include the
exercise of the Extension Option) of any Loan or Revolving Note, or any portion
thereof, or reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase in
interest rates) thereon or fees or reduce the principal amount thereof, or
increase the Commitment of any Lender over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment shall not constitute a change in
the terms of any Commitment of any Lender); (ii) release all or substantially
all of the Collateral or Guarantees (except as expressly permitted by the
Credit Documents); (iii) amend or waive any provision of this Section, or
Section 1.10(e), 1.11, 3.05, 10.07, 11.01, 11.02, 11.04, 11.06 or 11.07(c);
(iv) reduce any percentage specified in, or otherwise modify, the definition of
Requisite Lenders or Applicable Lenders; or (v) consent to the assignment or
transfer by the Borrower or the Parent of any of its rights and obligations
under any Credit Document; provided, further, however, that any provision of
any Credit Document that, by its express terms, requires the agreement or
consent of (A) all Lenders, shall not be amended, waived, discharged or
terminated without the prior written consent of all Lenders or (B) the
Applicable Lenders, shall not be amended, waived, charged or terminated without
the prior written consent of the Applicable Lenders. No provision of Section
10 may be amended without the prior written consent of the Agents. The
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, waivers or consent
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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. In the
case of any waiver effected in accordance with this Section 11.12, the Loan
Parties, the Lenders and the Agents shall be restored to their former position
and rights under each Credit Document, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon. Any amendment, termination, waiver or consent
effected in accordance with this Section 11.12 shall be binding upon each
holder of the Revolving Notes at the time outstanding, each future holder of
the Revolving Notes, and, if signed by the Borrower, on the Borrower and the
other Loan Parties.
11.13 Survival. All representations and warranties of each
Loan Party contained herein or in any other Credit Document or made in
connection herewith or therewith shall survive the making of, and shall not be
waived by the execution and delivery of, this Agreement or any other Credit
Document, any investigation by (or on behalf of) or knowledge of any of the
Agents or Lenders, the making of any Loan or any other event or condition
whatsoever. All covenants and agreements of each Loan Party contained herein
or in any other Credit Document shall continue in full force and effect from
and after the date hereof so long as the Borrower may borrow hereunder and
until payment in full of all Obligations. Without limitation, all obligations
of the Borrower and of the Parent under any Credit Document to make payments to
or indemnify any Indemnitee including pursuant to Sections 1.10, 1.11, 3.05 and
11.01, shall survive the payment in full of all Obligations, cancellation of
the Revolving Notes, termination of the Borrower's right to borrow, and all
other events and conditions whatsoever. In addition, all obligations of each
Lender under the Credit Documents to make payments to or indemnify the Agents
shall survive the payment in full by the Loan Parties of all Obligations,
termination of the Borrower's right to borrow and all other events or
conditions whatsoever.
11.14 WAIVERS. (1) EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 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
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on the waiver in entering into this Agreement, and that each will continue to
rely on the waiver in their related future dealings. Each party hereto 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, AND THE WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS OR REPLACEMENTS TO THIS AGREEMENT,
THE OTHER CREDIT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THE LOANS. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
(2) The Borrower, on behalf of itself and each of the other
Loan Parties, waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover any special, exemplary, punitive or consequential
damages from any of the Agents or Lenders in any Proceeding in connection with,
arising out of, or in any way related to the transactions contemplated herein
or in any other Document.
(3) The Borrower, on its own behalf and on behalf of each of
the other Loan Parties, hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations and any
requirement that any Lender protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against any
other Loan Party or any other Person or any collateral or other direct or
indirect security for any of the Obligations.
11.15 Independence of Representations, Warranties and
Covenants. The representations, warranties and covenants contained herein
shall be independent of each other and no exception to any representation,
warranty or covenant shall be deemed to be an exception to any other
representation, warranty or covenant contained herein unless expressly
provided, nor shall any such exception be deemed to permit any action or
omission that would be in contravention of applicable law.
11.16 Severability; Modification to Conform to Law. It is
the intention of the parties that this Agreement be enforceable to the fullest
extent permissible under applicable law, but that the unenforceability (or
modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder hereof. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, this Agreement shall, as to such jurisdiction, be
deemed amended to modify or delete, as necessary, the offending provision or
provisions and to alter the bounds
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thereof in order to render it or them valid and enforceable to the maximum
extent permitted by applicable law, without in any manner affecting the
validity or enforceability of such provision or provisions in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
11.17 Obligations Several; Independent Nature of Lenders'
Rights. The obligation of each Lender hereunder is several, and no Lender
shall be responsible for the obligation or commitment of any other Lender
hereunder. Nothing contained in this Agreement and no action taken by the
Lenders pursuant hereto shall be deemed to constitute the Lenders to be 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. Notwithstanding the foregoing, each Lender agrees that no Lender
shall have any right individually to seek to enforce any Security Document or
to realize upon the security granted by the Security Documents, it being
understood that such rights and remedies may be exercised only by the
Collateral Agent for the benefit of the Secured Parties.
11.18 Prior Understandings. This Agreement and the other
Credit Documents supersede all prior and contemporaneous understandings and
agreements, whether written or oral, among the parties hereto relating to the
transactions provided for herein and therein, except that the following shall
continue to remain in effect: (a) the Commitment Letter (other than (A) the
Term Sheet (as defined in the Commitment Letter), (B) the indemnification
provisions of Section 6 of the Commitment Letter and (C) the commitments of
Merrill Lynch and CIBC Inc. thereunder) and (b) each of the Fee Letters.
11.19 Agent's or Lender's Consent. Except in those
circumstances as may otherwise be expressly provided for in this Agreement,
whenever the consent of any of the Agents or Lenders is required to be obtained
under any Credit Document as a condition to any action, inaction, condition or
event, such Person shall be authorized to give or withhold such consent in its
sole and absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
11.20 Distribution of Documents. Each of the Agents
severally agrees (x) to inform the Borrower of all documents and other written
materials distributed by it or on its behalf to Lenders (unless such were
provided by any Loan Party) and to
<PAGE> 162
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furnish the Borrower with a copy of the same (unless such were provided by any
Loan Party) and (y) promptly to provide to such Lenders any supplement to any
such document or other written materials provided by the Borrower to it and
identified by the Borrower to it as a supplement to be provided to such
Lenders; provided, however, that the foregoing shall not be applicable to any
document or other written materials not provided by or on behalf of the Loan
Parties and that relate to the rights or remedies of the Lenders or the Agents'
and Lenders' plans or proposals with respect thereto or the exercise thereof.
11.21 Confidentiality. Each Lender and each Agent agrees to
keep all non-public information obtained by it pursuant hereto and the other
Credit Documents confidential in accordance with such Lender's or such Agent's
customary practice and agrees that it will only use such information in
connection with the transactions contemplated by the Credit Documents and not
disclose any of such information other than (i) to such Lender's or such
Agent's partners, joint venture partners, parent company, employees,
representatives and agents who are or are expected to be involved in the
evaluation of such information in connection with the transactions contemplated
by the Credit Documents and who are advised of the confidential nature of such
information, (ii) to the extent such information presently is or hereafter
becomes available to such Lender or such Agent on a non-confidential basis from
a source other than any Loan Party, (iii) to the extent disclosure is required
by law, regulation or judicial order or requested or required by regulators or
auditors or may be necessary in connection with any Proceeding and (iv) as
permitted by Section 11.04(e).
<PAGE> 163
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
PAXSON COMMUNICATIONS TELEVISION, INC.
By:
-------------------------------------
Name:
Title:
MERRILL LYNCH CAPITAL CORPORATION,
as Arranger and Syndication Agent
By:
-------------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as Administrative
Agent and Collateral Agent
By:
-------------------------------------
Name:
Title:
MERRILL LYNCH CAPITAL CORPORATION
By:
-------------------------------------
Name:
Title:
CIBC INC.
By:
-------------------------------------
Name:
Title:
BANK OF MONTREAL
By:
-------------------------------------
<PAGE> 164
Name:
Title:
BANQUE PARIBAS
By:
-------------------------------------
Name:
Title:
<PAGE> 165
ANNEX I
Annex I
MERRILL LYNCH CAPITAL CORPORATION
Address: World Financial Center
c/o Merrill Lynch & Co.
North Tower - 7th Floor
250 Vesey Street
New York, New York 10281-1307
Contact: Neil Parachini
Telephone: (212) 449-6228
Telecopier: (212) 449-3976
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY
Address: 425 Lexington Avenue
New York, New York 10017
Contact: Lorain Granberg
Telephone: (212) 856-3630
Telecopier: (212) 856-3558
Copies to:
Contact: Loan Syndications
Telephone: (212) 856-3691
Telecopier: (212) 856-3763
<PAGE> 166
Annex II
<TABLE>
<CAPTION>
Commitments
-----------
<S> <C>
MERRILL LYNCH CAPITAL CORPORATION $17,500,000
Address: World Financial Center
c/o Merrill Lynch & Co.
North Tower - 7th Floor
250 Vesey Street
New York, New York 10281-1307
Contact: Neil Parachini
Telephone: (212) 449-6228
Telecopier: (212) 449-3976
CIBC INC. $22,500,000
Address: 425 Lexington Avenue
New York, New York 10017
Contact: Lorain Granberg
Telephone: (212) 856-3630
Telecopier: (212) 856-3558
BANK OF MONTREAL $17,500,000
Address: 430 Park Avenue
New York, New York 10002
Contact: Dolores Rivera
Telephone: (212) 605-1471
Telecopier: (212) 605-1618 or 605-1525
BANQUE PARIBAS $17,500,000
Address: 787 7th Avenue
New York, New York 10019
Contact: Nicole Cawley
Telephone: (212) 841-2597
Telecopier: (212) 841-2369
</TABLE>
<PAGE> 167
SCHEDULE 7.03
Certain Permitted Encumbrances
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
Section 6.04;
(ii) Liens in respect of property or assets of any Loan
Party imposed by law which (1) were incurred in the ordinary course of
business, such as carriers', warehousemen's and mechanics' Liens and
other similar Liens arising In the Ordinary Course, and (x) do not in
the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of any Loan Party or (y) are being contested in good faith by
appropriate proceedings that have been promptly instituted and
diligently pursued, and which proceedings have the effect of staying
the forfeiture or sale of the property or asset subject to such Lien
or (2) do not relate to material liabilities of any Loan Party and do
not in the aggregate materially detract from the value of the property
and assets of the Borrower Group taken as a whole;
(iii) Liens in connection with any attachment or judgment
not constituting an Event of Default under Section 8.07;
(iv) Liens (other than Liens imposed by ERISA) incurred or
deposits made in the Ordinary Course 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, performance and return-of-money bonds and other similar
obligations (other than any Lien in respect of the payment for
borrowed money or the equivalent);
(v) easements, rights of way, restrictions, minor defects
or irregularities in title not interfering in any material respect
with the ordinary conduct of the business of the Borrower Group
incurred In the Ordinary Course and which do not materially impair for
its intended purposes the real property (whether owned or leased) to
which it relates;
(vi) leases or subleases on real property other than
Mortgaged Real Property granted to others not interfering
<PAGE> 168
-158-
in any material respect with the business of any member of the
Borrower Group; and
(vii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement.
<PAGE> 1
EXHIBIT 10.6
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of this 22nd day of September, 1994, is
by and among PAXSON COMMUNICATIONS CORP., a Delaware corporation having its
principal offices at 18401 U.S. Highway 19 North, Clearwater, FL 34624 (the
"Lender"), and WHITEHEAD MEDIA, INC., a Florida corporation having its
principal offices at 12144 Classic Drive, Coral Springs, Florida 33071 (the
"Borrower").
W I T N E S S E T H:
WHEREAS, Krypton Broadcasting of Fort Pierce, Inc., a Florida
corporation, as Debtor-in-Possession operating under the protection of Chapter
11, Title 11, United States Code, is the licensee of Television Station
WTVX-TV, Fort Pierce/West Palm Beach, Florida (the "Station");
WHEREAS, the Borrower intends to participate in the bidding for the
sale of the assets of the Station pursuant to procedures (the "Bid Procedures")
authorized and approved by the United States Bankruptcy Court, Southern
District of Florida (the "Court"); and
WHEREAS, the Borrower desires to borrow funds from the Lender to
finance the purchase and operation of the Station.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender and the Borrower agree as follows:
ARTICLE I
AMOUNT AND TERMS OF THE LOANS
SECTION 1.01 THE LOAN. The Lender agrees, upon the terms
and conditions hereinafter set forth, to make a loan or loans to the Borrower
in an aggregate principal amount not to exceed at any one time outstanding
Thirteen Million One Hundred Fifty Thousand Dollars ($13,150,000.00) plus such
additional amounts that are reasonably requested by Borrower for the purposes
set forth in Section 1.05 and are approved by Lender in its sole discretion
(the "Loan").
SECTION 1.02 THE PROMISSORY NOTE. The outstanding
principal amount of the Loan shall be evidenced by and subject to the terms of
a promissory note, dated of even date herewith, substantially in the form set
forth as Exhibit 1 hereto (the "Note") payable to the order of the Lender and
representing the obligation of the Borrower to pay the Lender the amount of the
Loan, with interest thereon, as prescribed in Section 1.04. The Lender is
authorized to endorse the date and amount of the Loan and each repayment of
principal and/or interest with respect
<PAGE> 2
- 2 -
thereto on the Schedule A annexed to and constituting a part of the Note.
SECTION 1.03 INTEREST. The Loan shall bear interest on
the unpaid principal amount thereof at a rate per annum at all times equal to
one-half percent (1/2%) above the rate charged Lender by its senior lenders as
adjusted from time to time. Interest shall be calculated on the basis of a
year of three hundred sixty (360) days and actual number of days elapsed during
the period for which such interest is payable. Interest shall begin to accrue
on the outstanding principal amount of the Loan on the date of disbursement of
all or a portion of the Final Installment (as defined below) pursuant to
Section 1.05(b) (the "Final Installment Date"). The first payment of interest
to the Lender shall be due One Hundred Fifty (150) days after the acquisition
of the Station by the Borrower pursuant to Federal Communications Commission
("FCC") authority at which time all interest accrued from the Final Installment
Date shall become due and payable; thereafter, accrued interest shall be paid
monthly, on the same date as the principal payments are due pursuant to Section
1.04 hereof. If any installment of principal or interest is not paid when due,
that installment shall bear interest at a rate per annum equal to the lower of
the highest rate permitted by law or eighteen percent (18%) from the due date
thereof until paid in full.
SECTION 1.04 REPAYMENT OF THE LOAN. In the event that any
portion of the Loan is used by the Borrower to fund an escrow deposit or
similar payment toward the purchase of the Station (the "Deposit"), and such
deposit is returned to the Borrower, the amount of such deposit shall be
immediately repaid to Lender together with all interest earned on such deposit
and paid to the Borrower. In the event that a party other than the Borrower is
selected to acquire the Station, Borrower shall repay to Lender the outstanding
principal balance of the Loan (other than any portion of the Loan used to fund
the Deposit) no later than one hundred eighty (180) days after such other party
acquires the Station. One hundred eighty (180) days after the acquisition of
the Station by the Borrower pursuant to FCC authority, the Borrower shall begin
repayment to the Lender of the Loan by making consecutive, equal monthly
payments of principal and interest on the basis of an eighty-four (84) month
amortization schedule.
SECTION 1.05 USE OF PROCEEDS AND ADVANCEMENT OF FUNDS.
a) The proceeds of the Loan are to be used by the
Borrower exclusively for financing the purchase of the Station
<PAGE> 3
- 3 -
and for working capital and operating expenses relating to the Station.
b) The Lender shall loan to the Borrower the funds
required to acquire the Station, less the Deposit (the "Final Installment"), at
the closing of the acquisition of the Station, following final and
nonappealable FCC approval of the assignment of the FCC licenses of the Station
to the Borrower.
SECTION 1.06 INFORMATION. The Borrower agrees to furnish
to the Lender such information as the Lender may reasonably request in
connection with the Loan or the Station.
SECTION 1.07 PREPAYMENT. The Borrower may prepay the Note
in whole at any time, or from time to time in part, with accrued interest to
the date of prepayment on the amount prepaid, without penalty, provided that
each payment, other than for the full amount of the outstanding balance, shall
be in the amount of Ten Thousand Dollars ($10,000.00) or an integral multiple
thereof. Each prepayment on the Note shall be applied to installments of
principal payable on the Note in the inverse order of maturity.
SECTION 1.08 PAYMENT ON NON-BUSINESS DAYS. Whenever any
payment to be made hereunder or under the Note shall become due on a Saturday,
Sunday or public holiday, such payment may be made on the next succeeding
business day, and such extension of time in such case shall be included in the
computation of interest hereunder and under the Note.
ARTICLE II
CLOSING
SECTION 2.01 CLOSING DATE. Closing of this transaction
shall occur on the date that the Borrower submits a bid for the Station
pursuant to the Bid Procedures, or such other date agreed upon by the parties
hereto (the "Closing Date").
ARTICLE III
SECURITY
SECTION 3.01 SECURITY INTEREST. As security for the Loan,
the Borrower shall execute and deliver to the Lender, on or before the Closing
Date, a security agreement in the form of Exhibit 2 hereto (the "Security
Agreement").
SECTION 3.02 PLEDGE AGREEMENT. As further security for
the Loan, on or before the Closing Date, the Borrower shall
<PAGE> 4
- 4 -
deliver to the Lender a pledge agreement in the form of Exhibit 3, duly
executed by Eddie L. Whitehead (the "Shareholder"), the sole shareholder of the
Borrower (the "Pledge Agreement").
SECTION 3.03 LEASEHOLD MORTGAGES. At such time as the
Borrower enters into any lease, it shall execute with respect to such lease a
leasehold mortgage in form and substance satisfactory to Lender (the "Leasehold
Mortgage"), granting the Lender a lien on its leasehold interest under such
lease. In particular, and without limiting the generality of the foregoing,
the Borrower shall execute a Leasehold Mortgage with respect to each lease, if
any, that it assumes as part of the acquisition of the Station. If requested
by the Lender, the Borrower shall also deliver to the Lender with respect to
any lease to which the Borrower becomes a party (i) evidence of the filing of a
memorandum of lease in form and substance satisfactory to Lender, (ii) an
executed estoppel certificate in form and substance satisfactory to Lender,
(iii) an executed landlord's consent and waiver in form and substance
satisfactory to Lender, and (iv) an ALTA mortgagee's policy of title insurance
in customary form with respect to such lease.
SECTION 3.04 MORTGAGES. As such time as the Borrower
acquires any parcel of real estate, the Borrower shall execute a first mortgage
or deed of trust in favor of the Lender on such parcel, in form and substance
satisfactory to the Lender. If requested by the Lender, the Borrower shall
also deliver to the Lender an ALTA mortgagee's policy of title insurance in
customary form with respect to such parcel.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01 CONDITIONS PRECEDENT TO LOAN. The obligation
of the Lender to disburse from time to time any portion of the Loan hereunder
is subject to the condition precedent that the Lender shall have received all
of the following, on or before the Closing Date, in form and substance
satisfactory to the Lender:
(a) The Note, duly executed and delivered by the Borrower;
(b) The Security Agreement, together with appropriate
UCC-1 forms, duly executed and delivered by the Borrower;
<PAGE> 5
- 5 -
(c) The Pledge Agreement, duly executed and delivered by
the Shareholder together with stock certificates and blank stock powers;
(d) A certified copy of the resolutions of the Board of
Directors of Borrower evidencing approval of the execution, delivery and
performance of this Agreement, the Note and the Security Agreement and other
matters contemplated hereby;
(e) A Certificate of Good Standing for the Borrower; and
(f) Copies of all bid documents, including, without
limitation, the Asset Purchase Agreement (the "Purchase Agreement"), submitted
pursuant to the Bid Procedures.
SECTION 4.02 CONDITIONS PRECEDENT TO FINAL INSTALLMENT. The
obligation of the Lender to advance the Final Installment to the Borrower is
subject to the condition precedent that the Lender shall have received each of
the following, on or before the Final Installment Date, in form and substance
satisfactory to the Lender:
(a) Leasehold Mortgages, to the extent required by
Section 3.03;
(b) A Certificate of Good Standing for the Borrower in
the State of Florida as of a recent date prior to the Final Installment Date;
(c) Copies of the certificates evidencing the insurance
required to be maintained by the Borrower pursuant to Section 6.01(e);
(d) Any memorandum of lease, to the extent required by
Section 3.03;
(e) Executed estoppel certificates, to the extent
required by Section 3.03;
(f) Executed landlord's consents and waivers, to the
extent required by Section 3.03;
(g) Evidence, in form and substance acceptable to Lender,
that Borrower has been selected to acquire the Station and that the sale of the
Station to Borrower has been approved by the Court pursuant to a final,
non-appealable order;
(h) A copy of the Purchase Agreement and each other
contract, certificate and other document executed by the Borrower
<PAGE> 6
- 6 -
or the seller of the Station in connection with the Borrower's acquisition of
the Station; and
(i) Such other agreements, certificates, opinions of
counsel and documents that the Lender may reasonably require.
SECTION 4.03 COMPLIANCE. All of the representations and
warranties of the Borrower in this Agreement shall be true and accurate in all
material respects on and as of the Closing Date and the date of any subsequent
disbursement of any portion of the Loan, as if made on and as of such date and
time. The Borrower shall be in compliance with all of the applicable terms and
provisions of this Agreement and no Event of Default or any event which with
the lapse of any applicable grace period or the giving of notice or both would
constitute an Event of Default shall have occurred and be continuing. The
Borrower shall have performed all obligations and taken all actions to be
performed or taken by it hereunder on or prior to such date. On the Closing
Date, the Borrower shall deliver to the Lender a certificate, dated as of such
date and signed by an executive officer of the Borrower, certifying compliance
with the conditions of this Section 4.03. Each disbursement of all or a
portion of the Loan to the Borrower shall in and of itself, constitute a
representation and warranty that the Borrower as of the date of such Loan, is
in compliance with this Section and if the Borrower is not in compliance with
this Section, the Lender shall not be required to disburse such Loan to the
Borrower.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 REPRESENTATIONS AND WARRANTIES OF BORROWER.
In order to induce the Lender to enter into this Agreement and make the Loan,
Borrower represents and warrants as follows:
(a) Existence and Standing. Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Florida and is qualified to do business and in good standing under the
laws of any other jurisdiction in which it conducts its business, and has all
requisite power and authority, corporate or otherwise, to conduct its business,
to own its properties and to execute and deliver, and to perform all of its
obligations under this Agreement, the Note, any Leasehold Mortgage, the
Security Agreement and all other documents that have been or will be executed
and delivered by the Borrower pursuant to this Agreement.
<PAGE> 7
- 7 -
(b) Authorizations, Compliance with Laws. The execution,
delivery and performance by the Borrower of this Agreement, the Note, any
Leasehold Mortgage, the Security Agreement and all other documents required to
be executed and delivered by the Borrower pursuant to this Agreement have been
duly authorized by all necessary corporate action and do not and will not (i)
violate (A) any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Borrower or (B) any provision of the charter or by-laws of
the Borrower; or (ii) result in a breach of or constitute a default under any
agreement or instrument to which the Borrower is a party or by which its
properties may be affected; or (iii) result in the creation of a lien, charge
or encumbrance of any nature upon the Borrower's properties or assets other
than as contemplated by this Agreement.
(c) No Consent. No authorization, consent, approval,
license, exemption of or filing or registration with any court or governmental
department or agency, except for filing with the FCC, is or will be necessary
to the valid execution, delivery and performance by the Borrower of this
Agreement, the Note, any Leasehold Mortgage, the Security Agreement or any
other document required to be executed and delivered by the Borrower pursuant
to this Agreement.
(d) Binding Obligations. This Agreement, the Note, any
Leasehold Mortgage, the Security Agreement and all other documents required to
be executed and delivered by the Borrower pursuant to this Agreement have been
or will be executed and delivered by duly authorized officers of the Borrower
and constitute or will constitute, legal, valid and binding obligations of the
Borrower enforceable in accordance with their respective terms.
(e) Litigation. There are no actions, suits or
proceedings pending, or, to the knowledge of the Borrower, threatened against
or affecting the Borrower or its properties before any court or governmental
department or agency which materially adversely affects the transactions
contemplated by this Agreement or which would have a material adverse effect on
the business, properties, operation or condition of the Borrower.
(f) No Default. The Borrower is not in default in the
performance, observance or fulfillment of any of the obligations or conditions
contained in any material agreement or instrument to which it is a party, nor
with respect to any order, judgment, writ, injunction or decree of any court,
governmental authority or arbitration board.
<PAGE> 8
- 8 -
(g) Compliance with Laws. The Borrower has complied with
all applicable federal, state and local laws. The Borrower has obtained all
necessary licenses and permits required for the conduct of its business and
operations or such licenses and permits have been applied for and are now being
diligently pursued.
(h) Taxes. The Borrower has filed all tax returns and
reports (federal, state and local) required to be filed by it, and has paid all
taxes shown thereon, including interest and penalties, and all assessments
received by it (except to the extent that the same are being contested in good
faith by appropriate proceedings diligently prosecuted and as to which adequate
reserves have been set aside on the books of the Borrower in conformity with
generally accepted accounting principles).
(i) Title to Properties. The Borrower has good and
marketable title to all of its property and assets and valid and enforceable
leasehold interests in the property which it holds under lease, all such
property, assets and leasehold interests being free and clear of any and all
mortgages, deeds of trust, assignments, liens, security interests, charges or
encumbrances of any nature whatsoever, except for those created hereby, and no
mortgages, deeds of trust, financing statements or other evidences of security
interests covering all or any of the aforesaid property are on file among the
records of any public office, except those evidencing a security interest in
favor of the Lender.
(j) Material Misstatement. No statement made herein or
information, exhibit or report furnished by the Borrower to the Lender in
connection with this Agreement or its negotiation, contains any material
misstatement of fact or omits to state a material fact or any fact necessary to
make the foregoing not misleading.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01 AFFIRMATIVE COVENANTS. So long as the Note
shall remain unpaid, the Borrower hereby covenants and agrees that it will,
unless the Lender shall otherwise consent in writing:
(a) Payment of Obligations. Pay punctually and discharge
when due: (i) all indebtedness heretofore or hereafter incurred; (ii) all
taxes, assessments and governmental charges or levies imposed upon it or its
income or profits, or upon any
<PAGE> 9
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properties belonging to it; (iii) claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons which, if unpaid might
become a lien or charge upon the property of the Borrower; provided that this
covenant shall not require the payment of any of the matters set forth in (i),
(ii) and (iii) above if the same shall be contested in good faith and by proper
proceedings diligently pursued and as to which adequate reserves have been set
aside on the books of the Borrower in accordance with generally accepted
accounting principles.
(b) Preservation of Existence. Preserve and maintain its
respective corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation.
(c) Maintenance of Properties. Maintain and preserve all
of its properties necessary or useful in the proper conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(d) Compliance with Laws. Comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority.
(e) Maintenance of Insurance. Maintain with responsible
and reputable insurance companies policies on all of its properties and
covering such risks, including public liability and workers' compensation, in
such amounts as are usually carried by companies engaged in similar businesses
and owning similar properties as the Borrower, and promptly upon execution
thereof provide to the Lender copies of all such policies and any riders or
amendments thereto. The policies of insurance required hereunder shall name
the Lender as an additional loss payee or additional insured, as applicable,
and shall provide that the Lender shall receive at least thirty (30) days'
written notice prior to the cancellation, termination or alteration of any such
policy.
(f) Operations in Ordinary Course. Continue to operate
its business in the ordinary course.
(g) Perfection of Liens. Do all things requested by the
Lender to preserve and perfect the liens and security interests of the Lender
arising pursuant to the Security Agreement, the Pledge Agreement, any Leasehold
Mortgage or any other agreement required hereunder as first liens and security
interests.
(h) FCC Approval. If counsel to the Lender reasonably
determines that the consent of the FCC is required in connection
<PAGE> 10
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with the execution, delivery and performance of this Agreement, the Pledge
Agreement, the Security Agreement or any other document delivered to the Lender
in connection herewith or therewith or as a result of any action which may be
taken pursuant hereto or thereto, then the Borrower, at its sole cost and
expense, agrees to use its best efforts to secure such consent and to cooperate
with the Lender in any action commenced by the Lender to secure such consent.
(i) Purchase Agreement. In the event Borrower is
selected to acquire the Station, Borrower shall execute and deliver the
Purchase Agreement and comply with its obligations thereunder.
SECTION 6.02 NEGATIVE COVENANTS. So long as the Note
shall remain unpaid and the Agreement shall not have been terminated, the
Borrower hereby covenants that it will not, without the Lender's prior written
approval:
(a) Indebtedness. Create or incur, assume or suffer to
exist any indebtedness, obligation or liability, whether matured or unmatured,
liquidated or unliquidated, direct or contingent, joint or several, except for:
(i) indebtedness evidenced by the Note; and (ii) indebtedness (other than for
borrowed money) incurred in the ordinary course of business not to exceed Fifty
Thousand Dollars ($50,000.00) in the aggregate at any one time.
(b) Liens. Create, assume or suffer to exist, directly
or indirectly, any security interest, mortgage, deed of trust, pledge, lien,
charge or other encumbrance, of any nature whatsoever upon any of its
properties or assets, now owned or hereafter as acquired, excluding, however,
from the operation of this covenant:
(i) any security interest or lien created
pursuant to this Agreement;
(ii) liens for taxes or assessments either not
delinquent or the validity of which are being contested in good faith by
appropriate legal or administrative proceedings and as to which adequate
reserves shall have been set aside on its books, in conformity with generally
accepted accounting principles;
(iii) materialmen's, mechanics', carriers',
workmen's, repairmen's, warehousemen's or other like liens arising in the
ordinary course of business and either not yet due and payable or being
contested in good faith by appropriate legal proceedings and as to which
adequate reserves shall have been set
<PAGE> 11
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aside on its books, in conformity with generally accepted accounting
principles;
(iv) deposits or pledges to secure payment of
workers' compensation, unemployment insurance or other social security benefits
or obligations; or
(v) any judgment lien, unless the judgment it
secures shall not, within thirty (30) days after the entry thereof, have been
discharged, vacated, reversed, or execution thereof stayed pending appeal, or
shall not have been discharged, vacated or reversed within thirty (30) days
after the expiration of any such stay.
(c) Disposition of Assets. Sell, transfer, lease or
otherwise dispose of all or any material part of its assets other than in the
ordinary course of business and in exchange for collateral of like value in
which the Lender shall have a security interest.
(d) Merger. Enter into any consolidation or merger with,
or into any acquisition of all or substantially all of the properties or assets
of any person or entity.
(e) Transfer or Issuance of Shares. Permit the issuance
or transfer of any shares of the capital stock of the Borrower, or any options,
warrants, convertible securities or other rights to purchase the Borrower's
stock . The preceding sentence shall not apply to (i) transfers to the Lender;
(ii) transfers resulting from the death of the Shareholder; and (iii) transfers
effected by the Shareholder with the prior written consent of the Lender (which
shall not be unreasonably withheld), solely for estate planning purposes of the
Shareholder.
(f) Change of Business. Change, in any material respect,
the nature or character of its business as intended, or engage in any activity
not reasonably related to such business.
(g) Remove Assets. Remove any of the assets procured
with the proceeds of the borrowings provided for herein, or any replacements
for such assets, to a jurisdiction in which no financing statement on Form
UCC-1 has been filed by the Lender with respect to such assets.
(h) Distributions or Dividends. Declare or make,
directly or indirectly, any payment or distribution, or incur any liability for
the purchase, acquisition, redemption or retirement of any capital stock of the
Borrower or as a dividend, return of capital or other payment or distribution
of any kind to a
<PAGE> 12
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shareholder of the Borrower or any affiliate of the Borrower (other than any
stock dividend or stock split or similar distribution payable only in capital
stock of the Borrower) in respect of the Borrower's capital stock, except that
the Borrower may declare one annual dividend per year on all classes of its
capital stock with the prior written consent of the Lender.
(i) Transactions with Affiliates. Enter into any
transaction or agreement with any affiliate of the Borrower.
(j) Contracts. Enter into any contract or commitment
relating to its stock or assets except for contracts involving aggregate
payments of less than Five Thousand Dollars ($5,000.00) and contracts which can
be terminated without penalty on thirty (30) days' notice or less, or amend or
terminate any material contract (or waive any substantial right thereunder), or
incur any obligation (including obligations relating to the borrowing of money
or guarantee of indebtedness).
(k) Adverse Change. Suffer any material adverse change
in the business, assets, properties, prospects or condition (financial or
otherwise) of the Borrower or the Station, or any damage, destruction or loss
affecting any assets used or useful in the conduct of the business of the
Borrower.
(l) Employee Compensation. Suffer any material increase
in excess of the reasonable range in the broadcast industry in the same or
similar markets in compensation payable or to become payable to any employees,
or any bonus payment made or promised to any employee, or any material change
in personnel policies, insurance benefits or other compensation arrangements
affecting any employees, provided that nothing in this clause shall be
construed to limit or restrict the commission compensation of employees who may
be selling brokered time for the Borrower.
(m) Cancellation of Debts. Cancel any debts owed or
claims held by the Borrower.
(n) Write-Down. Suffer any significant write-down of the
value of any assets or any significant write-off as uncollectible of any
accounts receivable without the prior written consent of the Lender except and
as required by generally accepted accounting principles as required to present
accurate financial information on the Borrower.
(o) Rights. Transfer or grant any right under, or enter
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, service mark,
<PAGE> 13
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trade name, franchise, or similar right, or modify any existing right relating
to the Borrower.
(p) Television Affiliation Agreement. In the event
Borrower acquires the Station, terminate, amend or waive any provision of the
Television Affiliation Agreement, if any, to which the Station is a party.
(q) Purchase Agreement. In the event the Borrower enters
into the Purchase Agreement, terminate, amend, commit any material breach or
default under or waive any term of the Purchase Agreement.
SECTION 6.03 REPORTING REQUIREMENTS. So long as the Note
shall remain unpaid and the Agreement shall not have been terminated, the
Borrower shall, unless the Lender shall otherwise consent in writing, furnish
to the Lender:
(a) Default Certificate. As soon as possible and in any
event within five (5) business days after the occurrence of each Event of
Default (as defined in Section 7.01) of which the Borrower has knowledge, the
statement of the President of the Borrower setting forth details of such Event
of Default and the action which the Borrower proposes to take with respect
thereto.
(b) Financial Statements. Beginning with the making of
the Final Installment, quarterly financial statements within thirty (30) days
after the end of each fiscal quarter; within ninety (90) days after the end of
each fiscal year of the Borrower, a copy of the audited financial statements
for such year for the Borrower, including therein a balance sheet of the
Borrower as of the end of such fiscal year, statements of income and expense of
the Borrower for such fiscal year, and a statement of cash flow of the Borrower
for such fiscal year, in each case prepared by an independent public accountant
of recognized standing acceptable to the Lender, except that the Lender may
waive the audit requirement and accept a review of the Borrower's financial
records.
(c) Notice of Litigation. Promptly give written notice
of all actions, suits and proceedings before any court or governmental agency,
domestic or foreign, which may be commenced or threatened against the Borrower
in which the claim involved is Five Thousand Dollars ($5,000.00) or more and of
any other matter of the type described in Section 5.01(e).
(d) Budget. An annual budget to the Lender within thirty
(30) days of the beginning of each fiscal year of the Borrower. Such budget
shall be satisfactory in form to the Lender.
<PAGE> 14
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(e) Other Information. Such other information respecting
the business, properties, operations or the condition, financial or otherwise,
of the Borrower as the Lender may from time to time reasonably request.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01 EVENTS OF DEFAULT. Under this Agreement, an
Event of Default shall be any of the following:
(a) The Borrower shall fail to pay any installment of
principal or interest on the Note, or any other obligation to the Lender when
due whether at the due date thereof or by acceleration or otherwise, and such
default shall remain unremedied for a period of five (5) days after notice
thereof shall have been given to the Borrower; or
(b) The security interest or lien of the Lender in any
material portion of the collateral covered by the Security Agreement, Pledge
Agreement or any Leasehold Mortgage shall at any time not constitute a legal,
valid and enforceable security interest or lien; or
(c) Any representation or warranty made by the Borrower
(or any of its officers) herein, in the Security Agreement or in any
certificate, agreement, instrument or statement contemplated by or made or
delivered pursuant to or in connection with this Agreement, the Note, any
Leasehold Mortgage or the Security Agreement, or by the Shareholder in the
Pledge Agreement shall prove to have been incorrect in any material respect
when made; or
(d) The Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement, the Note, the
Security Agreement, any Leasehold Mortgage or any Television Affiliation
Agreement relating to the Station (the "Television Affiliation Agreement"), or
the Shareholder shall fail to perform or observe any term, covenant or
agreement contained in the Pledge Agreement, and any such failure remains
unremedied for thirty (30) days after written notice thereof shall have been
given to the Borrower by the Lender; or
(e) The Borrower or the Shareholder shall fail to pay any
indebtedness for borrowed money owing by the Borrower or the Shareholder or any
interest or premium thereon, when due, whether such indebtedness shall become
due by scheduled maturity, by required prepayment, by acceleration, by demand
or otherwise, or the Borrower or the Shareholder shall fail to perform any
term,
<PAGE> 15
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covenant or agreement under any agreement or instrument evidencing or securing
or relating to any such indebtedness owing by the Borrower or the Shareholder
if the effect of such failure is to accelerate, or to permit the holder of such
indebtedness to accelerate the maturity of such indebtedness; or
(f) The Borrower shall expend the proceeds of the Loan
for any purpose other than the purchase of the Station and the operation of
the Station's business without the prior written consent of the Lender, which
may be withheld in the Lender's sole discretion; or
(g) The Borrower shall (i) fail to pay its debts as they
mature in the ordinary course of business; (ii) file a petition commencing a
voluntary case concerning it under any Chapter of Title 11 of the United States
Code entitled "Bankruptcy"; or (iii) the Borrower shall apply for or consent to
the appointment of any receiver, trustee, custodian or similar officer for it
or for all or any substantial part of its property; or (iv) such receiver,
trustee, custodian or similar officer shall be appointed without the
application or consent of the Borrower and such appointment shall continue
undischarged for a period of thirty (30) days; or (v) an involuntary case is
commenced against the Borrower under any Chapter of the aforementioned Title 11
and an order for relief under such Title 11 is entered or the petition
commencing the case is controverted but is not dismissed within thirty (30)
days after the commencement of the case; or (vi) the Borrower shall institute
(by petition, application, answer, consent or otherwise) any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, dissolution,
liquidation or similar proceeding relating to it under the laws of any
jurisdiction; or (vii) any such proceeding shall be instituted against the
Borrower and shall remain undismissed for a period of thirty (30) days; or
(viii) the Borrower shall take any action for the purpose of effectuating the
foregoing; or
(h) Any court, government, or government agency shall
condemn, seize or otherwise appropriate or take custody or control of all or a
substantial portion of the property or assets of the Borrower; or
(i) There shall be an irrevocable and unappealable denial
or revocation of the broadcast license for the Station.
SECTION 7.02 EFFECT OF EVENT OF DEFAULT. Should any Event
of Default occur, the Lender may at its option by written notice to the
Borrower declare the entire unpaid principal amount of the Note, together with
all unpaid interest and all other amounts payable under this Agreement and
every other obligation
<PAGE> 16
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of the Borrower to the Lender, immediately due and payable, whereupon the Note
and all such obligations shall become and be forthwith due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in the
Note or in such other note or evidence of indebtedness to the contrary
notwithstanding; provided, however, that in case of an Event of Default under
Section 7.01(g), all the obligations of the Borrower under this Agreement and
the Note shall become immediately due and payable as of the date of any such
Event of Default regardless of the cause of such Event of Default and without
any notice to the Borrower required from the Lender. The Lender shall have, in
addition to all other rights and remedies allowed by law, the rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
the State of Florida and, without limiting the generality of the foregoing, the
rights and remedies provided for in the Security Agreement, Pledge Agreements,
and any Leasehold Mortgage, which provisions are hereby incorporated by
reference.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 NO WAIVER; CUMULATIVE REMEDIES. No failure
or delay on the part of the Lender in exercising any right, power or remedy
hereunder shall operate as a waiver, nor shall any single or partial exercise
of any such right, power or remedy hereunder. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.02 AMENDMENTS. No amendment, modification,
termination or waiver of any provision of this Agreement, the Note, the
Security Agreement or any Leasehold Mortgage, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless in writing,
signed by the Lender and then only in the specific instance and for the
specific purpose for which given. No notice to or demand on the Borrower in
any case shall entitle it to any other or further notice or demand in similar
or other circumstances.
SECTION 8.03 CONFLICTS. In the event of any conflict or
inconsistency between any provision of this Agreement and a provision of the
Note, the Security Agreement or any Leasehold Mortgage, the provisions of this
Agreement shall control.
SECTION 8.04 ADDRESS FOR NOTICES. All notices and other
communications under this Agreement shall be in writing and shall be served by
personal service or by mailing a copy thereof
<PAGE> 17
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by registered or certified mail, return receipt requested, to the applicable
party at the addresses indicated below:
If to the Borrower:
Eddie L. Whitehead
Whitehead Media, Inc.
12144 Classic Drive
Coral Springs, FL 33071
with a copy (which shall not constitute notice) to:
Matthew L. Leibowitz, Esq.
Leibowitz & Associates, P.A.
One Southeast Third Avenue
Miami, Florida 33131
If to the Lender:
Mr. Lowell W. Paxson
Paxson Communications Corp.
18401 U.S. Highway 19 North
Clearwater, FL 34624
with a copy (which shall not constitute notice) to:
John R. Feore, Jr., Esq.
Dow, Lohnes & Albertson
1255 Twenty-third Street, N.W.
Suite 500
Washington, D.C. 20037
or at such other address as may be designated by either party in a written
notice to the other complying as to delivery with the terms of this Section.
All such notices and other communications shall be effective when deposited in
the mails.
SECTION 8.05 EXPENSES. The Borrower agrees to pay on
demand all costs and expenses incurred by the Lender directly in the
enforcement of this Agreement, the Note, the Security Agreement, any Leasehold
Mortgage, the Pledge Agreement and other instruments and documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of any attorney to whom the Note is referred for collection (whether
or not litigation is commenced) or for representation in proceedings under any
bankruptcy or insolvency law. In addition, the Borrower shall pay any and all
taxes and fees payable or determined to be payable in connection with the
execution, delivery and recordation of any instruments and documents to be
delivered hereunder.
<PAGE> 18
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SECTION 8.06 BINDING EFFECT; ASSIGNMENT. This Agreement
shall become effective when executed and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign any rights or obligations hereunder without the prior written consent of
the Lender.
SECTION 8.07 GOVERNING LAW. This Agreement, the Note, the
Security Agreement and related documents shall be governed by, and construed in
accordance with, the laws of the State of Florida with the exception of its
conflicts of laws provisions; provided that the effect of any recordation shall
be determined by the State thereof. The parties agree to the exclusive
jurisdiction and venue of the state and federal district courts for the
district including St. Petersburg, Florida.
SECTION 8.08 SEVERABILITY OF PROVISIONS. Any provision of
this Agreement, the Note, the Security Agreement, or any Leasehold Mortgage
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions or affecting the
validity or enforceability of any provisions in any other jurisdiction.
SECTION 8.09 HEADINGS. Article and Section headings in
this Agreement are including for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 8.010 RIGHTS AFFECTED BY EXTENSIONS. The rights of
the Lender and its assigns shall not be impaired by any indulgence, release,
renewal, extension or modification which the Lender may grant with respect to
the indebtedness or any part thereof, or with respect to the collateral or with
respect to any endorser, guarantor, or surety without notice or consent of the
Borrower or any endorser, guarantee, or surety.
SECTION 8.011 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made in this Agreement and in any documents
or certificates delivered pursuant hereto or thereto shall survive the
execution and delivery of this Agreement and the Note and the making of the
Loan hereunder and continue in full force and effect, as of the respective
dates as of which they were made, until all of the obligations of the Borrower
to the Lender hereunder have been paid in full.
SECTION 8.012 ATTORNEYS' FEES. If any litigation arises
between the parties in connection with the transactions
<PAGE> 19
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contemplated by this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees in addition to all other damages and
remedies.
SECTION 8.013 FURTHER ASSURANCES. From time to time, the
Borrower shall execute and deliver to the Lender such additional documents as
the Lender may reasonably require to carry out the purposes of this Agreement
or any of the documents entered into in connection herewith, or to preserve and
protect the rights of the Lender hereunder or thereunder.
SECTION 8.014 INDEMNIFICATION. The Borrower hereby
indemnifies and holds harmless the Lender and its directors, officers,
shareholders, employees, agents, counsel, subsidiaries and affiliates (the
"Indemnified Persons") from and against any and all losses, liabilities,
obligations, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against any Indemnified Person in any way relating to
or arising out of this Agreement, the documents entered into in connection
herewith, or any of them or any of the transactions contemplated hereby or
thereby; provided, however, that the Borrower shall not be liable to any
Indemnified Person, if there is a judicial determination that such losses,
liabilities, obligations, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or willful
misconduct of such Indemnified Person.
<PAGE> 20
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers, as of
the date first above written.
WITNESS: WHITEHEAD MEDIA, INC.
___________________________ By:__/s/ Eddie L. Whitehead_
Name:____Eddie L. Whitehead_
Title:___President__________
WITNESS: PAXSON COMMUNICATIONS CORP.
___________________________ By:__/s/ Lowell W. Paxson__
Name:______________________
Title:_____________________
<PAGE> 1
EXHIBIT 10.7
AMENDMENT TO LOAN AGREEMENT
This Amendment to Loan Agreement ("Amendment") is entered into as of
the third day of October, 1994, by and between PAXSON COMMUNICATIONS CORP., a
Delaware corporation having its principal offices at 18401 U.S. Highway 19
North, Clearwater, Florida 34624 (the "Lender") and WHITEHEAD MEDIA, INC., a
Florida corporation having its principal offices at 12144 Classic Drive, Coral
Springs, Florida 33071 (the "Borrower").
W I T N E S S E T H
WHEREAS, Lender and Borrower are parties to that certain Loan
Agreement dated as of September 22, 1994 and the associated documents
referenced in Article III thereof.
WHEREAS, Borrower was the successful bidder for the Station pursuant
to the Bid Procedures authorized and approved by the United States Bankruptcy
Court, Southern District of Florida;
WHEREAS, Lender has agreed to increase the amount of the Loan from
$13,150,000 to $18,000,000 so that Borrower can complete the acquisition of the
Station;
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Loan Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the Lender and the Borrower agree as follows:
1. Amendments. The Loan Agreement is hereby amended as follows:
a. Section 1.01 of the Loan Agreement is hereby amended to
increase the amount of the Loan available to Borrower under the Loan Agreement
from $13,150,000 to $18,000,000. References to Loan or Loans in the Loan
Agreement, as hereby amended, shall be deemed to be references to Loan or Loans
not to exceed $18,000,000. At no time shall the aggregate principal amount of
indebtedness outstanding under the Loan Agreement exceed $18,000,000.
b. Section 1.02 of the Loan Agreement is hereby amended to
indicate that the principal amount of the Loan shall be evidenced by and
subject to the terms of a Replacement Promissory Note dated as of even date
herewith, substantially in the form set forth as Exhibit 1 hereto (the "Note")
and all references to the Note in the Loan Agreement, as hereby amended, shall
be deemed to be references to the Replacement Promissory Note.
<PAGE> 2
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2. Counterparts. This Amendment may be executed in counterparts.
3. References to Loan Agreement. Except as amended hereby, all
terms and provisions of the Loan Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
Witness: WHITEHEAD MEDIA, INC.
_______________________ By: /s/ Eddie L. Whitehead
-------------------------
Name: Eddie L. Whitehead
-----------------------
Title: President
----------------------
Witness: PAXSON COMMUNICATIONS CORP.
_______________________ By: /s/ Lowell W. Paxson
-------------------------
Name:
-----------------------
Title:
----------------------
<PAGE> 1
EXHIBIT 10.8
SECOND AMENDMENT TO LOAN AGREEMENT
This Second Amendment to Loan Agreement ("Second Amendment") is
entered into as of the 4th day of August, 1995 by and between Whitehead Media,
Inc., a Florida corporation having its principal offices at 12144 Classic
Drive, Coral Springs, FL 33071 (the "Borrower"); and Paxson Communications of
Ft. Pierce-34, Inc., a Florida corporation having its principal offices at 601
Clearwater Park Road, West Palm Beach, FL 33401 ("Ft. Pierce-34").
W I T N E S S E T H:
WHEREAS, Paxson Communications Corporation, a Delaware corporation
formerly known as Paxson Communications Corp. ("PCC"), and Borrower have
entered into a Loan Agreement dated as of September 22, 1994, pursuant to which
PCC agreed to loan Borrower up to $13,150,000 to finance Borrower's acquisition
of Television Station WTVX-TV, Ft. Pierce/West Palm Beach, Florida (the
"Station"), and Borrower's subsequent operation of the Station;
WHEREAS, PCC and Borrower entered into an Amendment to Loan Agreement
dated as of October 3, 1994 (as amended, the "Loan Agreement") pursuant to
which PCC agreed to increase the loan amount from $13,150,000 to $18,000,000;
WHEREAS, Borrower was the successful bidder for the Station, the sale
of the Station to the Borrower has been approved by the United States
Bankruptcy Court, Southern District of Florida, and the Borrower has been
approved by the Federal Communications Commission as the licensee of the
Station;
WHEREAS, effective upon Borrower's acquisition of the Station, PCC
desires to assign its rights and interests under the Loan Agreement, as amended
by this Second Amendment, to Ft. Pierce-34, an indirect, wholly-owned
subsidiary of PCC, and Ft. Pierce-34 desires to accept such assignment and
assume PCC's obligations under the Loan Agreement, as amended by this Second
Amendment; and
WHEREAS, in anticipation of Borrower's completing its acquisition of
the Station, Borrower and Ft. Pierce-34 have agreed to amend the Loan Agreement
in accordance with the terms of this Second Amendment;
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of
<PAGE> 2
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which are hereby acknowledged, Ft. Pierce-34 and the Borrower, intending to be
legally bound, agree as follows:
1. Amendments. The Loan Agreement is hereby amended as follows:
(a) Section 1.02 of the Loan Agreement is hereby amended
to provide that the outstanding principal amount of the Loan shall be evidenced
by and subject to the terms of a promissory note, dated as of August 4, 1995,
substantially in the form set forth as Exhibit A hereto (the "Note"), payable
to the order of Paxson Communications of Ft. Pierce-34, Inc. ("Ft. Pierce-34")
and representing the obligation of the Borrower to pay Ft. Pierce-34 the amount
of the Loan, with interest thereon, as prescribed in Section 1.04 of the Loan
Agreement. All references to the "Note" in the Loan Agreement, the Security
Agreement and Pledge Agreement (as defined in the Loan Agreement), the
mortgages or deeds of trust referred to in Section 3.04 of the Loan Agreement
and in such other agreements and documents executed and delivered in connection
with the Loan Agreement shall be deemed to be references to the Note referred
to in this Section 1(a).
(b) Section 1.03 of the Loan Agreement is hereby deleted
in its entirety and the following provision is substituted in its place:
The Loan shall bear interest on the unpaid principal amount thereof at
a rate per annum at all times equal to one-half percent (1/2%) above
the highest interest rate paid by Lender or its affiliates on
outstanding debt, public or private, as such rate may be adjusted from
time to time. Interest shall be calculated on the basis of a year of
three-hundred and sixty (360) days and the actual number of days
elapsed during the period for which such interest is payable.
Interest shall begin to accrue on the outstanding principal amount of
the Loan on the date of disbursement of all or a portion of the Final
Installment (as defined below) pursuant to Section 1.05(b) (the "Final
Installment Date"). The first payment of interest to the Lender shall
be due one hundred and fifty (150) days after the acquisition of the
Station by the Borrower pursuant to Federal Communications Commission
("FCC") authority, at which time all interest accrued from the Final
Installment Date shall become due and payable. Thereafter, accrued
interest shall be paid monthly on or before the first day of each
month until all principal and interest hereunder is paid in full. If
any installment of principal or interest is not paid when due, that
installment shall bear interest at a rate per annum equal to the lower
of the highest rate permitted by law or eighteen percent (18%) from
the date due thereof until paid in full.
(c) Section 1.04 of the Loan Agreement is hereby deleted
in its entirety and the following provision is substituted in its place:
<PAGE> 3
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In the event that any portion of the Loan is used by the Borrower to
fund an escrow deposit or similar payment toward the purchase of the
Station (the "Deposit"), and such Deposit is returned to the Borrower,
the amount of such Deposit shall be immediately repaid to Lender,
together with all interest earned on such Deposit and paid to the
Borrower. In the event that a party other than the Borrower acquires
the Station, Borrower shall repay to Lender the outstanding principal
amount of the Loan (other than any portion of the Loan used to fund
the Deposit) no later than one-hundred eighty (180) days after such
other party acquires the Station. The principal amount of the Loan
plus any accrued and unpaid interest shall be due and payable on the
first day of the 84th month following the acquisition of the Station
by the Borrower (the "Term Date"). In the event of a termination of
the Time Brokerage Agreement dated as of September 22, 1994, between
Borrower and Lender, which Time Brokerage Agreement has been assigned,
effective as of the date of Borrower's acquisition of the Station, to
Lender's Affiliate, Paxson Communications of Ft. Pierce-34, Inc.,
Borrower shall, in addition to payments of interest required under
Section 1.03 hereof, repay the outstanding principal balance of the
Loan in consecutive, equal monthly installments commencing on the
first day of the month following such termination (the "Amortization
Commencement Date") and ending on the Term Date, with each such
monthly principal installment payment equal to (x) the principal
amount of the Loans outstanding hereunder as of the first day of the
month following such termination divided by (y) the total number of
consecutive months included in the period commencing on the
Amortization Commencement Date, through and including the Term Date.
(d) Section 1.07 of the Loan Agreement is hereby deleted
in its entirety and the following provision is substituted in its place:
The Borrower may prepay the Note in whole at any time, or from time to
time in part, with accrued interest to the date of prepayment on the
amount prepaid, without penalty, provided that each payment, other
than that for the full amount of the outstanding balance, shall be in
the amount of Ten Thousand Dollars ($10,000) or an integral multiple
thereof, provided, however, that if any such prepayment is made within
three years of the Borrower's acquisition of the Station, Borrower
shall reimburse Lender for any prepayment penalty imposed on Lender or
its affiliates under their debt agreements or instruments as a result
of Borrower's prepayment. Each prepayment on the Note shall be
applied to installments of principal payable on the Note in the
inverse order of maturity.
<PAGE> 4
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(e) The Loan Agreement is hereby amended by adding the
following Section 1.09:
SECTION 1.09 PREFERRED CONTINGENT FACILITY FEE. In
consideration for Lender's agreement to make the Loan, Borrower agrees
to pay Lender a preferred contingent facility fee (the "Contingent
Facility Fee") in an amount equal to twenty-five percent (25%) of the
Loan commitment payable to the extent available out of the Net Sale
Price received by Borrower or any Affiliate of Borrower in connection
with any Sale that is consummated at any time prior to August 4, 2003,
whether or not any portion of the Loan is outstanding as of such date.
The Contingent Facility Fee shall be due and payable by Borrower to
Lender by confirmed wire transfer of immediately available funds on
the date of closing of a Sale and prior to the payment by Borrower of
any other obligations or distributions. For the purpose of this
Section 1.09, the following terms shall have the following meanings:
"Affiliate", as applied to any entity or individual, means any other
entity or individual directly or indirectly controlling, controlled
by, or under common control with, that entity or individual. 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 entity or individual, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that entity or
individual, whether through the ownership of voting securities,
partnership interests or by contract or otherwise.
"Net Sale Price" means (a) the aggregate value of all consideration of
whatsoever nature (whether in cash, other property, services or
otherwise) directly or indirectly paid or payable to the Borrower and
any Affiliate of Borrower (or either of them) in connection with a
Sale and whether such amounts are payable as purchase price (whether
in cash at closing or on a deferred basis), non-compete payments,
payments for the provision of future services or the rental of
property or otherwise, or any combination thereof, plus (b) an amount
equal to the sum of all accounts receivable of the Station if such
accounts receivable are retained by Borrower or any Affiliate of
Borrower in connection with a Sale, minus (c) an amount equal to the
sum of all reasonable and necessary fees and expenses incurred by the
Borrower or any Affiliate of Borrower in connection with the
consummation of a Sale, minus (d) an amount equal to all liabilities
of the Station (as determined in accordance with generally accepted
principles consistently applied) that are retained by Borrower or any
Affiliate of Borrower in connection with a Sale,
<PAGE> 5
- 5 -
and minus (e) an amount equal to the sum of the principal balance of,
and all accrued but unpaid interest on, the Loans as of the date the
Contingent Facility Fee is due.
"Sale" means any (a) sale, exchange, transfer or other disposition to
any third party unaffiliated with Borrower or any Affiliate of
Borrower of all or substantially all of the Station's assets or of the
equity of (i) Borrower or (ii) any Affiliate of Borrower that acquires
the Station's assets in accordance with the requirements of this Loan
Agreement and any collateral document executed and delivered in
connection with this Loan Agreement (a "WTVX Affiliate") or (b)
merger, consolidation or similar transaction between a third party
unaffiliated with Borrower and Borrower or any WTVX Affiliate, whether
or not Borrower or such WTVX Affiliate is the surviving corporation.
(f) Section 7.01(g) of the Loan Agreement is hereby
deleted in its entirety and the following provision is substituted in its
place:
Either Borrower or the Shareholder shall (i) fail to pay its debts as
they mature in the ordinary course of business; or (ii) file a
petition commencing a voluntary case concerning it under any Chapter
of Title 11 of the United States Code entitled "Bankruptcy"; or (iii)
apply for or consent to the appointment of any receiver, trustee,
custodian or similar officer for it or for all or any substantial part
of its property; or (iv) such receiver, trustee, custodian or similar
officer shall be appointed without the application or consent of the
Borrower or the Shareholder and such appointment shall continue
undischarged for a period of thirty (30) days; or (v) an involuntary
case is commenced against the Borrower or the Shareholder under any
Chapter of the aforementioned Title 11 and an order for relief under
such Title 11 is entered or the petition commencing the case is
controverted but is not dismissed within thirty (30) days after the
commencement of the case; or (vi) the Borrower or the Shareholder
shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding
relating to it under the laws of any jurisdiction; or (vii) any such
proceeding shall be instituted against the Borrower or the Shareholder
and shall remain undismissed for a period of thirty (30) days; or
(viii) the Borrower or the Shareholder shall take any action for the
purpose of effectuating the foregoing.
(g) Section 7.01(i) of the Loan Agreement is hereby
deleted in its entirety and the following provision is substituted in its
place:
<PAGE> 6
- 6 -
(i) There shall be a cancellation, denial or
revocation of any material broadcast license for the Station, the
Borrower shall be finally denied renewal of any such license, or any
such license shall be renewed on terms that materially adversely
affect the economic or commercial value or usefulness thereof; or
(h) Section 7.01 of the Loan Agreement is hereby amended
by adding the following subparagraph (j) at the end of such Section:
(j) Any money judgment, writ or warrant of
attachment, or similar process involving (i) in any individual case an
amount in excess of $500,000, or (ii) in the aggregate at any time an
amount in excess of $500,000, and in either case not adequately
covered by insurance as to which the insurance company has
acknowledged coverage, shall be entered or filed against Borrower or
its assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 30 days or in any event later than five days
prior to the date of any proposed sale thereunder.
(i) The address set forth in Section 8.04 for notices and
other communications to be sent to Lender shall be deleted and the following
address substituted in its place:
Paxson Communications of Ft. Pierce-34, Inc.
601 Clearwater Park Road
West Palm Beach, Florida 33401
(j) Section 8.05 of the Loan Agreement is hereby amended
by adding the following at the end of such Section:
In addition, Borrower agrees to pay (i) all the actual and reasonable
costs and expenses of Lender in connection with the negotiation,
preparation and execution of the Loan Agreement, the Note, the
Security Agreement, the Pledge Agreement and all other documents and
instruments to be delivered hereunder (collectively, the "Loan
Documents") and all the costs of furnishing all opinions by counsel
for Borrower, and of Borrower's performance of and compliance with all
agreements and conditions contained herein and in the other Loan
Documents on its part to be performed or complied with including,
without limitation, confirming compliance with environmental and
insurance requirements; (ii) the reasonable fees, expenses and
disbursements of counsel to Lender (including allocated costs of
internal counsel) in connection with the negotiation, preparation,
execution and administration of the Loan Documents and the Loan and
any consents, amendments, waivers or other modifications
<PAGE> 7
- 7 -
hereto or thereto; and (iii) all the actual and reasonable costs and
expenses of creating and perfecting liens in favor of Lender pursuant
to any Loan Document.
(k) Section 8.06 of the Loan Agreement is hereby amended
by adding the following at the end of such Section:
Lender shall be permitted to assign, without Borrower's
consent, all or any portion of Lender's rights and interests hereunder
and under each other document executed in connection with this Loan
Agreement (x) to Paxson Communications of Ft. Pierce-34, Inc., a
Florida corporation and an indirect, wholly-owned affiliate of Lender
("Ft. Pierce-34"), or one or more other Affiliates (as defined in
Section 1.09) of Lender, and, upon any such assignment, each reference
herein or in such other document to "Lender" shall be deemed to be and
include a reference to Ft. Pierce-34 or such other Affiliate and (y)
to creditors of Lender or its Affiliates as security for indebtedness
of Lender or such Affiliates.
(l) Article VIII of the Loan Agreement is hereby amended
by adding the following Sections at the end of such Article:
SECTION 8.15 WAIVER. EACH OF LENDER, BORROWER AND
SHAREHOLDER HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER
IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOAN.
SECTION 8.16 MAXIMUM INTEREST. Lender and Borrower intend
that this Agreement and the other Loan Documents conform to all
applicable usury laws. Accordingly, no provisions of the Loan
Documents shall require the payment or permit the collection of
interest in excess of the maximum rate permitted by applicable law
("Maximum Rate"), or obligate Borrower to pay any taxes, assessments,
charges, insurance premiums or other amounts which are held to
constitute interest to the extent that such payments, when added to
<PAGE> 8
- 8 -
the other obligations under the Loan Documents, would be held to
constitute contracting for, or the payment by Borrower of, interest at
a rate greater than the Maximum Rate. Lender and Borrower further
agree that:
(i) if any excess of interest in such respect is
herein or in any such other instrument provided for, or shall be
adjudicated to be so provided for herein or in any such instrument,
the provisions of this subsection 8.16 shall govern, and neither
Borrower nor its successors or assigns shall be obligated to pay the
amount of such interest to the extent it is in excess of the Maximum
Rate;
(ii) if at any time the amount of interest under
any of the Loan Documents for a calendar year exceeds the Maximum Rate
had the Maximum Rate at all times been in effect, the interest
chargeable under any such Loan Document shall be limited to the amount
of interest that could have been charged if the Maximum Rate had at
all times been in effect, but any subsequent reductions in the
interest due shall not reduce the rate of interest chargeable under
any such Loan Document below the Maximum Rate until the total amount
of interest accrued under any such Loan Document equals the amount of
interest that would have accrued if the interest provided for in any
such Loan Document had at all times been in effect and collectible;
(iii) if the maturity of any Loan Document is
accelerated for any reason, or in the event of any prepayment by
Borrower, or in any other event, earned interest may never include
more than the Maximum Rate, computed from the date of disbursement of
the funds evidenced by such Loan Document until payment, and any
interest otherwise payable under such Loan Document that is in excess
of the Maximum Rate shall be canceled automatically as of such
acceleration or such other event and (if theretofore paid) shall be
credited against principal;
(iv) if it should be held that any interest
payable or chargeable under any Loan Document is in excess of the
Maximum Rate, the interest payable or chargeable under such Loan
Document shall be reduced to the maximum amount permitted by
applicable federal or state law, whichever shall permit the higher
lawful interest, as construed by courts having jurisdiction thereof;
and
(v) the spreading, prorating and amortizing of
interest over the term of the Loan Documents shall be allowed to the
fullest extent permitted by applicable law.
<PAGE> 9
- 9 -
2. Counterparts. This Second Amendment may be executed in
counterparts and each such counterpart, taken together, shall be deemed to
constitute one and the same instrument.
3. References to Loan Agreement. Except as amended hereby, all
terms and provisions of the Loan Agreement shall remain in full force and
effect.
4. Governing Law. This Second Amendment shall be governed,
construed, and enforced in accordance with the laws of the State of Florida
(without regard to the choice of law provisions thereof).
<PAGE> 10
IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the first day above written.
WHITEHEAD MEDIA, INC.
By:____________________________
Name:______________________
Title:_____________________
PAXSON COMMUNICATIONS
OF FT. PIERCE-34, INC.
By: /s/ Lowell W. Paxson
---------------------------
Name:______________________
Title:_____________________
AGREED AND CONSENTED TO:
________________________
Eddie L. Whitehead
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<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
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0
46,244,644
<OTHER-SE> 7,379,151
<TOTAL-LIABILITY-AND-EQUITY> 194,963,631
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