<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
LIN TELEVISION CORPORATION LIN HOLDINGS CORP.
(and Certain Subsidiaries Identified in Footnote 1 (Exact Name of Co-Registrant as Specified in its
Below) (Exact Name of Co-Registrant as Specified Charter)
in its Charter)
DELAWARE 75-2733091 DELAWARE 75-2733097
(State or other (I.R.S. Employer (State or other (I.R.S. Employer
jurisdiction of Identification No.) jurisdiction of Identification No.)
incorporation or incorporation or
organization) organization)
1 RICHMOND SQUARE, SUITE 230E 4833 PETER E. MALONEY
PROVIDENCE, RHODE ISLAND 02906 (Primary Standard Industrial 1 RICHMOND SQUARE, SUITE 230E
(Address, including Zip Code, and Classification Code Number) PROVIDENCE, RHODE ISLAND 02906
Telephone Number, including Area (Name, Address, including Zip Code,
Code, of the Principal Executive and Telephone Number, including Area
Office of each Co-Registrant) Code, of Agent for Service)
</TABLE>
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Copies to:
JEREMY W. DICKENS, ESQ.
WEIL, GOTSHAL & MANGES LLP
100 CRESCENT COURT, SUITE 1300
DALLAS, TEXAS 75201
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, (the "Securities Act"), check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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================================================================================================================================
AGGREGATE
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
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8 3/8% Senior Subordinated Notes due 2008 of LIN
Television Corporation(2)....................... $300,000,000 $1,000 $300,000,000 $88,500
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Senior Subordinated Guarantees(2).................
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10% Senior Discount Notes due 2008 of LIN Holdings
Corp.(3)........................................ $325,000,000 $1,000 $202,900,766 $59,856
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(1) The following direct and indirect subsidiaries of LIN Television Corporation
are Co-Registrants (the "Guarantors"), each of which is organized in the
state and has the I.R.S. Employer Identification Number indicated: Airwaves,
Inc., a Delaware corporation (05-0487757), Indiana Broadcasting, LLC, a
Delaware limited liability company (05-0496718), KXAN, Inc., a Delaware
corporation (13-2670260), KXTX Holdings, Inc., a Delaware corporation
(05-0481599), Linbenco, Inc., a Delaware corporation (05-0487755), LIN
Sports, Inc., a Delaware corporation (05-0487756), LIN Television of Texas,
Inc., a Delaware corporation (05-0481602), LIN Television of Texas, LP, a
Texas limited partnership (05-0481606), LWWI Broadcasting Inc., a Delaware
corporation (13-3191043), North Texas Broadcasting Corporation, a Delaware
corporation (13-2740821), WAND Television, Inc., a Delaware corporation
(37-1023233), WAVY Broadcasting, LLC, a Delaware limited liability company
(05-0496719), WIVB Broadcasting, LLC, a Delaware limited liability company
(05-0496720), WOOD License Co., LLC, a Delaware limited liability company
(05-0496721), WOOD Television, Inc., a Delaware corporation (06-1506282),
and WTNH Broadcasting, Inc., a Delaware corporation (05-0481600).
(2) The 8 3/8% Senior Subordinated Notes due 2008 are unconditionally (as well
as jointly and severally) guaranteed by the Guarantors on an unsecured,
senior subordinated basis. Pursuant to Rule 457(n) under the Securities Act,
no separate filing fee will be paid in respect to these guarantees.
(3) The "Amount to be Registered" with respect to the 10% Senior Discount Notes
due 2008 represents the aggregate principal amount at maturity of such
notes. The 10% Senior Discount Notes due 2008 were sold at a substantial
discount from their principal amount at maturity. The registration fee with
respect to the 10% Senior Discount Notes due 2008 was calculated based on
the approximate accreted value thereof as of May 29, 1998 determined
pursuant to the provisions of the indenture governing such notes.
THE CO-REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE CO-REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
LIN TELEVISION CORPORATION
LIN HOLDINGS CORP.
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING THE LOCATION IN
THE PROSPECTUS OF THE INFORMATION REQUIRED BY PART I OF FORM S-1
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FORM S-1 ITEM NUMBER AND HEADING LOCATION IN PROSPECTUS
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1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus... Cover Page of Registration Statement;
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus............................ Inside Front and Outside Back Cover Pages
of Prospectus
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges............. Certain Definitions and Market and Industry
Data; Summary; Risk Factors; Selected
Consolidated Financial and Operating
Data; Unaudited Pro Forma Financial
Information; Business
4. Use of Proceeds............................ Use of Proceeds
5. Determination of Offering Price............ Not Applicable
6. Dilution................................... Not Applicable
7. Selling Security Holders................... Not Applicable
8. Plan of Distribution....................... Front Cover Page of Prospectus; The
Exchange Offers; Plan of Distribution
9. Description of Securities to be
Registered............................... Description of New Senior Subordinated
Notes; Description of New Senior Discount
Notes
10. Interests of Named Experts and Counsel..... Not Applicable
11. Information with Respect to the
Registrant............................... Cover Page of Registration Statement;
Certain Definitions and Market and Industry
Data; Summary; Risk Factors; The
Transactions and Other Matters; Selected
Consolidated Financial and Operating
Data; Unaudited Pro Forma Consolidated
Financial Information; Management's
Discussion and Analysis of Financial
Condition and Results of Operations;
Business; Management; Securities
Ownership of Certain Beneficial Owners;
Certain Other Transactions; Description
of the Senior Credit Facilities; Legal
Matters
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.............................. Not Applicable
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<PAGE> 3
PROSPECTUS
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OFFER FOR ALL OUTSTANDING OFFER FOR ALL OUTSTANDING
8 3/8% SENIOR SUBORDINATED NOTES DUE 10% SENIOR DISCOUNT NOTES DUE 2008
2008 IN EXCHANGE FOR
IN EXCHANGE FOR 10% SENIOR DISCOUNT NOTES DUE 2008
8 3/8% SENIOR SUBORDINATED NOTES DUE OF
2008 LIN HOLDINGS CORP.
OF
LIN TELEVISION CORPORATION
</TABLE>
Pursuant to the terms and subject to the conditions set forth in this
Prospectus and the accompanying letters of transmittal, (i) LIN Television
Corporation, a Delaware corporation (the "Company"), and the Guarantors (as
defined) hereby offer (the "Senior Subordinated Notes Exchange Offer") to
exchange $1,000 principal amount of registered 8 3/8% Senior Subordinated Notes
Due 2008 (the "New Senior Subordinated Notes") issued by the Company, for each
$1,000 principal amount of unregistered 8 3/8% Senior Subordinated Notes Due
2008 (the "Old Senior Subordinated Notes," and together with the New Senior
Subordinated Notes, the "Senior Subordinated Notes") issued by LIN Acquisition
Company, the predecessor in interest of the Company ("LIN Acquisition"), of
which an aggregate principal amount of $300,000,000 is outstanding and (ii) LIN
Holdings Corp., a Delaware corporation ("Holdings") hereby offers (the "Senior
Discount Notes Exchange Offer," and together with the Senior Subordinated Notes
Exchange Offer, the "Exchange Offers") to exchange $1,000 principal amount at
maturity of registered 10% Senior Discount Notes Due 2008 (the "New Senior
Discount Notes") issued by Holdings, for each $1,000 principal amount at
maturity of unregistered 10% Senior Discount Notes Due 2008 (the "Old Senior
Discount Notes," and together with the New Senior Discount Notes, the "Senior
Discount Notes") issued by Holdings, of which an aggregate principal amount at
maturity of $325,000,000 is outstanding. The Old Senior Subordinated Notes and
the Old Senior Discount Notes are sometimes collectively referred to herein as
the "Old Notes" and the New Senior Subordinated Notes and the New Senior
Discount Notes are sometimes collectively referred to herein as the "New Notes."
The Old Notes and the New Notes are sometimes collectively referred to herein as
the "Notes." The Company and Holdings are sometimes collectively referred to
herein as the "Issuers."
The form and terms of the New Notes are identical to the form and terms of
the Old Notes except that (i) interest on the New Senior Subordinated Notes
shall accrue from the date of issuance of the Old Senior Subordinated Notes,
(ii) the Accreted Value (as defined) of the New Senior Discount Notes will be
calculated from the date of issuance of the Old Senior Discount Notes, and (iii)
the New Notes are being registered under the Securities Act of 1933, as amended
(the "Securities Act"), and will not bear any legends restricting their
transfer. The New Senior Subordinated Notes will evidence the same debt as the
Old Senior Subordinated Notes and will be issued pursuant to, and entitled to
the benefits of, the indenture governing the Old Senior Subordinated Notes. The
New Senior Discount Notes will evidence the same debt as the Old Senior Discount
Notes and will be issued pursuant to, and entitled to the benefits of, the
indenture governing the Old Senior Discount Notes. The Exchange Offers are being
made in order to satisfy certain contractual obligations of the Company and
Holdings. See "The Exchange Offers," "Description of the New Senior Subordinated
Notes" and "Description of the New Senior Discount Notes."
The net proceeds from the sale of the Old Notes were used to effect the
acquisition by Holdings of the Company and its subsidiaries (the "Acquisition").
Such acquisition was effected pursuant to the merger of LIN Acquisition with and
into the Company, with the Company surviving as a wholly owned subsidiary of
Holdings. See "The Transactions and Other Matters."
---------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 21 FOR A DISCUSSION OF CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
NEW NOTES.
---------------------
The Company and Holdings will accept for exchange any and all Old Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
, 1998, unless extended (as so extended, the "Expiration Date").
Tenders of Old Notes may be withdrawn at any time prior to the Expiration Date.
The Exchange Offers are subject to certain customary conditions. See "The
Exchange Offers."
In order for a holder of Old Notes to participate in an Exchange Offer, such
holder must represent to the Company or Holdings, as appropriate, that, among
other things, (i) the New Notes acquired pursuant to such Exchange Offer are
being obtained in the ordinary course of business of the person receiving such
New Notes, whether or not such person is the holder of the Old Notes, (ii)
neither the holder nor any such other person is engaging or intends to engage in
a distribution of such New Notes, (iii) neither the holder nor any such other
person has an arrangement or understanding with any person to participate in the
distribution of such New Notes within the meaning of the Securities Act, (iv)
neither the holder nor any such other person is an "affiliate," as defined under
Rule 405 promulgated under the Securities Act, of the Company, Holdings or any
Guarantor, and (v) if such holder or other person is a broker-dealer, that it
will receive New Notes for its own account in exchange for Old Notes that were
acquired as a result of marketmaking activities or other trading activities. See
"The Exchange Offers--Purpose and Effect."
Each broker-dealer that receives New Notes for its own account pursuant to
either of the Exchange Offers must acknowledge that it will deliver a prospectus
in connection with any resale of those New Notes. The letter of transmittal
accompanying this Prospectus states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company and Holdings have agreed
that, for a period of 90 days after the Expiration Date, they will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
No public market has existed for the Old Notes. The Company and Holdings
currently do not intend to list the New Notes on any securities exchange or to
seek approval for quotation through any automated quotation system, and no
active public market for the New Notes is currently anticipated. The Company and
Holdings will pay all expenses incident to the Exchange Offers.
The Exchange Offers are not conditioned upon any minimum principal amount of
Old Senior Subordinated Notes or Old Senior Discount Notes being tendered for
exchange pursuant to the Exchange Offers.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 4
continued from cover
The New Senior Subordinated Notes will bear interest at a rate of 8 3/8% per
annum, payable semi-annually on March 1 and September 1 of each year, commencing
on September 1, 1998. The New Senior Subordinated Notes will mature on March 1,
2008. Except as described below, the Company may not redeem the New Senior
Subordinated Notes prior to March 1, 2003. On or after such date the Company may
redeem the New Senior Subordinated Notes, in whole or in part, at the redemption
prices set forth herein, together with accrued and unpaid interest, if any, to
the date of redemption. In addition, at any time and from time to time on or
prior to March 1, 2001, the Company may, subject to certain requirements, redeem
up to 35% of the aggregate principal amount of the Senior Subordinated Notes
with the net cash proceeds from one or more private or public equity offerings
at a price equal to 108.735% of the principal amount to be redeemed, together
with accrued and unpaid interest, if any, to the date of redemption, provided
that at least 65% of the originally issued aggregate principal amount of the
Senior Subordinate Notes remains outstanding after each such redemption. The New
Senior Subordinated Notes will not be subject to any sinking fund requirement.
Upon a Change of Control (as defined), (i) the Company will have the option, at
any time on or prior to March 1, 2003, to redeem the New Senior Subordinated
Notes, in whole but not in part, at a redemption price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest plus the Applicable
Premium (as defined) and (ii) if the New Senior Subordinated Notes are not
redeemed or if such Change of Control occurs after March 1, 2003, the Company
will be required to make an offer to repurchase the New Senior Subordinated
Notes at a price equal to 101% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the date of repurchase. See "Description
of the New Senior Subordinated Notes."
The Old Senior Discount Notes were issued at a discount to their aggregate
principal amount at maturity and generated gross proceeds to Holdings of
$199,631,250. The yield to maturity of the New Senior Discount Notes is 10.00%
(computed on a semi-annual bond equivalent basis), calculated from March 3,
1998. Cash interest will not accrue or be payable on the New Senior Discount
Notes prior to March 1, 2003. Thereafter, cash interest on the New Senior
Discount Notes will accrue at a rate of 10% per annum and will be payable
semi-annually in arrears on March 1 and September 1 of each year, commencing on
September 1, 2003. The New Senior Discount Notes will mature on March 1, 2008.
Except as described below, Holdings may not redeem the New Senior Discount Notes
prior to March 1, 2003. On March 1, 2003, Holdings will be required to redeem
Senior Discount Notes with an aggregate principal amount at maturity equal to
(i) $125.0 million multiplied by (ii) the quotient obtained by dividing (x) the
aggregate principal amount at maturity of Senior Discount Notes then outstanding
by (y) $325.0 million, at a redemption price equal to 100% of the principal
amount at maturity of the Senior Discount Notes so redeemed. The New Senior
Discount Notes will be redeemable at the option of Holdings, in whole or in
part, at any time on or after March 1, 2003, at the redemption prices set forth
herein, together with accrued and unpaid interest, if any, to the date of
redemption. In addition, at any time and from time to time on or prior to March
1, 2001, Holdings may, subject to certain requirements, redeem up to 35% of the
aggregate principal amount at maturity of the Senior Discount Notes with the net
cash proceeds from one or more private or public equity offerings at a price
equal to 110% of the Accreted Value (as defined) at the date of redemption,
provided that at least 65% of the originally issued aggregate principal amount
at maturity of the Senior Discount Notes remains outstanding after each such
redemption. The New Senior Discount Notes will not be subject to any sinking
fund requirement. Upon a Change of Control, (i) Holdings will have the option,
at any time on or prior to March 1, 2003, to redeem the New Senior Discount
Notes, in whole but not in part, at a redemption price equal to 100% of the
Accreted Value thereof plus the Applicable Premium and (ii) if the New Senior
Discount Notes are not so redeemed or if such Change of Control occurs after
March 1, 2003, Holdings will be required to make an offer to repurchase the New
Senior Discount Notes at a price equal to (a) 101% of the Accreted Value thereof
if redeemed on or before March 1, 2003, and (b) 101% of the principal amount at
maturity, plus accrued and unpaid interest, if any, if redeemed after March 1,
2003. See "Description of the New Senior Discount Notes."
The New Notes will be general obligations of the relevant issuer. The New
Senior Subordinated Notes will be unsecured and will be subordinated in right of
payment to all existing and future Senior Indebtedness (as defined) of the
Company. The New Senior Discount Notes will be senior unsecured obligations of
Holdings. The New Senior Subordinated Notes will be guaranteed (the "Subsidiary
Guarantees") on an unsecured senior subordinated basis by the Company's direct
and indirect, existing and future, Restricted Subsidiaries (as defined). The New
Senior Discount Notes will not have the benefit of any guarantees. The
Indentures (as defined) will permit the Issuers to incur additional
indebtedness, including indebtedness of Subsidiaries (as defined), and in the
case of the Senior Subordinated Notes, Senior Indebtedness, subject to certain
limitations. In connection with the Acquisition, the Company obtained senior
credit facilities in an aggregate amount of up to $570.0 million (the "Senior
Credit Facilities"). The Senior Credit Facilities have been guaranteed on a
senior basis by Holdings and the Company's direct and indirect, existing
Restricted Subsidiaries and will be guaranteed on a senior basis by the
Company's direct and indirect future Restricted Subsidiaries, secured by a lien
on substantially all of the assets of Holdings and its subsidiaries. As of March
31, 1998, the aggregate principal amount of the Company's outstanding Senior
Indebtedness was approximately $170.0 million (excluding unused commitments
under the Senior Credit Facilities). As of such date, liabilities of
Subsidiaries of the Company and Holdings, including indebtedness and other
liabilities such as trade payables and accrued expenses, were $17.8 million and
$523.8 million, respectively. See "Risk Factors," "Description of the Senior
Credit Facilities," "Description of the New Senior Subordinated Notes" and
"Description of the New Senior Discount Notes."
i
<PAGE> 5
AVAILABLE INFORMATION
The Issuers and the Guarantors have filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement (which term shall
encompass any amendments thereto) on Form S-1 under the Securities Act with
respect to the securities offered hereby. This Prospectus does not contain all
information set forth in the Registration Statement and the exhibits thereto, to
which reference is hereby made. Although the Issuers and the Guarantors believe
that statements made in this Prospectus as to the contents of any contract,
agreement, or other document describe all material elements of such documents,
such statements are not necessarily complete. With respect to each such
contract, agreement, or other document filed as an exhibit to the Registration
Statement, reference is hereby made to such exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
As a result of the filing of the Registration Statement with the
Commission, the Issuers and the Guarantors each will become subject to the
informational reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In accordance therewith, the Company and Holdings
will be required to file reports and other information with the Commission. Such
reports and other information can be inspected and copied at the principal
office of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and the following Regional Offices of the Commission: Chicago
Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60611 and New York Regional office, 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material may also
be obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549. The Commission also maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission at http://www.sec.gov.
In reliance upon certain Staff Accounting Bulletins of the Commission,
interpretations of the staff of the Commission and no-action relief granted by
the Staff of the Commission to unrelated third parties, the Subsidiary
Guarantors do not intend to file periodic reports with the Commission under the
Exchange Act separately from the Issuers.
The Issuers will furnish holders of the securities offered hereby with
annual reports containing, among other information, audited financial statements
certified by an independent public accounting firm and quarterly reports
containing unaudited financial information for the first three quarters of each
fiscal year. The Issuers will also furnish such other reports as it may
determine or as may be required by law or by the indentures governing the New
Notes.
FORWARD LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS CERTAIN FORWARD LOOKING STATEMENTS WITH RESPECT TO
THE FINANCIAL CONDITIONS, RESULTS OF OPERATIONS AND BUSINESSES OF THE ISSUERS,
INCLUDING STATEMENTS UNDER THE CAPTIONS "SUMMARY," "UNAUDITED PRO FORMA
FINANCIAL INFORMATION," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" AND "BUSINESS." ALL OF THESE FORWARD
LOOKING STATEMENTS ARE BASED ON ESTIMATES AND ASSUMPTIONS MADE BY MANAGEMENT OF
THE ISSUERS WHICH, ALTHOUGH BELIEVED TO BE REASONABLE, ARE INHERENTLY UNCERTAIN.
THEREFORE, UNDUE RELIANCE SHOULD NOT BE PLACED UPON SUCH ESTIMATES AND
STATEMENTS. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH ESTIMATES OR STATEMENTS
WILL BE REALIZED AND IT IS LIKELY THAT ACTUAL RESULTS WILL DIFFER MATERIALLY
FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS. FACTORS THAT MAY
CAUSE SUCH DIFFERENCES INCLUDE: (1) INCREASED COMPETITION, INCLUDING FROM NEWER
FORMS OF ENTERTAINMENT AND ENTERTAINMENT MEDIA OR CHANGES IN THE POPULARITY OR
AVAILABILITY OF PROGRAMMING; (2) INCREASED COSTS, INCLUDING INCREASED CAPITAL
EXPENDITURES AS A RESULT OF NECESSARY TECHNOLOGICAL ENHANCEMENTS (E.G.,
EXPENDITURES RELATED TO THE TRANSITION TO DIGITAL
ii
<PAGE> 6
BROADCASTING) OR ACQUISITIONS OR INCREASED PROGRAMMING COSTS; (3) INABILITY TO
CONSUMMATE ACQUISITIONS ON ATTRACTIVE TERMS; (4) LOSS OR RETIREMENT OF KEY
MEMBERS OF MANAGEMENT; (5) INCREASES IN THE ISSUERS' COST OF BORROWINGS OR
INABILITY OR UNAVAILABILITY OF ADDITIONAL DEBT OR EQUITY CAPITAL; (6) ADVERSE
STATE OR FEDERAL LEGISLATION OR REGULATION OR ADVERSE DETERMINATIONS BY
REGULATORS; AND (7) CHANGES IN ADVERTISING TRENDS AND/OR BUDGETS AND IN GENERAL
ECONOMIC CONDITIONS IN THE MARKETS IN WHICH THE ISSUERS MAY, FROM TIME TO TIME,
COMPETE. MANY OF SUCH FACTORS WILL BE BEYOND THE CONTROL OF THE ISSUERS AND
THEIR MANAGEMENT. FORWARD-LOOKING STATEMENTS CONTAINED HEREIN SPEAK ONLY AS OF
THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE
RESULT OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS WHICH MAY BE MADE TO
REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS. FOR FURTHER INFORMATION OR OTHER FACTORS
WHICH COULD AFFECT THE FINANCIAL RESULTS OF THE ISSUERS AND SUCH FORWARD LOOKING
STATEMENTS, SEE "RISK FACTORS."
iii
<PAGE> 7
CERTAIN DEFINITIONS AND MARKET AND INDUSTRY DATA
As used in this Prospectus, unless the context otherwise requires, (i)
"Holdings" refers to LIN Holdings Corp., (ii) "LIN Acquisition" refers to LIN
Acquisition Company, (iii) "LIN Television" or the "Predecessor" refers to LIN
Television Corporation and its subsidiaries prior to the Acquisition, (iv) the
"Company" refers to LIN Television after giving effect to the Acquisition (as
defined), the Financings (as defined) and the Joint Venture (as defined)
(collectively, the "Transactions"), except where the context requires otherwise,
(v) "on a pro forma basis" or "pro forma" means after giving effect to the
Transactions, except as indicated otherwise and (vi) "Core Stations" refers to
the CBS, NBC and ABC-affiliated stations owned and operated by the Company
(WISH-TV, WANE-TV, WAND-TV, WAVY-TV, KXAN-TV, WTNH-TV and WIVB-TV). See "The
Transactions and Other Matters."
The terms "broadcast cash flow" ("BCF") and "EBITDA" are referred to in
various places in this Prospectus. BCF is defined as operating income (loss)
plus corporate expenses plus depreciation and amortization of intangible assets
and amortization of program rights plus other non-cash expenses (consisting of
tower write-offs and non-cash pension expenses), minus cash program payments.
EBITDA is defined as BCF minus corporate expenses. BCF and EBITDA are not
measures of performance calculated in accordance with generally accepted
accounting principles ("GAAP"). However, management believes that BCF is useful
to a prospective investor because it is a measure widely used in the broadcast
industry to evaluate a television broadcast company's operating performance and
that EBITDA is useful to a prospective investor because it is widely used in the
broadcast industry to evaluate a television broadcast company's ability to
service debt. BCF and EBITDA should not be considered in isolation of or as a
substitute for net income (loss), cash flows from operating activities and other
income and cash flow statement data prepared in accordance with GAAP or as a
measure of liquidity or profitability. BCF and EBITDA as determined above may
not be comparable to the BCF and EBITDA measures reported by other companies. In
addition, these measures do not represent funds available for discretionary use.
Designated market area ("DMA") rankings are from the Nielsen Station Index
dated November 1997 as estimated by the A.C. Nielsen Company ("Nielsen"). There
are 211 generally-recognized television "markets" or DMAs in the United States,
which are ranked in size according to various factors based upon actual or
potential audience. Unless otherwise indicated herein, (i) market revenue,
market revenue share, projected advertising revenue growth and station revenue
share data have been obtained from Investing in Television 1994, 1995, 1996 and
1997, BIA Publications, Inc. ("BIA"); (ii) television household data has been
obtained from the Nielsen Station Index for November of the appropriate year;
(iii) audience share and audience rankings, except where specifically stated to
the contrary, have been derived from Nielsen estimates (for May and November of
the appropriate year) of the percentage of persons in the DMA tuned into the
relevant station from sign-on to sign-off (Sunday to Saturday, 6:00 a.m. to 2:00
a.m.); (iv) general market economic data has been obtained from BIA and the
chambers of commerce in each station's market; (v) the term "station" or
"commercial station" means a television broadcast station and does not include
public television stations, cable stations or networks (e.g., CNN, TBS or ESPN),
or stations that do not meet the minimum Nielsen reporting standards (i.e.,
weekly cumulative audience share of at least 2.5% for Sunday to Saturday, 7:00
a.m. to 1:00 a.m.); and (vi) the term "independent" describes a commercial
television station that is not affiliated with the ABC, CBS, NBC, Fox, WB or UPN
television networks.
iv
<PAGE> 8
SUMMARY
The following summary should be read in conjunction with the more detailed
information, financial statements and notes thereto appearing elsewhere in this
Prospectus. For additional information relating to certain defined terms used
herein, as well as the sources for the market and other industry data contained
herein, see "Certain Definitions and Market and Industry Data."
THE COMPANY
The Company is a leading television station group operator in the United
States that operates eleven television stations and provides consulting services
to two additional television stations. Twelve of these stations are network
affiliates and nine are in top forty DMAs, including: Indianapolis, Indiana; New
Haven-Hartford, Connecticut; Buffalo, New York; Norfolk-Portsmouth, Virginia;
Grand Rapids-Kalamazoo-Battle Creek, Michigan and Dallas-Fort Worth, Texas.
These stations have an aggregate United States household reach of approximately
6.9%, ranking the Company among the top independent, "pure-play" television
station group operators in the United States.
The Company's Core Stations generated an aggregate pro forma BCF margin of
approximately 46% for the fiscal year ended December 31, 1997, principally as a
result of their strong network affiliations, leading local news programming and
tight cost controls. In addition, the Company's management pioneered the
"multi-channel strategy," which involves the combination of an owned and
operated television station with an LMA station and/or a 24-hour cable weather
channel (a "Local Weather Station") in the same market. The multi-channel
strategy has enhanced the Company's revenue market shares and increased its BCF
by leveraging its fixed costs over a larger revenue base.
The Company's station portfolio is well diversified in terms of its network
affiliations, geographic coverage, net revenues and cash flow. The Company owns
and operates three CBS affiliates, two NBC affiliates and two ABC affiliates
which accounted for 35%, 28% and 28%, respectively, of the Company's pro forma
BCF for the fiscal year ended December 31, 1997. The Company's LMA stations and
Local Weather Stations accounted for substantially all of the remaining 9% of
its BCF on the same basis. The Company's Core Stations broadcast in seven
different markets, with no market representing more than 25% of the Company's
pro forma net revenues or BCF for the fiscal year ended December 31, 1997. The
Company's pro forma net revenues, BCF and EBITDA were $196.1 million, $79.5
million and $72.7 million, respectively, for the fiscal year ended December 31,
1997.
Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse"), a leading private
equity firm with significant investments and experience in the media and
communications industry, has acquired LIN Television to serve as a platform for
acquiring and operating additional television stations that can benefit from
management's ability to improve operating performance and increase BCF margins
at acquired stations. In connection with the Acquisition, Hicks Muse and NBC
formed a television station joint venture (the "Joint Venture"). The Joint
Venture consists of KXAS-TV, LIN Television's Dallas-Fort Worth NBC affiliate,
and KNSD-TV, NBC's San Diego station. A wholly owned subsidiary of NBC is the
general partner of the Joint Venture (the "NBC General Partner") and NBC
operates the stations owned by the Joint Venture pursuant to a management
agreement. The NBC General Partner holds an approximate 80% equity interest and
the Company holds an approximate 20% equity interest in the Joint Venture.
General Electric Capital Corporation ("GECC") provided debt financing to the
Joint Venture in the form of the GECC Note (as defined), the proceeds of which
were distributed to the Company to finance a portion of the cost of the
Acquisition. The GECC Note is not an obligation of Holdings, the Company or any
of their respective subsidiaries and is recourse only to the Joint Venture, the
Company's equity interest therein and to one of Holding's two corporate parents
(the "GECC Note Guarantor") pursuant to a guarantee. The Company expects that
the interest payments on the GECC Note will be serviced solely by the cash flow
of the Joint Venture. See "The Transactions and Other Matters -- The Joint
Venture."
Later this year, the Company expects to acquire (the "Grand Rapids
Acquisition") from AT&T Corporation ("AT&T") the assets of WOOD-TV and the LMA
rights related to WOTV-TV (collectively,
1
<PAGE> 9
the "Grand Rapids Stations"), both of which stations are located in the Grand
Rapids-Kalamazoo-Battle Creek market. The Company currently provides services to
the Grand Rapids Stations pursuant to a consulting agreement with AT&T. See "The
Transactions and Other Matters -- The Grand Rapids Acquisition" and
"Business -- The Company -- History."
The following table provides information regarding the stations and other
programming outlets operated by the Company and the stations owned by the Joint
Venture:
<TABLE>
<CAPTION>
COMMERCIAL STATION STATION
DMAS, STATIONS AND OTHER DMA STATIONS IN RANK IN AUDIENCE
PROGRAMMING OUTLETS STATUS(A) AFFILIATION(B) RANK(C) DMA(D) DMA(E) Share(e)
------------------------ --------- -------------- ------- ----------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
COMPANY STATIONS AND OTHER PROGRAMMING OUTLETS:
INDIANAPOLIS, IN
WISH-TV.......................................... O&O CBS 25 8 1 18%
WIIH-LP (Satellite)(f)........................... O&O CBS
Local Weather Station............................ O&O Cable
NEW HAVEN-HARTFORD, CT
WTNH-TV.......................................... O&O ABC 27 8 2 14%
WBNE-TV.......................................... LMA WB 5(tie) 2%
GRAND RAPIDS-KALAMAZOO-BATTLE CREEK, MI(g)
WOOD-TV.......................................... CS NBC 37 8 1(tie) 18%
WOTV-TV.......................................... CS ABC 4 5%
NORFOLK-PORTSMOUTH, VA
WAVY-TV.......................................... O&O NBC 39 7 1(tie) 16%
WVBT-TV.......................................... LMA WB/Fox(h) 5 2%
Local Weather Station............................ O&O Cable
BUFFALO, NY
WIVB-TV.......................................... O&O CBS 40 7 2 17%
AUSTIN, TX
KXAN-TV.......................................... O&O NBC 60 7 3 14%
KNVA-TV.......................................... LMA WB 6 3%
KXAM-TV (Satellite)(i)........................... O&O NBC
Low Power Network................................ O&O UPN
DECATUR-CHAMPAIGN, IL
WAND-TV.......................................... O&O ABC 81 8 3 14%
Local Weather Station............................ O&O Cable
FORT WAYNE, IN
WANE-TV.......................................... O&O CBS 102 6 2 19%
Local Weather Station............................ O&O Cable
DALLAS-FORT WORTH, TX
KXTX-TV.......................................... LMA IND 8 13 9 3%
JOINT VENTURE STATIONS:
DALLAS-FORT WORTH, TX
KXAS-TV.......................................... JV NBC 8 13 3 12%
SAN DIEGO, CA
KNSD-TV.......................................... JV NBC 26 7 1 13%
</TABLE>
- ---------------
(a) "O&O" refers to a station owned and operated by the Company. "LMA" refers
to a station operated by the Company pursuant to a local marketing
agreement and with respect to which the Company has a purchase option
exercisable under certain circumstances. "JV" refers to a station owned by
the Joint Venture and operated by NBC. "CS" refers to a station which the
Company currently provides services to pursuant to a consulting agreement.
The Company's Core Stations, all of which are CBS, NBC and ABC affiliates,
are WISH-TV, WANE-TV, WAND-TV, WAVY-TV, KXAN-TV, WTNH-TV and WIVB-TV.
(b) "IND" refers to an independent station with no network affiliation.
(c) Rankings are based on the relative size of the station's "market" among the
211 generally recognized television markets in the United States. Source:
Nielsen Station Index DMA Market Ratings -- November 1997, A.C. Nielsen
Company.
(d) The number of stations in a market excludes local weather stations, low
power networks and satellite broadcasting facilities.
(e) Source: Nielsen Station Index DMA Market Ratings -- November 1997, A.C.
Nielsen Company, Sunday-Saturday 6:00 a.m.-2:00 a.m.
(f) Station WIIH-LP, Indianapolis, Indiana, is operated as a satellite station
of WISH-TV in order to increase WISH-TV's coverage.
2
<PAGE> 10
(g) The Company currently provides services to WOOD-TV and WOTV-TV pursuant to
a consulting agreement with AT&T. The Company has agreed to acquire the
assets of WOOD-TV and the LMA rights related to WOTV-TV from AT&T for a
purchase price of approximately $125.5 million. The acquisition is expected
to close later this year. See "The Transactions and Other Matters -- The
Grand Rapids Acquisition" and "Business -- The Company -- History."
(h) WVBT-TV will become a Fox affiliate on August 31, 1998.
(i) Station KXAM-TV, Llano, Texas, is operated as a satellite station of
KXAN-TV in order to increase KXAN-TV's coverage.
BUSINESS STRATEGY
The Company's business strategy is to maximize its BCF through both revenue
growth and the implementation of effective cost controls. To achieve these
goals, the Company seeks, among other things, to:
Maximize Revenue Shares. From 1993 to 1997, the Company increased its
broadcast television advertising revenue market share from 22.8% to 25.9%
(assuming the acquisitions of WIVB-TV and WTNH-TV occurred on January 1, 1993)
by targeting audiences with favorable demographic profiles, creating auxiliary
revenue streams and cultivating strong network affiliations. On the same basis,
the Company's gross advertising revenues have grown at a compound annual rate of
10.3%, whereas gross advertising revenues in the Company's markets have grown at
a compound annual rate of 6.8%.
The Company attempts to maximize each station's revenue share through a
quarterly "entitlement review process." This process involves the benchmarking
of each station's advertising revenues against an index which weights various
demographic attributes according to their relative advertising revenue value. As
a result of the entitlement review process, the Company's revenue shares
typically outperform its audience shares.
The Company's revenue shares also benefit from long term affiliations with
its three core networks -- CBS, NBC and ABC -- which provide the Company's
television stations affiliated with such networks with competitive programming,
including coverage of political events and high profile sporting events such as
the Olympic Games, Super Bowl and NCAA Men's Basketball Tournament. The Company
also has stations affiliated with Fox, WB and UPN, which further enhances its
ability to grow its revenue shares through access to their competitive
programming.
Emphasize Leading Local News. The Company's Core Stations are ranked number
one or two in late news in all but the Company's smallest market. Management
believes that a successful news operation is critical to the success of a
television station because news audiences generally have the best demographic
profiles from an advertising sales perspective. In addition, news programming:
(i) enables the Company to purchase less syndicated programming and thereby
maintain tight control over programming costs; (ii) serves as a strong lead-in
to other programming; and (iii) fosters a high profile in the local community,
which is critical to maximizing local advertising sales.
The Company believes that its local news programming significantly improves
its stations' BCF margins. Accordingly, the Company has increased the hours of
news produced per week from 81 in 1989 to 187 in 1997 on a pro forma basis.
Partly as a result of its emphasis on quality local news programming, management
has increased the BCF margin at the five network-affiliated stations that it has
operated throughout the period from January 1, 1991 to December 31, 1997
(WISH-TV, WANE-TV, WAND-TV, WAVY-TV and KXAN-TV) from 37% to 47%.
Execute a Multi-Channel Strategy. The Company's management pioneered the
"multi-channel strategy," which involves the combination of an owned and
operated television station with an LMA station and/or a Local Weather Station
in the same market. Management has pursued this strategy in all but one of the
Company's markets. Execution of the multi-channel strategy has been a factor in
the Company's ability to generate incremental cash flow. The advantages of the
multi-channel strategy are: (i) the ability to capitalize on management's
expertise; (ii) additional advertising inventory in each market; (iii) greater
programming flexibility; (iv) enhanced ability to leverage fixed operating costs
over a larger revenue base; (v) improved negotiating positions with respect to
suppliers of syndicated programming, advertisers and the networks; (vi)
increased share of actual viewers; (vii) the opportunity to affiliate with the
emerging networks; and (viii) enhanced opportunities for cross promotion.
3
<PAGE> 11
Control Costs. In addition to concentrating on maximizing advertising
revenues in its local markets, management focuses on controlling costs to
maximize BCF. In many markets, the Company operates with fewer personnel than
its competitors. In addition, management typically buys syndicated programming
on a Company-wide basis and performs detailed profitability analyses for all
programming purchases. As a result, management believes that the Company's
margins are among the highest in the industry for stations in markets of
comparable size.
Pursue Selective Acquisitions. The Company intends to pursue selective
acquisitions of television stations with the goal of improving their operating
performance by applying management's business strategy. Targeted stations
generally will share many of the following characteristics: (i) attractive
acquisition terms; (ii) opportunities for increased advertising revenue; (iii)
opportunities to implement effective cost controls; (iv) opportunities for
increased audience share through improved newscasts and programming; and (v)
market locations that are projected to have attractive growth in advertising
revenues. The Company intends to primarily target network-affiliated stations
located in the fifty largest DMAs, which stations typically have established
audiences for their news, sports and entertainment programming.
Invest in Digital Technology. Management believes that the Company is well
positioned for the transition to digital broadcasting and anticipates that the
Company will be one of the first television broadcasters in the United States to
transmit a digital signal. The Company has already invested $13 million to fully
prepare its towers and transmitter buildings for the transition, and estimates
that an additional $40 million will be required over the next five to seven
years for other necessary capital expenditures such as the purchase of antennae,
transmitters, studio equipment and news gathering equipment. In accordance with
FCC regulations, all station affiliates of ABC, CBS, NBC and Fox in the top ten
DMAs will be required to transmit a digital signal by May 1, 1999. Affiliates of
those networks in DMAs ranked eleven through thirty will be required to transmit
a digital signal by November 1, 1999. All remaining commercial broadcasters will
be required to transmit a digital signal by May 1, 2002.
MANAGEMENT AND OWNERSHIP
The Company's management team, led by Gary Chapman, the Company's President
and Chief Executive Officer, is recognized as an industry leader. As an
indication of management's expertise and ability, the five network-affiliated
stations operated by management throughout the period from January 1, 1991 to
December 31, 1997 (WISH-TV, WANE-TV, WAND-TV, WAVY-TV and KXAN-TV) achieved an
aggregate annual compound growth rate in net revenues and BCF of 8.9% (from
$57.8 million to $96.2 million) and 13.3% (from $21.4 million to $45.2 million),
respectively. Management also increased the Company's BCF margin at these
stations from 37% to 47% during such period. In connection with the Acquisition,
management and key employees reinvested a portion of their equity interest in
LIN Television in the indirect parent corporation of Holdings. In addition,
management and key employees will be granted options to acquire additional
shares representing an approximate 5% equity interest in such parent
corporation.
Hicks Muse is a leading private investment firm with offices in Dallas, New
York, St. Louis and Mexico City that specializes in leveraged acquisitions,
recapitalizations and other principal investing activities. Hicks Muse and its
predecessor firm have completed or have pending over 100 transactions having a
combined transaction value of more than $24 billion.
Although Hicks Muse invests in a wide variety of industries, it has
significant investments and experience in the media and communications industry,
including interests in Chancellor Media, Capstar Broadcasting, STC Broadcasting,
Katz Media, OmniAmerica Tower and Grupo MVS. Hicks Muse plans to utilize an
investment model for the Company similar to that used for Chancellor Media and
Capstar Broadcasting. Chancellor Media was formed in 1993 with the purchase of
two radio stations. Today, Chancellor Media is the second largest radio operator
in the United States in terms of revenue (behind only CBS). Similarly, Capstar
Broadcasting was formed in 1996 for the purpose of acquiring radio stations in
small to medium size markets. Capstar Broadcasting is now the largest radio
operator in the United States in terms of number of stations. See "Risk
Factors -- Potential Conflicts of Interest" and "Certain Other Transactions."
4
<PAGE> 12
THE TRANSACTIONS AND OTHER MATTERS
THE TRANSACTIONS
The Acquisition. Holdings, LIN Acquisition and LIN Television entered into
an Agreement and Plan of Merger on August 12, 1997 (as amended, the "Merger
Agreement"). Pursuant to, and upon the terms and conditions of, the Merger
Agreement, Holdings acquired LIN Television (the "Acquisition") on March 3, 1998
by merging LIN Acquisition, its wholly-owned subsidiary, with and into LIN
Television (the "Merger"), with LIN Television surviving the Merger and becoming
a direct, wholly owned subsidiary of Holdings. The total purchase price for the
common equity of LIN Television was approximately $1.7 billion. In addition, the
Company refinanced $260.2 million of LIN Television indebtedness and incurred
acquisition costs of approximately $32.2 million.
The Financings. The Acquisition was funded by (i) $6.9 million of excess
cash on the Company's balance sheet; (ii) $50.0 million aggregate principal
amount of senior secured Tranche A term loans ("Tranche A Term Loans"); (iii)
$120.0 million aggregate principal amount of senior secured Tranche B term loans
("Tranche B Term Loans"); (iv) $299.3 million gross proceeds from the issuance
by LIN Television of $300.0 million aggregate principal amount of Old Senior
Subordinated Notes; (v) $199.6 million gross proceeds from the issuance by
Holdings of $325.0 million aggregate principal amount at maturity of Old Senior
Discount Notes, which proceeds were contributed by Holdings to the common equity
of the Company; (vi) $558.1 million of common equity provided by affiliates of
Hicks Muse, management and other co-investors to the equity of the corporate
parents of Holdings, which in turn, through Holdings, contributed such amount to
the common equity of the Company; and (vii) $815.5 million of proceeds of the
GECC Note (collectively, the "Financings").
The Joint Venture. In connection with the Acquisition, Hicks Muse and NBC
formed the Joint Venture. The Joint Venture consists of KXAS-TV, formerly LIN
Television's Dallas-Fort Worth NBC affiliate, and KNSD-TV, formerly NBC's San
Diego station. A wholly owned subsidiary of NBC is the general partner of the
Joint Venture and NBC operates the stations owned by the Joint Venture. The NBC
General Partner holds an approximate 80% equity interest and the Company holds
an approximate 20% equity interest in the Joint Venture. GECC provided debt
financing for the Joint Venture in the form of an $815.5 million 25-year
non-amortizing senior secured note bearing an initial interest rate of 8.0% per
annum (the "GECC Note"). The Company expects that the interest payments on the
GECC Note will be serviced solely by the cash flow of the Joint Venture. All
Distributable Cash (as defined) of the Joint Venture will be distributed to the
Company and the NBC General Partner based on their respective equity interests
in the Joint Venture. On a pro forma basis for the fiscal year ended December
31, 1997, the Company's portion of the Joint Venture's Distributable Cash would
have been $2.2 million (without giving effect to a reserve of $15.0 million
which must be established, subject to waiver by the Company, prior to any
distribution of Distributable Cash). See "Risk Factors -- Control of Holdings
and the Company."
The GECC Note was issued by LIN Television of Texas, L.P., the Company's
indirect wholly owned partnership ("LIN Texas"), which distributed the proceeds
to the Company to finance a portion of the cost of the Acquisition. The
obligations to GECC under the GECC Note were assumed by the Joint Venture and
LIN Texas was simultaneously released from all obligations under the GECC Note.
The GECC Note is not an obligation of Holdings, the Company or any of their
respective subsidiaries and is recourse only to the Joint Venture, the Company's
equity interest therein and to the GECC Note Guarantor. See "Risk Factors --
Defaults under the GECC Note" and "The Transactions and Other Matters -- The
Joint Venture."
In connection with the formation of the Joint Venture, the Company received
an extension of its NBC network affiliation agreements to 2010 and the option
(exercisable through December 31, 1999) to purchase WVTM-TV, the NBC affiliate
in Birmingham, Alabama.
5
<PAGE> 13
Sources and Uses. The following table sets forth the sources and uses of
funds in connection with the Acquisition (dollars in millions):
<TABLE>
<S> <C>
SOURCES
Excess cash........................ $ 6.9
Term Loans(a)...................... 170.0
Old Senior Subordinated Notes(b)... 299.3
Holdings contributions(c).......... 757.7
GECC Note(d)....................... 815.5
--------
Total Sources................. $2,049.4
========
USES
Purchase of LIN Television
equity(e)........................ $1,706.4
Refinance LIN Television debt...... 260.2
Transaction fees and expenses(f)... 82.8
--------
Total Uses.................... $2,049.4
========
</TABLE>
- ---------------
(a) The Term Loans funded in connection with the Acquisition consisted of $50.0
million aggregate principal amount of Tranche A Term Loans and $120.0
million aggregate principal amount of Tranche B Term Loans. As of December
31, 1997, the interest rates payable on outstanding Tranche A Term Loans and
Tranche B Term Loans would have been approximately 7.50% and 8.00%,
respectively. See "Description of the Senior Credit Facilities."
(b) Represents gross proceeds to the Company from the issuance of $300.0 million
aggregate principal amount of Old Senior Subordinated Notes.
(c) Affiliates of Hicks Muse, management and other co-investors contributed
$558.1 million to the equity of the corporate parents of Holdings, which in
turn, through Holdings, contributed such amount to the common equity of the
Company. In addition, Holdings issued $325.0 million aggregate principal
amount at maturity of Old Senior Discount Notes and contributed the $199.6
million gross proceeds thereof to the common equity of the Company.
(d) LIN Texas distributed the proceeds from the issuance of the GECC Note to the
Company, which used such proceeds to finance a portion of the cost of the
Acquisition. The GECC Note is not an obligation of Holdings, the Company or
any of their respective subsidiaries and is recourse only to the Joint
Venture, the Company's equity interest therein and to the GECC Note
Guarantor. The Company expects that the interest payments on the GECC Note
will be serviced solely by the cash flow of the Joint Venture. See "Risk
Factors -- Control of Holdings and the Company" and "-- Defaults under the
GECC Note" and "The Transactions and Other Matters -- The Joint Venture.".
(e) The purchase price reflects the total price to acquire the equity of LIN
Television (including KXAS-TV, which was contributed to the Joint Venture).
(f) Includes discounts and commissions on the Old Notes in connection with the
Offerings.
6
<PAGE> 14
Organizational Structure
The following chart depicts (i) the summary organizational chart of
Holdings and the Company and (ii) the sources of financing for the Transactions:
LIN GRAPH
THE GRAND RAPIDS ACQUISITION
The Company expects to consummate the Grand Rapids Acquisition later this
year. The Company currently provides services to the Grand Rapids Stations
pursuant to a consulting agreement with AT&T. The total purchase price for the
Grand Rapids Acquisition will be approximately $125.5 million (plus accretion
thereon of 8% from March 1, 1998), which is expected to be funded by $125.0
million of additional Tranche A Term Loans. For the fiscal year ended December
31, 1997, the Grand Rapids Stations generated net revenues and BCF of $28.4
million and $11.3 million, respectively. The historical and pro forma financial
information contained herein does not give effect to the Grand Rapids
Acquisition. See "The Transactions and Other Matters -- The Grand Rapids
Acquisition" and "Business -- The Company -- History."
7
<PAGE> 15
THE EXCHANGE OFFERS
THE SENIOR SUBORDINATED NOTES EXCHANGE OFFER:
The Senior Subordinated Notes Exchange Offer applies to $300,000,000
aggregate principal amount of the Old Senior Subordinated Notes. The form and
terms of the New Senior Subordinated Notes will be the same as the form and
terms of the Old Senior Subordinated Notes except that (i) interest on the New
Senior Subordinated Notes will accrue from the date of issuance of the Old
Senior Subordinated Notes, and (ii) the New Senior Subordinated Notes are being
registered under the Securities Act and, therefore, will not bear legends
restricting their transfer. The New Senior Subordinated Notes will evidence the
same debt as the Old Senior Subordinated Notes and will be entitled to the
benefits of the Senior Subordinated Notes Indenture (as defined) pursuant to
which the Old Senior Subordinated Notes were issued. The Old Senior Subordinated
Notes and the New Senior Subordinated Notes are sometimes referred to
collectively herein as the "Senior Subordinated Notes." See "Description of the
New Senior Subordinated Notes."
The Senior Subordinated
Notes Exchange Offer..... $1,000 principal amount of New Senior Subordinated
Notes in exchange for each $1,000 principal amount
of Old Senior Subordinated Notes. As of the date
hereof, Old Senior Subordinated Notes representing
$300,000,000 aggregate principal amount are
outstanding. The terms of the New Senior
Subordinated Notes and the Old Senior Subordinated
Notes are substantially identical.
Based on an interpretation by the Commission's
staff set forth in no-action letters issued to
third parties unrelated to the Company, Holdings
and the Guarantors, the Company and the Guarantors
believe that New Senior Subordinated Notes issued
pursuant to the Senior Subordinated Notes Exchange
Offer in exchange for Old Senior Subordinated Notes
may be offered for resale, resold and otherwise
transferred by any person receiving the New Senior
Subordinated Notes, whether or not that person is
the registered holder (other than any such holder
or such other person that is an "affiliate" of the
Company or any Guarantors within the meaning of
Rule 405 under the Securities Act), without
compliance with the registration and prospectus
delivery provisions of the Securities Act, provided
that (i) the New Senior Subordinated Notes are
acquired in the ordinary course of business of that
holder or such other person, (ii) neither the
holder nor such other person is engaging in or
intends to engage in a distribution of the New
Senior Subordinated Notes, and (iii) neither the
holder nor such other person has an arrangement or
understanding with any person to participate in the
distribution of the New Senior Subordinated Notes.
See "The Exchange Offers -- Purpose and Effect."
Each broker-dealer that receives New Senior
Subordinated Notes for its own account in exchange
for Old Senior Subordinated Notes, where those Old
Senior Subordinated Notes were acquired by the
broker-dealer as a result of its market-making
activities or other trading activities, must
acknowledge that it will deliver a prospectus in
connection with any resale of such New Senior
Subordinated Notes. See "Plan of Distribution."
Senior Subordinated Notes
Registration Rights
Agreement................ The Old Senior Subordinated Notes were sold by the
Company on March 3, 1998, in a private placement in
reliance on Section 4(2) of the Securities Act and
immediately resold by the initial purchasers
thereof (the "Initial Purchasers") in reliance on
Rule 144A under the Securities
8
<PAGE> 16
Act (the "Original Senior Subordinated Notes
Offering"). In connection with the original Senior
Subordinated Notes Offering, the Company and
Holdings entered into a Registration Rights
Agreement with the Initial Purchasers (the "Senior
Subordinated Notes Registration Rights Agreement")
providing for, among other things, the Senior
Subordinated Notes Exchange Offer. See "The
Exchange Offers -- Purpose and Effect."
Expiration Date............ The Senior Subordinated Notes Exchange Offer will
expire at 5:00 p.m., New York City time, on
, 1998, or such later date and time to
which it is extended by the Company.
Withdrawal................. The tender of Old Senior Subordinated Notes
pursuant to the Senior Subordinated Notes Exchange
Offer may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
Any Old Senior Subordinated Notes not accepted for
exchange for any reason will be returned without
expense to the tendering holder thereof as promptly
as practicable after the expiration or termination
of the Senior Subordinated Notes Exchange Offer.
Interest on the New Senior
Subordinated Notes and
Old Senior Subordinated
Notes.................... Interest on each New Senior Subordinated Note will
accrue from the date of issuance of the Old Senior
Subordinated Note for which such Old Senior
Subordinated Note is exchanged or from the date of
the last periodic payment of interest on such Old
Note, whichever is later.
Conditions to the Senior
Subordinated Notes
Exchange Offer........... The Senior Subordinated Notes Exchange Offer is
subject to certain customary conditions, certain of
which may be waived by the Company. See "The
Exchange Offers -- Certain Conditions to the
Exchange Offers."
Procedures for Tendering
Old Senior Subordinated
Notes.................... Each holder of Old Senior Subordinated Notes
wishing to accept the Senior Subordinated Notes
Exchange Offer must complete, sign and date the
accompanying letter of transmittal relating to the
Senior Subordinated Notes Exchange Offer (the
"Senior Subordinated Notes Letter of Transmittal"),
or a copy thereof, in accordance with the
instructions contained herein and therein, and mail
or otherwise deliver the Senior Subordinated Notes
Letter of Transmittal, or the copy, together with
the Old Senior Subordinated Notes and any other
required documentation, to the Senior Subordinated
Notes Exchange Agent (as defined) at the address
set forth in the Senior Subordinated Notes Letter
of Transmittal. Persons holding Old Senior
Subordinated Notes through the Depository Trust
Company ("DTC") and wishing to accept the Senior
Subordinated Notes Exchange Offer must do so
pursuant to the DTC's Automated Tender Offer
Program, by which each tendering Participant will
agree to be bound by the Senior Subordinated Notes
Letter of Transmittal. By executing or agreeing to
be bound by the Senior Subordinated Notes Letter of
Transmittal, each holder will represent to the
Company that, among other things, (i) the New
Senior Subordinated Notes acquired pursuant to the
Senior Subordinated Notes Exchange Offer are being
obtained in the ordinary course of business of
9
<PAGE> 17
the person receiving such New Senior Subordinated
Notes, whether or not such person is the holder of
the Old Senior Subordinated Notes, (ii) neither the
holder nor any such other person is engaging in or
intends to engage in a distribution of such New
Senior Subordinated Notes, (iii) neither the holder
nor any such other person has an arrangement or
understanding with any person to participate in the
distribution of such New Senior Subordinated Notes
within the meaning of the Securities Act, (iv)
neither the holder nor any such person is an
"affiliate," as defined under Rule 405 promulgated
under the Securities Act, of the Company or any
Guarantor, and (v) if such holder or other person
is a broker-dealer, that it will receive New Senior
Subordinated Notes for its own account in exchange
for Old Senior Subordinated Notes that were
acquired as a result of market-making activities or
other trading activities and that it will be
required to acknowledge that it will deliver a
prospectus in connection with any resale of such
New Senior Subordinated Notes. See "The Exchange
Offers -- Procedures for Tendering."
Shelf Registration
Requirement.............. Pursuant to the Senior Subordinated Notes
Registration Rights Agreement, the Company is
required to file a "shelf" registration statement
for a continuous offering pursuant to Rule 415
under the Securities Act in respect of the Old
Senior Subordinated Notes if (i) because of any
change in law or applicable interpretations of the
staff of the Commission, the Company is not
permitted to effect the Senior Subordinated Notes
Exchange Offer, (ii) the Senior Subordinated Notes
Exchange Offer is not consummated within 225 days
of the Original Senior Subordinated Notes Offering,
(iii) any holder of Private Exchange Securities (as
defined) requests within 60 days after the Senior
Subordinated Notes Exchange Offer, (iv) any
applicable law or interpretations do not permit any
holder of Old Senior Subordinated Notes to
participate in the Senior Subordinated Notes
Exchange Offer, (v) any holder of Old Senior
Subordinated Notes participates in the Senior
Subordinated Notes Exchange Offer and does not
receive freely transferrable New Senior
Subordinated Notes in change for Old Senior
Subordinated Notes or (vi) the Company so elects.
Acceptance of Old Senior
Subordinated Notes and
Delivery of New Senior
Subordinated Notes....... The Company will accept for exchange any and all
Old Senior Subordinated Notes which are properly
tendered (and not withdrawn) in the Senior
Subordinated Notes Exchange Offer prior to 5:00
p.m., New York City time, on the Expiration Date.
The New Senior Subordinated Notes issued pursuant
to the Senior Subordinated Notes Exchange Offer
will be delivered promptly following the Expiration
Date. See "The Exchange Offers -- Terms of the
Exchange Offers."
Senior Subordinated Notes
Exchange Agent........... United States Trust Company of New York is serving
as Exchange Agent (the "Senior Subordinated Notes
Exchange Agent") in connection with the Senior
Subordinated Notes Exchange Offer.
10
<PAGE> 18
Federal Income Tax
Considerations........... The exchange pursuant to the Senior Subordinated
Notes Exchange Offer should not be a taxable event
for federal income tax purposes. See "Certain
United States Federal Income Tax Considerations."
Effect of Not Tendering.... Old Senior Subordinated Notes that are not tendered
or that are tendered but not accepted will,
following the completion of the Senior Subordinated
Notes Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof.
THE SENIOR DISCOUNT NOTES EXCHANGE OFFER:
The Senior Discount Notes Exchange Offer applies to $325,000,000 aggregate
principal amount at maturity of the Old Senior Discount Notes. The form and
terms of the New Senior Discount Notes will be the same as the form and terms of
the Old Senior Discount Notes except that (i) the Accreted Value (as defined) of
the New Senior Discount Notes will be calculated from the date of issuance of
the Old Senior Discount Notes and (ii) the New Senior Discount Notes are being
registered under the Securities Act and, therefore, will not bear legends
restricting their transfer. The New Senior Discount Notes will evidence the same
debt as the Old Senior Discount Notes and will be entitled to the benefits of
the Senior Discount Notes Indenture (as defined) pursuant to which the Old
Senior Discount Notes were issued. The Old Senior Discount Notes and the New
Senior Discount Notes are sometimes referred to collectively herein as the
"Senior Discount Notes." See "Description of the New Senior Discount Notes."
The Senior Discount Notes
Exchange Offer........... $1,000 principal amount at maturity of New Senior
Discount Notes in exchange for each $1,000
principal amount at maturity of Old Senior Discount
Notes. As of the date hereof, Old Senior Discount
Notes representing $325,000,000 aggregate principal
amount at maturity are outstanding. The terms of
the New Senior Discount Notes and the Old Senior
Discount Notes are substantially identical.
Based on an interpretation by the Commission's
staff set forth in no-action letters issued to
third parties unrelated to Holdings, Holdings
believes that New Senior Discount Notes issued
pursuant to the Senior Discount Notes Exchange
Offer in exchange for Old Senior Discount Notes may
be offered for resale, resold and otherwise
transferred by any person receiving the New Senior
Discount Notes, whether or not that person is the
holder (other than any such holder or such other
person that is an "affiliate" of Holdings within
the meaning of Rule 405 under the Securities Act),
without compliance with the registration and
prospectus delivery provisions of the Securities
Act, provided that (i) the New Senior Discount
Notes are required in the ordinary course of
business of that holder or such other person, (ii)
neither the holder nor such other person is
engaging in or intends to engage in a distribution
of the New Senior Discount Notes, and (iii) neither
the holder nor such other person has an arrangement
or understanding with any person to participate in
the distribution of the New Senior Discount Notes.
See "The Exchange Offers -- Purpose and Effect."
Each broker-dealer that receives New Senior
Discount Notes for its own account in exchange for
Old Senior Discount Notes where the Old Senior
Discount Notes were acquired by the broker-dealer
as a result of its market-making activities or
other trading activities, must acknowledge that it
will deliver a prospectus in connection with any
resale of such New Senior Discount Notes. See "Plan
of Distribution."
11
<PAGE> 19
Senior Discount Notes
Registration Rights
Agreement................ The Old Senior Discount Notes were sold by Holdings
on March 3, 1998, in a private placement in
reliance on Section 4(2) of the Securities Act and
immediately resold by the Initial Purchasers in
reliance on Rule 144A under the Securities Act (the
"Original Senior Discount Notes Offering," and
together with the Original Senior Subordinated
Notes Offering, the "Original Offerings.") In
connection with the Original Senior Discount Notes
Offering, the Company and Holdings entered into a
Registration Rights Agreement with the Initial
Purchasers (the "Senior Discount Notes Registration
Rights Agreement") providing for, among other
things, the Senior Discount Notes Exchange Offer.
See "The Exchange Offers -- Purpose and Effect."
Expiration Date............ The Senior Discount Notes Exchange Offer will
expire at 5:00 p.m., New York City time, on
, 1998, or such later date and time to
which it is extended by Holdings.
Withdrawal................. The tender of Old Senior Discount Notes pursuant to
the Senior Discount Notes Exchange Offer may be
withdrawn at any time prior to 5:00 p.m., New York
City time, on the Expiration Date. Any Old Senior
Discount Notes not accepted for exchange for any
reason will be returned without expense to the
tendering holder thereof as promptly as practicable
after the expiration or termination of the Senior
Discount Notes Exchange Offer.
Accreted Value of the New
Senior Discount Notes and
Old Senior Discount
Notes.................... The Accreted Value of each New Senior Discount Note
will be calculated from the date of issuance of the
Old Senior Discount Note for which such New Senior
Discount Note is exchanged.
Conditions to the Senior
Discount Notes Exchange
Offer.................... The Senior Discount Notes Exchange Offer is subject
to certain customary conditions, certain of which
may be waived by the Company. See "The Exchange
Offers -- Certain Conditions to the Exchange
Offers."
Procedures for Tendering
Senior Discount Notes.... Each holder of Old Senior Discount Notes wishing to
accept the Senior Discount Notes Exchange Offer
must complete, sign and date the accompanying
letter of transmittal relating to the Senior
Discount Notes Exchange Offer (the "Senior Discount
Notes Letter of Transmittal"; the Senior Discount
Notes Letter of Transmittal and the Senior
Subordinated Notes Letter of Transmittal are
sometimes referred to herein individually as a
"Letter of Transmittal" and collectively as the
"Letters of Transmittal"), or a copy thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver the
Senior Discount Notes Letter of Transmittal, or the
copy, together with the Old Senior Discount Notes
and any other required documentation, to the Senior
Discount Notes Exchange Offer (as defined) at the
address set forth in the Senior Discount Notes
Letter of Transmittal. Persons holding Old Discount
Notes through the DTC and wishing to accept the
Senior Discount Notes Exchange Offer must do so
pursuant to the DTC's Automated Tender Offer
Program, by which each tendering
12
<PAGE> 20
Participant will agree to be bound by the Senior
Discount Notes Letter of Transmittal. By executing
or agreeing to be bound by the Senior Discount
Notes Letter of Transmittal, each holder will
represent to Holdings that, among other things, (i)
the New Senior Discount Notes acquired pursuant to
the Senior Discount Notes Exchange Offer are being
obtained in the ordinary course of business of the
person receiving such New Senior Discount Notes,
whether or not such person is the holder of the Old
Senior Discount Notes, (ii) neither the holder nor
any such other person is engaging in or intends to
engage in a distribution of such New Senior
Discount Notes, (iii) neither the holder nor any
such other person has an arrangement or
understanding with any person to participate in the
distribution of such New Senior Discount Notes,
(iv) neither the holder nor any such other person
is an "affiliate," as defined under Rule 405
promulgated under the Securities Act, of Holdings,
and (v) if such holder or other person is a
broker-dealer, that it will receive New Senior
Discount Notes for its own account in exchange for
Old Senior Discount Notes that were acquired as a
result of market-making activities or other trading
activities and that it will be required to
acknowledge that it will deliver a prospectus in
connection with any resale of such New Senior
Discount Notes.
Shelf Registration
Requirement.............. Pursuant to the Senior Discount Notes Registration
Rights Agreement, Holdings is required to file a
"shelf" registration statement for a continuous
offering pursuant to Rule 415 under the Securities
Act in respect of the Old Senior Discount Notes if
(i) because of any change in law or applicable
interpretations of the staff of the Commission,
Holdings is not permitted to effect the Senior
Discount Notes Exchange Offer, (ii) the Senior
Discount Notes Exchange Offer is not consummated
within 225 days of the Original Senior Discount
Notes Offering, (iii) any holder of Private
Exchange Securities (as defined) requests within 60
days after the Senior Discount Notes Exchange
Offer, (iv) any applicable law or interpretations
do not permit any holder of Old Senior Discount
Notes to participate in the Senior Discount Notes
Exchange Offer, (v) any holder of Old Senior
Discount Notes participates in the Senior Discount
Notes Exchange Offer and does not receive freely
transferrable New Senior Discount Notes in exchange
for Old Senior Discount Notes or (vi) Holdings so
elects.
Acceptance of Old Senior
Discount Notes and
Delivery of New Senior
Discount
Notes.................... Holdings will accept for exchange any and all Old
Senior Discount Notes which are properly tendered
(and not withdrawn) in the Senior Discount Notes
Exchange Offer prior to 5:00 p.m., New York City
time, on the Expiration Date. The New Senior
Discount Notes issued pursuant to the Senior
Discount Notes Exchange Offer will be delivered
promptly following the Expiration Date. See "The
Exchange Offers -- Terms of the Exchange Offer."
Senior Discount Notes
Exchange Agent........... United States Trust Company of New York is serving
as Exchange Agent (the "Senior Discount Notes
Exchange Agent"; the Senior Subordinated Notes
Exchange Agent and the Senior Discount Notes
13
<PAGE> 21
Exchange Agent are sometimes referred to herein
individually as an "Exchange Agent" and
collectively as the "Exchange Agents") in
connection with the Senior Discount Notes Exchange
Offer.
Federal Income Tax
Considerations........... The exchange pursuant to the Senior Discount Notes
Exchange Offer should not be a taxable event for
federal income tax purposes. See "Certain United
States Federal Income Tax Considerations."
Effect of Not Tendering.... Old Senior Discount Notes that are not tendered or
that are tendered but not accepted will, following
the completion of the Senior Discount Notes
Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof.
TERMS OF THE NEW NOTES
NEW SENIOR SUBORDINATED NOTES
Issuer..................... LIN Television Corporation (as
successor-in-interest to LIN Acquisition Company).
Securities Offered......... $300,000,000 aggregate principal amount of 8 3/8%
Senior Subordinated Notes due 2008.
Maturity................... March 1, 2008.
Interest Payment Dates..... March 1 and September 1 of each year, commencing
September 1, 1998.
Sinking Fund............... None.
Optional Redemption........ Except as described below, the Company may not
redeem the New Senior Subordinated Notes prior to
March 1, 2003. On or after such date, the Company
may redeem the Senior Subordinated Notes, in whole
or in part, at the redemption prices set forth
herein, together with accrued and unpaid interest,
if any, to the date of redemption. In addition, at
any time and from time to time on or prior to March
1, 2001, the Company may redeem up to 35% of the
aggregate principal amount of the Senior
Subordinated Notes with the net cash proceeds of
one or more private or public offerings by the
Company, at a redemption price equal to 108.375% of
the principal amount to be redeemed, together with
accrued and unpaid interest, if any, to the date of
redemption, provided that at least 65% of the
originally issued aggregate principal amount of the
Senior Subordinated Notes remains outstanding after
each such redemption. See "Description of the New
Senior Subordinated Notes -- Optional Redemption."
Change of Control.......... Upon the occurrence of a Change of Control, (i) the
Company will have the option, at any time on or
prior to March 1, 2003, to redeem the New Senior
Subordinated Notes, in whole but not in part, at a
redemption price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest
plus the Applicable Premium (as defined) and (ii)
if the New Senior Subordinated Notes are not
redeemed or if such Change of Control occurs after
March 1, 2003, the Company will be required to make
an offer to repurchase the New Senior Subordinated
Notes at a price equal to 101% of the principal
amount thereof, together with accrued and unpaid
interest, if any, to the date of purchase. See
"Description of the New Senior Subordinated
Notes -- Change of Control" and "-- Amendment."
14
<PAGE> 22
Guarantees................. The New Senior Subordinated Notes will be
guaranteed (the "Subsidiary Guarantees"), jointly
and severally on an unsecured senior subordinated
basis, by the Company's direct and indirect,
existing and future, Restricted Subsidiaries (the
"Guarantors"). The Guarantors also will guarantee
all obligations of the Company under the Senior
Credit Facilities (as defined). The Company's
obligations under the Senior Credit Facilities also
will be secured by substantially all of the assets
of the Company and the Guarantors. The obligations
of each Guarantor under its Subsidiary Guarantee
will be subordinated in right of payment to the
prior payment in full of all Guarantor Senior
Indebtedness (as defined) of such Guarantor to
substantially the same extent as the Senior
Subordinated Notes are subordinated to all existing
and future Senior Indebtedness of the Company. See
"Description of the New Senior Subordinated
Notes -- Subsidiary Guarantees of the New Senior
Subordinated Notes."
Ranking.................... The New Senior Subordinated Notes will be unsecured
and will be subordinated in right of payment to all
existing and future Senior Indebtedness (as
defined) of the Company and will rank pari passu in
right of payment with all Senior Subordinated
Indebtedness (as defined) of the Company. As of
March 31, 1998, the aggregate principal amount of
the Company's outstanding Senior Indebtedness was
$170.0 million (consisting of outstanding Term
Loans) and the Company had no Senior Subordinated
Indebtedness outstanding other than the Senior
Subordinated Notes and had no Subsidiary
Indebtedness outstanding. As of such date,
liabilities of the Company's Subsidiaries reflected
on its consolidated balance sheet, including
indebtedness and other liabilities such as trade
payables and accrued expenses, aggregated $17.8
million. See "Description of the New Senior
Subordinated Notes -- Ranking and Subordination."
Restrictive Covenants...... The Senior Subordinated Notes Indenture limits,
among other things, (i) the incurrence of
additional indebtedness and issuance of capital
stock, (ii) layering of indebtedness, (iii) the
payment of dividends on, and redemption of, capital
stock of the Company, (iv) liens, (v) mergers,
consolidations, and sales of all or substantially
all of the Company's assets, (vi) asset sales,
(vii) asset swaps, (viii) dividend and other
payment restrictions affecting Restricted
Subsidiaries and (ix) transactions with affiliates
of the Company. However, all of these limitations
and prohibitions are subject to a number of
important qualifications and exceptions. See
"Description of the New Senior Subordinated
Notes -- Certain Covenants."
Use of Proceeds............ There will be no cash proceeds to the Company from
the exchange of New Senior Subordinated Notes for
Old Senior Subordinated Notes pursuant to the
Senior Subordinated Notes Exchange Offer. The net
proceeds from the Original Senior Subordinated
Notes Offering were used, together with the
proceeds of the other Financings, to consummate the
Acquisition.
NEW SENIOR DISCOUNT NOTES
Issuer..................... LIN Holdings Corp.
Securities Offered......... $325,000,000 aggregate principal amount at maturity
of 10% Senior Discount Notes due 2008. The Senior
Discount Notes will be issued at a discount to
their aggregate principal amount at maturity.
15
<PAGE> 23
Maturity................... March 1, 2008.
Interest Payment Dates..... Cash interest will not accrue or be payable on the
New Senior Discount Notes prior to March 1, 2003.
Thereafter, cash interest on the New Senior
Discount Notes will accrue at a rate of 10% per
annum and will be payable semi-annually in arrears
on March 1 and September 1 of each year, commencing
on September 1, 2003.
Original Issue Discount.... For federal income tax purposes, the New Senior
Discount Notes will be treated as having been
issued with "original issue discount" equal to the
difference between the issue price of the Old
Senior Discount Notes and the sum of all cash
payments (whether denominated as principal or
interest) to be made thereon. Each holder of a New
Senior Discount Note must include as gross income
for federal income tax purposes a portion of such
original issue discount for each day during each
taxable year in which a New Senior Discount Note is
held even though no cash interest payments will be
received prior to March 1, 2003. See "Certain
United States Federal Income Tax
Considerations -- Taxation of Original Issue
Discount."
Sinking Fund............... None.
Mandatory Principal
Redemption............... Except as described below, Holdings may not redeem
the New Senior Discount Notes prior to March 1,
2003. On March 1, 2003, Holdings will be required
to redeem Senior Discount Notes with an aggregate
principal amount at maturity equal to (i) $125.0
million multiplied by (ii) the quotient obtained by
dividing (x) the aggregate principal amount at
maturity of Senior Discount Notes then outstanding
(other than Senior Discount Notes then held by
Holdings or its Subsidiaries or the entities with
respect to which Holdings is a direct or indirect
Subsidiary) by (y) $325.0 million, (the "Mandatory
Principal Redemption Amount") at a redemption price
equal to 100% of the principal amount at maturity
of the Senior Discount Notes so redeemed. See
"Description of the New Senior Discount
Notes -- Mandatory Principal Redemption."
Optional Redemption........ The New Senior Discount Notes will be redeemable at
the option of Holdings, in whole or in part, at any
time on or after March 1, 2003. On or after such
date, Holdings may redeem the New Senior Discount
Notes, in whole or in part, at the redemption
prices set forth herein, together with accrued and
unpaid interest, if any, to the date of redemption.
In addition, at any time and from time to time on
or prior to March 1, 2001, Holdings may, subject to
certain requirements, redeem up to 35% of the
aggregate principal amount at maturity of the
Senior Discount Notes with the net cash proceeds
from one or more private or public equity offerings
at a price equal to 110% of the Accreted Value (as
defined) at the date of redemption, provided that
at least 65% of the originally issued aggregate
principal amount at maturity of the Senior Discount
Notes remains outstanding after each such
redemption. See "Description of the New Senior
Discount Notes -- Optional Redemption."
Change of Control.......... Upon a Change of Control, (i) Holdings will have
the option, at any time on or prior to March 1,
2003, to redeem the New Senior Discount Notes, in
whole but not in part, at a redemption price equal
to 100% of the Accreted Value thereof plus the
Applicable Premium and (ii) if the New Senior
Discount Notes are not so redeemed or if such
Change of Control occurs after March 1, 2003,
Holdings will be required to make
16
<PAGE> 24
an offer to repurchase the New Senior Discount
Notes at a price equal to (a) 101% of the Accreted
Value thereof if redeemed on or before March 1,
2003, and (b) 101% of the principal amount at
maturity, plus accrued and unpaid interest, if any,
thereon, if redeemed after March 1, 2003. See
"Description of the New Senior Discount
Notes -- Change of Control."
Guarantees................. None.
Ranking.................... The New Senior Discount Notes will be senior
unsecured obligations of Holdings and will rank
pari passu in right of payment with all Senior
Indebtedness of Holdings, including Holdings'
guarantee of the Senior Credit Facilities. Holdings
is a holding company with no operations of its own
and whose primary asset is the capital stock of the
Company (all of which will be pledged to secure the
Senior Credit Facilities). As a result of the
holding company structure, the New Senior Discount
Notes will effectively rank junior in right of
payment to all creditors of the Company and its
subsidiaries, including the lenders under the
Senior Credit Facilities, holders of the Senior
Subordinated Notes and trade creditors. As of March
31, 1998, the New Senior Discount Notes were
effectively subordinated to $523.8 of aggregate
liabilities (including indebtedness and other
liabilities such as trade payables and accrued
expenses that would have been reflected on the
consolidated balance sheet) of the Company and its
subsidiaries. See "Description of the New Senior
Discount Notes."
Restrictive Covenants...... The Senior Discount Notes Indenture limits, among
other things, (i) the incurrence of additional
indebtedness and issuance of capital stock, (ii)
the payment of dividends on, and redemption of,
capital stock of Holdings, (iii) mergers,
consolidations and sales of all or substantially
all of Holdings' assets, (iv) asset sales, (v)
asset swaps, (vi) dividend and other payment
restrictions affecting Restricted Subsidiaries and
(vii) transactions with affiliates. However, all of
these limitations and prohibitions are subject to a
number of important qualifications and exceptions.
See "Description of the New Senior Discount
Notes -- Certain Covenants."
Use of Proceeds............ There will be no cash proceeds to Holdings from the
exchange of New Senior Discount Notes for Old
Senior Discount Notes pursuant to the Senior
Discount Notes Exchange Offer. The net proceeds
from the Original Senior Discount Notes Offering
were used, together with the proceeds of the other
Financings, to consummate the Acquisition.
RISK FACTORS
Prospective investors should carefully consider all of the information set
forth in this Prospectus and, in particular, should evaluate the specific
factors set forth under "Risk Factors" for risks involved with an investment in
the New Notes, as well as a continuing investment in the Old Notes.
17
<PAGE> 25
SUMMARY HISTORICAL FINANCIAL DATA
The following table sets forth, as of the dates and for the years
indicated, summary historical consolidated financial data of the Company and
Holdings. The historical statement of operations and other data with respect to
December 31, 1995, 1996 and 1997 and the balance sheet data at December 31, 1996
and 1997, set forth below, are derived from, and are qualified by reference to,
the consolidated financial statements as audited by Ernst & Young LLP, included
elsewhere in this Prospectus and should be read in conjunction with those
financial statements and notes thereto. The historical statement of operations
and other data with respect to December 31, 1993 and 1994 and the balance sheet
data at December 31, 1993, 1994 and 1995, set forth below, are derived from LIN
Television's audited financial statements not included in this Prospectus. The
interim financial data set forth below is derived from the unaudited financial
statements included elsewhere in this Prospectus and should be read in
conjunction with those financial statements and the notes thereto.
<TABLE>
<CAPTION>
HOLDINGS COMPANY PREDECESSOR
PERIOD FROM PERIOD FROM PERIOD FROM PREDECESSOR
MARCH 3 MARCH 3 JANUARY 1 THREE MONTHS
THROUGH THROUGH THROUGH ENDED
MARCH 31, MARCH 31, MARCH 2, MARCH 31,
1998 1998 1998 1997
----------- ----------- ----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues..................... $ 16,211 $ 16,211 $43,804 $ 61,662
Operating costs and expenses:
Station operating expenses...... 8,026 8,026 22,818 32,393
Amortization of program
rights........................ 1,015 1,015 2,743 4,058
Depreciation and amortization of
intangible assets............. 4,474 4,474 4,581 6,396
Corporate expense............... 458 458 1,170 1,698
Tower write-offs(c)............. -- -- -- --
---------- ---------- ------- --------
Operating income................. 2,238 2,238 12,492 17,117
Interest expense................. 5,270 3,535 2,764 5,718
Other (income) expense........... 412 412 146 16
Merger expense(d)................ -- -- 8,616 --
---------- ---------- ------- --------
Income (loss) before provision
(benefit) for income taxes and
extraordinary item.............. (3,444) (1,709) 966 11,383
Provision (benefit) for income
taxes........................... (215) 2,019 3,710 4,246
---------- ---------- ------- --------
Income (loss) before
extraordinary item.............. (3,229) (3,728) (2,744) 7,137
Extraordinary item, net of income
tax benefit(e).................. -- -- -- --
---------- ---------- ------- --------
Net income (loss)................ $ (3,229) $ (3,728) $(2,744) $ 7,137
========== ========== ======= ========
BALANCE SHEET DATA:
Cash and cash equivalents........ $ 17,722 $ 17,722 $ 28,493
Total assets..................... 1,802,940 1,790,270 595,789
Long-term debt................... 670,560 469,301 335,000
Total stockholders' equity
(deficit)....................... 554,894 741,249 147,099
CASH FLOW DATA:
Net cash provided by (used in):
Operating activities............ 8,626 8,626 8,416 21,448
Investing activities............ (907,263) (907,263) (1,468) (7,421)
Financing activities............ 916,359 916,359 1,071 (13,486)
Net increase (decrease) in cash
and cash equivalents............ 17,722 17,722 8,019 541
OTHER DATA:
Capital expenditures............. $ 89 $ 89 $ 1,221 $ 7,171
BCF(f)........................... 7,730 7,730 17,104 25,817
EBITDA(f)........................ 7,272 7,272 15,934 24,119
Ratio of earnings to fixed
charges(g)...................... -- -- 1.4x 3.0x
<CAPTION>
PREDECESSOR
----------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1997 1996 1995(A) 1994(B) 1993
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues..................... $291,519 $273,367 $217,247 $150,523 $127,541
Operating costs and expenses:
Station operating expenses...... 134,219 128,928 96,988 66,001 57,587
Amortization of program
rights........................ 15,596 14,464 12,357 7,274 5,002
Depreciation and amortization of
intangible assets............. 24,789 23,817 17,127 8,849 7,920
Corporate expense............... 6,763 6,998 5,747 4,330 4,781
Tower write-offs(c)............. 2,697 -- -- -- --
-------- -------- -------- -------- --------
Operating income................. 107,455 99,160 85,028 64,069 52,251
Interest expense................. 21,340 26,582 26,262 13,451 13,678
Other (income) expense........... 200 (359) (938) (293) (797)
Merger expense(d)................ 7,206 -- -- -- --
-------- -------- -------- -------- --------
Income (loss) before provision
(benefit) for income taxes and
extraordinary item.............. 78,709 72,937 59,704 50,911 39,370
Provision (benefit) for income
taxes........................... 30,602 26,476 21,674 19,726 17,083
-------- -------- -------- -------- --------
Income (loss) before
extraordinary item.............. 48,107 46,461 38,030 31,185 22,287
Extraordinary item, net of income
tax benefit(e).................. -- -- -- (2,925) --
-------- -------- -------- -------- --------
Net income (loss)................ $ 48,107 $ 46,461 $ 38,030 $ 28,260 $ 22,287
======== ======== ======== ======== ========
BALANCE SHEET DATA:
Cash and cash equivalents........ $ 8,046 $ 27,952 $ 18,025 $ 17,907 $ 19,461
Total assets..................... 569,325 595,944 587,256 423,964 183,697
Long-term debt................... 260,000 350,000 387,000 295,000 176,447
Total stockholders' equity
(deficit)....................... 192,565 138,448 86,434 40,160 (99,115)
CASH FLOW DATA:
Net cash provided by (used in):
Operating activities............ $ 81,691 $ 70,799 $ 56,040 $ 49,654 $ 46,566
Investing activities............ (15,060) (27,864) (127,723) (142,168) (6,864)
Financing activities............ (86,537) (33,008) 71,801 90,960 (37,594)
Net increase (decrease) in cash
and cash equivalents............ (19,906) 9,927 118 (1,554) 2,108
OTHER DATA:
Capital expenditures............. $ 20,605 $ 27,557 $ 27,715 $ 20,406 $ 6,864
BCF(f)........................... 145,470 130,399 106,749 77,203 65,466
EBITDA(f)........................ 138,707 123,401 101,002 72,873 60,685
Ratio of earnings to fixed
charges(g)...................... 4.6x 3.7x 3.2x 4.5x 3.8x
</TABLE>
18
<PAGE> 26
- ---------------
(a) On October 2, 1995, the Company purchased station WIVB-TV, Buffalo, New York
for approximately $100.7 million in cash.
(b) On December 28, 1994, the Company purchased station WTNH-TV, New
Haven-Hartford, Connecticut for approximately $120.2 million in cash plus
approximately 3.4 million shares of LIN Television common stock.
(c) During the second quarter of 1997, the Company disposed of towers and other
broadcast equipment that could no longer be used with digital technology.
(d) During the last half of 1997, the Company incurred financial, legal advisory
and regulatory filing fees in connection with the Acquisition.
(e) In 1994, the Company recorded a $4.5 million write-off of unamortized bank
fees and expenses related to its existing credit facility. This write-off
has been reflected as an extraordinary loss on extinguishment of debt of
$2.9 million, after the effect of an income tax benefit of $1.6 million, in
the Company's financial statements.
(f) The terms "broadcast cash flow" ("BCF") and "EBITDA" are referred to in
various places in this Prospectus. BCF is defined as operating income (loss)
plus corporate expenses plus depreciation and amortization of intangible
assets and amortization of program rights plus other non-cash expenses
(consisting of tower write-offs and non-cash pension expenses) minus cash
program payments. EBITDA is defined as BCF minus corporate expenses. BCF and
EBITDA are not measures of performance calculated in accordance with
generally accepted accounting principles ("GAAP"). However, management
believes that BCF is useful to a prospective investor because it is a
measure widely used in the broadcast industry to evaluate a television
broadcast company's operating performance and that EBITDA is useful to a
prospective investor because it is widely used in the broadcast industry to
evaluate a television broadcast company's ability to service debt. BCF and
EBITDA should not be considered in isolation of or as a substitute for net
income (loss), cash flows from operating activities and other income and
cash flow statement data prepared in accordance with GAAP or as a measure of
liquidity or profitability. BCF and EBITDA as determined above may not be
comparable to the BCF and EBITDA measures reported by other companies. In
addition, these measures do not represent funds available for discretionary
use. The Company is currently considering selling to the Sports Joint
Venture (as defined) the Company's contractual rights with respect to
television station KXTX-TV, its Dallas-Fort Worth LMA station. In 1997,
KXTX-TV generated BCF of $6.8 million.
(g) For purposes of calculating the ratio of earnings to fixed charges,
"earnings" consist of income before provision for income taxes plus fixed
charges and losses from equity method joint ventures. "Fixed charges"
consist of interest expense, amortization of deferred financing costs and
the component of rental expense believed by management to be representative
of the interest factor thereon. Earnings were insufficient to cover fixed
charges by $3.0 million for Holdings for the period March 3 through March
31, 1998, and $1.2 million for the Company for the period March 3 through
March 31, 1998.
19
<PAGE> 27
SUMMARY PRO FORMA FINANCIAL DATA
The following table sets forth, as of the dates and for the years
indicated, summary pro forma financial data of the Company and Holdings. The pro
forma financial data is derived from the "Unaudited Pro Forma Financial
Information" that gives pro forma effect to the Transactions. The pro forma
statement of operations and other data give effect to the Transactions as if
they had occurred on January 1 of each of the periods presented. The pro forma
financial information contained herein does not give effect to the Grand Rapids
Acquisition. The pro forma financial data do not purport to represent what the
financial position or results of operations of the Company and Holdings and
their subsidiaries would actually have been had the Transactions in fact been
consummated on the assumed dates or to project the financial position or results
of operations of the Company and Holdings and their subsidiaries for any future
period or date. The pro forma financial data presented below are based on
assumptions which management believes are reasonable and should be read in
conjunction with "Selected Consolidated Financial and Operating Data,"
"Unaudited Pro Forma Financial Information," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements of the Company and Holdings, and the notes thereto,
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31, 1997
------------------- -------------------
HOLDINGS COMPANY HOLDINGS COMPANY
-------- -------- -------- --------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues....................................... $ 46,762 $ 46,762 $196,115 $196,115
Operating costs and expenses
Station operating expenses....................... 25,848 25,848 106,098 106,098
Amortization of program rights................... 3,413 3,413 13,566 13,566
Depreciation and amortization of intangible
assets........................................ 13,597 13,597 54,074 54,074
Corporate expense................................ 1,628 1,628 6,763 6,763
Tower write-offs(a).............................. -- -- 2,697 2,697
-------- -------- -------- --------
Operating income................................... 2,276 2,276 12,917 12,917
Interest expense................................... 16,394 10,646 64,828 43,112
Other (income) expense............................. 2,180 2,180 4,989 4,989
-------- -------- -------- --------
Income (loss) before provision (benefit) for income
taxes............................................ (16,298) (10,550) (56,900) (35,184)
Provision (benefit) for income taxes............... (1,159) 853 (13,485) (5,884)
-------- -------- -------- --------
Net loss........................................... $(15,139) $(11,403) $(43,415) $(29,300)
======== ======== ======== ========
OTHER DATA:
Capital expenditures............................... $ 1,002 $ 1,002 $ 18,066 $ 18,066
BCF(b)............................................. 17,024 17,024 79,488 79,488
EBITDA(b).......................................... 15,396 15,396 72,725 72,725
Ratio of earnings to fixed charges(c).............. -- -- -- --
</TABLE>
20
<PAGE> 28
- ---------------
(a) During the second quarter of 1997, the Company disposed of towers and other
broadcast equipment that could no longer be used with digital technology.
(b) The terms "broadcast cash flow" ("BCF") and "EBITDA" are referred to in
various places in this Prospectus. BCF is defined as operating income (loss)
plus corporate expenses plus depreciation and amortization of intangible
assets and amortization of program rights plus other non-cash expenses
(consisting of tower write-offs and non-cash pension expenses) minus cash
program payments. EBITDA is defined as BCF minus corporate expenses. BCF and
EBITDA are not measures of performance calculated in accordance with
generally accepted accounting principles ("GAAP"). However, management
believes that BCF is useful to a prospective investor because it is a
measure widely used in the broadcast industry to evaluate a television
broadcast company's operating performance and that EBITDA is useful to a
prospective investor because it is widely used in the broadcast industry to
evaluate a television broadcast company's ability to service debt. BCF and
EBITDA should not be considered in isolation of or as a substitute for net
income (loss), cash flows from operating activities and other income and
cash flow statement data prepared in accordance with GAAP or as a measure of
liquidity or profitability. BCF and EBITDA as determined above may not be
comparable to the BCF and EBITDA measures reported by other companies. In
addition, these measures do not represent funds available for discretionary
use. The Company is currently considering selling to the Sports Joint
Venture (as defined) the Company's contractual rights with respect to
television station KXTX-TV, its Dallas-Fort Worth LMA station. In 1997,
KXTX-TV generated BCF of $6.8 million.
(c) For purposes of calculating the ratio of earnings to fixed charges,
"earnings" consist of income before provision for income taxes plus fixed
charges and losses from equity method joint ventures. "Fixed charges"
consist of interest expense, amortization of deferred financing costs and
the component of rental expense believed by management to be representative
of the interest factor thereon. Earnings were insufficient to cover fixed
charges by $14.1 million and $51.9 million for Holdings for the periods
ended March 31, 1998 and December 31, 1997, respectively, and $8.4 million
and $30.2 million for the Company for the periods ended March 31, 1998 and
December 31, 1997, respectively.
21
<PAGE> 29
RISK FACTORS
Prospective investors should carefully consider the risk factors set forth
below, as well as the other information set forth in this Prospectus, before
making an investment in the Notes. This Prospectus contains forward-looking
statements which involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that might cause such differences include, but are not
limited to, the risk factors set forth below. See also "Forward Looking
Statements" and "Certain Definitions and Market and Industry Data" above.
SUBSTANTIAL LEVERAGE AND DEBT SERVICE
Holdings and the Company incurred substantial indebtedness in connection
with the Acquisition. As of March 31, 1998, Holdings had $670.6 million of
consolidated indebtedness and $554.9 million of consolidated common
shareholders' equity, and the Company had $469.3 million of consolidated
indebtedness and $741.2 million of consolidated common shareholder's equity.
Both Holdings and the Company are substantially leveraged as a result of the
consummation of the Transactions. On a pro forma basis, earnings were
insufficient to cover fixed charges by $51.9 million for Holdings and $30.2
million for the Company for the year ended December 31, 1997. See
"Capitalization" and "Unaudited Pro Forma Financial Information." Holdings and
the Company may incur additional indebtedness in the future, subject to certain
limitations contained in the instruments and documents governing their
respective indebtedness. Accordingly, Holdings and the Company have significant
debt service obligations. See "Description of the New Senior Subordinated
Notes," "Description of the New Senior Discount Notes" and "Description of the
Senior Credit Facilities."
Holdings' and the Company's high degrees of leverage could have important
consequences to holders of the Notes, including the following: (i) a substantial
portion of their cash flow from operations will be dedicated to the payment of
principal of, premium (if any) and interest on their respective indebtedness,
thereby reducing the funds available for operations, distributions to Holdings
for payments with respect to the Senior Discount Notes, future business
opportunities and other purposes and increasing the vulnerability of Holdings
and the Company to adverse general economic and industry conditions; (ii) the
ability of Holdings and the Company to obtain additional financing in the future
may be limited; (iii) certain of the Company's borrowings (including, without
limitation, amounts borrowed under the Senior Credit Facilities) will be at
variable rates of interest, which will expose the Company to increases in
interest rates; (iv) all of the indebtedness incurred in connection with the
Senior Credit Facilities will be secured and is scheduled to become due prior to
the time the principal payments on the Notes are scheduled to become due; and
(v) the Mandatory Principal Redemption Amount will become due and payable in a
lump sum on March 1, 2003.
Holdings' and the Company's abilities to make scheduled payments of the
principal of, or to pay interest on, or to refinance their respective
indebtedness (including the Notes) will depend on the future performance of the
Company and its subsidiaries, which to a certain extent will be subject to
economic, financial, regulatory, competitive and other factors beyond the
Company's control. Based upon the Company's current operations and anticipated
growth, management believes that future cash flow from operations, together with
the Company's available borrowings under the Senior Credit Facilities, will be
adequate to meet Holdings' and the Company's respective anticipated requirements
for capital expenditures, interest payments and scheduled principal payments.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources." There can be no assurance,
however, that the Company's business will continue to generate sufficient cash
flow from operations in the future to service its and Holdings' respective
indebtedness and make necessary capital expenditures. If unable to do so,
Holdings and the Company may be required to refinance all or a portion of their
respective indebtedness, including the Notes, to sell assets or to obtain
additional financing. There can be no assurance that any such refinancing would
be possible, that any assets could be sold (or, if sold, of the timing of such
sales and the amount of proceeds realized therefrom) or that additional
financing could be obtained.
22
<PAGE> 30
SUBSTANTIAL RESTRICTIONS AND COVENANTS
The Credit Agreement (as defined) and the Indentures (as defined) contain
numerous restrictive covenants, including, but not limited to, covenants that
restrict Holdings' and the Company's abilities to incur indebtedness, pay
dividends, create liens, sell assets, engage in certain mergers and acquisitions
and refinance indebtedness. In addition, the Credit Agreement requires the
Company to maintain certain financial ratios. The ability of Holdings and the
Company to comply with the covenants and other terms of the Credit Agreement and
the Indentures, to make cash payments with respect to the Notes and to satisfy
their other respective debt obligations (including, without limitation,
borrowings and other obligations under the Senior Credit Facilities) will depend
on the future operating performance of the Company and its subsidiaries. In the
event Holdings or the Company fails to comply with the various covenants
contained in the Credit Agreement or the Indentures, as applicable, it would be
in default thereunder, and in any such case, the maturity of substantially all
of its long-term indebtedness could be accelerated. A default under either of
the Indentures would also constitute an event of default under the Credit
Agreement. The Credit Agreement will prohibit the repayment, purchase,
redemption, defeasance or other payment of any of the principal of the Notes at
any time prior to their stated maturity. See "Description of the New Senior
Subordinated Notes," "Description of the New Senior Discount Notes" and
"Description of the Senior Credit Facilities."
RANKING OF THE NOTES AND GUARANTEES
The Senior Subordinated Notes are unsecured senior subordinated obligations
of the Company and the indebtedness evidenced by each Subsidiary Guarantee is
unsecured senior subordinated indebtedness of the relevant Guarantor. The
payment of principal of, premium (if any), and interest on the Senior
Subordinated Notes and the payment of any Subsidiary Guarantee will be
subordinated in right of payment to all Senior Indebtedness of the Company or
all Senior Indebtedness of ("Guarantor Senior Indebtedness") of the relevant
Guarantor, as the case may be, including all indebtedness and obligations of the
Company under the Senior Credit Facilities and such Guarantor's guarantee of
such obligations. As of March 31, 1998, Senior Indebtedness of the Company and
Guarantor Senior Indebtedness were approximately $170.0 million and $170.0
million, respectively, and Senior Subordinated Indebtedness of the Company and
Senior Subordinated Indebtedness of the Guarantors were approximately $300.0
million of aggregate principal and $300.0 million of aggregate principal,
respectively. The Senior Subordinated Notes Indenture permits the Company to
incur additional Senior Indebtedness, provided that certain conditions are met,
and the Company expects from time to time to incur additional Senior
Indebtedness. In addition, the Senior Subordinated Notes Indenture permits
Senior Indebtedness to be secured. By reasons of the subordination provisions of
the Senior Subordinated Notes Indenture, in the event of insolvency,
liquidation, reorganization, dissolution or other winding-up of the Company or a
Guarantor, holders of Senior Indebtedness of the Company or Guarantor Senior
Indebtedness, as the case may be, will have to be paid in full before the
Company makes payments in respect of the Senior Subordinated Notes or a
Guarantor makes payments in respect of its Subsidiary Guarantee. In addition, no
payment will be able to be made in respect of the Senior Subordinated Notes if
(i) any Senior Indebtedness is not paid when due or (ii) any other default on
Senior Indebtedness occurs and the maturity of such Senior Indebtedness is
accelerated in accordance with its terms. Accordingly, there may be insufficient
assets remaining after such payments to pay amounts due on the Senior
Subordinated Notes. Furthermore, if certain other defaults exist with respect to
Designated Senior Indebtedness (as defined), the holders of such Designated
Senior Indebtedness will be able to prevent payments on the Senior Subordinated
Notes for certain periods of time. See "Description of the New Senior
Subordinated Notes -- Ranking and Subordination."
The Senior Discount Notes are unsecured senior obligations of Holdings and
rank pari passu in right of payment with all unsecured Senior Indebtedness of
Holdings, including Holdings' guarantee of the Senior Credit Facilities. As a
result of the holding company structure, the holders of the Senior Discount
Notes effectively rank junior in right of payment to all creditors of the
Company and its subsidiaries, including, without limitation, the lenders under
the Senior Credit Facilities, holders of the Senior Subordinated Notes and trade
creditors. See "-- Structural Subordination of Holdings." In the event of the
dissolution, bankruptcy, liquidation or reorganization of Holdings or the
Company, the holders of the Senior Discount
23
<PAGE> 31
Notes may not receive any amounts in respect of the Senior Discount Notes until
after the payment in full of all claims of the creditors of the Company and its
subsidiaries. As of March 31, 1998, the Senior Discount Notes were effectively
subordinated to approximately $523.8 million of liabilities of Subsidiaries of
Holdings that would have been reflected on its consolidated balance sheet,
including indebtedness and other liabilities such as trade payables and accrued
expenses. See "Capitalization" and "Description of the New Senior Discount
Notes."
STRUCTURAL SUBORDINATION OF HOLDINGS
Holdings is a holding company whose only material asset is the capital
stock of the Company. The New Senior Discount Notes will be an obligation of
Holdings and the holders of the Senior Discount Notes will have no recourse to
the Company or its assets, including any subsidiaries of the Company. It is not
anticipated that Holdings will have any business (other than in connection with
its ownership of the capital stock of the Company and the performance of its
obligations with respect to the Senior Discount Notes and the Senior Credit
Facilities) and will depend on distributions from the Company to meet its debt
service obligations, including, without limitation, interest and principal
obligations with respect to the Senior Discount Notes. Because of the
substantial leverage of the Company, and the dependence of Holdings upon the
operating performance of the Company to generate distributions to Holdings,
there can be no assurance that Holdings will have adequate funds to fulfill its
obligations in respect of the Senior Discount Notes when due. In addition, the
Credit Agreement, the Senior Subordinated Notes Indenture and applicable federal
and state law will impose restrictions on the payment of dividends and the
making of loans by the Company to Holdings. As a result of the foregoing
restrictions, Holdings may be unable to gain access to the cash flow or assets
of the Company in amounts sufficient to pay the Mandatory Principal Redemption
Amount when due on March 1, 2003, and cash interest on the Senior Discount Notes
on and after March 1, 2003, the date on which cash interest thereon first
becomes payable, and principal of the Senior Discount Notes when due or upon a
Change of Control or the occurrence of any other event requiring the repayment
of principal. In such event, Holdings may be required to (i) refinance the
Senior Discount Notes, (ii) seek additional debt or equity financing, (iii)
cause the Company to refinance all or a portion of the Company's indebtedness
with indebtedness containing covenants allowing Holdings to gain access to the
Company's cash flow or assets, (iv) cause the Company to obtain modifications of
the covenants restricting Holdings' access to cash flow or assets of the Company
contained in the Company's financing documents (including, without limitation,
the Credit Agreement and the Senior Subordinated Notes Indenture) or (v) pursue
a combination of the foregoing actions. The measures Holdings may undertake to
gain access to sufficient cash flow to meet its future debt service requirements
in respect of the Senior Discount Notes will depend on general economic and
financial market conditions, as well as the financial condition of Holdings and
the Company and other relevant factors existing at the time. No assurance can be
given that any of the foregoing measures could be accomplished. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
ENCUMBRANCES ON ASSETS TO SECURE SENIOR CREDIT FACILITIES
The Company's obligations under the Senior Credit Facilities are secured by
a first priority pledge of, or a first priority security interest in, as the
case may be, substantially all of the assets (including 100% of the common
stock) of the Company and its subsidiaries. If the Company becomes insolvent or
is liquidated, or if payment under any of the Senior Credit Facilities or in
respect of any other secured Senior Indebtedness is accelerated, the lenders
under the Senior Credit Facilities or holders of such other secured Senior
Indebtedness will be entitled to exercise the remedies available to a secured
lender under applicable law (in addition to any remedies that may be available
under documents pertaining to the Senior Credit Facilities or such other Senior
Indebtedness). Neither the Senior Subordinated Notes nor the Senior Discount
Notes are secured. Accordingly, holders of such secured Senior Indebtedness will
have a prior claim with respect to the assets securing such indebtedness. See
"Description of the New Senior Subordinated Notes," "Description of the New
Senior Discount Notes" and "Description of the Senior Credit Facilities."
24
<PAGE> 32
OBLIGATIONS UPON A CHANGE OF CONTROL
Upon a Change of Control, (i) each Issuer will have the option, at any time
on or prior to March 1, 2003, to redeem such Issuer's Notes, in whole but not in
part, at a redemption price equal to (a) 100% of the principal amount thereof
plus the Applicable Premium and accrued and unpaid interest, if any, to the date
of redemption in the case of the Senior Subordinated Notes and (b) at a
redemption price equal to 100% of the Accreted Value thereof plus the Applicable
Premium in the case of the Senior Discount Notes and (ii) if an Issuer does not
redeem its Notes pursuant to clause (i) above, or such Change in Control occurs
after March 1, 2003, each holder of a Note may require the Issuer thereof to
repurchase such Note (a) at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
repurchase in the case of a Senior Subordinated Note and (b) at a price equal to
(x) 101% of the Accreted Value thereof if redeemed on or before March 1, 2003,
and (y) 101% of the principal amount at maturity, plus accrued and unpaid
interest, if any, thereon, if redeemed after March 1, 2003, in the case of a
Senior Discount Note. There can be no assurance that Holdings or the Company
will be able to raise sufficient funds to meet their respective repurchase
obligations upon a Change of Control or that, in any event, Holdings and the
Company would be permitted under the terms of the Credit Agreement or the
Indentures to fulfill such obligations. See "Description of the New Senior
Subordinated Notes -- Change of Control" and "Description of the New Senior
Discount Notes -- Change of Control."
CONTROL OF HOLDINGS AND THE COMPANY
A majority of the common stock of Holdings is controlled indirectly by
Hicks Muse and certain of its affiliates through Holdings' corporate parents. As
a result, Hicks Muse is effectively able to elect all of the members of the
Board of Directors of Holdings and its subsidiaries, including the Company, and
thereby directly control the management and policies of Holdings and the
Company. The interests of Hicks Muse and its affiliates may differ from the
interests of holders of the Notes. See "-- Potential Conflicts of Interest,"
"Securities Ownership of Certain Beneficial Owners" and "Certain Other
Transactions." In addition, if an event of default occurs under the GECC Note,
and GECC is unable to collect all obligations owed to it after exhausting all
commercially reasonable remedies against the Joint Venture (including during the
pendency of any bankruptcy involving the Joint Venture), GECC may proceed
against the GECC Guarantor to collect any deficiency. If the GECC Guarantor does
not otherwise satisfy its obligations under the guaranty, GECC could attempt to
claim all or a portion of the common stock of Holdings owned by the GECC
Guarantor (approximately 63% of the outstanding common stock of Holdings)
through an insolvency proceeding or otherwise. If such an event were to occur,
GECC could obtain control of Holdings. See "-- Defaults under the GECC Note."
POTENTIAL CONFLICTS OF INTEREST
The number of television stations the Company may acquire in any market is
limited by FCC rules and may vary depending upon whether the interests in other
television stations or certain other media properties of certain individuals
affiliated with the Company are attributable to those individuals under FCC
rules. In addition, the FCC's radio/television cross-ownership rule generally
prohibits a single individual or entity from having an attributable interest in
both a television station and a radio station serving the same market. The FCC
generally applies its ownership limits to "attributable" interests held by an
individual, corporation, partnership or other association. The broadcast
interests of the Company's officers, directors and majority stockholder are
generally attributable to the Company, which may limit the Company from
acquiring or owning television stations in certain markets. See "Management,"
"Securities Ownership of Certain Beneficial Owners" and "Business -- Licensing
and Regulation."
As a result of the current or future ownership of television and radio
broadcast stations by entities in which Hicks Muse has significant equity
interests (other than through the Company), regulatory and other restrictions
may restrict or prohibit the Company from entering the markets in which those
other stations operate or intend to operate.
25
<PAGE> 33
Hicks Muse is in the business of making significant investments in existing
or newly formed companies and may from time to time acquire and hold controlling
or noncontrolling interests in television broadcast assets (such as its existing
investment in STC Broadcasting) other than through the Company, or in other
businesses (such as Chancellor Media and Capstar Broadcasting) that may directly
or indirectly compete with the Company for advertising revenues, among other
things. Hicks Muse and its affiliates may from time to time identify, pursue and
consummate acquisitions of television stations or other broadcast related
businesses that may be complementary to the business of the Company and
therefore such acquisition opportunities may not be available to the Company. In
addition, Hicks Muse may from time to time identify and structure acquisitions
for the Company and will receive fees in connection with such transactions.
Certain affiliates of Hicks Muse have entered, and in the future may enter into,
business relationships with the Company or its subsidiaries. See "Certain Other
Transactions."
The Company is currently considering selling to an affiliate of Hicks Muse
(the "Sports Joint Venture") the Company's contractual rights with respect to
television station KXTX-TV, its Dallas-Fort Worth LMA station. Should this
transaction be consummated, such consideration would be subject to a fairness
opinion to be delivered by an independent investment banking firm of nationally
recognized standing. See "Description of the New Senior Subordinated
Notes -- Limitations on Transactions with Affiliates." There can be no assurance
that the transaction will be consummated or on what terms the transaction would
be consummated. In 1997, KXTX-TV generated BCF of $6.8 million.
DEPENDENCE UPON KEY PERSONNEL
The Company believes that its success will continue to be dependent upon
its ability to attract and retain skilled managers and other personnel,
including its present officers and general managers. The loss of the services of
the Company's President and Chief Executive Officer, Gary R. Chapman, may have a
material adverse effect on the operations of the Company. Mr. Chapman's current
employment agreement with the Company runs through December 31, 1999. In
connection with the Acquisition, the Company's management team, including Mr.
Chapman, reinvested a portion of its equity interest in LIN Television in the
indirect parent corporation of Holdings. In addition, the management team will
be granted options to acquire additional shares representing an approximate 5%
equity interest in such parent corporation.
GROWTH THROUGH ACQUISITIONS; FUTURE CAPITAL REQUIREMENTS
The Company intends to pursue selective acquisitions of television stations
with the goal of improving their operating performance by applying management's
business strategy. Inherent in any future acquisitions are certain risks such as
increasing leverage and debt service requirements and combining company cultures
and facilities which could have a material adverse effect on the Company's
operating results, particularly during the period immediately following such
acquisitions. Additional debt or equity capital may be required to complete
future acquisitions, and there can be no assurance the Company will be able to
raise the required capital. Moreover, there can be no assurances that with
respect to any acquired station, the Company will be able to successfully
implement effective cost controls, increase advertising revenues or increase its
audience share.
DEPENDENCE ON CERTAIN EXTERNAL FACTORS
The Company's operating results are primarily dependent on advertising
revenues which, in turn, depend on national and local economic conditions,
coverage of political events and high profile sporting events (e.g., the
Olympics, Super Bowl and NCAA Men's Basketball Tournament), the relative
popularity of the Company's programming (which in many cases, is dependent on
the relative popularity of the relevant affiliate's programming), the
demographic characteristics of the Company's markets, the activities of
competitors and other factors which are outside the Company's control. The
television industry is cyclical in nature, and the Company's revenues could be
adversely affected by a future local, regional or national recession.
26
<PAGE> 34
RELIANCE ON PROGRAMMING
The Company's most significant operating cost is syndicated programming.
There can be no assurance that the Company will not be exposed in the future to
increased syndicated programming costs which may adversely affect the Company's
operating results. Acquisition of program rights are often made two or three
years in advance, making it difficult to accurately predict how a program will
perform. In some instances, programs must be replaced before their costs have
been fully amortized, resulting in write-offs that increase station operating
costs.
CERTAIN AFFILIATION AGREEMENTS
Three of the Company's owned and operated stations are affiliated with CBS,
two with NBC, and two with ABC. Each of these networks generally provides these
stations with up to 22 hours of prime time programming per week. In return, the
stations broadcast network-inserted commercials during such programming and
receive cash network compensation. Although network affiliates generally have
achieved higher ratings than unaffiliated independent stations in the same
market, there can be no assurance as to the future success of each network's
programming or the continuation of such programming. The Company's network
affiliation agreements are subject to termination by such networks under certain
circumstances. The Company believes that it enjoys a good relationship with each
of CBS, NBC and ABC, as well as the other networks with which it has affiliation
agreements. However, there can be no assurance that such affiliation agreements
will remain in place or that each network will continue to provide programming
or compensation to affiliates on the same basis as it currently provides
programming or compensation. The non-renewal or termination of a network
affiliation agreement could have a material adverse effect on the Company's
operations.
Certain of the networks with which the Company's stations are affiliated
have floated proposals that would either reduce, or in some cases, eliminate
over time, network affiliation compensation paid to the Company or materially
modify the terms of the Company's existing affiliation agreements in exchange
for enhanced programming or other investment opportunities. The Company cannot
predict whether it will be able to reach agreement with its networks as to the
modification of its existing affiliation agreements or whether such
modifications would be materially financially disadvantageous to the Company.
COMPETITION
The television broadcasting industry is highly competitive and is
undergoing a period of consolidation and significant change. Many of the
Company's current and potential competitors have greater financial, marketing,
programming and broadcasting resources than the Company. Technological
innovation and the resulting proliferation of programming alternatives, such as
cable television, wireless cable, satellite-to-home distribution services,
pay-per-view and home video and entertainment systems, have fractionalized
television viewing audiences and have subjected free over-the-air television
broadcast stations to new types of competition. In addition, as a result of the
Telecommunications Act of 1996, the legislative ban on telephone cable ownership
has been repealed and telephone companies are now permitted to seek FCC approval
to provide video services to homes under specified circumstances.
IMPACT OF NEW TECHNOLOGIES
The FCC has adopted rules for implementing Advanced Television ("ATV"),
commonly referred to as "digital" television, in the United States.
Implementation of digital television will improve the technical quality of
over-the-air broadcast television. Under certain circumstances, however,
conversion to digital operations may reduce a station's geographical coverage
area. The FCC has adopted a plan which would allot a second broadcast channel to
each regular commercial television station for digital operation. Within the
next five years, stations are required to phase in their digital operations on
the second channel, build necessary digital facilities and begin operations,
with stations in the largest markets being required to initiate digital
transmissions by November 1999. Stations may be required to surrender their
non-digital channel by the year 2006. Implementation of digital television will
impose additional costs on television stations providing the new service due to
increased equipment costs. The Company estimates that the adoption of ATV will
require
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<PAGE> 35
average capital expenditures of approximately $2.0 million per station to
develop facilities necessary for transmitting a digital signal. The conversion
of a station's equipment enabling it, for example, to produce and transmit
digital programming will require that consumers purchase new receivers
(television sets) for digital signals or, if available by that time, adapters
for their existing receivers. The FCC has assigned to full-power digital
stations the channels currently occupied by many low power television stations
("LPTVs") and has "cleared" a portion of the current broadcast spectrum (e.g.,
channels 60-69) and proposed to auction it off to other users. These proposals
could adversely affect the Company's LPTV stations. The Company believes that
digital television is essential to the long-term viability of the Company and
the broadcast industry, but the Company cannot predict the precise effect
digital television might have on the Company's business. As required by the
Telecommunications Act of 1996, the FCC has also proposed to levy fees on
broadcasters with respect to nonbroadcast uses of digital channels, including
data transmissions or subscriber services.
Further advances in technology may also increase competition for household
audiences and advertisers. The video compression techniques now under
development for use with current cable television channels or direct broadcast
satellites which do not carry local television signals (some of which commenced
operation in 1994) are expected to reduce the bandwidth which is required for
television signal transmission. These compression techniques, as well as other
technological developments, are applicable to all video delivery systems,
including over-the-air broadcasting, and have the potential to provide vastly
expanded programming to highly targeted audiences. Reduction in the cost of
creating additional channel capacity could lower entry barriers for new channels
and encourage the development of increasingly specialized "niche" programming.
This ability to reach a very defined audience may alter the competitive dynamics
for advertising expenditures. The Company is unable to predict the effect that
technological changes will have on the broadcast television industry or the
future results of the Company's operations.
LACK OF CONTROL OVER JOINT VENTURE
KXAS-TV is now managed by NBC rather than the Company. Accordingly, the
ability for the Joint Venture to generate BCF margins in the future which are as
high as KXAS-TV's historical BCF margins will be beyond the control of the
Company. Because the stations included in the Joint Venture will be managed by
NBC, which will have discretion in determining certain elements of Distributable
Cash of the Joint Venture, the Company will not control the amount of
Distributable Cash produced by the Joint Venture. See "The Transactions and
Other Matters -- The Joint Venture."
DEFAULTS UNDER THE GECC NOTE
Annual cash interest payments on the GECC Note will be approximately $65.2
million. There will be no scheduled payments of principal due prior to 2023, the
stated maturity of the GECC Note. The GECC Note is not an obligation of
Holdings, the Company or any of their respective subsidiaries and is recourse
only to the Joint Venture, the Company's equity interest therein, and to the
GECC Guarantor.
An event of default under the GECC Note will occur only if the Joint
Venture fails to make any scheduled payment of interest (within 90 days of the
date due and payable) on or principal of the GECC Note. A cash reserve of $15.0
million is expected to be established by the Joint Venture for the purpose of
making interest payments on the GECC Note. If the Joint Venture cannot make an
interest payment on the GECC Note when due, both the GECC Guarantor and NBC will
have the right to make a shortfall loan to the Joint Venture to cover such
interest payment. Notwithstanding the foregoing, if the Joint Venture fails to
pay interest on the GECC Note, and neither the GECC Guarantor nor NBC makes a
shortfall loan to cover such interest payment, an event of default would occur
under the GECC Note and GECC could accelerate the maturity of the $815.5 million
principal amount due under the GECC Note.
The formation of the Joint Venture is intended to be tax-free to the
Company. However, any prepayment of the GECC Note, whether due to an
acceleration upon default or otherwise, could result in a substantial tax
liability to the Company which would have a material adverse effect on the
Company. Other than the acceleration of the principal amount of the GECC Note
upon an event of default as described above, prepayment of principal of the GECC
Note will be prohibited without the prior consent of the Company.
28
<PAGE> 36
In addition, if an event of default occurs under the GECC Note, and GECC is
unable to collect all amounts owed to it after exhausting all commercially
reasonable remedies against the Joint Venture (including during the pendency of
any bankruptcy involving the Joint Venture), GECC may proceed against the GECC
Guarantor to collect any deficiency. In connection with the Transactions, the
assets contributed to the Joint Venture were attributed a value of $1.2 billion
by the parties thereto. See "-- Control of Holdings and the Company" and "The
Transactions and Other Matters -- The Joint Venture."
RENEWAL OF FCC LICENSES
The broadcasting industry is subject to regulation by the FCC pursuant to
the Communications Act of 1934, as amended (the "Communications Act"). Approval
by the FCC is required for the issuance, renewal and assignment of station
operating licenses and the transfer of control of station licensees. In
particular, the Company's business will be dependent upon its continuing to hold
television broadcast licenses from the FCC, which licenses, since January 1997,
are issued for maximum terms of eight years. While in the vast majority of cases
such licenses are renewed by the FCC, there can be no assurance that the
Company's licenses or the licenses owned by the owner-operators of the stations
with which the Company has LMAs will be renewed at their expiration dates.
Following the Acquisition, all of the Company's stations will be operating under
regular eight-year FCC licenses except for WIVB-TV, WTNH-TV, KXTX-TV and
KXAN-TV, each of which is operating under a five-year license issued prior to
January 1997 and is expected to be issued an eight-year FCC license during the
current renewal cycle. See "Business -- Licensing and Regulation."
MULTIPLE OWNERSHIP RULES AND EFFECT ON LMAS
The local marketing agreements pursuant to which the Company operates its
LMAs require the Company to pay fixed periodic fees and incur programming and
operating costs relating to its LMA stations, but the Company retains all of the
LMA stations' advertising revenues. The FCC has initiated rulemaking proceedings
to consider proposals to relax its television ownership restrictions, including
proposals that would permit the ownership, in some circumstances, of two
television stations with overlapping service areas and relaxing the rules
prohibiting cross-ownership of radio and television stations in the same market.
The FCC is also considering whether to adopt new restrictions on television
LMAs. The "duopoly" rules currently prevent the Company from acquiring the FCC
licenses of its LMA stations, thereby preventing the Company from directly
fulfilling its obligations under put options held by the licensees of the
Company's LMA stations (which options had an aggregate exercise price of $9.1
million at December 31, 1997). If the Company is unable to fulfill its
obligation under a put option, it will be required to find an assignee who could
perform such obligation. There is no assurance that the Company could find an
assignee to fulfill the Company's obligations under the put options on favorable
terms. Under the Telecommunications Act of 1996 (the "1996 Act"), the Company's
LMAs were "grandfathered." The precise extent to which the FCC may nevertheless
restrict existing LMAs or make them attributable ownership interests is
uncertain. The FCC has proposed for adoption rules that would make LMAs fully
attributable ownership interests, and thus prohibited, with a possibility of
case by case waivers for stations that meet specified criteria (e.g., VHF-UHF or
UHF-UHF station combinations, start-up stations and failed or failing stations).
Under the FCC's proposal, "grandfathering" rights for current LMAs which do not
qualify for conversion to ownership could be limited to the fulfillment of their
current lease terms, and renewal and transferability rights could be eliminated.
All of the Company's LMAs involve stations which are UHF stations and, at the
time the LMAs were formed, were either start-up stations or failing stations and
therefore would appear to be strong candidates for grandfathering and/or for
conversion to ownership under the proposals. Nevertheless, it is possible that
the FCC could prohibit such conversion or require the Company to modify its LMAs
in ways which impair their viability. Further, if the FCC were to find that the
licensee of one of the Company's LMA stations failed to maintain control over
its operations, the licensee of the LMA station and/or the Company could be
sanctioned. Sanctions could include, among other things, the short-term renewal
or loss of the station's FCC license. The Company is unable to predict the
ultimate outcome of possible changes to these FCC rules and the impact such FCC
rules would have on its broadcasting operations.
In accordance with FCC rules, regulations and policies, all of the
Company's LMAs allow preemption of the Company's programming by the
owner-operator and FCC licensee of each LMA station. Accordingly,
29
<PAGE> 37
there can be no assurance that the Company will be able to air all of the
programming it expects to air on its LMA stations or that the Company will
receive the anticipated advertising revenue from the sale of advertising spots
during such programming. Although the Company believes that the terms and
conditions of each of its LMAs should enable the Company to air its programming
and utilize the programming and other non-broadcast license assets acquired for
use at the LMA stations, there can be no assurance that early terminations of
the LMAs or unanticipated preemptions of all or a significant portion of the
programming by the owner-operator and FCC licensee of such LMA stations will not
occur. An early termination of one of the Company's LMAs, or repeated and
material preemptions of programming thereunder, could adversely affect the
Company's operations.
The Company cannot predict what other proposals or changes might be
considered by the FCC in the future, nor can it predict what impact, if any, the
implementation of any such proposals or changes might have on its business.
FRAUDULENT CONVEYANCE
The incurrence of indebtedness (such as the Notes) in connection with the
Transactions and payments to consummate the Transactions with the proceeds
thereof are subject to review under relevant federal and state fraudulent
conveyance statutes in a bankruptcy or reorganization case or a lawsuit by or on
behalf of creditors of the Company or Holdings. Under these statutes, if a court
were to find that obligations (such as the Notes) were incurred with the intent
of hindering, delaying or defrauding present or future creditors, or that the
Company or Holdings received less than a reasonably equivalent value or fair
consideration for those obligations and, at the time of the occurrence of the
obligations, the obligor either (i) was insolvent or rendered insolvent by
reason thereof, (ii) was engaged or was about to engage in a business or
transaction for which its remaining unencumbered assets constituted unreasonably
small capital or (iii) intended to or believed that it would incur debts beyond
its ability to pay such debts as they matured or became due, such court could
void the Company's or Holdings' obligations under the Senior Subordinated Notes
or the Senior Discount Notes, respectively, subordinate the Senior Subordinated
Notes or the Senior Discount Notes to other indebtedness of the Company or
Holdings, respectively, or take other action detrimental to the holders of the
Notes. Some courts have held that an obligor's purchase of its own capital stock
does not constitute reasonably equivalent value or fair consideration for
indebtedness incurred to finance that purchase.
The measure of insolvency for purposes of a fraudulent conveyance claim
will vary depending upon the law of the applicable jurisdiction. Generally,
however, a company will be considered insolvent at a particular time if the sum
of its debts at that time is greater than the then fair value of its assets or
if the fair saleable value of its assets at that time is less than the amount
that would be required to pay its probable liability on its existing debts as
they become absolute and mature. The Company and Holdings believe that, after
giving effect to the Transactions, (i) neither the Company nor Holdings will be
insolvent or rendered insolvent by the incurrence of indebtedness in connection
with the Transactions, (ii) each of the Company and Holdings will be in
possession of sufficient capital to run its business effectively and (iii) each
of the Company and Holdings will have incurred debts within its ability to pay
as the same mature or become due.
There can be no assurance, however, as to what standard a court would apply
to evaluate the Issuers' intents or to determine whether the Company or Holdings
was insolvent at the time of, or rendered insolvent upon, the consummation of
the Transactions or that, regardless of the standard, a court would not
determine that the Company or Holdings was insolvent at the time of, or rendered
insolvent upon, the consummation of the Transactions.
In addition, the Subsidiary Guarantees may be subject to review under
relevant federal and state fraudulent conveyance and similar statutes in a
bankruptcy or reorganization case or a lawsuit by or on behalf of creditors of
any of the Guarantors. In such a case, the analysis set forth above generally
would apply. A court could avoid a Guarantor's obligation under its Subsidiary
Guarantee, subordinate the Subsidiary Guarantee to other indebtedness of such
Guarantor or take other action detrimental to the holders of the New Senior
Subordinated Notes.
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<PAGE> 38
ORIGINAL ISSUE DISCOUNT CONSEQUENCES OF NEW SENIOR DISCOUNT NOTES
The New Senior Discount Notes will be issued at a substantial discount from
their principal amount at maturity. Although cash interest will not accrue on
the New Senior Discount Notes prior to March 1, 2003, and there will be no
periodic payments of cash interest on the New Senior Discount Notes prior to
September 1, 2003, original issue discount (the difference between the stated
redemption price at maturity and the issue price of the Old Senior Discount
Notes) will accrue from the issue date of the Old Senior Discount Notes.
Consequently, purchasers of New Senior Discount Notes generally will be required
to include amounts in gross income for United States federal income tax purposes
in advance of their receipt of the cash payments to which the income is
attributable. Such amounts in the aggregate will be equal to the difference
between the stated redemption price at maturity (inclusive of stated interest on
the New Senior Discount Notes) and the issue price of the Senior Discount Notes.
See "Certain United States Federal Income Tax Consequences."
In the event a bankruptcy case is commenced by or against Holdings under
the United States Bankruptcy Code after the issuance of the New Senior Discount
Notes, the claim of a holder of New Senior Discount Notes may be limited to an
amount equal to the sum of (i) the initial offering price and (ii) that portion
of the original issue discount which is not deemed to constitute "unmatured
interest" for purposes of the Bankruptcy Code. Any original issue discount that
was not amortized as of the date of any such bankruptcy filing would constitute
"unmatured interest." To the extent that the Bankruptcy Code differs from the
Internal Revenue Code in determining the method of amortization of original
issue discount, a holder of New Senior Discount Notes may realize taxable gain
or loss on payment of such holder's claim in bankruptcy.
LACK OF PUBLIC MARKET FOR THE NEW NOTES
The Old Notes were issued on March 3, 1998 and the Issuers are not aware
that any active trading markets for the Old Notes have developed. The issuers do
not intend to apply for listings of the New Notes on a securities exchange or on
any automated dealer quotation system. There can be no assurances that markets
will develop for the New Notes or as to the liquidity of any markets that may
develop for the New Notes, the ability of the holders of the New Notes to sell
their New Notes or the prices at which such holders would be able to sell their
New Notes. If such markets were to exist, the New Notes could trade at prices
that may fluctuate significantly depending upon many factors, including
prevailing interest rates and the markets for similar securities.
The liquidity of, and trading markets, if any, for, the New Notes also may
be adversely affected by general declines in the markets for similar securities.
Such a decline may adversely affect such liquidity and trading markets
independent of the financial performance of, and prospects for, the Issuers.
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<PAGE> 39
THE TRANSACTIONS AND OTHER MATTERS
The Acquisition. Pursuant to, and upon the terms and conditions of, the
Merger Agreement, Holdings consummated the Acquisition by merging LIN
Acquisition, its wholly owned subsidiary, with and into LIN Television, with LIN
Television surviving the Merger and becoming a direct, wholly owned subsidiary
of Holdings. The total purchase price for the common equity of LIN Television
was approximately $1.7 billion. In addition, the Company refinanced $260.2
million of LIN Television indebtedness and incurred acquisition costs of
approximately $32.2 million.
The Financings. The Acquisition was funded by (i) $6.9 million of excess
cash on the Company's balance sheet; (ii) $50.0 million aggregate principal
amount of Tranche A Term Loans; (iii) $120.0 million aggregate principal amount
of Tranche B Term Loans; (iv) $299.3 million gross proceeds from the issuance by
LIN Television of the $300.0 million aggregate principal amount of Old Senior
Subordinated Notes; (v) $199.6 million gross proceeds from the issuance by
Holdings of $325.0 million aggregate principal amount at maturity of Old Senior
Discount Notes, which proceeds were contributed by Holdings to the common equity
of the Company; (vi) $558.1 million of common equity provided by affiliates of
Hicks Muse, management and other co-investors to the equity of the corporate
parents of Holdings, which in turn, through Holdings, contributed such amount to
the common equity of the Company; and (vii) $815.5 million of proceeds of the
GECC Note.
The Joint Venture. In connection with the Acquisition, Hicks Muse and NBC
formed the Joint Venture. The Joint Venture consists of KXAS-TV, formerly LIN
Television's Dallas-Fort Worth NBC affiliate, and KNSD-TV, formerly NBC's San
Diego station. A wholly owned subsidiary of NBC is the general partner of the
Joint Venture and NBC operates the stations owned by the Joint Venture pursuant
to a management services agreement in exchange for a fee based on the BCF, less
capital expenditures, of the stations owned by the Joint Venture. The Company
will not be involved in the day-to-day operations of the stations owned by the
Joint Venture, but will have consent rights with respect to certain significant
transactions involving the Joint Venture. See "Risk Factors -- Lack of Control
Over Joint Venture."
GECC provided debt financing for the Joint Venture in the form of the GECC
Note. The difference between the value of assets contributed by the Company to
the Joint Venture and the GECC Note represents the Company's net equity
investment in the Joint Venture. The GECC Note was issued by LIN Texas, the
Company's wholly-owned partnership, which distributed the proceeds to the
Company to finance a portion of the cost of the Acquisition. The obligations to
GECC under the GECC Note were assumed by the Joint Venture and LIN Texas was
simultaneously released from all obligations under the GECC Note. Interest
payments under the GECC Note are payable quarterly, and no principal will be
payable until the maturity of the GECC Note in 2023. The GECC Note will bear
interest at a rate of 8.0% per annum for the first fifteen years of its term,
and at a rate of 9.0% per annum thereafter.
The GECC Note is not an obligation of Holdings, the Company or any of their
respective subsidiaries and is recourse only to the Joint Venture, the Company's
equity interest therein and to the GECC Guarantor. The Company expects that the
interest payments on the GECC Note will be serviced solely by the cash flow of
the Joint Venture. In order to make a claim against the GECC Guarantor, GECC
must first exhaust all commercially reasonable remedies against the assets of
the Joint Venture (including during the pendency of any bankruptcy proceeding
involving the Joint Venture). In connection with the Transactions, the assets
contributed to the Joint Venture were attributed a value of $1.2 billion by the
parties thereto. The GECC Guarantor is not bound by any covenants or
restrictions in connection with its guaranty. The only events of default under
the GECC Note which would allow GECC to declare the entire principal and unpaid
interest under the GECC Note payable are (i) a failure to pay interest within
ninety days of the due date thereof (with the GECC Guarantor and NBC having the
right to make a shortfall loan to the Joint Venture for the purpose of enabling
the Joint Venture to make such interest payment) or (ii) a failure to pay
principal at maturity in 2023. See "Risk Factors -- Defaults Under the GECC
Note" and "-- Control of Holdings and the Company."
All Distributable Cash of the Joint Venture, if any, will be distributed to
the Company and NBC quarterly based on their respective equity interests in the
Joint Venture. For purposes of the Joint Venture,
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<PAGE> 40
"Distributable Cash" is defined as all cash and cash equivalents on hand at the
end of each month after paying the operating expenses of the stations included
in the Joint Venture, interest payments on the GECC Note, and NBC's management
fee, and after providing for capital expenditures and operating reserves
determined by NBC. A cash reserve of $15.0 million for the payment of interest
on the GECC Note must be maintained (subject to waiver by the Company) by the
Joint Venture before any distributions of Distributable Cash may be made to the
members of the Joint Venture. Because the stations included in the Joint Venture
are managed by NBC, and NBC has discretion in determining certain elements of
Distributable Cash, the Company will not control the amount of Distributable
Cash produced by the Joint Venture. On a pro forma basis for the fiscal year
ended December 31, 1997, the Company's portion of the Joint Venture's
Distributable Cash would have been $2.2 million (without giving effect to the
reserve of $15.0 million which must be established, subject to waiver by the
Company, prior to any distribution of Distributable Cash). See "Risk
Factors -- Lack of Control Over Joint Venture."
In connection with the formation of the Joint Venture, the Company received
an extension of the Company's network affiliation agreements with NBC to 2010
and the option (exercisable through December 31, 1999) to purchase WVTM-TV, the
NBC affiliate in Birmingham, Alabama for a fixed price.
The Grand Rapids Acquisition. The Company expects to consummate the Grand
Rapids Acquisition later this year. The Company currently provides services to
the Grand Rapids Stations pursuant to a consulting agreement with AT&T. The
total purchase price for the Grand Rapids Acquisition will be approximately
$125.5 million (plus accretion thereon of 8% from March 1, 1998), which is
expected to be funded by $125.0 million of additional Tranche A Term Loans. For
the fiscal year ending December 31, 1997, the Grand Rapids Stations generated
net revenues and BCF of $28.4 million and $11.3 million, respectively. The
historical and pro forma financial information contained herein does not give
effect to the Grand Rapids Acquisition.
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<PAGE> 41
USE OF PROCEEDS
The Issuers will not receive any proceeds for the exchange of New Notes for
the Old Notes pursuant to the Exchange Offers. The net proceeds of the Original
Offerings were used, together with the proceeds of the other Financings, to
consummate the Acquisition.
CAPITALIZATION
The following table sets forth the capitalization of the Company and
Holdings as of March 31, 1998. The information set forth below should be read in
conjunction with the "Selected Consolidated Financial and Operating Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements of the Company and the
related notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
----------------------
COMPANY HOLDINGS
-------- --------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Cash and cash equivalents................................... $ 17.7 $ 17.7
======== ========
Long-term debt (including current maturities):
Tranche A Term Loans................................... $ 50.0 $ 50.0
Tranche B Term Loans................................... 120.0 120.0
Senior Subordinated Notes(a)........................... 299.3 299.3
Senior Discount Notes(b)............................... -- 201.3
-------- --------
Total long-term debt................................. 469.3 670.6
Total shareholders' equity(b)............................... 741.2 554.9
-------- --------
Total capitalization................................. $1,210.5 $1,225.5
======== ========
</TABLE>
- ---------------
(a) Represents gross proceeds to the Company of the issuance of $300.0 million
aggregate principal amount at maturity of the Senior Subordinated Notes.
(b) Certain affiliates of Hicks Muse, management and other co-investors
contributed approximately $558.1 million to the equity of the corporate
parents of Holdings, which in turn, through Holdings, contributed such
amount to the common equity of the Company. Holdings issued $325.0 million
aggregate principal amount at maturity of Senior Discount Notes and
contributed the $199.6 million gross proceeds thereof to the common equity
of the Company.
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<PAGE> 42
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The following table sets forth selected consolidated financial and
operating data of the Company as of and for each of the five years in the period
ended December 31, 1997 and for the three-month periods ended March 31, 1997 and
1998 and of Holdings as of and for the interim period ending March 31, 1998. The
historical statement of operations, cash flow and other data with respect to the
periods ended December 31, 1995, 1996, and 1997 and the balance sheet data at
December 31, 1996 and 1997, set forth below, are derived from, and are qualified
by reference to, the consolidated financial statements as audited by Ernst &
Young LLP, included elsewhere in this Prospectus and should be read in
conjunction with those financial statements and notes thereto. The historical
statement of operations, cash flow and other data with respect to December 31,
1993 and 1994 and the balance sheet data at December 31, 1993, 1994 and 1995,
set forth below, are derived from the Company's audited financial statements not
included in this Prospectus. The interim financial data set forth below are
derived from the unaudited financial statements included elsewhere in this
Prospectus and should be read in conjunction with those financial statements and
notes thereto. The following information should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and the consolidated financial statements of the Company and
Holdings, and the notes thereto, included elsewhere herein.
<TABLE>
<CAPTION>
HOLDINGS COMPANY PREDECESSOR
PERIOD FROM PERIOD FROM PERIOD FROM PREDECESSOR
MARCH 3 MARCH 3 JANUARY 1 THREE MONTHS
THROUGH THROUGH THROUGH ENDED
MARCH 31, MARCH 31, MARCH 2, MARCH 31,
1998 1998 1998 1997
----------- ----------- ----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues..................... $ 16,211 $ 16,211 $43,804 $ 61,662
Operating costs and expenses:
Station operating expenses...... 8,026 8,026 22,818 32,393
Amortization of program
rights........................ 1,015 1,015 2,743 4,058
Depreciation and amortization of
intangible assets............. 4,474 4,474 4,581 6,396
Corporate expense............... 458 458 1,170 1,698
Tower write-offs(c)............. -- -- -- --
---------- ---------- ------- --------
Operating income................. 2,238 2,238 12,492 17,117
Interest expense................. 5,270 3,535 2,764 5,718
Other (income) expense........... 412 412 146 16
Merger expense(d)................ -- -- 8,616 --
---------- ---------- ------- --------
Income (loss) before provision
(benefit) for income taxes and
extraordinary item.............. (3,444) (1,709) 966 11,383
Provision (benefit) for income
taxes........................... (215) 2,019 3,710 4,246
---------- ---------- ------- --------
Income (loss) before
extraordinary item.............. (3,229) (3,728) (2,744) 7,137
Extraordinary item, net of income
tax benefit(e).................. -- -- -- --
---------- ---------- ------- --------
Net income (loss)................ $ (3,229) $ (3,728) $(2,744) $ 7,137
========== ========== ======= ========
BALANCE SHEET DATA:
Cash and cash equivalents........ $ 17,722 $ 17,722 $ 28,493
Total assets..................... 1,802,940 1,790,270 595,789
Long-term debt................... 670,560 469,301 335,000
Total stockholders' equity
(deficit)....................... 554,894 741,249 147,099
CASH FLOW DATA:
Net cash provided by (used in):
Operating activities............ $ 8,626 $ 8,626 $ 8,416 $ 21,448
Investing activities............ (907,263) (907,263) (1,468) (7,421)
Financing activities............ 916,359 916,359 1,071 (13,486)
Net increase (decrease) in cash
and cash equivalents............ 17,722 17,722 8,019 541
OTHER DATA:
Capital expenditures............. 89 89 1,221 7,171
BCF(f)........................... 7,730 7,730 17,104 25,817
BCF margin(f).................... 47.7% 47.7% 39.0% 41.9%
BCF margin, excluding LMA
stations(f)..................... 50.5% 50.5% 42.7% 45.5%
EBITDA(f)........................ 7,272 7,272 15,934 24,119
Ratio of earnings to fixed
charges(g)...................... -- -- 1.4x 3.0x
<CAPTION>
PREDECESSOR
----------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1997 1996 1995(a) 1994(b) 1993
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues..................... $291,519 $273,367 $217,247 $150,523 $127,541
Operating costs and expenses:
Station operating expenses...... 134,219 128,928 96,988 66,001 57,587
Amortization of program
rights........................ 15,596 14,464 12,357 7,274 5,002
Depreciation and amortization of
intangible assets............. 24,789 23,817 17,127 8,849 7,920
Corporate expense............... 6,763 6,998 5,747 4,330 4,781
Tower write-offs(c)............. 2,697 -- -- -- --
-------- -------- -------- -------- --------
Operating income................. 107,455 99,160 85,028 64,069 52,251
Interest expense................. 21,340 26,582 26,262 13,451 13,678
Other (income) expense........... 200 (359) (938) (293) (797)
Merger expense(d)................ 7,206 -- -- -- --
-------- -------- -------- -------- --------
Income (loss) before provision
(benefit) for income taxes and
extraordinary item.............. 78,709 72,937 59,704 50,911 39,370
Provision (benefit) for income
taxes........................... 30,602 26,476 21,674 19,726 17,083
-------- -------- -------- -------- --------
Income (loss) before
extraordinary item.............. 48,107 46,461 38,030 31,185 22,287
Extraordinary item, net of income
tax benefit(e).................. -- -- -- (2,925) --
-------- -------- -------- -------- --------
Net income (loss)................ $ 48,107 $ 46,461 $ 38,030 $ 28,260 $ 22,287
======== ======== ======== ======== ========
BALANCE SHEET DATA:
Cash and cash equivalents........ $ 8,046 $ 27,952 $ 18,025 $ 17,907 $ 19,461
Total assets..................... 569,325 595,944 587,256 423,964 183,697
Long-term debt................... 260,000 350,000 387,000 295,000 176,447
Total stockholders' equity
(deficit)....................... 192,565 138,448 86,434 40,160 (99,115)
CASH FLOW DATA:
Net cash provided by (used in):
Operating activities............ $ 81,691 $ 70,799 $ 56,040 $ 49,654 $ 46,566
Investing activities............ (15,060) (27,864) (127,723) (142,168) (6,864)
Financing activities............ (86,537) (33,008) 71,801 90,960 (37,594)
Net increase (decrease) in cash
and cash equivalents............ (19,906) 9,927 118 (1,554) 2,108
OTHER DATA:
Capital expenditures............. $ 20,605 $ 27,557 $ 27,715 $ 20,406 $ 6,864
BCF(f)........................... 145,470 130,399 106,749 77,203 65,466
BCF margin(f).................... 49.9% 47.7% 49.1% 51.3% 51.3%
BCF margin, excluding LMA
stations(f)..................... 54.9% 55.0% 53.0% 53.0% 51.3%
EBITDA(f)........................ $138,707 $123,401 $101,002 $ 72,873 $ 60,685
Ratio of earnings to fixed
charges(g)...................... 4.6x 3.7x 3.2x 4.5x 3.8x
</TABLE>
35
<PAGE> 43
- ---------------
(a) On October 2, 1995, the Company purchased station WIVB-TV, Buffalo, New York
for approximately $100.7 million in cash.
(b) On December 28, 1994, the Company purchased station WTNH-TV, New
Haven-Hartford, Connecticut for approximately $120.2 million in cash plus
approximately 3.4 million shares of LIN Television common stock.
(c) During the second quarter of 1997, the Company disposed of towers and other
broadcast equipment that could no longer be used with digital technology.
(d) During the last half of 1997, the Company incurred financial, legal advisory
and regulatory filing fees in connection with the Merger.
(e) In 1994, the Company recorded a $4.5 million write-off of unamortized bank
fees and expenses related to its existing credit facility. This write-off
has been reflected as an extraordinary loss on extinguishment of debt of
$2.9 million, after the effect of an income tax benefit of $1.6 million, in
the Company's financial statements.
(f) The terms "broadcast cash flow" ("BCF") and "EBITDA" are referred to in
various places in this Prospectus. BCF is defined as operating income (loss)
plus corporate expenses plus depreciation and amortization of intangible
assets and amortization of program rights plus other non-cash expenses
(consisting of tower write-offs and non-cash pension expense), minus cash
program payments. EBITDA is defined as BCF minus corporate expenses. BCF and
EBITDA are not measures of performance calculated in accordance with
generally accepted accounting principles ("GAAP"). However, management
believes that BCF is useful to a prospective investor because it is a
measure widely used in the broadcast industry to evaluate a television
broadcast company's operating performance and that EBITDA is useful to a
prospective investor because it is widely used in the broadcast industry to
evaluate a television broadcast company's ability to service debt. BCF and
EBITDA should not be considered in isolation of or as a substitute for net
income (loss), cash flows from operating activities and other income and
cash flow statement data prepared in accordance with GAAP or as a measure of
liquidity or profitability. BCF and EBITDA as determined above may not be
comparable to the BCF and EBITDA measures reported by other companies. In
addition, these measures do not represent funds available for discretionary
use. The Company is currently considering selling to the Sports Joint
Venture the Company's contractual rights with respect to television station
KXTX-TV, its Dallas-Fort Worth LMA station. In 1997, KXTX-TV generated BCF
of $6.8 million.
(g) For purposes of calculating the ratio of earnings to fixed charges,
"earnings" consist of income before provision for income taxes plus fixed
charges and losses from equity method joint ventures. "Fixed charges"
consist of interest expense, amortization of deferred financing costs and
the component of rental expense believed by management to be representative
of the interest factor thereon. Earnings were insufficient to cover fixed
charges by $3.0 million for Holdings for the period March 3 through March
31, 1998, and $1.2 million for the Company for the period March 3 through
March 31, 1998.
36
<PAGE> 44
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information (the "Unaudited Pro
Forma Financial Information") of the Company and Holdings is based on the
financial statements of the Company and Holdings, which are included elsewhere
in this Prospectus, and has been prepared to give pro forma effect to the
Transactions. The Unaudited Pro Forma Financial Information and accompanying
notes should be read in conjunction with the historical financial statements of
the Company and Holdings and other financial information pertaining to the
Company and Holdings including "The Transactions and Other Matters,"
"Capitalization" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere herein.
The Acquisition has been accounted for using the purchase method of
accounting. The total purchase price for the Acquisition (approximately $2.0
billion, including debt assumed) was allocated to the tangible and intangible
assets and liabilities acquired based upon their respective fair values. The
allocation of the aggregate purchase price reflected in the Unaudited Pro Forma
Financial Information is preliminary. The final allocation of the purchase price
is contingent upon the receipt of final appraisals of the acquired assets;
however, that allocation is not expected to differ materially from the
preliminary allocation.
The following unaudited pro forma statements of operations for the year
ended December 31, 1997, and for the quarter ended March 31, 1998 give effect to
the Transactions as if they had occurred on January 1 of each of the periods
presented. The pro forma financial information contained herein does not give
effect to the Grand Rapids Acquisition.
The Unaudited Pro Forma Financial Information is based on the historical
consolidated financial statements of the Company and Holdings and the
assumptions and adjustments described in the accompanying notes. The unaudited
pro forma statement of operations does not purport to represent what the results
of operations of the Company and Holdings actually would have been if the
Transactions had occurred as of the date indicated or what results will be for
any future periods. The Unaudited Pro Forma Financial Information is based upon
assumptions that management believes are reasonable and should be read in
conjunction with the consolidated financial statements and the related notes
thereto included elsewhere in this Prospectus.
37
<PAGE> 45
LIN TELEVISION CORPORATION AND LIN HOLDINGS CORP.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS LIN TELEVISION ADJUSTMENTS LIN HOLDINGS, CORP.
---------- ----------- -------------- ----------- -------------------
<S> <C> <C> <C> <C> <C>
Net revenues...................... $291,519 $ (95,404)(a) $196,115 $ -- $196,115
Operating costs and expenses:
Direct operating................ 70,746 (14,394)(b) 56,352 56,352
Selling, general and
administrative............... 63,473 (13,727)(c) 49,746 49,746
Corporate....................... 6,763 -- 6,763 6,763
Amortization of program
rights....................... 15,596 (2,030)(d) 13,566 13,566
Depreciation and amortization of
intangible assets............ 24,789 29,285(e) 54,074 54,074
Tower write-offs................ 2,697 -- 2,697 2,697
-------- --------- -------- -------- --------
Total operating costs and
expenses........................ 184,064 (866) 183,198 -- 183,198
-------- --------- -------- -------- --------
Operating income.................. 107,455 (94,538) 12,917 -- 12,917
Other (income) expense:
Interest expense................ 21,340 21,772(f) 43,112 21,716(k) 64,828
Interest income................. (1,332) 1,332(g) -- -- --
Equity in joint venture......... 1,532 3,457(h) 4,989 4,989
Merger expenses................. 7,206 (7,206)(i) -- --
-------- --------- -------- -------- --------
Total other expense............... 28,746 19,355 48,101 21,716 69,817
-------- --------- -------- -------- --------
Income (loss) before provision
(benefit) for income taxes...... 78,709 (113,893) (35,184) (21,716) (56,900)
Provision (benefit) for income
taxes 30,602 (36,486)(j) (5,884) (7,601)(l) (13,485)
-------- --------- -------- -------- --------
Net income (loss)................. $ 48,107 $ (77,407) $ 29,300) $(14,115) $(43,415)
======== ========= ======== ======== ========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Statement of Operations.
38
<PAGE> 46
LIN TELEVISION CORPORATION AND LIN HOLDINGS CORP.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C>
(a) To reflect the withdrawal of the operations of KXAS-TV from
historical operations....................................... (95,404)
(b) This adjustment relates to additional costs to be incurred
by KXTX-TV due to the services agreement with KXAS-TV and
the withdrawal of the operations of KXAS-TV from historical
operations
Additional costs incurred by KXTX-TV................... 499
Withdrawal of KXAS-TV from historical operations....... (14,893)
-------
(14,394)
=======
(c) This adjustment relates to additional costs to be incurred
by KXTX-TV due to the services agreement with KXAS-TV, and
the withdrawal of the operations of KXAS-TV from historical
operations
Additional costs incurred by KXTX-TV................... 96
Withdrawal of KXAS-TV from historical operations....... (13,823)
-------
(13,727)
=======
(d) To reflect the withdrawal of the operations of KXAS-TV from
historical operations....................................... (2,030)
(e) To reflect additional amortization of intangible assets
recorded as a result of the Acquisition purchase price
allocation, additional depreciation expense and the
withdrawal of the operations of KXAS-TV from historical
results
Amortization of intangible assets...................... 27,441
Additional depreciation expense related to the step-up
to estimated fair value of property and equipment..... 4,289
-------
Withdrawal of KXAS-TV from historical operations....... (2,445)
=======
29,285
(f) To reflect the additional interest expense and amortization
of deferred financing costs and commitment fees as a result
of borrowings under the Senior Credit Facilities and the
Senior Subordinated Notes
Tranche A Term Loans ($50,000 @ 7.5%).................. 3,750
Tranche B Term Loans ($120,000 @ 8.0%)................. 9,600
Commitment Fees ($175,000 @ .375%)..................... 656
Senior Subordinated Notes ($300,000 @ 8.375%).......... 25,125
Amortization of Bond Discount.......................... 47
Amortization of Deferred Financing costs............... 3,934
Less historical interest expense....................... (21,340)
-------
Total adjustment to interest expense................... 21,772
=======
(g) To reflect the elimination of historical investment
income...................................................... 1,332
(h) To reflect the equity in Joint Venture...................... 3,457
(i) To reflect the elimination of Merger Expenses paid by the
company..................................................... (7,206)
</TABLE>
39
<PAGE> 47
LIN TELEVISION CORPORATION AND LIN HOLDINGS CORP.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS -- (CONTINUED)
<TABLE>
<S> <C> <C>
(j) To reflect the income tax benefit as a result of the
adjustments described above and the withdrawal of the
operations of KXAS-TV from historical results
Withdrawal of KXAS-TV from historical results.......... (21,121)
Adjustment to income taxes to reflect the
acquisition........................................... (15,365)
-------
(36,486)
=======
(k) To reflect interest expense and amortization of deferred
financing costs related to the Senior Discount notes........ 21,716
(l) To reflect income tax benefit of interest expense on LIN
Holdings Corp............................................... (7,601)
</TABLE>
40
<PAGE> 48
LIN TELEVISION CORPORATION AND LIN HOLDINGS CORP.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HOLDINGS PREDECESSOR
--------------- -----------------
PERIOD FROM PERIOD FROM
MARCH 3 THROUGH JANUARY 1 THROUGH PRO FORMA PRO FORMA PRO FORMA PRO FORMA
MARCH 31, 1998 MARCH 2, 1998 ADJUSTMENTS LIN TELEVISION ADJUSTMENTS LIN HOLDINGS CORP.
--------------- ----------------- ----------- -------------- ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues........... $16,211 $43,804 $(13,253)(a) $ 46,762 $ -- $ 46,762
Operating costs and
expenses:
Direct operating..... 3,730 11,117 (2,246)(b) 12,601 12,601
Selling, general and
administrative.... 4,296 11,701 (2,750)(c) 13,247 13,247
Corporate............ 458 1,170 -- 1,628 1,628
Amortization of
program rights.... 1,015 2,743 (345)(d) 3,413 3,413
Depreciation and
amortization of
intangible
assets............ 4,474 4,581 4,542(e) 13,597 13,597
------- ------- -------- -------- ------- --------
Total operating costs
and expenses......... 13,973 31,312 (799) 44,486 44,486
------- ------- -------- -------- ------- --------
Operating income....... 2,238 12,492 (12,454) 2,276 2,276
Other (income) expense:
Interest expense..... 5,270 2,764 2,612(f) 10,646 5,748(k) 16,394
Interest income...... (50) (98) 148(g) -- -- --
Equity in joint
venture........... 462 244 1,474(h) 2,180 2,180
Merger expenses...... -- 8,616 (8,616)(i) -- --
------- ------- -------- -------- ------- --------
Total other expense.... 5,682 11,526 (4,382) 12,826 5,748 18,574
------- ------- -------- -------- ------- --------
Income (loss) before
provision (benefit)
for income taxes..... (3,444) 966 (8,072) (10,550) (5,748) (16,298)
Provision (benefit) for
income taxes......... (215) 3,710 (2,642)(j) 853 (2,012)(l) (1,159)
------- ------- -------- -------- ------- --------
Net income (loss)...... $(3,229) $(2,744) $ (5,430) $(11,403) $(3,736) $(15,139)
======= ======= ======== ======== ======= ========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Statement of Operations.
41
<PAGE> 49
LIN TELEVISION CORPORATION AND LIN HOLDINGS CORP.
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1998
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C>
(a) To reflect the withdrawal of the operations of KXAS-TV from
historical operations....................................... (13,253)
(b) To reflect the withdrawal of the operations of KXAS-TV from
historical operations....................................... (2,246)
(c) To reflect the withdrawal of the operations of KXAS-TV from
historical operations....................................... (2,750)
(d) To reflect the withdrawal of the operations of KXAS-TV from
historical operations....................................... (345)
(e) To reflect additional amortization of intangible assets
recorded as a result of the Acquisition purchase price
allocation, additional depreciation expense and the
withdrawal of the operations of KXAS-TV from historical
results
Amortization of intangible assets...................... 4,261
Additional depreciation expense related to the step-up
to estimated fair value of property and equipment..... 717
Withdrawal of KXAS-TV from historical operations....... (436)
-------
4,542
=======
(f) To reflect the additional interest expense and amortization
of deferred financing costs and commitment fees as a result
of borrowings under the Senior Credit Facilities and the
Senior Subordinated Notes
Senior Credit Facilities ($170,000 @ 7.5429%).......... 3,206
Commitment Fees ($175,000@ .375%)...................... 164
Senior Subordinated Notes ($300,000 @ 8.375%).......... 6,281
Amortization of Bond Discount.......................... 12
Amortization of Deferred Financing costs............... 983
Less historical interest expense....................... (8,034)
-------
Total adjustment to interest expense................... 2,612
=======
(g) To reflect the elimination of historical investment
income...................................................... 148
(h) To reflect the equity in the Joint Venture.................. 1,474
(i) To reflect the elimination of merger expenses paid by the
Company..................................................... (8,616)
(j) To reflect the elimination of historical income tax expense
and to record the new expense as a result of the pro forma
changes
Withdrawal of historical income tax expense............ (3,495)
Adjustment to income taxes to reflect the
acquisition........................................... 853
-------
(2,642)
=======
(k) To reflect interest expense and amortization of deferred
financing costs related to the Senior Discount notes........ 5,748
(l) To reflect income tax benefit of interest expense on LIN
Holdings Corp............................................... (2,012)
</TABLE>
42
<PAGE> 50
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL FACTORS AFFECTING THE COMPANY'S BUSINESS
The operating results of the Company depend primarily on advertising
revenues, which in turn depend on the economic conditions of the markets in
which the Company operates, the demographic makeup of those markets and the
marketing strategy and efforts of the Company's stations in those markets. The
Company experiences quarterly fluctuations in operating results, generally
reporting its highest revenues during the fourth quarter each year due to
advertisers' anticipation of higher consumer spending during the holiday season.
The Company also experiences annual fluctuations in operating results due
substantially to political spending in major election years, such as 1994 and
1996. The Olympic Games also cause cyclical fluctuations in the Company's
operating results, the size of such fluctuations depending on which network is
televising the Olympic Games and which of the Company's stations are affiliated
with that network. The Company also depends on automotive-related advertising.
Approximately 24% of the Company's gross advertising revenues for the years
ended December 31, 1997, 1996 and 1995 consisted of automotive advertising. A
significant decrease in such advertising could have a material adverse affect on
the Company's operating results. For other factors that may affect the Company's
business, see "Forward Looking Statements" and "Risk Factors."
Set forth below are the significant factors that contributed to the
operating results of the Company's stations for each of the three years in the
period ended December 31, 1997 and for the three month periods ended March 31,
1998 and 1997. The 1995 results reported below, unless otherwise specifically
stated, include station WIVB-TV only from the date of its acquisition by the
Company (i.e., from October 2, 1995). The following commentary should be read in
conjunction with the Company's consolidated financial statements and the notes
thereto presented elsewhere in this Prospectus. The WIVB-TV acquisition, and, to
a lesser extent, the start-up operations of the Company's four LMAs, affect the
year-to-year comparability of the Company's financial results reported below.
Except as otherwise noted, the following discussion of the results of
operations of LIN Television does not give effect to the Transactions. As a
result of the Transactions, the Company's capital structure is highly leveraged
and a significant portion of its cash flow will be used to service the Company's
debt obligations. The Company no longer owns and operates KXAS-TV, its former
Dallas-Fort Worth NBC affiliate (which contributed 33%, 34%, and 36% of the
Company's 1997, 1996 and 1995 net revenues, respectively, and is now owned by
the Joint Venture and managed by a wholly owned subsidiary of NBC), and the
common equity of LIN Television is no longer publicly traded (but will be
controlled by affiliates of Hicks Muse). Consequently, the future results of
operations of the Company will not be comparable to LIN Television's results of
operations prior to the Transactions. See "The Transactions and Other Matters."
43
<PAGE> 51
RESULTS OF OPERATIONS
Set forth below is a summary of the Company's operating results for each of
the fiscal years ended December 31, 1997, 1996 and 1995, as well as for the
three-month periods ended March 31, 1997 and 1998 and of Holdings' operating
results for the interim period ending March 31, 1998.
<TABLE>
<CAPTION>
HOLDINGS PERIOD COMPANY PERIOD PREDECESSOR PERIOD
FROM MARCH 3 FROM MARCH 3 FROM JANUARY 1 PREDECESSOR THREE
THROUGH THROUGH THROUGH MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1998 MARCH 2, 1998 MARCH 31, 1997
------------------ ------------------ ------------------ ------------------
% OF NET % OF NET % OF NET % OF NET
AMOUNT REVENUES AMOUNT REVENUES AMOUNT REVENUES AMOUNT REVENUES
------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues.................... $16,211 100.0% $16,211 100.0% $43,804 100.0% $61,662 100.0%
Operating costs and expenses:
Direct operating............... 3,730 23.0 3,730 23.0 11,117 25.4 16,068 26.1
Selling, general and
administrative............... 4,296 26.5 4,296 26.5 11,701 26.7 16,325 26.5
Corporate expense.............. 458 2.8 458 2.8 1,170 2.7 1,698 2.8
Amortization of program
rights....................... 1,015 6.3 1,015 6.3 2,743 6.3 4,058 6.6
Depreciation and amortization
of intangible assets......... 4,474 27.6 4,474 27.6 4,581 10.5 6,396 10.4
Tower write-offs............... -- -- -- -- -- -- -- --
------- ----- ------- ----- ------- ----- ------- -----
Total operating costs and
expenses.................... 13,973 86.2 13,973 86.2 31,312 71.6 44,545 72.4
------- ----- ------- ----- ------- ----- ------- -----
Operating income................ $ 2,238 13.8% $ 2,238 13.8% $12,492 28.4 $17,117 27.6%
======= ===== ======= ===== ======= ===== ======= =====
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1997 1996 1995
------------------- ------------------- -------------------
% OF NET % OF NET % OF NET
AMOUNT REVENUES AMOUNT REVENUES AMOUNT REVENUES
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................... $291,519 100.0% $273,367 100.0% $217,247 100.0%
Operating costs and expenses:
Direct operating............... 70,746 24.3 68,954 25.2 49,342 22.7
Selling, general and
administrative............... 63,473 21.8 59,974 21.9 47,646 21.9
Corporate expense.............. 6,763 2.3 6,998 2.6 5,747 2.7
Amortization of program
rights....................... 15,596 5.3 14,464 5.3 12,357 5.7
Depreciation and amortization
of intangible assets......... 24,789 8.5 23,817 8.7 17,127 7.9
Tower write-offs............... 2,697 0.9 -- -- -- --
-------- ----- -------- ----- -------- -----
Total operating costs and
expenses.................... 184,064 63.1 174,207 63.7 132,219 60.9
-------- ----- -------- ----- -------- -----
Operating income................ $107,455 36.9% $ 99,160 36.3% $ 85,028 39.1%
======== ===== ======== ===== ======== =====
</TABLE>
Quarter Ended March 31, 1998 Compared to Quarter Ended March 31, 1997
Net Revenues
Total net revenues consist primarily of national and local time sales, net
of sales adjustments and agency commissions, network compensation, barter
revenues, revenues from the production of local commercials and sports
programming, tower rental revenues, Local Weather Station revenues, and cable
retransmission income. Total net revenues decreased approximately 2.8% to $60.0
million for the three month period ended March 31, 1998 compared to $61.7
million for the same period last year, due primarily to the contribution of KXAS
to the Joint Venture in connection with the Merger on March 3, 1998. On a same
station basis, net revenues for the quarter ended March 31, 1998 increased
approximately 14% compared to the same period last year.
Approximately 87% of the Company's total net revenues for the three month
periods ended March 31, 1998 and 1997, were derived from net advertising time
sales. Advertising revenues for the first quarter of 1998 decreased 2.0% from
the same period last year due primarily to the contribution of KXAS to the Joint
Venture in connection with the Merger on March 3, 1998. On a same station basis,
approximately 88% and 86% of the Company's total net revenues for the three
month periods ended March 31, 1998 and 1997, respectively, were derived from net
advertising time sales. Same station advertising revenues for the first quarter
1998 increased approximately 16% over the same period last year. The increase
was attributable primarily to the broadcast of the 1998 Winter Olympics on the
Company's CBS affiliated stations, continued improvement in the local economy in
the market in which WTNH-TV operates, and to net advertising growth at the LMA
stations.
The Company's network revenue represents amounts paid to the Company for
broadcasting network programming provided by CBS, NBC, and ABC. On a same
station basis, network revenue for the period ended March 31, 1998 was
relatively flat when compared to the same period last year.
Revenues from the Local Weather Stations remained relatively flat when
compared to the same period last year. The Company provides Local Weather
Stations to cable operators in all of its markets except New Haven-Hartford and
Buffalo, to which markets it intends to provide this service in the future.
44
<PAGE> 52
Operating Costs and Expenses
Direct operating expenses, consisting primarily of news, engineering,
programming and music licensing costs, decreased approximately 8.1% to $14.8
million for the three month period ended March 31, 1998 compared to $16.1
million for the same period in 1997, due primarily to the contribution of KXAS
to the Joint Venture in connection with the Merger on March 3, 1998. On a same
station basis, direct operating expenses remained relatively flat for the three
month period ended March 31, 1998, compared to the same period last year.
Selling, general and administrative ("SG&A") expenses consist primarily of
employee salaries and sales commissions, advertising and promotion expenses, and
other expenses such as rent, utilities, insurance and other employee benefit
costs. SG&A expenses decreased approximately 1.8% to $16.0 million for the three
month period ended March 31, 1998 compared to $16.3 million for the same period
in 1997, due primarily to the contribution of KXAS to the Joint Venture in
connection with the Merger on March 3, 1998. On a same station basis, SG&A
expenses increased approximately 4.9% for the three month period ended March 31,
1998 over the same period in 1997, due in part to increased sales compensation
resulting from the increase in local revenues. The increase was also
attributable to higher payroll taxes related to increased employees in 1998
compared to 1997.
Total corporate expenses, which are comprised of costs associated with the
centralized management of the Company's stations, remained relatively flat for
the three month period ended March 31, 1998, compared to the same period in
1997.
Amortization of program rights reflect the expenses related to the
acquisition of syndicated programming, features and specials. Amortization of
program rights decreased approximately 7.3% to $3.8 million for the three month
period ended March 31, 1998 compared to $4.1 million for the same period in
1997, due primarily to the contribution of KXAS to the Joint Venture in
connection with the Merger on March 3, 1998. On a same station basis,
amortization of program rights decreased approximately 4.8% for the three month
period ended March 31, 1998 compared to the same period in 1997 due primarily to
a change in the syndicated/ barter programming mix at WTNH-TV.
Depreciation and amortization of intangible assets increased approximately
41.6% for the three month period ended March 31, 1998 compared to the same
period last year primarily as a result of the acquisition of LIN Television on
March 3, 1998. The excess of the purchase price over the estimated fair market
value of the net tangible assets acquired was allocated to intangible assets,
primarily to FCC licenses and network affiliations.
Operating Income
For the reasons discussed above, the Company reported a decrease in
operating income of $2.4 million for the three month period ended March 31,
1998, compared to the same period last year. On a same station basis, operating
income increased $5.4 million for the three month period ended March 31, 1998
compared to the same period in 1997.
The Company's interest expense increased approximately 10.2% for the three
month period ended March 31, 1998, when compared to the same period last year,
as a result of the new borrowings under the Senior Credit Facilities and the
issuance of the $300 million 8 3/8% Senior Subordinated Notes in connection with
the Merger. In addition, Holdings incurred $1.7 million of non-cash interest
expense for the period from March 3, 1998 through March 31, 1998 due to the
issuance of its 10% Senior Discount Notes.
During the first quarter of 1998, the Company incurred financial and legal
advisory fees and regulatory filing fees in connection with the Merger. These
expenses of approximately $8.6 million are reflected on the Predecessor's
Consolidated Statements of Income as merger expense.
The Company's provision for income taxes increased approximately 34.9% for
the three month period ended March 31,1998, compared to the same period in 1997,
due to a change in the Company's effective annual tax rate as a result of a
substantial increase in non-deductible amortization relating to goodwill.
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Year Ended December 31, 1997 Compared to Year Ended December 31, 1996
Net Revenues. Total net revenues consist of national and local time sales
(net of sales adjustments and agency commissions), network compensation, barter
revenues, revenue from the production of local commercials and sports
programming, tower rental revenues, Local Weather Station revenues and cable
retransmission revenues. Total net revenues increased approximately 7% for the
year ended December 31, 1997 compared to the same period in 1996. Nearly 87% and
89% of the Company's total net revenues for 1997 and 1996, respectively, were
derived from net national and net local advertising time sales.
The LMA stations and the continued ratings strength of the NBC-affiliated
stations accounted for approximately $3.7 million and $4.1 million of the net
national and net local advertising revenue increases, respectively, for the year
ended December 31, 1997. The advertising revenue increase for 1997 was also
attributable in part to local advertising revenue growth of approximately $2.5
million at station WTNH-TV due to continued improvement in economic conditions
in that station's market.
The Company's network revenue represents amounts paid to the Company for
broadcasting network programming provided by CBS, NBC and ABC. Network revenue
was relatively stable from 1996 to 1997.
Other broadcast revenues increased approximately $5.8 million for the year
ended December 31, 1997 due substantially to the sale of broadcast rights and
production services to outside parties. Increased revenues from the Local
Weather Stations also contributed to the increase in other broadcast revenues.
The Company provides Local Weather Stations to cable operators in all of its
markets except New Haven-Hartford and Buffalo, to which markets it intends to
provide this service in the future.
Operating Costs and Expenses. Direct operating expenses, consisting
primarily of news, engineering, programming and music licensing costs, increased
approximately $1.8 million for the year ended December 31, 1997 as compared with
the same period in 1996. Direct operating expenses at stations KXAN-TV and
KXAS-TV increased approximately $1.1 million as a result of expanded news
coverage. News costs also increased as a result of the acquisition of a
helicopter at station WISH-TV.
Selling, general and administrative ("SG&A") expenses consist primarily of
employee salaries and sales commissions, advertising and promotion expenses, and
other expenses such as rent, utilities, insurance and other employee benefit
costs. SG&A expenses increased approximately $3.5 million for the year ended
December 31, 1997, compared to the same period in 1996, due in part to increased
sales compensation resulting from the increase in local revenues. The increase
was also due in part to higher promotional expenditures at stations in the
Dallas-Fort Worth market.
Corporate expenses, which are comprised of costs associated with the
centralized management of the Company's stations, remained relatively flat for
the year ended December 31, 1997 compared to the same period in 1996.
Amortization of program rights reflect the expenses related to the
acquisition of syndicated programming, features and specials. Amortization of
program rights for the year ended December 31, 1997 rose approximately $1.1
million as a result of new programming purchases at station WTNH-TV and
programming write-offs at stations KNVA-TV and WBNE-TV.
Depreciation and the amortization of intangible assets increased
approximately $1.0 million for the year ended December 31, 1997 compared to the
same period in 1996. This increase is related primarily to an increase in
depreciation expense resulting from capital expenditures aimed at maintaining a
high quality on-air product at each of the Company's stations and, to a lesser
extent, to a full year of depreciation for a new production facility.
In 1995, the Company began to construct new facilities and purchase new
broadcast equipment to prepare for the transition to digital broadcasting.
During the second quarter of 1997, the Company disposed of towers and other
broadcast equipment that could no longer be used with digital technology. The
net book loss on this equipment of approximately $2.7 million is reflected on
the Company's Consolidated Statements of Income as tower write-offs.
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Operating Income. For the reasons discussed above, the Company reported an
increase in operating income of $8.3 million (approximately 8.0%) for the year
ended December 31, 1997, compared to the same period in 1996.
Interest expense, comprised primarily of interest payable on funds borrowed
under the Company's existing credit facility (the "Existing Credit Facility"),
decreased approximately 20% for the year ended December 31, 1997, compared to
the same period in 1996. The decrease was the result of the renegotiated terms
of the Existing Credit Facility and a reduction in the principal amount
outstanding. See "Note 4 -- Long Term Debt" of the Company's Consolidated
Financial Statements.
During the second half of 1997, the Company incurred financial and legal
advisory fees and regulatory filing fees in connection with the Merger. These
expenses of approximately $7.2 million are reflected on the Company's
Consolidated Statements of Income as merger expense.
The Company's provision for income taxes increased approximately 16% for
the year ended December 31, 1997, compared to the same period in 1996, due to
higher income before taxes and an increase in the Company's effective tax rate.
Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
Net Revenues. Total net revenues increased approximately 26% for the year
ended December 31, 1996 compared to the same period in 1995. Nearly 89% of the
Company's total net revenues for both 1996 and 1995 were derived from net
national and net local advertising time sales.
The WIVB-TV acquisition and the start-up operation of the LMAs accounted
for approximately $23.3 million of the net national and net local revenue
increase for the year ended December 31, 1996. The advertising revenue increase
for 1996 was also attributable to approximately $4.5 million in incremental
revenues resulting from the telecast of the 1996 Summer Olympics on the
NBC-affiliated stations, which led to a more complete sale of inventory and
increased advertising rates for those stations. The increase was also the result
of strong political sales growth of approximately $7.2 million in 1996.
Advertising revenue increases were also driven by the continued steady demand
for television advertising time since 1994, reflecting strong economic activity
in most of the Company's markets.
Increased network revenues of approximately $3.4 million for the year ended
December 31, 1996 also contributed to the total net revenue increase. The
Company negotiated a new network compensation agreement for the ABC affiliate
WTNH-TV in 1996 which was effective as of September 1995. WTNH-TV's network
compensation increased approximately $2.3 million in 1996 as a result of this
new agreement. Network revenues also increased as a result of the inclusion of a
full year of operations at station WIVB-TV.
Other broadcast revenues increased $1.8 million for the year ended December
31, 1996 due primarily to increases in sports programming production, local spot
production and Local Weather Station revenues. In connection with the
acquisition of the Texas Rangers baseball broadcast rights, the Company launched
a new production facility to produce these on-air broadcasts. A substantial
portion of the increase in other broadcast revenues resulted from this new
production facility. Increased revenues from Local Weather Stations also
contributed to the increase in other broadcast income.
Operating Costs and Expenses. Direct operating expenses for the year ended
December 31, 1996 increased approximately 40% over the same period in 1995 due
primarily to the WIVB-TV acquisition, an increase in the amortization of sports
programming rights, expansion of news coverage and a change in the
syndicated/barter programming mix. The increase in amortization of sports
programming rights resulted from the acquisition in 1996 of broadcasting rights
to Texas Rangers baseball games. Direct operating expenses at stations KXAS-TV
and WTNH-TV increased approximately $1.7 million as a result of expanded news
coverage and approximately $0.8 million as a result of increased barter
programming at station WTNH-TV.
SG&A expenses increased approximately 26% for the year ended December 31,
1996 compared to the same period in 1995. The increase was due to the WIVB-TV
acquisition, expenses associated with the new production facility, the operation
of the LMA stations and, to a lesser extent, to increased sales commissions at
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most of the stations related to the increase in net revenues in 1996. SG&A
expenses also increased approximately $1.0 million in 1996 as a result of
increased sales and promotional efforts at the Company's LMA stations.
Corporate expenses are comprised primarily of costs associated with the
centralized management of the stations. Corporate expenses increased
approximately $1.3 million for the year ended December 31, 1996 compared to the
same period in 1995, due primarily to expenses associated with the Company's
continuing effort to seek out acquisition opportunities.
The amortization of programming rights for the year ended December 31, 1996
rose approximately $2.1 million as compared with the same period in 1995 as a
result of a $1.3 million increase due to the WIVB-TV acquisition as well as a
change in the syndicated/barter programming mix at WAVY-TV.
Depreciation and the amortization of intangible assets increased $6.7
million for the year ended December 31, 1996 compared to the same period in
1995. This increase is related primarily to the WIVB-TV acquisition, a $3.1
million increase in depreciation expense related to capital expenditures aimed
at maintaining a high quality on-air product at each of the Company's stations
and, to a lesser extent, the operation of the new production facility.
Operating Income. For the reasons discussed above, the Company reported an
increase in operating income of $14.1 million (approximately 17%) for the year
ended December 31, 1996 compared to the same period in 1995.
Interest expense increased moderately for the year ended December 31, 1996,
compared to the same period in 1995, due to interest on the additional funds
borrowed for the WIVB-TV acquisition, partially offset by lower interest rates.
See "Note 4 -- Long Term Debt" of the Company's Consolidated Financial
Statements.
The Company's provision for income taxes increased approximately 22% for
the year ended December 31, 1996 compared to the same period in 1995, due to
higher income before taxes.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaled $17.0 million and $21.4
million for the three-month periods ended March 31, 1998 and 1997, respectively,
and $81.7 million, $70.8 million, and $56.0 million for the years ended December
31, 1997, 1996 and 1995, respectively. The decrease in net cash provided by
operating activities for the quarter ended March 31, 1998 compared to the same
period in 1997 was primarily due to the contribution of KXAS to the Joint
Venture in connection with the Merger on March 3, 1998. The increase in net cash
provided by operating activities for the year ended December 31, 1997 compared
to 1996 was primarily due to improved operating results and a reduction in
amounts paid for interest, offset by merger expenses. The increase for the year
ended December 31, 1996 compared to 1995 was due primarily to improved operating
results. Net cash used in investing activities totaled $908.7 million and $7.4
million for the three-month periods ended March 31, 1998 and 1997, respectively,
and $15.1 million, $27.9 million and $127.7 million for the years ended December
31, 1997, 1996 and 1995, respectively. The increase in net cash used in
investing activities for the quarter ended March 31, 1998 compared to the same
period in 1997 was due primarily to the acquisition of LIN Television in March,
1998, the effects of which were offset by the contribution of KXAS to the Joint
Venture. The decrease in 1997 from 1996 was attributable to a reduction in
capital expenditures of $7.0 million coupled with proceeds of $7.0 million from
asset dispositions. Net cash used in investing activities decreased for the year
ended December 31, 1996 compared to 1995 due to costs related to acquisitions in
1995. Net cash provided by financing activities for the three-month period ended
March 31, 1998 totaled $917.4 million compared to $13.5 million used in the
three-months ended March 31, 1997. Net cash used in financing activities totaled
$86.5 million and $33.0 million for the years ended December 31, 1997 and 1996,
respectively. Net cash provided by financing activities totaled $71.8 million in
1995. The fluctuation for the three-month period ended March 31, 1998, compared
to the same period in 1997, was due primarily to the issuance of the 8 3/8%
Senior Subordinated Notes by the Company, the issuance of 10% Senior Discount
Notes by Holdings and the equity contribution by Hicks Muse in connection with
the
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Merger, the effects of which were partially offset by the principal payment of
$260.0 million to retire the old debt. Net cash used in financing activities
increased for the years ended December 31, 1997 and 1996 due to an increase in
principal payments on long-term debt under the Existing Credit Facility. As of
March 31, 1998, the Company had a working capital surplus of $22.9 million,
compared to a working capital surplus of $50.7 million in 1997. The decrease in
the three-month period ended March 31, 1998, compared to the same period in
1997, was due primarily to the use of cash to fund the Acquisition and accrued
interest related to the Notes and the Senior Credit Facilities. As of December
31, 1997, the Company had a working capital surplus of $28.3 million, compared
to a working capital surplus of $56.6 million in 1996, and a working capital
surplus of $34.0 million in 1995. The decrease in 1997 compared to 1996 is
primarily due to principal payments on long term debt. The increase in 1996
compared to 1995 is primarily attributable to improved operating cash flows and
a reduction of programming liabilities.
Interest payments on the Notes and interest payments and amortization with
respect to the Senior Credit Facilities represent significant liquidity
requirements for the Company and Holdings. The Senior Subordinated Notes and the
Term Loans funded in connection with the Acquisition will require annual
interest payments of approximately $25.1 million and $13.4 million,
respectively. The Tranche A Term Loans funded in connection with the Acquisition
are repayable in quarterly principal payments over seven years in the amount of
approximately $1.8 million each. If funded in connection with the Grand Rapids
Acquisition, an additional $125.0 million of Tranche A Term Loans will be
repayable in quarterly principal installments of approximately $4.5 million
each. The Tranche B Term Loans are repayable over nine years in quarterly
principal payments, in the amount of $240,000 each in 1998, $480,000 each in
each of 1999 through 2004, $28,920,000 each in 2005, $68,400,000 each in 2006,
and $19,560,000 each in 2007. See "Description of the Senior Credit Facilities."
The Company's capital expenditures primarily include purchases of
broadcasting equipment, studio equipment, vehicles and office equipment to
improve the efficiency and quality of television broadcasting operations. The
Company's capital expenditures for the first three-months of 1998 were $1.3
million compared to $7.2 million for the same period in 1997. The Company's
capital expenditures for the full year of 1997 were $20.6 million compared to
$27.6 million in 1996 and $27.7 million in 1995. The Company has invested
approximately $13.0 million to fully prepare its towers and transmitter
buildings for the upcoming digital transition. The Company expects to spend
approximately $22 million per year on capital expenditures in 1998 and 1999.
After 1999, an additional $29.3 million will be required through 2002 to
complete the transition to digital broadcasting. The Company anticipates that it
will be able to meet its capital expenditure requirements with internally
generated funds and borrowings under the Senior Credit Facilities.
In addition to the foregoing capital expenditures, the Company intends to
pursue selective acquisitions of television stations whose performance
management believes can be improved by applying management's business strategy.
In particular, the Company expects to consummate the Grand Rapids Acquisition
later in 1998 and the acquisition of WVTM-TV, the Birmingham, Alabama NBC
affiliate, in 1999. Although it is expected that the cost of the Grand Rapids
Acquisition and the WVTM-TV acquisition will be funded by additional Tranche A
Term Loans and the Incremental Term Loans, respectively, the cost of any
additional acquisitions may require additional debt and/or equity capital. There
can be no assurance that the Company will be able to obtain such additional
capital on attractive terms, if at all.
Based on the current level of operations and anticipated future growth
(both internally generated as well as through acquisitions), the Company
anticipates that its cash flow from operations, together with borrowings under
the Senior Credit Facilities should be sufficient to meet its anticipated
requirements for working capital, capital expenditures, interest payments and
scheduled principal payments. The Company's future operating performance and
ability to service or refinance the Notes and to extend or refinance the Senior
Credit Facilities will be subject to future economic conditions and to
financial, business and other factors, many of which are beyond the Company's
control.
The Notes and the Senior Credit Facilities impose certain restrictions on
the Company's ability to make capital expenditures and limit the Company's
ability to incur additional indebtedness. Such restrictions could limit the
Company's ability to respond to market conditions, to provide for unanticipated
capital investments
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or to take advantage of business or acquisition opportunities. The covenants
contained in the Credit Agreement and the Indentures also, among other things,
limit the ability of the Company to dispose of assets, repay indebtedness or
amend other debt instruments, pay distributions, create liens on assets, enter
into sale and leaseback transactions, make investments, loans or advances and
make acquisitions. See "Description of the New Senior Subordinated Notes,"
"Description of the New Senior Discount Notes" and "Description of the Senior
Credit Facilities."
Holdings is a holding company whose only material asset is the capital
stock of the Company. Holdings does not have any business (other than in
connection with its ownership of the capital stock of the Company and the
performance of its obligations with respect to the Senior Discount Notes and the
Senior Credit Facilities) and will depend on the distributions from the Company
to meet its debt service obligations, including, without limitation, interest
and principal obligations with respect to the Senior Discount Notes. Because of
the substantial leverage of the Company, and the dependence of Holdings upon the
operating performance of the Company to generate distributions to Holdings with
respect to the Company's common stock, there can be no assurance that Holdings
will have adequate funds to fullfil its obligations with respect to the New
Senior Discount Notes when due. In addition, the Credit Agreement, the Senior
Subordinated Notes Indenture and applicable federal and state law will impose
restrictions on the payment of dividends and the making of loans by the Company
to Holdings.
Accordingly, Holdings' only source of cash to pay interest on and principal
of the Senior Discount Notes is distributions with respect to its ownership
interest in the Company and the Company's subsidiaries from the net earnings and
cash flow generated by the Company and its subsidiaries. Prior to March 1, 2003,
Holdings' interest expense on the Senior Discount Notes will consist solely of
non-cash accretion of principal interest and the Senior Discount Notes will not
require cash interest payments. On March 1, 2003, Holdings will be required to
pay the Mandatory Principal Redemption Amount. After such time, the Senior
Discount Notes will require annual cash interest payments of $20.0 million. In
addition, the Notes mature on March 1, 2008. See "Description of the New Senior
Discount Notes."
YEAR 2000 ISSUE
Some of the Company's older computer programs were written using two digits
rather than four to define the applicable year. As a result, those computer
programs have time-sensitive software that recognize a date using "00" as the
year 1900 rather than the year 2000. This could cause a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
The Company has completed an assessment of a majority of its systems and
expects to complete the review of all its systems by December 31, 1998, which is
prior to any anticipated impact on its operating systems. The Company has
initiated formal communications with all of its significant suppliers and large
customers to determine the extent to which the Company's interface systems are
vulnerable to the failure of those third parties' to address their own Year 2000
issues. A majority of the systems tested and third parties reviewed to date are
Year 2000 compliant. There is no guarantee that the systems of other companies
on which the Company's systems rely will be timely converted and would not have
an adverse effect on the Company's systems.
Based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources and other factors, the Company believes it will complete its Year 2000
modifications, the costs of which are immaterial, by mid-year 1999.
INFLATION
The Company believes that its businesses are affected by inflation to an
extent no greater than other businesses generally.
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RECENTLY-ISSUED ACCOUNTING PRINCIPLES
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income" ("Statement 130") effective for years beginning after
December 15, 1997. Statement 130 requires that a public company report items of
other comprehensive income either below the total for net income in the income
statement, or in a statement of changes in equity, and to disclose the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in-capital in the equity section of the balance
sheet. Statement 130 was adopted during the first quarter of 1998 and was
applied to prior period financial statements on a retroactive basis. The
adoption of Statement 130 did not have a material impact on the consolidated
financial statements.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("Statement 131") effective for years
beginning after December 15, 1997. Statement 131 requires that a public company
report financial and descriptive information about its reportable operating
segments pursuant to criteria that differ from current accounting practice.
Operating segments, as defined, are components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. The financial information to be reported includes segment
profit or loss, certain revenue and expense items and segment assets and
reconciliations to corresponding amounts in the general purpose financial
statements. Statement 131 also requires information about revenues from products
or services, countries where the company has operations or assets and major
customers. Management does not believe the implementation of Statement 131 will
have a material impact on its consolidated financial statements.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" ("Statement 132") effective
for years beginning after December 15, 1997. Statement 132 revises employers'
disclosures about pension and other postretirement benefit plans. It does not
change the measurement or recognition of those plans. This Statement
standardizes the disclosure requirements for pensions and other postretirement
benefits to the extent practicable, requires additional information on changes
in the benefit obligations and fair values of plan assets that will facilitate
financial analysis, and eliminates certain disclosures that are no longer as
useful as they were when SFAS No. 87, "Employers' Accounting for Pensions", SFAS
No. 88, "Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits", and SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" were
issued. The Statement suggests combined formats for presentation of pension and
other postretirement benefit disclosures. Management does not believe the
implementation of Statement 132 will have a material impact on its consolidated
financial statements.
In April 1998, Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") effective for fiscal years beginning after December 15,
1998. This SOP provides guidance on the financial reporting of start-up costs
and organization costs. It requires that costs of start-up activities and
organization costs be expensed as incurred. Initial application of SOP 98-5
should be reported as the cumulative effect of a change in accounting principle,
as described in Accounting Principles Board (APB) Opinion No. 20, "Accounting
Changes". When adopting this SOP, entities are not required to report the pro
forma effects of retroactive application. Management does not believe the
implementation of SOP 98-5 will have a material impact on its consolidated
financial statements.
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BUSINESS
THE COMPANY
Overview. The Company is a leading television station group operator in the
United States that operates eleven television stations and provides consulting
services to two additional television stations. Twelve of these stations are
network affiliates and nine are in top forty DMAs, including: Indianapolis,
Indiana; New Haven-Hartford, Connecticut; Buffalo, New York; Norfolk-Portsmouth,
Virginia; Grand Rapids-Kalamazoo-Battle Creek, Michigan and Dallas-Fort Worth,
Texas. These stations have an aggregate United States household reach of
approximately 6.9%, ranking the Company among the top independent, "pureplay"
television station group operators in the United States.
The Company's Core Stations generated an aggregate pro forma BCF margin of
approximately 46% for the fiscal year ended December 31, 1997, principally as a
result of their strong network affiliations, leading local news programming and
tight cost controls. In addition, the Company's management pioneered the
"multi-channel strategy," which involves the combination of an owned and
operated television station with a LMA station and/or a Local Weather Station in
the same market. The multi-channel strategy has enhanced the Company's revenue
market shares and increased its BCF by leveraging its fixed costs over a larger
revenue base.
History. Prior to 1994, the Company was an indirect wholly-owned subsidiary
of LIN Broadcasting. LIN Broadcasting bought its first broadcasting property in
1965 and also entered into the cellular telephone business in the early 1980's.
McCaw Cellular purchased a majority stake in LIN Broadcasting in March 1990.
AT&T then acquired McCaw Cellular in September 1994 in a tax-free merger
transaction. On December 28, 1994, AT&T spun-off to public shareholders the
common stock of the Company (the "Spin-Off"), at which time AT&T Wireless, a
wholly-owned subsidiary of AT&T, became the Company's largest stockholder. In
connection with the Spin-Off, the Company acquired WTNH-TV (New Haven/Hartford,
CT) from Cook Inlet Communication, Inc. and AT&T retained the Grand Rapids
Stations, which theretofore had been owned by the Company. Since the Spin-Off,
the Company has continued to provide services to the Grand Rapids Stations
pursuant to a consulting agreement with AT&T. AT&T Wireless holds approximately
45% of the outstanding shares of the Company's Common Stock.
THE STATIONS
The Company's station portfolio is well diversified in terms of its network
affiliations, geographic coverage, net revenues and cash flow. The Company owns
and operates three CBS affiliates, two NBC affiliates and two ABC affiliates
which accounted for 35%, 28% and 28%, respectively, of the Company's pro forma
BCF for the fiscal year ended December 31, 1997. The Company's LMA stations and
other revenue sources accounted for the remaining 9% of its BCF on the same
basis. The Company's Core Stations broadcast in seven different markets, with no
market representing more than 25% of the Company's pro forma net revenues or BCF
for the fiscal year ended December 31, 1997.
Core Stations. The Company owns and operates two NBC affiliates in the
Norfolk-Portsmouth and Austin markets. In the Norfolk-Portsmouth market, a very
competitive news market, WAVY-TV has regularly been a leader in attracting the
most favorable demographics. Its 11:00 p.m. newscast has consistently been
ranked first in the market. KXAN-TV operates in the Austin market, which is one
of the five fastest growing markets in the United States, has attractive
demographics and commands advertising rates comparable to rates in much larger
markets. Based on the foregoing factors and NBC's network leadership position,
management believes that WAVY-TV and KXAN-TV are well positioned for continued
strong performance.
The Company owns and operates three CBS affiliates in the Indianapolis,
Buffalo and Fort Wayne markets. The Company anticipates that CBS's recent
acquisition of the right to broadcast AFC football games will particularly
benefit the Company's CBS stations (Indianapolis, Indiana and Buffalo, New York
are home to the Indianapolis Colts and Buffalo Bills football teams,
respectively, both of which are part of the American Football Conference (AFC)).
WISH-TV, a station operating in the Indianapolis market since 1954, is not
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only the ratings leader in its market, but also the highest-rated CBS affiliate
in a major metered market in the United States. WIVB-TV, the Company's Buffalo
station and most recent acquisition, has gained considerable momentum and had
among the highest advertising sales growth rates of the Company's Core Stations
during the fourth quarter of 1997. In the Fort Wayne market, WANE-TV was
recently rated first in news.
The Company owns and operates two ABC affiliates, including WTNH-TV in the
New Haven-Hartford market. WTNH-TV has recently begun to recognize the benefits
of its repositioning as a leading news source in its market. Management believes
that the station is now well positioned to reap the benefits of an important
1998 political season in Connecticut.
Local News. The Company's performance in local news is excellent,
consistently ranking first or second in news in all but its smallest market.
Local news remains a primary focus of management because it reaches a desirable
viewing audience and allows the Company to maintain its tight control over
programming costs. The Company historically has derived 35%-40% of its revenues,
and a higher percentage of its BCF, from news programming. Local news provides
product differentiation from cable television and some insulation from
over-reliance on national network programming.
Local Marketing Agreements. The Company has entered into 10-year local
marketing agreements pursuant to which it provides marketing services and
programming to LMA stations KNVA-TV, Austin, Texas, WBNE-TV, New Haven-Hartford,
Connecticut, WVBT-TV, Norfolk-Portsmouth, Virginia and KXTX-TV, Dallas-Fort
Worth, Texas. In addition to providing the Company with an enhanced revenue
stream, the Company's LMA strategy is intended to permit stations that otherwise
might "go dark," or operate with marginal profitability, to add local news and
public affairs programming and contribute to diversity in their respective
markets. The Company also benefits from the cross-marketing of programming, or
the ability to time-shift or double run certain programming.
Over the past few years, the Company has taken various steps to increase
its market penetration and broaden its demographics by developing its LMA
stations. As start-up stations, the Company's LMA stations historically have
generated revenues but produced negative BCF. However, the Company's LMA
stations contributed approximately $7.1 million to the Company's BCF in 1997.
53
<PAGE> 61
The following table provides information regarding the stations and other
programming outlets operated by the Company and the stations owned by the Joint
Venture:
<TABLE>
<CAPTION>
COMMERCIAL STATION STATION
DMA, STATIONS AND OTHER DMA STATIONS IN RANK IN AUDIENCE
PROGRAMMING OUTLETS STATUS(A) AFFILIATION(B) RANK(C) DMA(D) DMA(E) SHARE(E)
----------------------- --------- -------------- ------- ----------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
COMPANY STATIONS AND OTHER
PROGRAMMING OUTLETS:
INDIANAPOLIS, IN
WISH-TV.................................... O&O CBS 25 8 1 18%
WIIH-LP (Satellite)(f)..................... O&O CBS
Local Weather Station...................... O&O Cable
NEW HAVEN-HARTFORD, CT
WTNH-TV.................................... O&O ABC 27 8 2 14%
WBNE-TV.................................... LMA WB 5(tie) 2%
GRAND RAPIDS-KALAMAZOO-BATTLE CREEK, MI(g)
WOOD-TV.................................... CS NBC 37 8 1(tie) 18%
WOTV-TV.................................... CS ABC 4 5%
NORFOLK-PORTSMOUTH, VA
WAVY-TV.................................... O&O NBC 39 7 1(tie) 16%
WVBT-TV.................................... LMA WB/Fox(h) 5 2%
Local Weather Station...................... O&O Cable
BUFFALO, NY
WIVB-TV.................................... O&O CBS 40 7 2 17%
AUSTIN, TX
KXAN-TV.................................... O&O NBC 60 7 3 14%
KNVA-TV.................................... LMA WB 6 3%
KXAM-TV (Satellite)(i)..................... O&O NBC
Low Power Network.......................... O&O UPN
DECATUR-CHAMPAIGN, IL
WAND-TV.................................... O&O ABC 81 8 3 14%
Local Weather Station...................... O&O Cable
FORT WAYNE, IN
WANE-TV.................................... O&O CBS 102 6 2 19%
Local Weather Station...................... O&O Cable
DALLAS-FORT WORTH, TX
KXTX-TV.................................... LMA IND 8 13 9 3%
JOINT VENTURE STATIONS:
DALLAS-FORT WORTH, TX
KXAS-TV.................................... JV NBC 8 13 3 12%
SAN DIEGO, CA
KNSD-TV.................................... JV NBC 26 7 1 13%
</TABLE>
- ---------------
(a) "O&O" refers to a station owned and operated by the Company. "LMA" refers to
a station operated by the Company pursuant to a local marketing agreement
and with respect to which the Company has a purchase option exercisable
under certain circumstances. "JV" refers to a station owned by the Joint
Venture and operated by NBC. "CS" refers to a station which the Company
provides services to pursuant to a consulting agreement. The Company's Core
Stations, all of which are CBS, NBC and ABC affiliates, are WISH-TV,
WANE-TV, WAND-TV, WAVY-TV, KXAN-TV, WTNH-TV and WIBV-TV.
(b) "IND" refers to an independent station with no network affiliation.
(c) Rankings are based on the relative size of the station's "market" among the
211 generally recognized television markets in the United States. Source:
Nielsen Station Index DMA Market Ratings -- November 1997, A.C. Nielsen
Company.
(d) The number of stations in a market excludes local weather stations, low
power networks and satellite broadcasting facilities.
(e) Source: Nielsen Station Index DMA Market Ratings -- November 1997, A.C.
Nielsen Company, Sunday-Saturday 6:00 a.m.-2:00 a.m.
(f) Station WIIH-LP, Indianapolis, Indiana, is operated as a satellite station
of WISH-TV in order to increase WISH-TV's coverage.
(g) The Company currently provides services to WOOD-TV and WOTV-TV pursuant to a
consulting agreement with AT&T. It has agreed to acquire the assets of
WOOD-TV and the LMA rights related to WOTV-TV from AT&T for a purchase price
of
54
<PAGE> 62
approximately $125.5 million. The acquisition is expected to close later this
year. See "The Transactions and Other Matters -- The Grand Rapids Acquisition"
and "Business -- The Company -- History."
(h) WVBT-TV will become a Fox affiliate on August 31, 1998.
(i) Station KXAM-TV, Llano, Texas, is operated as a satellite station of KXAN-TV
in order to increase KXAN-TV's coverage.
The following are descriptions of the stations operated by the Company:
WISH-TV (Indianapolis, Indiana)
Station Profile. WISH-TV has been the leading station in Indianapolis,
ranked number one in audience share since 1990. In spite of increased
competition, recent investments by the Company in news gathering equipment,
including a helicopter, have reinforced WISH-TV's leading position in its
market. A recently completed tower and transmission facility has helped to
favorably position the station for the upcoming transition to digital
transmission. Approximately 51% of WISH-TV's 24 hours of daily broadcasting time
consists of programming that is either locally produced or purchased from
non-network sources.
Market Overview. Indianapolis, Indiana is the twenty-fifth largest DMA in
the United States, with a population of approximately 2,386,000 and
approximately 957,050 television households. Cable penetration in the
Indianapolis market is estimated to be 65%. The Indianapolis market experienced
revenue growth of approximately 9.1% in 1996 and is expected to grow at a
compound annual rate of 5.6% through 2000. Average household income is estimated
to be $41,171.
The table below provides an overview of the competitive stations servicing
the Indianapolis market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
- ---- ------------ ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Station
WISH-TV.................. Indianapolis VHF CBS LIN Television Corp. 18 17 17 18
Others
WTTV-TV.................. Bloomington VHF UPN Sinclair Comm Inc. 8 7 9 7
WRTV-TV.................. Indianapolis VHF ABC McGraw-Hill Bcstg. 12 13 13 12
WTHR-TV.................. Indianapolis UHF NBC Dispatch Bcstg. Group 17 16 16 15
WNDY-TV.................. Marion UHF WB Wabash Valley Bcstg. 3 3 3 4
WXIN-TV.................. Indianapolis UHF Fox Tribune Bcstg. Co. 8 8 9 8
</TABLE>
WTNH-TV and WBNE-TV (New Haven-Hartford, Connecticut)
Station Profiles. WTNH-TV, acquired in 1994, has fully implemented the
Company's operating methods and, as a result thereof, has achieved a leading
position in late news and increased its share in all newscasts over the past
three years. The Company has heightened its commitment to news gathering and
weather forecasting and has set a goal of becoming the leading news and weather
station in Connecticut. As one of only two VHF signals in the market, WTNH-TV
has a competitive advantage in its market. WTNH-TV's market position provides a
measure of consistency in a market where other major stations have experienced a
change of control. The Company believes that this market activity should enable
WTNH-TV to strengthen its position as a market leader.
The Company's LMA station in the New Haven-Hartford market, WBNE-TV, will
also help to gain additional market share for the Company. Programming shared
between WTNH-TV and WBNE-TV, such as Boston Red Sox games, will further
differentiate the Company's stations in the market. Approximately 45% of
WTNH-TV's 24 hours of daily broadcast time and approximately 90% of WBNE-TV's
broadcast time consists of programming that is either locally produced or
purchased from non-network sources.
Market Overview. New Haven-Hartford, Connecticut is the twenty-seventh
largest DMA in the country with population of approximately 2,299,000 and
approximately 915,770 television households. Cable penetration in the New
Haven-Hartford market is estimated to be 87%. The New Haven-Hartford market
experienced revenue growth of approximately 4.5% in 1996 and is expected to grow
at a compound annual growth rate of approximately 5.3% through 2000. Average
household income is estimated to be $48,932.
55
<PAGE> 63
The table below provides an overview of the competitive stations serving
the New Haven-Hartford market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
---- ----------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Station/LMA
WTNH-TV..................... New Haven VHF ABC LIN Television 15 15 15 14
Corp.
WBNE-TV..................... New Haven UHF WB K-W Television -- 2 2 2
Other
WFSB-TV..................... Hartford VHF CBS Meredith Corp. 16 17 16 16
WTXX-TV..................... Waterbury UHF UPN Counterpoint Comm. 2 2 2 2
WVIT-TV..................... New Britain UHF NBC NBC 14 13 13 13
WTIC-TV..................... Hartford UHF Fox Tribune Bcstg. Co. 9 8 9 8
</TABLE>
WOOD-TV and WOTV-TV (Grand Rapids-Kalamazoo-Battle Creek, Michigan)
Station Profiles. WOOD-TV has long been a leading station in the Grand
Rapids-Kalamazoo-Battle Creek market, partly as a result of its broad geographic
reach. It competes with stations that have less extensive signal coverage or
focus on serving the smaller cities in the DMA. The station has benefitted from
the strength of NBC, which has helped the station maintain its lead in news and
prime time. Some of WOOD-TV's competitors have focused their news coverage on
Battle Creek and Kalamazoo, leaving WOOD-TV with a powerful position in Grand
Rapids, the largest and most attractive segment of the market.
WOTV-TV, an LMA station affiliated with ABC, has a strong local presence in
Battle Creek. WOTV-TV provides the only local news for the Battle Creek
sub-market and significantly benefits from its LMA relationship with the
Company. Its signal is limited to the southern tier of the market as another ABC
affiliate has the rest of the market. 46% and 37% of WOOD-TV's and WOTV-TV's 24
hours of daily broadcasting time, respectively, consists of programming that is
either locally produced or purchased from non-network sources.
Market Overview. Grand Rapids-Kalamazoo-Battle Creek, Michigan is the
thirty-seventh largest DMA in the United States. The Grand
Rapids-Kalamazoo-Battle Creek market has a population of approximately 1,727,000
and approximately 659,340 television households. Cable penetration in the Grand
Rapids market is estimated to be 62%. The Grand Rapids-Kalamazoo-Battle Creek
market experienced revenue growth of approximately 7.0% in 1996 and is expected
to grow at a compound annual rate of 5.3% through 2000. Average household income
is estimated to be $39,023.
The table below provides an overview of the competitive stations serving
the Grand Rapids-Kalamazoo-Battle Creek market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
---- ------------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Stations
WOOD-TV.................. Grand Rapids VHF NBC LIN Television Corp. 19 19 20 18
WOTV-TV.................. Battle Creek UHF ABC Channel 41 Inc. 4 4 4 5
Others
WWMT-TV.................. Kalamazoo VHF CBS Granite Bcstg Corp. 19 18 17 18
WZZM-TV.................. Grand Rapids UHF ABC Gannett Co Inc. 16 15 14 14
WXMI-TV.................. Grand Rapids UHF Fox Dudley Comm Corp. 8 8 9 9
</TABLE>
WAVY-TV and WVBT-TV (Norfolk-Portsmouth, Virginia)
Station Profiles. The Company's share of revenues in the Norfolk-Portsmouth
market has grown from 24.8% in 1990 to an estimated 29% in 1997 principally as a
result of WAVY-TV's improvements in its news position over the past 5 years
coupled with the creation of the WVBT-TV LMA. During the same period, market
revenue has grown more than 50% from $63.0 million to an estimated $96.0
million. These factors
56
<PAGE> 64
have combined to increase BCF for WAVY-TV and WVBT-TV from approximately $6.5
million in 1990 to $14.1 million in 1997.
The Company has invested heavily in the Norfolk-Portsmouth market, making
an extensive commitment to enhanced weather service with radar and storm
trackers, important equipment in a highly volatile weather belt. This
positioning and commitment, together with the Company's ability to provide a
strong local newscast, helped the Company to obtain the Fox affiliation for
WVBT-TV beginning on September 1, 1998.
Approximately 43% of WAVY-TV's 24 hours of daily broadcasting time consists
of programming that is either locally produced or purchased from non-network
sources. Approximately 87% of WVBT-TV's 24 hours of daily broadcast time
consists of programming that is either locally produced or purchased from
non-network sources. Network programming, which currently is supplied to WVBT-TV
by the WB Network, will be provided by Fox commencing on August 31, 1998.
Market Overview. Norfolk-Portsmouth, Virginia is the thirty-ninth largest
DMA in the country with a population of approximately 1,651,000 and
approximately 635,810 television households. Cable penetration in the
Norfolk-Portsmouth market is estimated to be 75%. The Norfolk-Portsmouth market
experienced revenue growth of approximately 6.0% in 1996 and is expected to grow
at a compound annual rate of 5.8% through 2000. Average household income is
estimated to be $36,548.
The table below provides an overview of the competitive stations serving
the Norfolk-Portsmouth market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
---- ------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Station/LMA
WAVY-TV............... Portsmouth VHF NBC LIN Television Corp. 18 18 17 16
WVBT-TV............... Virginia Beach UHF WB Ulloa, Walter F. -- 2 2 2
Other
WTKR-TV............... Norfolk VHF CBS New York Times Co. 19 17 18 16
WVEC-TV............... Hampton UHF ABC Belo Corp. 17 18 18 16
WGNT-TV............... Portsmouth UHF UPN Paramount Stations 4 4 4 5
WTVZ-TV............... Norfolk UHF Fox Sinclair Comm. Inc. 7 5 7 7
</TABLE>
WIVB-TV (Buffalo, New York)
Station Profile. Acquired by the Company in 1995, WIVB-TV is still in the
process of fully implementing the Company's operating methods. Recent
improvements in the station's operating performance have been aided by several
factors. One such factor is the slight improvement in the local economy which
has aided the station's sales efforts. The effects of these factors are seen in
the growth of second half 1997 advertising sales over the same period in 1996,
with respect to which WIVB-TV is among leaders of the Core Stations.
Finally, the station has a strong syndicated programming line-up. Other
programming was by the previous owners at prices somewhat higher than the
Company would typically pay for such programming. Accordingly, management
believes that programming costs may be reduced over time. Approximately 50% of
WIVB-TV's 24 hours of daily broadcasting time consists of programming that is
either locally produced or purchased from non-network sources.
Market Overview. Buffalo, New York is the fortieth largest DMA in the
United States with a population of approximately 1,570,000 and approximately
629,970 television households. Cable penetration in the Buffalo market is
estimated to be 75%. The Buffalo market experienced revenue decline of
approximately 2.0% in 1996 and is expected to grow at a compound annual rate of
approximately 5.3% through 2000. Average household income is estimated to be
$33,913.
57
<PAGE> 65
The table below provides an overview of the competitive stations serving
the Buffalo market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
---- ------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Station
WIVB-TV................... Buffalo VHF CBS LIN Television Corp. 20 19 18 17
Other
WGRZ-TV................... Buffalo VHF NBC Gannett Co. Inc. 15 13 15 15
WKBW-TV................... Buffalo VHF ABC Granite Bcstg. Corp. 22 22 22 20
WNYB-TV................... Jamestown UHF IND Tri-State Christian TV -- -- -- --
WUTV-TV................... Buffalo UHF Fox/UPN Sullivan Bcstg Co. Inc. 7 5 6 5
WNYO-TV................... Buffalo UHF WB Grant, Milton NR 3 2 3
</TABLE>
KXAN-TV and KNVA (Austin, Texas)
Station Profile. KXAN-TV, the Company's NBC affiliate in Austin, is a
leader in the fast growing, highly competitive Austin market. Several unusual
factors shape the Austin competitive environment. There is only one VHF station
in the market and it is affiliated with Fox. There was an affiliation switch in
1995 by competitors in the Austin market which created some confusion among
viewers and enabled the Company to strategically manage the marketing of KXAN-TV
to move it into the number two market position. At the same time, the Company
established KNVA-TV as an LMA station. The Company also has relationships with
the San Antonio Spurs and Texas Rangers for local sports coverage. The Company's
syndicated programming schedule in Austin is very strong as well. Approximately
39% of KXAN-TV's 24 hours of daily broadcasting time consists of programming
that is either locally produced or purchased from non-network sources.
Approximately 92% of KNVA-TV's 24 hours of daily broadcasting time consists of
programming that is either locally produced or purchased from non-network
sources.
Market Overview. Austin, Texas is the sixtieth largest DMA in the country
with a population of approximately 1,113,000 and approximately 452,430
television households. Cable penetration in the Austin market is estimated to be
66%. The Austin market, which is one of the five fastest growing markets in the
United States, experienced revenue growth of 6.4% in 1996 and is expected to
grow at a compound annual rate of 6.3% through 2000. Average household income is
estimated to be $41,348.
The following table provides an overview of the competitive stations
serving the Austin market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
---- ------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Station/LMA
KXAN-TV......................... Austin UHF NBC LIN Television Corp. 17 16 14 14
KNVA-TV......................... Austin UHF WB 54 Bcstg. Inc. 3 2 3 3
Other
KTBC-TV......................... Austin VHF Fox Fox Television 10 10 13 15
KVUE-TV......................... Austin UHF ABC Gannett Co. Inc. 16 15 17 16
KEYE-TV......................... Austin UHF CBS Granite Bcstg. Corp. 15 15 15 13
K13VC-TV........................ Austin UHF IND Fox Television -- -- -- --
</TABLE>
WAND-TV (Decatur-Champaign, Illinois)
Station Profile. WAND-TV, the Company's ABC affiliate, is located in a
market that is unusual because it consists of three cities with very different
demographic profiles. Although WAND-TV is in the smallest of the three cities,
the station is a solid and consistent performer. Approximately 47% of WAND-TV's
24 hours of daily broadcasting time consists of programming that is either
locally produced or purchased from non-network sources.
Market Overview. Decatur-Champaign, Illinois, is the eighty-first largest
DMA in the country with a population of approximately 807,000 and approximately
330,820 television households. Cable penetration in the Decatur-Champaign market
is estimated to be 76%. The Decatur-Champaign market experienced
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<PAGE> 66
revenue growth of approximately 10.1% in 1996 and is expected to grow at a
compound annual rate of 5.5% through 2000. Average household income is estimated
to be $38,320.
The following table provides an overview of the competitive stations
serving the Decatur-Champaign market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF-UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
- ---- ------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Station
WAND-TV.................... Decatur UHF ABC LIN Television Corp. 14 15 14 14
Other
WCIA-TV.................... Champaign VHF CBS Midwest Television 24 22 22 21
WICS-TV.................... Springfield UHF NBC Guy Gannett Comm. 20 18 17 17
WFHL-TV.................... Decatur UHF IND Foursquare Bcstg. -- -- -- --
WRSP-TV.................... Springfield UHF Fox/UPN Bahakel Comm. 5 4 6 6
</TABLE>
WANE-TV (Fort Wayne, Indiana)
Station Profile. The Company has the number two audience share in the Fort
Wayne market. Improvement in the station's performance should be driven by
improved programming at CBS. WANE-TV has a major commitment to news and is the
leading authority for weather, the market's most important news component. This
leadership position in weather should improve the station's overall news
position. Approximately 47% of WANE-TV's 24 hours of daily broadcasting time
consists of programming that is either locally produced or purchased from
non-network sources.
Market Overview. Fort Wayne, Indiana is the one hundred second largest DMA
in the country with a population of approximately 630,000 and approximately
243,910 television households. Cable penetration in the Fort Wayne market is
estimated to be 57%. The Fort Wayne market experienced revenue growth of
approximately 3.2% in 1996 and is expected to grow at a compound annual rate of
5.2% through 2002. Average household income is estimated to be $39,231.
The following table provides an overview of the competitive stations
serving the Fort Wayne market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
- ---- ------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN Station
WANE-TV................... Fort Wayne UHF CBS LIN Television Corp. 18 19 19 19
Other
WPTA...................... Fort Wayne UHF ABC Granite Bcstg Corp. 21 21 22 20
WKJG-TV................... Fort Wayne UHF NBC Cloutier Trust 16 14 16 14
WFFT-TV................... Fort Wayne UHF Fox/UPN Great Trails Bcstg. 7 7 8 8
WINM...................... Angola UHF IND Tri-State Christian TV -- -- -- --
</TABLE>
KXTX-TV (Dallas-Fort Worth, Texas)
Station Profile. KXTX-TV is uniquely positioned in the Dallas-Fort Worth
market as a leading local sports station. Since 1996, the station has
established a powerful sports franchise broadcasting Texas Rangers baseball,
Dallas Mavericks basketball, and Southwest Conference/Big 12 football and
basketball. KXTX-TV also provides popular western programming on weekends that
performs very well in this market. With this programming base, KXTX-TV is one of
the fastest growing independent stations in the Dallas-Fort Worth market.
Approximately 97% of KXTX-TV's 24 hours of broadcasting time consists of
programming that is locally produced or purchased from non-network sources.
The momentum of the station was interrupted for nine months by an October
1996 tower collapse that affected signal coverage of the market and reduced the
station's household reach. The tower was rebuilt and full power restored in
June, 1997.
The Company is currently considering selling to the Sports Joint Venture
the Company's contractual rights with respect to television station KXTX-TV, its
Dallas-Fort Worth LMA station. There can be no
59
<PAGE> 67
assurance that the transaction will be consummated or on what terms the
transaction would be consummated. See "Risk Factors -- Potential Conflicts of
Interest." In 1997, KXTX-TV generated BCF of $6.8 million.
Market Overview. Dallas-Fort Worth, Texas is the eighth largest DMA in the
United States with a population of approximately 4,921,000 and approximately
1,899,330 television households. Cable penetration in the Dallas-Fort Worth
market is estimated to be 52%. The Dallas-Fort Worth market experienced revenue
growth of approximately 3.6% in 1996 and is expected to grow at a compound
annual rate of 5.8% through 2000. Average household income is estimated to be
$45,117.
The following table provides an overview of the competitive stations
serving the Dallas-Fort Worth market:
<TABLE>
<CAPTION>
SHARE
CITY ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
- ---- ------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN/Joint Venture Stations
KXTX-TV.................... Dallas UHF IND Christian Bcstg. 5 3 2 3
Network
KXAS-TV.................... Fort Worth VHF NBC NBC/LIN Television 16 14 15 12
Other
KDFW-TV.................... Dallas VHF Fox Fox Television 11 10 13 15
WFAA-TV.................... Dallas VHF ABC Belo Corp. 18 18 20 17
KTVT....................... Fort Worth VHF CBS Gaylord Bcstg. 11 10 10 9
KTXA....................... Fort Worth UHF UPN Paramount Stations 7 7 8 6
KUVN....................... Garland UHF IND Univision TV Group 2 2 3 3
KDFI-TV.................... Dallas UHF IND DMIC Corp. 3 3 3 4
KDAF....................... Dallas UHF WB Tribune Bcstg Co. 8 8 8 7
</TABLE>
Below are descriptions of the stations to be owned by the Joint Venture and
managed by NBC:
KXAS-TV (Dallas-Fort Worth, Texas)
Station Profile. KXAS-TV, acquired by the Company in May 1974, is the NBC
affiliate in the Dallas-Fort Worth, Texas market. As described elsewhere herein,
KXAS-TV was contributed by the Company to the Joint Venture. Approximately 42%
of KXAS-TV's 24 hours of daily broadcasting time consists of programming that is
either locally produced or purchased from non-network sources.
Market Overview. See "-- KXTX-TV (Dallas-Fort Worth, Texas) -- Market
Overview" above.
KNSD-TV (San Diego, California)
Station Profile. KNSD-TV was formerly owned and operated by NBC, a wholly
owned subsidiary of GE. KNSD-TV had been acquired by NBC in 1996. As described
above, NBC contributed KNSD-TV to the Joint Venture. Approximately 35% of KNSD's
24 hours of daily broadcast time consists of programming that is either locally
produced or purchased from non-network sources.
Market Overview. San Diego, California is the country's twenty-sixth
largest DMA with a population of approximately 2,528,000 and approximately
924,190 television households. Cable penetration in the San Diego market is
estimated to be 82%. The San Diego market experienced revenue growth of
approximately 3.9% in 1996 and is expected to grow at a compound annual rate of
5.3% through 2000. Average household income is estimated to be $42,316.
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<PAGE> 68
The following table provides an overview of the competitive stations
serving the San Diego market:
<TABLE>
<CAPTION>
SHARE
CITY OF ---------------------------------
CALL LICENSE VHF/UHF AFFILIATION OWNER MAY 96 MAY 97 NOV 96 NOV 97
---- ------- ------- ----------- ----- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIN/Joint Venture
Station
KNSD-TV............... San Diego UHF NBC NBC/LIN Television 14 13 13 13
Other
KETV-TV............... Tijuana, Mexico VHF Fox Milmo, E.A. 7 7 8 7
KFMB-TV............... San Diego VHF CBS Midwest Television 13 12 12 12
KGTV-TV............... San Diego VHF ABC McGraw-Hill Bcstg. 12 10 13 11
XEWT-TV............... Tijuana, Mexico VHF IND Televisora DeCalimex -- --
KUSI-TV............... San Diego UHF UPN McKinnon Family 7 7 8 7
KITY-TV............... San Diego UHF WB Tribune Bcstg. Co. -- -- -- --
</TABLE>
INDUSTRY OVERVIEW
General Television Broadcasting
Commercial television broadcasting began in the United States on a regular
basis in the 1940s. Currently there are a limited number of channels available
for broadcasting in any one geographic area. Television stations can be
distinguished by the frequency on which they broadcast. Television stations
which broadcast over the very high frequency ("VHF") band (channels 2-13) of the
spectrum generally have some competitive advantage over television stations
which broadcast over the ultra-high frequency ("UHF") band (channels 13 and
higher) of the spectrum because the former usually have better signal coverage
and operate at a lower transmission cost. However, the improvement of UHF
transmitters and receivers, the complete elimination from the marketplace of
VHF-only receivers and carriage by cable television systems have virtually
equalized the reception of VHF and UHF signals. Nonetheless, based on historical
patterns, VHF stations continue to have a competitive advantage over UHF
stations.
Of the approximately 1,200 commercial stations in the United States,
approximately 850 are affiliated with one of the four major national networks
(ABC, CBS, NBC and Fox), with the remaining being affiliated with WB or UPN or
being "independents." The Company operates twelve network affiliated stations,
including 3 CBS affiliates, 2 NBC affiliates and 2 ABC affiliates owned by the
Company, and one independent station in Dallas-Fort Worth.
All television stations in the country are grouped by A.C. Nielsen, a
national audience measuring service, into approximately 211 DMAs that are ranked
in size according to various formulae based upon actual or potential audience.
Each DMA is determined as an exclusive geographic area consisting of all
counties in which the home-market commercial stations receive the greatest
percentage of total viewing hours. Nielsen periodically publishes data on
estimated audiences for the television stations in the various television
markets throughout the country. The estimates are expressed in terms of the
percentage of the total potential audience in the market viewing a station (the
station's "rating") and of their percentage of the audience actually watching
television (the station's "share"). The Company operates five network affiliated
stations and one independent station in top forty DMAs, which stations have an
aggregate United States household reach of 5.8%.
During a period of deregulation in the 1980s, inexpensive and abundant
capital allowed entrepreneurs to build television groups. In the late 1980s,
tighter lending practices began to shrink the size and volume of television
station acquisitions. In the early 1990s, a retail recession curtailed
advertising budgets and competition from cable and the emerging networks reduced
the value of traditional affiliate operators, triggering a new wave of
consolidation in the industry. Several other factors have influenced the
consolidation, the most significant of which has been the relaxation of
ownership restrictions pursuant to the 1996 Act. Prior to the 1996 Act, station
ownership was limited to 12 stations on a national level with a maximum coverage
of 25% of all U.S. households. As a result of the 1996 Act, the national limit
on television station ownership is now subject to a limitation of coverage of
35% of U.S. households (UHF station coverage is counted as 50% of the households
in each market).
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LMAs have also changed the competitive profile of the television industry.
An LMA is a means of allowing a station owner to program and sell advertising
for a second station in the same market or for a single station for which it
does not hold the license. LMAs enable station operators to cut costs, broaden
audience reach through counterprogramming and improve their negotiating position
with programming distributors, networks and advertisers. Management estimates
that there are approximately 70 such operations in the United States. LIN was
one of the first operators to utilize LMAs and now has five such operations.
The FCC also recently finalized its allotment of new ATV channels to
existing broadcast stations. ATV is a digital television signal which delivers
improved video and audio signals and also has substantial multiplexing and data
transmission capabilities. The FCC and Congress have adopted a transition plan
which calls for stations to provide dual analog and digital transmissions for
the next eight years with broadcasters surrendering their analog channels in the
year 2006, at which time they will be auctioned by the government. Stations are
required to initiate digital transmissions as early as November 1998 in the
largest markets, with a rollout in all markets to be completed by approximately
2002.
Competition
Competition in the television broadcasting industry takes place on several
levels: competition for audience, competition for programming, and competition
for advertisers. Additional factors that are material to a television station's
competitive position include signal coverage and assigned frequency. The
television broadcasting industry is continuously faced with technological change
and innovation, the possible rise in popularity of competing forms of
entertainment and entertainment media, and restrictions imposed by or actions of
federal regulatory bodies, including the FCC and Federal Trade Commission, any
of which could have a material effect on television station operators.
Audience. Through the 1970s, network television broadcasting enjoyed
virtual dominance in viewership and television advertising revenue because
network-affiliated stations competed only with each other in most local markets.
Beginning in the 1980s, however, this level of dominance began to change as more
local stations were authorized by the FCC and marketplace choices for video
services expanded with the growth of independent stations, cable television
services and multipoint distribution services. Cable television systems, which
grew at a rapid rate beginning in the early 1970s, were initially used to
retransmit broadcast television programming to paying subscribers in areas with
poor broadcast signal reception.
In the aggregate, cable-originated programming has emerged as a significant
competitor for viewers of broadcast television programming, although no single
cable programming network regularly attains audience levels amounting to more
than a small fraction of any single major broadcast network. With the increase
in cable penetration in the 1980s, the advertising share of cable networks has
increased. However, broadcast television still commands an estimated 91.3% of
total television revenues and an estimated 70% of total viewership.
The audience shares of television stations affiliated with ABC, NBC and CBS
have declined during the 1980s and 1990s primarily because of the emergence of
Fox and certain strong independent stations and because of increased cable
penetration. In addition, there has been substantial growth in the number of
home satellite dish receivers and VCRs, which has further expanded the number of
programming alternatives for household audiences.
Despite the increased popularity in cable television, broadcast television
remains the dominant and most efficient medium to reach a mass audience. It can
be argued that the proliferation of cable networks has, in fact, diluted the
reach of individual cable networks and highlighted the mass reach of the
broadcast networks and their local affiliates.
Programming. A typical major network affiliate receives the majority of its
programming each day from the network. This programming, along with cash
payments ("network compensation"), is provided to the affiliate by the network
in exchange for a substantial majority of the advertising time during network
programs. The network then sells this advertising time and retains the revenues.
The affiliate retains the revenues from time sold during breaks in and between
network programs and programs the affiliate produces or purchases from
non-network sources.
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A fully independent station purchases or produces all of the programming
which it broadcasts, generally resulting in higher programming costs, which
typically account for up to 20% of a station's net revenues. The independent
station is able to retain its entire inventory of advertising and all of the
revenue obtained therefrom. However, under increasingly popular barter
arrangements, a national program distributor may receive advertising time in
exchange for programming it supplies, with the station paying a reduced fee or
no cash fee at all for such programming.
For independent television stations, the largest non-payroll expense is
programming. Film costs for affiliates of the emerging networks (WB and UPN) are
generally lower than film costs for pure independents and have declined in
recent years as the number of hours of major network-supplied prime-time
programming has increased. Network affiliates typically have lower film costs
than independent stations because they receive a higher percentage of their
programming from the networks.
As a result of the above factors, BCF margins for network affiliate
stations historically have been higher than BCF margins for pure independents.
However, cash flow margins are converging as film costs dramatically decline.
Advertising. Television station revenues are derived primarily from local,
regional and national advertising and, to a lesser extent, from network
compensation revenues, studio rental and commercial production activities. For
the fiscal year ending December 31, 1997, on a pro forma basis, advertising
revenues accounted for approximately 86% of the Company's net revenues. With the
exception of 1991, television advertising revenue has increased every year since
1971, growing at a compound annual rate of 10.5%.
Advertising rates are based upon a variety of factors, including a
program's popularity among the viewers an advertiser wishes to attract, the
number of advertisers competing for the available time, the size and demographic
makeup of the market served by the station and the availability of alternative
advertising media in the market. Rates are also determined by a station's
overall ratings and share in its market, as well as the station's ratings and
share among particular demographic groups which an advertiser may be targeting.
LICENSING AND REGULATION
The following is a brief discussion of certain provisions of the
Communications Act of 1934, as amended (the "Communications Act"), and of FCC
regulations and policies that affect the business operations of television
broadcasting stations. Reference should be made to the Communications Act, FCC
rules and the public notices and rulings of the FCC on which this discussion is
based, for further information concerning the nature and extent of FCC
regulation of television broadcasting stations.
License Renewal, Assignments and Transfers. Television broadcast licenses
are granted for a maximum term of eight years (five years prior to 1996) and are
subject to renewal upon application to the FCC. The FCC prohibits the assignment
of a license or the transfer of control of a broadcasting licensee without prior
FCC approval. In determining whether to grant or renew a broadcasting license,
the FCC considers a number of factors pertaining to the applicant, including
compliance with a variety of ownership limitations and compliance with character
and technical standards. During certain limited periods when a renewal
application is pending, petitions to deny a license renewal may be filed by
interested parties, including members of the public. Such petitions may raise
various issues before the FCC. The FCC is required to hold evidentiary, trial-
type hearings on renewal applications if a petition to deny renewal of such
license raises a "substantial and material question of fact" as to whether the
grant of the renewal application would be inconsistent with the public interest,
convenience and necessity. The FCC must grant the renewal application if, after
notice and opportunity for a hearing, it finds that the incumbent has served the
public interest and has not committed any serious violation of FCC requirements.
If the incumbent fails to meet that standard, and if it does not show mitigating
factors warranting a lesser sanction, the FCC has authority to deny the renewal
application.
Failure to observe FCC rules and policies, including, but not limited to,
those discussed above, can result in the imposition of various sanctions,
including monetary forfeitures, the grant of short-term license renewals or, for
particularly egregious violations, the denial of a license renewal application
or revocation of a license.
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Multiple and Cross-Ownership Rules. On a national level, the FCC rules
generally prevent an entity or individual from having an attributable interest
in television stations with an aggregate audience reach in excess of 35% of all
U.S. households. On a local level, the "duopoly" rules prohibit or restrict such
interests in two or more television stations with overlapping service areas.
Additional cross-ownership restrictions generally prohibit new television/radio,
broadcast/daily newspaper or television/cable combinations in the same market.
The FCC generally applies its ownership limits only to "attributable" interests
held by an individual, corporation, partnership or other association. In the
case of corporations holding broadcast licenses, the interest of officers,
directors and those who, directly or indirectly, have the right to vote 5% or
more of the corporation's voting stock (or 10% or more of such stock in the case
of insurance companies, mutual funds, bank trust departments and certain other
passive investors that are holding stock for investment purposes only) are
generally deemed to be attributable, as are positions as an officer or director
of a corporate parent of a broadcast licensee.
Because of these multiple and cross-ownership rules, a purchaser of the
Company's Common Stock who acquires an attributable interest in the Company may
violate the FCC's rules if that purchaser also has an attributable interest in
other television or radio stations, or in daily newspapers or cable systems,
depending on the number and location of those radio or television stations or
daily newspapers or cable systems. Such a purchaser also may be restricted in
the companies in which it may invest to the extent that those investments give
rise to an attributable interest. If an attributable stockholder of the Company
violates any of these ownership rules or if a proposed acquisition by the
Company would cause such a violation, the Company may be unable to obtain from
the FCC one or more authorizations needed to conduct its television station
business and may be unable to obtain FCC consents for certain future
acquisitions. Given Hicks Muse's extensive interests in radio and television
broadcasters, the Acquisition might limit future acquisition opportunities for
the Company.
The FCC has initiated rulemaking proceedings to consider proposals to relax
its television ownership restrictions, including proposals that would permit the
ownership, in some circumstances, of two television stations with overlapping
service areas and relaxing the rules prohibiting cross-ownership of radio and
television stations in the same market. The FCC is also considering in these
proceedings whether to adopt new restrictions on television LMAs. The "duopoly"
rules currently prevent the Company from acquiring the FCC licenses of its LMA
stations, thereby preventing the Company from directly fulfilling its
obligations under put options that such LMA stations have with the Company. If
the Company should be unable to fulfill its obligation under a put option, it
would be required to find an assignee who could perform such obligation. There
is no assurance that the Company could find an assignee to fulfill the Company's
obligations under the put options on favorable terms. Under the 1996 Act, the
Company's LMAs were "grandfathered." The precise extent to which the FCC may
nevertheless restrict existing LMAs or make them attributable ownership
interests is uncertain. The FCC has proposed to make LMAs fully attributable
ownership interests and thus prohibited with a possibility of case by case
waivers for stations that meet specified criteria (e.g., VHF-UHF or UHF-UHF
combinations; second station is a start-up, failed or failing station). Under
the FCC's proposal, "grandfathering" rights for current LMAs which do not
qualify for conversion to ownership could be limited to fulfilling the current
lease term, and renewal rights and transferability rights could be eliminated.
All of the Company's LMAs involve stations which are UHF stations and, at the
time they were formed, were either start-up stations or failing stations and
therefore would appear to be strong candidates for grandfathering and/or for
conversion to ownership under the proposals. Nevertheless, it is possible that
the FCC could prohibit such conversion or require the Company to modify its LMAs
in ways which impair their viability. Further, if the FCC were to find that the
licensee of one of the Company's LMA stations failed to maintain control over
its operations, the licensee of the LMA station and/or the Company could be
sanctioned. Sanctions could include, among other things, the short term renewal
or loss of the station's FCC license. The Company is unable to predict the
ultimate outcome of possible changes to these FCC rules and the impact such FCC
rules would have on its broadcasting operations.
The Congress and the FCC have under consideration, and in the future may
consider and adopt, other new laws, regulations and policies regarding a wide
variety of matters that could affect, directly or indirectly, the operation,
ownership and profitability of the Company's broadcast stations, result in the
loss of audience
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share and advertising revenues for the Company's broadcast stations, and affect
the ability of the Company to acquire additional broadcast stations or finance
such acquisitions.
Alien Ownership. Under the Communications Act, broadcast licenses may not
be granted to or held by any corporation having more than one-fifth of its
capital stock owned of record or voted by non-U.S. citizens (including a
non-U.S. corporation), foreign governments or their representatives
(collectively, "Aliens"). The Communications Act also prohibits a corporation
from holding a broadcast license if that corporation is controlled, directly or
indirectly, by another corporation, more than one-fourth of the capital stock of
which is owned of record or voted by Aliens, unless the FCC finds that such
ownership would be in the public interest. The FCC has issued interpretations of
existing law under which these restrictions in modified form apply to other
forms of business organizations, including general and limited partnerships. As
a result of these provisions, the Company, which serves as a holding company for
its various television station licensee subsidiaries, cannot have more than 25%
of its capital stock owned of record or voted by Aliens.
Programming and Operation. The Communications Act requires broadcasters to
serve "the public interest." Since the late 1970s, the FCC gradually has relaxed
or eliminated many of the more formalized procedures it had developed to promote
the broadcast of certain types of programming responsive to the needs of a
station's community of license. Broadcast station licensees continue, however,
to be required to present programming that is responsive to community problems,
needs and interests and to maintain certain records demonstrating such
responsiveness. Complaints from viewers concerning a station's programming may
be considered by the FCC when it evaluates license renewal applications,
although such complaints may be filed, and generally may be considered by the
FCC, at any time. Stations also must follow various rules promulgated under the
Communications Act that regulate, among other things, children's television
programming, political advertising, sponsorship identifications, contest and
lottery advertising, obscene and indecent broadcasts, and technical operations,
including limits on radio frequency radiation. In addition, broadcast licensees
must develop and implement affirmative action programs designed to promote equal
employment opportunities, and must submit reports to the FCC with respect to
these matters on an annual basis and in connection with a license renewal
application. As a result of a Report and Order effective September 1, 1997, the
FCC imposed revised rules and regulations increasing broadcasters' obligations
under its rules implementing the Children's Television Act of 1990. These rules
require television stations to present programming specifically directed to the
"educational and informational" needs of children. In addition, on August 25,
1997, the FCC adopted standards for the exposure of the public and workers to
potentially harmful radio frequency radiation emitted by broadcast station
transmitting facilities.
Syndicated Exclusivity/Territorial Exclusivity. Effective January 1, 1990,
the FCC reimposed syndicated exclusivity rules and expanded the existing network
nonduplication rules. The syndicated exclusivity rules allow local broadcast
stations to require that cable operators black out certain syndicated,
non-network programming carried on "distant signals" (i.e., signals of broadcast
stations, including so-called super stations, that serve areas substantially
removed from the cable system's local community). Under certain circumstances,
the network nonduplication rules allow local broadcast network affiliates to
demand that cable operators black out duplicative network broadcast programming
carried on more distant signals.
Restrictions on Broadcast Advertising. The advertising of cigarettes on
broadcast stations has been banned for many years. The broadcast advertising of
smokeless tobacco products has more recently been banned by Congress. Certain
Congressional committees have examined legislative proposals to eliminate or
severely restrict the advertising of beer and wine. The Company cannot predict
whether any or all of the present proposals will be enacted into law and, if so,
what the final form of such law might be. The elimination of all beer and wine
advertising could have an adverse effect on the Stations' revenues and operating
profits as well as the revenues and operating profits of other stations that
carry beer and wine advertising. In 1996, some television stations began airing
hard liquor advertising. In the past, this group of advertisers had a
self-imposed ban on TV advertising. None of the Stations have aired this type of
advertising. The Company cannot predict the effect the airing of these
advertisements on competing stations will have on the Company's operating
results.
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Other Programming Restrictions. The 1996 Act directs the FCC to establish,
if the broadcast industry does not do so on a voluntary basis, guidelines and
procedures for rating programming that contains sexual, violent, or other
indecent material so as to inform parents. A multi-industry task force has
developed a ratings plan which was submitted to the FCC in January 1997 and put
out for public comment by the FCC. The FCC could either ratify the industry
proposal or issue its own guidelines later this year. The 1996 Act also requires
the FCC to issue rules that require TV set manufacturers to include in the sets
that they manufacture appropriate technology (a "V-Chip" that can block
programming based on an electronically encoded rating) to facilitate the
implementation of the new rating guidelines.
Cable "Must-Carry" or Retransmission Consent Rights. The 1992 Cable Act,
enacted in October 1992, requires television broadcasters to make an election to
exercise either certain "must-carry" or retransmission consent rights in
connection with their carriage by cable television systems in the station's
local market. If a broadcaster chooses to exercise its must-carry rights, it may
demand carriage on a specified channel on cable systems within its DMA.
Must-carry rights are not absolute, and their exercise is dependent on variables
such as the number of activated channels on, and the location and size of, the
cable system and the amount of duplicative programming on a broadcast station.
Under certain circumstances, a cable system may decline to carry a given
station. If a broadcaster chooses to exercise its retransmission consent rights,
it may prohibit cable systems from carrying its signal, or permit carriage under
a negotiated compensation arrangement. Generally, the stations operated by the
Company have negotiated retransmission consent agreements with cable television
systems in their markets, with terms generally ranging from three to 10 years,
which provide for carriage of the stations' signals and the Local Weather
Station. The licensees of the Company's LMA stations generally have opted for
must-carry status.
Telecommunications Act of 1996. The 1996 Act made various changes in the
Communications Act that will affect the broadcast industry. Among other things
and in addition to matters previously mentioned, the Act (i) directs the FCC to
increase the national audience reach cap for television from 25% to 35% and to
eliminate the 12-station numerical limit; (ii) directs the FCC to review its
local broadcast ownership restrictions; (iii) clarifies that existing LMAs were
in compliance with applicable FCC regulations, are "grandfathered," and that
future LMAs are not inconsistent with the 1996 Act so long as they comply with
applicable FCC regulations; (iv) directs the FCC to extend its liberal policy of
permitting waivers of its television/radio cross-ownership restriction to
proposed combinations in the top 50 markets; (v) lifts the statutory ban on
cable-broadcast cross-ownership but does not direct the FCC to eliminate its
parallel FCC rule prohibition; (vi) repeals the statutory ban against telephone
companies providing video programming in their own service areas; and (vii)
permits but does not require the FCC to award to broadcasters a second channel
for ATV and other digital services and imposes a fee on subscription based
services.
Advanced Television Transmissions. The FCC has adopted rules for
implementing ATV in the United States. Implementation of ATV will improve the
technical quality of over-the-air broadcast television. Under certain
circumstances, however, conversion to ATV operations may reduce a station's
geographical coverage area. The FCC has adopted a plan which would allot a
second broadcast channel to each regular commercial television station for ATV
operation. Within the next five years, stations are required to phase in their
ATV operations on the second channel, build necessary ATV facilities and begin
operations, with certain stations in the largest markets, such as Dallas,
initiating transmissions by November 1998. Stations may be required to surrender
their non-ATV channel by the year 2006. Implementation of ATV will impose
additional costs on television stations providing the new service due to
increased equipment costs. The Company estimates that the adoption of ATV will
require average capital expenditures of approximately $2 million per station to
provide facilities necessary to pass along an ATV signal. The conversion of a
station's equipment enabling it, for example, to produce and transmit ATV
programming will be substantially more expensive. The introduction of this new
technology will require that consumers purchase new receivers (television sets)
for ATV signals or, if available by that time, adapters for their existing
receivers. The FCC has also assigned to full-power ATV stations the channels
currently occupied by many LPTVs and has "cleared" a portion of the current
broadcast spectrum (e.g., channels 60-69) and has proposed to auction it off to
other users, proposals which could adversely affect a significant proportion of
the Company's LPTV channels. As required by the Telecommunications Act of 1996,
the FCC has also proposed to levy fees on broadcasters with respect to any
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"ancillary" or "supplementary" uses they make of their ATV channels, including
data transmissions or subscriber services. The Company believes that it is
essential to the long-term viability of the Company and the broadcast industry
that the FCC authorize ATV in the United States, but the Company cannot
otherwise predict when such authorization might be given or the precise effect
such authorization might have on the Company's business.
Proposed Legislation and Regulations. The FCC has initiated a Notice of
Inquiry proceeding seeking comment on whether the public interest would be
served by establishing limits on the amount of commercial matter broadcast by
television stations. No prediction can be made at this time as to whether the
FCC will impose any commercial limits at the conclusion of its deliberations.
The Company is unable to determine what effect, if any, the imposition of limits
on the commercial matter broadcast by television stations would have on the
Company's operations. Other matters that could affect the Company's broadcast
properties include technological innovations affecting the mass communications
industry such as technical allocation matters, including assignment by the FCC
of channels for additional broadcast stations, LPTVs and wireless cable systems
and their relationship to and competition with full power television
broadcasting service.
Congress and the FCC also have under consideration, or may in the future
consider and adopt, new laws, regulations and policies regarding a wide variety
of matters that could, directly or indirectly, affect the operation, ownership
and profitability of the Company and the Stations, result in the loss of
audience share and advertising revenues of the Stations, and affect the
Company's ability to acquire additional broadcast stations or finance such
acquisitions. Such matters include, for example, (i) imposition of greater
spectrum use or other governmental imposed fees upon a licensee; (ii) changes in
the FCC's cross-interest multiple ownership, alien ownership and cross-ownership
policies; (iii) proposals to expand the FCC's equal employment opportunity rules
and other matters relating to minority and female involvement in broadcasting;
(iv) proposals to increase the benchmarks or thresholds for attributing
ownership interest in broadcast media; (v) proposals to change rules or policies
relating to political advertising and to require free advertising and/or program
time for political candidates; (vi) technical and frequency allocation matters,
including those relative to the implementation of ATV; (vii) proposals to
restrict or prohibit the advertising of beer, wine and other alcoholic beverages
on broadcast stations; (viii) changes to broadcast technical requirements; and
(ix) proposals to limit the tax deductibility of advertising expenses by
advertisers.
The Company cannot predict what other matters might be considered in the
future, nor can it judge in advance what impact, if any, the implementation of
any of these proposals or changes might have on its business.
The foregoing does not purport to be a complete discussion of all the
provisions of the Communications Act or other Congressional acts or the
regulations and policies of the FCC promulgated thereunder. Reference is made to
the Communications Act, other Congressional acts, such regulations, and the
public notices promulgated by the FCC, on which the foregoing discussion is
based, for further information. There are additional FCC regulations and
policies, and regulations and policies of other federal agencies, that govern
political broadcasts, public affairs programming, equal employment opportunities
and other areas affecting the Stations' businesses and operations.
EMPLOYEES
As of March 31, 1998, the Company employed approximately 1,200 full-time
and 90 part-time employees in its broadcasting offices. Of these employees,
approximately 220 were represented by unions. The Company believes that its
employee relations are generally good.
PROPERTIES
The Company maintains its corporate headquarters in Providence, Rhode
Island. Each of the stations operated by the Company has facilities consisting
of offices, studios, sales offices and transmitter and tower sites. Transmitter
and tower sites are located to provide coverage of each station's market. The
Company owns substantially all of the offices where the stations are located and
owns all of the property where its towers and primary transmitters are located.
The Company leases the remaining properties, consisting primarily of sales
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office locations and microwave transmitter sites. While none of the properties
owned or leased by the Company is individually material to the Company's
operations, if the Company were required to relocate any of its towers, the cost
could be significant because the number of sites in any geographic area that
permit a tower of reasonable height to provide good coverage of the market is
limited, and zoning and other land use restrictions, as well as Federal Aviation
Administration regulations, limit the number of alternative sites or increase
the cost of acquiring them for tower siting.
LEGAL PROCEEDINGS
On September 4, 1997, the Company announced that it had learned of four
lawsuits regarding the then proposed merger. The Company and some or all of its
then present directors are defendants in all of the lawsuits. AT&T is a
defendant in three of the lawsuits, and an AT&T affiliate and Hicks Muse are
defendants in one of the lawsuits. Each of the lawsuits was filed by a purported
shareholder of the Company seeking to represent a putative class of all the
Company's public shareholders. Three of the four lawsuits were filed in Delaware
Chancery Court, while the fourth lawsuit was filed in New York Supreme Court.
While the allegations of the complaints are not identical, all of the
lawsuits basically assert that the terms of the original merger agreement were
not in the best interests of the Company's public shareholders. All of the
complaints allege breach of fiduciary duty in approving the merger agreement.
Two of the complaints also allege breach of fiduciary duty in connection with
the proposed sale of television station WOOD-TV by AT&T to Hicks Muse and the
amendment to a Private Market Value Guarantee Agreement that was entered into
simultaneously with the first merger agreement. The complaints seek the
preliminary and permanent enjoinment of the merger or alternatively seek damages
in an unspecified amount. The complaints have not been amended to reflect the
terms of the merger itself.
The plaintiffs in each of the actions have agreed to an indefinite
extension of time for each of the defendants served to respond to the respective
complaints. No discovery has taken place.
While the Company believes each lawsuit is without merit, the Company is
unable to determine the likelihood and possible impact on the Company's
financial condition or results of operations of unfavorable outcomes.
In addition, the Company currently and from time to time is involved in
litigation incidental to the conduct of its business. In the opinion of the
Company's management, none of such litigation is likely to have a material
adverse effect on the Company's financial condition, results of operations or
cash flows.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF HOLDINGS AND THE COMPANY
The following table provides information concerning the directors and
executive officers of Holdings and the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- ---- --------
<S> <C> <C>
Thomas O. Hicks........... 51 Chairman of the Board of Holdings and the Company
Michael J. Levitt......... 39 Director of Holdings and the Company
John R. Muse.............. 47 Director of Holdings and the Company
C. Dean Metropoulos....... 50 Director of Holdings and the Company
Eric C. Neuman............ 52 Director of Holdings and the Company
Gary R. Chapman........... 54 Director, President and Chief Executive Officer of
Holdings and the Company
James G. Babb, Jr......... 65 Vice President of Industry Relations of Holdings and
the Company
Deborah R. Jacobson....... 38 Vice President of Corporate Development and Treasurer
of Holdings and the Company
Paul Karpowicz............ 45 Vice President of Television of Holdings and the
Company
Peter E. Maloney.......... 43 Vice President of Finance of Holdings and the Company
C. Robert Ogren, Jr....... 54 Vice President of Engineering & Operations of
Holdings and the Company
Gregory M. Schmidt........ 48 Vice President of New Development, General Counsel
and Secretary of Holdings and the Company
Denise M. Parent.......... 35 Vice President-Deputy General Counsel of Holdings and
the Company
</TABLE>
THOMAS O. HICKS is the Chairman of the Board of Holdings and the Company.
Mr. Hicks has been Chairman and Chief Executive Officer of Hicks Muse since
co-founding the Firm in 1989 and has over 25 years of experience in leveraged
acquisitions and private investments. Mr. Hicks serves as a director of
Chancellor Media, Capstar Broadcasting, Berg Electronics Corp., Sybron
International Corporation and Neodata Corporation and is Vice Chairman of the
Board of Regents of the University of Texas System.
MICHAEL J. LEVITT is a director of Holdings and the Company. Mr. Levitt is
a Managing Director and Principal of Hicks Muse. Before joining Hicks Muse, Mr.
Levitt was a Managing Director and Deputy Head of Investment Banking with Smith
Barney Inc. from 1993 through 1995. From 1986 through 1993, Mr. Levitt was with
Morgan Stanley & Co. Incorporated, most recently as a Managing Director
responsible for the New York-based Financial Entrepreneurs Group. Mr. Levitt
also serves as a director of Chancellor Media, Capstar Broadcasting, STC
Broadcasting, Inc., Atrium Companies, Inc. and International Home Foods, Inc.
JOHN R. MUSE has been a director of Holdings and the Company since May
1998. Mr. Muse is Chief Operating Officer, Managing Director and co-founder of
Hicks Muse. Prior to the formation of Hicks Muse in 1989, Mr. Muse headed the
merchant/investment banking operations of Prudential Securities in the
Southwestern region of the United States. Mr. Muse is Chairman of Arena Brands,
Inc., Atrium Companies, Inc., Sunrise Television Corp. and serves as Director of
International Home Foods, Inc., Olympus Real Estate Corporation, Arnold Palmer
Golf Management Co. and Suiza Foods Corporation. Mr. Muse also serves on the
Board of Directors for the SMU Edwin L. Cox School of Business, St. Philip's
School and Community Center, and Goodwill Industries.
C. DEAN METROPOULOS has been a director of Holdings and the Company since
May 1998. Mr. Metropoulos is the Chairman of the Board of Directors and Chief
Executive Officer of International Home Foods, Inc. and Chief Executive Officer
of C. Dean Metropoulos & Co., a management services
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company. From 1993 through 1997, Mr. Metropoulos served as Chairman of the Board
and Chief Executive Officer of the Morningstar Group, Inc. From 1983 through
1993, he served as President and Chief Executive Officer of Stella Foods, Inc.
Before then, Mr. Metropoulos served in a variety of U.S. and international
executive positions with GTE Corporation, including Vice President and General
Manager -- Europe and Vice President and Controller, GTE International. Mr.
Metropoulos also serves as a Director of Suiza Foods and Atrium Companies, Inc.
ERIC C. NEUMAN is a director of Holdings and the Company. Mr. Neuman has
served as an officer of Hicks Muse since 1993 and as a Senior Vice President
thereof since 1996. Before joining Hicks Muse, Mr. Neuman served for eight years
as Managing General Partner of Communications Partners, Ltd., a Dallas-based
private investment firm. Mr. Neuman also serves as a director of Chancellor
Media, Capstar Broadcasting, STC Broadcasting and Grupo MVS. Effective July 1,
1998, Mr. Neuman will become Senior Vice President of Strategic Development for
Chancellor Media.
GARY R. CHAPMAN has been President of the Company since 1989 and a director
and CEO since November 1994 and became a director, the President and CEO of
Holdings concurrently with the closing of the Acquisition. Mr. Chapman served as
Joint Chairman of the National Association of Broadcasters from 1991 to 1993 and
serves as a board member of the Advanced Television Test Center. Currently, Mr.
Chapman serves on the Board of Directors of the Association for Maximum Service
Television and is Co-Chairman of the Advisory Board of Governors for the
National Association of Broadcasters Education Foundation.
JAMES G. BABB, JR. has been the Company's Vice President of Industry
Relations since April 1996 and became Holding's Vice President of Industry
Relations concurrently with the closing of the Acquisition. Prior to joining the
Company, Mr. Babb was Chairman, CEO and President of Outlet Communications, Inc.
from May 1991 to February 1996. Mr. Babb currently serves as the Chairman of the
Television Board of the National Association of Broadcasters.
DEBORAH R. JACOBSON has been Vice President of Corporate Development and
Treasurer of the Company since February 13, 1995. She became the Vice President
of Corporate Development and Treasurer of Holdings concurrently with the closing
of the Acquisition. From 1981 to 1995, Ms. Jacobson was employed by The Bank of
New York, where most recently she served as Senior Vice President and Division
Head of the Communications, Entertainment and Publishing Lending Division.
PAUL KARPOWICZ has served as Vice President of Television of the Company
since January 1994 and became the Vice President of Television of Holdings
concurrently with the closing of the Acquisition. Prior to January 1994, Mr.
Karpowicz served as a general manager of the Company's Indianapolis CBS
affiliate station, WISH-TV, from July 1989 through July 1995.
PETER E. MALONEY has been Vice President of Finance of the Company since
January 1995 and became the Vice President of Finance of Holding concurrently
with the closing of the Acquisition. Prior to January 1995, Mr. Maloney was
employed by LIN Broadcasting as Vice President of Tax from June 1990 to December
1994 and as Director of Taxation and Financial Planning from January 1983 to
June 1990.
C. ROBERT OGREN, JR. has been Vice President of Engineering and Operations
of the Company since November 1990 and became the Vice President of Engineering
and Operations of Holdings concurrently with the closing of the Acquisition.
Prior to November 1990, Mr. Ogren was Director of Engineering at WBAL-TV from
June 1989 to October 1990 and Director of Engineering for Freedom Newspapers,
Inc. from June 1984 to May 1989.
GREGORY M. SCHMIDT has been Vice President of New Development, General
Counsel and Secretary since March 1995. He became Vice President of New
Development, General Counsel and Secretary of Holdings concurrently with the
closing of the Acquisition. From 1985 to 1995, he was a partner at Covington &
Burling, a Washington law firm with a high-profile presence in regulatory and
communications law.
DENISE M. PARENT has been Vice President-Deputy General Counsel since March
1997 and became the Vice President-Deputy General Counsel of Holdings
concurrently with the closing of the Acquisition. From 1993 to 1997, she was
employed by The Providence Journal Company as Senior Corporate Counsel. Prior to
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1993, Ms. Parent was employed by Adler Pollock & Sheehan Incorporated, a law
firm in Providence, Rhode Island.
COMPENSATION FOR EXECUTIVE OFFICERS
The following table sets forth the compensation earned or paid, including
deferred compensation, by the Company to the Chief Executive Officer of the
Company (the "CEO") and the five other most highly compensated executive
officers of the Company for services rendered for the years ended December 31,
1997, 1996 and 1995.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- ---------------------------
OTHER ANNUAL
COMPENSATION OPTIONS/SARS
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(A) (#)(B)
--------------------------- ---- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Gary R. Chapman................................ 1997 500,000 205,000 22,305 100,000
President & CEO 1996 475,000 146,250 48,632 75,000
1995 475,000 134,000 24,978 0
Gregory M. Schmidt(c).......................... 1997 320,000 100,000 11,559 47,000
Vice President -- New Development, 1996 310,000 95,000 21,764 39,500
General Counsel & Secretary 1995 251,539 85,000 8,526 90,000
Paul Karpowicz................................. 1997 300,000 110,000 237,708 47,000
Vice President -- Television 1996 237,000 150,000 237,840 39,500
1995 230,000 85,000 27,672 90,000
Deborah R. Jacobson(c)......................... 1997 180,000 65,000 11,665 35,000
Vice President -- Corporate 1996 175,000 78,000 11,400 29,000
Development & Treasurer 1995 150,385 75,000 34,228 70,000
Peter E. Maloney............................... 1997 165,000 80,000 6,898 35,000
Vice President -- Finance 1996 145,000 65,000 5,763 29,000
1995 140,000 45,000 118,457 55,000
C. Robert Ogren, Jr............................ 1997 165,000 80,000 10,701 35,000
Vice President -- Engineering & 1996 140,000 65,000 8,849 29,000
Operations 1995 122,000 40,000 6,636 55,000
</TABLE>
- ---------------
(a) The amount set forth in Other Annual Compensation includes as to all named
executive officers the value of executive life and disability insurance and
to most named executive officers the personal use of Company automobiles and
nonqualified pension contributions. In addition, such amount includes
relocation expenses of $16,669, $19,878 and $111,053 for Mr. Karpowicz, Ms.
Jacobson and Mr. Maloney respectively in 1995, $196,345 for Mr. Karpowicz in
1996, and an additional $212,196 tax gross-up relocation payment for Mr.
Karpowicz in 1997.
(b) "Special grant" options have a longer vesting period than normal options.
The purpose of these options was to provide the Company's executive group
with a strong incentive to maximize stockholder value. Of the options
granted to Messrs. Karpowicz, Maloney and Ogren in January 1995, "special
grant" options accounted for 15,000, 10,000 and 10,000, respectively, of
their option grants. Of the options granted to Ms. Jacobson in February
1995, "special grant" options accounted for 15,000 of her option grant. Of
the options granted to Mr. Schmidt in March 1995, "special grant" options
accounted for 15,000 of his option grant. The "special grant" options become
exercisable in four equal annual installments beginning December 31, 1996.
(c) Ms. Jacobson and Mr. Schmidt commenced employment with the Company on
February 13, 1995 and March 1, 1995, respectively.
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<PAGE> 79
The following table discloses for the CEO and the other named executive
officers information on options granted during the 1997 fiscal year:
OPTION GRANTS DURING THE 1997 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(2)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME SHARES FISCAL YEAR(%) ($/SHARE) DATE 5%($) 10%($)
---- ------------ ---------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Gary R. Chapman......................... 100,000 15.1 41.44 1/2/07 2,606,139 6,604,469
Gregory M. Schmidt...................... 47,000 7.1 41.44 1/2/07 1,224,885 3,104,100
Paul Karpowicz.......................... 47,000 7.1 41.44 1/2/07 1,224,885 3,104,100
Deborah R. Jacobson..................... 35,000 5.3 41.44 1/2/07 912,149 2,311,564
Peter E. Maloney........................ 35,000 5.3 41.44 1/2/07 912,149 2,311,564
C. Robert Ogren Jr...................... 35,000 5.3 41.44 1/2/07 912,149 2,311,564
</TABLE>
- ---------------
(1) All options granted to the named executive officers become exercisable in
four equal annual installments beginning one year after the grant date and
have an option term of ten years. In the event of a change in control, the
named executive officers may surrender their vested options to the Company
in exchange for a cash payment. See "-- Employment Contracts and Termination
and Change in Control Arrangements."
(2) The dollar amounts set forth under these columns are the result of
calculations at the 5% and 10% assumed rates set by the SEC and therefore
are not intended to forecast possible future appreciation, if any, of the
Company's Common Stock price. The assumed annual rates of appreciation of 5%
and 10% would result in the price of the Company's stock increasing to
$67.50 and $107.49, respectively, from a base price of $41.44.
The following table discloses, for the CEO and the other named executive
officers, individual exercises of options in the last fiscal year and the number
and value of options held by such named executive officer at December 31, 1997:
AGGREGATE EXERCISES DURING THE 1997 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
SHARES UNDERLYING UNEXERCISED
SHARES OPTION PRICE AT VALUE UNEXERCISED IN-THE-MONEY
ACQUIRED ON PRICE EXERCISE REALIZED OPTIONS AT OPTIONS AT
NAME EXERCISE(#) SHARE($) ($) ($) FISCAL YEAR END(#) FISCAL YEAR END($)
---- ----------- -------- -------- -------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Gary R. Chapman................ -- -- -- -- 571,110 14,782,843
Gregory M. Schmidt............. 9,000 29.375 54.281 224,154 167,500 3,606,820
Paul Karpowicz................. -- -- -- -- 182,957 4,337,539
Deborah R. Jacobson............ 3,500 30.25 53.315 80,728 127,500 2,700,225
Peter E. Maloney............... 917 5.466 42.00 35,501 129,889 3,126,101
83 9.024 42.00 2,737 -- --
1,000 9.024 38.375 29,351 -- --
C. Robert Ogren, Jr............ -- -- -- -- 122,985 2,852,744
</TABLE>
- ---------------
(1) Messrs. Chapman, Karpowicz, Maloney and Ogren hold options with respect to
shares of AT&T Corp. common stock received as compensation from LIN
Broadcasting prior to the Spin-off, which amounts are not reflected in the
above chart.
EMPLOYMENT CONTRACTS AND TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS
Employment Agreement with Gary Chapman. The Company has an employment
agreement with Mr. Chapman. The employment agreement provides for (i) a term
that ends on December 31, 1999, (ii) a minimum annual base salary of $475,000
and (iii) a target bonus of at least $150,000. The agreement also provides for
option grants, participation in certain of the Company's benefit programs,
additional severance benefits upon termination without cause, and the vesting of
unvested options in the event of certain changes in control of the Company.
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<PAGE> 80
Severance Compensation Agreements. The Company has entered into Severance
Compensation Agreements with Mr. Chapman and the other named executive officers
of the Company. Under such agreements, if employment is terminated other than
for cause (as defined in the Severance Compensation Agreements), the employee is
entitled to certain severance benefits in addition to any compensation otherwise
payable. Such severance benefits include a lump sum payment designed to provide
the equivalent to the sum of (i) an amount equal to two times the employee's
annual base salary on the Date of Termination (as defined in the Severance
Compensation Agreements); (ii) an amount equal to two times the bonus
compensation paid to the employee with respect to the last complete fiscal year;
and (iii) the present value as of the Date of Termination, of the sum of (a) all
benefits which have accrued to the employee but have not vested under the LIN
Television Corporation Retirement Plan as of the Date of Termination and (b) all
additional benefits which would have accrued to the employee under the
Retirement Plan if the employee had continued to be employed by the Company on
the same terms the employee was employed on the Date of Termination, from the
Date of Termination to the date twelve months after the Date of Termination. In
addition to such cash payments, the employee is entitled to (i) life, health and
disability and accident insurance benefits substantially similar to those which
the employee was receiving prior to the Notice of Termination (as defined) (or,
if greater, immediately prior to a Change in Control, as defined in the
Severance Compensation Agreements) for a period of two years; (ii) acceleration
of all stock options granted under the Company's stock option plans; and (iii)
the right within one year following the later of the Change in Control or the
exercise of each stock option to sell to the Company shares of Common Stock that
have been acquired upon the exercise of stock options at a price equal to the
average market price of the Common Stock for the 30-day period prior to the
change in control.
The Company and Hicks Muse expect that the Company will enter into
continuing employment and severance agreements with Mr. Chapman and the other
named executive officers of the Company.
DIRECTOR COMPENSATION
Directors of the Company and Holdings who are also employees of the
company, Holdings or Hicks Muse serve without additional compensation. At
present there are no independent directors of the Company or Holdings.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Company has 1,000 shares of common stock, par value $0.01 per share,
issued and outstanding, all of which are owned by Holdings. Holdings has 1,000
shares of common stock, par value $0.01 per share, issued and outstanding, 630
of which are owned by Ranger Equity Holdings B Corp. (the "GECC Guarantor") and
370 of which are owned by Ranger Equity Holdings A Corp. All of the shares of
capital stock of the GECC Guarantor and Ranger Equity Holdings A Corp. are held
by Ranger Equity Holdings Corporation, which is controlled by a limited
partnership controlled by a limited liability company which is in turn
controlled by Thomas O. Hicks. For a description of the relationship between
Hicks Muse and the Company, see "Certain Other Transactions."
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<PAGE> 81
CERTAIN OTHER TRANSACTIONS
In connection with the Acquisition, Holdings, Company and certain of their
respective affiliates (collectively, the "Clients") entered into a ten-year
agreement (the "Monitoring and Oversight Agreement") with Hicks, Muse & Co.
Partners, L.P., ("Hicks Muse Partners"), an affiliate of Hicks Muse, pursuant to
which the Clients have agreed to pay Hicks Muse Partners an annual fee (payable
quarterly) for oversight and monitoring services to the Clients. The aggregate
annual fee is adjustable on January 1 of each calendar year to an amount equal
to 1.0% of the budgeted consolidated annual EBITDA of Holdings and its
subsidiaries for the then-current fiscal year. Upon the acquisition by Holdings
and its subsidiaries of another entity or business, the fee shall be adjusted
prospectively in the same manner using the pro forma consolidated annual EBITDA
of Holdings and its subsidiaries. In no event shall the annual fee be less than
$1,000,000. Thomas O. Hicks, Chairman of Holdings and the Company, and Michael
J. Levitt, director of Holdings and the Company, are each principals of Hicks
Muse Partners. Hicks Muse Partners is also entitled to reimbursement for any
expenses incurred by it in connection with rendering services allocable to the
Clients. The Clients, jointly and severally, have agreed to indemnify Hicks Muse
Partners, its affiliates, and their respective directors, officers, controlling
persons, agents and employees from and against all claims, liabilities, losses,
damages, expenses and fees related to or arising out of or in connection with
the services rendered by Hicks Muse Partners under the Monitoring and Oversight
Agreement and not resulting primarily from the bad faith, gross negligence, or
willful misconduct of Hicks Muse Partners. The Monitoring and Oversight
Agreement makes available the resources of Hicks Muse Partners concerning a
variety of financial and operational matters. Holdings and the Company do not
believe that the services that have been and will continue to be provided to
them by Hicks Muse Partners could otherwise be obtained by them without the
addition of personnel or the engagement of outside professional advisors. In the
opinion of Holdings and the Company, the fees provided for under the Monitoring
and Oversight Agreement reasonably reflect the benefits received and to be
received by Holdings and the Company.
In connection with the Acquisition, the Clients entered into a ten-year
agreement (the "Financial Advisory Agreement") with Hicks Muse Partners,
pursuant to which Hicks Muse Partners received a financial advisory fee at the
closing of the Acquisition as compensation for its services as financial advisor
to the Clients in connection with the Acquisition. Hicks Muse Partners also is
entitled to receive a fee equal to 1.5% of the "transaction value" (as defined)
for each "subsequent transaction" (as defined) in which a Client is involved.
The term "transaction value" means the total value of the subsequent transaction
including without limitation, the aggregate amount of the funds required to
complete the subsequent transaction (excluding any fees payable pursuant to the
Financial Advisory Agreement), including the amount of any indebtedness,
preferred stock or similar obligations assumed (or remaining outstanding). The
term "subsequent transaction" means any future proposal for a tender offer,
acquisition, sale, merger, exchange offer, recapitalization, restructuring or
other similar transaction directly involving the Holdings or any of its
subsidiaries, and any other person or entity. In addition, the Clients, jointly
and severally, have agreed to indemnify Hicks Muse Partners, its affiliates, and
their respective directors, officers, controlling persons, agents and employees
from and against all claims, liabilities, losses, damages, expenses and fees
related to or arising out of or in connection with the services rendered by
Hicks Muse Partners under the Financial Advisory Agreement and not resulting
primarily from the bad faith, gross negligence, or willful misconduct of Hicks
Muse Partners. The Financial Advisory Agreement makes available the resources of
Hicks Muse Partners concerning a variety of financial and operation matters.
Holdings and the Company do not believe that the services that will be provided
by Hicks Muse Partners could otherwise be obtained by them without the addition
of personnel or the engagement of outside professional advisors. In the opinion
of Holdings and the Company, the fees provided for under the Financial Advisory
Agreement reasonably reflect the benefits received and to be received by
Holdings and the Company.
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<PAGE> 82
THE EXCHANGE OFFERS
PURPOSE AND EFFECT
The Old Notes were sold by the Issuers on March 3, 1998, in the Original
Offerings. In connection with the Original Offerings, the Company entered into
an Exchange and Registration Rights Agreement dated March 3, 1998 and Holdings
entered into an Exchange and Registration Rights Agreement dated March 3, 1998
(such agreements being collectively referred to herein as the "Registration
Rights Agreements"). The Registration Rights Agreements require that the Issuers
file a registration statement under the Securities Act with respect to the New
Notes and, upon the effectiveness of that registration statement, offer (the
"Exchange Offers") to the holders of the Old Notes the opportunity to exchange
their Old Notes for a like principal amount (or principal amount at maturity) of
New Notes, which will be issued without a restrictive legend and may be
reoffered and resold by the holder without registration under the Securities
Act. The Registration Rights Agreements further provide that the Issuers must
use their respective best efforts to cause the registration statement with
respect to the Exchange Offers to be declared effective on or before August 29,
1998. Except as provided below, upon the completion of the Exchange Offers, the
Issuers' obligations with respect to the registration of the Old Notes and the
New Notes will terminate. Copies of the Registration Rights Agreements have been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part and although the Issuers believe that the summary herein of certain
provisions thereof describes all material elements of the Registration Rights
Agreements, such summary does not purport to be complete and is subject to, and
is qualified in its entirety by reference thereto. As a result of the filing and
the effectiveness of the Registration Statement, certain liquidated damages
provided for in the Registration Rights Agreements will not become payable by
the Issuers.
In order to participate in an Exchange Offer, a holder must represent to
the applicable Issuer, among other things, that (i) the New Notes acquired
pursuant to such Exchange Offer are being obtained in the ordinary course of
business of the person receiving such New Notes, whether or not such person is
the holder of the Old Notes, (ii) neither the holder nor any such other person
is engaging in or intends to engage in a distribution of the New Notes, (iii)
neither the holder nor any such other person has an arrangement or understanding
with any person to participate in the distribution of such New Notes, (iv)
neither the holder nor any such other person is an "affiliate," as defined under
Rule 405 promulgated under the Securities Act, of Holdings, the Company or any
Guarantor, and (v) if such holder or other person is a broker-dealer, that it
will receive New Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading activities and
that it will be required to acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes.
Pursuant to the Registration Rights Agreements, each Issuer is required to
file a "shelf" registration statement for a continuous offering pursuant to Rule
415 under the Securities Act in respect of the Old Notes if (i) because of any
change in law or applicable interpretations of the staff of the Commission, such
Issuer is not permitted to effect its Exchange Offer, (ii) its Exchange Offer is
not consummated within 225 days of the applicable Original Offering, (iii) any
holder of Private Exchange Securities (as defined) requests within 60 days after
the Exchange Offer, (iv) any applicable law or interpretations do not permit any
holder of Old Notes to participate in the applicable Exchange Offer, (v) any
holder of Old Notes participates in the applicable Exchange Offer and does not
receive freely transferrable New Notes in exchange for Old Notes or (vi) the
applicable Issuer so elects. In the event that an Issuer is obligated to file a
"shelf" registration statement, it will be required to keep such "shelf"
registration statement effective for up to two years. Other than as set forth in
this paragraph, no holder will have the right to participate in the "shelf"
registration statement nor otherwise to require that the applicable Issuer
register such holder's shares of Old Notes under the Securities Act. See
"-- Procedures for Tendering."
Based on an interpretation by the Commission's staff set forth in no-action
letters issued to third-parties unrelated to the Issuers, the Issuers believe
that New Notes issued pursuant to the Exchange Offers in exchange for Old Notes
may be offered for resale, sold and otherwise transferred by any person
receiving such New Notes, whether or not such person is the holder (other than
any such holder or such other person which is an "affiliate" of Holdings, the
Company or any of the Guarantors within the meaning of Rule 405 under the
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<PAGE> 83
Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that (i) the New Notes are
acquired in the ordinary course of business of that holder or such other person,
(ii) neither the holder nor such other person is engaging in or intends to
engage in a distribution of the New Notes, and (iii) neither the holder nor such
other person has an arrangement or understanding with any person to participate
in the distribution of the New Notes. Any holder who tenders in an Exchange
Offer for the purpose of participating in a distribution of New Notes cannot
rely on this interpretation by the Commission's staff and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. Each broker-dealer that receives
New Notes for its own account in exchange for Old Notes, whether the Old Notes
were acquired by that broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. See "Plan of Distribution."
CONSEQUENCES OF FAILURE TO EXCHANGE
Following the completion of the Exchange Offers (except as set forth in the
third paragraph under "-- Purpose and Effect" above), holders of Old Notes not
tendered will not have any further registration rights and those Old Notes will
continue to be subject to certain restrictions on transfer. Accordingly, the
liquidity of the market for a holder's Old Notes could be adversely affected
upon completion of the Exchange Offers if the holder does not participate in the
Exchange Offers.
TERMS OF THE SENIOR SUBORDINATED NOTES EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Senior Subordinated Notes Letter of Transmittal, the Company will
accept any and all Old Senior Subordinated Notes validly tendered and not
withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. The
Company will issue $1,000 principal amount of New Senior Subordinated Notes in
exchange for each $1,000 principal amount of outstanding Old Senior Subordinated
Notes accepted in the Senior Subordinated Notes Exchange Offer. Holders may
tender some or all of their Old Senior Subordinated Notes pursuant to the Senior
Subordinated Notes Exchange Offer. However, Old Senior Subordinated Notes may be
tendered only in integral multiples of $1,000 in principal amount.
The form and terms of the New Senior Subordinated Notes will be
substantially the same as the form and terms of the Old Senior Subordinated
Notes except that (i) interest on the New Senior Subordinated Notes will accrue
from the date of issuance of the Old Senior Subordinated Notes or the date of
the last periodic payment of interest on such Old Senior Subordinated Note,
whichever is later, and (ii) the New Senior Subordinated Notes have been
registered under the Securities Act and will not bear legends restricting their
transfer. The New Senior Subordinated Notes will evidence the same debt as the
Old Senior Subordinated Notes and will be issued pursuant to, and entitled to
the benefits of, the Senior Subordinated Notes Indenture.
As of March 31, 1998, the Old Subordinated Notes representing $300,000,000
aggregate principal amount were outstanding. This Prospectus, together with the
Senior Subordinated Notes Letter of Transmittal, is being sent to registered
holders and to others believed to have beneficial interests in the Old Senior
Subordinated Notes. Holders of Old Senior Subordinated Notes do not have any
appraisal or dissenters' rights under the General Corporation Law of the State
of Delaware or the Senior Subordinated Notes Indenture in connection with the
Senior Subordinated Notes Exchange Offer. The Company intends to conduct the
Senior Subordinated Notes Exchange Offer in accordance with the applicable
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder.
The Company shall be deemed to have accepted validly tendered Old Senior
Subordinated Notes when, as, and if the Company has given oral or written notice
thereof, to the Senior Subordinated Notes Exchange Agent. The Senior
Subordinated Notes Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the New Senior Subordinated Notes from the Company.
If any tendered Old Senior Subordinated Notes are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Senior
Subordinated Notes
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<PAGE> 84
will be returned, without expense, to the tendering holder thereof as promptly
as practicable after the Expiration Date.
Holders who tender Old Senior Subordinated Notes in the Senior Subordinated
Notes Exchange Offer will not be required to pay brokerage commissions or fees
or, subject to the instructions in the Senior Subordinated Notes Letter of
Transmittal, transfer taxes with respect to the exchange of Old Senior
Subordinated Notes pursuant to the Senior Subordinated Notes Exchange Offer, the
Company will pay all charges and expenses, other than certain applicable taxes,
in connection with the Senior Subordinated Notes Exchange Offer. See "The
Exchange Offers -- Fees and Expenses."
TERMS OF THE DISCOUNT NOTES EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Senior Discount Notes Letter of Transmittal, Holdings will accept any
and all Old Senior Discount Notes validly tendered and not withdrawn prior to
5:00 p.m., New York City time, on the Expiration Date. Holdings will issue
$1,000 principal amount at maturity of New Senior Discount Notes in exchange for
each $1,000 principal amount at maturity of outstanding Old Senior Discount
Notes accepted in the Senior Discount Notes Exchange Offer. Holders may tender
some or all of their Old Senior Discount Notes pursuant to the Senior Discount
Notes Exchange Offer. However, Old Senior Discount Notes may be tendered only in
integral multiples of $1,000 in principal amount at maturity.
The form and terms of the New Senior Discount Notes will be substantially
the same as the form and terms of the Old Senior Discount Notes except that (i)
the Accreted Value of the New Senior Discount Notes will be calculated from the
date of issuance of the Old Senior Discount Notes and (ii) the New Senior
Discount Notes have been registered under the Securities Act and will not bear
legends restricting their transfer. The New Senior Discount Notes will evidence
the same debt as the Old Senior Discount Notes and will be issued pursuant to,
and entitled to the benefit of, the Senior Discount Notes Indenture.
As of March 31, 1998, Old Discount Notes representing $325,000,000
aggregate principal amount at maturity were outstanding. This Prospectus,
together with the Senior Discount Notes Letter of Transmittal, is being sent to
registered holders and to others believed to have beneficial interests in the
Old Senior Discount Notes. Holders of Old Senior Discount Notes do not have any
appraisal or dissenters' rights under the General Corporation Law of the State
of Delaware or the Senior Discount Notes Indenture in connection with the Senior
Discount Notes Exchange Offer. Holdings intends to conduct the Senior Discount
Notes Exchange Offer in accordance with the applicable requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder.
Holdings shall be deemed to have accepted validly tendered Old Senior
Discount Notes when, as, and if Holdings has given oral or written notice
thereof to the Senior Discount Notes Exchange Agent. The Senior Discount Notes
Exchange Agent will act as agent for the tendering holders for the purpose of
receiving the New Senior Discount Notes from Holdings. If any tendered Old
Senior Discount Notes are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
certificates for any such unaccepted Old Senior Discount Notes will be returned,
without expense, to the tendering holder thereof as practicable after the
Expiration Date.
Holders who tender Old Senior Discount Notes in the Senior Discount Notes
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Senior Discount Notes Letter of Transmittal,
transfer taxes with respect to the exchange of Old Senior Discount Notes
pursuant to the Senior Discount Notes Exchange Offer. Holdings will pay all
charges and expenses, other than certain applicable taxes, in connection with
the Senior Discount Notes Exchange Offer. See "The Exchange Offers -- Fees and
Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean, with respect to either Exchange
Offer, 5:00 p.m., New York City time, on , 1998, unless an Issuer,
in its sole discretion, extends the Exchange Offer applicable
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<PAGE> 85
to its Old Notes, in which case the term "Expiration Date" shall mean the latest
date and time to which such Exchange Offer is extended. In any event, each
Exchange Offer will be held open for at least thirty days. In order to extend
its Exchange Offer, the applicable Issuer will issue a notice of any extension
by press release or other public announcement prior to 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
Each Issuer reserves the right, in its sole discretion (i) to delay accepting
any Old Notes, to extend its Exchange Offer, or, if any of the conditions set
forth under "The Exchange Offers -- Certain Conditions to Exchange Offers" shall
not have been satisfied, to terminate such Exchange Offer, by giving oral or
written notice of such delay, extension or termination to the applicable
Exchange Agent, as the case may be, or (ii) to amend the terms of its Exchange
Offer in any manner.
PROCEDURES FOR TENDERING
Only a holder of Old Notes may tender the Old Notes in an Exchange Offer.
Except as set forth under "The Exchange Offers -- Book Entry Transfer," to
tender in an Exchange Offer a holder must complete, sign and date the Letter of
Transmittal applicable to such Exchange Offer, or a copy thereof, have the
signature thereon guaranteed if required by such Letter of Transmittal, and mail
or otherwise deliver such Letter of Transmittal or copy to the Exchange Agent
for such Exchange Offer prior to the Expiration Date for such Exchange Offer. In
addition, either (i) certificates for such Old Notes must be received by the
Exchange Agent for such Exchange Offer along with the Letter of Transmittal
applicable to such Exchange Offer, or (ii) a timely confirmation of a book-entry
transfer (a "Book-Entry Confirmation") of such Old Notes, if that procedure is
available, into the account of the Exchange Agent for such Exchange Offer at the
DTC (the "Book-Entry Transfer Facility") pursuant to the procedure for
book-entry transfer described below, must be received by such Exchange Agent
prior to the Expiration Date, or (iii) the Holder must comply with the
guaranteed delivery procedures described below. To be tendered effectively, a
Letter of Transmittal and other required documents must be received by the
appropriate Exchange Agent at its address set forth under "The Exchange
Offers -- Exchange Agents" prior to the Expiration Date.
The tender by a holder that is not withdrawn before the Expiration Date
will constitute an agreement between that holder and the applicable Issuer in
accordance with the terms and subject to the conditions set forth herein and in
the Letter of Transmittal applicable to such Issuer's Exchange Offer.
THE METHOD OF DELIVERY OF OLD NOTES, A LETTER OF TRANSMITTAL, AND ALL OTHER
REQUIRED DOCUMENTS TO AN EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO AN EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE ISSUERS. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, OR
NOMINEES TO EFFECT THESE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company, or other nominee and who wishes
to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. If the beneficial
owner wishes to tender on the owner's own behalf, the owner must, prior to
completing and executing a Letter of Transmittal and delivering the owner's Old
Notes, either make appropriate arrangements to register ownership of the Old
Notes in the beneficial owner's name or obtain a properly completed bond power
from the registered holder. The transfer of registered ownership may take
considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless Old Notes tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on such Letter of Transmittal
or (ii) for the account of an Eligible Institution. If signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, the guarantee must be by any eligible guarantor institution that is
a member of or participant in
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<PAGE> 86
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program, the Stock Exchange Medallion Program, or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Exchange Act (an "Eligible Institution").
If a Letter of Transmittal is signed by a person other than the registered
holder of any Old Notes listed therein, the Old Notes must be endorsed or
accompanied by a properly completed bond power, signed by the registered holder
as that registered holder's name appears on the Old Notes.
If a Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations, or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
relevant Issuer of their authority to so act must be submitted with such Letter
of Transmittal unless waived by the relevant Issuer.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of tendered Old Notes will be determined by
the Issuers in their sole discretion, which determination will be final and
binding. Each Issuer reserves the absolute right to reject any and all Old Notes
not properly tendered or any Old Notes the acceptance of which would, in the
opinion of counsel for such Issuer, be unlawful. Each Issuer also reserves the
right to waive any defects, irregularities, or conditions of tender as to
particular Old Notes. An Issuer's interpretation of the terms and conditions of
its Exchange Offer (including the instructions in a Letter of Transmittal) will
be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within such
time as the Issuer of such Old Notes shall determine. Although each Issuer
intends to notify holders of defects or irregularities with respect to tenders
of Old Notes, neither the Issuers, the Exchange Agents, nor any other person
shall incur any liability for failure to give such notification. Tenders of Old
Notes will not be deemed to have been made until such defects or irregularities
have been cured or waived. Any Old Notes received by an Exchange Agent that are
not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by such Exchange Agent to the tendering
holders, unless otherwise provided in the Letter of Transmittal accompanying
such Old Notes, as soon as practicable following the Expiration Date.
In addition, each Issuer reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding after the
Expiration Date or, as set forth under "The Exchange Offers -- Conditions to the
Exchange Offer," to terminate its Exchange Offer and, to the extent permitted by
applicable law, purchase Old Notes in the open market, in privately negotiated
transactions, or otherwise. The terms of any such purchases or offers could
differ from the terms of such Issuer's Exchange Offer.
By tendering, each holder will represent that, among other things, (i) the
New Notes acquired pursuant to such Exchange Offer are being obtained in the
ordinary course of business of the person receiving such New Notes, whether or
not such person is the holder of the Old Notes, (ii) neither the holder nor any
such other person is engaging or intends to engage in a distribution of such New
Notes, (iii) neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such New
Notes within the meaning of the Securities Act, (iv) neither the holder nor any
such other person is an "affiliate," as defined under Rule 405 promulgated under
the Securities Act, of Holdings, the Company or any Guarantor, and (v) if such
holder or other person is a broker-dealer, that it will receive New Notes for
its own account in exchange for Old Notes that were acquired as a result of
market-making activities or other trading activities and that it will be
required to acknowledge that it will deliver a prospectus in connection with any
resale of such New Notes.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to an Exchange Offer will be made only after timely receipt by
the Exchange Agent for such Exchange Offer of certificates for such Old Notes or
a timely Book-Entry Confirmation of such Old Notes into such Exchange Agent's
account at the Book-Entry Transfer Facility, a properly completed and duly
executed Letter of Transmittal (or, with respect to the DTC and its
participants, electronic instructions in which the tendering holder acknowledges
its receipt of and agreement to be bound by the Letter of Transmittal for such
Exchange Offer) and all other required documents. If any tendered Old Notes are
not accepted for any reason set forth in the terms and conditions of the
Exchange Offer for such Old Notes or if Old Notes are submitted for a
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<PAGE> 87
greater principal amount than the holder desires to exchange, such unaccepted or
non-exchanged Old Notes will be returned without expense to the tendering Holder
thereof (or, in the case of Old Notes tendered by book-entry transfer into an
Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described below, such non-exchanged Old Notes
will be credited to an account maintained with such Book-Entry Transfer
Facility) as promptly as practicable after the expiration or termination of the
Exchange Offer for such Old Notes.
BOOK-ENTRY TRANSFER
The Exchange Agents will make requests to establish accounts with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offers within two business days after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Notes being tendered by
causing the Book-Entry Transfer Facility to transfer such Old Notes into the
appropriate Exchange Agent's account at the Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's procedures for transfer.
However, although delivery of Old Notes may be effected through book-entry
transfer at the Book-Entry Transfer Facility, a Letter of Transmittal or copy
thereof, with any required signature guarantees and any other required
documents, must, in any case other than as set forth in the following paragraph,
be transmitted to and received by the appropriate Exchange Agent at its address
set forth under "The Exchange Offers -- Exchange Agents" on or prior to the
Expiration Date or the guaranteed delivery below must be complied with.
DTC's Automated Tender Offer Program ("ATOP") is the only method of
processing exchange offers through DTC. To accept an Exchange Offer through
ATOP, participants in DTC must send electronic instructions to DTC through DTC's
communication system in place of sending a signed, hard copy Letter of
Transmittal. DTC is obligated to communicate those electronic instructions to
the Exchange Agents. To tender Old Notes through ATOP, the electronic
instructions sent to DTC and transmitted by DTC to an Exchange Agent must
contain the participant's acknowledgment of its receipt of and agreement to be
bound by the Letter of Transmittal for such Old Notes.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of Old Notes desires to tender such Old Notes and
the Old Notes are not immediately available, or time will not permit such
holder's Old Notes or other required documents to reach the appropriate Exchange
Agent before the Expiration Date, or the procedure for book-entry transfer
cannot be completed on a timely basis, a tender may be effected if (i) the
tender if made through an Eligible Institution, (ii) prior to the Expiration
Date, such Exchange Agent received from such Eligible Institution a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof) and
Notice of Guaranteed Delivery, substantially in the form provided by the Issuer
of the Old Notes tendered (by telegram, telex, facsimile transmission, mail or
hand delivery), setting forth the name and address of the holder of such Old
Notes and the amount of Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that within three New York Stock Exchange ("NYSE")
trading days after the date of execution of the Notice of Guaranteed Delivery,
the certificates for all physically tendered Old Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and any other
documents required by the applicable Letter of Transmittal will be deposited by
the Eligible Institution with the appropriate Exchange Agent, and (iii) the
certificates for all physically tendered Old Notes, in proper form for transfer,
or a Book-Entry Confirmation, as the case may be, and all other documents
required by the applicable Letter of Transmittal, are received by such Exchange
Agent within three NYSE trading days after the date of execution of the Notice
of Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date.
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For a withdrawal of a tender of Old Notes to be effective, a written or
(for a DTC participant) electronic ATOP transmission notice of withdrawal must
be received by the appropriate Exchange Agent at its address set forth in this
Prospectus prior to 5:00 p.m., New York City time, on the Expiration Date. Any
such notice of withdrawal must (i) specify the name of the person having
deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old
Notes to be withdrawn (including the certificate number or numbers and principal
mount of such Old Notes), (iii) be signed by the holder in the same manner as
the original signature on the Letter of Transmittal by which such Old Notes were
tendered (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee of such Old Notes register
the transfer of such Old Notes into the name of the person withdrawing the
tender, and (iv) specify the name in which any such Old Notes are to be
registered, if different from that of the holder who tendered such Old Notes.
All questions as to the validity, form, and eligibility (including time of
receipt) of such notices will be determined by the Issuer of the Old Notes
subject to such notice, whose determination shall be final and binding on all
parties. Any Old Notes so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offer relating to such Old
Notes. Any Old Notes which have been tendered for exchange but which are not
exchanged for any reason will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender, or
termination of the Exchange Offer relating to such Old Notes. Properly withdrawn
Old Notes may be retendered by following one of the procedures under "The
Exchange Offers -- Procedures for Tendering" at any time on or prior to the
Expiration Date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offers, an Issuer shall
not be required to accept for exchange, or to issue New Notes in exchange for,
any Old Notes and may terminate or amend such Issuer's Exchange Offer if at any
time before the acceptance of such Old Notes for exchange or the exchange of the
New Notes for such Old Notes, such Issuer determines that its Exchange Offer
violates applicable law, any applicable interpretation of the staff of the
Commission or any order of any governmental agency or court of competent
jurisdiction.
The foregoing conditions are for the sole benefit of the Issuers and may be
asserted by the Issuers regardless of the circumstances giving rise to any such
condition or may be waived by the Issuers in whole or in part at any time and
from time to time in their sole discretion. The failure by an Issuer at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
In addition, an Issuer will not accept for exchange any Old Notes tendered,
and no New Notes will be issued in exchange for any such Old Notes, if at such
time any stop order shall be threatened or in effect with respect to the
Registration Statement of which this Prospectus constitutes a part or the
qualification of the indenture relating to such Issuer's Old Notes under the
Trust Indenture Act of 1939, as amended (the "TIA"). In any such event each
Issuer is required to use every reasonable effort to obtain the withdrawal of
any stop order at the earliest possible time.
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EXCHANGE AGENTS
All executed Letters of Transmittal should be directed to the applicable
Exchange Agent. The United States Trust Company of New York has been appointed
as both the Senior Subordinated Notes Exchange Agent and the Discount Notes
Exchange Agent. Questions, requests for assistance and requests for additional
copies of the Prospectus or a Letter of Transmittal should be directed to the
applicable Exchange Agent addressed as follows:
To: THE UNITED STATES TRUST COMPANY OF NEW YORK,
<TABLE>
<S> <C> <C>
By Overnight Courier: By Hand: By Registered or Certified
Mail:
United States Trust Company United States Trust Company United States Trust Company
of New York of New York of New York
770 Broadway, 13th Floor 111 Broadway, Lower Level P. O. Box 844
New York, New York 10003 New York, New York 10006 Cooper Station
Attn: Corporate Trust Services Attn: Corporate Trust Services New York, New York 10276-0844
Telephone: (800) 548-6565 Attn: Corporate Trust Services
Facsimile: (212) 420-6152 Telephone: (800) 548-6565
Facsimile: (212) 420-6152
</TABLE>
FEES AND EXPENSES
The Issuers will not make any payments to brokers, dealers, or other
soliciting acceptances of the Exchange Offers. The principal solicitation is
being made by mail; however, additional solicitations may be made in person or
by telephone by officers and employees of the Issuers.
The estimated cash expenses to be incurred in connection with the Exchange
Offers will be paid by the Issuers and are estimated in the aggregate to be
$ , which includes fees and expenses of the Trustees for the Old Notes,
accounting, legal, printing, and related fees and expenses.
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to
pay any transfer taxes in connection except that holders who instruct an Issuer
to register New Notes in the name of, or request that Old Notes not tendered or
not accepted in an Exchange Offer be returned to, a person other than the
registered tendering holder will be responsible for the payment of any
applicable transfer tax thereon.
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DESCRIPTION OF THE NEW SENIOR SUBORDINATED NOTES
GENERAL
The New Senior Subordinated Notes are to be issued under the Indenture,
dated as of March 3, 1998 (the "Senior Subordinated Notes Indenture"), between
LIN Acquisition (as predecessor to the Company), the Guarantors and United
States Trust Company of New York, as trustee (the "Senior Subordinated Notes
Trustee"), a copy of which is available upon request to the Company. The Old
Senior Subordinated Notes were also issued under the Senior Subordinated Notes
Indenture. The following summary of certain provisions of the Senior
Subordinated Notes Indenture and the Senior Subordinated Notes does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of the Senior Subordinated Notes Indenture (including the
definitions of certain terms therein and those terms made a part thereof by the
Trust Indenture Act of 1939, as amended) and the Senior Subordinated Notes.
Capitalized terms used herein and not otherwise defined shall have the meanings
given to them in the Senior Subordinated Notes Indenture. For definitions of
certain terms used in this section, see "-- Certain Definitions" below.
Principal of, premium, if any, and interest on the Senior Subordinated
Notes will be payable, and the Senior Subordinated Notes may be exchanged or
transferred, at the office or agency of the Company in the Borough of Manhattan,
The City of New York (which initially shall be the corporate trust office of the
Senior Subordinated Notes Trustee in New York, New York), except that, at the
option of the Company, payment of interest may be made by check mailed to the
address of the holders as such address appears in the Senior Subordinated Notes
register.
The Senior Subordinated Notes will be issued in fully registered form only,
without coupons, in denominations of $1,000 and integral multiples thereof.
Initially, the Senior Subordinated Notes Trustee will act as Paying Agent and
Registrar for the Senior Subordinated Notes. The Senior Subordinated Notes may
be presented for registration of transfer and exchange at the offices of the
Registrar, which initially will be the Senior Subordinated Notes Trustee's
corporate trust office. The Company may change any Paying Agent and Registrar
without notice to holders of the Senior Subordinated Notes.
PRINCIPAL, MATURITY AND INTEREST
The Senior Subordinated Notes will be unsecured, senior subordinated
obligations of the Company and will be limited to $300,000,000 aggregate
principal amount, and will mature on March 1, 2008. Interest on the Senior
Subordinated Notes will accrue at a rate of 8 3/8% per annum and will be payable
in cash semi-annually on each March 1 and September 1, commencing on September
1, 1998, to the holders of record of Senior Subordinated Notes at the close of
business on February 15 and August 15, respectively, immediately preceding such
interest payment date. Interest on the Senior Subordinated Notes will accrue
from the most recent interest payment date to which interest has been paid or,
if no interest has been paid, from the date of original issuance. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
OPTIONAL REDEMPTION
The Senior Subordinated Notes may be redeemed at any time on or after March
1, 2003, in whole or in part, at the option of the Company, at the redemption
prices (expressed as a percentage of the principal amount thereof on the
applicable redemption date) set forth below, plus accrued and unpaid interest,
if any, to the redemption date, if redeemed during the 12-month period beginning
on March 1 of each of the years set forth below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003........................................................ 104.188%
2004........................................................ 102.792%
2005........................................................ 101.396%
2006 and thereafter......................................... 100.000%
</TABLE>
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<PAGE> 91
In addition, prior to March 1, 2001, the Company may, at its option, use
the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Senior Subordinated Notes at a redemption price equal to
108.375% of the principal amount thereof plus accrued and unpaid interest to the
redemption date; provided, however, that after any such redemption, at least 65%
of the aggregate principal amount of the Senior Subordinated Notes originally
issued would remain outstanding immediately after giving effect to such
redemption. Any such redemption will be required to occur on or prior to the
date that is one year after the receipt by the Company of the proceeds of an
Equity Offering. The Company shall effect such redemption on a pro rata basis.
In addition, prior to March 1, 2003, the Company may, at its option, redeem
the Senior Subordinated Notes upon a Change of Control. See "-- Change of
Control."
SELECTION AND NOTICE
If less than all of the Senior Subordinated Notes are to be redeemed at any
time, selection of Senior Subordinated Notes for redemption will be made by the
Senior Subordinated Notes Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Senior Subordinated
Notes are listed or, in the absence of such requirements or if the Senior
Subordinated Notes are not so listed, on a pro rata basis, provided that no such
Senior Subordinated Notes of $1,000 or less shall be redeemed in part. Notice of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each holder of Senior Subordinated Notes to
be redeemed at its registered address. If any Senior Subordinated Note is to be
redeemed in part only, the notice of redemption that relates to such Senior
Subordinated Note shall state the portion of the principal amount thereof to be
redeemed. A new Senior Subordinated Note in principal amount equal to the
unredeemed portion thereof will be issued in the name of the holder thereof upon
cancellation of the original Senior Subordinated Note. On and after the
redemption date, interest ceases to accrue on Senior Subordinated Notes or
portions of them called for redemption.
CHANGE OF CONTROL
Change of Control Offer. The Senior Subordinated Notes Indenture provides
that, upon the occurrence of a Change of Control, each holder will have the
right to require that the Company purchase all or a portion of such holder's
Senior Subordinated Notes in cash pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase.
The Senior Subordinated Notes Indenture provides that, prior to the mailing
of the notice referred to below, but in any event within 30 days following the
date on which the Company becomes aware that a Change of Control has occurred,
if the purchase of the Senior Subordinated Notes would violate or constitute a
default under any other Indebtedness of the Company, then the Company shall, to
the extent needed to permit such purchase of Senior Subordinated Notes, either
(i) repay all such Indebtedness and terminate all commitments outstanding
thereunder or (ii) obtain the requisite consents, if any, under such
Indebtedness to permit the purchase of the Senior Subordinated Notes as provided
below. The Company will first comply with the covenant in the preceding sentence
before it will be required to make the Change of Control Offer or purchase the
Senior Subordinated Notes pursuant to the provisions described below.
Within 30 days following the date on which the Company becomes aware that a
Change of Control has occurred, the Company must send, by first-class mail
postage prepaid, a notice to each holder of Senior Subordinated Notes, which
notice shall govern the terms of the Change of Control Offer. Such notice shall
state, among other things, the purchase date, which must be no earlier than 30
days nor later than 45 days from the date such notice is mailed, other than as
may be required by law (the "Change of Control Payment Date"). Holders electing
to have any Senior Subordinated Notes purchased pursuant to a Change of Control
Offer will be required to surrender such Senior Subordinated Notes to the Paying
Agent and Registrar for the Senior Subordinated Notes at the address specified
in the notice prior to the close of business on the business day prior to the
Change of Control Payment Date.
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<PAGE> 92
Change of Control Redemption. In addition, the Senior Subordinated Notes
Indenture will provide that, prior to March 1, 2003, upon the occurrence of a
Change of Control, the Company will have the option to redeem the Senior
Subordinated Notes in whole but not in part (a "Change of Control Redemption")
at a redemption price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest to the redemption date plus the Applicable Premium.
In order to effect a Change of Control Redemption, the Company must send a
notice to each holder of Senior Subordinated Notes, which notice shall govern
the terms of the Change of Control Redemption. Such notice must be mailed to
holders of the Senior Subordinated Notes within 30 days following the date the
Change of Control occurred (the "Change of Control Redemption Date") and state
that the Company is effecting a Change of Control Redemption in lieu of a Change
of Control Offer.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act of 1934, as amended (the "Exchange Act"), to the extent applicable
in connection with the purchase of Senior Subordinated Notes pursuant to a
Change of Control Offer.
These "Change of Control" covenants will not apply in the event of (a)
changes in a majority of the board of directors of the Company or Holdings so
long as a majority of such board of directors continues to consist of Continuing
Directors and (b) certain transactions with Permitted Holders (including Hicks
Muse, its officers and directors, and their respective Affiliates). In addition,
the Change of Control Offer requirement is not intended to afford holders of
Senior Subordinated Notes protection in the event of certain highly leveraged
transactions, reorganizations, restructurings, mergers and other similar
transactions that might adversely affect the holders of Senior Subordinated
Notes, but would not constitute a Change of Control. The Company could, in the
future, enter into certain transactions including certain recapitalizations of
the Company, that would not constitute a Change of Control with respect to the
Change of Control purchase feature of the Senior Subordinated Notes, but would
increase the amount of Indebtedness outstanding at such time. However, the
Senior Subordinated Notes Indenture will contain limitations on the ability of
the Company to incur additional Indebtedness and to engage in certain mergers,
consolidations and sales of assets, whether or not a Change of Control is
involved, subject, in each case, to limitations and qualifications. See "--
Certain Covenants -- Limitation on Incurrence of Additional Indebtedness and
Issuance of Capital Stock" and "-- Certain Covenants -- Merger, Consolidation
and Sale of Assets" below.
With respect to the sale of "all or substantially all" the assets of the
Company, which would constitute a Change of Control for purposes of the Senior
Subordinated Notes Indenture, the meaning of the phrase "all or substantially
all" varies according to the facts and circumstances of the subject transaction,
has no clearly established meaning under relevant law and is subject to judicial
interpretation. Accordingly, in certain circumstances there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of "all or substantially all" of the assets of the Company and,
therefore, it may be unclear whether a Change of Control has occurred and
whether the Senior Subordinated Notes should be subject to a Change of Control
Offer.
The occurrence of certain of the events that would constitute a Change of
Control would constitute a default under the Senior Credit Facilities. Future
Senior Indebtedness of the Company and its Subsidiaries may also contain
prohibitions of certain events that would constitute a Change of Control or
require such Senior Indebtedness to be repurchased upon a Change of Control.
Moreover, the exercise by the holders of their right to require the Company to
repurchase the Senior Subordinated Notes could cause a default under such Senior
Indebtedness, even if the Change of Control itself does not, due to the
financial effect of such repurchase on the Company. Finally, the Company's
ability to pay cash to the holders upon a repurchase may be limited by the
Company's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required
repurchases. Even if sufficient funds were otherwise available, the terms of the
Senior Credit Facilities may prohibit the Company's prepayment of Senior
Subordinated Notes prior to their scheduled maturity. Consequently, if the
Company is not able to prepay the Indebtedness under the Senior Credit
Facilities and any other Senior Indebtedness containing similar restrictions or
obtain the requisite consents, as described above, the Company will be unable to
fulfill its repurchase obligations if holders of Senior Subordinated Notes
exercise their repurchase rights following a Change of Control, thereby
resulting in a default under the Senior Subordinated Notes Indenture.
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None of the provisions in the Senior Subordinated Notes Indenture relating
to a purchase of Senior Subordinated Notes upon a Change of Control is waivable
by the board of directors of the Company. Without the consent of each holder of
Senior Subordinated Notes affected thereby, after the mailing of the notice of a
Change of Control Offer, no amendment to the Senior Subordinated Notes Indenture
may, directly or indirectly, affect the Company's obligation to purchase the
outstanding Senior Subordinated Notes or amend, modify or change the obligation
of the Company to consummate a Change of Control Offer or waive any default in
the performance thereof or modify any of the provisions of the definitions with
respect to any such offer.
RANKING AND SUBORDINATION
The payment of the principal of, premium (if any), and interest on the
Senior Subordinated Notes, and any liquidated damages ("Additional Amounts")
under the Senior Subordinated Notes Exchange and Registration Rights Agreement
(as defined), is subordinated in right of payment, to the extent set forth in
the Senior Subordinated Notes Indenture, to the payment when due of all existing
and future Senior Indebtedness of the Company. However, payment from the money
or the proceeds of U.S. Government Obligations held in any defeasance trust
described under "Satisfaction and Discharge of Senior Subordinated Notes
Indenture; Defeasance" below is not subordinate to any Senior Indebtedness or
subject to the restrictions described herein. As of December 31, 1997 on a pro
forma basis, the Company would have had $170.0 million of Senior Indebtedness
outstanding (excluding unused commitments). Although the Senior Subordinated
Notes Indenture contains limitations on the amount of additional Indebtedness
that the Company and its subsidiaries may incur, under certain circumstances the
amount of such additional Indebtedness could be substantial and, in any case,
all or a portion of such Indebtedness may be Senior Indebtedness and may be
secured. See "-- Certain Covenants -- Limitation on Incurrence of Additional
Indebtedness and Issuance of Capital Stock."
Only Indebtedness of the Company that is Senior Indebtedness will rank
senior to the Senior Subordinated Notes in accordance with the provisions of the
Senior Subordinated Notes Indenture. The Senior Subordinated Notes will in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Company. The Company has agreed in the Senior Subordinated Notes Indenture that
it will not incur, directly or indirectly, any Indebtedness that is subordinate
or junior in ranking in any respect to Senior Indebtedness unless such
Indebtedness is Senior Subordinated Indebtedness or is contractually
subordinated in right of payment to Senior Subordinated Indebtedness. Unsecured
Indebtedness is not deemed to be subordinate or junior to Secured Indebtedness
merely because it is unsecured, nor is any Indebtedness deemed to be subordinate
or junior to other Indebtedness merely because it matures after such other
Indebtedness. Secured Indebtedness is not deemed to be Senior Indebtedness
merely because it is secured.
The Company may not pay principal of, premium (if any) or interest on or
Additional Amounts with respect to, the Senior Subordinated Notes or make any
deposit pursuant to the provisions described under "-- Satisfaction and
Discharge of Senior Subordinated Notes Indenture; Defeasance" below and may not
otherwise redeem, purchase or retire any Senior Subordinated Notes
(collectively, "pay the Senior Subordinated Notes") if (i) any Senior
Indebtedness is not paid when due or (ii) any other default on Senior
Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated
in accordance with its terms unless, in either case, the default has been cured
or waived and/or any such acceleration has been rescinded or such Senior
Indebtedness has been paid; provided, however, that the Company may pay the
Senior Subordinated Notes without regard to the foregoing if the Company and the
Senior Subordinated Notes Trustee receive written notice approving such payment
from the Representative of the Senior Indebtedness with respect to which either
of the events set forth in clause (i) or (ii) of the immediately preceding
sentence has occurred and is continuing. During the continuance of any default
(other than a default described in clause (i) or (ii) of the preceding sentence)
with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, the Company may not pay the Senior Subordinated
Notes (except (i) in Qualified Capital Stock issued by the Company to pay
interest on the Senior Subordinated Notes or issued in exchange for the Senior
Subordinated Notes, (ii) in
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securities substantially identical to the Senior Subordinated Notes issued by
the Company in payment of interest accrued thereon or (iii) in securities issued
by the Company which are subordinated to the Senior Indebtedness at least to the
same extent as the Senior Subordinated Notes and having a Weighted Average Life
to Maturity at least equal to the remaining Weighted Average Life to Maturity of
the Senior Subordinated Notes) for a period (a "Payment Blockage Period")
commencing upon the receipt by the Senior Subordinated Notes Trustee (with a
copy to the Company) of written notice (a "Blockage Notice") of such default
from the Representative of the holders of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (i) by
written notice to the Senior Subordinated Notes Trustee and the Company from the
Person or Persons who gave such Blockage Notice, (ii) because the default giving
rise to such Blockage Notice has been cured or waived or is no longer continuing
or (iii) because such Designated Senior Indebtedness has been repaid in full).
Notwithstanding the provisions described in the immediately preceding sentence,
but subject to the provisions of the first sentence of this paragraph and the
provisions of the immediately succeeding paragraph, the Company may resume
payments on the Senior Subordinated Notes after the end of such Payment Blockage
Period. Not more than one Blockage Notice may be given, and not more than one
payment Blockage Period may occur, in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period. However, if any Blockage Notice within such
360-day period is given by or on behalf of any holders of Designated Senior
Indebtedness (other than the agent under the Senior Credit Facilities), the
agent under the Senior Credit Facilities may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Payment Blockage Periods is in effect exceed 179 days
in the aggregate during any 360-consecutive-day period. No nonpayment default
that existed or was continuing on the date of delivery of any Blockage Notice to
the Senior Subordinated Notes Trustee shall be, or be made, the basis for a
subsequent Blockage Notice unless such default shall have been cured or waived
for a period of not less than 90 consecutive days.
Upon any payment or distribution of the assets of the Company upon a total
or partial liquidation or dissolution or reorganization or bankruptcy of or
similar proceeding relating to the Company or its property, the holders of
Senior Indebtedness will be entitled to receive payment in full, in cash or Cash
Equivalents, of the Senior Indebtedness before the holders of the Senior
Subordinated Notes are entitled to receive any payment or distribution, and
until the Senior Indebtedness is paid in full, in cash or Cash Equivalents, any
payment or distribution to which holders of the Senior Subordinated Notes would
be entitled but for the subordination provisions of the Senior Subordinated
Notes Indenture will be made to holders of the Senior Indebtedness as their
interests may appear. If a distribution is made to the Senior Subordinated Notes
Trustee or to holders of the Senior Subordinated Notes that, due to the
subordination provisions, should not have been made to them, the Senior
Subordinated Notes Trustee or such holders are required to hold it in trust for
the holders of Senior Indebtedness and pay it over to them as their interests
may appear.
If payment of the Senior Subordinated Notes is accelerated because of an
Event of Default, the Company or the Senior Subordinated Notes Trustee shall
promptly notify the Representative (if any) of any issue of Designated Senior
Indebtedness which is then outstanding; provided, however, that the Company and
the Senior Subordinated Notes Trustee shall be obligated to notify such a
Representative (other than with respect to the Senior Credit Facilities) only if
such Representative has delivered or caused to be delivered an address for the
service of such a notice to the Company and the Senior Subordinated Notes
Trustee (and the Company and the Senior Subordinated Notes Trustee shall be
obligated only to deliver the notice to the address so specified). If a notice
is required pursuant to the immediately preceding sentence, the Company may not
pay the Senior Subordinated Notes (except payment (i) in Qualified Capital Stock
issued by the Company to pay interest on the Senior Subordinated Notes or issued
in exchange for the Senior Subordinated Notes), (ii) in securities substantially
identical to the Senior Subordinated Notes issued by the Company in payment of
interest accrued thereon or (iii) in securities issued by the Company which are
subordinated to the Senior Indebtedness at least to the same extent as the
Senior Subordinated Notes and have a Weighted Average Life to Maturity at least
equal to the remaining Weighted Average Life to Maturity of the Senior
Subordinated Notes), until five Business Days after the respective
Representative of the Designated Senior Indebtedness receives notice (at the
address specified in the preceding sentence) of such acceleration and,
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thereafter, may pay the Senior Subordinated Notes only if the subordination
provisions of the Senior Subordinated Notes Indenture otherwise permit payment
at that time.
By reason of such subordination provisions contained in the Senior
Subordinated Notes Indenture, in the event of liquidation or insolvency,
creditors of the Company who are holders of Senior Indebtedness may recover
more, ratably, than the holders of the Senior Subordinated Notes, and creditors
of the Company who are not holders of Senior Indebtedness (including holders of
the Senior Subordinated Notes) may recover less, ratably, than holders of Senior
Indebtedness. In addition, the Senior Subordinated Notes Indenture does not
prohibit the transfer or contribution of assets of the Company to its Restricted
Subsidiaries. In the event of any such transfer or contribution, holders of the
Senior Subordinated Notes will be effectively subordinated to the claims of
creditors of such Restricted Subsidiaries with respect to such assets.
SUBSIDIARY GUARANTEES OF THE SENIOR SUBORDINATED NOTES
Each of the Guarantors will unconditionally guarantee on a joint and
several basis (the "Subsidiary Guarantees") all of the Company's obligations
under the Senior Subordinated Notes, including its obligations to pay principal,
premium, if any, and interest with respect to the Senior Subordinated Notes. The
Subsidiary Guarantees will be unsecured senior subordinated obligations of the
Guarantors. The obligations of each Guarantor under its Subsidiary Guarantee
will be subordinated and junior in right of payment to the prior payment in full
of existing and future Senior Indebtedness of such Guarantor substantially to
the same extent as the Senior Subordinated Notes are subordinated to all
existing and future Senior Indebtedness of the Company. The Guarantors will also
guarantee all obligations under the Senior Credit Facilities, and each Guarantor
has granted a security interest in all or substantially all of its assets to
secure the obligations under the Senior Credit Facilities. The obligations of
each Guarantor are limited to the maximum amount which, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections or payments from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Subsidiary Guarantee or pursuant to its contribution obligations under the
Senior Subordinated Notes Indenture, will result in the obligations of such
Guarantor under its Subsidiary Guarantee not constituting a fraudulent
conveyance or fraudulent transfer under federal or state law. Each Guarantor
that makes a payment or distribution under a Subsidiary Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount, based
on the net assets of each Guarantor determined in accordance with GAAP.
The Senior Subordinated Notes Indenture provides that the Company shall
cause each Restricted Subsidiary issuing a Subsidiary Guarantee after the Senior
Subordinated Notes Issue Date pursuant to "Certain Covenants -- Subsidiary
Guarantees by Restricted Subsidiaries" to (i) execute and deliver to the Senior
Subordinated Notes Trustee a supplemental indenture in a form reasonably
satisfactory to the Senior Subordinated Notes Trustee pursuant to which such
Restricted Subsidiary shall become a party to the Senior Subordinated Notes
Indenture and thereby unconditionally guarantee all of the Company's obligations
under the Senior Subordinated Notes and the Senior Subordinated Notes Indenture
on the terms set forth therein and (ii) deliver to the Senior Subordinated Notes
Trustee an Opinion of Counsel that such supplemental indenture has been duly
authorized, executed and delivered by such Restricted Subsidiary and constitutes
a valid, binding and enforceable obligation of such Restricted Subsidiary (which
opinion may be subject to customary assumptions and qualifications). Thereafter,
such Restricted Subsidiary shall (unless released in accordance with the terms
of the Senior Subordinated Notes Indenture) be a Guarantor for all purposes of
the Senior Subordinated Notes Indenture.
Each Subsidiary Guarantee will be a continuing Guarantee and will (a)
remain in full force and effect until payment of all of the obligations covered
thereby, except as provided below, (b) be binding upon each Guarantor and (c)
inure to the benefit of and be enforceable by the Senior Subordinated Notes
Trustee, holders of the Senior Subordinated Notes and their successors,
transferees and assigns.
The Senior Subordinated Notes Indenture provides that if the Senior
Subordinated Notes thereunder are defeased in accordance with the terms of the
Senior Subordinated Notes Indenture, or if all or substantially all of the
assets of any Guarantor or all of the equity interest in any Guarantor are sold
(including through
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merger, consolidation, by issuance or otherwise) by the Company in a transaction
constituting an Asset Sale, and if (x) the Net Cash Proceeds from such Asset
Sale are used in accordance with the covenant described under "-- Certain
Covenants -- Limitation on Asset Sales" or (y) the Company delivers to the
Senior Subordinated Notes Trustee an Officer's Certificate to the effect that
the Net Cash Proceeds from such Asset Sale shall be used in accordance with the
covenant described under "-- Certain Covenants -- Limitation on Asset Sales" and
within the time limits specified by such covenant, then such Guarantor (in the
event of a sale or other disposition of all of the equity interests of such
Guarantor) or the Person acquiring the assets (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) shall
be released and discharged of its Subsidiary Guarantee obligations in respect of
the Senior Subordinated Notes Indenture and the Senior Subordinated Notes.
Any Guarantor that is designated an Unrestricted Subsidiary shall upon such
designation be released and discharged of its Subsidiary Guarantee obligations
in respect of the Senior Subordinated Notes Indenture and the Senior
Subordinated Notes and any Unrestricted Subsidiary that is redesignated as a
Restricted Subsidiary shall upon such redesignation be required to become a
Guarantor.
CERTAIN COVENANTS
Limitation on Incurrence of Additional Indebtedness and Issuance of Capital
Stock. The Senior Subordinated Notes Indenture provides that (a) the Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to (collectively,
"incur") any Indebtedness (other than Permitted Indebtedness) and the Company
will not issue any Disqualified Capital Stock and its Restricted Subsidiaries
will not issue any Preferred Stock (except Preferred Stock issued to the Company
or a Restricted Subsidiary of the Company so long as it is so held); provided,
however, that the Company and its Restricted Subsidiaries that are Guarantors
may incur Indebtedness or issue shares of such Capital Stock if, in either case,
the Company's Leverage Ratio at the time of incurrence of such Indebtedness or
the issuance of such Capital Stock, as the case may be, after giving pro forma
effect to such incurrence or issuance as of such date and to the use of proceeds
therefrom is less than 7.0 to 1.
(b) The Company will not incur or suffer to exist, or permit any of its
Restricted Subsidiaries to incur or suffer to exist, any Obligations with
respect to an Unrestricted Subsidiary that would violate the provisions set
forth in the definition of Unrestricted Subsidiary.
Limitation on Layering. The Senior Subordinated Notes Indenture provides
that the Company will not incur any Indebtedness if such Indebtedness is
subordinate or junior in ranking in any respect to any Senior Indebtedness
unless such Indebtedness is Senior Subordinated Indebtedness or is contractually
subordinated in right of payment to all Senior Subordinated Indebtedness
(including the Senior Subordinated Notes).
Limitation on Restricted Payments. The Senior Subordinated Notes Indenture
provides that (a) the Company will not, and will not cause or permit any of its
Restricted Subsidiaries, to, directly or indirectly, make any Restricted Payment
if at the time of such Restricted Payment and immediately after giving effect
thereto:
(i) a Default or Event of Default shall have occurred and be
continuing; or
(ii) the Company is not able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with the "Limitation on
Incurrence of Additional Indebtedness and Issuance of Capital Stock"
covenant; or
(iii) the aggregate amount of Restricted Payments made subsequent to
the Senior Subordinated Notes Issue Date (the amount expended for such
purposes, if other than in cash, being the fair market value of such
property as determined by the board of directors of the Company in good
faith) exceeds the sum of (a)(x) 100% of the aggregate Consolidated Cash
Flow of the Company (or, in the event such Consolidated Cash Flow shall be
a deficit, minus 100% of such deficit) accrued subsequent to the Senior
Subordinated Notes Issue Date to the most recent date for which financial
information is available to the Company, taken as one accounting period,
less (y) 1.4 times Consolidated Interest Expense for the same
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period, plus (b) 100% of the aggregate net proceeds, including the fair
market value of property other than cash as determined by the board of
directors of the Company in good faith, received subsequent to the Senior
Subordinated Notes Issue Date by the Company from any Person (other than a
Restricted Subsidiary of the Company) from the issuance and sale subsequent
to the Senior Subordinated Notes Issue Date of Qualified Capital Stock of
the Company (excluding (i) any net proceeds from issuances and sales
financed directly or indirectly using funds borrowed from the Company or
any Restricted Subsidiary of the Company, until and to the extent such
borrowing is repaid, but including the proceeds from the issuance and sale
of any securities convertible into or exchangeable for Qualified Capital
Stock to the extent such securities are so converted or exchanged and
including any additional proceeds received by the Company upon such
conversion or exchange and (ii) any net proceeds received from issuances
and sales that are used to consummate a transaction described in clause (2)
of paragraph (b) below), plus (c) without duplication of any amount
included in clause (iii)(b) above, 100% of the aggregate net proceeds,
including the fair market value of property other than cash (valued as
provided in clause (iii)(b) above), received by the Company as a capital
contribution subsequent to the Senior Subordinated Notes Issue Date, plus
(d) the amount equal to the net reduction in Investments (other than
Permitted Investments) made by the Company or any of its Restricted
Subsidiaries in any Person resulting from, and without duplication, (i)
repurchases or redemptions of such Investments by such Person, proceeds
realized upon the sale of such Investment to an unaffiliated purchaser and
repayments of loans or advances or other transfers of assets by such Person
to the Company or any Restricted Subsidiary of the Company or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investment") not to
exceed, in the case of any Restricted Subsidiary, the amount of Investments
previously made by the Company or any of its Restricted Subsidiaries in
such Unrestricted Subsidiary, which amount was included in the calculation
of Restricted Payments; provided, however, that no amount shall be included
under this clause (d) to the extent it is already included in Consolidated
Cash Flow, plus (e) the aggregate net cash proceeds received by a Person in
consideration for the issuance of such Person's Capital Stock (other than
Disqualified Capital Stock) that are held by such Person at the time such
Person is merged with and into the Company in accordance with the "Merger,
Consolidation and Sale of Assets" covenant subsequent to the Senior
Subordinated Notes Issue Date; provided, however, that concurrently with or
immediately following such merger the Company uses an amount equal to such
net cash proceeds to redeem or repurchase the Company's Capital Stock, plus
(f) $15,000,000.
(b) Notwithstanding the foregoing, these provisions do not prohibit: (1)
the payment of any dividend or the making of any distribution within 60 days
after the date of its declaration if such dividend or distribution would have
been permitted on the date of declaration; (2) the purchase, redemption or other
acquisition or retirement of any Capital Stock of the Company or any warrants,
options or other rights to acquire shares of any class of such Capital Stock
either (x) solely in exchange for shares of Qualified Capital Stock or other
rights to acquire Qualified Capital Stock or (y) through the application of the
net proceeds of a substantially concurrent sale for cash (other than to a
Restricted Subsidiary of the Company) of shares of Qualified Capital Stock or
warrants, options or other rights to acquire Qualified Capital Stock or (z) in
the case of Disqualified Capital Stock, solely in exchange for, or through the
application of the net proceeds of a substantially concurrent sale for cash
(other than to a Restricted Subsidiary of the Company) of, Disqualified Capital
Stock; (3) payments made pursuant to any merger, consolidation or sale of assets
effected in accordance with the "Merger, Consolidation and Sale of Assets"
covenant; provided, however, that no such payment may be made pursuant to this
clause (3) unless, after giving effect to such transaction (and the incurrence
of any Indebtedness in connection therewith and the use of the proceeds
thereof), the Company would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with the "Limitation on
Incurrence of Additional Indebtedness and Issuance of Capital Stock" covenant
such that after incurring that $1.00 of additional Indebtedness, the Leverage
Ratio would be less than 6.0 to 1; (4) payments to enable the Company or a
Holding Company (as hereinafter defined) to pay dividends on its Capital Stock
(other than Disqualified Capital Stock) after the first Public Equity Offering
in an annual amount not to exceed 6.0% of the gross proceeds (before deducting
underwriting discounts and commissions and other fees and expenses of the
offering) received from shares of Capital Stock (other than Disqualified
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Capital Stock) sold for the account of the issuer thereof (and not for the
account of any stockholder) in such initial Public Equity Offering; (5) payments
by the Company to fund the payment by any company as to which the Company is,
directly or indirectly, a Subsidiary (a "Holding Company") of audit, accounting,
legal or other similar expenses, to pay franchise or other similar taxes and to
pay other corporate overhead expenses, so long as such dividends are paid as and
when needed by its respective direct or indirect Holding Company and so long as
the aggregate amount of payments pursuant to this clause (5) does not exceed
$1,000,000 in any calendar year; (6) payments by the Company to repurchase, or
to enable a Holding Company to repurchase, Capital Stock or other securities
from employees of the Company or a Holding Company in an aggregate amount not to
exceed $15,000,000; (7) payments by the Company to redeem or repurchase, or to
enable a Holding Company to redeem or repurchase, stock purchase or similar
rights granted by the Company or a Holding Company with respect to its Capital
Stock in an aggregate amount not to exceed $500,000; (8) payments, not to exceed
$200,000 in the aggregate, to enable the Company or a Holding Company to make
cash payments to holders of its Capital Stock in lieu of the issuance of
fractional shares of its Capital Stock; (9) payments by the Company to fund
taxes of a Holding Company for a given taxable year in an amount equal to the
Company's "separate return liability," as if the Company were the parent of a
consolidated group (for purposes of this clause (9) "separate return liability"
for a given taxable year shall mean the hypothetical United States tax liability
of the Company defined as if the Company had filed its own U.S. federal tax
return for such taxable year); (10) the payment of any dividend or the making of
any distribution to a Holding Company in amounts sufficient to permit a Holding
Company (i) to pay interest when due on the Senior Discount Notes and (ii) to
make any mandatory redemptions or principal payments in respect of the Senior
Discount Notes; and (11) payments by the Company to Hicks Muse Partners in
accordance with the terms of the Financial Advisory Agreement and the Monitoring
and Oversight Agreement; provided, however, that in the case of clauses (3),
(4), (6), (7), (8) and (10), no Event of Default shall have occurred or be
continuing at the time of such payment or as a result thereof. In determining
the aggregate amount of Restricted Payments made subsequent to the Senior
Subordinated Notes Issue Date, amounts expended pursuant to clauses (1), (4),
(6), (7) and (8) shall be included in such calculation.
Limitation on Liens. The Senior Subordinated Notes Indenture provides that
the Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur or assume any Lien
securing Indebtedness on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, unless contemporaneously therewith effective provision is made, in
the case of the Company, to secure the Senior Subordinated Notes and all other
amounts due under the Senior Subordinated Notes Indenture, and in the case of a
Restricted Subsidiary which is a Guarantor, to secure such Restricted
Subsidiary's Subsidiary Guarantee of the Senior Subordinated Notes and all other
amounts due under the Senior Subordinated Notes Indenture, equally and ratably
with such Indebtedness (or, in the event that such Indebtedness is subordinated
in right of payment to the Senior Subordinated Notes or such Subsidiary's
Subsidiary Guarantee, prior to such Indebtedness) with a Lien on the same
properties and assets securing such Indebtedness for so long as such
Indebtedness is secured by such Lien, except for (i) Liens securing Senior
Indebtedness and Guarantor Senior Indebtedness and (ii) Liens securing
Indebtedness described in clause (xi) of the definition of Permitted
Indebtedness; provided that such Liens cover only the property referred to in
such definition.
Merger, Consolidation and Sale of Assets. The Senior Subordinated Notes
Indenture provides that the Company shall not, in a single transaction or a
series of related transactions, consolidate with or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of the Company's or any Guarantor's assets determined on a consolidated basis
for the Company to another Person or adopt a plan of liquidation unless (i)
either (1) the Company is the Surviving Person or (2) the Person (if other than
the Company) formed by such consolidation or into which the Company is merged or
the Person that acquires by conveyance, transfer or lease the properties and
assets of the Company substantially as an entirety or in the case of a plan of
liquidation, the Person to which assets of the Company have been transferred,
shall be a corporation, partnership, limited liability company or trust
organized and existing under the laws of the United States or any State thereof
or the District of Columbia; (ii) such Surviving Person shall assume all of the
obligations of the Company under the Senior Subordinated Notes and the Senior
Subordinated Notes Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Senior Subordinated
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Notes Trustee; (iii) immediately after giving effect to such transaction and the
use of the proceeds therefrom (on a pro forma basis, including giving effect to
any Indebtedness incurred or anticipated to be incurred in connection with such
transaction), (x) no Default or Event of Default shall have occurred and be
continuing and (y) the Company (in the case of clause (1) of the foregoing
clause (i)) or such Person (in the case of clause (2) of the foregoing clause
(i)) shall be able to incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with the "Limitation on Incurrence of
Additional Indebtedness and Issuance of Capital Stock" covenant; and (iv) the
Company has delivered to the Senior Subordinated Notes Trustee prior to the
consummation of the proposed transaction an Officers' Certificate and an Opinion
of Counsel, each stating that such consolidation, merger or transfer complies
with the Senior Subordinated Notes Indenture and that all conditions precedent
in the Senior Subordinated Notes Indenture relating to such transaction have
been satisfied. For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of related
transactions) of all or substantially all of the properties and assets of one or
more Restricted Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties or assets of the Company, will be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company. Notwithstanding the foregoing clauses (ii) and (iii), (1) any
Restricted Subsidiary of the Company may consolidate with, merge into or
transfer all or part of its properties and assets to the Company and (2) the
Company may merge with an Affiliate thereof organized solely for the purpose of
reorganizing the Company in another jurisdiction in the U.S. to realize tax or
other benefits. Notwithstanding the foregoing, clauses (iii) and (iv) shall not
apply to the Merger.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraph in
which the Company, as the case may be, is not the Surviving Person and the
Surviving Person is to assume all the obligations of the Company under the
Senior Subordinated Notes and the Senior Subordinated Notes Indenture pursuant
to a supplemental indenture, such Surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of the Company, as the
case may be, and the Company shall be discharged from its Obligations under the
Senior Subordinated Notes Indenture and the Senior Subordinated Notes.
Limitation on Asset Sales. The Senior Subordinated Notes Indenture provides
that the Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by management
of the Company or, if such Asset Sale involves consideration in excess of
$10,000,000, by the board of directors of the Company, as evidenced by a board
resolution), (ii) at least 75% of the consideration received by the Company or
such Restricted Subsidiary, as the case may be, from such Asset Sale is in the
form of cash or Cash Equivalents and is received at the time of such disposition
and (iii) upon the consummation of an Asset Sale, the Company applies, or causes
such Restricted Subsidiary to apply, such Net Cash Proceeds within 180 days of
receipt thereof either (A) to repay any Senior Indebtedness of the Company or
any Indebtedness of a Restricted Subsidiary of the Company (and, to the extent
such Senior Indebtedness relates to principal under a revolving credit or
similar facility, to obtain a corresponding reduction in the commitments
thereunder, except that the Company may temporarily repay Senior Indebtedness
using the Net Cash Proceeds from such Asset Sale and thereafter use such funds
to reinvest pursuant to clause (B) below within the period set forth therein
without having to obtain a corresponding reduction in the commitments
thereunder), (B) to reinvest, or to be contractually committed to reinvest
pursuant to a binding agreement, in Productive Assets and, in the latter case,
to have so reinvested within 360 days of the date of receipt of such Net Cash
Proceeds or (C) to purchase Senior Subordinated Notes and other Senior
Subordinated Indebtedness, pro rata tendered to the Company for purchase at a
price equal to 100% of the principal amount thereof (or the accreted value of
such other Senior Subordinated Indebtedness, if such other Senior Subordinated
Indebtedness is issued at a discount) plus accrued interest thereon, if any, to
the date of purchase pursuant to an offer to purchase made by the Company as set
forth below (a "Net Proceeds Offer"); provided, however, that the Company may
defer making a Net Proceeds Offer until the aggregate Net Cash Proceeds from
Asset Sales not otherwise applied in accordance with this covenant equal or
exceed $15,000,000.
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Subject to the deferral right set forth in the final proviso of the
preceding paragraph, each notice of a Net Proceeds Offer will be mailed, by
first-class mail, to holders of Senior Subordinated Notes not more than 180 days
after the relevant Asset Sale or, in the event the Company or a Restricted
Subsidiary has entered into a binding agreement as provided in (B) above, within
180 days following the termination of such agreement but in no event later than
360 days after the relevant Asset Sale. Such notice will specify, among other
things, the purchase date (which will be no earlier than 30 days nor later than
45 days from the date such notice is mailed, except as otherwise required by
law) and will otherwise comply with the procedures set forth in the Senior
Subordinated Notes Indenture. Upon receiving notice of the Net Proceeds Offer,
holders of Senior Subordinated Notes may elect to tender their Senior
Subordinated Notes in whole or in part in integral multiples of $1,000. To the
extent holders properly tender Senior Subordinated Notes in an amount which,
together with all other Senior Subordinated Indebtedness so tendered, exceeds
the Net Proceeds Offer, Senior Subordinated Notes and other Senior Subordinated
Indebtedness of tendering holders will be repurchased on a pro rata basis (based
upon the aggregate principal amount tendered, or, if applicable, the aggregate
accreted value tendered). To the extent that the aggregate principal amount of
Senior Subordinated Notes tendered pursuant to any Net Proceeds Offer, which,
together with the aggregate principal amount or aggregate accreted value, as the
case may be, of all other Senior Subordinated Indebtedness so tendered, is less
than the amount of Net Cash Proceeds subject to such Net Proceeds Offer, the
Company may use any remaining portion of such Net Cash Proceeds not required to
fund the repurchase of tendered Senior Subordinated Notes and other Senior
Subordinated Indebtedness for any purposes not otherwise prohibited by the
Senior Subordinated Notes Indenture. Upon the consummation of any Net Proceeds
Offer, the amount of Net Cash Proceeds subject to any future Net Proceeds Offer
from the Asset Sales giving rise to such Net Cash Proceeds shall be deemed to be
zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act to the extent applicable in connection with the repurchase of
Senior Subordinated Notes pursuant to a Net Proceeds Offer.
Limitation on Asset Swaps. The Senior Subordinated Notes Indenture provides
that the Company will not, and will not permit any Restricted Subsidiary to,
engage in any Asset Swap unless: (i) at the time of entering into such Asset
Swap, and immediately after giving effect to such Asset Swap, no Default or
Event of Default shall have occurred and be continuing, (ii) in the event such
Asset Swap involves an aggregate amount in excess of $10,000,000, the terms of
such Asset Swap have been approved by a majority of the members of the board of
directors of the Company and (iii) in the event such Asset Swap involves an
aggregate amount in excess of $50,000,000, the Company has received a written
opinion from an independent investment banking firm of nationally recognized
standing that such Asset Swap is fair to the Company or such Restricted
Subsidiary, as the case may be, from a financial point of view.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Senior Subordinated Notes Indenture provides that the Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause to permit to exist or become effective, by
operation of the charter of such Restricted Subsidiary or by reason of any
agreement, instrument, judgment, decree, rule, order, statute or governmental
regulation, any encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) pay dividends or make any other distributions on its Capital
Stock; (b) make loans or advances or pay any Indebtedness or other obligation
owed to the Company or any of its Restricted Subsidiaries; or (c) transfer any
of its property or assets to the Company, except for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) the Senior
Subordinated Notes Indenture; (3) customary non-assignment provisions of any
lease governing a leasehold interest of the Company or any Restricted
Subsidiary; (4) any instrument governing Acquired Indebtedness or Acquired
Preferred Stock, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; (5) agreements existing on the
Senior Subordinated Notes Issue Date (including the Credit Agreement) as such
agreements are from time to time in effect; provided, however, that any
amendments or modifications of such agreements that affect the encumbrances or
restrictions of the types subject to this covenant shall not result in such
encumbrances or restrictions being less favorable to the Company in any material
respect, as determined in good faith by the board of directors of the Company,
than the provisions as in effect before giving effect to the respective
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amendment or modification; (6) any restriction with respect to such a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or disposition; (7) an
agreement effecting a refinancing, replacement or substitution of Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in clause (2),
(4) or (5) above or any other agreement evidencing Indebtedness permitted under
the Senior Subordinated Notes Indenture; provided, however, that the provisions
relating to such encumbrance or restriction contained in any such refinancing,
replacement or substitution agreement or any such other agreement are no less
favorable to the Company in any material respect as determined in good faith by
the board of directors of the Company than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2), (4) or (5); (8) restrictions on the transfer of the assets subject to any
Lien imposed by the holder of such Lien; (9) a licensing agreement to the extent
such restrictions or encumbrances limit the transfer of property subject to such
licensing agreement; (10) restrictions relating to Subsidiary Preferred Stock
that require that due and payable dividends thereon to be paid in full prior to
dividends on such Subsidiary's common stock or (11) any agreement or charter
provision evidencing Indebtedness or Capital Stock permitted under the Senior
Subordinated Notes Indenture; provided, however, that the provisions relating to
such encumbrance or restriction contained in such agreement or charter provision
are not less favorable to the Company in any material respect as determined in
good faith by the board of directors of the Company than the provisions relating
to such encumbrance or restriction contained in the Senior Subordinated Notes
Indenture.
Limitations on Transactions with Affiliates. The Senior Subordinated Notes
Indenture provides that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease,
contribution or exchange of any property or the rendering of any service) with
or for the benefit of any of its Affiliates (other than transactions between the
Company and a Restricted Subsidiary of the Company or among Restricted
Subsidiaries of the Company) (an "Affiliate Transaction"), other than Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction on an arm's-length
basis from a person that is not an Affiliate; provided, however, that for a
transaction or series of related transactions involving value of $5,000,000 or
more, such determination will be made in good faith by a majority of members of
the board of directors of the Company and by a majority of the disinterested
members of the board of directors of the Company, if any; provided, further,
that for a transaction or series of related transactions involving value of
$15,000,000 or more, the board of directors of the Company has received an
opinion from an independent investment banking firm of nationally recognized
standing that such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Restricted Subsidiary. The foregoing restrictions
will not apply to (1) reasonable and customary directors' fees, indemnification
and similar arrangements and payments thereunder; (2) any obligations of the
Company under any employment agreement, noncompetition or confidentiality
agreement with any officer of the Company, as in effect on the Senior
Subordinated Notes Issue Date (provided that each amendment of any of the
foregoing agreements shall be subject to the limitations of this covenant); (3)
any Restricted Payment permitted to be made pursuant to the covenant described
under "Limitation on Restricted Payments"; (4) any issuance of securities, or
other payments, awards or grants in cash, securities or otherwise pursuant to,
or the funding of, employment arrangements, stock options and stock ownership
plans approved by the board of directors of the Company; (5) loans or advances
to employees in the ordinary course of business of the Company or any of its
Restricted Subsidiaries consistent with past practices; (6) payments made in
connection with the Transactions and the Grand Rapid Acquisition, including,
without limitation, fees to Hicks Muse, as described in the Prospectus; and (7)
payments by the Company to Hicks Muse Partners in accordance with the terms of
the Financial Advisory Agreement and the Monitoring and Oversight Agreement.
Subsidiary Guarantees by Restricted Subsidiaries. The Senior Subordinated
Notes Indenture provides that the Company will not create or acquire, nor cause
or permit any of its Restricted Subsidiaries, directly or indirectly, to create
or acquire, any Subsidiary other than (A) an Unrestricted Subsidiary in
accordance with the other terms of the Senior Subordinated Notes Indenture or
(B) a Restricted Subsidiary that, simultaneously with such creation or
acquisition, executes and delivers a supplemental indenture to the Senior
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Subordinated Notes Indenture pursuant to which it will become a Guarantor under
the Senior Subordinated Notes Indenture in accordance with "-- Subsidiary
Guarantees of the Senior Subordinated Notes" above.
Reports. The Senior Subordinated Notes Indenture provides that so long as
any of the Senior Subordinated Notes are outstanding, the Company will provide
to the Senior Subordinated Notes Trustee and the holders of Senior Subordinated
Notes and file with the Commission, to the extent such submissions are accepted
for filing by the Commission, copies of the annual reports and of the
information, documents and other reports that the Company would have been
required to file with the Commission pursuant to Sections 13 or 15(d) of the
Exchange Act of 1934, as amended (the "Exchange Act"), regardless of whether the
Company is then obligated to file such reports.
EVENTS OF DEFAULT
The following events are defined in the Senior Subordinated Notes Indenture
as "Events of Default": (i) the failure to pay interest on the Senior
Subordinated Notes when the same becomes due and payable and the Default
continues for a period of 30 days (whether or not such payment is prohibited by
the provisions described under "-- Ranking and Subordination" above); (ii) the
failure to pay principal of or premium, if any, on any Senior Subordinated Notes
when such principal or premium, if any, becomes due and payable, at maturity,
upon redemption or otherwise (whether or not such payment is prohibited by the
provisions described under "-- Ranking and Subordination" above); (iii) a
default in the observance or performance of any other covenant or agreement
contained in the Senior Subordinated Notes or the Senior Subordinated Notes
Indenture, which default continues for a period of 30 days after the Company
receives written notice thereof specifying the default from the Senior
Subordinated Notes Trustee or holders of at least 25% in aggregate principal
amount of outstanding Senior Subordinated Notes; (iv) the failure to pay at the
stated maturity (giving effect to any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary of the Company,
or the acceleration of the final stated maturity of any such Indebtedness, if
the aggregate principal amount of such Indebtedness, together with the aggregate
principal amount of any other such Indebtedness in default for failure to pay
principal at the final stated maturity (giving effect to any extensions thereof)
or which has been accelerated, aggregates $10,000,000 or more at any time in
each case after a 10-day period during which such default shall not have been
cured or such acceleration rescinded; (v) one or more judgments in an aggregate
amount in excess of $15,000,000 (which are not covered by insurance as to which
the insurer has not disclaimed coverage) being rendered against the Company or
any of its Significant Restricted Subsidiaries and such judgment or judgments
remain undischarged or unstayed for a period of 60 days after such judgment or
judgments become final and nonappealable; and (vi) certain events of bankruptcy,
insolvency or reorganization affecting the Company or any of its Significant
Restricted Subsidiaries.
Upon the happening of any Event of Default specified in the Senior
Subordinated Notes Indenture, the Senior Subordinated Notes Trustee may, and the
Senior Subordinated Notes Trustee upon the request of holders of 25% in
principal amount of the outstanding Senior Subordinated Notes shall, or the
holders of at least 25% in principal amount of outstanding Senior Subordinated
Notes may, declare the principal of all the Senior Subordinated Notes, together
with all accrued and unpaid interest and premium, if any, to be due and payable
by notice in writing to the Company and the Senior Subordinated Notes Trustee
specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), and the same (i) shall become
immediately due and payable or (ii) if there are any amounts outstanding under
the Senior Credit Facilities, will become due and payable upon the first to
occur of an acceleration under the Senior Credit Facilities or five Business
Days after receipt by the Company and the agent under the Senior Credit
Facilities of such Acceleration Notice (unless all Events of Default specified
in such Acceleration Notice have been cured or waived). If an Event of Default
with respect to bankruptcy proceedings relating to the Company or any
Significant Restricted Subsidiaries occurs and is continuing, then such amount
will ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Senior Subordinated Notes Trustee or
any holder of the Senior Subordinated Notes.
At any time after a declaration of acceleration with respect to the Senior
Subordinated Notes as described in the preceding paragraph, the holders of a
majority in principal amount of the Senior Subordinated
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Notes then outstanding (by notice to the Senior Subordinated Notes Trustee) may
rescind and cancel such declaration and its consequences if (i) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) all existing Defaults and Events of Default have been cured
or waived except nonpayment of principal of or interest on the Senior
Subordinated Notes that has become due solely by such declaration of
acceleration, (iii) to the extent the payment of such interest is lawful,
interest (at the same rate specified in the Senior Subordinated Notes) on
overdue installments of interest and overdue payments of principal, which has
become due otherwise than by such declaration of acceleration has been paid,
(iv) the Company has paid the Senior Subordinated Notes Trustee its reasonable
compensation and reimbursed the Senior Subordinated Notes Trustee for its
reasonable expenses, disbursements and advances and (v) in the event of the cure
or waiver of a Default or Event of Default of the type described in clause (vi)
of the first paragraph of "-- Events of Default" above, the Senior Subordinated
Notes Trustee has received an Officers' Certificate and Opinion of Counsel that
such Default or Event of Default has been cured or waived. The holders of a
majority in principal amount of the Senior Subordinated Notes may waive any
existing Default or Event of Default under the Senior Subordinated Notes
Indenture, and its consequences, except a default in the payment of the
principal of or interest on any Senior Subordinated Notes.
The Company is required to deliver to the Senior Subordinated Notes
Trustee, within 120 days after the end of the Company's fiscal year, a
certificate indicating whether the signing officers know of any Default or Event
of Default that occurred during the previous year and whether the Company has
complied with its obligations under the Senior Subordinated Notes Indenture. In
addition, the Company will be required to notify the Senior Subordinated Notes
Trustee of the occurrence and continuation of any Default or Event of Default
promptly after the Company becomes aware of the same.
Subject to the provisions of the Senior Subordinated Notes Indenture
relating to the duties of the Senior Subordinated Notes Trustee in case an Event
of Default thereunder should occur and be continuing, the Senior Subordinated
Notes Trustee will be under no obligation to exercise any of the rights or
powers under the Senior Subordinated Notes Indenture at the request or direction
of any of the holders of the Senior Subordinated Notes unless such holders have
offered to the Senior Subordinated Notes Trustee reasonable indemnity or
security against any loss, liability or expense. Subject to such provision for
security or indemnification and certain limitations contained in the Senior
Subordinated Notes Indenture, the holders of a majority in principal amount of
the outstanding Senior Subordinated Notes have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Senior Subordinated Notes Trustee or exercising any trust or power conferred on
the Senior Subordinated Notes Trustee.
SATISFACTION AND DISCHARGE OF SENIOR SUBORDINATED NOTES INDENTURE; DEFEASANCE
The Company may terminate its obligations under the Senior Subordinated
Notes Indenture at any time by delivering all outstanding Senior Subordinated
Notes to the Senior Subordinated Notes Trustee for cancellation and paying all
sums payable by it thereunder. The Company, at its option, (i) will be
discharged from any and all obligations with respect to the Senior Subordinated
Notes (except for certain obligations of the Company to register the transfer or
exchange of such Senior Subordinated Notes, replace stolen, lost or mutilated
Senior Subordinated Notes, maintain paying agencies and hold moneys for payment
in trust) or (ii) need not comply with certain of the restrictive covenants with
respect to the Senior Subordinated Notes Indenture, if the Company deposits with
the Senior Subordinated Notes Trustee, in trust, U.S. legal tender or U.S.
Government Obligations or a combination thereof that, through the payment of
interest and premium thereon and principal in respect thereof in accordance with
their terms, will be sufficient to pay all the principal of and interest and
premium on the Senior Subordinated Notes on the dates such payments are due or
through any date of redemption, if earlier than the dates such payments are due,
in any case in accordance with the terms of such Senior Subordinated Notes, as
well as the Senior Subordinated Notes Trustee's fees and expenses. To exercise
either such option, the Company is required to deliver to the Senior
Subordinated Notes Trustee (A) an Opinion of Counsel or a private letter ruling
issued to the Company by the Internal Revenue Service (the "IRS") to the effect
that the holders of the Senior Subordinated Notes will not recognize income,
gain or loss for federal income tax purposes as a result of the deposit and
related defeasance and will be subject to federal income tax on the same amount
and in the same manner and at the same times
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as would have been the case if such option had not been exercised and, in the
case of an Opinion of Counsel furnished in connection with a discharge pursuant
to clause (i) above, accompanied by a private letter ruling issued to the
Company by the IRS to such effect, (B) subject to certain qualifications, an
Opinion of Counsel to the effect that funds so deposited will not be subject to
avoidance under applicable bankruptcy law and (C) an Officers' Certificate and
an Opinion of Counsel to the effect that the Company has complied with all
conditions precedent to the defeasance. Notwithstanding the foregoing, the
Opinion of Counsel required by clause (A) above need not be delivered if all
Senior Subordinated Notes not theretofore delivered to the Senior Subordinated
Notes Trustee for cancellation (i) have become due and payable, (ii) will become
due and payable on the maturity date within one year or (iii) are to be called
for redemption within one year under arrangements satisfactory to the Senior
Subordinated Notes Trustee for the giving of notice of redemption by the Senior
Subordinated Notes Trustee in the name, and at the expense, of the Company.
MODIFICATION OF THE SENIOR SUBORDINATED NOTES INDENTURE
From time to time, the Company and the Senior Subordinated Notes Trustee,
together, without the consent of the holders of the Senior Subordinated Notes,
may amend or supplement the Senior Subordinated Notes Indenture for certain
specified purposes, including curing ambiguities, defects or inconsistencies.
Other modifications and amendments of the Senior Subordinated Notes Indenture
may be made with the consent of the holders of a majority in principal amount of
the then outstanding Senior Subordinated Notes, except that, without the consent
of each holder of the Senior Subordinated Notes affected thereby, no amendment
may, directly or indirectly: (i) reduce the amount of Senior Subordinated Notes
whose holders must consent to an amendment; (ii) reduce the rate of or change
the time for payment of interest, including defaulted interest, on any Senior
Subordinated Notes; (iii) reduce the principal of or change the fixed maturity
of any Senior Subordinated Notes, or change the date on which any Senior
Subordinated Notes may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor; (iv) make any Senior Subordinated Notes
payable in money other than that stated in the Senior Subordinated Notes and the
Senior Subordinated Notes Indenture; (v) make any change in provisions of the
Senior Subordinated Notes Indenture protecting the right of each holder of a
Senior Subordinated Note to receive payment of principal of, premium on and
interest on such Senior Subordinated Note on or after the due date thereof or to
bring suit to enforce such payment or permitting holders of a majority in
principal amount of the Senior Subordinated Notes to waive a Default or Event of
Default; or (vi) after the Company's obligation to purchase the Senior
Subordinated Notes arises under the Senior Subordinated Notes Indenture, amend,
modify or change the obligation of the Company to make or consummate a Change of
Control Offer or a Net Proceeds Offer or waive any default in the performance
thereof or modify any of the provisions or definitions with respect to any such
offers.
CONCERNING THE SENIOR SUBORDINATED NOTES TRUSTEE
The Senior Subordinated Notes Indenture contains certain limitations on the
rights of the Senior Subordinated Notes Trustee, should it become a creditor of
the Company, to obtain payment of claims in certain cases, or to realize on
certain property received in respect of any such claim as security or otherwise.
The Senior Subordinated Notes Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest, it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue or resign.
The holders of a majority in principal amount of the then outstanding
Senior Subordinated Notes will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Senior Subordinated Notes Trustee, subject to certain exceptions. The Senior
Subordinated Notes Indenture provides that in case an Event of Default shall
occur (which shall not be cured), the Senior Subordinated Notes Trustee will be
required, in the exercise of its power, to use the degree of care of a prudent
person in the conduct of such person's own affairs. Subject to such provisions,
the Senior Subordinated Notes Trustee will be under no obligation to exercise
any of its rights or powers under the Senior Subordinated Notes Indenture at the
request of any holder of Senior Subordinated Notes, unless such holder shall
have offered to
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the Senior Subordinated Notes Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
GOVERNING LAW
The Senior Subordinated Notes Indenture provides that it and the Senior
Subordinated Notes will be governed by, and construed in accordance with, the
laws of the State of New York without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Senior Subordinated Notes Indenture. Reference is made to the Senior
Subordinated Notes Indenture for the full definition of all such terms, as well
as any other terms used herein for which no definition is provided.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with the Company or any of
its Restricted Subsidiaries or assumed in connection with the acquisition of
assets from such Person and not incurred by such Person in connection with, or
in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such acquisition, merger or consolidation.
"Acquired Preferred Stock" means the Preferred Stock of any Person at such
time as such Person becomes a Restricted Subsidiary of the Company or at the
time it merges or consolidates with the Company or any of its Restricted
Subsidiaries and not issued by such Person in connection with, or in
anticipation or contemplation of, such acquisition, merger or consolidation.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Chase and its
Affiliates shall not be deemed Affiliates of the Company by reason of the Senior
Credit Facilities or their direct or indirect investments in any fund managed by
Hicks Muse or any Person in which any such fund is invested.
"Applicable Premium" means, with respect to a Senior Subordinated Note at
any Change of Control Redemption Date, the greater of (i) 1.0% of the principal
amount of such Senior Subordinated Note and (ii) the excess of (A) the present
value at such time of (1) the redemption price of such Senior Subordinated Note
at March 1, 2003 (such redemption price being described under "-- Optional
Redemption") plus (2) all semi-annual payments of interest through, March 1,
2003 computed using a discount rate equal to the Treasury Rate plus 75 basis
points over (B) the principal amount of such Senior Subordinated Note.
"Asset Acquisition" means (i) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or shall be
consolidated or merged with the Company or any Restricted Subsidiary of the
Company or (ii) the acquisition by the Company or any Restricted Subsidiary of
the Company of assets of any Person comprising a division or line of business of
such Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries (excluding any sale and leaseback transaction or any
pledge of assets or stock by the Company or any of its Restricted Subsidiaries)
to any Person other than the Company or a Restricted Subsidiary of the Company
of (i) any Capital Stock of any Restricted Subsidiary of the Company or (ii) any
other property or assets of the Company or any Restricted Subsidiary of the
Company other than in the ordinary course of business; provided, however, that
for purposes of the "Limitation on Asset Sales" covenant, Asset Sales shall not
include (a) a transaction or series of related transactions in which the Company
or any of its Restricted Subsidiaries receive aggregate consideration of less
than $1,000,000,
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(b) transactions permitted under the "Limitation on Asset Swaps" covenant, (c)
transactions covered by the "Merger, Consolidation and Sale of Assets" covenant,
(d) a Restricted Payment that otherwise qualifies under the "Limitation on
Restricted Payments" covenant, (e) any disposition of obsolete or worn out
equipment or equipment that is no longer useful in the conduct of the business
of the Company and its Subsidiaries and that is disposed of, in each case, in
the ordinary course of business and (f) any transaction that constitutes a
Change of Control. Solely for purposes of the second to last paragraph of
"-- Subsidiary Guarantees of the Senior Subordinated Notes" an Asset Sale is
deemed to include a sale, conveyance or transfer by the Representative following
a foreclosure on such assets.
"Asset Swap" means the execution of a definitive agreement, subject only to
FCC approval, if applicable, and other customary closing conditions that the
Company in good faith believes will be satisfied, for a substantially concurrent
purchase and sale, or exchange, of Productive Assets between the Company or any
of its Restricted Subsidiaries and another Person or group of affiliated
Persons; provided that any amendment to or waiver of any closing condition that
individually or in the aggregate is material to the Asset Swap shall be deemed
to be a new Asset Swap; it being understood that an Asset Swap may include a
cash equalization payment made in connection therewith provided that such cash
payment, if received by the Company or its Subsidiaries, shall be deemed to be
proceeds received from an Asset Sale and shall be applied in accordance with
"Certain Covenants -- Limitation on Asset Sales."
"Business Day" means any day (other than a day which is a Saturday, Sunday
or legal holiday in State of New York) on which banks are open for business in
New York, New York.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated) of capital stock of such Person and (ii) with respect to any Person
that is not a corporation, any and all partnership or other equity interests of
such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligation of
such Person to pay rent or other amounts under a lease to which such Person is a
party that is required to be classified and accounted for as a capital lease
obligation under GAAP, and for purposes of this definition, the amount of such
obligation at any date shall be the capitalized amount of such obligation at
such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, 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 political subdivision 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, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or 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, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from Moody's
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of not
less than $200,000,000; (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (iv)
above; and (vi) investments in money market funds that invest substantially all
their assets in securities of the types described in clauses (i) through (v)
above.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group") (whether or not otherwise in compliance with the
provisions of the Senior Subordinated Notes Indenture), other than to Hicks Muse
or any of its Affiliates, officers or directors (the "Permitted Holders"); or
(ii) a majority of the board of directors of the Company or Holdings shall
consist of Persons who are not Continuing Directors; or (iii) the acquisition by
any Person or Group (other than the
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Permitted Holders or any direct or indirect subsidiary of any Permitted Holder,
including without limitation Holdings) of the power, directly or indirectly, to
vote or direct the voting of securities having more than 50% of the ordinary
voting power for the election of directors of the Company.
"Commodity Agreement" means any commodity futures contract, commodity
option or other similar agreement or arrangement.
"Consolidated Cash Flow" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, (a) all income taxes of such
Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP
for such period (other than income taxes attributable to extraordinary or
nonrecurring gains or losses), (b) Consolidated Interest Expense and (c)
Consolidated Non-Cash Charges, all as determined on a consolidated basis for
such Person and its Restricted Subsidiaries in conformity with GAAP and (iii)
the lesser of (x) dividends or distributions paid in cash to such Person or its
Restricted Subsidiary by another Person whose results are reflected as a
minority interest in the consolidated financial statements of such first Person
and (y) such Person's equity interest in the Consolidated Cash Flow of such
other Person (but in no event less than zero), except, that in the case of the
Joint Venture, (x) such amount shall not exceed 10% of the Consolidated Cash
Flow of the Company for such period and (y) such first Person shall be deemed to
have received by dividend its proportionate share of distributable cash retained
by the Joint Venture to fund the interest reserve.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, the sum of (i) the interest expense of such Person
and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Swap Agreements
(including any amortization of discounts), (c) the interest portion of any
deferred payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance financing or
similar facilities, and (e) all accrued interest and (ii) the interest component
of Capitalized Lease Obligations paid or accrued by such Person and its
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or loss) of such Person and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall be excluded therefrom, without duplication,
(a) gains and losses from Asset Sales (without regard to the $1,000,000
limitation set forth in the definition thereof) or abandonments or reserves
relating thereto and the related tax effects, (b) items classified as
extraordinary or nonrecurring gains and losses, and the related tax effects
according to GAAP, (c) the net income (or loss) of any Person acquired in a
pooling of interests transaction accrued prior to the date it becomes a
Restricted Subsidiary of such first referred to Person or is merged or
consolidated with it or any of its Restricted Subsidiaries, (d) the net income
of any Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is restricted
by contract, operation of law or otherwise, and (e) the net income or loss of
any Person, other than a Restricted Subsidiary; and provided further, however,
that (i) there shall be added to net income in an amount equal to the
consolidated cash flow losses attributable to stations which the Company or any
of its Restricted Subsidiaries operates pursuant to local marketing agreements
provided that such addback shall not exceed $3,000,000 in any Four Quarter
Period and (ii) in determining net income, pro forma effect shall be given to
the reimbursement of promotional expenses as if such reimbursement obligation
were in effect for the entire period with respect to periods ending prior to
March 31, 1999 (but only if such reimbursement obligation is then in effect).
"Consolidated Non-Cash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such person and its Restricted Subsidiaries (excluding any such charges
constituting an extraordinary or nonrecurring item) reducing Consolidated Net
Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
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"Continuing Director" means, as of the date of determination, any Person
who (i) was a member of the board of directors of the Company or Holdings on the
Senior Subordinated Notes Issue Date, (ii) was nominated for election or elected
to the board of directors of the Company or Holdings, as the case may be, with
the affirmative vote of a majority of the Continuing Directors who were members
of such board of directors at the time of such nomination or election or (iii)
is a representative of a Permitted Holder.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) all obligations under the Senior
Credit Facilities and (ii) any other Senior Indebtedness of the Company which,
at the date of determination, has an aggregate principal amount outstanding of,
or under which, at the date of determination, the holders thereof are committed
to lend up to, at least $20,000,000 and is specifically designated by the
Company in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of the Senior Subordinated Notes
Indenture.
"Disposition" means, with respect to any Person, any merger, consolidation
or other business combination involving such Person (whether or not such Person
is the Surviving Person) or the sale, assignment, or transfer, lease, conveyance
or other disposition of all or substantially all of such Person's assets.
"Disqualified Capital Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control), in whole or in part, on or prior to
the final maturity date of the Senior Subordinated Notes; provided that only the
portion of Capital Stock which so matures or is mandatorily redeemable or is so
redeemable at the sole option of the holder thereof prior to March 1, 2008 shall
be deemed Disqualified Capital Stock.
"Equity Offering" means a private sale or public offering of Capital Stock
(other than Disqualified Capital Stock) of the Company or a Holding Company (to
the extent, in the case of a Holding Company, that the net cash proceeds thereof
are contributed to the common or non-redeemable preferred equity capital of the
Company).
"Financial Advisory Agreement" means the Financial Advisory Agreement by
and among the Company, Holdings and Hicks Muse Partners, as in effect on the
Senior Subordinated Notes Issue Date.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of the Senior Subordinated Notes
Indenture, including those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or the Commission or in such other statements by such other
entity as approved by a significant segment of the accounting profession. All
ratios and computations based on GAAP contained in the Senior Subordinated Notes
Indenture shall be computed in conformity with GAAP.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Guarantor" means each of the Company's direct and indirect, existing and
future, Restricted Subsidiaries, other than a Subsidiary organized under the
laws of a jurisdiction other than the United States or any State thereof,
provided that such Subsidiary's assets and principal place of business are
located outside the United States.
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"Guarantor Senior Indebtedness" means, as to any Guarantor, Senior
Indebtedness of such Guarantor, it being understood that for the purpose of this
definition, all references to the Company in the definition of Senior
Indebtedness shall be deemed references to such Guarantor.
"Indebtedness" means with respect to any Person, without duplication, any
liability of such Person (i) for borrowed money, (ii) evidenced by bonds,
debentures, notes or other similar instruments, (iii) constituting Capitalized
Lease Obligations, (iv) incurred or assumed as the deferred purchase price of
property, or pursuant to conditional sale obligations and title retention
agreements (but excluding trade accounts payable arising in the ordinary course
of business), (v) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (vi) for Indebtedness of
others guaranteed by such Person, (vii) for Interest Swap Agreements, Commodity
Agreements and Currency Agreements and (viii) for Indebtedness of any other
Person of the type referred to in clauses (i) through (vii) which is secured by
any Lien on any property or asset of such first referred to Person, the amount
of such Indebtedness being deemed to be the lesser of the value of such property
or asset or the amount of the Indebtedness so secured. The amount of
Indebtedness of any Person at any date shall be (i) the outstanding principal
amount of all unconditional obligations described above, as such amount would be
reflected on a balance sheet prepared in accordance with GAAP, and the maximum
liability at such date of such Person for any contingent obligations described
above, (ii) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount and (iii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Interest Swap Agreements" means any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (in each case, including by way of Guarantee or
similar arrangement, but excluding (i) any debt or extension of credit
represented by a bank deposit other than a time deposit and (ii) advances to
customers in the ordinary course of business) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by such Person. For purposes of the "Limitation on Restricted Payments"
covenant, (A) "Investment" shall include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such
Restricted Subsidiary of the Company at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent "Investment" (if
positive) equal to (1) the Company's "Investment" in such Unrestricted
Subsidiary at the time of such redesignation less (2) the portion (proportionate
to the Company's equity interest in such Unrestricted Subsidiary) of the fair
market value of the net assets of such Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is so redesignated from an Unrestricted Subsidiary
to a Restricted Subsidiary; and (B) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the board of
directors of the Company.
"Leverage Ratio" means, as to any Person, the ratio of (i) the aggregate
outstanding amount of Indebtedness of such Person and its Restricted
Subsidiaries as of the date of calculation on a consolidated basis in accordance
with GAAP plus the aggregate liquidation preference of all Disqualified Capital
Stock of such Person and of all outstanding Preferred Stock of Restricted
Subsidiaries of such Person (other than any such Disqualified Capital Stock or
Preferred Stock held by such Person or any of its Restricted Subsidiaries) to
(ii) the Consolidated Cash Flow of such Person for the four full fiscal quarters
(the "Four Quarter Period") ending on or prior to the date of determination.
For purposes of this definition, the aggregate outstanding principal amount
of Indebtedness of the Person and its Restricted Subsidiaries for which such
calculation is made shall be determined on a pro forma basis as if the
Indebtedness giving rise to the need to perform such calculation had been
incurred and the proceeds therefrom had been applied, and all other transactions
in respect of which such Indebtedness is being incurred
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has occurred, on the last day of the Four Quarter Period. In addition to the
foregoing, for purposes of this definition, "Consolidated Cash Flow" shall be
calculated on a pro forma basis after giving effect to (i) the Transactions,
(ii) the incurrence of the Indebtedness of such Person and its Restricted
Subsidiaries (and the application of the proceeds therefrom) giving rise to the
need to make such calculation and any incurrence (and the application of the
proceeds therefrom) or repayment of other Indebtedness, other than the
incurrence or repayment of Indebtedness pursuant to working capital facilities,
at any time subsequent to the beginning of the Four Quarter Period and on or
prior to the date of determination, as if such incurrence (and the application
of the proceeds thereof), or the repayment, as the case may be, occurred on the
first day of the Four Quarter Period, (iii) any Asset Sales (including those
excluded from the definition thereof by clauses (b), (c) or (d) of the
definition thereof) or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Subsidiaries (including any Person that becomes a
Restricted Subsidiary as a result of such Asset Acquisition) incurring, assuming
or otherwise becoming liable for Indebtedness) or Asset Swaps at any time on or
subsequent to the first day of the Four Quarter Period and on or prior to the
date of determination, as if such Asset Sale, Asset Acquisition (including the
incurrence, assumption or liability for any such Indebtedness and also including
any Consolidated Cash Flow associated with such Asset Acquisition) or Asset Swap
occurred on the first day of the Four Quarter Period and (iv) cost savings
resulting from employee termination, facilities consolidations and closings,
standardization of employee benefits and compensation practices, consolidation
of property, casualty and other insurance coverage and policies, standardization
of sales representation commissions and other contract rates, and reductions in
taxes other than income taxes (collectively, "Cost Savings Measures"), which
cost savings the Company reasonably believes in good faith could have been
achieved during the Four Quarter Period as a result of such Asset Acquisition or
Asset Swap (regardless of whether such cost savings could then be reflected in
pro forma financial statements under GAAP, Regulation S-X promulgated by the
Commission or any other regulation or policy of the Commission), less the amount
of any additional expenses that the Company reasonably estimates would result
from anticipated replacement of any items constituting Cost Savings Measures in
connection with such Asset Acquisitions or Asset Swap; provided, however, that
both (A) such cost savings and Cost Savings Measures were identified and such
cost savings were quantified in an officer's certificate delivered to the Senior
Subordinated Notes Trustee at the time of the consummation of the Asset
Acquisition or Asset Swap and (B) with respect to each Asset Acquisition or
Asset Swap completed prior to the 90th day preceding such date of determination,
actions were commenced or initiated by the Company within 90 days of such Asset
Acquisition or Asset Swap to effect the Cost Savings Measures identified in such
officer's certificate (regardless, however, of whether the corresponding cost
savings have been achieved). Furthermore, in calculating "Consolidated Interest
Expense" for purposes of the calculation of "Consolidated Cash Flow," (i)
interest on Indebtedness determined on a fluctuating basis as of the date of
determination (including Indebtedness actually incurred on the date of the
transaction giving rise to the need to calculate the Leverage Ratio) and which
will continue to be so determined thereafter shall be deemed to have accrued at
a fixed rate per annum equal to the rate of interest on such Indebtedness as in
effect on the date of determination and (ii) notwithstanding (i) above, interest
determined on a fluctuating basis, to the extent such interest is covered by
Interest Swap Agreements, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
"Lien" means, with respect to any asset, any lien, mortgage, deed of trust,
pledge, security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof and any agreement to give any security interest).
"Monitoring and Oversight Agreement" means the Monitoring and Oversight
Agreement by and among the Company, Holdings and Hicks Muse Partners, as in
effect on the Senior Subordinated Notes Issue Date.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents (including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents)
received by the Company or any of its Subsidiaries from such Asset Sale net of
(i) reasonable out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees
and sales commissions, recording fees, relocation costs, title
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insurance premiums, appraisers fees and costs reasonably incurred in preparation
of any asset or property for sale), (ii) taxes paid or reasonably estimated to
be payable (calculated based on the combined state, federal and foreign
statutory tax rates applicable to the Company or the Restricted Subsidiary
engaged in such Asset Sale), (iii) all distributions and other payments required
to be made to any Person owning a beneficial interest in the assets subject to
sale or minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Sale, (iv) any reserves established in accordance with GAAP for
adjustment in respect of the sales price of the asset or assets subject to such
Asset Sale or for any liabilities associated with such Asset Sale and (v)
repayment of Indebtedness secured by assets subject to such Asset Sale;
provided, however, that if the instrument or agreement governing such Asset Sale
requires the transferor to maintain a portion of the purchase price in escrow
(whether as a reserve for adjustment of the purchase price or otherwise) or to
indemnify the transferee for specified liabilities in a maximum specified
amount, the portion of the cash or Cash Equivalents that is actually placed in
escrow or segregated and set aside by the transferor for such indemnification
obligation shall not be deemed to be Net Cash Proceeds until the escrow
terminates or the transferor ceases to segregate and set aside such funds, in
whole or in part, and then only to the extent of the proceeds released from
escrow to the transferor or that are no longer segregated and set aside by the
transferor.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing, or otherwise relating to, any
Indebtedness.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Senior Subordinated Notes Trustee. The counsel may
be an employee of or counsel to the Company or the Senior Subordinated Notes
Trustee.
"Permitted Indebtedness" means, without duplication, (i) Indebtedness
outstanding on the Senior Subordinated Notes Issue Date (including the Senior
Discount Notes); (ii) Indebtedness of the Company and any of its Restricted
Subsidiaries that is a Guarantor (a) outstanding under the Senior Credit
Facilities (including letter of credit obligations); provided that the aggregate
principal amount at any time outstanding does not exceed $570,000,000; provided
that of such amount (x) $125,000,000 may be used under the Delayed Tranche A
Facility only to finance the Grand Rapids Acquisition (and refinancings of such
borrowings) and (y) $225,000,000 may be used under the Incremental Term Facility
only to finance acquisitions of Productive Assets or to make distributions to a
Holding Company to enable a Holding Company to make interest payments on the
Senior Discount Notes (and refinancings of such borrowings) or (b) incurred
under the Senior Credit Facilities pursuant to and in compliance with (x) clause
(v) of this definition or (y) the proviso in the covenant described under the
caption "-- Limitation on Incurrence of Additional Indebtedness and Issuance of
Capital Stock" above; (iii) Indebtedness evidenced by or arising under the
Senior Subordinated Notes and the Senior Subordinated Notes Indenture; (iv)
Interest Swap Agreements, Commodity Agreements and Currency Agreements;
provided, however, that such agreements are entered into for bona fide hedging
purposes and not for speculative purposes; (v) additional Indebtedness of the
Company or any of its Restricted Subsidiaries that is a Guarantor not to exceed
$20,000,000 in principal amount outstanding at any time (which amount may, but
need not, be incurred under the Senior Credit Facilities); (vi) Refinancing
Indebtedness; (vii) Indebtedness owed by the Company to any Restricted
Subsidiary of the Company or by any Restricted Subsidiary of the Company to the
Company or any Restricted Subsidiary of the Company; (viii) guarantees by the
Company or Restricted Subsidiaries of any Indebtedness permitted to be incurred
pursuant to the Senior Subordinated Notes Indenture; (ix) Indebtedness in
respect of performance bonds, bankers' acceptances and surety or appeal bonds
provided by the Company or any of its Restricted Subsidiaries to their customers
in the ordinary course of their business; (x) Indebtedness arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in each case incurred in
connection with the disposition of any business assets or Restricted
Subsidiaries of the Company (other than guarantees of Indebtedness or other
obligations incurred by any Person acquiring all or any portion of such business
assets or Restricted Subsidiaries of the Company for the purpose of financing
such acquisition) in a principal amount not to exceed the gross proceeds
actually received by the Company or any
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of its Restricted Subsidiaries in connection with such disposition; provided,
however, that the principal amount of any Indebtedness incurred pursuant to this
clause (x), when taken together with all Indebtedness incurred pursuant to this
clause (x) and then outstanding, shall not exceed $20,000,000; and (xi)
Indebtedness represented by Capitalized Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property or assets used in a related business or incurred to
refinance any such purchase price or cost of construction or improvement, in
each case incurred no later than 365 days after the date of such acquisition or
the date of completion of such construction or improvement; provided, however,
that the principal amount of any Indebtedness incurred pursuant to this clause
(xi) shall not exceed $7,500,000 at any time outstanding.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company to acquire the stock or assets of any
Person (or Acquired Indebtedness or Acquired Preferred Stock acquired in
connection with a transaction in which such Person becomes a Restricted
Subsidiary of the Company) engaged in the broadcast business or businesses
reasonably related thereto; provided, however, that if any such Investment or
series of related Investments involves an Investment by the Company in excess of
$10,000,000, the Company is able, at the time of such Investment and immediately
after giving effect thereto, to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with the "Limitation on
Incurrence of Additional Indebtedness and Issuance of Capital Stock" covenant,
(ii) Investments received by the Company or its Restricted Subsidiaries as
consideration for a sale of assets made in compliance with the other terms of
the Senior Subordinated Notes Indenture, (iii) Investments by the Company or any
Restricted Subsidiary of the Company in any Restricted Subsidiary of the Company
(whether existing on the Senior Subordinated Notes Issue Date or created
thereafter) or any Person that after such Investments, and as a result thereof,
becomes a Restricted Subsidiary of the Company and Investments in the Company or
any Restricted Subsidiary by any Restricted Subsidiary of the Company, (iv)
Investments in cash and Cash Equivalents, (v) Investments in securities of trade
creditors, wholesalers or customers received pursuant to any plan of
reorganization or similar arrangement, (vi) loans or advances to employees of
the Company or any Restricted Subsidiary thereof for purposes of purchasing the
Company's or a Holding Company's Capital Stock and other loans and advances to
employees made in the ordinary course of business consistent with past practices
of the Company or such Restricted Subsidiary, (vii) Investments in the Sports
Joint Venture made at the time of the initial formation of the Sports Joint
Venture and (viii) additional Investments in an aggregate amount not to exceed
$5,000,000 at any time outstanding.
"Person" means an individual, partnership, corporation, limited liability
company, unincorporated organization, trust or joint venture, or a governmental
agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Productive Assets" means assets of a kind used or usable by the Company
and its Restricted Subsidiaries in the broadcast business or businesses
reasonably related, ancillary or complementary thereto (including any
sports-related business acquired pursuant to the Sports Joint Venture), and
specifically includes assets acquired through Asset Acquisitions (it being
understood that "assets" may include Capital Stock of a Person that owns such
Productive Assets, provided that either (x) such assets consist of ownership
interests in the Sports Joint Venture or (y) after giving effect to such
transaction, such Person would be a Restricted Subsidiary of the Company).
"Public Equity Offering" means an underwritten public offering of Capital
Stock (other than Disqualified Capital Stock) of the Company or a Holding
Company (to the extent, in the case of a Holding Company, that the net cash
proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of the Company), pursuant to an effective registration statement
filed with the Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
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"Refinancing Indebtedness" means any refinancing by the Company of
Indebtedness of the Company or any of its Restricted Subsidiaries incurred in
accordance with the "Limitation on Incurrence of Additional Indebtedness and
Issuance of Capital Stock" covenant (other than pursuant to clause (iii) or (iv)
of the definition of Permitted Indebtedness) that does not (i) result in an
increase in the aggregate principal amount of Indebtedness (such principal
amount to include, for purposes of this definition, any premiums, penalties or
accrued interest paid with the proceeds of the Refinancing Indebtedness) of such
Person or (ii) create Indebtedness with (A) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the Indebtedness
being refinanced or (B) a final maturity earlier than the final maturity of the
Indebtedness being refinanced.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Senior Indebtedness; provided, however, that
if, and for so long as, any issue of Senior Indebtedness lacks such a
representative, then the Representative for such issue of Senior Indebtedness
shall at all times constitute the holders of a majority in outstanding principal
amount of such issue of Senior Indebtedness.
"Restricted Payment" means (i) the declaration or payment of any dividend
or the making of any other distribution (other than dividends or distributions
payable in Qualified Capital Stock or in options, rights or warrants to acquire
Qualified Capital Stock) on shares of the Company's Capital Stock, (ii) the
purchase, redemption, retirement or other acquisition for value of any Capital
Stock of the Company, or any warrants, rights or options to acquire shares of
Capital Stock of the Company, other than through the exchange of such Capital
Stock or any warrants, rights or options to acquire shares of any class of such
Capital Stock for Qualified Capital Stock or warrants, rights or options to
acquire Qualified Capital Stock or (iii) the making of any Investment (other
than a Permitted Investment).
"Restricted Subsidiary" means a Subsidiary of the Company other than an
Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Senior Subordinated Notes Issue Date. The board of directors
of the Company may designate any Unrestricted Subsidiary or any person that is
to become a Subsidiary as a Restricted Subsidiary if immediately after giving
effect to such action (and treating any Acquired Indebtedness as having been
incurred at the time of such action), the Company could have incurred at least
$1.00 of additional indebtedness (other than Permitted Indebtedness) pursuant to
the "Limitation on Incurrence of Additional Indebtedness and Issuance of Capital
Stock" covenant.
"Secured Indebtedness" means any Indebtedness of the Company or a
Restricted Subsidiary secured by a Lien.
"Senior Credit Facilities" means the Senior Credit Facilities, under that
certain Credit Agreement dated as of March 3, 1998, among Holdings, the Company,
The Chase Manhattan Bank, as administrative agent and collateral agent, The Bank
of New York, as syndication agent, National Westminster Bank PLC, as
documentation agent, and the other financial institutions from time to time
party thereto, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including by way of adding Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders (or other
institutions).
"Senior Indebtedness" means, whether outstanding on the Senior Subordinated
Notes Issue Date or thereafter issued, all Indebtedness of the Company,
including interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any
Restricted Subsidiary whether or not a claim for post-filing interest is allowed
in such proceeding) and premium, if any, thereon, and other monetary amounts
(including fees, expenses, reimbursement obligations under letters of credit and
indemnities) owing in respect thereof unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that the obligations in respect of such Indebtedness ranks pari passu with the
Senior Subordinated Notes; provided, however, that Senior Indebtedness will not
include (1) any obligation of the Company to any Restricted Subsidiary, (2) any
liability for federal, state,
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foreign, local or other taxes owed or owing by the Company, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including Guarantees thereof or instruments evidencing such
liabilities) (4) any Indebtedness, Guarantee or obligation of the Company that
is expressly subordinate or junior in right of payment to any other
Indebtedness, Guarantee or obligation of the Company, including any Senior
Subordinated Indebtedness or (5) obligations in respect of any Capital Stock.
"Senior Subordinated Indebtedness" means the Senior Subordinated Notes and
any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Senior Subordinated Notes in right
of payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"Senior Subordinated Notes Issue Date" means the date of original issuance
of the Old Senior Subordinated Notes.
"Significant Restricted Subsidiary" means, at any date of determination,
any Restricted Subsidiary that would be a "significant subsidiary" as defined in
Article I, Rule 1-02 of Regulation S-X, promulgated under the Securities Act of
1933, as amended, as such rule is in effect on the Senior Subordinated Notes
Issue Date.
"Sports Joint Venture" means any Hicks Muse affiliated entity to which the
Company contributes station KXTX-TV and related assets in exchange for a
minority ownership interest therein, cash or a combination thereof.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly through one or more
intermediaries, by such Person or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, through one or more intermediaries, owned by such
Person. Notwithstanding anything in the Senior Subordinated Notes Indenture to
the contrary, all references to the Company and its consolidated Subsidiaries or
to financial information prepared on a consolidated basis in accordance with
GAAP shall be deemed to include the Company and its Subsidiaries as to which
financial statements are prepared on a combined basis in accordance with GAAP
and to financial information prepared on such a combined basis. Notwithstanding
anything in the Senior Subordinated Notes Indenture to the contrary, an
Unrestricted Subsidiary shall not be deemed to be a Restricted Subsidiary for
purposes of the Senior Subordinated Notes Indenture.
"Surviving Person" means, with respect to any Person involved in or that
makes any Disposition, the Person formed by or surviving such Disposition or the
Person to which such Disposition is made.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) that
has become publicly available at least two business days prior to the Change of
Control Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) most nearly equal to the
period from the Change of Control Redemption Date to March 1, 2003; provided,
however, that if the period from the Change of Control Redemption Date to March
1, 2003 is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given except that if the period from the Change of Control
Redemption Date to March 1, 2003 is less than one year, the weekly average yield
on actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.
"Unrestricted Subsidiary" means a Subsidiary of the Company created after
the Issue Date and so designated by a resolution adopted by the board of
directors of the Company; provided, however, that (a) neither the Company nor
any of its other Restricted Subsidiaries (1) provides any credit support for any
Indebtedness or other Obligations of such Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness) or (2) is directly or
indirectly liable for any Indebtedness or other Obligations of such Subsidiary
and (b) at the time of designation of such Subsidiary, such Subsidiary has no
property or
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assets (other than de minimis assets resulting from the initial capitalization
of such Subsidiary). The board of directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (x) the Company could incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
the "Limitation on Incurrence of Additional Indebtedness and Issuance of
Disqualified Capital Stock" covenant and (y) no Default or Event of Default
shall have occurred or be continuing. Any designation pursuant to this
definition by the board of directors of the Company shall be evidenced to the
Senior Subordinated Notes Trustee by the filing with the Senior Subordinated
Notes Trustee of a certified copy of the resolution of the Company's board of
directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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DESCRIPTION OF THE NEW SENIOR DISCOUNT NOTES
GENERAL
The New Senior Discount Notes are to be issued under the indenture, dated
as of March 3, 1998 (the "Senior Discount Notes Indenture"), between Holdings
and United States Trust Company of New York, as trustee (the "Senior Discount
Notes Trustee"), a copy of which is available upon request to Holdings. The Old
Senior Discount Notes were also issued under the Senior Discount Notes
Indenture. The following summary of certain provisions of the Senior Discount
Notes Indenture and the Senior Discount Notes does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Senior Discount Notes Indenture (including the definitions of
certain terms therein and those terms made a part thereof by the Trust Indenture
Act of 1939, as amended) and the Senior Discount Notes. Capitalized terms used
herein and not otherwise defined shall have the meanings given to them in the
Senior Discount Notes Indenture. For definitions of certain terms used in this
section, see "-- Certain Definitions" below.
Principal of, premium, if any, and interest on the Senior Discount Notes
will be payable, and the Senior Discount Notes may be exchanged or transferred,
at the office or agency of Holdings in the Borough of Manhattan, The City of New
York (which initially shall be the corporate trust office of the Senior Discount
Notes Trustee in New York, New York), except that, at the option of Holdings,
payment of interest may be made by check mailed to the address of the holders as
such address appears in the Senior Discount Notes register.
The Senior Discount Notes will be issued in fully registered form only,
without coupons, in denominations of $1,000 (in principal amount at maturity)
and integral multiples thereof. Initially, the Senior Discount Notes Trustee
will act as Paying Agent and Registrar for the Senior Discount Notes. The Senior
Discount Notes may be presented for registration of transfer and exchange at the
offices of the Registrar, which initially will be the Senior Discount Notes
Trustee's corporate trust office. Holdings may change any Paying Agent and
Registrar without notice to holders of the Senior Discount Notes.
PRINCIPAL, MATURITY AND INTEREST
The Senior Discount Notes will be unsecured, senior obligations of Holdings
and will be limited to $325,000,000 aggregate principal amount at maturity, and
will mature on March 1, 2008. The Senior Discount Notes will be issued at a
discount to their aggregate principal amount at maturity and will generate gross
proceeds to Holdings of $199,631,250. Based on the issue price thereof, the
yield to maturity of the Senior Discount Notes is 10.00% (computed on a
semi-annual bond equivalent basis), calculated from the original date of
issuance. Cash interest will not accrue or be payable on the Senior Discount
Notes prior to March 1, 2003. Thereafter, cash interest on the Senior Discount
Notes will accrue at a rate of 10% per annum and will be payable semi-annually
in arrears on March 1 and September 1 of each year, commencing on September 1,
2003 to the holder of record of Senior Discount Notes at the close of business
on February 15 and August 15, respectively, immediately preceding such interest
payment date. Interest on the Senior Discount Notes will accrue from the most
recent interest payment date to which interest has been paid or, if no interest
has been paid, from the date of original issuance. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months.
MANDATORY PRINCIPAL REDEMPTION
Except as described below, Holdings may not redeem the Senior Discount
Notes prior to March 1, 2003. On March 1, 2003, Holdings will be required to
redeem Senior Discount Notes with an aggregate principal amount at maturity
equal to (i) $125.0 million multiplied by (ii) the quotient obtained (other than
Senior Discount Notes then held by Holdings or its Subsidiaries or the entities
with respect to which Holdings is a direct or indirect Subsidiary) by dividing
(x) the aggregate principal amount at maturity of Senior Discount Notes then
outstanding by (y) $325.0 million, (the "Mandatory Principal Redemption Amount")
at a redemption price equal to 100% of the principal amount at maturity of the
Senior Discount Notes so redeemed.
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OPTIONAL REDEMPTION
The Senior Discount Notes may be redeemed at any time on or after March 1,
2003, in whole or in part, at the option of Holdings, at the redemption prices
(expressed as a percentage of the principal amount thereof on the applicable
redemption date) set forth below, plus accrued and unpaid interest, if any, to
the redemption date, if redeemed during the 12-month period beginning on March 1
of each of the years set forth below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003........................................................ 105.000%
2004........................................................ 103.333%
2005........................................................ 101.667%
2006 and thereafter......................................... 100.000%
</TABLE>
In addition, prior to March 1, 2001, Holdings may, at its option, use the
net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount at maturity of the Senior Discount Notes at a redemption price
equal to 110% of the Accreted Value at the date of redemption, provided,
however, that after any such redemption, at least 65% of the aggregate principal
amount at maturity of the Senior Discount Notes originally issued would remain
outstanding immediately after giving effect to such redemption. Any such
redemption will be required to occur on or prior to the date that is one year
after the receipt by Holdings of the proceeds of an Equity Offering. Holdings
shall effect such redemption on a pro rata basis.
In addition, prior to March 1, 2003, Holdings may, at its option, redeem
the Senior Discount Notes upon a Change of Control. See "-- Change of Control."
SELECTION AND NOTICE
If less than all of the Senior Discount Notes are to be redeemed at any
time, selection of Senior Discount Notes for redemption will be made by the
Senior Discount Notes Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Senior Discount
Notes are listed or, in the absence of such requirements or if the Senior
Discount Notes are not so listed, on a pro rata basis, provided that no such
Notes of $1,000 principal amount at maturity or less shall be redeemed in part.
Notice of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each holder of Senior Discount
Notes to be redeemed at its registered address. If any Senior Discount Note is
to be redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed. A new
Senior Discount Note in principal amount at maturity equal to the unredeemed
portion thereof will be issued in the name of the holder thereof upon
cancellation of the original Senior Discount Note. On and after the redemption
date, interest ceases to accrue on Senior Discount Notes or portions of them
called for redemption.
CHANGE OF CONTROL
Change of Control Offer. The Senior Discount Notes Indenture provides that,
upon the occurrence of a Change of Control, each holder will have the right to
require that Holdings purchase all or a portion of such holder's Senior Discount
Notes in cash pursuant to the offer described below (the "Change of Control
Offer"), at a purchase price equal to (a) 101% of the Accreted Value thereof if
redeemed on or before March 1, 2003 and (b) 101% of the principal amount thereof
plus accrued and unpaid interest, if any, thereon, if purchased after March 1,
2003.
Prior to the mailing of the notice referred to below, but in any event
within 30 days following the date on which Holdings becomes aware that a Change
of Control has occurred, if the purchase of the Senior Discount Notes would
violate or constitute a default under any other Indebtedness of Holdings or its
Subsidiaries, or not be permitted by (including because Subsidiaries of Holdings
could not provide adequate funds therefor), then Holdings shall and shall cause
its Subsidiaries, to the extent needed to permit such purchase of Senior
Discount Notes, either (i) to repay all such Indebtedness and terminate all
commitments outstanding thereunder or (ii) to obtain the requisite consents, if
any, under such Indebtedness to permit the purchase of
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the Senior Discount Notes as provided below. Holdings will first comply with the
covenant in the preceding sentence before it will be required to make the Change
of Control Offer or purchase the Senior Discount Notes pursuant to the
provisions described below.
Within 30 days following the date on which Holdings becomes aware that a
Change of Control has occurred, Holdings must send, by first-class mail postage
prepaid, a notice to each holder of Senior Discount Notes, which notice shall
govern the terms of the Change of Control Offer. Such notice shall state, among
other things, the purchase date, which must be no earlier than 30 days nor later
than 45 days from the date such notice is mailed, other than as may be required
by law (the "Change of Control Payment Date"). Holders electing to have any
Senior Discount Notes purchased pursuant to a Change of Control Offer will be
required to surrender such Senior Discount Notes to the Paying Agent and
Registrar for the Senior Discount Notes at the address specified in the notice
prior to the close of business on the business day prior to the Change of
Control Payment Date.
Change of Control Redemption. In addition, the Senior Discount Notes
Indenture provides that, prior to March 1, 2003, upon the occurrence of a Change
of Control, Holdings will have the option to redeem the Senior Discount Notes in
whole but not in part (a "Change of Control Redemption") at a redemption price
equal to 100% of the Accreted Value thereof plus the Applicable Premium. In
order to effect a Change of Control Redemption, Holdings must send a notice to
each holder of Senior Discount Notes, which notice shall govern the terms of the
Change of Control Redemption. Such notice must be mailed to holders of the
Senior Discount Notes within 30 days following the date the Change of Control
occurred (the "Change of Control Redemption Date") and state that Holdings is
effecting a Change of Control Redemption in lieu of a Change of Control Offer.
Holdings will comply with the requirements of Rule 14e-1 under the Exchange
Act to the extent applicable in connection with the purchase of Senior Discount
Notes pursuant to a Change of Control Offer.
These "Change of Control" covenants will not apply in the event of (a)
changes in a majority of the board of directors of the Company or Holdings so
long as a majority of such board of directors continues to consist of Continuing
Directors and (b) certain transactions with Permitted Holders (including Hicks
Muse, its officers and directors, and their respective Affiliates). In addition,
the Change of Control Offer requirement is not intended to afford holders of
Senior Discount Notes protection in the event of certain highly leveraged
transactions, reorganizations, restructurings, mergers and other similar
transactions that might adversely affect the holders of Senior Discount Notes,
but would not constitute a Change of Control. Holdings could, in the future,
enter into certain transactions including certain recapitalizations of Holdings,
that would not constitute a Change of Control with respect to the Change of
Control purchase feature of the Senior Discount Notes, but would increase the
amount of Indebtedness outstanding at such time. However, the Senior Discount
Notes Indenture will contain limitations on the ability of Holdings to incur
additional Indebtedness and to engage in certain mergers, consolidations and
sales of assets, whether or not a Change of Control is involved, subject, in
each case, to limitations and qualifications. See "-- Certain
Covenants -- Limitation on Incurrence of Additional Indebtedness and Issuance of
Capital Stock" and "-- Certain Covenants -- Merger, Consolidation and Sale of
Assets" below.
With respect to the sale of "all or substantially all" the assets of
Holdings, which would constitute a Change of Control for purposes of the Senior
Discount Notes Indenture, the meaning of the phrase "all or substantially all"
varies according to the facts and circumstances of the subject transaction, has
no clearly established meaning under relevant law and is subject to judicial
interpretation. Accordingly, in certain circumstances there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of "all or substantially all" of the assets of Holdings and,
therefore, it may be unclear whether a Change of Control has occurred and
whether the Senior Discount Notes should be subject to a Change of Control
Offer.
The occurrence of certain of the events that would constitute a Change of
Control would constitute a default under the Senior Credit Facilities. Future
Senior Indebtedness of Holdings and its Restricted Subsidiaries may also contain
prohibitions of certain events that would constitute a Change of Control or
require such Senior Indebtedness to be repurchased upon a Change of Control.
Moreover, the exercise by the
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holders of their right to require Holdings to repurchase the Senior Discount
Notes could cause a default under such Senior Indebtedness, even if the Change
of Control itself does not, due to the financial effect of such repurchase on
Holdings. Finally, Holdings' ability to pay cash to the holders upon a
repurchase may be limited by Holdings' then existing financial resources. There
can be no assurance that sufficient funds will be available when necessary to
make any required repurchases. Even if sufficient funds were otherwise
available, the terms of the Senior Credit Facilities may prohibit Holdings'
prepayment of Senior Discount Notes prior to their scheduled maturity.
Consequently, if Holdings is not able to prepay the Indebtedness under the
Senior Credit Facilities and any other Senior Indebtedness containing similar
restrictions or obtain the requisite consents, as described above, Holdings will
be unable to fulfill its repurchase obligations if holders of Senior Discount
Notes exercise their repurchase rights following a Change of Control, thereby
resulting in a default under the Senior Discount Notes Indenture.
None of the provisions in the Senior Discount Notes Indenture relating to a
purchase of Senior Discount Notes upon a Change of Control is waivable by the
board of directors of Holdings. Without the consent of each holder of Senior
Discount Notes affected thereby, after the mailing of the notice of a Change of
Control Offer, no amendment to the Senior Discount Notes Indenture may, directly
or indirectly, affect Holdings' obligation to purchase the outstanding Senior
Discount Notes or amend, modify or change the obligation of Holdings to
consummate a Change of Control Offer or waive any default in the performance
thereof or modify any of the provisions of the definitions with respect to any
such offer.
GUARANTEES OF THE SENIOR DISCOUNT NOTES
The Senior Discount Notes will not be guaranteed by any present or future
Subsidiaries of Holdings. See "Risk Factors -- Ranking of the Notes and
Guarantees."
CERTAIN COVENANTS
Limitation on Incurrence of Additional Indebtedness and Issuance of Capital
Stock. The Senior Discount Notes Indenture provides that (a) Holdings will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, incur any Indebtedness (other than Permitted Indebtedness) and
Holdings will not issue any Disqualified Capital Stock and its Restricted
Subsidiaries will not issue any Preferred Stock (except Preferred Stock issued
to Holdings or a Restricted Subsidiary of Holdings so long as it is so held);
provided, however, that Holdings and its Restricted Subsidiaries may incur
Indebtedness or issue shares of such Capital Stock if, in either case, Holdings'
Leverage Ratio at the time of incurrence of such Indebtedness or the issuance of
such Capital Stock, as the case may be, after giving pro forma effect to such
incurrence or issuance as of such date and to the use of proceeds therefrom is
less than 8.75 to 1 and, provided further, that if such Indebtedness is
Indebtedness of Holdings, such Indebtedness is pari passu with the Senior
Discount Notes as to right of payment and such Indebtedness shall not have the
benefit of any security except to the extent that the New Senior Discount Notes
are equally and ratably secured therewith.
(b) Holdings will not incur or suffer to exist, or permit any of its
Subsidiaries to incur or suffer to exist, any Obligations with respect to an
Unrestricted Subsidiary that would violate the provisions set forth in the
definition of Unrestricted Subsidiary.
Limitation on Restricted Payments. The Senior Discount Notes Indenture
provides that: (a) Holdings will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment
if at the time of such Restricted Payment and immediately after giving effect
thereto:
(i) a Default or Event of Default shall have occurred; or
(ii) Holdings would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with the "Limitation on
Incurrence of Additional Indebtedness and Issuance of Capital Stock"
covenant; or
(iii) the aggregate amount of Restricted Payments made subsequent to
the Senior Discount Notes Issue Date (the amount expended for such
purposes, if other than in cash, being the fair market value of such
property as determined by the board of directors of Holdings in good faith)
exceeds the sum of
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(a) (x) 100% of the aggregate Consolidated Cash Flow of Holdings (or, in
the event such Consolidated Cash Flow shall be a deficit, minus 100% of
such deficit) accrued subsequent to the Senior Discount Notes Issue Date to
the most recent date for which financial information is available to
Holdings, taken as one accounting period, less (y) 1.4 times Consolidated
Interest Expense for the same period, plus (b) 100% of the aggregate net
proceeds, including the fair market value of property other than cash as
determined by the board of directors of the Company in good faith, received
subsequent to the Senior Discount Notes Issue Date by Holdings from any
Person (other than a Restricted Subsidiary of Holdings) from the issuance
and sale subsequent to the Senior Discount Notes Issue Date of Qualified
Capital Stock of Holdings (excluding (i) any net proceeds from issuances
and sales financed directly or indirectly using funds borrowed from
Holdings or any Restricted Subsidiary of Holdings, until and to the extent
such borrowing is repaid, but including the proceeds from the issuance and
sale of any securities convertible into or exchangeable for Qualified
Capital Stock to the extent such securities are so converted or exchanged
and including any additional proceeds received by Holdings upon such
conversion or exchange and (ii) any net proceeds received from issuances
and sales that are used to consummate a transaction described in clause (2)
of paragraph (b) below), plus (c) without duplication of any amount
included in clause (iii)(b) above, 100% of the aggregate net proceeds,
including the fair market value of property other than cash (valued as
provided in clause (iii)(b) above), received by Holdings as a capital
contribution subsequent to the Senior Discount Notes Issue Date, plus (d)
the amount equal to the net reduction in Investments (other than Permitted
Investments) made by Holdings or any of its Restricted Subsidiaries in any
Person resulting from, and without duplication, (i) repurchases or
redemptions of such Investments by such Person, proceeds realized upon the
sale of such Investment to an unaffiliated purchaser and repayments of
loans or advances or other transfers of assets by such Person to Holdings
or any Restricted Subsidiary of Holdings or (ii) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case
as provided in the definition of "Investment") not to exceed, in the case
of any Restricted Subsidiary, the amount of Investments previously made by
Holdings or any Restricted Subsidiary in such Unrestricted Subsidiary,
which amount was included in the calculation of Restricted Payments;
provided, however, that no amount shall be included under this clause (d)
to the extent it is already included in Consolidated Cash Flow, plus (e)
the aggregate net cash proceeds received by a Person in consideration for
the issuance of such Person's Capital Stock (other than Disqualified
Capital Stock) that are held by such Person at the time such Person is
merged with and into the Company in accordance with the "Merger,
Consolidation and Sale of Assets" covenant subsequent to the Senior
Discount Notes Issue Date; provided, however, that concurrently with or
immediately following such merger the Company uses an amount equal to such
net cash proceeds to redeem or repurchase the Company's Capital Stock, plus
(f) $15,000,000.
(b) Notwithstanding the foregoing, these provisions do not prohibit: (1)
the payment of any dividend or the making of any distribution within 60 days
after the date of its declaration if such dividend or distribution would have
been permitted on the date of declaration; (2) the purchase, redemption or other
acquisition or retirement of any Capital Stock of Holdings or any warrants,
options or other rights to acquire shares of any class of such Capital Stock
either (x) solely in exchange for shares of Qualified Capital Stock or other
rights to acquire Qualified Capital Stock or (y) through the application of the
net proceeds of a substantially concurrent sale for cash (other than to a
Restricted Subsidiary of Holdings) of shares of Qualified Capital Stock or
warrants, options or other rights to acquire Qualified Capital Stock or (z) in
the case of Disqualified Capital Stock, solely in exchange for, or through the
application of the net proceeds of a substantially concurrent sale for cash
(other than to a Restricted Subsidiary of Holdings) of, Disqualified Capital
Stock; (3) payments made pursuant to any merger, consolidation or sale of assets
effected in accordance with the "Merger, Consolidation and Sale of Assets"
covenant; provided, however, that no such payment may be made pursuant to this
clause (3) unless, after giving effect to such transaction (and the incurrence
of any Indebtedness in connection therewith and the use of the proceeds
thereof), Holdings would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with the "Limitation on
Incurrence of Additional Indebtedness and Issuance of Capital Stock" covenant
such that after incurring that $1.00 of Additional Indebtedness, the Leverage
Ratio would be less than 7.75 to 1; (4) payments to enable Holdings or any
holding company as to which Holdings is, directly or indirectly, a Restricted
Subsidiary (a
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"Holding Company") to pay dividends on its Capital Stock (other than
Disqualified Capital Stock) after the first Public Equity Offering in an annual
amount not to exceed 6.0% of the gross proceeds (before deducting underwriting
discounts and commissions and other fees and expenses of the offering) received
from shares of Capital Stock (other than Disqualified Capital Stock) sold for
the account of the issuer thereof (and not for the account of any stockholder)
in such initial Public Equity Offering; (5) payments by Holdings to fund the
payment by any Holding Company of audit, accounting, legal or other similar
expenses, to pay franchise or other similar taxes and to pay other corporate
overhead expenses, so long as such dividends are paid as and when needed by its
respective direct or indirect Holding Company and so long as the aggregate
amount of payments pursuant to this clause (5) does not exceed $1,000,000 in any
calendar year; (6) payments by Holdings to repurchase, or to enable a Holding
Company to repurchase, Capital Stock or other securities from employees of the
Company or a Holding Company in an aggregate amount not to exceed $15,000,000;
(7) payments by Holdings to redeem or repurchase or to enable a Holding Company
to redeem or repurchase stock purchase or similar rights granted by Holdings
with respect to its Capital Stock in an aggregate amount not to exceed $500,000;
(8) payments, not to exceed $200,000 in the aggregate, to enable Holdings or a
Holding Company to make cash payments to holders of its Capital Stock in lieu of
the issuance of fractional shares of its Capital Stock; (9) payments by Holdings
to fund taxes of a Holding Company for a given taxable year in an amount equal
to Holdings' "separate return liability," as if the Company were the parent of a
consolidated group (for purposes of this clause (9) "separate return liability"
for a given taxable year shall mean the hypothetical United States tax liability
of Holdings defined as if Holdings had filed its own U.S. federal tax return for
such taxable year); and (10) payments by Holdings to Hicks Muse Partners in
accordance with the terms of the Financial Advisory Agreement and the Monitoring
and Oversight Agreement; provided, however, that in the case of clauses (3),
(4), (6), (7) and (8), no Event of Default shall have occurred or be continuing
at the time of such payment or as a result thereof. In determining the aggregate
amount of Restricted Payments made subsequent to the Senior Discount Notes Issue
Date, amounts expended pursuant to clauses (1), (4), (6), (7) and (8) shall be
included in such calculation.
Merger, Consolidation and Sale of Assets. The Senior Discount Notes
Indenture provides that Holdings shall not, in a single transaction or a series
of related transactions, consolidate with or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets to, another Person or adopt a plan of liquidation unless (i)
either (1) Holdings is the surviving Person or (2) the Person (if other than
Holdings) formed by such consolidation or into which Holdings is merged or the
person that acquires by conveyance, transfer or lease the properties and assets
of Holdings substantially as an entirety or in the case of a plan of
liquidation, the Person to which assets of Holdings have been transferred, shall
be a corporation, partnership, limited liability company or trust organized and
existing under the laws of the United States or any State thereof or the
District of Columbia; (ii) such surviving person shall assume all of the
obligations of Holdings under the Senior Discount Notes and the Senior Discount
Notes Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Senior Discount Notes Trustee; (iii) immediately after
giving effect to such transaction and the use of the proceeds therefrom (on a
pro forma basis, including giving effect to any Indebtedness incurred or
anticipated to be incurred in connection with such transaction), (1) no Default
or Event of Default shall have occurred and be continuing and (2) Holdings (in
the case of clause (1) of the foregoing clause (i)) or such Person (in the case
of clause (2) of the foregoing clause (i)) shall have a Leverage Ratio that
would be less than 8.75 to 1; and (iv) Holdings has delivered to the Senior
Discount Notes Trustee prior to the consummation of the proposed transaction an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with the Senior Discount Notes
Indenture and that all conditions precedent in the Senior Discount Notes
Indenture relating to such transaction have been satisfied. For purposes of the
foregoing, the transfer (by lease, assignment, sale or otherwise, in a single
transaction or series of related transactions) of all or substantially all of
the properties and assets of one or more Restricted Subsidiaries, the Capital
Stock of which constitutes all or substantially all of the properties or assets
of Holdings, will be deemed to be the transfer of all or substantially all of
the properties and assets of Holdings. Notwithstanding the foregoing clauses
(ii) and (iii), (1) any Restricted Subsidiary of Holdings may consolidate with,
merge into or transfer all or part of its properties and assets to Holdings and
(2) Holdings may merge with an Affiliate thereof organized solely for the
purpose of reorganizing Holdings in another jurisdiction in the U.S. to realize
tax or other benefits.
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In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraph in
which Holdings, as the case may be, is not the Surviving Person and the
Surviving Person is to assume all the obligations of Holdings under the Senior
Discount Notes and the Senior Discount Notes Indenture pursuant to a
supplemental indenture, such Surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of Holdings, as the case
may be, and Holdings shall be discharged from its Obligations under the Senior
Discount Notes Indenture and the Senior Discount Notes.
Limitation on Asset Sales. The Senior Discount Notes Indenture provides
that Holdings will not, and will not permit any of its Restricted Subsidiaries
to, consummate an Asset Sale unless (i) Holdings or the applicable Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the fair market value of the assets sold or otherwise
disposed of (as determined in good faith by management of Holdings or, if such
Asset Sale involves consideration in excess of $10,000,000, by the board of
directors of Holdings, as evidenced by a board resolution), (ii) at least 75% of
the consideration received by Holdings or such Restricted Subsidiary, as the
case may be, from such Asset Sale is in the form of cash or Cash Equivalents and
is received at the time of such disposition and (iii) upon the consummation of
an Asset Sale, Holdings applies, or causes such Restricted Subsidiary to apply,
such Net Cash Proceeds within 180 days of receipt thereof either (A) to repay
any Indebtedness of a Restricted Subsidiary of Holdings (and, to the extent such
Indebtedness relates to principal under a revolving credit or similar facility,
to obtain a corresponding reduction in the commitments thereunder, except that
the Company may temporarily repay Senior Indebtedness using the Net Cash
Proceeds from such Asset Sale and thereafter use such funds to reinvest pursuant
to clause (B) below within the period set forth therein without having to obtain
a corresponding reduction in the commitments thereunder), (B) to reinvest, or to
be contractually committed to reinvest pursuant to a binding agreement, in
Productive Assets and, in the latter case, to have so reinvested within 360 days
of the date of receipt of such Net Cash Proceeds or (C) to purchase Senior
Discount Notes tendered to Holdings for purchase at a price equal to (a) 101% of
the Accreted Value thereof if redeemed on or before March 1, 2003, and (b) 100%
of the principal amount thereof plus accrued interest thereon, if any, if
redeemed after March 1, 2003, pursuant to an offer to purchase made by Holdings
as set forth below (a "Net Proceeds Offer"); provided, however, that Holdings
may defer making a Net Proceeds Offer until the aggregate Net Cash Proceeds from
Asset Sales not otherwise applied in accordance with this covenant equal or
exceed $15,000,000. To the extent that the aggregate principal amount of Senior
Discount Notes tendered pursuant to any Net Proceeds Offer is less than the
amount of Net Cash Proceeds subject to such Net Proceeds Offer, Holdings may use
any remaining portion of such Net Cash Proceeds not required to fund the
repurchase of tendered Senior Discount Notes for any purposes not otherwise
prohibited by the Senior Discount Notes Indenture. Upon the consummation of any
Net Proceeds Offer, the amount of Net Cash Proceeds subject to any future Net
Proceeds Offer from the Asset Sales giving rise to such Net Cash Proceeds shall
be deemed to be zero.
Holdings will comply with the requirements of Rule 14e-1 under the Exchange
Act to the extent applicable in connection with the repurchase of Senior
Discount Notes pursuant to a Net Proceeds Offer.
Limitation on Asset Swaps. The Senior Discount Notes Indenture provides
that Holdings will not, and will not permit any Restricted Subsidiary to, engage
in any Asset Swap, unless: (i) at the time of entering into such Asset Swap, and
immediately after giving effect to such Asset Swap, no Default or Event of
Default shall have occurred and be continuing, (ii) in the event such Asset Swap
involves an aggregate amount in excess of $10,000,000, the terms of such asset
Swap have been approved by a majority of the members of the board of directors
of Holdings and (iii) in the event such Asset Swap involves an aggregate amount
in excess of $50,000,000, Holdings has received a written opinion from an
independent investment banking firm of nationally recognized standing that such
Asset Swap is fair to Holdings or such Restricted Subsidiary, as the case may
be, from a financial point of view.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Senior Discount Notes Indenture provides that Holdings will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause to permit to exist or become effective, by
operation of the charter of such Restricted Subsidiary or by reason of any
agreement, instrument, judgment,
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decree, rule, order, statute or governmental regulation, any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends or
make any other distributions on its Capital Stock; (b) make loans or advances or
pay any Indebtedness or other obligation owed to Holdings or any of its
Restricted Subsidiaries; or (c) transfer any of its property or assets to
Holdings, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) the Senior Discount Notes Indenture; (3)
customary non-assignment provisions of any lease governing a leasehold interest
of Holdings or any Restricted Subsidiary; (4) any instrument governing Acquired
Indebtedness or Acquired Preferred Stock, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired; (5)
agreements existing on the Senior Discount Notes Issue Date (including the
Senior Subordinated Notes and the Credit Agreement) as such agreements are from
time to time in effect; provided, however, that any amendments or modifications
of such agreements that affect the encumbrances or restrictions of the types
subject to this covenant shall not result in such encumbrances or restrictions
being less favorable to Holdings in any material respect, as determined in good
faith by the board of directors of Holdings, than the provisions as in effect
before giving effect to the respective amendment or modification; (6) any
restriction with respect to such a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
the Capital Stock or assets of such Restricted Subsidiary pending the closing of
such sale or disposition; (7) an agreement effecting a refinancing, replacement
or substitution of Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clause (2), (4) or (5) above or any other agreement
evidencing Indebtedness permitted under the Senior Discount Notes Indenture;
provided, however, that the provisions relating to such encumbrance or
restriction contained in any such refinancing, replacement or substitution
agreement or any such other agreement are no less favorable to Holdings in any
material respect as determined in good faith by the board of directors of
Holdings than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (2), (4) or (5); (8)
restrictions on the transfer of the assets subject to any Lien imposed by the
holder of such Lien; (9) a licensing agreement to the extent such restrictions
or encumbrances limit the transfer of property subject to such licensing
agreement; (10) restrictions relating to Subsidiary Preferred Stock that require
that due and payable dividends thereon to be paid in full prior to dividends on
such Subsidiary's common stock; or (11) any agreement or charter provision
evidencing Indebtedness or Capital Stock permitted under the Senior Discount
Notes Indenture; provided, however, that the provisions relating to such
encumbrance or restriction contained in such agreement or charter provision are
not less favorable to Holdings in any material respect as determined in good
faith by the board of directors of Holdings than the provisions relating to such
encumbrance or restriction contained in the Senior Discount Notes Indenture.
Limitations on Transactions with Affiliates. The Senior Discount Notes
Indenture provides that Holdings will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease,
contribution or exchange of any property or the rendering of any service) with
or for the benefit of any of its Affiliates (other than transactions between
Holdings and a Restricted Subsidiary of Holdings or among Restricted
Subsidiaries of Holdings) (an "Affiliate Transaction"), other than Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction on an arm's-length
basis from a person that is not an Affiliate; provided, however, that for a
transaction or series of related transactions involving value of $5,000,000 or
more, such determination will be made in good faith by a majority of members of
the board of directors of Holdings and by a majority of the disinterested
members of the board of directors of Holdings, if any; provided, further, that
for a transaction or series of related transactions involving value of
$15,000,000 or more, the board of directors of Holdings has received an opinion
from an independent investment banking firm of nationally recognized standing
that such Affiliate Transaction is fair, from a financial point of view, to
Holdings or such Restricted Subsidiary. The foregoing restrictions will not
apply to (1) reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder; (2) any obligations of Holdings
under any employment agreement, noncompetition or confidentiality agreement with
any officer of Holdings as in effect on the Senior Discount Notes Issue Date
(provided that each amendment of any of the foregoing agreements shall be
subject to the limitations of this covenant); (3) any Restricted Payment
permitted to be made pursuant to the covenant described under "Limitation on
Restricted
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Payments"; (4) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the board of
directors of Holdings; (5) loans or advances to employees in the ordinary course
of business of Holdings or any of its Restricted Subsidiaries consistent with
past practices; (6) payments made in connection with the Transaction and the
Grand Rapids Acquisition, including, without limitation, fees to Hicks Muse, as
described in the Prospectus; and (7) payments by Holdings to Hicks Muse Partners
in accordance with the terms of the Financial Advisory Agreement and the
Monitoring and Oversight Agreement.
Reports. The Senior Discount Notes Indenture provides that so long as any
of the Senior Discount Notes are outstanding, Holdings will provide to the
Senior Discount Notes Trustee and the holders of Senior Discount Notes and file
with the Commission, to the extent such submissions are accepted for filing by
the Commission, copies of the annual reports and of the information, documents
and other reports that Holdings would have been required to file with the
Commission pursuant to Sections 13 or 15(d) of the Exchange Act of 1934, as
amended (the "Exchange Act"), regardless of whether Holdings is then obligated
to file such reports.
EVENTS OF DEFAULT
The following events are defined in the Senior Discount Notes Indenture as
"Events of Default": (i) the failure to pay interest on the Senior Discount
Notes when the same becomes due and payable and the Default continues for a
period of 30 days; (ii) the failure to pay principal of or premium, if any, on
any Senior Discount Notes when such principal or premium, if any, becomes due
and payable, at maturity, upon redemption or otherwise; (iii) a default in the
observance or performance of any other covenant or agreement contained in the
Senior Discount Notes or the Senior Discount Notes Indenture, which default
continues for a period of 30 days after Holdings receives written notice thereof
specifying the default from the Senior Discount Notes Trustee or holders of at
least 25% in aggregate principal amount of outstanding Senior Discount Notes;
(iv) the failure to pay at the stated maturity (giving effect to any extensions
thereof) the principal amount of any Indebtedness of Holdings or any Restricted
Subsidiary of Holdings, or the acceleration of the final stated maturity of any
such Indebtedness, if the aggregate principal amount of such Indebtedness,
together with the aggregate principal amount of any other such Indebtedness in
default for failure to pay principal at the final stated maturity (giving effect
to any extensions thereof) or which has been accelerated, aggregates $10,000,000
or more at any time in each case after a 10-day period during which such default
shall not have been cured or such acceleration rescinded; (v) one or more
judgments in an aggregate amount in excess of $15,000,000 (which are not covered
by insurance as to which the insurer has not disclaimed coverage) being rendered
against Holdings or any of its Significant Restricted Subsidiaries and such
judgment or judgments remain undischarged or unstayed for a period of 60 days
after such judgment or judgments become final and nonappealable; (vi) Holdings
ceasing for any reason to own directly all of the outstanding capital stock
(including shares issuable upon conversion or exchange of other instruments or
obligations) of the Company; and (vii) certain events of bankruptcy, insolvency
or reorganization affecting Holdings or any of its Significant Restricted
Subsidiaries.
Upon the happening of any Event of Default specified in the Senior Discount
Notes Indenture, the Senior Discount Notes Trustee may, and the Senior Discount
Notes Trustee upon the request of holders of 25% in principal amount at maturity
of the outstanding Senior Discount Notes shall, or the holders of at least 25%
in principal amount at maturity of outstanding Senior Discount Notes may,
declare (a) the Accreted Value of all the Senior Discount Notes, if on or before
March 1, 2003, and (b) the principal amount of all the Senior Discount Notes,
together with all accrued and unpaid interest and premium, if any, if after
March 1, 2003, to be due and payable by notice in writing to Holdings and the
Senior Discount Notes Trustee specifying the respective Event of Default and
that it is a "notice of acceleration" (the "Acceleration Notice"), and the same
shall become immediately due and payable. If an Event of Default with respect to
bankruptcy proceedings relating to Holdings or any Significant Restricted
Subsidiaries occurs and is continuing, then such amount will ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Senior Discount Notes Trustee or any holder of the Senior Discount
Notes.
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At any time after a declaration of acceleration with respect to the Senior
Discount Notes as described in the preceding paragraph, the holders of a
majority in principal amount at maturity of the Senior Discount Notes then
outstanding (by notice to the Senior Discount Notes Trustee) may rescind and
cancel such declaration and its consequences if (i) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction, (ii)
all existing Defaults and Events of Default have been cured or waived except
nonpayment of principal of or interest on the Senior Discount Notes that has
become due solely by such declaration of acceleration, (iii) to the extent the
payment of such interest is lawful, interest (at the same rate specified in the
Senior Discount Notes) on overdue installments of interest and overdue payments
of principal, which has become due otherwise than by such declaration of
acceleration has been paid, (iv) Holdings has paid the Senior Discount Notes
Trustee its reasonable compensation and reimbursed the Senior Discount Notes
Trustee for its reasonable expenses, disbursements and advances and (v) in the
event of the cure or waiver of a Default or Event of Default of the type
described in clause (vi) of the first paragraph of "-- Events of Default" above,
the Senior Discount Notes Trustee has received an Officers' Certificate and
Opinion of Counsel that such Default or Event of Default has been cured or
waived. The holders of a majority in principal amount at maturity of the Senior
Discount Notes may waive any existing Default or Event of Default under the
Senior Discount Notes Indenture, and its consequences, except a default in the
payment of the principal of or interest on any Senior Discount Notes.
Holdings is required to deliver to the Senior Discount Notes Trustee,
within 120 days after the end of Holdings' fiscal year, a certificate indicating
whether the signing officers know of any Default or Event of Default that
occurred during the previous year and whether Holdings has complied with its
obligations under the Senior Discount Notes Indenture. In addition, Holdings
will be required to notify the Senior Discount Notes Trustee of the occurrence
and continuation of any Default or Event of Default promptly after Holdings
becomes aware of the same.
Subject to the provisions of the Senior Discount Notes Indenture relating
to the duties of the Senior Discount Notes Trustee in case an Event of Default
thereunder should occur and be continuing, the Senior Discount Notes Trustee
will be under no obligation to exercise any of the rights or powers under the
Senior Discount Notes Indenture at the request or direction of any of the
holders of the Senior Discount Notes unless such holders have offered to the
Senior Discount Notes Trustee reasonable indemnity or security against any loss,
liability or expense. Subject to such provision for security or indemnification
and certain limitations contained in the Senior Discount Notes Indenture, the
holders of a majority in principal amount at maturity of the outstanding Senior
Discount Notes have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Senior Discount Notes Trustee or
exercising any trust or power conferred on the Senior Discount Notes Trustee.
SATISFACTION AND DISCHARGE OF SENIOR DISCOUNT NOTES INDENTURE; DEFEASANCE
Holdings may terminate its obligations under the Senior Discount Notes
Indenture at any time by delivering all outstanding Senior Discount Notes to the
Senior Discount Notes Trustee for cancellation and paying all sums payable by it
thereunder. Holdings, at its option, (i) will be discharged from any and all
obligations with respect to the Senior Discount Notes (except for certain
obligations of Holdings to register the transfer or exchange of such Senior
Discount Notes, replace stolen, lost or mutilated Senior Discount Notes,
maintain paying agencies and hold moneys for payment in trust) or (ii) need not
comply with certain of the restrictive covenants with respect to the Senior
Discount Notes Indenture, if Holdings deposits with the Senior Discount Notes
Trustee, in trust, U.S. legal tender or U.S. Government Obligations or a
combination thereof that, through the payment of interest and premium thereon
and principal in respect thereof in accordance with their terms, will be
sufficient to pay all the principal of and interest and premium on the Senior
Discount Notes on the dates such payments are due or through any date of
redemption, if earlier than the dates such payments are due, in any case in
accordance with the terms of such Senior Discount Notes, as well as the Senior
Discount Notes Trustee's fees and expenses. To exercise either such option,
Holdings is required to deliver to the Senior Discount Notes Trustee (A) an
Opinion of Counsel or a private letter ruling issued to Holdings by the Internal
Revenue Service (the "IRS") to the effect that the holders of the Senior
Discount Notes will not recognize income, gain or loss for federal income tax
purposes as a result of the
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deposit and related defeasance and will be subject to federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such option had not been exercised and, in the case of an Opinion of
Counsel furnished in connection with a discharge pursuant to clause (i) above,
accompanied by a private letter ruling issued to Holdings by the IRS to such
effect, (B) subject to certain qualifications, an opinion of counsel to the
effect that funds so deposited will not be subject to avoidance under applicable
bankruptcy law and (C) an Officers' Certificate and an Opinion of Counsel to the
effect that Holdings has complied with all conditions precedent to the
defeasance. Notwithstanding the foregoing, the Opinion of Counsel required by
clause (A) above need not be delivered if all Senior Discount Notes not
theretofore delivered to the Senior Discount Notes Trustee for cancellation (i)
have become due and payable, (ii) will become due and payable on the maturity
date within one year or (iii) are to be called for redemption within one year
under arrangements satisfactory to the Senior Discount Notes Trustee for the
giving of notice of redemption by the Senior Discount Notes Trustee in the name,
and at the expense, of Holdings.
MODIFICATION OF THE SENIOR DISCOUNT NOTES INDENTURE
From time to time, Holdings and the Senior Discount Notes Trustee,
together, without the consent of the holders of the Senior Discount Notes, may
amend or supplement the Senior Discount Notes Indenture for certain specified
purposes, including curing ambiguities, defects or inconsistencies. Other
modifications and amendments of the Senior Discount Notes Indenture may be made
with the consent of the holders of a majority in principal amount at maturity of
the then outstanding Senior Discount Notes, except that, without the consent of
each holder of the Senior Discount Notes affected thereby, no amendment may,
directly or indirectly: (i) reduce the amount of Senior Discount Notes whose
holders must consent to an amendment; (ii) reduce the rate of or change the time
for payment of interest, including defaulted interest, on any Senior Discount
Notes; (iii) reduce the principal of or change the fixed maturity of any Senior
Discount Notes, or change the date on which any Senior Discount Notes may be
subject to redemption or repurchase, or reduce the redemption or repurchase
price therefor; (iv) make any Senior Discount Notes payable in money other than
that stated in the Senior Discount Notes and the Senior Discount Notes
Indenture; (v) make any change in provisions of the Senior Discount Notes
Indenture protecting the right of each holder of a Senior Discount Note to
receive payment of principal of, premium on and interest on such Senior Discount
Note on or after the due date thereof or to bring suit to enforce such payment
or permitting holders of a majority in principal amount of the Senior Discount
Notes to waive a Default or Event of Default; or (vi) after Holdings' obligation
to purchase the Senior Discount Notes arises under the Senior Discount Notes
Indenture, amend, modify or change the obligation of Holdings to make or
consummate a Change of Control Offer or a Net Proceeds Offer or waive any
default in the performance thereof or modify any of the provisions or
definitions with respect to any such offers.
CONCERNING THE SENIOR DISCOUNT NOTES TRUSTEE
The Senior Discount Notes Indenture contains certain limitations on the
rights of the Senior Discount Notes Trustee, should it become a creditor of
Holdings, to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
Senior Discount Notes Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest, it must eliminate such
conflict within 90 days, apply to the Commission for permission to continue or
resign.
The holders of a majority in principal amount of the then outstanding
Senior Discount Notes will have the right to direct the time, method and place
of conducting any proceeding for exercising any remedy available to the Senior
Discount Notes Trustee, subject to certain exceptions. The Senior Discount Notes
Indenture provides that in case an Event of Default shall occur (which shall not
be cured), the Senior Discount Notes Trustee will be required, in the exercise
of its power, to use the degree of care of a prudent person in the conduct of
such person's own affairs. Subject to such provisions, the Senior Discount Notes
Trustee will be under no obligation to exercise any of its rights or powers
under the Senior Discount Notes Indenture at the request of any holder of Senior
Discount Notes, unless such holder shall have offered to the Senior Discount
Notes Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
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GOVERNING LAW
The Senior Discount Notes Indenture provides that it and the Senior
Discount Notes will be governed by, and construed in accordance with, the laws
of the State of New York without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Senior Discount Notes Indenture. Reference is made to the Senior Discount Notes
Indenture for the full definition of all such terms, as well as any other terms
used herein for which no definition is provided.
"Accreted Value" as of any date (the "Specified Date") means, with respect
to each $1,000 principal amount at maturity of Senior Discount Notes:
(i) if the Specified Date is one of the following dates (each a
"Semi-Annual Accretion Date"), the amount set forth opposite such date below:
<TABLE>
<CAPTION>
ACCRETED
SEMI-ANNUAL ACCRETION DATE VALUE
-------------------------- ---------
<S> <C>
Issue Date.................................................. $ 614.25
September 1, 1998........................................... 644.61
March 1, 1999............................................... 676.84
September 1, 1999........................................... 710.68
March 1, 2000............................................... 746.22
September 1, 2000........................................... 783.53
March 1, 2001............................................... 822.70
September 1, 2001........................................... 863.84
March 1, 2002............................................... 907.03
September 1, 2002........................................... 952.38
March 1, 2003............................................... $1,000.00
</TABLE>
(ii) if the Specified Date occurs between two Semi-Annual Accretion Dates,
the sum of (a) the Accreted Value for the Semi-Annual Accretion Date immediately
preceding the Specified Date and (b) an amount equal to the product of (x) the
Accreted Value for the immediately following Semi-Annual Accretion Date less the
Accreted Value for the immediately preceding Semi-Annual Accretion Date and (y)
a fraction, the numerator of which is the number of days actually elapsed from
the immediately preceding Semi-Annual Accretion Date to the Specified Date and
the denominator of which is 180, and
(iii) if the Specified date is after March 1, 2003, $1000.00.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of Holdings or at the time it merges or consolidates with Holdings or
any of its Restricted Subsidiaries or assumed in connection with the acquisition
of assets from such Person and not incurred by such Person in connection with,
or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of Holdings or such acquisition, merger or consolidation.
"Acquired Preferred Stock" means the Preferred Stock of any Person at such
time as such Person becomes a Restricted Subsidiary of Holdings or at the time
it merges or consolidates with Holdings or any of its Restricted Subsidiaries
and not issued by such Person in connection with, or in anticipation or
contemplation of, such acquisition, merger or consolidation.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Chase and its
Affiliates shall not be deemed Affiliates of the Company by reason of the Senior
Credit Facilities or
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their direct or indirect investments in any fund managed by Hicks Muse or any
Person in which such fund is invested.
"Applicable Premium" means, with respect to a Senior Discount Note at any
Change of Control Redemption Date, the greater of (i) 1.0% of the accreted value
of such Senior Discount Note and (ii) the excess of (A) the present value at
such time of the redemption price of such Senior Discount Note at March 1, 2003
(such redemption price being described under "-- Optional Redemption") computed
using a discount rate equal to the Treasury Rate plus 87.5 basis points over (B)
the accreted value of such Senior Discount Note.
"Asset Acquisition" means (i) an Investment by Holdings or any Restricted
Subsidiary of Holdings in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of Holdings or shall be consolidated or merged
with Holdings or any Restricted Subsidiary of Holdings or (ii) the acquisition
by Holdings or any Restricted Subsidiary of Holdings of assets of any Person
comprising a division or line of business of such Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by Holdings or any of its
Restricted Subsidiaries (excluding any Sale and Leaseback Transaction or any
pledge of assets or stock by Holdings or any of its Restricted Subsidiaries) to
any Person other than Holdings or a Restricted Subsidiary of Holdings of (i) any
Capital Stock of any Restricted Subsidiary of Holdings or (ii) any other
property or assets of Holdings or any Restricted Subsidiary of Holdings other
than in the ordinary course of business; provided, however, that for purposes of
the "Limitation on Asset Sales" covenant, Asset Sales shall not include (a) a
transaction or series of related transactions in which Holdings or its
Restricted Subsidiaries receive aggregate consideration of less than $1,000,000,
(b) transactions permitted under the "Limitation on Asset Swaps" covenant, (c)
transactions covered by the "Merger, Consolidation and Sale of Assets" covenant,
(d) a Restricted Payment that otherwise qualifies under the "Limitation on
Restricted Payment" covenant, (e) any disposition of obsolete or worn out
equipment or equipment that is no longer useful in the conduct of the business
of Holdings and its Subsidiaries and that is disposed of, in each case, in the
ordinary course of business and (f) any transaction that constitutes a Change of
Control.
"Asset Swap" means the execution of a definitive agreement, subject only to
FCC approval, if applicable, and other customary closing conditions that
Holdings in good faith believes will be satisfied for a substantially concurrent
purchase and sale, or exchange, of Productive Assets between Holdings and any of
its Restricted Subsidiaries and another Person or group of affiliated Persons;
provided that any amendment to or waiver of any closing condition that
individually or in the aggregate is material to the Asset Swap shall be deemed
to be a new Asset Swap; it being understood that an Asset Swap may include a
cash equalization payment made in connection therewith provided that such cash
payment, if received by Holdings or its Subsidiaries, shall be deemed to be
proceeds received from an Asset Sale and shall be applied in accordance with
"Certain Covenants -- Limitation on Asset Sales."
"Business Day" means any day (other than a day which is a Saturday, Sunday
or legal holiday in the State of New York) on which banks are open for business
in New York, New York.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated) of capital stock of such Person and (ii) with respect to any Person
that is not a corporation, any and all partnership or other equity interests of
such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligation of
such Person to pay rent or other amounts under a lease to which such Person is a
party that is required to be classified and accounted for as a capital lease
obligation under GAAP, and for purposes of this definition, the amount of such
obligation at any date shall be the capitalized amount of such obligation at
such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable
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direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Corporation or 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, having a rating of at least A-1 from
Standard & Poor's Corporation or at least P-1 from Moody's Investors Service,
Inc.; (iv) certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than
$200,000,000; (v) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (iv) above;
and (vi) investments in money market funds that invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of
Holdings to any Person or group of related Persons for purposes of Section 13(d)
of the Exchange Act (a "Group") (whether or not otherwise in compliance with the
provisions of the Senior Discount Notes Indenture), other than to Hicks Muse or
any of its Affiliates, officers or directors (the "Permitted Holders"); or (ii)
a majority of the board of directors of Holdings or Holdings shall consist of
Persons who are not Continuing Directors; or (iii) the acquisition by any Person
or Group (other than the Permitted Holders or any direct or indirect Subsidiary
of any Permitted Holder) of the power, directly or indirectly, to vote or direct
the voting of securities having more than 50% of the ordinary voting power for
the election of directors of Holdings or Holdings.
"Commodity Agreement" means any commodity futures contract, commodity
option or other similar agreement or arrangement.
"Consolidated Cash Flow" means, with respect to any Person, for any period,
the sum (without duplication) of (i) Consolidated Net Income, (ii) to the extent
Consolidated Net Income has been reduced thereby, (a) all income taxes of such
Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP
for such period (other than income taxes attributable to extraordinary or
nonrecurring gains or losses), (b) Consolidated Interest Expense and (c)
Consolidated Non-Cash Charges, all as determined on a consolidated basis for
such Person and its Restricted Subsidiaries in conformity with GAAP and (iii)
the lesser of (x) dividends or distributions paid to such first referred to
Person or its Restricted Subsidiary by another Person whose results are
reflected as a minority interest in the consolidated financial statements of
such Person and (y) such Person's equity interest in the Consolidated Cash Flow
of such other Person (but in no event less than zero), except, that in the case
of the Joint Venture, (x) such amount shall not exceed 10% of the Consolidated
Cash Flow of the Company for such period and (y) such first Person shall be
deemed to have received by dividend its proportionate share of distributable
cash retained by the Joint Venture to fund the interest reserve.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, the sum of (i) the interest expense of such Person
and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Swap Agreements
(including any amortization of discounts), (c) the interest portion of any
deferred payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance financing or
similar facilities, and (e) all accrued interest and (ii) the interest component
of Capitalized Lease Obligations paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or loss) of such Person and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall be excluded therefrom, without duplication,
(a) gains and
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losses from Asset Sales (without regard to the $1,000,000 limitation set forth
in the definition thereof) or abandonments or reserves relating thereto and the
related tax effects, (b) items classified as extraordinary or nonrecurring gains
and losses, and the related tax effects according to GAAP, (c) the net income
(or loss) of any Person acquired in a pooling of interests transaction accrued
prior to the date it becomes a Restricted Subsidiary of such first referred to
Person or is merged or consolidated with it or any of its Restricted
Subsidiaries, (d) the net income of any Restricted Subsidiary to the extent that
the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is restricted by contract, operation of law or
otherwise and (e) the net income or loss of any Person, other than a Restricted
Subsidiary; and provided further, however, that (i) there shall be added to net
income Consolidated Cash Flow losses attributable to stations which Holdings or
any of its Restricted Subsidiaries operates pursuant to local market agreements
provided that such addback shall not exceed $3,000,000 in any four quarter
period and (ii) in determining net income, pro forma effect shall be given to
the reimbursement of promotional expenses as if such reimbursement obligation
were in effect for the entire period with respect to periods ending prior to
March 31, 1999 (but only if such reimbursement obligation is then in effect).
"Consolidated Non-Cash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries (excluding any such charges
constituting an extraordinary or nonrecurring item) reducing Consolidated Net
Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Continuing Director" means, as of the date of determination, any Person
who (i) was a member of the board of directors of the Company or Holdings on the
Senior Discount Notes Issue Date, (ii) was nominated for election or elected to
the board of directors of the Company or Holdings, as the case may be, with the
affirmative vote of a majority of the Continuing Directors who were members of
such board of directors at the time of such nomination or election or (iii) is a
Representative of a Permitted Holder.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Disqualified Capital Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control), in whole or in part, on or prior to
the final maturity date of the Senior Discount Notes; provided that only the
portion of Capital Stock which so matures or is mandatorily redeemable or is so
redeemable at the sole option of the holder thereof prior to March 1, 2008 shall
be deemed Disqualified Capital Stock.
"Equity Offering" means a private sale or public offering of Capital Stock
(other than Disqualified Capital Stock) of Holdings or a Holding Company (to the
extent, in the case of a Holding Company, that the net cash proceeds thereof are
contributed to the common or non-redeemable preferred equity capital of
Holdings).
"Financial Advisory Agreement" means the Financial Advisory Agreement by
and among the Company, Holdings and Hicks Muse Partners, as in effect on the
Senior Discount Notes Issue Date.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of the Senior Discount Notes Indenture,
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or the
Commission or in such other statements by such other entity as approved by a
significant segment of the accounting profession. All ratios and computations
based on GAAP contained in the Senior Discount Notes Indenture shall be computed
in conformity with GAAP.
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"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Guarantor" means a Guarantor under the Senior Subordinated Notes
Indenture.
"Indebtedness" means with respect to any Person, without duplication, any
liability of such Person (i) for borrowed money, (ii) evidenced by bonds,
debentures, notes or other similar instruments, (iii) constituting Capitalized
Lease Obligations, (iv) incurred or assumed as the deferred purchase price of
property, or pursuant to conditional sale obligations and title retention
agreements (but excluding trade accounts payable arising in the ordinary course
of business), (v) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (vi) for Indebtedness of
others guaranteed by such Person, (vii) for Interest Swap Agreements, Commodity
Agreements and Currency Agreements and (viii) for Indebtedness of any other
Person of the type referred to in clauses (i) through (vii) which is secured by
any Lien on any property or asset of such first referred to Person, the amount
of such Indebtedness being deemed to be the lesser of the value of such property
or asset or the amount of the Indebtedness so secured. The amount of
Indebtedness of any Person at any date shall be (i) the outstanding principal
amount of all unconditional obligations described above, as such amount would be
reflected on a balance sheet prepared in accordance with GAAP, and the maximum
liability at such date of such Person for any contingent obligations described
above, (ii) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount and (iii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Interest Swap Agreements" means any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (in each case, including by way of Guarantee or
similar arrangement, but excluding (i) any debt or extension of credit
represented by a bank deposit other than a time deposit and (ii) advances to
customers in the ordinary course of business) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by such Person. For purposes of the "Limitation on Restricted Payments"
covenant, (A) "Investment" shall include the portion (proportionate to Holdings'
equity interest in a Restricted Subsidiary to be designated as an Unrestricted
Subsidiary) of the fair market value of the net assets of such Restricted
Subsidiary of Holdings at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Unrestricted Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to
continue to have a permanent "Investment" (if positive) equal to (1) Holdings'
"Investment" in such Unrestricted Subsidiary at the time of such redesignation
less (2) the portion (proportionate to Holdings' equity interest in such
Subsidiary) of the fair market value of the net assets of such Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is so redesignated from
an Unrestricted Subsidiary to a Restricted Subsidiary; and (B) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the board of directors of Holdings.
"Leverage Ratio" means, as to any Person, the ratio of (i) the aggregate
outstanding amount of Indebtedness of such Person and its Restricted
Subsidiaries as of the date of calculation on a consolidated basis in accordance
with GAAP plus the aggregate liquidation preference of all Disqualified Capital
Stock of such Person and of all outstanding Preferred Stock of Restricted
Subsidiaries of such Person (other than any such Disqualified Capital Stock or
Preferred Stock held by such Person or any of its Restricted Subsidiaries) to
(ii) the Consolidated Cash Flow of such Person for the four full fiscal quarters
(the "Four Quarter Period") ending on or prior to the date of determination.
For purposes of this definition, the aggregate outstanding principal amount
of Indebtedness of the Person and its Restricted Subsidiaries for which such
calculation is made shall be determined on a pro forma basis as if the
Indebtedness giving rise to the need to perform such calculation had been
incurred and the proceeds
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therefrom had been applied, and all other transactions in respect of which such
Indebtedness is being incurred has occurred, on the last day of the Four Quarter
Period. In addition to the foregoing, for purposes of this definition,
"Consolidated Cash Flow" shall be calculated on a pro forma basis after giving
effect to (i) the Transactions, (ii) the incurrence of the Indebtedness of such
Person and its Restricted Subsidiaries (and the application of the proceeds
therefrom) giving rise to the need to make such calculation and any incurrence
(and the application of the proceeds therefrom) or repayment of other
Indebtedness, other than the incurrence or repayment of Indebtedness pursuant to
working capital facilities, at any time subsequent to the beginning of the Four
Quarter Period and on or prior to the date of determination, as if such
incurrence (and the application of the proceeds thereof), or the repayment, as
the case may be, occurred on the first day of the Four Quarter Period, (iii) any
Asset Sales (including those excluded from the definitions thereof by clauses
(b), (c) or (d) of the definition thereof) or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person that becomes a Restricted Subsidiary as a result of such
Asset Acquisition) incurring, assuming or otherwise becoming liable for
Indebtedness) or Asset Swaps at any time on or subsequent to the first day of
the Four Quarter Period and on or prior to the date of determination, as if such
Asset Sale, Asset Acquisition (including the incurrence, assumption or liability
for any such Indebtedness and also including any Consolidated Cash Flow
associated with such Asset Acquisition) or Asset Swap occurred on the first day
of the Four Quarter Period and (iv) cost savings resulting from employee
terminations, facilities consolidations and closings, standardization of
employee benefits and compensation practices, consolidation of property,
casualty and other insurance coverage and policies, standardization of sales
representation commissions and other contract rates, and reductions in taxes
other than income taxes (collectively, "Cost Savings Measures"), which cost
savings such Person reasonably believes in good faith could have been achieved
during the Four Quarter Period as a result of such Asset Acquisition or Asset
Swap (regardless of whether such cost savings could then be reflected in pro
forma financial statements under GAAP, Regulation S-X promulgated by the
Commission or any other regulation or policy of the Commission), less the amount
of any additional expenses that such Person reasonably estimates would result
from anticipated replacement of any items constituting Cost Savings Measures in
connection with such Asset Acquisitions or Asset Swap; provided, however, that
both (A) such cost savings and Cost Savings Measures were identified and such
cost savings were quantified in an officer's certificate delivered to the Senior
Discount Notes Trustee at the time of the consummation of the Asset Acquisition
or Asset Swap and (B) with respect to each Asset Acquisition or Asset Swap
completed prior to the 90th day preceding such date of determination, actions
were commenced or initiated by Holdings within 90 days of such Asset Acquisition
or Asset Swap to effect the Cost Savings Measures identified in such officer's
certificate (regardless, however, of whether the corresponding cost savings have
been achieved). Furthermore, in calculating "Consolidated Interest Expense" for
purposes of the calculation of "Consolidated Cash Flow," (i) interest on
Indebtedness determined on a fluctuating basis as of the date of determination
(including Indebtedness actually incurred on the date of the transaction giving
rise to the need to calculate the Leverage Ratio) and which will continue to be
so determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness as in effect on the
date of determination and (ii) notwithstanding (i) above, interest determined on
a fluctuating basis, to the extent such interest is covered by Interest Swap
Agreements, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Lien" means, with respect to any asset, any lien, mortgage, deed of trust,
pledge, security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof and any agreement to give any security interest).
"Monitoring and Oversight Agreement" means the Monitoring and Oversight
Agreement by and among the Company, Holdings and Hicks Muse Partners, as in
effect on the Senior Discount Notes Issue Date.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents (including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents)
received by Holdings or any of its Restricted Subsidiaries from such Asset Sale
net of (i) reasonable out-of-pocket expenses and fees relating to such Asset
Sale (including, without limitation,
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relocation costs, legal, accounting and investment banking fees and sales
commissions, recording fees, relocation costs, title insurance premiums,
appraisers, fees and costs reasonably incurred in preparation of any asset or
property for sale), (ii) taxes paid or reasonably estimated to be payable
(calculated based on the combined state, federal and foreign statutory tax rates
applicable to Holdings or the Restricted Subsidiary engaged in such Asset Sale),
(iii) all distributions and other payments required to be made to any Person
owning a beneficial interest in the assets subject to sale or minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Sale, (iv)
any reserves established in accordance with GAAP for adjustment in respect of
the sales price of the asset or assets subject to such Asset Sale or for any
liabilities associated with such Asset Sale and (v) repayment of Indebtedness
secured by assets subject to such Asset Sale; provided, however, that if the
instrument or agreement governing such Asset Sale requires the transferor to
maintain a portion of the purchase price in escrow (whether as a reserve for
adjustment of the purchase price or otherwise) or to indemnify the transferee
for specified liabilities in a maximum specified amount, the portion of the cash
or Cash Equivalents that is actually placed in escrow or segregated and set
aside by the transferor for such indemnification obligation shall not be deemed
to be Net Cash Proceeds until the escrow terminates or the transferor ceases to
segregate and set aside such funds, in whole or in part, and then only to the
extent of the proceeds released from escrow to the transferor or that are no
longer segregated and set aside by the transferor.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing, or otherwise relating to, any
Indebtedness.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Senior Discount Notes Trustee. The counsel may be
an employee of or counsel to Holdings or the Senior Discount Notes Trustee.
"Permitted Indebtedness" means, without duplication, (i) Indebtedness
outstanding on the Senior Discount Notes Issue Date (including the Senior
Subordinated Notes); (ii) Indebtedness of Holdings, the Company and any of its
Restricted Subsidiaries that is a Guarantor (a) outstanding under the Senior
Credit Facilities (including letter of credit obligations); provided that the
aggregate principal amount at any time outstanding does not exceed $570,000,000;
provided that, of such amount (x) $125,000,000 may be used under the Delayed
Tranche A Facility only to finance the Grand Rapids Acquisition (and
refinancings of such borrowings) and (y) $225,000,000 may be used under the
Incremental Term Facility only to finance acquisitions of Productive Assets or
to make interest payments on the Senior Discount Notes (and refinancings of such
borrowings); or (b) incurred under the Senior Credit Facilities pursuant to and
in compliance with (x) clause (v) of this definition or (y) the proviso in the
covenant described under the caption "-- Limitation on Incurrence of Additional
Indebtedness and Issuance of Capital Stock" above; (iii) Indebtedness evidenced
by or arising under the Senior Discount Notes and the Senior Discount Notes
Indenture; (iv) Interest Swap Agreements, Commodity Agreements and Currency
Agreements; provided, however, that such agreements are entered into for bona
fide hedging purposes and not for speculative purposes; (v) additional
Indebtedness of Holdings or any of its Restricted Subsidiaries that is a
Guarantor not to exceed $20,000,000 in principal amount outstanding at any time
(which amount may, but need not, be incurred under the Senior Credit
Facilities); (vi) Refinancing Indebtedness; (vii) Indebtedness owed by Holdings
to any Subsidiary of Holdings or by any Restricted Subsidiary of Holdings to
Holdings or any Subsidiary of Holdings; (viii) guarantees by Restricted
Subsidiaries of any Indebtedness permitted to be incurred pursuant to the Senior
Discount Notes Indenture; (ix) Indebtedness in respect of performance bonds,
bankers' acceptances and surety or appeal bonds provided by Holdings or any of
its Restricted Subsidiaries to their customers in the ordinary course of their
business; (x) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
guarantees or letters of credit, surety bonds or performance bonds securing any
obligations of Holdings or any of its Restricted Subsidiaries pursuant to such
agreements, in each case incurred in connection with the disposition of any
business assets or Restricted Subsidiaries of Holdings (other than guarantees of
Indebtedness or other obligations incurred by any Person acquiring all or any
portion of such business assets or Restricted Subsidiaries of Holdings for the
purpose of financing such acquisition) in a principal amount not to
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exceed the gross proceeds actually received by Holdings or any of its Restricted
Subsidiaries in connection with such disposition; provided, however, that the
principal amount of any Indebtedness incurred pursuant to this clause (x), when
taken together with all Indebtedness incurred pursuant to this clause (x) and
then outstanding, shall not exceed $20,000,000; and (xi) Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations, in each case incurred for the purpose of financing all or any
part of the purchase price or cost of construction or improvement of property or
assets used in a related business or incurred to refinance any such purchase
price or cost of construction or improvement, in each case incurred no later
than 365 days after the date of such acquisition or the date of completion of
such construction or improvement; provided, however, that the principal amount
of any Indebtedness incurred pursuant to this clause (xi) shall not exceed
$7,500,000 at any time outstanding.
"Permitted Investments" means (i) Investments by Holdings or any Restricted
Subsidiary of Holdings to acquire the stock or assets of any Person (or Acquired
Indebtedness or Acquired Preferred Stock acquired in connection with a
transaction in which such Person becomes a Restricted Subsidiary of Holdings)
engaged in the broadcast business or businesses reasonably related thereto;
provided, however, that if any such Investment or series of related Investments
involves an Investment by Holdings in excess of $10,000,000, at the time of such
Investment and immediately after giving effect thereto (1) Holdings has incurred
no additional Indebtedness and (2) Holdings is able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
the "Limitation on Incurrence of Additional Indebtedness and Issuance of Capital
Stock" covenant, (ii) Investments received by Holdings or its Restricted
Subsidiaries as consideration for a sale of assets made in compliance with the
other terms of the Senior Discount Notes Indenture, (iii) Investments by
Holdings or any Restricted Subsidiary of Holdings in any Restricted Subsidiary
of Holdings (whether existing on the Senior Discount Notes Issue Date or created
thereafter) or any Person that after such Investments, and as a result thereof,
becomes a Restricted Subsidiary of Holdings and Investments in Holdings or any
Restricted Subsidiary by any Restricted Subsidiary of Holdings, (iv) Investments
in cash and Cash Equivalents, (v) Investments in securities of trade creditors,
wholesalers or customers received pursuant to any plan of reorganization or
similar arrangement, (vi) loans or advances to employees of Holdings or any
Restricted Subsidiary thereof for purposes of purchasing Holdings' or a Holding
Company's Capital Stock and other loans and advances to employees made in the
ordinary course of business consistent with past practices of Holdings or such
Restricted Subsidiary, (vii) Investments in the Sports Joint Venture made at the
time of the initial formation of the Sports Joint Venture, and (viii) additional
Investments in an aggregate amount not to exceed $5,000,000 at any time
outstanding.
"Person" means an individual, partnership, corporation, limited liability
company, unincorporated organization, trust or joint venture, or a governmental
agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Productive Assets" means assets of a kind used or usable by Holdings and
its Restricted Subsidiaries in broadcast business or businesses reasonably
related, ancillary or complementary thereto (including any sports-related
business acquired pursuant to the Sports Joint Venture), and specifically
includes assets acquired through Asset Acquisitions (it being understood that
"assets" may include Capital Stock of a Person that owns such Productive Assets,
provided that either (x) such assets consist of ownership interests in the
Sports Joint Venture or (y) after giving effect to such transaction, such Person
would be a Restricted Subsidiary of Holdings).
"Public Equity Offering" means an underwritten public offering of Capital
Stock (other than Disqualified Capital Stock) of Holdings or a Holding Company
(to the extent, in the case of a Holding Company, that the net cash proceeds
thereof are contributed to the common or non-redeemable preferred equity capital
of Holdings), pursuant to an effective registration statement filed with the
Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
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"Refinancing Indebtedness" means any refinancing of Indebtedness incurred
in accordance with the "Limitation on Incurrence of Additional Indebtedness and
Issuance of Capital Stock" covenant (other than pursuant to clause (iii) or (iv)
of the definition of Permitted Indebtedness) that does not (i) result in an
increase in the aggregate principal amount of Indebtedness (such principal
amount to include, for purposes of this definition, any premiums, penalties or
accrued interest paid with the proceeds of the Refinancing Indebtedness) of such
Person or (ii) create Indebtedness with (A) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the Indebtedness
being refinanced or (B) a final maturity earlier than the final maturity of the
Indebtedness being refinanced.
"Representative" means the indenture Senior Discount Notes Trustee or other
Senior Discount Notes Trustee, agent or representative in respect of any Senior
Indebtedness; provided, however, that if, and for so long as, any issue of
Senior Indebtedness lacks such a representative, then the Representative for
such issue of Senior Indebtedness shall at all times constitute the holders of a
majority in outstanding principal amount of such issue of Senior Indebtedness.
"Restricted Payment" means (i) the declaration or payment of any dividend
or the making of any other distribution (other than dividends or distributions
payable in Qualified Capital Stock or in options, rights or warrants to acquire
Qualified Capital Stock) on shares of Holdings' Capital Stock, (ii) the
purchase, redemption, retirement or other acquisition for value of any Capital
Stock of Holdings, or any warrants, rights or options to acquire shares of
Capital Stock of Holdings, other than through the exchange of such Capital Stock
or any warrants, rights or options to acquire shares of any class of such
Capital Stock for Qualified Capital Stock or warrants, rights or options to
acquire Qualified Capital Stock or (iii) the making of any Investment (other
than a Permitted Investment).
"Restricted Subsidiary" means a Subsidiary of Holdings other than an
Unrestricted Subsidiary and includes all of the Subsidiaries of Holdings
existing as of the Senior Discount Notes Issue Date. The board of directors of
Holdings may designate any Unrestricted Subsidiary or any person that is to
become a Subsidiary as a Restricted Subsidiary if immediately after giving
effect to such action (and treating any Acquired Indebtedness as having been
incurred at the time of such action), Holdings could have incurred at least
$1.00 of additional indebtedness (other than Permitted Indebtedness) pursuant to
the "Limitation on Incurrence of Additional Indebtedness and Issuance of Capital
Stock" covenant.
"Senior Credit Facilities" means the Senior Credit Facilities under that
certain Credit Agreement, dated as of March 1, 1998, among Holdings, the
Company, The Chase Manhattan Bank, as administrative agent and collateral agent,
The Bank of New York as syndication agent and National Westminster Bank PLC as
documentation agent, and any other financial institutions from time to time
party thereto, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including by way of adding Restricted Subsidiaries of Holdings as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders (or other
institutions).
"Senior Discount Notes Issue Date" means the date of original issuance of
the Old Senior Discount Notes.
"Senior Indebtedness" means, whether outstanding on the Senior Discount
Notes Issue Date or thereafter issued, (x) the Senior Discount Notes and (y) all
other Indebtedness of Holdings, including interest (including interest accruing
on or after the filing of any petition in bankruptcy or for reorganization
relating to Holdings or any Restricted Subsidiary whether or not a claim for
post-filing interest is allowed in such proceeding) and premium, if any,
thereon, and other monetary amounts (including fees, expenses, reimbursement
obligations under letters of credit and indemnities) owing in respect thereof
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that the obligations in respect of such
Indebtedness ranks pari passu with the Senior Discount Notes; provided however,
that Senior Indebtedness will not include (1) any obligation of Holdings to any
Restricted
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Subsidiary, (2) any liability for federal, state, foreign, local or other taxes
owed or owing by Holdings, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities), (4) any Indebtedness,
Guarantee, or obligation of Holdings that is expressly subordinate or junior in
right of payment to any other Indebtedness, guarantee or obligation of Holdings,
including any Senior Subordinated Indebtedness and any Subordinated Obligations
or (5) obligations in respect of any Capital Stock.
"Significant Restricted Subsidiary" means, at any date of determination,
any Restricted Subsidiary that would be a "significant subsidiary" as defined in
Article I, Rule 1-02 of Regulation S-X, promulgated under the Securities Act of
1933, as amended, as such rule is in effect on the Senior Discount Notes Issue
Date.
"Sports Joint Venture" means any Hicks Muse affiliated entity to which the
Company contributes station KXTX-TV and related assets in exchange for a
minority ownership interest therein, cash or a combination thereof.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly through one or more
intermediaries, by such Person or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, through one or more intermediaries, owned by such
Person. Notwithstanding anything in the Senior Discount Notes Indenture to the
contrary, all references to Holdings and its consolidated Restricted
Subsidiaries or to financial information prepared on a consolidated basis in
accordance with GAAP shall be deemed to include Holdings and its Restricted
Subsidiaries as to which financial statements are prepared on a combined basis
in accordance with GAAP and to financial information prepared on such a combined
basis. Notwithstanding anything in the Senior Discount Notes Indenture to the
contrary, an Unrestricted Subsidiary shall not be deemed to be a Restricted
Subsidiary for purposes of the Senior Discount Notes Indenture.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) that
has become publicly available at least two business days prior to the Change of
Control Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) most nearly equal to the
period from the Change of Control Redemption Date to March 1, 2003; provided,
however, that if the period from the Change of Control Redemption Date to March
1, 2003 is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given except that if the period from the Change of Control
Redemption Date to March 1, 2003 is less than one year, the weekly average yield
on actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.
"Unrestricted Subsidiary" means a Subsidiary of Holdings created after the
Issue Date and so designated by a resolution adopted by the board of directors
of Holdings; provided, however, that (a) neither Holdings nor any of its other
Restricted Subsidiaries (1) provides any credit support for any Indebtedness or
other Obligations of such Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness) or (2) is directly or indirectly liable
for any Indebtedness or other Obligations of such Subsidiary and (b) at the time
of designation of such Subsidiary, such Subsidiary has no property or assets
(other than de minimis assets resulting from the initial capitalization of such
Subsidiary). The board of directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (1)(x) Holdings has incurred no additional
Indebtedness and (y) the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with the "Limitation on
Incurrence of Additional Indebtedness and Issuance of Disqualified Capital
Stock" covenant and (2) no Default or Event of Default shall have occurred or be
continuing. Any designation pursuant to this definition by the board of
directors of Holdings shall be evidenced to the Senior Discount Notes Trustee by
the filing with the Senior Discount Notes Trustee of a certified copy of the
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resolution of Holdings' board of directors giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"Unsubordinated Indebtedness" means the Senior Discount Notes and any other
Indebtedness of Holdings that specifically provides that such Indebtedness is to
rank pari passu with the Senior Discount Notes in right of payment and is not
subordinated by its terms in right of payment to any Senior Indebtedness of
Holdings.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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DESCRIPTION OF THE SENIOR CREDIT FACILITIES
Concurrently with the consummation of the Acquisition, Holdings and the
Company entered into a credit agreement (the "Credit Agreement") with The Chase
Manhattan Bank, as administrative agent (the "Agent"), and the lenders named
therein (the "Lenders") that provide term loans of $295.0 million, a revolving
credit facility of $50.0 million and an incremental term loan facility of $225.0
million. Chase Securities Inc. acted as advisor and arranger (the "Arranger") in
connection with the Senior Credit Facilities. The following is a summary
description of the principal terms of the Senior Credit Facilities and is
subject to and qualified in its entirety by reference to the Credit Agreement.
Structure. Loans under the Credit Agreement consist of (i) initial Tranche
A term loans (the "Initial Tranche A Term Loans") in the amount of $50.0
million; (ii) delayed Tranche A term loans (the "Delayed Tranche A Term Loans"
and, together with the Initial Tranche A Term Loans, the "Tranche A Term Loans")
in the amount of $125.0 million to finance the Grand Rapids Acquisition (iii)
Tranche B term loans (the "Tranche B Term Loans" and, together with the Tranche
A Term Loans, the "Term Loans") in the amount of $120.0 million; (iv) a
revolving credit facility (the "Revolving Credit Facility") in the amount of
$50.0 million (which will be available for letters of credit and in the form of
swingline loans); and (v) incremental term loans (the "Incremental Term Loans"
and, together with the Term Loans and the Revolving Credit Facility, the "Senior
Credit Facilities") under an incremental term loan facility (the "Incremental
Facility") in an amount up to $225.0 million. The Company used the Initial
Tranche A Term Loans and the Tranche B Term Loans to provide a portion of the
funding necessary to consummate the Acquisition and refinance $260.0 million of
LIN Television's then existing indebtedness. The Company will use the Delayed
Tranche A Term Loans to fund the Grand Rapids Acquisition and the Incremental
Term Loans to provide funding for permitted acquisitions, including the
acquisition of WVTM-TV in Birmingham, Alabama, or for the Mandatory Principle
Redemption in respect of the Senior Discount Notes on March 1, 2003. The Company
will use the Revolving Credit Facility for general corporate purposes including,
without limitation, permitted acquisitions.
Security; Guaranty. The obligations of the Company under the Senior Credit
Facilities are unconditionally and irrevocably guaranteed, jointly and
severally, by Holdings and by each existing and subsequently acquired or
organized subsidiary of the Company. In addition, the Senior Credit Facilities
and the guarantees thereunder are secured by substantially all of the assets of
the Company and its subsidiaries (collectively, the "Collateral"), including but
not limited to (i) a first priority pledge of all the capital stock of the
Company and of each existing and subsequently acquired or organized subsidiary
of the Company; (ii) a perfected first priority security interest in, and
mortgage on, substantially all tangible and intangible assets of the Company and
the guarantors (including but not limited to accounts receivable, documents,
inventory, equipment, intellectual property, investment property, general
intangibles, real property, cash and cash accounts and proceeds of the
foregoing), in each case subject to certain limited exceptions. The Credit
Agreement provides for the release of guarantees under certain limited
circumstances.
Availability. The availability of the Senior Credit Facilities will be
subject to various conditions precedent typical of bank loans including, among
other things, the absence of any material adverse effect on the part of the
Company. The full amount of the Initial Tranche A Term Loans and the Tranche B
Term Loans were drawn at the closing of the Acquisition. The full amount of the
Delayed Tranche A Term Loans must be drawn in a single drawing at a time not
later than June 3, 1999. Amounts under the Incremental Facility may be drawn in
up to five drawings before March 3, 2003 (subject to the consent of the lenders
after March 3, 2001). Amounts repaid or prepaid under the Term Loans and the
Incremental Facility may not be reborrowed. Amounts under the Revolving Credit
Facility will be available on a revolving basis.
Amortization, Interest. The Tranche A Term Loans are repayable in quarterly
principal payments over seven years, commencing on December 31, 1998. The
Tranche A Term Loans bear interest at a rate per annum equal (at the Company's
option) to: (i) an adjusted London inter-bank offered rate ("Adjusted LIBOR")
plus a percentage based on the Company's financial performance or (ii) a rate
equal to the highest of the Agent's prime rate, a certificate of deposit rate
plus 1.00% and the Federal Funds effective rate plus 1/2 of 1.00% (the
"Alternate Base Rate") plus a percentage based on the Company's financial
performance. The Tranche B Term Loans are repayable in quarterly principal
payments over nine years, in the aggregate amount
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of $240,000 in 1998, $480,000 in each of 1999 through 2004, $28,920,000 in 2005,
$68,400,000 in 2006 and $19,560,000 in 2007, and bear interest at a rate per
annum equal (at the Company's option) to: (i) Adjusted LIBOR plus a percentage
based on the Company's financial performance or (ii) the Alternate Base Rate
plus a percentage based on the Company's financial performance. The Incremental
Term Loans, if any, will be repayable based on an amortization schedule to be
determined at each time such loans are made; provided that such amortization
will be nominal prior to six months after final maturity of the Tranche B Term
Loans, and will bear interest at a rate per annum equal (at the Company's
option) to (i) Adjusted LIBOR plus an applicable margin to be determined or (ii)
the Alternate Base Rate plus an applicable margin to be determined, in each case
subject to certain reductions based on the Company's financial performance. The
Revolving Credit Facility is a seven year facility and outstanding balances
thereunder bear interest at a rate per annum equal (at the Company's option) to
(i) Adjusted LIBOR plus a percentage based on the Company's financial
performance or (ii) the Alternate Base Rate plus a percentage based on the
Company's financial performance. Amounts under the Senior Credit Facilities not
paid when due bear interest at a default rate equal to 2.00% above the otherwise
applicable rate.
Prepayments. The Senior Credit Facilities permit the Company to prepay
loans and to permanently reduce revolving credit commitments and Delayed Tranche
A Term Loan commitments, in whole or in part, at any time. In addition, the
Company is required to make mandatory prepayments of Term Loans, subject to
certain exceptions, in amounts equal to (i) 75% of Excess Cash Flow (as defined
in the Credit Agreement); and (ii) 100% of the net cash proceeds of certain
dispositions of assets or issuances of debt or equity of Holdings, the Company
or any of its subsidiaries (in each case, subject to certain exceptions and
subject to a reduction to zero based upon the Company's financial performance).
Mandatory and optional prepayments of the Term Loans will be allocated pro rata
between the Tranche A Term Loans, the Tranche B Term Loan and the Incremental
Term Loans, as applicable, and applied ratably based on the number of remaining
installments under each, except that, so long as the Tranche A Term Loans are
outstanding, the Lenders participating in the Tranche B Term Loans and the
Incremental Term Loans, as applicable, will have the right to refuse mandatory
prepayments, in which case such prepayments will be applied to the Tranche A
Term Loans. Any prepayment of Adjusted LIBOR loans other than at the end of an
interest period will be subject to reimbursement of breakage costs.
Fees. The Company is required to pay the Lenders, on a quarterly basis, a
commitment fee equal to 1/2 of 1.00% per annum on the undrawn portion of the
unused commitments, subject to reductions based upon the Company's financial
performance. The Company is also be required to pay (i) a commission on the face
amount of all outstanding letters of credit equal to the applicable margin then
in effect for Adjusted LIBOR loans under the Revolving Credit Facility, less
amounts paid under clause (ii) below, (ii) a fronting fee in the amount of 0.25%
per annum on each letter of credit, to the issuing bank on a quarterly basis,
(iii) annual administration fees and (iv) agent, arrangement and other similar
fees.
Covenants. The Credit Agreement contains covenants that, among other
things, restrict the ability of Holdings, the Company and its subsidiaries to
dispose of assets, incur additional indebtedness, incur guarantee obligations,
prepay other indebtedness or amend other debt instruments, pay dividends, create
liens on assets, enter into sale and leaseback transactions, make investments,
loans or advances, make acquisitions, engage in mergers or consolidations,
change the business conducted by the Company, make capital expenditures, or
engage in certain transactions with affiliates and otherwise restrict certain
corporate activities. In addition, under the Credit Agreement, the Company will
be required to comply with specified financial ratios, including minimum
interest coverage ratios, maximum leverage ratios and minimum fixed charge
coverage ratios.
The Credit Agreement also contains provisions that prohibit any
modification of the Senior Subordinated Notes Indenture in any manner adverse to
the Lenders and that will limit the Company's ability to refinance or otherwise
prepay the Senior Subordinated Notes without the consent of such Lenders.
Events of Default. The Credit Agreement contains customary events of
default, including payment defaults, breach of representations and warranties,
covenant defaults, cross-defaults to certain other indebtedness, certain events
of bankruptcy and insolvency, ERISA events, judgment defaults, actual or
asserted invalidity of any security interest and change of control.
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BOOK-ENTRY; DELIVERY AND FORM
Except as described in the next paragraph, both the New Senior Subordinated
Notes and the New Senior Discount Notes initially will be represented by one or
more permanent global certificates in definitive, duly registered form
(collectively, the "Global Notes"). The Global Notes will be deposited on their
date of issue with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC") and registered in the name of a nominee of DTC.
The Global Notes. The Issuers expect that pursuant to procedures
established by DTC (i) upon the issuance of the Global Notes, DTC or its
custodian will credit, on its internal system, the principal amount of New Notes
of the individual beneficial interests represented by such Global Notes to the
respective accounts of persons who have accounts with such depositary and (ii)
ownership of beneficial interests in the Global Notes will be shown on, and the
transfer of such ownership will be effected only through, records maintained by
DTC or its nominee (with respect to interests of participants) and the records
of participants (with respect to interests of persons other than participants).
Ownership of beneficial interests in the Global Notes will be limited to persons
who have accounts with DTC ("participants") or persons who hold interests
through participants.
So long as DTC, or its nominee, is the registered owner or holder of the
New Notes, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the New Notes represented by such Global Notes for all
purposes under the Indentures. No beneficial owner of an interest in the Global
Notes will be able to transfer that interest except in accordance with DTC's
procedures.
Payments of the principal of, premium (if any) and interest on, the Global
Notes will be made to DTC or its nominee, as the case may be, as the registered
owner thereof. None of the Company, Holdings, the Trustees or any Paying Agent
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the Global
Notes or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.
The Issuers expect that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, and interest on the Global Notes, will credit
participants' accounts with payments in amounts proportionate to their
beneficial interests in the principal amount of the Global Notes as shown on the
records of DTC or its nominee. The Issuers also expect that payments by
participants to owners of beneficial owners in the Global Notes held through
such participants will be governed by standing instructions and customary
practice, as is now the case with securities held for the accounts of customers
registered in the names of nominees for such customers. Such payments will be
the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
through DTC's same-day funds system in accordance with DTC rules and will be
settled in same-day funds. If a holder requires physical delivery of a
certificated Note for any reason, including to sell Notes to persons in states
in which require physical delivery of the Notes, or to pledge such securities,
such holder must transfer its interest in a Global Note, in accordance with the
normal procedures of DTC.
DTC has advised the Issuers that it will take any action permitted to be
taken by a holder of Notes (including the presentation of New Notes for exchange
as described below) only at the direction of one or more participants to whose
account the DTC interests in the Global Notes are credited and only in respect
of such portion of the aggregate principal amount of New Notes as to which such
participant or participants has or have given such direction.
DTC has advised the Issuers as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and certain other organizations. Indirect access to the DTC system is available
to others
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such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Notes among participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither of the Issuers nor the Trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
Certificated Notes. If DTC is at any time unwilling or unable to continue
as a depositary for the Global Notes and a successor depositary is not appointed
by the Issuer within 90 days, certificated Notes will be issued in exchange for
the Global Notes.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 90 days after
the Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until , 1998, all dealers effecting transactions in the
New Notes may be required to deliver a Prospectus.
The Issuers will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such New Notes. Any broker-dealer that
resells New Notes that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a prospectus
meeting the requirements of the Securities Act, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 90 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the applicable Letter of Transmittal. The Issuers have agreed to pay all
expenses incident to the Exchange Offers (including the expenses of one counsel
for the holders of the Notes) other than commissions or concessions of any
broker-dealers and will indemnify holders of the Old Notes (including any
broker-dealers) against certain liabilities, including certain liabilities under
the Securities Act.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is based upon the provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the applicable Treasury
Regulations promulgated and proposed thereunder, judicial authority and current
administrative rulings and practice, all of which are subject to change,
possibly with retroactive effect. Except as specifically provided below, the
following discussion is limited to the U.S. federal income tax consequences
relevant to a holder of a Note who or which is (i) an individual who is a
citizen or resident of the United States, (ii) a corporation created or
organized under the laws of the United States, or any political subdivision
thereof, (iii) an estate whose income is includable in gross income for United
States federal income tax purposes regardless of its source, or (iv) a trust if
a U.S. court is able to exercise primary supervision over the administration of
the trust and one or more U.S. persons have the authority to control all
substantial decisions of the trust (each a "U.S. Holder"). For purposes of the
withholding tax on interest, a non-resident alien or other non-resident
fiduciary of an estate or trust will be considered to be a holder other than a
U.S. Holder (a "Non-U.S. Holder"). This discussion does not purport to deal with
all aspects of U.S. federal income taxation that might be relevant to particular
holders in light of their personal investment circumstances or status, nor does
it discuss the U.S. federal income tax consequences to certain types of holders
subject to special treatment under the U.S. federal income tax laws (for
example, financial institutions, insurance companies, dealers in securities,
tax-exempt organizations, or taxpayers holding the Notes as part of a
"straddle," "hedge" or "conversion transaction"). Moreover, the effect of any
applicable state, local or foreign tax laws is not discussed.
Except as otherwise indicated below, this discussion assumes that the Notes
are held as capital assets (as defined in Section 1221 of the Code) by the
holders thereof. This discussion is limited to the U.S. federal income tax
consequences to holders acquiring Notes on original issue for cash. The Issuers
will treat the Notes as indebtedness for U.S. federal income tax purposes, and
the balance of the discussion is based on the assumption that such treatment
will be respected.
Prospective holders are urged to consult their own tax advisors regarding
the federal, state, local and other tax considerations of the acquisition,
ownership and disposition of the Notes.
U.S. HOLDERS
Stated Interest on the Senior Subordinated Notes. The stated interest on
the Senior Subordinated Notes will be included in income by a U.S. Holder in
accordance with such U.S. Holder's usual method of accounting. It is anticipated
that the Senior Subordinated Notes will be issued without any original issue
discount ("OID"), as described below.
Stated Interest on the Senior Discount Notes. The stated interest on the
Senior Discount Notes will be included in the amount of OID on such Senior
Discount Notes. A U.S. Holder will not be required to report separately as
taxable income actual payments of stated interest with respect to the Senior
Discount Notes.
Original Issue Discount on the Senior Discount Notes. For the reasons
discussed below, the Senior Discount Notes will be deemed to have been issued
with OID. Accordingly, each U.S. Holder will be required to include in income
(regardless of whether such U.S. Holder is a cash or accrual basis taxpayer) in
each taxable year, in advance of the receipt of cash payments on such Senior
Discount Notes, that portion of the OID, computed on a constant yield basis,
attributable to each day during such year on which the holder held the Senior
Discount Notes. See "Taxation of Original Issue Discount" below.
The amount of OID with respect to each Senior Discount Note will be equal
to the excess of (i) its "stated redemption price at maturity" over (ii) its
"issue price." The "issue price" of a Senior Discount Note will be equal to the
first price at which a substantial amount of the Senior Discount Notes are sold.
For purposes of determining the issue price of the Senior Discount Notes, sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers are ignored.
Under the Treasury Regulations, the "stated redemption price at maturity"
of a Senior Note Note will equal the sum of all cash payments required to be
made on such Senior Discount Note (including principal
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and stated interest) and the excess of the aggregate of such amounts over the
issue price of a Senior Discount Note would be included in the holder's income
as OID.
Taxation of Original Issue Discount. A U.S. Holder of a debt instrument
issued with OID is required to include in gross income for U.S. federal income
tax purposes an amount equal to the sum of the "daily portions" of such OID for
all days during the taxable year on which such holder holds the debt instrument.
The daily portions of OID required to be included in a U.S. Holder's gross
income in a taxable year will be determined under a constant yield method by
allocating to each day during the taxable year on which the U.S. Holder holds
the debt instrument a pro rata portion of the OID on such debt instrument which
is attributable to the "accrual period" in which such day is included. The
amount of the OID attributable to each accrual period will be the product of the
"adjusted issue price" of the Senior Discount Note at the beginning of such
accrual period multiplied by the "yield to maturity" of the Senior Discount Note
(properly adjusted for the length of the accrual period). The Senior Discount
Note's "yield to maturity" is that discount rate which, when used in computing
the present value of all principal and stated interest payments to be made under
a Senior Discount Note, produces an amount equal to the issue price of a Senior
Discount Note. The "adjusted issue price" of the Senior Discount Note at the
beginning of an accrual period will generally be its issue price plus the
aggregate amount of OID that accrued in all prior accrual periods (determined
without regard to the rules described below concerning acquisition premium) less
any cash payments on the Senior Discount Note. An "accrual period" may be of any
length and may vary in length over the term of the debt instrument, provided
that each accrual period is not longer than one year and each scheduled payment
of principal or interest occurs either on the final day or the first day of an
accrual period.
Acquisition Premium on Senior Discount Notes. A U.S. Holder of a Senior
Discount Note who purchases such Senior Discount Note for an amount that is
greater than its then adjusted issue price but equal to or less than the sum of
all amounts payable on the Senior Discount Note after the purchase date will be
considered to have purchased such Senior Discount Note at an "acquisition
premium." Under the acquisition premium rules, the amount of OID which such U.S.
Holder must include in income with respect to such Senior Discount Note for any
taxable year will be reduced by the portion of such acquisition premium properly
allocable to such year.
Amortizable Bond Premium on Senior Subordinated Notes. If a U.S. Holder's
basis in the Notes exceeds the sum of all amounts payable on the bond after the
acquisition date (other than payments of qualified stated interest, which
includes interest on the Senior Subordinated Notes), such excess will be
deductible by the holder of the Senior Subordinated Notes (or, if it would
result in a smaller amortizable bond premium, an amount equal to the excess of
the U.S. Holder's adjusted basis in such bond over the amount payable upon the
exercise of an issuer call, over the period to such earlier call date) as
amortizable bond premium over the term of the Senior Subordinated Notes on a
constant yield basis, if an election by the holder under Section 171 of the Code
is made or is already in effect. An election under Section 171 of the Code is
available only if the Senior Subordinated Notes are held as capital assets. This
election is revocable only with the consent of the Internal Revenue Service and
applies to all obligations held by the holder during or after the taxable year
for which the election is made. To the extent the excess is deducted as
amortizable bond premium, the holder's adjusted tax basis in the Senior
Subordinated Notes will be reduced. The amortizable bond premium will be treated
as an offset to interest income on the Notes rather than as a separate deduction
item.
Market Discount on Notes. Generally, the market discount rules discussed
below will not apply to a U.S. Holder who acquired a Note when it was originally
issued. These rules would apply, however, to an original holder whose tax basis
in a Note is less than such Note's "issue price" (as defined above).
Gain recognized on the disposition (including a redemption) by a U.S.
Holder of a Note that has accrued market discount will be treated as ordinary
income, and not capital gain, to the extent of the accrued market discount,
provided that the amount of market discount exceeds a statutorily defined de
minimis amount. "Market discount" is defined as the excess, if any, of the
"revised issue price" (as defined below) in the case of the Senior Discount
Notes or the "stated redemption price at maturity" in the case of the Senior
Subordinated Notes over the tax basis of the debt obligation in the hands of the
holder immediately after its acquisition. The "revised issue price" of a debt
obligation generally equals the sum of its issue price and the
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<PAGE> 145
total amount of OID includible in the gross income of all holders for periods
before the acquisition of the debt obligation by the current holder (without
regard to any reduction in such income resulting from any prior purchase at an
acquisition premium) and less any cash payments in respect of such debt
obligation. The "stated redemption price at maturity" of the Senior Subordinated
Notes will equal the stated principal amount thereof.
Unless the U.S. Holder elects otherwise, the accrued market discount would
be the amount calculated by multiplying the market discount by a fraction, the
numerator of which is the number of days the obligation has been held by the
U.S. Holder and the denominator of which is the number of days after the U.S.
Holder's acquisition of the obligation up to and including its maturity date.
A U.S. Holder of a Note acquired at a market discount also may be required
to defer the deduction of a portion of the interest on any indebtedness incurred
or maintained to carry such Note until it is disposed of in a taxable
transaction. Moreover, to the extent of any accrued market discount on such
Notes, any partial principal payment with respect such Notes will be includible
as ordinary income upon receipt as will such Note's fair market value on certain
otherwise non-taxable transfers (such as gifts).
A U.S. Holder of a Note acquired at market discount may elect to include
the market discount in income as it accrues (on either a straight-line or
constant yield to maturity basis). This election would apply to all market
discount obligations acquired by the electing U.S. Holder on or after the first
day of the first taxable year to which the election applies. The election may be
revoked only with the consent of the Internal Revenue Service. If a holder of a
Note so elects to include market discount in income currently, the
above-discussed rules with respect to ordinary income recognition resulting from
sales and certain other disposition transactions and to deferral of interest
deductions would not apply.
Election to Apply OID Principles. A U.S. Holder may generally, upon
election, include in income all interest (including stated interest, acquisition
discount, OID, de minimis OID, market discount, de minimis market discount, and
unstated interest, as adjusted by any amortizable bond premium or acquisition
premium) that accrues on a Note by using the constant yield method applicable to
OID obligations, subject to certain limitations and exceptions. The election is
to be made for the taxable year in which the U.S. Holder acquired such Note, and
may not be revoked without the consent of the Internal Revenue Service. If such
election to apply the constant yield method is made with respect to a bond that
bears market discount, the electing holder will be treated as having made the
election described above to include market discount in income currently.
Tax Basis. A U.S. Holder's initial tax basis in a Note will be equal to the
purchase price paid by such holder for such Note.
A U.S. Holder's tax basis in a Senior Discount Note will be increased by
the amount of OID that is included in such U.S. Holder's income pursuant to the
foregoing rules (taking into account acquisition premium) through the day
preceding the day of disposition (and the accruals of market discount, if any,
which the U.S. Holder elected to include in gross income on an annual basis) and
will be decreased by the amount of any cash payments received. A U.S. Holder's
tax basis in a Senior Subordinated Note will be increased by the amount of
accrued market discount, if any, which the U.S. Holder elected to include in
gross income on an annual basis and decreased by the amortizable bond premium,
if any, which the U.S. Holder has elected to offset against interest income.
Sale or Redemption. Unless a nonrecognition provision applies, the sale,
exchange, redemption or other disposition of Notes will be a taxable event for
U.S. federal income tax purposes. In such event, a U.S. Holder will recognize
gain or loss equal to the difference between (i) the amount of cash plus the
fair market value of any property received upon such sale, exchange, redemption
or other taxable disposition (except to the extent that amounts received are
attributable, in the case of the Senior Subordinated Notes, to accrued interest,
which portion of the consideration would be taxed as ordinary income if the
interest was previously untaxed) and (ii) the holder's adjusted tax basis
therein. Subject to the discussion above under the caption "Market Discount"
with respect to the Notes, such gain or loss should be capital gain or loss. In
the case of non-corporate U.S. Holders, any such gain will be long-term capital
gain if the Notes have been held for more than
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eighteen months at the time of such sale, exchange, redemption or other
disposition and will be mid-term capital gain if the Notes have been held for
more than one year but not more than eighteen months at the time of such sale,
exchange, redemption or other disposition.
Exchange Offer. The exchange of Old Notes for New Notes pursuant to the
Exchange Offers should not constitute a significant modification of the terms of
the Old Notes and, therefore, such exchange should not constitute an exchange
for U.S. federal income tax purposes. Accordingly, such exchange should have no
U.S. federal income tax consequences to U.S. Holders of Old Notes.
Upon the failure to comply with certain of its obligations with respect to
the Exchange Offers, the Company (in the case of the Senior Subordinated Notes)
or Holdings (in the case of the Senior Discount Notes) would be required to pay
additional cash interest (the "Additional Interest") on the Senior Subordinated
Notes or Senior Discount Notes, as the case may be. In general, the Additional
Interest should be recognized as ordinary income by U.S. Holders when paid.
Backup Withholding and Information Reporting. Under the Code, U.S. Holders
of Notes may be subject, under certain circumstances, to information reporting
and "backup withholding" at a 31% rate with respect to cash payments in respect
of principal (and premium, if any), OID, interest, and the gross proceeds from
dispositions thereof. Backup withholding applies only if the U.S. Holder (i)
fails to furnish its social security or other taxpayer identification number
("TIN") within a reasonable time after a request therefor, (ii) furnishes an
incorrect TIN, (iii) fails to report properly interest or dividends, or (iv)
fails, under certain circumstances, to provide a certified statement, signed
under penalty of perjury, that the TIN provided is its correct number and that
it is not subject to backup withholding. Any amount withheld from a payment to a
U.S. Holder under the backup withholding rules is allowable as a credit (and may
entitle such holder to a refund) against such U.S. Holder's U.S. federal income
tax liability, provided that the required information is furnished to the
Service. Certain persons are exempt from backup withholding, including
corporations and financial institutions. U.S. Holders of Notes should consult
their tax advisors as to their qualification for exemption from backup
withholding and the procedure for obtaining such exemption.
Holdings and the Company will furnish annually to the Internal Revenue
Service and to record holders of the Notes (to whom it is required to furnish
such information) information relating to the amount of OID and interest.
Because this information will be based upon the adjusted issue price of the
Senior Discount Notes as if the holder were an original holder, purchasers who
purchase Senior Discount Notes for an amount other than the adjusted issue price
at the time of purchase will be required to determine for themselves the amount
of OID, if any, that they are required to report. See also " -- Acquisition
Premium on Senior Discount Notes" and "-- Market Discount on Notes."
THE FOREGOING DISCUSSION IS BASED ON THE PROVISIONS OF THE CODE,
REGULATIONS, RULINGS AND JUDICIAL DECISIONS NOW IN EFFECT, ALL OF WHICH ARE
SUBJECT TO CHANGE. ANY SUCH CHANGES MAY BE APPLIED RETROACTIVELY IN A MANNER
THAT COULD ADVERSELY AFFECT U.S. HOLDERS OF NOTES. EACH PURCHASER OF ANY OF THE
NOTES SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO
IT, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX
LAWS, OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES.
NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a Non-U.S. Holder of a Note.
For purposes of the following discussion, interest and gain on the sale,
exchange or other disposition of a Note will be considered to be "U.S. trade or
business income" if such income or gain is (i) effectively connected with the
conduct of a U.S. trade or business or (ii) in the case of a treaty resident,
attributable to a permanent establishment (or, in the case of an individual, a
fixed base) in the United States.
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Stated Interest and OID on Notes. Generally any interest or OID paid to a
Non-U.S. Holder of a Note that is not U.S. trade or business income will not be
subject to U.S. federal income tax if the interest or OID qualifies as
"portfolio interest." Generally interest and OID on the Notes will qualify as
portfolio interest if (i) the Non-U.S. Holder does not actually or
constructively own 10% or more of the total voting power of all voting stock of
the Company (in the case of the Senior Subordinated Notes) or Holdings (in the
case of the Senior Discount Notes) and (ii) such holder is not a "controlled
foreign corporation" with respect to which the Company or Holdings, as the case
may be, is a "related person" within the meaning of the Code, and (iii) either
the beneficial owner, under penalty of perjury, certifies that the beneficial
owner is not a United States person and such certificate provides the beneficial
owner's name and address, or a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business and holds the Notes certifies under penalties of perjury,
that such statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner, and (iv) the Non-U.S.
Holder is not a bank receiving interest on the extension of credit made pursuant
to a loan agreement made in the ordinary course of its trade or business.
The gross amount of payments to a Non-U.S. Holder of interest or OID that
do not qualify for the portfolio interest exception and that are not effectively
connected with the conduct of a U.S. trade or business will be subject to U.S.
federal income tax at the rate of 30%, unless a U.S. income tax treaty applies
to reduce or eliminate withholding. U.S. trade or business income will be taxed
on a net basis at regular U.S. rates rather than the 30% gross rate. In the case
of a Non-U.S. Holder that is a corporation, such United States trade or business
income may also be subject to the branch profits tax (which is generally imposed
on a foreign corporation on the actual or deemed repatriation from the United
States of earnings and profits attributable to United States trade or business
income) at a 30% rate. The branch profits tax may not apply (or may apply at a
reduced rate) if a recipient is a qualified resident of certain countries with
which the United States has an income tax treaty. To claim the benefit of a tax
treaty or to claim exemption from withholding because the income is U.S. trade
or business income, the Non-U.S. Holder must provide a properly executed Form
1001 or 4224 (or such successor forms as the Internal Revenue Service
designates), as applicable, prior to the payment of interest. These forms must
be periodically updated. Also under these regulations, a Non-U.S. Holder who is
claiming the benefits of a treaty may be required in certain instances to obtain
a U.S. taxpayer identification number and to provide certain documentary
evidence issued by foreign governmental authorities to prove residence in the
foreign country. If the Senior Discount Notes are AHYDOs, the recharacterization
of a portion of OID as dividends as described above will not apply for purposes
of U.S. withholding tax.
Sale, Exchange or Redemption of Notes. A Non-U.S. Holder will generally not
be subject to U.S. federal income tax recognized on a sale, redemption or other
disposition of a Note unless (i) the gain is effectively connected with the
conduct of a trade or business within the United States by the Non-U.S. Holder;
(ii) in the case of a Non-U.S. Holder who is a nonresident alien individual and
holds such Note as a capital asset, such holder is present in the United States
for 183 or more days in the taxable year and certain other requirements are met;
or (iii) the Non-U.S. Holder is subject to the special rules applicable to
former citizens and residents of the United States
Federal Estate Tax. If interest on the Notes is exempt from withholding of
U.S. federal income tax as portfolio interest described above, the Notes will
not be included in the estate of a deceased Non-U.S. Holder for U.S. federal
estate tax purposes.
Information Reporting and Backup Withholding. The Company and Holdings must
report annually to the Internal Revenue Service and to each Non-U.S. Holder any
interest or OID that is subject to withholding, or that is exempt from U.S.
withholding tax pursuant to a tax treaty, or interest or OID that is exempt from
United States tax under the portfolio interest exception. Copies of these
information returns may also be made available under the provisions of a
specific treaty or agreement to the tax authorities of the country in which the
Non-U.S. Holder resides.
In the case of payments of interest (including OID) to Non-U.S. Holders,
Treasury Regulations provide that information reporting and backup withholding
at a rate of 31% will not apply to such payments with respect to which either
the requisite certification has been received or an exemption has otherwise been
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established (provided that neither the payor nor its paying agent has actual
knowledge that the holder is a U.S. person or the conditions of any other
exemption are not, in fact, satisfied).
The Treasury Regulations provide that backup withholding and information
reporting will not apply to payments of principal on the Notes by the Company or
Holdings to a Non-U.S. Holder, if the Holder certifies as to its non-U.S. status
under penalties of perjury or otherwise establishes an exemption (provided that
neither the Company nor Holdings nor their paying agents has actual knowledge
that the holder is a United States person or that the conditions of any other
exemption are not, in fact, satisfied).
The payment of the proceeds from the disposition of the Notes to or through
the United States office of any broker, U.S. or foreign, will be subject to
information reporting and possible backup withholding unless the owner certifies
as to its non-U.S. status under penalty of perjury or otherwise establishes an
exemption, provided that the broker does not have actual knowledge that the
holder is a U.S. person or that the conditions of any other exemption are not,
in fact, satisfied. The payment of the proceeds from the disposition of a Note
to or through a non-U.S. office of a non-U.S. broker that is not a U.S. related
person will not be subject to information reporting or backup withholding. For
this purpose, a "U.S. related person" is (i) a "controlled foreign corporation"
for U.S. federal income tax purposes or (ii) a foreign person 50% or more of
whose gross income from all sources for the three-year period ending with the
close of its taxable year preceding the payment (or for such part of the period
that the broker has been in existence) is derived from activities that are
effectively connected with the conduct of a United States trade or business.
In the case of the payment of proceeds from the disposition of Notes to or
through a non-U.S. office of a broker that is either a U.S. person or a U.S.
related person, the regulations require information reporting on the payment
unless the broker has documentary evidence in its files that the owner is a
Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a broker
that is not a U.S. person or a U.S. related person (absent actual knowledge that
the payee is a U.S. person).
The Treasury Department recently promulgated final Treasury Regulations
regarding the withholding and information reporting rules discussed above. In
general, the final regulations do not significantly alter the substantive
withholding and information reporting requirements but rather unify current
certification procedures and forms and clarify reliance standards. The final
regulations are generally effective for payments made after December 31, 1998,
subject to certain transition rules. Non-U.S. Holders should consult their own
tax advisors with respect to the impact, if any, of the new final Treasury
Regulations.
Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a refund or a credit against such Non-U.S.
Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY,
EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISER AS TO PARTICULAR TAX
CONSEQUENCES TO IT OF PURCHASING, HOLDING AND DISPOSING OF THE NOTES, INCLUDING
THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY
PROPOSED CHANGES IN APPLICABLE LAWS.
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LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the
Issuers by Weil Gotshal & Manges LLP, Dallas, Texas.
CHANGE IN ACCOUNTANT
The Company on March 27, 1998 changed its independent accountants from
Ernst & Young LLP ("Ernst & Young") to Coopers & Lybrand L.L.P. Ernst & Young's
report on the consolidated financial statements of LIN Television for fiscal
years 1997 and 1996 did not contain an adverse opinion or a disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. Additionally, no reportable conditions as described in
Item 304(a)(1)(v) of Regulation S-K were identified during Ernst & Young's
audits of the consolidated financial statements. During Ernst & Young's
appointment as independent accountants, there were no disagreements on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure which if not resolved to Ernst & Young's
satisfaction would have caused Ernst & Young to make reference to the subject
matter of the disagreement in their reports on LIN Television's consolidated
financial statements.
EXPERTS
The consolidated financial statements of LIN Television Corporation at
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, appearing in this Prospectus and the Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein, and is included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
The consolidated balance sheet of LIN Holdings Corp. as of December 31,
1997 included in this Prospectus and the Registration Statement, has been
included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
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INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
LIN TELEVISION CORPORATION
Report of Independent Auditors.............................. F-2
Consolidated Balance Sheets as of December 31, 1997 and
1996...................................................... F-3
Consolidated Statements of Income for each of the years
ended December 31, 1997, 1996
and 1995.................................................. F-4
Consolidated Statements of Stockholders' Equity for each of
the years ended December 31, 1997, 1996 and 1995.......... F-5
Consolidated Statements of Cash Flows for each of the years
ended December 31, 1997, 1996 and 1995.................... F-6
Notes to Consolidated Financial Statements.................. F-7
Consolidated Balance Sheets as of March 31, 1998 (unaudited)
and December 31, 1997..................................... F-22
Consolidated Statements of Income for the three months ended
March 31, 1998 and 1997 (unaudited)....................... F-23
Consolidated Statements of Cash Flows for the three months
ended March 31, 1998 and 1997 (unaudited)................. F-24
Notes to Consolidated Financial Statements (unaudited)...... F-25
LIN HOLDINGS CORP.
Report of Independent Accountants........................... F-32
Consolidated Balance Sheet as of December 31, 1997.......... F-33
Notes to Consolidated Balance Sheet......................... F-34
Consolidated Balance Sheets as of March 31, 1998 (unaudited)
and December 31, 1997..................................... F-37
Consolidated Statements of Income for the three months ended
March 31, 1998 and 1997 (unaudited)....................... F-38
Consolidated Statements of Cash Flows for the three months
ended March 31, 1998 and 1997 (unaudited)................. F-39
Notes to Consolidated Financial Statements (unaudited)...... F-40
</TABLE>
F-1
<PAGE> 151
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
LIN Television Corporation
We have audited the accompanying consolidated balance sheets of LIN
Television Corporation as of December 31, 1997 and 1996, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
LIN Television Corporation at December 31, 1997 and 1996, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1997, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Fort Worth, Texas
January 19, 1998, except for
Note 2, as to which the
date is March 3, 1998
F-2
<PAGE> 152
LIN TELEVISION CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1997 1996
-------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 8,046 $ 27,952
Accounts receivable, less allowance for doubtful accounts
(1997 -- $2,197; 1996 -- $1,960)....................... 57,645 52,666
Program rights............................................ 9,916 10,133
Other current assets...................................... 1,865 6,675
-------- ---------
Total current assets.............................. 77,472 97,426
Property and equipment, less accumulated depreciation....... 107,593 106,441
Program rights and other non current assets................. 14,199 10,427
Equity in joint venture..................................... 473 505
Intangible assets, less accumulated amortization
(1997 -- $70,905;
1996 -- $59,348).......................................... 369,588 381,145
-------- ---------
Total assets...................................... $569,325 $ 595,944
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 7,553 $ 7,593
Program obligations....................................... 11,320 10,724
Accrued income taxes...................................... 3,444 2,518
Other accruals............................................ 26,891 20,023
-------- ---------
Total current liabilities......................... 49,208 40,858
Long-term debt.............................................. 260,000 350,000
Deferred income taxes....................................... 65,248 64,211
Other non current liabilities............................... 2,304 2,427
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares -- 15,000,000
Issued and outstanding shares -- none.................. -- --
Common stock, $0.01 par value:
Authorized shares -- 90,000,000
Issued and outstanding shares(1997 -- 29,857,000;
29,717,000 -- 1996)................................... 299 297
Treasury stock............................................ (3) --
Additional paid-in capital................................ 283,177 276,997
Accumulated deficit....................................... (90,908) (138,846)
-------- ---------
Total stockholders' equity........................ 192,565 138,448
-------- ---------
Total liabilities and stockholders' equity........ $569,325 $ 595,944
======== =========
</TABLE>
See accompanying notes.
F-3
<PAGE> 153
LIN TELEVISION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Net revenues............................................... $291,519 $273,367 $217,247
Operating costs and expenses:
Direct operating......................................... 70,746 68,954 49,342
Selling, general & administrative........................ 63,473 59,974 47,646
Corporate expense........................................ 6,763 6,998 5,747
Amortization of program rights........................... 15,596 14,464 12,357
Depreciation and amortization of intangible assets....... 24,789 23,817 17,127
Tower write-offs......................................... 2,697 -- --
-------- -------- --------
Total operating costs and expenses............... 184,064 174,207 132,219
-------- -------- --------
Operating income........................................... 107,455 99,160 85,028
Other (income) expense:
Interest expense......................................... 21,340 26,582 26,262
Investment income........................................ (1,332) (1,354) (1,258)
Other expense............................................ -- -- 320
Equity in loss of joint venture.......................... 1,532 995 --
Merger expense........................................... 7,206 -- --
-------- -------- --------
Total other expense.............................. 28,746 26,223 25,324
-------- -------- --------
Income before provision for income taxes................... 78,709 72,937 59,704
Provision for income taxes................................. 30,602 26,476 21,674
-------- -------- --------
Net income................................................. $ 48,107 $ 46,461 $ 38,030
======== ======== ========
Net income per share:
Net income............................................... $ 1.62 $ 1.57 $ 1.29
======== ======== ========
Net income-assuming dilution............................. $ 1.58 $ 1.54 $ 1.28
======== ======== ========
Weighted average shares outstanding........................ 29,781 29,631 29,367
======== ======== ========
Weighted average shares outstanding-assuming dilution...... 30,534 30,120 29,757
======== ======== ========
</TABLE>
See accompanying notes.
F-4
<PAGE> 154
LIN TELEVISION CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(DOLLARS AND SHARES IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
--------------- TREASURY PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT STOCK CAPITAL DEFICIT EQUITY
------ ------ -------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995............ 29,183 $292 $ -- $263,205 $(223,337) $ 40,160
Net income.......................... -- -- -- -- 38,030 38,030
Proceeds from exercises of stock
options and issuance of Employee
Stock Purchase Plan shares....... 306 3 -- 5,144 -- 5,147
Adjustment of prior year LIN
Broadcasting corporate service
charges.......................... -- -- -- (365) -- (365)
Tax benefit from exercises of stock
options.......................... -- -- -- 3,462 -- 3,462
------ ---- ----- -------- --------- --------
Balance at December 31, 1995.......... 29,489 295 -- 271,446 (185,307) 86,434
Net income.......................... -- -- -- -- 46,461 46,461
Proceeds from exercises of stock
options and issuance of Employee
Stock Purchase Plan shares....... 228 2 -- 4,800 -- 4,802
Tax benefit from exercises of stock
options.......................... -- -- -- 751 -- 751
------ ---- ----- -------- --------- --------
Balance at December 31, 1996.......... 29,717 297 -- 276,997 (138,846) 138,448
Net income.......................... -- -- -- -- 48,107 48,107
Proceeds from exercises of stock
options and issuance of Employee
Stock Purchase Plan shares....... 140 2 -- 3,633 -- 3,635
Treasury stock purchases............ -- -- (816) -- -- (816)
Treasury stock reissuances.......... -- -- 813 -- (169) 644
Tax benefit from exercises of stock
options.......................... -- -- -- 2,547 -- 2,547
------ ---- ----- -------- --------- --------
Balance at December 31, 1997.......... 29,857 $299 $ (3) $283,177 $ (90,908) $192,565
====== ==== ===== ======== ========= ========
</TABLE>
See accompanying notes.
F-5
<PAGE> 155
LIN TELEVISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1997 1996 1995
-------- -------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................................. $ 48,107 $ 46,461 $ 38,030
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization (includes amortization of
financing costs)...................................... 25,688 24,818 18,242
LIN Broadcasting corporate service charges forgiven...... -- -- (365)
Tax benefit from exercises of stock options.............. 2,547 751 3,462
Deferred income taxes.................................... 54 3,127 2,719
Net loss (gain) on disposition of assets................. 3,067 (158) 422
Amortization of program rights........................... 15,596 14,464 12,357
Program payments......................................... (13,179) (15,536) (14,311)
Equity in joint venture.................................. 1,532 995 --
Changes in operating assets and liabilities:
Accounts receivable................................... (4,979) (1,934) (4,954)
Other assets.......................................... (3,976) 3,514 (3,148)
Liabilities........................................... 7,234 (5,703) 3,586
-------- -------- ---------
Total adjustments................................ 33,584 24,338 18,010
-------- -------- ---------
Net cash provided by operating activities.................. 81,691 70,799 56,040
INVESTING ACTIVITIES
Capital expenditures....................................... (20,605) (27,557) (27,715)
Asset dispositions......................................... 7,045 693 56
Investment in joint venture................................ (1,500) (1,000) (500)
Acquisitions............................................... -- -- (97,563)
Local Marketing Agreement expenditures..................... -- -- (2,001)
-------- -------- ---------
Net cash used in investing activities...................... (15,060) (27,864) (127,723)
FINANCING ACTIVITIES
Proceeds from exercise of stock options and sale of
Employee Stock Purchase Plan shares...................... 4,279 4,802 5,147
Treasury stock purchases................................... (816) -- --
Principal payments on long-term debt....................... (90,000) (37,000) (25,000)
Proceeds from long-term debt............................... -- -- 92,000
Purchase of interest rate caps............................. -- -- (346)
Loan fees incurred on long-term debt....................... -- (810) --
-------- -------- ---------
Net cash provided by (used in) financing activities........ (86,537) (33,008) 71,801
-------- -------- ---------
Net increase (decrease) in cash and cash equivalents....... (19,906) 9,927 118
Cash and cash equivalents at beginning of the year......... 27,952 18,025 17,907
-------- -------- ---------
Cash and cash equivalents at end of the year............... $ 8,046 $ 27,952 $ 18,025
======== ======== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest................................................. $ 20,608 $ 28,866 $ 21,733
Income taxes............................................. $ 26,092 $ 25,285 $ 14,175
</TABLE>
See accompanying notes.
F-6
<PAGE> 156
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS AND ORGANIZATION
On December 28, 1994, the Company became an independent public company when
its common stock was distributed to LIN Broadcasting Corp. ("LIN Broadcasting")
shareholders on a tax-free basis (the "Spin-Off"). The Company's common stock
was distributed to the LIN Broadcasting shareholders on the basis of one share
of the Company's common stock for every two shares of LIN Broadcasting common
stock held of record as of December 9, 1994.
The Company operates twelve television stations (including KXAS-TV) and
provides consulting services to two additional television stations. (See Note
8). Thirteen of these stations are network affiliates and ten are in the forty
largest domestic television markets. The twelve television stations operated by
the Company include four stations to which the Company provides programming and
marketing services pursuant to local marketing agreements. See Note 14. The
Company serves additional programming outlets through operation of low-power
television stations and satellite broadcasting facilities. The Company, with its
predecessors, has been engaged in commercial television broadcasting since 1966.
Stations in larger markets traditionally command higher revenues than
stations in smaller markets due to a larger audience. Station KXAS-TV, in the
Dallas-Fort Worth market, has generated a substantial portion of the Company's
net revenues. Approximately 33%, 34% and 36% of the Company's 1997, 1996 and
1995 net revenues, respectively, were attributable to KXAS-TV. A significant
downturn in the economy of that station's market could substantially affect the
operating results of the Company. The Company is also dependent on
automotive-related advertising. Approximately 24% of the Company's gross
advertising revenues for the years ended December 31, 1997, 1996 and 1995
consisted of automotive advertising. A significant decrease in such advertising
could materially effect the Company's operating results.
The Company currently owns the following network-affiliated television
broadcasting stations:
<TABLE>
<CAPTION>
STATION AND LOCATION CHANNEL NETWORK AFFILIATION
-------------------- ------- -------------------
<S> <C> <C>
KXAS-TV, Fort Worth-Dallas, TX.......................... 5(VHF) NBC
WISH-TV, Indianapolis, IN............................... 8(VHF) CBS
WTNH-TV, New Haven-Hartford, CT......................... 8(VHF) ABC
WIVB-TV, Buffalo, NY.................................... 4(VHF) CBS
WAVY-TV, Portsmouth-Norfolk, VA......................... 10(VHF) NBC
KXAN-TV, Austin, TX..................................... 36(UHF) NBC
WAND-TV, Decatur, IL.................................... 17(UHF) ABC
WANE-TV, Fort Wayne, IN................................. 15(UHF) CBS
</TABLE>
The Company also provides programming and marketing services to the
following stations pursuant to local marketing agreements ("LMAs"):
<TABLE>
<CAPTION>
STATION AND LOCATION CHANNEL NETWORK AFFILIATION
-------------------- ------- -------------------
<S> <C> <C>
KXTX-TV, Fort Worth-Dallas, TX.......................... 39(UHF) Ind.
WBNE-TV, New Haven-Hartford, CT......................... 59(UHF) WB
WVBT-TV, Portsmouth-Norfolk, VA......................... 43(UHF) WB/Fox
KNVA-TV, Austin, TX..................................... 54(UHF) WB
</TABLE>
2. SUBSEQUENT EVENT
The Company and two newly formed affiliates of Hicks, Muse, Tate & Furst
Incorporated ("Hicks Muse"), the predecessors-in-interest of LIN Holdings Corp.
("Holdings") and LIN Acquisition Company ("LIN Acquisition"), entered into an
Agreement and Plan of Merger on August 12, 1997 (as amended, the
F-7
<PAGE> 157
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
"Merger Agreement"). On January 7, 1998, the stockholders of the Company adopted
and approved the Merger Agreement.
Pursuant to, and upon the terms and conditions of, the Merger Agreement,
Holdings acquired the Company (the "Acquisition") on March 3, 1998 by merging
LIN Acquisition, its wholly owned subsidiary, with and into the Company (the
"Merger"), with the Company surviving the merger and becoming a direct, wholly
owned subsidiary of Holdings. The total purchase price for the common equity of
the Company was approximately $1.7 billion (subject to the payment of 8.0% per
annum thereon from and including February 15, 1998 up to but excluding March 3,
1998, the date on which the Merger became effective). The Company incurred
additional financing and legal fees in connection with the closing of the
Merger.
The Acquisition was funded by (i) $6.9 million of excess cash on the
Company's balance sheet; (ii) $50.0 million aggregate principal amount of senior
secured Tranche A term loans ("Tranche A Term Loans"); (iii) $120.0 million
aggregate principal amount of senior secured Tranche B term loans ("Tranche B
Term Loans"); (iv) $299.3 million of gross proceeds from the issuance by LIN
Television of $300.0 million aggregate principal amount of unregistered 8 3/8%
senior subordinated notes due 2008 (the "Old Senior Subordinated Notes"); (v)
$199.6 million of gross proceeds from the issuance by Holdings of $325.0 million
aggregate principal amount at maturity of unregistered 10% senior discount notes
due 2008 (the "Old Senior Discount Notes"), which proceeds were contributed by
Holdings to the common equity of the Company; (vi) $815.5 million of proceeds of
the GECC Note (as defined below) and (vii) $558.1 million of common equity
provided by affiliates of Hicks Muse, management and other co-investors to the
equity of the corporate parents of Holdings, which in turn, through Holdings,
contributed such amount to the common equity of the Company (collectively, the
"Financings").
In connection with the Acquisition, Hicks Muse and NBC formed a television
station joint venture (the "Joint Venture"). The Joint Venture consists of
KXAS-TV, formerly the Company's Dallas-Fort Worth NBC affiliate, and KNSD-TV,
formerly NBC's San Diego station. A wholly owned subsidiary of NBC is the
general partner of the Joint Venture (the "NBC General Partner") and NBC
operates the stations owned by the Joint Venture. The NBC General Partner holds
an approximate 80% equity interest and the Company holds an approximate 20%
equity interest in the Joint Venture. General Electric Capital Corporation
("GECC") provided debt financing for the Joint Venture in the form of an $815.5
million 25-year non-amortizing senior secured note bearing an interest rate of
8% per annum for the first fifteen years of its term, and at a rate of 9.0% per
annum thereafter (the "GECC Note") The Company expects that the interest
payments on the GECC Note will be serviced solely by the cash flow of the Joint
Venture.
The GECC Note was issued by LIN Television of Texas, L.P., the Company's
indirect wholly owned partnership ("LIN-Texas"), which distributed the proceeds
to the Company. The obligations to GECC under the GECC Note were assumed by a
limited liability company to finance a portion of the cost of the Acquisition.
The obligations to GECC under the GECC note were assumed by the Joint Venture
and LIN Texas was simultaneously released from all obligations under the GECC
Note. The GECC Note is not an obligation of Holdings, the Company, or any of
their respective subsidiaries and is recourse only to the Joint Venture, the
Company's interest therein and to one of Holdings two corporate parents pursuant
to a guarantee.
In connection with the formation of the Joint Venture, the Company received
an extension of its NBC network affiliation agreements to 2010 and the option
(exercisable through December 31, 1999) to purchase WVTM-TV, the NBC affiliate
in Birmingham, Alabama.
Additionally, on August 12, 1997, the Company entered into an asset
purchase agreement with AT&T Corp. ("AT&T") pursuant to which it will acquire
WOOD-TV, a television station in Grand Rapids, and the LMA rights relating to
station WOTV-TV, for approximately $125.5 million (the "Grand Rapids
Acquisition"). The funding for this acquisition is expected to be provided under
the new credit facility arranged in connection with the Acquisition funding. The
Company expects to acquire the Grand Rapids stations from
F-8
<PAGE> 158
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AT&T in 1998. Management has been providing consulting services to the Grand
Rapids stations under a consulting agreement with AT&T since 1994.
The summarized unaudited pro forma consolidated results of operations set
forth below for the year ended December 31, 1997, assume the Acquisition and the
Joint Venture had taken place on January 1, 1997. Such results do not give
effect to the Grand Rapids acquisition.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-----------------
(IN THOUSANDS)
<S> <C>
Net revenues.......................................... $196,115
Net loss.............................................. $(43,415)
</TABLE>
The pro forma results do not necessarily represent results that would have
occurred if the Acquisition and Joint Venture had taken place on the dates
indicated nor are they necessarily indicative of the results of future
operations.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. All significant
intercompany accounts and transactions have been eliminated.
Use of Estimates
The management of the Company is required, in certain instances, to use
estimates and assumptions that affect the amounts reported in the financial
statements, and the notes thereto, in order to conform with generally accepted
accounting principles. The Company's actual results could differ from these
estimates.
F-9
<PAGE> 159
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Cash and Cash Equivalents
Cash equivalents consist of highly liquid, short-term investments which
have a maturity of three months or less when purchased. The Company's excess
cash is invested primarily in commercial paper.
Property and Equipment
Property and equipment is recorded at cost and is depreciated by the
straight-line method over the estimated useful lives of the assets. The Company
recorded depreciation expense of $13.2, $12.3 million, and $8.2 million during
1997, 1996, and 1995, respectively.
In 1997, the Company completed the upgrade of several of its analog
transmitter towers and transmitter buildings to digital equipment. In accordance
with Financial Accounting Standards Board (the "FASB") Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of, the Company disposed of towers and other broadcast equipment
that could no longer be used with digital technology. The net book loss on this
equipment of approximately $2.7 million is reflected on the Company's
Consolidated Statements of Income as "tower write-off."
Revenue Recognition
Broadcast revenue is recognized during the period in which the advertising
is aired. Barter revenue is recognized based on the estimated fair value of the
product or service received.
Advertising Expense
The cost of advertising is expensed as incurred. The Company incurred $5.6
million, $4.8 million, and $4.1 million in advertising costs during 1997, 1996,
and 1995, respectively.
Intangible Assets
Intangible assets represent the excess of the purchase price over the
estimated fair value of identifiable assets acquired in business acquisitions,
and is attributable to FCC licenses, network affiliations, and goodwill.
Intangible assets acquired subsequent to October 31, 1970, the effective date of
Accounting Principles Board Opinion No. 17, are being amortized over 40 years.
Intangible assets of $5.8 million acquired prior to October 31, 1970 are not
being amortized. The carrying value of intangible assets will be evaluated, in
terms of undiscounted cash flows, if the facts and circumstances suggest that
they may be impaired. If this review indicates that intangible assets will not
be recoverable, the Company's carrying value of the intangible assets will be
reduced to their fair value.
Program Rights
Program rights are recorded as assets when the license period begins and
the programs are available for broadcasting. Costs incurred in connection with
the purchase of programs to be broadcast within one year are classified as
current assets, while costs of those programs to be broadcast subsequently are
considered non-current. The program costs are charged to expense over their
estimated broadcast periods using the straight-line method. Program obligations
are classified as current or non-current in accordance with the payment terms of
the license agreement.
Net Income Per Share
Net income per share is based on the average number of shares of common
stock outstanding during each year presented. Net income per share assuming
dilution is based on the average number of shares of common stock outstanding
during each year presented and the dilutive effect of common stock equivalents
of 753,000, 489,000 and 390,000 for the years ended December 31, 1997, 1996 and
1995, respectively.
F-10
<PAGE> 160
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Reclassification
Certain reclassifications have been made to the prior period financial
statements to conform to the current period financial statement presentation.
Impact of Recently Issued Accounting Standards
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings Per Share (Statement 128), which is required to be adopted on
December 31, 1997. Statement 128 replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings per share. Unlike
primary earnings per share, basic earnings per share excludes any dilutive
effect of options, warrants and convertible securities. Dilutive earnings per
share is calculated similarly to the previously recorded fully diluted earnings
per share using the average market price of the weighted-average shares
outstanding. All earnings per share amounts for all periods have been presented
and, where appropriate, restated to conform to the Statement 128 requirements.
In June 1997, the FASB issued Statement No. 130, Reporting Comprehensive
Income(Statement 130) effective for years beginning after December 15, 1997.
Statement 130 requires that a public company report items of other comprehensive
income either below the total for net income in the income statement, or in a
statement of changes in equity, and to disclose the accumulated balance of other
comprehensive income separately from retained earnings and additional
paid-in-capital in the equity section of the balance sheet. The Company does not
expect the adoption of Statement 130 to have a material impact on financial
statement disclosures.
In June 1997, the FASB issued Statement No. 131, Disclosures about Segments
of an Enterprise and Related Information (Statement 131) effective for years
beginning after December 15, 1997. Statement 131 requires that a public company
report financial and descriptive information about its reportable operating
segments pursuant to criteria that differ from current accounting practice.
Operating segments, as defined, are components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision-maker in deciding how to allocate resources and in
assessing performance. The financial information to be reported includes segment
profit or loss, certain revenue and expense items and segment assets and
reconciliations to corresponding amounts in the general-purpose financial
statements. SFAS 131 also requires information about revenues from products or
services, countries where the company has operations or assets and major
customers. The Company does not expect the adoption of Statement 131 to have a
material impact on financial statement disclosures.
4. PROPERTY AND EQUIPMENT
The major classifications of property and equipment for the years ended
December 31 were as follows:
<TABLE>
<CAPTION>
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Land........................................................ $ 10,550 $ 11,533
Buildings................................................... 39,977 34,677
Broadcasting equipment...................................... 129,238 122,807
-------- --------
179,765 169,017
Less accumulated depreciation............................... 72,172 62,576
-------- --------
$107,593 $106,441
======== ========
</TABLE>
F-11
<PAGE> 161
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. LONG-TERM DEBT
In August 1996, the Company renegotiated the terms of its existing $305
million bank credit facility (the "Credit Facility") primarily to reduce the
interest attributable to outstanding debt. The Credit Facility, as amended,
permits the Company to borrow up to $600 million of an eight-year, reducing
revolving credit facility. In August 1997, the Company decided to reduce the
available borrowing under the Credit Facility to $305 million. The Company has
indebtedness outstanding of $260 million and funds of $45 million available
under the Credit Facility as of December 31, 1997 (see Note 2 -- "Subsequent
Events" for a discussion of the financing related to the Merger).
The Company incurred financing and legal fees totaling approximately $7.1
million in connection with the Credit Facility in 1994 and an additional $0.8
million in financing and legal fees associated with the amendment to the Credit
Facility in 1996 which are being amortized over the contractual term of the
Credit Facility.
Under the renegotiated terms of the Credit Facility, interest is payable at
the higher of the prevailing prime rate or an adjusted Federal Funds Rate, or
LIBOR, plus an applicable margin that varies from 0.4% to 1.0% based upon the
ratio of the Company's consolidated total debt to consolidated operating cash
flow.
The commitment of the Credit Facility will begin to reduce in semi-annual
installments commencing June 30, 1999 such that the annual commitment reduction
will be $15.25 million in 1999, $61.0 million per year in years 2000-2003, and
the remaining $45.75 million in 2004. As of December 31, 1997, the Company would
be required, in 2000, to begin making payments to the extent that the balance
outstanding under the Credit Facility exceeded the reduced commitment available
and continue making semi-annual installments under the revolving facility
through December 31, 2004, at which time the debt will be fully repaid. The
Company is required to apply cash proceeds from certain sales of assets which
are not reinvested in similar assets to the prepayment of loans. The Credit
Facility, as amended, also permits the Company to solicit commitments for an
incremental $300 million, eight-year, reducing revolving credit facility (the
"Incremental Facility"). Aggregate commitments to the Incremental Facility, if
any, will reduce in eight equal semi-annual amounts beginning 2001 and ending
2004. The weighted average interest rate on outstanding borrowings was 6.4%,
6.16% and 6.64% at December 31, 1997, 1996 and 1995, respectively. The Company
is also required to pay quarterly commitment fees ranging from 0.1875% to
0.2500%, based upon the Company's leverage ratio for that particular quarter, on
any unused portion of the Credit Facility. The Company incurred commitment fees
of approximately $343,724, $449,000 and $811,000 for the three years ended
December 31, 1997, 1996, and 1995, respectively. In order to comply with
covenants under the Credit Facility, prior to the renegotiated terms, and to
provide interest rate protection, the Company purchased interest rate caps at a
cost of $346,000 during the year ended December 31, 1995. The interest rate caps
cover notional amounts totaling $190.0 million, are based on three-month LIBOR,
and have strike rates of 9%. Each of these interest rate cap agreements
terminated on December 31, 1997. The costs of the interest rate caps were
capitalized and charged to interest expense over the lives of the caps. During
the past three years, the prevailing market rates have been below the rate caps
in effect. Therefore, the only effect on the Company's interest expense from
such transactions has been the amortization of the cost of these caps of
$124,588, $124,588 and $187,073 during the years ended December 31, 1997, 1996
and 1995, respectively. Under the renegotiated terms of the Credit Facility the
Company is no longer required to purchase interest rate caps.
The Credit Facility contains covenants restricting or limiting certain
activities, including (i) acquisitions and investments, including treasury
stock, (ii) incurrence of debt, (iii) distributions and dividends to
stockholders, (iv) mergers and sales of assets, (v) prepayments and subordinated
indebtedness, and (vi) creations of liens. The Company is required to apply cash
proceeds from certain sales of assets which are not reinvested in similar assets
and excess cash flow to the prepayment of loans. As security under the Credit
Facility, the Company has given a negative pledge on the assets and capital
stock of each of its subsidiaries, which own all of the Company's television
properties. Such subsidiaries are restricted from making certain
F-12
<PAGE> 162
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
distributions or payments to the Company. Under the Credit Facility, the Company
must remain in compliance with a series of financial covenants, which compare
the levels of the Company's indebtedness to its cash flows as of the end of each
quarter. As of December 31, 1997, the Company was in compliance with all
covenants.
The aggregate amounts of principal maturities under the Credit Facility
subsequent to December 31, 1997 are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- --------------
(IN THOUSANDS)
<S> <C>
1998-1999.............................................. $ --
2000................................................... 31,250
2001................................................... 61,000
2002................................................... 61,000
Thereafter............................................. 106,750
--------
$260,000
========
</TABLE>
6. PRIVATE MARKET VALUE GUARANTEE
AT&T through its wholly-owned subsidiary, AT&T Wireless Services Inc.
("AT&T Wireless"), currently owns approximately 45% of the outstanding common
stock of the Company. AT&T Wireless has agreed, pursuant to a Private Market
Value Guarantee ("PMVG"), to either offer to purchase the remaining shares of
the Company in 1998 for the private market value (as defined) or put the Company
up for sale. If AT&T Wireless does not agree to acquire such remaining shares,
the Company will be sold in its entirety in a manner intended to maximize
shareholder value. There is no assurance that AT&T Wireless will agree to
acquire shares of the Company's Common Stock for private market value. If AT&T
Wireless does not offer to acquire such shares, there is no assurance that the
Company will be sold in its entirety, or, if sold, that the consideration
obtained will be considered favorable to holders of shares of the Company's
Common Stock. The PMVG also provides for the selection of three independent
directors who serve on the Company's Board of Directors.
As previously mentioned, on August 12, 1997, the Company entered into the
Merger Agreement pursuant to which newly formed affiliates of Hicks Muse will
acquire the Company (See Note 2 -- "Subsequent Events"). The total purchase
price for the Company's Common Stock, par value $0.01 per share, will be
approximately $1.7 billion (subject to the payment of 8% per annum thereon from
and including February 15, 1998 up to but excluding the date on which the Merger
becomes effective). In addition the Company will refinance the $260 million of
LIN Television indebtedness outstanding as of December 31, 1997.
7. STOCKHOLDERS' EQUITY
Pursuant to the Company's 1994 Adjustment Stock Incentive Plan,
nonqualified options have been granted to officers and key employees of the
Company and LIN Broadcasting who held options to purchase LIN Broadcasting stock
at the date of the Spin-Off. On December 28, 1994, one option to purchase stock
of the Company was granted for every two LIN Broadcasting options held,
resulting in 701,175 options to purchase common stock of the Company being
granted at exercise prices ranging from $2.74 to $20.02.
The Company and LIN Broadcasting have agreed to divide the income tax
benefits of such stock option exercises between the two companies with such
benefits accruing to the company whose employee exercises an option. A total of
4,701,175 options to purchase common stock are authorized to be granted under
the Company's 1994 Adjustment Stock Incentive Plan, 1994 Amended and Restated
Stock Incentive Plan and
F-13
<PAGE> 163
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the 1994 Non-employee Director Stock Incentive Plan. Options are generally not
exercisable until one year after grant, have vesting terms of four years or
less, and expire ten years from date of grant.
Pursuant to the Company's stock option plans, in the event of a "change in
control" (as defined in the plans) of the Company, vested options at the time of
the change in control may be surrendered by officers of the Company, subject to
Section 16 of the Securities Exchange Act of 1934, as amended, in exchange for a
cash payment per share by the Company equal to the difference between the
exercise price for the option and the greater of the highest amount paid to any
holder of common stock by the acquirer in connection with the resulting change
in control or the highest selling price of the common stock during the 90-day
period prior to the date of surrender of the option. Notwithstanding the
foregoing, if a change in control results in the consolidation or merger of the
Company with AT&T or a successor to AT&T under the PMVG and AT&T or any
successor is the surviving company, or if AT&T becomes the beneficial owner of
80% or more of the Company's stock (other than pursuant to a private market
sale, as defined in the Company's PMVG with AT&T), each outstanding option shall
be converted into an option to purchase AT&T's Class A Common Stock. If a change
in control results from a private market sale, upon a vote by a majority of the
Company's Independent Directors (as defined in the plans), each outstanding
option will be converted into an option to purchase the common stock of the
acquirer. If the Independent Directors do not approve the conversion, the
Company may (but is not required to) cancel each such option in exchange for a
payment per share in cash equal to the excess of the purchase price per share in
the private market sale over the exercise price of such option.
The Company's Employee Stock Purchase Plan (the "ESPP") allows eligible
employees to purchase shares of the Company's common stock, through regular
payroll deductions, at 85% of the closing market price of the stock as of the
last trading day of each month. The ESPP restricts a participant to purchase no
more than $25,000 of stock in any calendar year. A total of 300,000 shares have
been authorized under the ESPP. Common shares of 38,156, 48,280 and 48,823 were
purchased and distributed to employees participating in the plan during 1997,
1996 and 1995, respectively, at prices ranging from $30.65 to $46.22 per share
in 1997, $26.56 to $35.38 per share in 1996 and $21.89 to $31.98 per share in
1995.
The Company has elected to follow Opinion 25 and the related
Interpretations in accounting for these plans. There has been no compensation
expense associated with these fixed-option plans recognized under Opinion 25
because the exercise price of the Company's employee stock options equals the
market price of the underlying stock on the date of grant.
Pro forma information regarding net income and earnings per share is
required by Statement 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using the Black-Scholes option pricing model with the following weighted-average
assumptions for grants in 1997, 1996 and 1995: risk-free interest rates of
5.92%, 5.48% and 7.63% for 1997, 1996 and 1995, respectively; volatility factors
of the expected market price of the Company's Common Stock of 0.30; and a
weighted-average expected life of the option of seven years. For purposes of pro
forma disclosures, the estimated fair value of the options is amortized to
expense over the options' vesting period.
Because the rules for pro forma disclosure under Statement 123 expressly
prohibit retroactive recognition of compensation expense, the following
disclosures will not be indicative of future compensation expense until
F-14
<PAGE> 164
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the new rules are applied to all outstanding non-vested awards. The Company's
pro forma information follows (in thousands except for earnings per share
information):
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Pro forma net income.......................... $45,532 $43,611 $36,447
Pro forma per share amounts:
Net income.................................. 1.53 1.47 1.24
Net income-assuming dilution................ 1.49 1.45 1.22
</TABLE>
A summary of the Company's stock option activity, and related information
for the years ended December 31 follows:
<TABLE>
<CAPTION>
1997 1996 1995
-------------------------- -------------------------- --------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE
--------- -------------- --------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding -- beginning of
year........................... 1,859,798 $26.75 1,621,305 $24.43 1,282,169 $20.23
Granted.......................... 662,400 41.08 581,311 30.44 714,600 28.05
Exercised........................ (120,995) 23.32 (179,604) 18.61 (257,257) 16.37
Canceled or Expired.............. (28,770) 22.28 (163,214) 25.93 (118,207) 21.68
--------- --------- ---------
Outstanding -- end of year....... 2,372,433 31.02 1,859,798 26.75 1,621,305 24.43
========= ========= =========
Exercisable at end of year....... 1,013,187 25.96 722,833 23.44 552,195 19.95
Weighted-average fair value of
options granted during the
year........................... 18.61 13.49 13.85
</TABLE>
Exercise prices for options outstanding as of December 31, 1997 range from
$7.88 to $44.125 with approximately 92% of those options ranging in exercise
price from $26.63 to $44.125. The weighted-average remaining contractual life of
those options is eight years. Exercise prices for options exercised during 1997
ranged from $4.05 to $34.25. As of December 31, 1997, there were 1,681,867
options available for future grants.
8. INCOME TAXES
Deferred taxes are determined based on the estimated future tax effects of
differences between the financial statement and the tax basis of assets and
liabilities given the provisions of enacted tax laws.
The components of the deferred tax liability are as follows at December 31:
<TABLE>
<CAPTION>
1997 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Intangible assets........................................... $52,957 $50,353
Property and equipment...................................... 14,389 12,164
Other....................................................... (2,098) 1,694
------- -------
$65,248 $64,211
======= =======
</TABLE>
F-15
<PAGE> 165
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Income tax expense included in the accompanying consolidated statements of
income consisted of the following:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal........................................... $29,325 $22,439 $18,816
State............................................. 1,223 910 139
------- ------- -------
30,548 23,349 18,955
Deferred:
Federal........................................... 210 3,258 2,220
State............................................. (156) (131) 499
------- ------- -------
54 3,127 2,719
------- ------- -------
$30,602 $26,476 $21,674
======= ======= =======
</TABLE>
The following table reconciles the amount that would be provided by
applying the 35% federal statutory rate to income before income tax expense to
the actual income tax expense:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Expense assuming federal statutory rate............. $27,548 $25,528 $20,896
State taxes, net of federal tax benefit............. 846 962 793
Amortization........................................ 1,077 1,077 740
Other............................................... 1,131 (1,091) (755)
------- ------- -------
$30,602 $26,476 $21,674
======= ======= =======
</TABLE>
9. RELATED-PARTY TRANSACTIONS
On December 28, 1994, the Company entered into an agreement with LCH
Communications, Inc. ("LCH") and LIN Michigan Broadcasting Corporation
(collectively the "Companies") to provide certain management and operations
consulting for WOOD-TV and WOTV-TV. The agreement had an initial eighteen month
term and granted the Companies the right to renew the agreement for an
additional twelve months. In accordance with that provision, the Companies
renewed the consulting agreement for an additional twelve months, until June 28,
1997. At that date the Company and the Companies entered into a new consulting
agreement for a period equal to the shorter of (i) from the date of June 28,
1997 until a date which is ninety days after the transfer of control of WOOD-TV
from LCH to an unrelated third party; or (ii) an additional twenty four month
term, from June 28, 1997 to June 28, 1999 at a revised consulting fee of
$360,000 per year. The Company received $304,500 for these services in 1997 and
$250,000 during each of the years ended December 31, 1996 and 1995. In addition,
WOOD-TV participates in the Company's programming joint ventures. Costs are
allocated to WOOD-TV based on relative market size. Programming and service
purchases are directly charged to WOOD-TV and WOTV-TV based on the actual
contract or a relative-market-size allocation.
In addition, on August 12, 1997, the Company entered into an asset purchase
agreement with AT&T pursuant to which it will acquire WOOD-TV, a television
station in Grand Rapids, and its LMA station WOTV-TV, for approximately $125.5
million. The funding for this acquisition is expected to be provided under the
new credit facility arranged in connection with the Acquisition funding. The
Company expects to acquire the Grand Rapids stations from AT&T in 1998.
F-16
<PAGE> 166
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
10. RETIREMENT PLANS
The Retirement Plan is a defined benefit retirement plan covering employees
of the Company who meet eligibility requirements, including length of service
and age. Pension benefits vest on completion of five years of service and are
computed, subject to certain adjustments, by multiplying 1.25% of the employee's
last three years' average annual compensation by the number of years of credited
service. The assets of the pension plan are invested primarily in long-term
fixed income securities, large and small cap U.S. equities, and international
equities. The Company's policy is to fund at least the minimum requirement and
is further based on legal requirements and tax considerations. No funding was
required for the Retirement Plan during 1997 and 1996.
As a result of the WIVB-TV Acquisition, LIN Television Corporation assumed
sponsorship of the Buffalo Broadcasting Company Retirement Plan. On January 1,
1996, the Buffalo Broadcasting Company Retirement Plan was merged into the LIN
Television Retirement Plan.
The Company's net pension expense is based on actuarial valuations of the
Company's employees participating in the Retirement Plan. The components of net
pension expense were as follows for the years ended December 31:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost of current period........................ $ 963 $ 891 $ 573
Interest cost on projected benefit obligation......... 3,511 3,312 2,887
Actual return on plan assets.......................... (5,883) (5,960) (9,609)
Net amortization of unrecognized net transition assets
and deferral of variance from actual return on
assets.............................................. 2,758 3,253 7,017
------- ------- -------
Net pension expense................................... 1,349 1,496 868
Net pension expense allocated to LIN Broadcasting..... -- -- 16
------- ------- -------
Net pension expense allocated to the Company.......... $ 1,349 $ 1,496 $ 852
======= ======= =======
</TABLE>
The following table sets forth the Retirement Plans' funded status and
amounts recognized in the Company's balance sheet at December 31:
<TABLE>
<CAPTION>
1997 1996
------------------- -------------------
FUNDED UNFUNDED FUNDED UNFUNDED
------- -------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Actuarial present value of accumulated plan
benefits, including vested benefits of
$49,636 and $44,948 in 1997 and 1996,
respectively.............................. $49,843 $ 823 $45,222 $ 651
======= ======= ======= =======
Plan assets at fair value, primarily
publicly traded stocks and bonds.......... $58,015 $ -- $50,631 $ --
Less projected benefit obligation for
service rendered to date.................. 52,440 1,801 47,338 1,167
------- ------- ------- -------
Plan assets in excess of (less than)
projected benefit obligation.............. 5,575 (1,801) 3,293 (1,167)
Unrecognized prior service cost............. 1,123 12 2,435 14
Unrecognized net (gain) loss................ (8,912) 665 (6,641) 330
Unrecognized net transition asset being
recognized over 15 years.................. (1,253) (65) (1,567) (81)
------- ------- ------- -------
Accrued pension cost included in balance
sheet..................................... $(3,467) $(1,189) $(2,480) $ (904)
======= ======= ======= =======
</TABLE>
F-17
<PAGE> 167
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The assumptions used in accounting for the Retirement Plan are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Weighted average assumed discount rate...................... 7.0% 7.25% 7.0%
Assumed rate of increases in future compensation levels..... 5.0% 5.0% 5.0%
Expected long-term rate of return on plan assets............ 8.0% 8.0% 8.0%
</TABLE>
11. COMMITMENTS
The Company leases land, buildings, vehicles, and equipment under operating
lease agreements that expire at various dates through the year 2007. Commitments
for these non-cancelable operating lease payments subsequent to December 31,
1997 are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- --------------
(IN THOUSANDS)
<S> <C>
1998.................................................... $ 957
1999.................................................... 612
2000.................................................... 353
2001.................................................... 290
2002.................................................... 153
Thereafter.............................................. 294
------
$2,659
======
</TABLE>
Rent expense included in the consolidated statements of income was $1.2
million, $1.2 million and $1.0 million for the years ended December 31, 1997,
1996 and 1995, respectively.
The Company has also entered into commitments for future syndicated news,
entertainment, and sports programming. Future payments associated with these
commitments subsequent to December 31, 1997 are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- --------------
(IN THOUSANDS)
<S> <C>
1998................................................. $13,317
1999................................................. 19,128
2000................................................. 17,070
2001................................................. 3,655
2002................................................. 2,328
Thereafter........................................... --
-------
$55,498
=======
</TABLE>
12. CONTINGENCIES
On September 4, 1997, the Company announced that it had learned of four
lawsuits regarding the Merger. The Company and its directors are defendants in
all of the lawsuits. AT&T is a defendant in three of the lawsuits, and Hicks
Muse is a defendant in one of the lawsuits. Each of the lawsuits was filed by a
shareholder seeking to represent a putative class of all the Company's public
shareholders. Three of the four lawsuits were filed in Delaware Chancery Court,
New Castle County, while the fourth lawsuit was filed in New York Supreme Court,
New York County.
While the allegations of each complaint are not identical, all of the
lawsuits basically assert that the Merger is not in the interests of the
Company's public shareholders. All of the complaints allege breach of fiduciary
duty in approving the Merger. Two of the complaints also allege breach of
fiduciary duty in
F-18
<PAGE> 168
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
connection with the proposed sale of the television station WOOD-TV by AT&T to
Hicks Muse and the amendment to a Private Market Value Guarantee Agreement that
was entered into simultaneously with the Merger Agreement. The complaints seek
the preliminary and permanent enjoinment of the Merger or alternatively seek
damages in an undetermined amount.
While the Company intends to vigorously defend against the allegations in
each complaint and believes each lawsuit is without merit, these lawsuits are in
their early stages and the Company is unable to determine the likelihood and
possible impact on the Company's financial condition or results of operations of
unfavorable outcomes.
In addition, the Company currently and from time to time is involved in
litigation incidental to the conduct of its business. In the opinion of the
Company's management, none of such litigation is likely to have a material
adverse effect on the Company's financial condition, results of operations or
cash flows.
13. FINANCIAL INSTRUMENTS
Concentrations of credit risk
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash investments and
unsecured trade accounts receivable.
The Company maintains cash and cash equivalents at various financial
institutions. These financial institutions are located throughout the country.
The Company's cash equivalents consist of investments in the commercial paper of
various companies. The Company performs periodic evaluations of the relative
credit standing of these entities.
Concentrations of credit risk with respect to trade accounts receivable are
limited due to the large number of agencies comprising the Company's accounts
receivable. Trade receivables are generally not collateralized. The Company
performs credit evaluations of its customers' financial condition.
14. FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash and cash equivalents
The carrying amount of cash and cash equivalents reported in the Company's
Balance Sheet approximates fair value.
Accounts receivable and accounts payable
The carrying amounts reported in the Company's Balance Sheet for accounts
receivable and accounts payable approximates their fair value.
Long-term debt
Interest rates associated with the Company's long-term debt are based on
the prevailing prime rate or LIBOR rates plus an applicable margin. Interest is
fixed for a period ranging from one month to 12 months, depending on
availability of the interest basis selected, except if the Company selects a
prime-based loan, in which case the interest rate will fluctuate during the
period as the prime rate fluctuates. Due to the frequent re-pricing of the
borrowings, the book values of the liabilities at December 31, 1997 approximate
market values.
15. LOCAL MARKETING AGREEMENTS
The Company entered into Local Marketing Agreements ("LMAs") with the
owners of KXTX-TV in Dallas-Fort Worth, Texas in June 1994, KNVA-TV in Austin,
Texas in August 1994, WBNE-TV in New
F-19
<PAGE> 169
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Haven-Hartford, Connecticut in December 1994 and WVBT-TV in Norfolk-Portsmouth,
Virginia in December 1994. Under the LMAs, the Company is required to pay fixed
periodic fees and incur programming and operating costs relating to the LMA
stations, but retains all advertising revenues.
In connection with the KXTX-TV and KNVA-TV LMAs, the Company purchased
4.49% ownership interests in the licensees of the stations and entered into
option and put agreements that would enable or require the Company to purchase
the stations for a fixed amount under certain conditions, including a change by
the FCC in its "duopoly" rules to permit such acquisitions. The aggregate
purchase price for these interests and the purchase options was approximately
$1.6 million. The "duopoly" rules currently prevent the Company from acquiring
its LMA stations, thereby preventing the Company from directly fulfilling its
obligations under put options that such LMAs have with the Company. Should
future legislation amend the current single-market ownership limits, the
Company, at the option of the parties involved in the LMA contracts, could be
required to purchase certain of the LMA stations. Potential commitments for
fulfilling these put options totaled a maximum of $9.1 million at December 31,
1997.
LMA rent expense included in the consolidated statements of income was $1.4
million, $1.5 million and $1.4 million for the years ended December 31, 1997,
1996 and 1995, respectively.
Future minimum rental payments required under all four of these LMAs
(assuming that the put options relating to these LMAs are not exercised) for the
years ending December 31 are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- --------------
(IN THOUSANDS)
<S> <C>
1998................................................. $ 2,096
1999................................................. 2,054
2000................................................. 2,079
2001................................................. 1,533
2002................................................. 1,404
Thereafter........................................... 2,381
-------
$11,547
=======
</TABLE>
F-20
<PAGE> 170
LIN TELEVISION CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
16. UNAUDITED QUARTERLY DATA
The first three quarters of 1997, 1996 and 1995 per share amounts have been
restated to comply with Statement 128.
<TABLE>
<CAPTION>
FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER
------------- -------------- ------------- --------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
1997
Net revenues............................ $61,662 $83,305 $71,911 $74,641
Operating income........................ 17,117 30,468 25,129 34,741
Net income.............................. 7,137 15,550 9,935 15,485
Per share amounts:
Net income........................... $ 0.24 $ 0.52 $ 0.34 $ 0.52
Net income-assuming dilution......... $ 0.23 $ 0.51 $ 0.34 $ 0.50
1996
Net revenues............................ $57,539 $75,576 $68,780 $71,472
Operating income........................ 15,990 28,274 22,378 32,518
Net income.............................. 5,952 13,841 9,745 16,923
Per share amounts:
Net income........................... $ 0.20 $ 0.47 $ 0.33 $ 0.57
Net income-assuming dilution......... $ 0.20 $ 0.46 $ 0.32 $ 0.56
1995
Net revenues............................ $48,417 $55,861 $49,066 $63,903
Operating income........................ 14,912 24,601 18,502 27,013
Net income.............................. 5,312 11,157 7,913 13,648
Per share amounts:
Net income........................... $ 0.18 $ 0.38 $ 0.27 $ 0.46
Net income-assuming dilution......... $ 0.18 $ 0.37 $ 0.27 $ 0.46
</TABLE>
F-21
<PAGE> 171
LIN TELEVISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
---------- ------------
MARCH 31, DECEMBER 31,
1998 1997
---------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 17,722 $ 8,046
Accounts receivable, less allowance for doubtful accounts
(1998 - $2,067; 1997 - $2,197)......................... 34,769 57,645
Program rights............................................ 5,736 9,916
Other current assets...................................... 21,276 1,865
---------- --------
Total current assets.............................. 79,503 77,472
Property and equipment, less accumulated depreciation....... 123,575 107,593
Program rights and other non current assets................. 4,490 8,778
Deferred financing costs.................................... 37,589 5,421
Equity in joint venture..................................... 76,017 473
Intangible assets, less accumulated amortization
(1998 - $3,208;
1997 - $70,905)........................................... 1,469,096 369,588
---------- --------
Total assets...................................... $1,790,270 $569,325
========== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable.......................................... $ 9,904 $ 7,553
Program obligations....................................... 6,179 11,320
Accrued income taxes...................................... 3,263 3,444
Current portion of long-term debt......................... 3,931 --
Other accruals............................................ 33,319 26,891
---------- --------
Total current liabilities......................... 56,596 49,208
Long-term debt, excluding current portion................... 465,370 260,000
Deferred income taxes....................................... 525,242 65,248
Other non current liabilities............................... 1,813 2,304
---------- --------
Total liabilities................................. 1,049,021 376,760
Stockholder's equity:
Preferred stock, $.01 par value:
Authorized shares -- (1998 - none; 1997 - 5,000,000)
Issued and outstanding shares -- none.................. -- --
Common stock, $0.01 par value:
Authorized shares -- (1998 - 1,000; 1997 - 90,000,000)
Issued and outstanding shares -- (1998 - 1,000;
1997 - 29,857,000).................................... -- 299
Treasury stock.............................................. -- (3)
Additional paid-in capital.................................. 744,977 283,177
Accumulated deficit......................................... (3,728) (90,908)
---------- --------
Total stockholder's equity........................ 741,249 192,565
---------- --------
Total liabilities and stockholder's equity........ $1,790,270 $569,325
========== ========
</TABLE>
See accompanying notes.
The December 31, 1997 information was derived from the audited financial
statements at that date.
F-22
<PAGE> 172
LIN TELEVISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMPANY PREDECESSOR PREDECESSOR
--------------- ----------------- -----------------
PERIOD FROM PERIOD FROM THREE MONTHS
MARCH 3 THROUGH JANUARY 1 THROUGH ENDED
MARCH 31, 1998 MARCH 2, 1998 MARCH 31, 1997
--------------- ----------------- -----------------
<S> <C> <C> <C>
Net revenues.................................... $16,211 $43,804 $61,662
Operating costs and expenses
Direct operating.............................. 3,730 11,117 16,068
Selling, general and administrative........... 4,296 11,701 16,325
Corporate..................................... 458 1,170 1,698
Amortization of program rights................ 1,015 2,743 4,058
Depreciation and amortization of intangible
assets..................................... 4,474 4,581 6,396
------- ------- -------
Total operating costs and expenses.... 13,973 31,312 44,545
------- ------- -------
Operating income................................ 2,238 12,492 17,117
Other (income) expense:
Interest expense.............................. 3,535 2,764 5,718
Investment income............................. (50) (98) (387)
Equity in joint venture....................... 462 244 403
Merger expenses............................... -- 8,616 --
------- ------- -------
Total other expense................... 3,947 11,526 5,734
------- ------- -------
Income (loss) before provision for income
taxes......................................... (1,709) 966 11,383
Provision for income taxes...................... 2,019 3,710 4,246
------- ------- -------
Net income (loss)............................... $(3,728) $(2,744) $ 7,137
======= ======= =======
Net income (loss) per share:
Basic income (loss) per share................. $ (0.09) $ 0.24
======= =======
Diluted income (loss) per share............... $ (0.09) $ 0.23
======= =======
Weighted average shares outstanding............. 29,875 29,745
======= =======
Weighted average shares outstanding -- assuming
dilution...................................... -- 30,379
======= =======
</TABLE>
See accompanying notes.
F-23
<PAGE> 173
LIN TELEVISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMPANY PREDECESSOR PREDECESSOR
--------------- ------------------ --------------
PERIOD FROM PERIOD FROM THREE MONTHS
MARCH 3 THROUGH JANUARY 1 THROUGH ENDED
MARCH 31, 1998 MARCH 2, 1998 MARCH 31, 1997
--------------- ------------------ --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................... $ (3,728) $(2,744) $ 7,137
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization (includes
amortization of financing costs and notes
discounts)................................. 4,804 4,714 6,621
Tax benefit from exercises of stock options... -- 10,714 --
Deferred income taxes......................... 1,693 149 957
Net loss on disposition of assets............. -- 19 --
Amortization of program rights................ 1,015 2,743 4,058
Program payments.............................. (546) (4,157) (3,838)
Equity in joint venture....................... 462 244 403
Changes in operating assets and liabilities:
Accounts receivable........................ (1,773) 7,793 5,586
Other assets............................... (265) (19,147) (8,021)
Liabilities................................ 6,964 8,088 8,545
----------- ------- --------
Total adjustments..................... 12,354 11,160 14,311
----------- ------- --------
Net cash provided by operating activities....... 8,626 8,416 21,448
----------- ------- --------
INVESTING ACTIVITIES:
Capital expenditures............................ (89) (1,221) (7,171)
Asset dispositions.............................. -- 3 --
Investment in joint venture..................... -- (250) (250)
Contribute KXAS-TV to station joint venture..... 815,500 -- --
Acquisition of LIN Television Corporation....... (1,722,674) -- --
----------- ------- --------
Net cash used in investing activities........... (907,263) (1,468) (7,421)
----------- ------- --------
FINANCING ACTIVITIES:
Proceeds from exercises of stock options and
from sale of Employee Stock Purchase Plan
shares........................................ -- 1,071 1,514
Principal payments on long-term debt............ (260,000) -- (15,000)
Proceeds from long-term debt.................... 469,298 -- --
Loan fees incurred on long-term debt............ (37,916) -- --
Equity contribution............................. 744,977 -- --
----------- ------- --------
Net cash provided by (used in) financing
activities.................................... 916,359 1,071 (13,486)
----------- ------- --------
Net increase in cash and cash equivalents....... 17,722 8,019 541
----------- ------- --------
Cash and cash equivalents at the beginning of
the period.................................... -- 8,046 27,952
----------- ------- --------
Cash and cash equivalents at the end of the
period........................................ $ 17,722 $16,065 $ 28,493
=========== ======= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for:
Interest...................................... $ 167 $ 2,895 $ 5,492
Income taxes.................................. $ 432 $ 46 $ 46
</TABLE>
See accompanying notes.
F-24
<PAGE> 174
LIN TELEVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION
LIN Holdings Corp. ("Holdings") was formed on July 18, 1997. On the same
date, LIN Acquisition Company ("LIN Acquisition") was formed as a wholly-owned
subsidiary of Holdings to acquire LIN Television Corporation ("LIN Television"
or the "Predecessor" prior to the Merger and the "Company" following the Merger
(as defined)) pursuant to the Merger Agreement as defined. (See Note 2)
The consolidated financial statements have been prepared without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the accompanying unaudited interim financial
statements contain all adjustments (consisting of normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows of the Company and its subsidiaries for the periods presented. The
results of operations for the three month period ended March 31, 1998 are not
necessarily indicative of the results to be expected for the full year. It is
suggested that these financial statements be read in conjunction with the
consolidated financial statements and the notes thereto included elsewhere in
this Prospectus.
The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly-owned. All significant
intercompany balances and transactions have been eliminated in consolidation.
Holdings and the Company conduct their business through their subsidiaries,
and have no operations or assets other than their investment in their
subsidiaries. All of the Company's direct and indirect consolidated subsidiaries
fully and unconditionally guarantee the Company's Senior Subordinated Notes (as
defined) on a joint and several basis. Accordingly, no separate or additional
financial information about the subsidiaries is provided.
NOTE 2 -- SUBSEQUENT EVENTS
Holdings and LIN Acquisition, two newly formed affiliates of Hicks, Muse,
Tate & Furst Incorporated ("Hicks Muse"), entered into an Agreement and Plan of
Merger with LIN Television on August 12, 1997 (as amended, the "Merger
Agreement").
Pursuant to, and upon the terms and conditions of, the Merger Agreement,
Holdings acquired LIN Television (the "Acquisition") on March 3, 1998 by merging
LIN Acquisition, its wholly-owned subsidiary, with and into LIN Television (the
"Merger"), with LIN Television surviving the merger and becoming a direct,
wholly-owned subsidiary of Holdings. The total purchase price for the common
equity of LIN Television was approximately $1.7 billion in cash. In addition,
the Company refinanced $260.2 million of LIN Television's indebtedness and
incurred acquisition costs of approximately $32.2 million.
The Acquisition was funded by (i) $6.9 million of excess cash on the
Company's balance sheet; (ii) $50.0 million aggregate principal amount of senior
secured Tranche A term loans ("Tranche A Term Loans"); (iii) $120.0 million
aggregate principal of senior secured Tranche B term loans ("Tranche B Term
Loans"); (iv) $299.3 million of gross proceeds from the issuance by LIN
Television of $300.0 million aggregate principal amount of unregistered 8 3/8%
senior subordinated notes due 2008 (the "Old Senior Subordinated Notes"); (v)
$199.6 million of gross proceeds from the issuance by Holdings of $325.0 million
aggregate principal amount at maturity of unregistered 10% senior discount notes
due 2008 (the "Old Senior Discount Notes"), which proceeds were contributed by
Holdings to the common equity of the Company; (vi) $815.5 million of proceeds of
the GECC Note (as defined below); and (vii) $558.1 million of common
F-25
<PAGE> 175
LIN TELEVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
equity provided by affiliates of Hicks Muse, management and other co-investors
to the equity of the corporate parents of Holdings, which in turn, through
Holdings, contributed such amount to the common equity of the Company
(collectively, the "Financings").
In connection with the Acquisition, Hicks Muse and NBC formed a television
station joint venture (the "Joint Venture"). The Joint Venture consists of
KXAS-TV, formerly LIN Television's Dallas-Fort Worth NBC affiliate, and KNSD-TV,
formerly NBC's San Diego station. A wholly-owned subsidiary of NBC is the
general partner of the Joint Venture (the "NBC General Partner") and NBC
operates the stations owned by the Joint Venture. The NBC General Partner holds
an approximate 80% equity interest and the Company holds an approximate 20%
equity interest in the Joint Venture (see Note 6). General Electric Capital
Corporation ("GECC") provided debt financing for the Joint Venture in the form
of an $815.5 million 25-year non-amortizing senior secured note bearing an
initial interest rate of 8.0% per annum for the first fifteen years of its term,
and at a rate of 9.0% per annum thereafter (the "GECC Note"). The Company
expects that the interest payments on the GECC Note will be serviced solely by
the cash flow of the Joint Venture.
The GECC Note was issued by LIN Television of Texas, L.P., the Company's
indirect wholly owned partnership ("LIN Texas"), which distributed the proceeds
to the Company to finance a portion of the cost of the Acquisition. The
obligations to GECC under the GECC Note were assumed by the Joint Venture and
LIN Texas was simultaneously released from all obligations under the GECC Note.
The GECC Note is not an obligation of Holdings, the Company or any of their
respective subsidiaries and is recourse only to the Joint Venture, the Company's
equity interest therein and to one of Holdings two corporate parents ("GECC Note
Guarantor") pursuant to a guarantee.
In connection with the formation of the Joint Venture, the Company received
an extension of its NBC network affiliation agreements to 2010 and the option
(exercisable through December 31, 1999) to purchase WVTM-TV, the NBC affiliate
in Birmingham, Alabama.
The Acquisition was accounted for as a purchase and accordingly, the
purchase price has been allocated to the assets and liabilities acquired based
upon their fair values at the date of acquisition. The excess of purchase price
over the fair value of net tangible assets acquired is allocated to intangible
assets, primarily to FCC licenses, network affiliations, and goodwill. The
results of operations associated with the acquired assets have been included in
the accompanying statements from the date of acquisition on March 3, 1998
through March 31, 1998.
The Acquisition is summarized as follows:
Assets acquired and liabilities assumed (dollars in thousands):
<TABLE>
<S> <C>
Working capital, including cash of $9,185................... $ 23,646
Property and equipment...................................... 124,752
Other noncurrent assets..................................... 81,114
Intangible assets........................................... 1,472,304
Deferred tax liability...................................... (523,549)
Other noncurrent liabilities................................ (1,908)
----------
Total acquisition................................. $1,176,359
==========
</TABLE>
F-26
<PAGE> 176
LIN TELEVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following summarizes pro forma consolidated results of operations for
the three month periods ended March 31, 1998 and 1997 as if the Acquisition and
the Joint Venture had taken place on January 1, 1997 (dollars in thousands).
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1998 1997
-------- --------
<S> <C> <C>
Net revenues............................................ $ 46,762 $ 41,018
Operating income (loss)................................. 2,276 (3,089)
Net loss................................................ (11,403) (12,978)
</TABLE>
The pro forma results do not necessarily represent results that would have
occurred if the Acquisition and Joint Venture had taken place on the dates
indicated nor are they necessarily indicative of the results of future
operations.
Later this year, the Company expects to acquire from AT&T Corporation
("AT&T") the assets of WOOD-TV and the LMA rights related to WOTV-TV
(collectively, the "Grand Rapids Stations"), both of which stations are located
in the Grand Rapids-Kalamazoo-Battle Creek market (the "Grand Rapids
Acquisition"). The Company currently provides services to the Grand Rapids
Stations pursuant to a consulting agreement with AT&T. The total purchase price
for the Grand Rapids Acquisition will be approximately $125.5 million, plus
accretion of 8.0% interest which commenced on March 1, 1998. The Grand Rapids
Acquisition is expected to be funded by $125.0 million of additional Tranche A
Term Loans. For the fiscal year ended December 31, 1997 the Grand Rapids
Stations generated net revenues and operating income of $28.4 million and $8.2
million, respectively. The historical and pro forma financial information
provided above does not give effect to the Grand Rapids Acquisition.
NOTE 3 -- RELATED PARTY TRANSACTIONS
In connection with the Acquisition, Holdings, Company and certain of their
respective affiliates (collectively, the "Clients") entered into a ten-year
agreement (the "Monitoring and Oversight Agreement") with Hicks, Muse & Co.
Partners, L.P., ("Hicks Muse Partners"), an affiliate of Hicks Muse, pursuant to
which the Clients have agreed to pay Hicks Muse Partners an annual fee (payable
quarterly) for oversight and monitoring services to the Clients. The aggregate
annual fee is adjustable on January 1 of each calendar year to an amount equal
to 1.0% of the budgeted consolidated annual EBITDA of Holdings and its
subsidiaries for the then-current fiscal year. Upon the acquisition by Holdings
and its subsidiaries of another entity or business, the fee shall be adjusted
prospectively in the same manner using the pro forma consolidated annual EBITDA
of Holdings and its subsidiaries. In no event shall the annual fee be less than
$1,000,000. Hicks Muse Partners is also entitled to reimbursement for any
expenses incurred by it in connection with rendering services allocable to the
Company and Holdings.
In connection with the Acquisition, the Clients entered into a ten-year
agreement (the "Financial Advisory Agreement") with Hicks Muse Partners,
pursuant to which Hicks Muse Partners received a financial advisory fee at the
closing of the Acquisition as compensation for its services as financial advisor
to the Clients in connection with the Acquisition. Hicks Muse Partners also is
entitled to receive a fee equal to 1.5% of the "transaction value" (as defined)
for each "subsequent transaction" (as defined) in which a Client is involved.
F-27
<PAGE> 177
LIN TELEVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 4 -- INTANGIBLE ASSETS
Intangibles consist of the following at March 31, 1998 and December 31,
1997 (dollars in thousands):
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
---------- ------------
MARCH 31, DECEMBER 31,
1998 1997
---------- ------------
<S> <C> <C>
FCC licenses and network affiliations....................... $ 807,029 $312,450
Goodwill.................................................... 665,275 128,043
---------- --------
1,472,304 440,493
Less accumulated amortization............................. (3,208) (70,905)
---------- --------
$1,469,096 $369,588
========== ========
</TABLE>
Intangible assets represent the excess of the purchase price over the
estimated fair value of identifiable assets acquired in business acquisitions,
and are being amortized straight-line over 40 years. The Company periodically
evaluates intangible assets for potential impairment. At this time, in the
opinion of the management, no impairment has occurred.
NOTE 5 -- LONG-TERM DEBT
Long-term debt consisted of the following at March 31, 1998 and December
31, 1997 (dollars in thousands):
<TABLE>
<CAPTION>
COMPANY PREDECESSOR
--------- ------------
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
<S> <C> <C>
Senior Credit Facilities.................................... $170,000 $260,000
8 3/8% Senior Subordinated Notes due 2008................... 299,301 --
-------- --------
Total long-term debt.............................. 469,301 260,000
Less current portion...................................... (3,931) --
-------- --------
$465,370 $260,000
======== ========
</TABLE>
Senior Credit Facilities
On March 3, 1998, Holdings and the Company entered into a credit agreement
(the "Credit Agreement") with the Chase Manhattan Bank, as administrative agent
(the "Agent"), and the lenders named therein. Under the Credit Agreement, the
Company established a $295 million term loan facility, a $50 million revolving
facility, and a $225 million incremental term loan facility (collectively, the
"Senior Credit Facilities"). Borrowings under the Senior Credit Facilities and
part of the proceeds from the 8 3/8% Senior Subordinated Notes were used to
repay LIN Television's existing debt.
Borrowings under the Senior Credit Facilities bear interest at a rate
based, at the option of the Company, on an adjusted London interbank offered
rate ("Adjusted LIBOR"), or the highest of the Agent's prime rate, a certificate
of deposit rate plus 1.00%, or the Federal Funds effective rate plus 1/2 of
1.00% (the "Alternate Base Rate"), plus an incremental rate based on the
Company's financial performance. At March 31, 1998, the interest rates on the
$50 million Tranche A term loan and the $120 million Tranche B term loan were
7.19% and 7.69%, respectively, based on the Adjusted LIBOR. The Company is
required to pay quarterly commitment fees ranging from 0.25% to 0.50%, based
upon the Company's leverage ratio for that particular quarter on the unused
portion of the loan commitment, in addition to annual agency and other
administration fees.
F-28
<PAGE> 178
LIN TELEVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The obligations of the Company under the Senior Credit Facilities will be
unconditionally and irrevocably guaranteed, jointly and severally, by Holdings
and by each existing and subsequently acquired or organized subsidiary of the
Company. In addition, substantially all of the assets of the Company and its
subsidiaries are pledged to secure the performance of these obligations.
Required principal repayments of amounts outstanding under the Senior Credit
Facilities commence on December 31, 1998. The Company's ability to make
additional borrowings under the Senior Credit Facilities is subject to
compliance with certain financial covenants and other conditions set forth in
the Senior Credit Facilities. As of March 31, 1998, the Company was in
compliance with all covenants.
Senior Subordinated Notes
On March 3, 1998, the Company issued $300 million aggregate principal
amount of 8 3/8% Senior Subordinated Notes due 2008 ("Senior Subordinated
Notes") in a private placement for net proceeds of $290.3 million. The Senior
Subordinated Notes are unsecured obligations of the Company, subordinated in
right of payment to all existing and any future senior indebtedness of the
Company. The Senior Subordinated Notes are fully and unconditionally guaranteed,
on a joint and several basis, by all wholly-owned subsidiaries of the Company.
The effective interest rate of the Senior Subordinated Notes is 8.9% on an
annual basis. Interest on the Senior Subordinated Notes accrues at a rate of
8 3/8% per annum and is payable in cash semi-annually in arrears commencing on
September 1, 1998.
NOTE 6 -- SUMMARIZED FINANCIAL INFORMATION OF THE JOINT VENTURE
The Company owns approximately 20% of the Joint Venture, and accounts for
its equity interest in the Joint Venture using the equity method. The following
presents the summarized financial information of the Joint Venture for the
period from March 3, 1998 through March 31, 1998 (dollars in thousands).
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM MARCH 3 THROUGH
MARCH 31, 1998
--------------------
<S> <C>
Net Revenues.............................................. $10,536
Operating Income.......................................... 2,858
Net Loss.................................................. (2,035)
</TABLE>
NOTE 7 -- INCOME TAXES
Income tax expense (benefit) differs from the amount computed by applying
the federal statutory income tax rate of 35% to income before income taxes due
to the effects of state income taxes and permanent book/ tax differences,
primarily non-deductible goodwill.
The current and deferred income taxes of the Company are calculated by
applying SFAS No. 109 "Accounting for Income Taxes" to the Company as if it were
a separate taxpayer.
NOTE 8 -- COMMITMENTS AND CONTINGENCIES
On September 4, 1997, the Company announced that it had learned of four
lawsuits regarding the then proposed merger. The Company and some or all of its
then present directors are defendants in all of the lawsuits. AT&T is a
defendant in three of the lawsuits, and an AT&T affiliate and Hicks Muse are
defendants in one of the lawsuits. Each of the lawsuits was filed by a purported
shareholder of the Company seeking to represent a putative class of all the
Company's public shareholders. Three of the four lawsuits were filed in Delaware
Chancery Court, while the fourth lawsuit was filed in New York Supreme Court.
While the allegations of the complaints are not identical, all of the
lawsuits basically assert that the terms of the original merger agreement were
not in the best interests of the Company's public shareholders. All of
F-29
<PAGE> 179
LIN TELEVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the complaints allege breach of fiduciary duty in approving the merger
agreement. Two of the complaints also allege breach of fiduciary duty in
connection with the proposed sale of the television station WOOD-TV by AT&T to
Hicks Muse and the amendment to a Private Market Value Guarantee Agreement that
was entered into simultaneously with the first merger agreement. The complaints
seek the preliminary and permanent enjoinment of the merger or alternatively
seek damages in an unspecified amount. The complaints have not been amended to
reflect the terms of the merger itself.
The plaintiffs in each of the actions have agreed to an indefinite
extension of time for each of the defendants served to respond to the respective
complaints. No discovery has taken place.
While the Company believes each lawsuit is without merit, the Company is
unable to determine the likelihood and possible impact on the Company's
financial condition or results of operations of unfavorable outcomes.
NOTE 9 -- IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income" ("Statement 130") effective for years beginning after
December 15, 1997. Statement 130 requires that a public company report items of
other comprehensive income either below the total for net income in the income
statement, or in a Statement of changes in equity, and to disclose the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in-capital in the equity section of the balance
sheet. Statement 130 was adopted during the first quarter of 1998 and was
applied to prior period financial statements on a retroactive basis. The
adoption of Statement 130 did not have a material impact on the consolidated
financial statements.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("Statement 131") effective for years
beginning after December 15, 1997. Statement 131 requires that a public company
report financial and descriptive information about its reportable operating
segments pursuant to criteria that differ from current accounting practice.
Operating segments, as defined, are components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. The financial information to be reported includes segment
profit or loss, certain revenue and expense items and segment assets and
reconciliations to corresponding amounts in the general purpose financial
statements. Statement 131 also requires information about revenues from products
or services, countries where the company has operations or assets and major
customers. Management does not believe the implementation of Statement 131 will
have a material impact on its consolidated financial statements.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" ("Statement 132") effective
for years beginning after December 15, 1997. Statement 132 revises employers'
disclosures about pension and other postretirement benefit plans. It does not
change the measurement or recognition of those plans. This Statement
standardizes the disclosure requirements for pensions and other postretirement
benefits to the extent practicable, requires additional information on changes
in the benefit obligations and fair values of plan assets that will facilitate
financial analysis, and eliminates certain disclosures that are no longer as
useful as they were when SFAS No. 87, "Employers' Accounting for Pensions", SFAS
No. 88, "Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits", and SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" were
issued. The Statement suggests combined formats for presentation of pension and
other postretirement benefit disclosures. Management does not believe the
implementation of Statement 132 will have a material impact on its consolidated
financial statements.
F-30
<PAGE> 180
LIN TELEVISION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In April 1998, Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") effective for fiscal years beginning after December 15,
1998. This SOP provides guidance on the financial reporting of start-up costs
and organization costs. It requires that costs of start-up activities and
organization costs be expensed as incurred. Initial application of SOP 98-5
should be reported as the cumulative effect of a change in accounting principle,
as described in Accounting Principles Board (APB) Opinion No. 20, "Accounting
Changes". When adopting this SOP, entities are not required to report the pro
forma effects of retroactive application. Management does not believe the
implementation of SOP 98-5 will have a material impact on its consolidated
financial statements.
F-31
<PAGE> 181
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
LIN Holdings Corp.:
We have audited the accompanying consolidated balance sheet of LIN Holdings
Corp. (the "Company") as of December 31, 1997. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the consolidated financial position of LIN Holdings Corp. as
of December 31, 1997 in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
May 22, 1998
F-32
<PAGE> 182
LIN HOLDINGS CORP.
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1997
ASSETS
<TABLE>
<S> <C>
Current assets:
Stock purchase receivable................................. $1,000
------
Total current assets.............................. 1,000
------
Total assets...................................... $1,000
======
LIABILITIES AND STOCKHOLDERS' EQUITY
Stockholders' equity:
Common stock, $.01 par value:
Authorized shares, 1,000
Issued and outstanding shares, 1,000................... $ 10
Additional paid-in capital................................ 990
------
Total stockholders' equity........................ 1,000
------
Total liabilities and stockholders' equity........ $1,000
======
</TABLE>
See accompanying notes.
F-33
<PAGE> 183
LIN HOLDINGS CORP.
NOTES TO CONSOLIDATED BALANCE SHEET
1. ORGANIZATION:
LIN Holdings Corp. ("Holdings") was formed on July 18, 1997. Holdings
issued 1,000 shares of its common stock, $.01 par value per share, to the
corporate parents of Holdings, owned by affiliates of Hicks, Muse, Tate & Furst
("Hicks Muse") and other co-investors, in exchange for a $1,000 stock purchase
receivable.
On the same date, LIN Acquisition Company ("LIN Acquisition") was formed as
a wholly-owned subsidiary of Holdings. LIN Acquisition issued 1,000 shares of
its common stock, $.01 par value per share, to Holdings. LIN Acquisition was
formed to acquire LIN Television Corporation ("LIN Television" or the
"Predecessor" prior to the Merger and the "Company" following the Merger)
pursuant to the Merger Agreement as defined (see Note 2).
Neither Holdings nor LIN Acquisition had other significant operations or
assets separate from those disclosed above from July 18, 1997 to December 31,
1997.
Following the Merger (see Note 2), Holdings and the Company conduct their
business through their subsidiaries, all of which are wholly-owned, and have no
operations or assets other than their investment in their subsidiaries. All of
the Company's direct and indirect consolidated subsidiaries fully and
unconditionally guarantee the Company's senior subordinated notes on a joint and
several basis. The senior discount notes issued by Holdings in connection with
the Merger are unsecured senior obligations of Holdings, and are not guaranteed.
Accordingly, no separate or additional financial information about the
subsidiaries is provided.
2. SUBSEQUENT EVENTS:
Holdings and LIN Acquisition, two newly formed affiliates of Hicks, Muse,
Tate & Furst Incorporated ("Hicks Muse"), entered into an Agreement and Plan of
Merger with LIN Television on August 12, 1997 (as amended, the "Merger
Agreement").
Pursuant to, and upon the terms and conditions of, the Merger Agreement,
Holdings acquired LIN Television (the "Acquisition") on March 3, 1998 by merging
LIN Acquisition, its wholly-owned subsidiary, with and into LIN Television (the
"Merger"), with LIN Television surviving the merger and becoming a direct,
wholly-owned subsidiary of Holdings. The total purchase price for the common
equity of LIN Television was approximately $1.7 billion in cash. In addition,
the Company refinanced $260.2 million of LIN Television's indebtedness and
incurred acquisition costs of approximately $32.2 million.
The Acquisition was funded by (i) $6.9 million of excess cash on the
Company's balance sheet; (ii) $50.0 million aggregate principal amount of senior
secured Tranche A term loans ("Tranche A Term Loans"); (iii) $120.0 million
aggregate principal of senior secured Tranche B term loans ("Tranche B Term
Loans"); (iv) $299.3 million of gross proceeds from the issuance by LIN
Television of $300.0 million aggregate principal amount of unregistered 8 3/8%
senior subordinated notes due 2008 (the "Old Senior Subordinated Notes"); (v)
$199.6 million of gross proceeds from the issuance by Holdings of $325.0 million
aggregate principal amount at maturity of unregistered 10% senior discount notes
due 2008 (the "Old Senior Discount Notes"), which proceeds were contributed by
Holdings to the common equity of the Company; (vi) $815.5 million of proceeds of
the GECC Note (as defined below); and (vii) $558.1 million of common equity
provided by affiliates of Hicks Muse, management and other co-investors to the
equity of the corporate parents of Holdings, which in turn, through Holdings,
contributed such amount to the common equity of the Company (collectively, the
"Financings").
In connection with the Acquisition, Hicks Muse and NBC formed a television
station joint venture (the "Joint Venture"). The Joint Venture consists of
KXAS-TV, formerly LIN Television's Dallas-Fort Worth NBC affiliate, and KNSD-TV,
formerly NBC's San Diego station. A wholly-owned subsidiary of NBC is the
general partner of the Joint Venture (the "NBC General Partner") and NBC
operates the stations owned by the Joint Venture. The NBC General Partner holds
an approximate 80% equity interest and the Company
F-34
<PAGE> 184
LIN HOLDINGS CORP.
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
holds an approximate 20% equity interest in the Joint Venture (see Note 6).
General Electric Capital Corporation ("GECC") provided debt financing for the
Joint Venture in the form of an $815.5 million 25-year non-amortizing senior
secured note bearing an initial interest rate of 8.0% per annum for the first
fifteen years of its term, and at a rate of 9.0% per annum thereafter (the "GECC
Note"). The Company expects that the interest payments on the GECC Note will be
serviced solely by the cash flow of the Joint Venture.
The GECC Note was issued by LIN Television of Texas, L.P., the Company's
indirect wholly owned partnership ("LIN Texas"), which distributed the proceeds
to the Company to finance a portion of the cost of the Acquisition. The
obligations to GECC under the GECC Note were assumed by the Joint Venture and
LIN Texas was simultaneously released from all obligations under the GECC Note.
The GECC Note is not an obligation of Holdings, the Company or any of their
respective subsidiaries and is recourse only to the Joint Venture, the Company's
equity interest therein and to one of Holdings two corporate parents ("GECC Note
Guarantor") pursuant to a guarantee.
In connection with the formation of the Joint Venture, the Company received
an extension of its NBC network affiliation agreements to 2010 and the option
(exercisable through December 31, 1999) to purchase WVTM-TV, the NBC affiliate
in Birmingham, Alabama.
The Acquisition was accounted for as a purchase and accordingly, the
purchase price has been allocated to the assets and liabilities acquired based
upon their fair values at the date of acquisition. The excess of purchase price
over the fair value of net tangible assets acquired is allocated to intangible
assets, primarily to FCC licenses, network affiliations, and goodwill. The
results of operations associated with the acquired assets have been included in
the accompanying statements from the date of acquisition on March 3, 1998
through March 31, 1998.
The Acquisition is summarized as follows:
Assets acquired and liabilities assumed (dollars in thousands):
<TABLE>
<S> <C>
Working capital, including cash of $9,185................... $ 23,646
Property and equipment...................................... 124,752
Other noncurrent assets..................................... 81,114
Intangible assets........................................... 1,472,304
Deferred tax liability...................................... (523,549)
Other noncurrent liabilities................................ (1,908)
----------
Total acquisition................................. $1,176,359
==========
</TABLE>
The following summarizes pro forma consolidated results of operations for
the three month periods ended March 31, 1998 and 1997 as if the Acquisition and
the Joint Venture had taken place on January 1, 1997 (dollars in thousands).
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1998 1997
-------- --------
<S> <C> <C>
Net revenues............................................ $ 46,762 $ 41,018
Operating income (loss)................................. 2,276 (3,089)
Net loss................................................ (11,403) (12,978)
</TABLE>
The pro forma results do not necessarily represent results that would have
occurred if the Acquisition and Joint Venture had taken place on the dates
indicated nor are they necessarily indicative of the results of future
operations.
Later this year, the Company expects to acquire from AT&T Corporation
("AT&T") the assets of WOOD-TV and the LMA rights related to WOTV-TV
(collectively, the "Grand Rapids Stations"), both of which stations are located
in the Grand Rapids-Kalamazoo-Battle Creek market (the "Grand Rapids
F-35
<PAGE> 185
LIN HOLDINGS CORP.
NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)
Acquisition"). The Company currently provides services to the Grand Rapids
Stations pursuant to a consulting agreement with AT&T. The total purchase price
for the Grand Rapids Acquisition will be approximately $125.5 million, plus
accretion of 8.0% interest which commenced on March 1, 1998. The Grand Rapids
Acquisition is expected to be funded by $125.0 million of additional Tranche A
Term Loans. For the fiscal year ended December 31, 1997 the Grand Rapids
Stations generated net revenues and operating income of $28.4 million and $8.2
million, respectively. The historical and pro forma financial information
provided above does not give effect to the Grand Rapids Acquisition.
3. COMMITMENTS AND CONTINGENCIES:
On September 4, 1997, the Company announced that it had learned of four
lawsuits regarding the then proposed merger. The Company and some or all of its
then present directors are defendants in all of the lawsuits. AT&T is a
defendant in three of the lawsuits, and an AT&T affiliate and Hicks Muse are
defendants in one of the lawsuits. Each of the lawsuits was filed by a purported
shareholder of the Company seeking to represent a putative class of all the
Company's public shareholders. Three of the four lawsuits were filed in Delaware
Chancery Court, while the fourth lawsuit was filed in New York Supreme Court.
While the allegations of the complaints are not identical, all of the
lawsuits basically assert that the terms of the original merger agreement were
not in the best interests of the Company's public shareholders. All of the
complaints allege breach of fiduciary duty in approving the merger agreement.
Two of the complaints also allege breach of fiduciary duty in connection with
the proposed sale of the television station WOOD-TV by AT&T to Hicks Muse and
the amendment to a Private Market Value Guarantee Agreement that was entered
into simultaneously with the first merger agreement. The complaints seek the
preliminary and permanent enjoinment of the merger or alternatively seek damages
in an unspecified amount. The complaints have not been amended to reflect the
terms of the merger itself.
The plaintiffs in each of the actions have agreed to an indefinite
extension of time for each of the defendants served to respond to the respective
complaints. No discovery has taken place.
While the Company believes each lawsuit is without merit, the Company is
unable to determine the likelihood and possible impact on the Company's
financial condition or results of operations of unfavorable outcomes.
4. RELATED PARTY TRANSACTIONS:
In connection with the Acquisition, Holdings, Company and certain of their
respective affiliates (collectively, the "Clients") entered into a ten-year
agreement (the "Monitoring and Oversight Agreement") with Hicks, Muse & Co.
Partners, L.P., ("Hicks Muse Partners"), an affiliate of Hicks Muse, pursuant to
which the Clients have agreed to pay Hicks Muse Partners an annual fee (payable
quarterly) for oversight and monitoring services to the Clients. The aggregate
annual fee is adjustable on January 1 of each calendar year to an amount equal
to 1.0% of the budgeted consolidated annual EBITDA of Holdings and its
subsidiaries for the then-current fiscal year. Upon the acquisition by Holdings
and its subsidiaries of another entity or business, the fee shall be adjusted
prospectively in the same manner using the pro forma consolidated annual EBITDA
of Holdings and its subsidiaries. In no event shall the annual fee be less than
$1,000,000. Hicks Muse Partners is also entitled to reimbursement for any
expenses incurred by it in connection with rendering services allocable to the
Company and Holdings.
In connection with the Acquisition, the Clients entered into a ten-year
agreement (the "Financial Advisory Agreement") with Hicks Muse Partners,
pursuant to which Hicks Muse Partners received a financial advisory fee at the
closing of the Acquisition as compensation for its services as financial advisor
to the Clients in connection with the Acquisition. Hicks Muse Partners also is
entitled to receive a fee equal to 1.5% of the "transaction value" (as defined)
for each "subsequent transaction" (as defined) in which a Client is involved.
F-36
<PAGE> 186
LIN HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HOLDINGS PREDECESSOR
------------------------- ------------
MARCH 31, DECEMBER 31, DECEMBER 31,
ASSETS 1998 1997 1997
- ------ ---------- ------------ ------------
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents............................. $ 17,722 $ -- $ 8,046
Accounts receivable, less allowance for doubtful
accounts (1998 -- $2,067, 1997 -- $2,197).......... 34,769 -- 57,645
Program rights........................................ 5,736 -- 9,916
Other current assets.................................. 21,276 1 1,865
---------- ---------- ----------
Total current assets.......................... 79,503 1 77,472
Property and equipment, less accumulated depreciation... 123,575 -- 107,593
Program rights and other non current assets............. 4,490 -- 8,778
Deferred financing costs................................ 50,259 -- 5,421
Equity in joint venture................................. 76,017 -- 473
Intangible assets, less accumulated amortization
(1998 -- $3,208, 1997 -- $70,905)..................... 1,469,096 -- 369,588
---------- ---------- ----------
Total assets.................................. $1,802,940 $ 1 $ 569,325
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................... $ 9,904 $ -- $ 7,553
Program obligations................................... 6,179 -- 11,320
Accrued income taxes.................................. 2,659 -- 3,444
Current portion of long-term debt..................... 3,931 -- --
Other accruals........................................ 33,319 -- 26,891
---------- ---------- ----------
Total current liabilities..................... 55,992 -- 49,208
Long-term debt, excluding current portion............... 666,629 -- 260,000
Deferred income taxes................................... 523,612 -- 65,248
Other non current liabilities........................... 1,813 -- 2,304
---------- ---------- ----------
Total liabilities............................. 1,248,046 -- 376,760
Stockholders' equity:
Preferred stock, $0.01 par value:
Authorized shares -- (1998 -- none;
1997 -- 15,000,000)
Issued and outstanding shares -- none.............. -- -- --
Common stock, $0.01 par value:
Authorized shares -- (1998 -- 1,000; 1997 -- 1,000,
1997 -- 90,000,000)
Issued and outstanding shares -- (1998 -- 1,000;
1997 -- 1,000, 1997 -- 29,857,000)............... -- -- 299
Treasury stock.......................................... -- -- (3)
Additional paid-in capital.............................. 558,123 1 283,177
Accumulated deficit..................................... (3,229) -- (90,908)
---------- ---------- ----------
Total stockholders' equity.................... 554,894 1 192,565
---------- ---------- ----------
Total liabilities and stockholders' equity.... $1,802,940 $ 1 $ 569,325
========== ========== ==========
</TABLE>
See accompanying notes.
The December 31, 1997 information was derived from the audited financial
statements at that date.
F-37
<PAGE> 187
LIN HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HOLDINGS PREDECESSOR
--------------- ----------------------------------
PERIOD FROM PERIOD FROM THREE MONTHS
MARCH 3 THROUGH JANUARY 1 THROUGH ENDED
MARCH 31, 1998 MARCH 2, 1998 MARCH 31, 1997
--------------- ----------------- --------------
<S> <C> <C> <C>
Net revenues.................................... $16,211 $43,804 $61,662
Operating costs and expenses
Direct operating.............................. 3,730 11,117 16,068
Selling, general and administrative........... 4,296 11,701 16,325
Corporate..................................... 458 1,170 1,698
Amortization of program rights................ 1,015 2,743 4,058
Depreciation and amortization of intangible
assets..................................... 4,474 4,581 6,396
------- ------- -------
Total operating costs and expenses.... 13,973 31,312 44,545
------- ------- -------
Operating income................................ 2,238 12,492 17,117
Other (income) expense:
Interest expense.............................. 5,270 2,764 5,718
Investment income............................. (50) (98) (387)
Equity in joint venture....................... 462 244 403
Merger expenses............................... -- 8,616 --
------- ------- -------
Total other expense................... 5,682 11,526 5,734
------- ------- -------
Income (loss) before provision for income
taxes......................................... (3,444) 966 11,383
Provision (benefit) for income taxes............ (215) 3,710 4,246
------- ------- -------
Net income (loss)............................... $(3,229) $(2,744) $ 7,137
======= ======= =======
Net income (loss) per share:
Basic income (loss) per share................. $ (0.09) $ 0.24
======= =======
Diluted income (loss) per share............... $ (0.09) $ 0.23
======= =======
Weighted average shares outstanding............. 29,875 29,745
======= =======
Weighted average shares outstanding -- assuming
dilution...................................... -- 30,379
======= =======
</TABLE>
See accompanying notes.
F-38
<PAGE> 188
LIN HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HOLDINGS PREDECESSOR
---------------- ----------------------------------
PERIOD FROM PERIOD FROM THREE MONTHS
MARCH 3 THROUGH JANUARY 1 THROUGH ENDED
MARCH 31, 1998 MARCH 2, 1998 MARCH 31, 1997
---------------- ----------------- --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................... $ (3,229) $ (2,744) $ 7,137
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization (includes
amortization of deferred financing costs
and notes discounts)....................... 6,539 4,714 6,621
Tax benefit from exercises of stock options... -- 10,714 --
Deferred income taxes......................... 63 149 957
Net loss (gain) on disposition of assets...... -- 19 --
Amortization of program rights................ 1,015 2,743 4,058
Program payments.............................. (546) (4,157) (3,838)
Equity in joint venture....................... 462 244 403
Changes in operating assets and liabilities:
Accounts receivable........................ (1,773) 7,793 5,586
Other assets............................... (265) (19,147) (8,021)
Liabilities................................ 6,360 8,088 8,545
----------- -------- --------
Total adjustments..................... 11,855 11,160 14,311
----------- -------- --------
Net cash provided by operating activities....... 8,626 8,416 21,448
----------- -------- --------
INVESTING ACTIVITIES:
Capital expenditures............................ (89) (1,221) (7,171)
Asset dispositions.............................. -- 3 --
Investment in Joint Venture..................... -- (250) (250)
Contribute KXAS-TV to station joint venture..... 815,500 -- --
Acquisition of LIN Television Corporation....... (1,722,674) -- --
----------- -------- --------
Net cash used in investing activities........... (907,263) (1,468) (7,421)
----------- -------- --------
FINANCING ACTIVITIES:
Proceeds from exercises of stock options and
from sale of Employee Stock Purchase Plan
shares........................................ -- 1,071 1,514
Principal payments on long-term debt............ (260,000) -- (15,000)
Proceeds from long-term debt.................... 668,929 -- --
Loan fees incurred on long-term debt............ (50,693) -- --
Proceeds from sale of common stock.............. 558,123 -- --
----------- -------- --------
Net cash provided by (used in) financing
activities.................................... 916,359 1,071 (13,486)
----------- -------- --------
Net increase in cash and cash equivalents....... 17,722 8,019 541
----------- -------- --------
Cash and cash equivalents at the beginning of
the period.................................... -- 8,046 27,952
----------- -------- --------
Cash and cash equivalents at the end of the
period........................................ $ 17,722 $ 16,065 $ 28,493
=========== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for:
Interest...................................... $ 167 $ 2,895 $ 5,492
Income taxes.................................. $ 432 $ 46 $ 46
</TABLE>
See accompanying notes.
F-39
<PAGE> 189
LIN HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)
NOTE 1 -- BASIS OF PRESENTATION
LIN Holdings Corp. ("Holdings") was formed on July 18, 1997. On the same
date, LIN Acquisition Company ("LIN Acquisition") was formed as a wholly-owned
subsidiary of Holdings to acquire LIN Television Corporation ("LIN Television"
or the "Predecessor" prior to the Merger and the "Company" following the Merger
(as defined)) pursuant to the Merger Agreement as defined. (See Note 2)
The consolidated financial statements have been prepared without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations.
In the opinion of management, the accompanying unaudited interim financial
statements contain all adjustments (consisting of normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows of Holdings and its subsidiaries for the periods presented. The
results of operations for the three month period ended March 31, 1998 are not
necessarily indicative of the results to be expected for the full year. It is
suggested that these financial statements be read in conjunction with the
consolidated financial statements and the notes thereto included elsewhere in
this Prospectus.
The consolidated financial statements include the accounts of Holdings and
its subsidiaries, all of which are wholly-owned. All significant intercompany
balances and transactions have been eliminated in consolidation.
Holdings and the Company conduct their business through their subsidiaries,
and have no operations or assets other than their investment in their
subsidiaries. All of the Company's direct and indirect consolidated subsidiaries
fully and unconditionally guarantee the Company's Senior Subordinated Notes (as
defined) on a joint and several basis. Accordingly, no separate or additional
financial information about the subsidiaries is provided.
NOTE 2 -- SUBSEQUENT EVENT
Holdings and LIN Acquisition, two newly formed affiliates of Hicks, Muse,
Tate & Furst Incorporated ("Hicks Muse"), entered into an Agreement and Plan of
Merger with LIN Television on August 12, 1997 (as amended, the "Merger
Agreement").
Pursuant to, and upon the terms and conditions of, the Merger Agreement,
Holdings acquired LIN Television (the "Acquisition") on March 3, 1998 by merging
LIN Acquisition, its wholly-owned subsidiary, with and into LIN Television (the
"Merger"), with LIN Television surviving the merger and becoming a direct,
wholly-owned subsidiary of Holdings. The total purchase price for the common
equity of LIN Television was approximately $1.7 billion in cash. In addition,
the Company refinanced $260.2 million of LIN Television's indebtedness and
incurred acquisition costs of approximately $32.2 million.
The Acquisition was funded by (i) $6.9 million of excess cash on the
Company's balance sheet; (ii) $50.0 million aggregate principal amount of senior
secured Tranche A term loans ("Tranche A Term Loans"); (iii) $120.0 million
aggregate principal of senior secured Tranche B term loans ("Tranche B Term
Loans"); (iv) $299.3 million of gross proceeds from the issuance by LIN
Television of $300.0 million aggregate principal amount of unregistered 8 3/8%
senior subordinated notes due 2008 (the "Old Senior Subordinated Notes"); (v)
$199.6 million of gross proceeds from the issuance by Holdings of $325.0 million
aggregate principal amount at maturity of unregistered 10% senior discount notes
due 2008 (the "Old Senior Discount Notes"), which proceeds were contributed by
Holdings to the common equity of the Company; (vi) $815.5 million of proceeds of
the GECC Note (as defined below); and (vii) $558.1 million of common
F-40
<PAGE> 190
LIN HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
equity provided by affiliates of Hicks Muse, management and other co-investors
to the equity of the corporate parents of Holdings, which in turn, through
Holdings, contributed such amount to the common equity of the Company
(collectively, the "Financings").
In connection with the Acquisition, Hicks Muse and NBC formed a television
station joint venture (the "Joint Venture"). The Joint Venture consists of
KXAS-TV, formerly LIN Television's Dallas-Fort Worth NBC affiliate, and KNSD-TV,
formerly NBC's San Diego station. A wholly-owned subsidiary of NBC is the
general partner of the Joint Venture (the "NBC General Partner") and NBC
operates the stations owned by the Joint Venture. The NBC General Partner holds
an approximate 80% equity interest and the Company holds an approximate 20%
equity interest in the Joint Venture (see Note 6). General Electric Capital
Corporation ("GECC") provided debt financing for the Joint Venture in the form
of an $815.5 million 25-year non-amortizing senior secured note bearing an
interest rate of 8.0% per annum for the first fifteen years of its term, and at
a rate of 9.0% per annum thereafter (the "GECC Note"). The Company expects that
the interest payments on the GECC Note will be serviced solely by the cash flow
of the Joint Venture.
The GECC Note was issued by LIN Television of Texas, L.P., the Company's
indirect wholly- owned partnership ("LIN Texas"), which distributed the proceeds
to the Company to finance a portion of the cost of the Acquisition. The
obligations to GECC under the GECC Note were assumed by the Joint Venture and
LIN Texas was simultaneously released from all obligations under the GECC Note.
The GECC Note is not an obligation of Holdings, the Company or any of their
respective subsidiaries and is recourse only to the Joint Venture, the Company's
equity interest therein and to one of Holdings two corporate parents ("GECC Note
Guarantor") pursuant to a guarantee.
In connection with the formation of the Joint Venture, the Company received
an extension of its NBC network affiliation agreements to 2010 and the option
(exercisable through December 31, 1999) to purchase WVTM-TV, the NBC affiliate
in Birmingham, Alabama.
The Acquisition was accounted for as a purchase and accordingly, the
purchase price has been allocated to the assets and liabilities acquired based
upon their fair values at the date of acquisition. The excess of purchase price
over the fair value of net tangible assets acquired is allocated to intangible
assets, primarily to FCC licenses, network affiliations, and goodwill. The
results of operations associated with the acquired assets have been included in
the accompanying statements from the date of acquisition on March 3, 1998
through March 31, 1998.
The Acquisition is summarized as follows:
Assets acquired and liabilities assumed (dollars in thousands):
<TABLE>
<S> <C>
Working capital, including cash of $9,185................... $ 23,646
Property and equipment...................................... 124,752
Other noncurrent assets..................................... 81,114
Intangible assets........................................... 1,472,304
Deferred tax liability...................................... (523,549)
Other noncurrent liabilities................................ (1,908)
----------
Total acquisition................................. $1,176,359
==========
</TABLE>
F-41
<PAGE> 191
LIN HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following summarizes pro forma consolidated results of operations for
the three month periods ended March 31, 1998 and 1997 as if the Acquisition and
the Joint Venture had taken place on January 1, 1997 (dollars in thousands).
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
-------- --------
<S> <C> <C>
Net revenues................................................ $ 46,762 $ 41,018
Operating income (loss)..................................... 2,276 (3,089)
Net loss.................................................... (15,139) (16,386)
</TABLE>
The pro forma results do not necessarily represent results that would have
occurred if the Acquisition and Joint Venture had taken place on the dates
indicated nor are they necessarily indicative of the results of future
operations.
Later this year, the Company expects to acquire from AT&T Corporation
("AT&T") the assets of WOOD-TV and the LMA rights related to WOTV-TV
(collectively, the "Grand Rapids Stations"), both of which stations are located
in the Grand Rapids-Kalamazoo-Battle Creek market (the "Grand Rapids
Acquisition"). The Company currently provides services to the Grand Rapids
Stations pursuant to a consulting agreement with AT&T. The total purchase price
for the Grand Rapids Acquisition will be approximately $125.5 million, plus
accretion of 8.0% interest which commenced on March 1, 1998. The Grand Rapids
Acquisition is expected to be funded by $125.0 million of additional Tranche A
Term Loans. For the fiscal year ended December 31, 1997 the Grand Rapids
Stations generated net revenues and operating income of $28.4 million and $8.2
million, respectively. The historical and pro forma financial information
provided above does not give effect to the Grand Rapids Acquisition.
NOTE 3 -- RELATED PARTY TRANSACTIONS
In connection with the Acquisition, Holdings, Company and certain of their
respective affiliates (collectively, the "Clients") entered into a ten-year
agreement (the "Monitoring and Oversight Agreement") with Hicks, Muse & Co.
Partners, L.P., ("Hicks Muse Partners"), an affiliate of Hicks Muse, pursuant to
which the Clients have agreed to pay Hicks Muse Partners an annual fee (payable
quarterly) for oversight and monitoring services to the Clients. The aggregate
annual fee is adjustable on January 1 of each calendar year to an amount equal
to 1.0% of the budgeted consolidated annual EBITDA of Holdings and its
subsidiaries for the then-current fiscal year. Upon the acquisition by Holdings
and its subsidiaries of another entity or business, the fee shall be adjusted
prospectively in the same manner using the pro forma consolidated annual EBITDA
of Holdings and its subsidiaries. In no event shall the annual fee be less than
$1,000,000. Hicks Muse Partners is also entitled to reimbursement for any
expenses incurred by it in connection with rendering services allocable to the
Company and Holdings.
In connection with the Acquisition, the Clients entered into a ten-year
agreement (the "Financial Advisory Agreement") with Hicks Muse Partners,
pursuant to which Hicks Muse Partners received a financial advisory fee at the
closing of the Acquisition as compensation for its services as financial advisor
to the Clients in connection with the Acquisition. Hicks Muse Partners also is
entitled to receive a fee equal to 1.5% of the "transaction value" (as defined)
for each "subsequent transaction" (as defined) in which a Client is involved.
F-42
<PAGE> 192
LIN HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 4 -- INTANGIBLE ASSETS
Intangibles consist of the following at March 31, 1998 and December 31,
1997 (dollars in thousands):
<TABLE>
<CAPTION>
HOLDINGS PREDECESSOR
---------- ------------
MARCH 31, DECEMBER 31,
1998 1997
---------- ------------
<S> <C> <C>
FCC licenses and network affiliations....................... $ 807,029 $312,450
Goodwill.................................................... 665,275 128,043
---------- --------
1,472,304 440,493
Less accumulated amortization............................... (3,208) (70,905)
---------- --------
$1,469,096 $369,588
========== ========
</TABLE>
Intangible assets represent the excess of the purchase price over the
estimated fair value of identifiable assets acquired in business acquisitions,
and are being amortized straight-line over 40 years. The Company periodically
evaluates intangible assets for potential impairment. At this time, in the
opinion of the management, no impairment has occurred.
NOTE 5 -- LONG-TERM DEBT
Long-term debt consisted of the following at March 31, 1998 and December
31, 1997 (dollars in thousands):
<TABLE>
<CAPTION>
HOLDINGS PREDECESSOR
-------- -----------
<S> <C> <C>
Senior Credit Facilities.................................... $170,000 $ 260,000
8 3/8% Senior Subordinated Notes due 2008................... 299,301 --
10% Senior Discount Notes due 2008 (net of discount of
$123,741)................................................. 201,259 --
-------- ---------
Total long-term debt.............................. 670,560 260,000
Less current portion........................................ (3,931) --
-------- ---------
$666,629 $ 260,000
======== =========
</TABLE>
Senior Credit Facilities
On March 3, 1998, Holdings and the Company entered into a credit agreement
(the "Credit Agreement") with the Chase Manhattan Bank, as administrative agent
(the "Agent"), and the lenders named therein. Under the Credit Agreement, the
Company established a $295 million term loan facility, a $50 million revolving
facility, and a $225 million incremental term loan facility (collectively, the
"Senior Credit Facilities"). Borrowings under the Senior Credit Facilities and
part of the proceeds from the 8 3/8% Senior Subordinated Notes were used to
repay LIN Television's existing debt.
Borrowings under the Senior Credit Facilities bear interest at a rate
based, at the option of the Company, on an adjusted London interbank offered
rate ("Adjusted LIBOR"), or the highest of the Agent's prime rate, a certificate
of deposit rate plus 1.00%, or the Federal Funds effective rate plus 1/2 of
1.00% (the "Alternate Base Rate"), plus an incremental rate based on the
Company's financial performance. At March 31, 1998, the interest rates on the
$50 million Tranche A term loan and the $120 million Tranche B term loan were
7.19% and 7.69%, respectively, based on the Adjusted LIBOR. The Company is
required to pay quarterly commitment fees ranging from 0.25% to 0.50%, based
upon the Company's leverage ratio for that particular quarter on the unused
portion of the loan commitment, in addition to annual agency and other
administration fees.
The obligations of the Company under the Senior Credit Facilities will be
unconditionally and irrevocably guaranteed, jointly and severally, by Holdings
and by each existing and subsequently acquired or organized
F-43
<PAGE> 193
LIN HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
subsidiary of the Company. In addition, substantially all of the assets of the
Company and its subsidiaries are pledged to secure the performance of these
obligations. Required principal repayments of amounts outstanding under the
Senior Credit Facilities commence on December 31, 1998. The Company's ability to
make additional borrowings under the Senior Credit Facilities is subject to
compliance with certain financial covenants and other conditions set forth in
the Credit Agreement. As of March 31, 1998, the Company was in compliance with
all covenants under the Credit Agreement.
Senior Subordinated Notes
On March 3, 1998, the Company issued $300 million aggregate principal
amount of 8 3/8% Senior Subordinated Notes due 2008 ("Senior Subordinated
Notes") in a private placement for net proceeds of $290.3 million. The Senior
Subordinated Notes are unsecured obligations of the Company, subordinated in
right of payment to all existing and any future senior indebtedness of the
Company. The Senior Subordinated Notes are fully and unconditionally guaranteed,
on a joint and several basis, by all wholly-owned subsidiaries of the Company.
The effective interest rate of the Senior Subordinated Notes is 8.9% on an
annual basis. Interest on the Senior Subordinated Notes accrues at a rate of 8
3/8% per annum and is payable in cash semi-annually in arrears commencing on
September 1, 1998.
Senior Discount Notes
In connection with the Merger on March 3, 1998, Holdings issued $325
million aggregate principal amount at maturity of 10% Senior Discount Notes due
2008 ("Senior Discount Notes") in a private placement. The Senior Discount Notes
were issued at a discount and generated net proceeds of $192.6 million to
Holdings. The Senior Discount Notes are unsecured senior obligations of
Holdings, and are not guaranteed. The effective interest rate of the Senior
Discount Notes is 11.0% on an annual basis. Cash interest will not accrue or be
payable on the Senior Discount Notes prior to March 1, 2003. Thereafter, cash
interest will accrue at a rate of 10% per annum and will be payable
semi-annually in arrears commencing September 1, 2003.
NOTE 6 -- SUMMARIZED FINANCIAL INFORMATION OF THE JOINT VENTURE
The Company owns approximately 20% of the Joint Venture, and accounts for
its equity interest in the Joint Venture using the equity method. The following
presents the summarized financial information of the Joint Venture for the
period from March 3, 1998 through March 31, 1998 (dollars in thousands).
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM MARCH 3
THROUGH
MARCH 31, 1998
--------------
<S> <C>
Net Revenues................................................ $10,536
Operating Income............................................ 2,858
Net Loss.................................................... (2,035)
</TABLE>
NOTE 7 -- INCOME TAXES
Income tax expense (benefit) differs from the amount computed by applying
the federal statutory income tax rate of 35% to income before income taxes due
to the effects of state income taxes and permanent book / tax differences,
primarily non-deductible goodwill.
F-44
<PAGE> 194
LIN HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 8 -- COMMITMENTS AND CONTINGENCIES
On September 4, 1997, the Company announced that it had learned of four
lawsuits regarding the then proposed merger. The Company and some or all of its
then present directors are defendants in all of the lawsuits. AT&T is a
defendant in three of the lawsuits, and an AT&T affiliate and Hicks Muse are
defendants in one of the lawsuits. Each of the lawsuits was filed by a purported
shareholder of the Company seeking to represent a putative class of all the
Company's public shareholders. Three of the four lawsuits were filed in Delaware
Chancery Court, while the fourth lawsuit was filed in New York Supreme Court.
While the allegations of the complaints are not identical, all of the
lawsuits basically assert that the terms of the original merger agreement were
not in the best interests of the Company's public shareholders. All of the
complaints allege breach of fiduciary duty in approving the merger agreement.
Two of the complaints also allege breach of fiduciary duty in connection with
the proposed sale of the television station WOOD-TV by AT&T to Hicks Muse and
the amendment to a Private Market Value Guarantee Agreement that was entered
into simultaneously with the first merger agreement. The complaints seek the
preliminary and permanent enjoinment of the merger or alternatively seek damages
in an unspecified amount. The complaints have not been amended to reflect the
terms of the merger itself.
The plaintiffs in each of the actions have agreed to an indefinite
extension of time for each of the defendants served to respond to the respective
complaints. No discovery has taken place.
While the Company believes each lawsuit is without merit, the Company is
unable to determine the likelihood and possible impact on the Company's
financial condition or results of operations of unfavorable outcomes.
In addition, the Company currently and from time to time is involved in
litigation incidental to the conduct of its business. In the opinion of the
Company's management, none of such litigation is likely to have a material
adverse effect on the Company's financial condition, results of operations or
cash flows.
NOTE 9 -- IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income" ("Statement 130") effective for years beginning after
December 15, 1997. Statement 130 requires that a public company report items of
other comprehensive income either below the total for net income in the income
statement, or in a statement of changes in equity, and to disclose the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in-capital in the equity section of the balance
sheet. Statement 130 was adopted during the first quarter of 1998 and was
applied to prior period financial statements on a retroactive basis. The
adoption of Statement 130 did not have a material impact on the consolidated
financial statements.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("Statement 131") effective for years
beginning after December 15, 1997. Statement 131 requires that a public company
report financial and descriptive information about its reportable operating
segments pursuant to criteria that differ from current accounting practice.
Operating segments, as defined, are components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate resources and in
assessing performance. The financial information to be reported includes segment
profit or loss, certain revenue and expense items and segment assets and
reconciliations to corresponding amounts in the general purpose financial
statements. Statement 131 also requires information about revenues from products
or services, countries where the company has operations or assets and major
customers. Management does not believe the implementation of Statement 131 will
have a material impact on its consolidated financial statements.
F-45
<PAGE> 195
LIN HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits" ("Statement 132") effective
for years beginning after December 15, 1997. Statement 132 revises employers'
disclosures about pension and other postretirement benefit plans. It does not
change the measurement or recognition of those plans. This Statement
standardizes the disclosure requirements for pensions and other postretirement
benefits to the extent practicable, requires additional information on changes
in the benefit obligations and fair values of plan assets that will facilitate
financial analysis, and eliminates certain disclosures that are no longer as
useful as they were when SFAS No. 87, "Employers' Accounting for Pensions", SFAS
No. 88, "Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits", and SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" were
issued. The Statement suggests combined formats for presentation of pension and
other postretirement benefit disclosures. Management does not believe the
implementation of Statement 132 will have a material impact on its consolidated
financial statements.
In April 1998, Accounting Standards Executive Committee ("AcSEC") issued
Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5") effective for fiscal years beginning after December 15,
1998. This SOP provides guidance on the financial reporting of start-up costs
and organization costs. It requires that costs of start-up activities and
organization costs be expensed as incurred. Initial application of SOP 98-5
should be reported as the cumulative effect of a change in accounting principle,
as described in Accounting Principles Board (APB) Opinion No. 20, "Accounting
Changes". When adopting this SOP, entities are not required to report the pro
forma effects of retroactive application. Management does not believe the
implementation of SOP 98-5 will have a material impact on its consolidated
financial statements.
F-46
<PAGE> 196
============================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUERS SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................... ii
Forward Looking Statements.................. ii
Certain Definitions and Market and
Industry Data............................. iv
Summary..................................... 1
Risk Factors................................ 22
The Transactions and Other Matters.......... 32
Use of Proceeds............................. 34
Capitalization.............................. 34
Selected Consolidated Financial and
Operating Data............................ 35
Unaudited Pro Forma Financial Information... 37
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................ 43
Business.................................... 52
Management.................................. 69
Securities Ownership of Certain Beneficial
Owners.................................... 73
Certain Other Transactions.................. 74
The Exchange Offers......................... 75
Description of the New Senior Subordinated
Notes..................................... 83
Description of the New Senior Discount
Notes..................................... 109
Description of the Senior Credit
Facilities................................ 131
Book-Entry; Delivery and Form............... 133
Plan of Distribution........................ 135
Certain United States Federal Income Tax
Considerations............................ 136
Legal Matters............................... 142
Change in Accountants....................... 142
Experts..................................... 142
Index to Financial Statements............... F-1
</TABLE>
---------------------
UNTIL , 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE NEW
NOTES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
============================================================
============================================================
LOGO
OFFER FOR ALL OUTSTANDING
8 3/8% SENIOR SUBORDINATED NOTES DUE 2008
IN EXCHANGE FOR
8 3/8% SENIOR SUBORDINATED NOTES DUE 2008
OF
LIN TELEVISION CORPORATION
OFFER FOR ALL OUTSTANDING
10% SENIOR DISCOUNT NOTES DUE 2008
IN EXCHANGE FOR
10% SENIOR DISCOUNT NOTES DUE 2008
OF
LIN HOLDINGS CORP.
------------------------
PROSPECTUS
------------------------
, 1998
============================================================
<PAGE> 197
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses payable in connection with the
offering of the securities to be registered and offered hereby. All of such
expenses are estimates, other than the registration fee payable to the
Securities and Exchange Commission.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 148,356
Printing and Engraving Expenses............................. *
Legal Fees and Expenses..................................... *
Accounting Fees and Expenses................................ *
Miscellaneous............................................... *
-----------
Total............................................. $ *
===========
</TABLE>
- ---------------
* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware law authorizes corporations to limit or to eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. The certificate of
incorporation of each corporate Co-Registrant, as amended, limits the liability
of each corporate Co-Registrant's directors to each corporate Co-Registrant or
its stockholders to the fullest extent permitted by the Delaware statute as in
effect from time to time. Specifically, directors of each corporate
Co-Registrant will not be personally liable for monetary damages for breach of a
director's fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to each corporate Co-Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) for unlawful payments
of dividends or unlawful stock repurchases or redemptions as provided in the
Delaware law, or (iv) for any transaction from which the director derived an
improper personal benefit.
The certificate of incorporation, as amended, of each corporate
Co-Registrant provides that each corporate Co-Registrant shall indemnify its
officers and directors and former officers and directors to the fullest extent
permitted by the General Corporation Law of the State of Delaware. Pursuant to
the provisions of Section 145 of the General Corporation Law of the State of
Delaware, each corporate Co-Registrant has the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding (other than an action by or in
the right of each Issuer) by reason of the fact that he is or was a director,
officer, employee, or agent of each corporate Co-Registrant, against any and all
expenses, judgments, fines, and amounts paid in actually and reasonably incurred
in connection with such action, suit, or proceeding. The power to indemnify
applies only if such person acted in good faith and in a manner he reasonably
believed to be in the best interest or not opposed to the best interest, of each
corporate Co-Registrant and with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right of
each corporate Co-Registrant as well, but only to the extent of defense and
settlement expenses and not to any satisfaction of a judgment or settlement of
the claim itself, and with the further limitation that in such actions no
indemnification shall be made in the event of any adjudication of negligence or
misconduct unless the court, in its discretion, believes that in light of all
the circumstances indemnification should apply.
The statute further specifically provides that the indemnification
authorized thereby shall not be deemed exclusive of any other rights to which
any such officer or director may be entitled under any bylaws, agreement, vote
of stockholders or disinterested directors, or otherwise.
II-1
<PAGE> 198
Each limited liability company Co-Registrant is empowered by the Delaware
Limited Liability Company Act, through its limited liability company agreement,
to indemnify and hold harmless any member or manager or other person from and
against any and all claims and demands whatsoever.
Article 8 of each limited liability company Co-Registrant's Limited
Liability Company Agreement provides as follows:
Liability of Members; Indemnification.
(a) Neither a Member (including the Managing Member) nor any officer,
employee or agent of the Company (including a person having more than one
such capacity) shall be personally liable for any expenses, liabilities,
debts or obligations of the Company solely by reason of acting in such
capacity except as provided in the Act.
(b) To the fullest extent permitted by law, the Company shall
indemnify and hold harmless the Managing Member, each Member and any
officer, employee or agent of the Company from and against any and all
losses, claims, damages, liabilities or expenses of whatever nature (each a
"Claim"), as incurred, arising out or of relating to the management or
business of the Company; provided that such indemnification shall not apply
to any such person if a court of competent jurisdiction has made a final
determination that such Claim resulted directly from the gross negligence,
bad faith or willful misconduct of such person.
The limited partnership Co-Registrant is empowered by the Delaware Revised
Uniform Limited Partnership Act, through its partnership agreement, to indemnify
and hold harmless any partner or other person from and against any and all
claims and demands whatsoever.
The limited partnership Co-Registrant's partnership agreement provides that
"[i]f any Partner or any director, officer or partner of any Partner serving on
behalf of the Partnership, or any officer of the Partnership (an "Indemnitee")
was or is a party or is threatened to be made a party in any threatened, pending
or completed action, suit, proceeding or investigation involving a cause of
action or alleged cause of action for damages or other relief arising from or
related to the business or affairs of the Partnership, the Partnership (but
without recourse to the separate assets of any Partner) shall indemnify such
Indemnitee against all losses, costs and expenses, including attorney's fees,
judgements and amounts paid in settlement actually and reasonably incurred by
the Indemnitee in connection with such action, suit, proceeding or
investigation, so long as such Indemnitee['s] ..." conduct for and on behalf of
the Partnership was taken in good faith, in a manner reasonably believed to be
in or not opposed to the best interests of the partnership, or with the care
that an ordinarily prudent person in a like position would use under similar
circumstances.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to directors,
officers, members, partners and controlling persons of each Co-Registrant
pursuant to the foregoing provisions, or otherwise, each Co-Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by each Co-Registrant of
expenses incurred or paid by a director, officer, member, partner or controlling
person thereof in the successful defense of any action, suit or proceeding) is
asserted by a director, officer, member, partner or controlling person in
connection with the securities being registered, each Co-Registrant will, unless
in the opinion of its counsel the matter has been settled by controlled
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On March 3, 1998, Holdings sold $325,000,000 aggregate principal amount at
maturity of Old Senior Discount Notes in a private placement in reliance of
Section 4(2) under the Securities Act for total gross
II-2
<PAGE> 199
proceeds of approximately $200,000,000. The Old Senior Discount Notes were
immediately resold by the Initial Purchasers in reliance on Rule 144A under the
Securities Act.
On March 3, 1998, the Company sold $300,000,000 aggregate principal amount
at maturity of Old Senior Subordinated Notes in a private placement in reliance
on Section 4(2) under the Securities Act for total gross proceeds of
approximately $300,000,000. The Old Senior Subordinated Notes were immediately
resold by the Initial Purchasers in reliance on Rule 144A under the Securities
Act. Each of the Guarantors guaranteed the Old Senior Subordinated Notes fully
and unconditionally pursuant to the Subsidiary Guarantees.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<C> <S>
2.1 -- Agreement and Plan of Merger among Ranger Holdings Corp.,
Ranger Acquisition Company, and LIN Television
Corporation dated as of August 12, 1997, as amended as of
October 21, 1997.*
3.1.1 -- Certificate of Incorporation of LIN Holdings Corp.
(formerly known as Ranger Holdings Corp.).*
3.1.2 -- Certificate of Amendment of Certificate of Incorporation
of LIN Holdings Corp. (formerly known as Ranger Holdings
Corp.).*
3.2 -- Bylaws of LIN Holdings Corp.*
3.3 -- Restated Certificate of Incorporation of LIN Television
Corporation.*
3.4 -- Restated Bylaws of LIN Television Corporation.*
3.5 -- Certificate of Incorporation of Airwaves, Inc.*
3.6 -- Bylaws of Airwaves, Inc.*
3.7 -- Certificate of Formation of Indiana Broadcasting, LLC.*
3.8 -- Limited Liability Company Agreement of Indiana
Broadcasting, LLC, dated as of February 3, 1998.*
3.9.1 -- Certificate of Incorporation of KXAN, Inc. (formerly
known as C.&W.A., Inc.).*
3.9.2 -- Certificate of Amendment of Certificate of Incorporation
of KXAN, Inc. (formerly known as C.&W.A., Inc.).*
3.9.3 -- Certificate of Amendment of Certificate of Incorporation
of KXAN, Inc. (formerly known as WFIL, Inc.).*
3.10 -- Bylaws of KXAN, Inc.*
3.11 -- Certificate of Incorporation of KXTX Holdings, Inc.
(formerly known as KXAS Holdings, Inc.).*
3.12 -- Bylaws of KXTX Holdings, Inc.*
3.13 -- Certificate of Incorporation of Linbenco, Inc.*
3.14 -- Bylaws of Linbenco, Inc.*
3.15 -- Certificate of Incorporation of LIN Sports, Inc.*
3.16 -- Bylaws of LIN Sports, Inc.*
3.17 -- Certificate of Incorporation of LIN Television of Texas,
Inc.*
3.18 -- By-laws of LIN Television of Texas, Inc.*
3.19 -- Amended and Restated Certificate of Limited Partnership
of LIN Television of Texas, L.P.*
3.20 -- Amended and Restated Agreement of Limited Partnership of
LIN Television of Texas, L.P.*
3.21 -- Certificate of Incorporation of LWWI Broadcasting Inc.*
</TABLE>
II-3
<PAGE> 200
<TABLE>
<C> <S>
3.22 -- By-laws of LWWI Broadcasting Inc.*
3.23 -- Certificate of Incorporation of North Texas Broadcasting
Corporation.*
3.24 -- By-laws of North Texas Broadcasting Corporation.*
3.25 -- Certificate of Incorporation of WAND Television, Inc.*
3.26 -- By-laws of WAND Television, Inc.*
3.27 -- Certificate of Formation of WAVY Broadcasting, LLC.*
3.28 -- Limited Liability Company Agreement of WAVY Broadcasting,
LLC, dated as of February 3, 1998.*
3.29 -- Certificate of Formation of WIVB Broadcasting, LLC.*
3.30 -- Limited Liability Company Agreement of WIVB Broadcasting,
LLC, dated as of February 3, 1998.*
3.31 -- Certificate of Formation of WOOD License Co., LLC.*
3.32 -- Limited Liability Company Agreement of WOOD License Co.,
LLC, dated as of February 3, 1998.*
3.33 -- Certificate of Incorporation of WOOD Television, Inc.*
3.34 -- By-laws of WOOD Television, Inc.*
3.35 -- Certificate of Incorporation of WTNH Broadcasting, Inc.*
3.36 -- By-laws of WTNH Broadcasting, Inc.*
4.1 -- Indenture, dated as of March 3, 1998, among LIN
Acquisition Company, the Guarantors named therein, and
United States Trust Company of New York, as Trustee,
relating to the Senior Subordinated Notes.*
4.2 -- Form of Old Senior Subordinated Note (included in Exhibit
4.1 hereto as Exhibit A).
4.3 -- Form of New Senior Subordinated Note (included in Exhibit
4.1 hereto as Exhibit B).
4.4 -- Indenture, dated as of March 3, 1998, among LIN Holdings
Corp. and United States Trust Company of New York, as
Trustee, relating to the Senior Discount Notes.*
4.5 -- Form of Old Senior Discount Note (included in Exhibit 4.4
hereto as Exhibit A).
4.6 -- Form of New Senior Discount Note (included in Exhibit 4.4
hereto as Exhibit B).
4.7 -- Exchange and Registration Rights Agreement, dated as of
February 18, 1998, among LIN Acquisition Company, the
Guarantors named therein, Chase Securities Inc., Bear,
Stearns & Co. Inc., Morgan Stanley & Co. Incorporated,
NatWest Capital Markets Limited, and BNY Capital Markets,
Inc., relating to the Senior Subordinated Notes.*
4.8 -- Exchange and Registration Rights Agreement, dated as of
February 18, 1998, among LIN Holdings Corp., Chase
Securities Inc., Bear, Stearns & Co. Inc., Morgan Stanley
& Co. Incorporated, NatWest Capital Markets Limited, and
BNY Capital Markets, Inc., relating to the Senior
Discount Notes.*
5.1 -- Opinion of Weil, Gotshal & Manges LLP as to the
Securities issued hereby.+
10.1 -- Credit Agreement, dated as of March 3, 1998, among LIN
Holdings Corp., LIN Television Corporation, the lenders
party thereto, The Chase Manhattan Bank, as
Administrative Agent, Issuing Lender and Swingline
Lender, the Bank of New York, as Syndication Agent, and
National Westminster Bank PLC, as Documentation Agent.*
</TABLE>
II-4
<PAGE> 201
<TABLE>
<C> <S>
10.2 -- Guarantee and Collateral Agreement, dated as of March 3,
1998, made by LIN Holdings Corp., LIN Acquisition
Company, LIN Television Corporation and the Guarantors
named herein, in favor of The Chase Manhattan Bank, as
Administrative Agent.*
10.3 -- Monitoring and Oversight Agreement, dated as of March 3,
1998, among LIN Television Corporation, LIN Holdings
Corp., Ranger Equity Holdings Corporation, Ranger Equity
Holdings A Corp., Ranger Equity Holdings B Corp. and
Hicks, Muse & Co. Partners, L.P.*
10.4 -- Financial Advisory Agreement, dated as of March 3, 1998,
among LIN Television Corporation, LIN Holdings Corp.,
Ranger Equity Holdings Corporation, Ranger Equity
Holdings A Corp., Ranger Equity Holdings B Corp. and
Hicks, Muse & Co. Partners, L.P.*
10.5 -- Amended and Restated Transaction Agreement, dated as of
January 22, 1998, between National Broadcasting Company,
Inc., Outlet Broadcasting, Inc., LIN Television of Texas,
L.P., LIN Television Corporation, Station Venture
Holdings, LLC, Station Venture Operations, LP, and Ranger
Holdings Corp.*
10.6 -- Asset Purchase Option Agreement, dated as of March 3,
1998, among LIN Holdings Corp. and Birmingham
Broadcasting (WVTM TV), Inc. and joined in by National
Broadcasting Company, Inc. for the sole purpose of
Article 12.*
10.7 -- Asset Purchase Agreement, dated as of August 12, 1997,
among LIN Holdings Corp., LIN Television Corporation, LIN
Broadcasting Corporation, LIN Michigan Broadcasting
Corporation and LCH Communications, Inc.*
10.8 -- Television Affiliation Agreement for WAND-TV with
American Broadcasting Companies, Inc., dated February 8,
1990, as amended.(1)
10.9 -- Television Affiliation Agreement for WANE-TV with CBS,
Inc., dated November 1, 1992.(1)
10.10 -- Television Affiliation Agreement for WISH-TV with CBS,
Inc., dated November 1, 1992, as amended.(1)
10.11 -- Television Affiliation Agreement for WTNH-TV with
American Broadcasting Companies, Inc., dated February 17,
1993, as amended.(1)
10.12 -- Television Affiliation Agreement for WIVB-TV with CBS,
Inc., dated December 4, 1992.*
10.13.1 -- Television Affiliation Agreement for KXAN-TV with
National Broadcasting Company, Inc., dated April 12,
1995.(2)
10.13.2 -- Amendment to Television Affiliation Agreement for KXAN-TV
with National Broadcasting Company, Inc., dated March 2,
1998.*
10.14.1 -- Television Affiliation Agreement for WOOD-TV with
National Broadcasting Company, Inc., dated April 12,
1995.(2)
10.14.2 -- Amendment to Television Affiliation Agreement for WOOD-TV
with National Broadcasting Company, Inc., dated March 2,
1998.*
10.15.1 -- Television Affiliation Agreement for WAVY-TV with
National Broadcasting Company, Inc., dated April 12,
1995.(2)
10.15.2 -- Amendment to Television Affiliation Agreement for WAVY-TV
with National Broadcasting Company, Inc., dated March 2,
1998.*
10.16 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Gary R.
Chapman.(2)
10.17 -- Employment Agreement dated as of September 5, 1996,
between LIN Television Corporation and Gary R.
Chapman.(3)
</TABLE>
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<PAGE> 202
<TABLE>
<C> <S>
10.18 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Deborah R.
Jacobson.(3)
10.19 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Paul
Karpowicz.(3)
10.20 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and C. Robert
Ogren, Jr.(3)
10.21 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Gregory M.
Schmidt.(3)
10.22 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Peter E.
Maloney.*
10.23 -- LIN Television Corporation Amended and Restated 1994
Stock Incentive Plan.(1)
10.24 -- Supplemental Benefit Retirement Plan of LIN Television
Corporation and Subsidiary Companies, as amended and
restated.(1)
10.25 -- LIN Television Corporation Retirement Plan, as amended
and restated.(1)
10.26 -- LIN Television Corporation 401(k) Plan and Trust.(1)
12.1 -- Statement regarding Computation of Ratio of Earnings to
Fixed Charges.*
21.1 -- Subsidiaries of the Registrants.*
23.1 -- Consent of Weil, Gotshal & Manges LLP (included in the
opinion filed as Exhibit 5.1 to this Registration
Statement).+
23.2 -- Consent of Ernst & Young LLP, independent auditors.*
23.3 -- Consent of Coopers & Lybrand L.L.P., independent
auditors.*
24.1 -- Power of Attorney for LIN Holdings Corp. (included on its
signature page to this Registration Statement).*
24.2 -- Power of Attorney for LIN Television Corporation
(included on its signature page to this Registration
Statement).*
24.3 -- Power of Attorney for Airwaves, Inc. (included on its
signature page to this Registration Statement).*
24.4 -- Power of Attorney for Indiana Broadcasting LLC (included
on its signature page to this Registration Statement).*
24.5 -- Power of Attorney for KXAN, Inc. (included on its
signature page to this Registration Statement).*
24.6 -- Power of Attorney for KXTX Holdings, Inc. (included on
its signature page to this Registration Statement).*
24.7 -- Power of Attorney for Linbenco, Inc. (included on its
signature page to this Registration Statement).*
24.8 -- Power of Attorney for LIN Sports, Inc. (included on its
signature page to this Registration Statement).*
24.9 -- Power of Attorney for LIN Television of Texas, Inc.
(included on its signature page to this Registration
Statement).*
24.10 -- Power of Attorney for LIN Television of Texas, LP
(included on its signature page to this Registration
Statement).*
24.11 -- Power of Attorney for LWWI Broadcasting Inc. (included on
its signature page to this Registration Statement).*
24.12 -- Power of Attorney for North Texas Broadcasting
Corporation (included on its signature page to this
Registration Statement).*
</TABLE>
II-6
<PAGE> 203
<TABLE>
<C> <S>
24.13 -- Power of Attorney for WAND Television, Inc. (included on its signature page to this
Registration Statement).*
24.14 -- Power of Attorney for WAVY Broadcasting, LLC (included on its signature page to this
Registration Statement).*
24.15 -- Power of Attorney for WIVB Broadcasting, LLC (included on its signature page to this
Registration Statement).*
24.16 -- Power of Attorney for WOOD License Co., LLC (included on its signature page to this
Registration Statement).*
24.17 -- Power of Attorney for WOOD Television, Inc. (included on its signature page to this
Registration Statement).*
24.18 -- Power of Attorney for WTNH Broadcasting, Inc. (included on its signature page to this
Registration Statement).*
25.1 -- Form T-1 of the United States Trust Company of New York, as Trustee.+
27.1 -- Financial Data Schedule.*
27.2 -- Financial Data Schedule.*
27.3 -- Financial Data Schedule.*
99.1 -- Form of Letter of Transmittal for 8 3/8% Senior Subordinated Notes due 2008 of LIN
Television Corporation.+
99.2 -- Form of Notice of Guaranteed Delivery for 8 3/8% Senior Subordinated Notes due 2008 of
LIN Television Corporation.+
99.3 -- Form of Letter of Transmittal for 10% Senior Discount Notes due 2008 for LIN Holdings
Corp.+
99.4 -- Form of Notice of Guaranteed Delivery for 10% Senior Discount Notes due 2008 for LIN
Holdings Corp.+
</TABLE>
- ---------------
* Filed herewith.
+ To be filed by amendment.
(1) Incorporated by reference to the Registration Statement on Form S-1 of LIN
Broadcasting Corporation, dated October 4, 1994, File No. 33-84718.
(2) Incorporated by reference to the Quarterly Report on Form 10-Q of LIN
Television Corporation for the fiscal quarter ended March 31, 1995, File
No. 0-2481.
(3) Incorporated by reference to the Quarterly Report on Form 10-Q of LIN
Television Corporation for the fiscal quarter ended September 30, 1996,
File No. 0-25206.
(B) FINANCIAL STATEMENT SCHEDULES
The following Financial Statement Schedules are included in this
Registration Statement:
Report of Independent Auditors
Schedule I -- Condensed Financial Information of Registrant
Schedule II -- Valuation and Qualifying Accounts
ITEM 17. UNDERTAKINGS
(a) Each of the undersigned Co-Registrants hereby undertakes:
(1) To file, during any period in which offers of sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
II-7
<PAGE> 204
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviating from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such posteffective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) See Item 14.
II-8
<PAGE> 205
SIGNATURE PAGE
Pursuant to the requirements of the Securities Act of 1933, as amended,
each of the Co-Registrants has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Providence, State of Rhode Island, on the 29th day of May, 1998.
LIN HOLDINGS CORP.
LIN TELEVISION CORPORATION
By: /s/ PETER E. MALONEY
----------------------------------
Peter E. Maloney
Vice President of Finance
POWER OF ATTORNEY
Each individual whose signature appears below constitutes and appoints Gary
R. Chapman and Peter E. Maloney, and each of them, such person's true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for such person and in such person's name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and requests to accelerate the effectiveness of
this registration statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GARY R. CHAPMAN President, Chief Executive May 29, 1998
- ----------------------------------------------------- Officer and Director
Gary R. Chapman (Principal Executive Officer)
of each of the Co-Registrants
/s/ PETER E. MALONEY Vice President of Finance May 29, 1998
- ----------------------------------------------------- (Principal Financial and
Peter E. Maloney Accounting Officer) and
Director of each of the
Co-Registrants
/s/ THOMAS O. HICKS Chairman of the Board of each May 29, 1998
- ----------------------------------------------------- of the Co-Registrants
Thomas O. Hicks
/s/ MICHAEL J. LEVITT Director of each of the May 29, 1998
- ----------------------------------------------------- Co-Registrants
Michael J. Levitt
/s/ ERIC C. NEUMAN Director of each of the May 29, 1998
- ----------------------------------------------------- Co-Registrants
Eric C. Neuman
</TABLE>
II-9
<PAGE> 206
SIGNATURE PAGE
Pursuant to the requirements of the Securities Act of 1933, as amended,
each of the Co-Registrants has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Providence, State of Rhode Island, on the 29th day of May, 1998.
AIRWAVES, INC.
KXAN, INC.
KXTX HOLDINGS, INC.
LINBECO, INC.
LIN SPORTS, INC.
LIN TELEVISION OF TEXAS, INC.
LWWI BROADCASTING INC.
NORTH TEXAS BROADCASTING
CORPORATION
WAND TELEVISION, INC.
WOOD TELEVISION, INC.
WTNH BROADCASTING, INC.
By: /s/ PETER E. MALONEY
------------------------------------
Peter E. Maloney
Vice President of Finance
POWER OF ATTORNEY
Each individual whose signature appears below constitutes and appoints Gary
R. Chapman and Peter E. Maloney, and each of them, such person's true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for such person and in such person's name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and requests to accelerate the effectiveness of
this registration statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GARY R. CHAPMAN President, Chief Executive May 29, 1998
- ----------------------------------------------------- Officer and Director
Gary R. Chapman (Principal Executive Officer)
of each of the Co-Registrants
/s/ PETER E. MALONEY Vice President of Finance May 29, 1998
- ----------------------------------------------------- (Principal Financial and
Peter E. Maloney Accounting Officer) and
Director of each of the
Co-Registrants
/s/ PAUL KARPOWICZ Vice President of Television May 29, 1998
- ----------------------------------------------------- and Director of each of the
Paul Karpowicz Co-Registrants
</TABLE>
II-10
<PAGE> 207
SIGNATURE PAGE
Pursuant to the requirements of the Securities Act of 1933, as amended,
each of the Co-Registrants has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Providence, State of Rhode Island, on the 29th day of May, 1998.
INDIANA BROADCASTING LLC
WAVY BROADCASTING, LLC
WIVB BROADCASTING, LLC
WOOD LICENSE CO., LLC
By: LIN TELEVISION CORPORATION, its
Managing Member
By: /s/ PETER E. MALONEY
----------------------------------
Peter E. Maloney
Vice President of Finance
POWER OF ATTORNEY
Each individual whose signature appears below constitutes and appoints Gary
R. Chapman and Peter E. Maloney, and each of them, such person's true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for such person and in such person's name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and requests to accelerate the effectiveness of
this registration statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GARY R. CHAPMAN President, Chief Executive Officer May 29, 1998
- ----------------------------------------------------- and Director of LIN Television
Gary R. Chapman Corporation (Principal Executive
Officer)
/s/ PETER E. MALONEY Vice President of Finance of LIN May 29, 1998
- ----------------------------------------------------- Television Corporation
Peter E. Maloney (Principal Financial and
Accounting Officer)
/s/ THOMAS O. HICKS Chairman of the Board of LIN May 29, 1998
- ----------------------------------------------------- Television Corporation
Thomas O. Hicks
</TABLE>
II-11
<PAGE> 208
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ MICHAEL J. LEVITT Director of LIN Television May 29, 1998
- ----------------------------------------------------- Corporation
Michael J. Levitt
/s/ ERIC C. NEUMAN Director of LIN Television May 29, 1998
- ----------------------------------------------------- Corporation
Eric C. Neuman
</TABLE>
II-12
<PAGE> 209
SIGNATURE PAGE
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Providence,
State of Rhode Island, on the 29th day of May, 1998.
LIN TELEVISION OF TEXAS, L.P.
By: LIN TELEVISION OF TEXAS, INC.,
its General Partner
By: /s/ PETER E. MALONEY
----------------------------------
Peter E. Maloney
Vice President of Finance
POWER OF ATTORNEY
Each individual whose signature appears below constitutes and appoints Gary
R. Chapman and Peter E. Maloney, and each of them, such person's true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for such person and in such person's name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and requests to accelerate the effectiveness of
this registration statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GARY R. CHAPMAN President, Chief Executive Officer May 29, 1998
- ----------------------------------------------------- and Director (Principal
Gary R. Chapman Executive Officer) of LIN
Television of Texas, Inc.
/s/ PETER E. MALONEY Vice President of Finance May 29, 1998
- ----------------------------------------------------- (Principal Financial and
Peter E. Maloney Accounting Officer) and Director
of LIN Television of Texas, Inc.
/s/ PAUL KARPOWICZ Vice President of Television and May 29, 1998
- ----------------------------------------------------- Director of LIN Television of
Paul Karpowicz Texas, Inc.
</TABLE>
II-13
<PAGE> 210
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
LIN Television Corporation
We have audited the consolidated financial statements of LIN Television
Corporation as of December 31, 1997 and 1996, and for each of the three years in
the period ended December 31, 1997, and have issued our report thereon dated
January 19, 1998 except for Note 2, as to which the date is March 3, 1998
(included elsewhere in this Registration Statement). Our audits also included
the financial statement schedules listed in Item 16(b) of this Registration
Statement. These schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
ERNST & YOUNG LLP
Fort Worth, Texas
March 3, 1998
S-1
<PAGE> 211
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
LIN TELEVISION CORPORATION
CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 561 $ 16
Other current assets...................................... 558 402
-------- --------
Total current assets........................................ 1,119 418
Property and equipment, less accumulated depreciation....... 489 430
Program rights and other noncurrent assets.................. 210 428
Investments in wholly-owned subsidiaries.................... 191,296 137,925
-------- --------
Total assets................................................ $193,114 $139,201
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other current liabilities............ $ 613 $ 817
Deferred income taxes....................................... (64) (64)
Stockholders' equity:
Common stock.............................................. 299 297
Other stockholders' equity................................ 192,266 138,151
-------- --------
Total stockholders' equity.................................. 192,565 138,448
-------- --------
Total liabilities and stockholders' equity.................. $193,114 $139,201
======== ========
</TABLE>
See accompanying notes.
S-2
<PAGE> 212
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONTINUED)
LIN TELEVISION CORPORATION
CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Operating revenue:
Management fees........................................... $ 7,068 $ 7,248 $ 5,997
Other operating income.................................... -- 16 --
------- ------- -------
Total operating revenue..................................... 7,068 7,264 5,997
Operating costs and expenses:
General and administrative................................ 6,763 6,998 5,747
Depreciation expense...................................... 182 172 103
------- ------- -------
Total operating costs and expenses.......................... 6,945 7,170 5,850
------- ------- -------
Operating income............................................ 123 94 147
Provision for income taxes.................................. 63 150 25
------- ------- -------
60 (56) 122
Equity in net income of subsidiaries........................ 48,047 46,517 37,908
------- ------- -------
Net income.................................................. $48,107 $46,461 $38,030
======= ======= =======
</TABLE>
See accompanying notes.
S-3
<PAGE> 213
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONTINUED)
LIN TELEVISION CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Net cash provided by (used in) operating activities......... $ 1,309 $ (731) $ (161)
INVESTING ACTIVITIES
Capital expenditures........................................ (241) (39) (610)
Contribution to subsidiary.................................. (3,986) (4,032) (4,374)
------- ------- -------
Net cash used in investing activities....................... (4,227) (4,071) (4,984)
FINANCING ACTIVITIES
Proceeds from exercise of stock options and Employee Stock
Purchase Plan shares...................................... 4,279 4,802 5,147
Treasury stock purchases.................................... (816) -- --
------- ------- -------
Net cash provided by financing activities 3,463 4,802 5,147
------- ------- -------
Net increase in cash and cash equivalents................... 545 -- 2
Cash and cash equivalents at beginning of the year.......... 16 16 14
------- ------- -------
Cash and cash equivalents at end of the year................ $ 561 $ 16 $ 16
======= ======= =======
</TABLE>
See accompanying notes.
S-4
<PAGE> 214
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONTINUED)
LIN TELEVISION CORPORATION
NOTES TO CONDENSED FINANCIAL INFORMATION
A. BASIS OF PRESENTATION
In these parent-only financial statements, LIN Television Corporation's
(the "Company") investments in subsidiaries is stated at cost plus equity in the
undistributed earnings (losses) of subsidiaries since the date of their
acquisition. These parent-only financial statements should be read in
conjunction with the Company's consolidated financial statements and notes
thereto.
B. SUBSEQUENT EVENT
The Company and two newly formed affiliates of Hicks, Muse, Tate & Furst
Incorporated ("Hicks Muse"), the predecessors-in-interest of LIN Holdings Corp.
("Holdings") and LIN Acquisition Company ("LIN Acquisition"), entered into an
Agreement and Plan of Merger on August 12, 1997 (as amended, the "Merger
Agreement"). On January 7, 1998, the stockholders of the Company adopted and
approved the Merger Agreement.
Pursuant to, and upon the terms and conditions of, the Merger Agreement,
Holdings acquired the Company (the "Acquisition") on March 3, 1998 by merging
LIN Acquisition, its wholly owned subsidiary, with and into the Company (the
"Merger"), with the Company surviving the merger and becoming a direct, wholly
owned subsidiary of Holdings. The total purchase price for the common equity of
the Company was approximately $1.7 billion (subject to the payment of 8.0% per
annum thereon from and including February 15, 1998 up to but excluding March 3,
1998, the date on which the Merger became effective). The Company incurred
additional financing and legal fees in connection with the closing of the
Merger.
The Acquisition was funded by (i) $6.9 million of excess cash on the
Company's balance sheet; (ii) $50.0 million aggregate principal amount of senior
secured Tranche A term loans ("Tranche A Term Loans"); (iii) $120.0 million
aggregate principal amount of senior secured Tranche B term loans ("Tranche B
Term Loans"); (iv) $299.3 million of gross proceeds from the issuance by LIN
Television of $300.0 million aggregate principal amount of unregistered 8 3/8%
senior subordinated notes due 2008 (the "Old Senior Subordinated Notes"); (v)
$199.6 million of gross proceeds from the issuance by Holdings of $325.0 million
aggregate principal amount at maturity of unregistered 10% senior discount notes
due 2008 (the "Old Senior Discount Notes"), which proceeds were contributed by
Holdings to the common equity of the Company; (vi) $815.5 million of proceeds of
the GECC Note (as defined below) and (vii) $558.1 million of common equity
provided by affiliates of Hicks Muse, management and other co-investors to the
equity of the corporate parents of Holdings, which in turn, through Holdings,
contributed such amount to the common equity of the Company (collectively, the
"Financings").
In connection with the Acquisition, Hicks Muse and NBC formed a television
station joint venture (the "Joint Venture"). The Joint Venture consists of
KXAS-TV, formerly the Company's Dallas-Fort Worth NBC affiliate, and KNSD-TV,
formerly NBC's San Diego station. A wholly owned subsidiary of NBC is the
general partner of the Joint Venture (the "NBC General Partner") and NBC
operates the stations owned by the Joint Venture. The NBC General Partner holds
an approximate 80% equity interest and the Company holds an approximate 20%
equity interest in the Joint Venture. General Electric Capital Corporation
("GECC") provided debt financing for the Joint Venture in the form of an $815.5
million 25-year non-amortizing senior secured note bearing an interest rate of
8% per annum for the first fifteen years of its term, and at a rate of 9.0% per
annum thereafter (the "GECC Note") The Company expects that the interest
payments on the GECC Note will be serviced solely by the cash flow of the Joint
Venture.
The GECC Note was issued by LIN Television of Texas, L.P., the Company's
indirect wholly owned partnership ("LIN-Texas"), which distributed the proceeds
to the Company. The obligations to GECC under
S-5
<PAGE> 215
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONTINUED)
LIN TELEVISION CORPORATION
the GECC Note were assumed by a limited liability company to finance a portion
of the cost of the Acquisition. The obligations to GECC under the GECC note were
assumed by the Joint Venture and LIN Texas was simultaneously released from all
obligations under the GECC Note. The GECC Note is not an obligation of Holdings,
the Company, or any of their respective subsidiaries and is recourse only to the
Joint Venture, the Company's interest therein and to one of Holdings two
corporate parents pursuant to a guarantee.
In connection with the formation of the Joint Venture, the Company received
an extension of its NBC network affiliation agreements to 2010 and the option
(exercisable through December 31, 1999) to purchase WVTM-TV, the NBC affiliate
in Birmingham, Alabama.
Additionally, on August 12, 1997, the Company entered into an asset
purchase agreement with AT&T Corp. ("AT&T") pursuant to which it will acquire
WOOD-TV, a television station in Grand Rapids, and the LMA rights relating to
station WOTV-TV, for approximately $125.5 million (the "Grand Rapids
Acquisition"). The funding for this acquisition is expected to be provided under
the new credit facility arranged in connection with the Acquisition funding. The
Company expects to acquire the Grand Rapids stations from AT&T in 1998.
Management has been providing consulting services to the Grand Rapids stations
under a consulting agreement with AT&T since 1994.
The summarized unaudited pro forma consolidated results of operations set
forth below for the year ended December 31, 1997, assume the Acquisition and the
Joint Venture had taken place on January 1, 1997. Such results do not give
effect to the Grand Rapids acquisition.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-----------------
(IN THOUSANDS)
<S> <C>
Net revenues.......................................... $196,115
Net loss.............................................. $(43,415)
</TABLE>
The pro forma results do not necessarily represent results that would have
occurred if the Acquisition and Joint Venture had taken place on the dates
indicated nor are they necessarily indicative of the results of future
operations.
C. LONG-TERM DEBT
Immediately prior to the Spin-Off (see Note 1 to the Company's consolidated
financial statements), the Company was restructured to allow the banks in the
Credit Facility to have a pledge of the stock in the borrowing entity. As a
result, LWWI Broadcasting, Inc. ("LWWI") was named the borrower under the Bank
Credit Facility and virtually all of the Company's operating assets and
liabilities were transferred to LWWI as restricted assets. The Company has
guaranteed the payment of all principal and interest under the Bank Credit
Facility.
D. INCOME TAXES
The Company was owed amounts from its subsidiaries for their allocated
share of federal income taxes. These amounts were contributed to the
subsidiaries' capital accounts in a similar fashion.
S-6
<PAGE> 216
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
LIN TELEVISION CORPORATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
---------------------
BALANCE AT CHARGED TO CHARGED
BEGINNING OF COSTS AND TO OTHER BALANCE AT END
PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
------------ ---------- -------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1997:
Deducted from asset accounts:
Allowance for Doubtful
Accounts:..................... $1,960 $971 $ -- $ 734(1) $2,197
Year ended December 31, 1996:
Deducted from asset accounts:
Allowance for Doubtful
Accounts:..................... $1,964 $496 $ -- $ 500(1) $1,960
Year ended December 31, 1995:
Deducted from asset accounts:
Allowance for Doubtful
Accounts:..................... $2,301 $527 $168(2) $1,032(1) $1,964
</TABLE>
- ---------------
(1) Uncollected accounts written off, net of recoveries.
(2) Additions charged to Other Accounts for 1995 reflects Allowances for Bad
Debts at Acquisition of $168 for WIVB-TV.
S-7
<PAGE> 217
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.1 -- Agreement and Plan of Merger among Ranger Holdings Corp.,
Ranger Acquisition Company, and LIN Television
Corporation dated as of August 12, 1997, as amended as of
October 21, 1997.*
3.1.1 -- Certificate of Incorporation of LIN Holdings Corp.
(formerly known as Ranger Holdings Corp.).*
3.1.2 -- Certificate of Amendment of Certificate of Incorporation
of LIN Holdings Corp. (formerly known as Ranger Holdings
Corp.).*
3.2 -- Bylaws of LIN Holdings Corp.*
3.3 -- Restated Certificate of Incorporation of LIN Television
Corporation.*
3.4 -- Restated Bylaws of LIN Television Corporation.*
3.5 -- Certificate of Incorporation of Airwaves, Inc.*
3.6 -- Bylaws of Airwaves, Inc.*
3.7 -- Certificate of Formation of Indiana Broadcasting, LLC.*
3.8 -- Limited Liability Company Agreement of Indiana
Broadcasting, LLC, dated as of February 3, 1998.*
3.9.1 -- Certificate of Incorporation of KXAN, Inc. (formerly
known as C.&W.A., Inc.).*
3.9.2 -- Certificate of Amendment of Certificate of Incorporation
of KXAN, Inc. (formerly known as C.&W.A., Inc.).*
3.9.3 -- Certificate of Amendment of Certificate of Incorporation
of KXAN, Inc. (formerly known as WFIL, Inc.).*
3.10 -- Bylaws of KXAN, Inc.*
3.11 -- Certificate of Incorporation of KXTX Holdings, Inc.
(formerly known as KXAS Holdings, Inc.).*
3.12 -- Bylaws of KXTX Holdings, Inc.*
3.13 -- Certificate of Incorporation of Linbenco, Inc.*
3.14 -- Bylaws of Linbenco, Inc.*
3.15 -- Certificate of Incorporation of LIN Sports, Inc.*
3.16 -- Bylaws of LIN Sports, Inc.*
3.17 -- Certificate of Incorporation of LIN Television of Texas,
Inc.*
3.18 -- By-laws of LIN Television of Texas, Inc.*
3.19 -- Amended and Restated Certificate of Limited Partnership
of LIN Television of Texas, L.P.*
3.20 -- Amended and Restated Agreement of Limited Partnership of
LIN Television of Texas, L.P.*
3.21 -- Certificate of Incorporation of LWWI Broadcasting Inc.*
3.22 -- By-laws of LWWI Broadcasting Inc.*
3.23 -- Certificate of Incorporation of North Texas Broadcasting
Corporation.*
3.24 -- By-laws of North Texas Broadcasting Corporation.*
3.25 -- Certificate of Incorporation of WAND Television, Inc.*
3.26 -- By-laws of WAND Television, Inc.*
3.27 -- Certificate of Formation of WAVY Broadcasting, LLC.*
</TABLE>
<PAGE> 218
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.28 -- Limited Liability Company Agreement of WAVY Broadcasting,
LLC, dated as of February 3, 1998.*
3.29 -- Certificate of Formation of WIVB Broadcasting, LLC.*
3.30 -- Limited Liability Company Agreement of WIVB Broadcasting,
LLC, dated as of February 3, 1998.*
3.31 -- Certificate of Formation of WOOD License Co., LLC.*
3.32 -- Limited Liability Company Agreement of WOOD License Co.,
LLC, dated as of February 3, 1998.*
3.33 -- Certificate of Incorporation of WOOD Television, Inc.*
3.34 -- By-laws of WOOD Television, Inc.*
3.35 -- Certificate of Incorporation of WTNH Broadcasting, Inc.*
3.36 -- By-laws of WTNH Broadcasting, Inc.*
4.1 -- Indenture, dated as of March 3, 1998, among LIN
Acquisition Company, the Guarantors named therein, and
United States Trust Company of New York, as Trustee,
relating to the Senior Subordinated Notes.*
4.2 -- Form of Old Senior Subordinated Note (included in Exhibit
4.1 hereto as Exhibit A).
4.3 -- Form of New Senior Subordinated Note (included in Exhibit
4.1 hereto as Exhibit B).
4.4 -- Indenture, dated as of March 3, 1998, among LIN Holdings
Corp. and United States Trust Company of New York, as
Trustee, relating to the Senior Discount Notes.*
4.5 -- Form of Old Senior Discount Note (included in Exhibit 4.4
hereto as Exhibit A).
4.6 -- Form of New Senior Discount Note (included in Exhibit 4.4
hereto as Exhibit B).
4.7 -- Exchange and Registration Rights Agreement, dated as of
February 18, 1998, among LIN Acquisition Company, the
Guarantors named therein, Chase Securities Inc., Bear,
Stearns & Co. Inc., Morgan Stanley & Co. Incorporated,
NatWest Capital Markets Limited, and BNY Capital Markets,
Inc., relating to the Senior Subordinated Notes.*
4.8 -- Exchange and Registration Rights Agreement, dated as of
February 18, 1998, among LIN Holdings Corp., Chase
Securities Inc., Bear, Stearns & Co. Inc., Morgan Stanley
& Co. Incorporated, NatWest Capital Markets Limited, and
BNY Capital Markets, Inc., relating to the Senior
Discount Notes.*
5.1 -- Opinion of Weil, Gotshal & Manges LLP as to the
Securities issued hereby.+
10.1 -- Credit Agreement, dated as of March 3, 1998, among LIN
Holdings Corp., LIN Television Corporation, the lenders
party thereto, The Chase Manhattan Bank, as
Administrative Agent, Issuing Lender and Swingline
Lender, the Bank of New York, as Syndication Agent, and
National Westminster Bank PLC, as Documentation Agent.*
10.2 -- Guarantee and Collateral Agreement, dated as of March 3,
1998, made by LIN Holdings Corp., LIN Acquisition
Company, LIN Television Corporation and the Guarantors
named herein, in favor of The Chase Manhattan Bank, as
Administrative Agent.*
</TABLE>
<PAGE> 219
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.3 -- Monitoring and Oversight Agreement, dated as of March 3,
1998, among LIN Television Corporation, LIN Holdings
Corp., Ranger Equity Holdings Corporation, Ranger Equity
Holdings A Corp., Ranger Equity Holdings B Corp. and
Hicks, Muse & Co. Partners, L.P.*
10.4 -- Financial Advisory Agreement, dated as of March 3, 1998,
among LIN Television Corporation, LIN Holdings Corp.,
Ranger Equity Holdings Corporation, Ranger Equity
Holdings A Corp., Ranger Equity Holdings B Corp. and
Hicks, Muse & Co. Partners, L.P.*
10.5 -- Amended and Restated Transaction Agreement, dated as of
January 22, 1998, between National Broadcasting Company,
Inc., Outlet Broadcasting, Inc., LIN Television of Texas,
L.P., LIN Television Corporation, Station Venture
Holdings, LLC, Station Venture Operations, LP, and Ranger
Holdings Corp.*
10.6 -- Asset Purchase Option Agreement, dated as of March 3,
1998, among LIN Holdings Corp. and Birmingham
Broadcasting (WVTM TV), Inc. and joined in by National
Broadcasting Company, Inc. for the sole purpose of
Article 12.*
10.7 -- Asset Purchase Agreement, dated as of August 12, 1997,
among LIN Holdings Corp., LIN Television Corporation, LIN
Broadcasting Corporation, LIN Michigan Broadcasting
Corporation and LCH Communications, Inc.*
10.8 -- Television Affiliation Agreement for WAND-TV with
American Broadcasting Companies, Inc., dated February 8,
1990, as amended.(1)
10.9 -- Television Affiliation Agreement for WANE-TV with CBS,
Inc., dated November 1, 1992.(1)
10.10 -- Television Affiliation Agreement for WISH-TV with CBS,
Inc., dated November 1, 1992, as amended.(1)
10.11 -- Television Affiliation Agreement for WTNH-TV with
American Broadcasting Companies, Inc., dated February 17,
1993, as amended.(1)
10.12 -- Television Affiliation Agreement for WIVB-TV with CBS,
Inc., dated December 4, 1992.*
10.13.1 -- Television Affiliation Agreement for KXAN-TV with
National Broadcasting Company, Inc., dated April 12,
1995.(2)
10.13.2 -- Amendment to Television Affiliation Agreement for KXAN-TV
with National Broadcasting Company, Inc., dated March 2,
1998.*
10.14.1 -- Television Affiliation Agreement for WOOD-TV with
National Broadcasting Company, Inc., dated April 12,
1995.(2)
10.14.2 -- Amendment to Television Affiliation Agreement for WOOD-TV
with National Broadcasting Company, Inc., dated March 2,
1998.*
10.15.1 -- Television Affiliation Agreement for WAVY-TV with
National Broadcasting Company, Inc., dated April 12,
1995.(2)
10.15.2 -- Amendment to Television Affiliation Agreement for WAVY-TV
with National Broadcasting Company, Inc., dated March 2,
1998.*
10.16 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Gary R.
Chapman.(2)
10.17 -- Employment Agreement dated as of September 5, 1996,
between LIN Television Corporation and Gary R.
Chapman.(3)
10.18 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Deborah R.
Jacobson.(3)
</TABLE>
<PAGE> 220
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.19 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Paul
Karpowicz.(3)
10.20 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and C. Robert
Ogren, Jr.(3)
10.21 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Gregory M.
Schmidt.(3)
10.22 -- Severance Compensation Agreement dated as of September 5,
1996, between LIN Television Corporation and Peter E.
Maloney.*
10.23 -- LIN Television Corporation Amended and Restated 1994
Stock Incentive Plan.(1)
10.24 -- Supplemental Benefit Retirement Plan of LIN Television
Corporation and Subsidiary Companies, as amended and
restated.(1)
10.25 -- LIN Television Corporation Retirement Plan, as amended
and restated.(1)
10.26 -- LIN Television Corporation 401(k) Plan and Trust.(1)
12.1 -- Statement regarding Computation of Ratio of Earnings to
Fixed Charges.*
21.1 -- Subsidiaries of the Registrants.*
23.1 -- Consent of Weil, Gotshal & Manges LLP (included in the
opinion filed as Exhibit 5.1 to this Registration
Statement).+
23.2 -- Consent of Ernst & Young LLP, independent auditors.*
23.3 -- Consent of Coopers & Lybrand L.L.P., independent
auditors.*
24.1 -- Power of Attorney for LIN Holdings Corp. (included on its
signature page to this Registration Statement).*
24.2 -- Power of Attorney for LIN Television Corporation
(included on its signature page to this Registration
Statement).*
24.3 -- Power of Attorney for Airwaves, Inc. (included on its
signature page to this Registration Statement).*
24.4 -- Power of Attorney for Indiana Broadcasting LLC (included
on its signature page to this Registration Statement).*
24.5 -- Power of Attorney for KXAN, Inc. (included on its
signature page to this Registration Statement).*
24.6 -- Power of Attorney for KXTX Holdings, Inc. (included on
its signature page to this Registration Statement).*
24.7 -- Power of Attorney for Linbenco, Inc. (included on its
signature page to this Registration Statement).*
24.8 -- Power of Attorney for LIN Sports, Inc. (included on its
signature page to this Registration Statement).*
24.9 -- Power of Attorney for LIN Television of Texas, Inc.
(included on its signature page to this Registration
Statement).*
24.10 -- Power of Attorney for LIN Television of Texas, LP
(included on its signature page to this Registration
Statement).*
24.11 -- Power of Attorney for LWWI Broadcasting Inc. (included on
its signature page to this Registration Statement).*
24.12 -- Power of Attorney for North Texas Broadcasting
Corporation (included on its signature page to this
Registration Statement).*
24.13 -- Power of Attorney for WAND Television, Inc. (included on
its signature page to this Registration Statement).*
</TABLE>
<PAGE> 221
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
24.14 -- Power of Attorney for WAVY Broadcasting, LLC (included on
its signature page to this Registration Statement).*
24.15 -- Power of Attorney for WIVB Broadcasting, LLC (included on
its signature page to this Registration Statement).*
24.16 -- Power of Attorney for WOOD License Co., LLC (included on
its signature page to this Registration Statement).*
24.17 -- Power of Attorney for WOOD Television, Inc. (included on
its signature page to this Registration Statement).*
24.18 -- Power of Attorney for WTNH Broadcasting, Inc. (included
on its signature page to this Registration Statement).*
25.1 -- Form T-1 of the United States Trust Company of New York,
as Trustee.+
27.1 -- Financial Data Schedule.*
27.2 -- Financial Data Schedule.*
27.3 -- Financial Data Schedule.*
99.1 -- Form of Letter of Transmittal for 8 3/8% Senior
Subordinated Notes due 2008 of LIN Television
Corporation.+
99.2 -- Form of Notice of Guaranteed Delivery for 8 3/8% Senior
Subordinated Notes due 2008 of LIN Television
Corporation.+
99.3 -- Form of Letter of Transmittal for 10% Senior Discount
Notes due 2008 for LIN Holdings Corp.+
99.4 -- Form of Notice of Guaranteed Delivery for 10% Senior
Discount Notes due 2008 for LIN Holdings Corp.+
</TABLE>
- ---------------
* Filed herewith.
+ To be filed by amendment.
(1) Incorporated by reference to the Registration Statement on Form S-1 of LIN
Broadcasting Corporation, dated October 4, 1994, File No. 33-84718.
(2) Incorporated by reference to the Quarterly Report on Form 10-Q of LIN
Television Corporation for the fiscal quarter ended March 31, 1995, File
No. 0-2481.
(3) Incorporated by reference to the Quarterly Report on Form 10-Q of LIN
Television Corporation for the fiscal quarter ended September 30, 1996,
File No. 0-25206.
<PAGE> 1
EXHIBIT 2.1
CONFORMED COPY
-----------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
RANGER HOLDINGS CORP.,
RANGER ACQUISITION COMPANY
AND
LIN TELEVISION CORPORATION
DATED AS OF AUGUST 12, 1997
-----------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C> <C>
ARTICLE I
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.3 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.4 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.5 Certificate of Incorporation; By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.6 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . . . . . . . . . . . . . 3
SECTION 2.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Common Stock of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Cancellation of Treasury Stock and Parent Owned Company Common Stock . . . . . . . . . . . . . 3
(c) Conversion of Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(d) Shares of Dissenting Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(e) Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Payment; Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Paying Agent; Payment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) No Further Ownership Rights in Company Common Stock . . . . . . . . . . . . . . . . . . . . . . 5
(d) Termination of Payment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(e) No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Withholding Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3 Treatment of Employee Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4 Termination of Private Market Value Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.1 Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Organization and Qualification; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Certificates of Incorporation and By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Authority Relative to Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(f) Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) SEC Documents and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(h) Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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(i) Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(j) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(k) Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(l) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(m) Employee Arrangements and Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(n) Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(o) Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(p) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(q) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(r) Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(s) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(t) Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(u) Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(v) Tangible Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.2 Representations and Warranties of Parent and Sub . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(b) Authority Relative to Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(c) Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(g) FCC Licenses of Parent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(h) FCC Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(i) Ownership and Operations of Parent and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(j) Attributable Interests and Meaningful Relationships . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IV
CONDUCT OF BUSINESSES PENDING THE MERGER . . . . . . . . . . . . . . . . . . 23
SECTION 4.1 Conduct of Business of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.2 Control of Company Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.3 Conduct of Business of Parent and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.4 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.5 Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.1 Shareholder Approval; Preparation of Proxy Statement . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.2 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.3 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.4 Employee Benefits Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.5 Directors' and Officers' Indemnification and Insurance . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.6 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.7 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.9 Conveyance Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
-ii-
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<TABLE>
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<S> <C> <C>
SECTION 5.10 Solvency Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.11 Definitive Financing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VI
CONDITIONS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.1 Conditions to Obligation of Each Party to Effect the Merger . . . . . . . . . . . . . . . . . . 34
SECTION 6.2 Conditions to Obligations of Parent and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.3 Conditions to Obligations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . 37
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.4 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.5 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.6 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.1 Non-Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . 40
SECTION 8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.3 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.5 Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.6 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.7 Director and Officer Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.8 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 8.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>
-iii-
<PAGE> 5
1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 12, 1997
(this "Agreement"), among RANGER HOLDINGS CORP., a Delaware corporation
("Parent"), RANGER ACQUISITION COMPANY, a Delaware corporation and a wholly
owned subsidiary of Parent ("Sub"), and LIN TELEVISION CORPORATION, a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and
the Company have approved, and deem it advisable and in the best interests of
Parent, Sub and the Company and of their respective shareholders to consummate,
the business combination transaction provided for herein in which Sub will
merge with and into the Company (the "Merger");
WHEREAS, pursuant to the Merger, each outstanding share of the
Company's common stock, par value $.01 per share (the "Company Common Stock"),
shall be converted into the right to receive the Merger Consideration (as
defined in Section 2.1(c)), upon the terms and subject to the conditions set
forth herein;
WHEREAS, Parent and Sub are unwilling to enter into this
Agreement (and effect the transactions contemplated hereby) unless,
contemporaneously with the execution and delivery hereof, the Principal Company
Shareholder (as defined in Section 2.4) and Cook Inlet Communications Corp.
("CI") each enters into an agreement (collectively, the "Shareholders
Agreements") providing for certain matters with respect to its shares of
Company Common Stock and the Principal Company Shareholder and CI have each
agreed to execute and deliver such agreements;
WHEREAS, Parent, by its execution of this Agreement, has
authorized, approved, adopted and consented to this Agreement and the
transactions contemplated hereby; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, mutual covenants and agreements herein
contained, and intending to be legally bound hereby, Parent, Sub and the
Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION I.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), at the Effective Time
(as defined in Section 1.3), Sub shall be merged with and into the Company. As
a result of the Merger, the separate corporate existence of Sub shall cease,
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation") and shall continue under the name LIN Television
Corporation.
SECTION I.2 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.1 and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Merger (the "Closing")
will take place as promptly as practicable (and in any event within two
business days) following satisfaction or waiver of the conditions set forth in
Article VI (the "Closing Date"), at the offices of
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Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153-0119,
unless another date, time or place is agreed to in writing by the parties
hereto.
SECTION I.3 Effective Time of the Merger. As soon as
practicable on or after the Closing Date, the parties hereto shall cause the
Merger to be consummated by filing this Agreement or a certificate of merger
(the "Certificate of Merger") with the Secretary of State of the State of
Delaware, in such form as required by, and executed in accordance with the
relevant provisions of, the DGCL (the date and time of the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware (or
such later time as is specified in the Certificate of Merger) being the
"Effective Time").
SECTION I.4 Effects of the Merger. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the properties,
rights, privileges, immunities, powers and franchises of the Company and Sub
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Company and Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION I.5 Certificate of Incorporation; By-Laws. (a) At
the Effective Time, the certificate of incorporation of the Company, as in
effect immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation following the Merger.
(b) The by-laws of Sub, as in effect immediately prior to the
Effective Time, shall be the by-laws of the Surviving Corporation and
thereafter may be amended or repealed in accordance with their terms or the
certificate of incorporation of the Surviving Corporation or as provided by
applicable law.
SECTION I.6 Directors and Officers. The directors of Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the certificate
of incorporation and by-laws of the Surviving Corporation, and the officers of
the Company immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed, as the case may be, and qualified.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION II.1 Effect on Capital Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the holders of
any shares of Company Common Stock, or any shares of capital stock of Sub:
(a) Common Stock of Sub. Each share of common stock, par
value $0.01 per share, of Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation, which shall be all of the issued and outstanding capital
stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Company
Common Stock. Each share of Company Common Stock and all other shares of
capital stock of the Company that are owned by the Company or by any subsidiary
of the Company, and each share of Company Common Stock and all other shares of
capital stock of the Company that are owned by Parent, Sub or any other
subsidiary of Parent, shall automatically be cancelled and retired and shall
cease to exist and no consideration shall be delivered or deliverable in
exchange therefor.
<PAGE> 7
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(c) Conversion of Company Common Stock. Except as otherwise
provided herein and subject to Section 2.1(d), each issued and outstanding
share of Company Common Stock (other than shares to be cancelled in accordance
with Section 2.1(b)) shall be converted into the right to receive $47.50 plus
the additional amounts, if any, payable with respect thereto pursuant to
Section 2.1(e) (collectively, the "Merger Consideration"), payable to the
holder thereof upon surrender of the certificate formerly representing such
share of Company Common Stock in the manner provided in Section 2.2. All such
shares of Company Common Stock, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each certificate previously representing any such shares shall cease
to have any rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificates in accordance
with Section 2.2.
(d) Shares of Dissenting Holders. Notwithstanding anything
in this Agreement to the contrary, shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time held by holders who have
not voted in favor of the Merger or consented thereto in writing and who have
demanded appraisal rights with respect thereto in accordance with Section 262
of the DGCL (the "Dissenting Shares") shall not be converted into the right to
receive the Merger Consideration as described in Section 2.1(c), but holders of
such shares shall be entitled to receive payment of the appraised value of such
shares in accordance with the provisions of such Section 262; provided,
however, that any Dissenting Shares held by a holder who shall thereafter have
failed to perfect or shall have effectively withdrawn such demand for appraisal
of such shares or shall have lost the right to appraisal as provided in Section
262 of the DGCL shall thereupon be deemed to have been converted, at the
Effective Time, into the right to receive the Merger Consideration as described
in Section 2.1(c) upon surrender (in the manner provided in Section 2.2) of the
Certificate or Certificates that, immediately prior to the Effective Time,
evidenced such shares of Company Common Stock. The Company shall give Parent
(i) prompt notice of any written demands for appraisal of any shares, attempted
withdrawals of such demands, and any other instruments served pursuant to the
DGCL that are received by the Company relating to shareholders' rights of
appraisal and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. The Company shall not,
except with the prior written consent of Parent, voluntarily make any payment
with respect to any demands for appraisals of capital stock of the Company,
offer to settle or settle any such demands or approve any withdrawal of any
such demands.
(e) Additional Amounts. (i) The amount of cash to which
holders of issued and outstanding shares of Company Common Stock shall be
entitled pursuant to Section 2.1(c) shall be increased by an additional amount
per share equal to $47.50 multiplied by a fraction (A) the numerator of which
shall be equal to the Applicable Rate (as defined below) multiplied by the
number of days from and including the earlier of (x) the date on which the
Required Vote shall have been obtained and (y) January 1, 1998 (the earlier of
such dates being the "Accretion Start Date"), to but excluding the date on
which the Effective Time occurs and (B) the denominator of which shall be 365.
(ii) For purposes of this Section 2.1(e), the term
"Applicable Rate" shall mean 8% per annum.
SECTION II.2 Payment; Exchange of Certificates.
(a) Paying Agent; Payment Fund. Prior to the Effective Time,
Parent shall designate a bank or trust company who shall be reasonably
satisfactory to the Company to act as paying agent in the Merger (the "Paying
Agent"), and on or prior to the Closing Date, Parent shall deposit or cause to
be deposited with the Paying Agent for the benefit of the holders of the
Company Common Stock (other than the Company and holders of Dissenting Shares)
cash in an amount necessary for the payment of the Merger Consideration as
provided in Section 2.1 upon surrender of certificates
<PAGE> 8
4
representing shares of Company Common Stock as part of the Merger. Funds
deposited with the Paying Agent shall be invested by the Paying Agent as
directed by Parent or, after the Effective Time, the Surviving Corporation,
provided that such investments shall only be in obligations of or guaranteed by
the United States of America, in commercial paper obligations rated A-1 or P-1
or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker's acceptances of commercial banks with capital exceeding $1 billion.
Any interest earned on such funds shall be for the Surviving Corporation. The
Paying Agent shall, pursuant to irrevocable instructions from Parent and the
Surviving Corporation, use the funds deposited with the Paying Agent to pay the
holders of the Company Common Stock in accordance with this Article II, and
such funds shall not be used for any other purpose. If for any reason
(including losses) the funds on deposit with the Paying Agent are inadequate to
pay the amounts to which the holders of shares of Company Common Stock shall be
entitled under Article II, Parent shall cause the Surviving Corporation to
promptly deposit in trust additional cash with the Paying Agent sufficient to
make all payments required under this Agreement, and the Surviving Corporation
shall in any event be liable for payment thereof.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Paying Agent shall mail to each holder of record
of a certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates"),
whose shares were converted pursuant to Section 2.1 into the right to receive
the Merger Consideration, (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Paying Agent
and shall be in such form and have such other provisions as Parent and the
Company may reasonably specify) and (ii) instructions to effect the surrender
of the Certificates in exchange for payment of the Merger Consideration. Upon
surrender of one or more Certificates for cancellation to the Paying Agent or
to such other agent or agents as may be appointed by Parent, which agents shall
be reasonably satisfactory to the Company, together with such letter of
transmittal, duly executed, the holder of such Certificates shall be entitled
to receive in exchange therefor the Merger Consideration for each share of
Company Common Stock formerly represented by such Certificate, and the
Certificates so surrendered shall forthwith be cancelled. Except as required
by law, no interest shall be paid on the Merger Consideration payable upon
surrender of any Certificate. If payment of the Merger Consideration is to be
made to a person other than the person in whose name the surrendered
Certificate is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the person requesting such payment shall have
paid any transfer and other taxes required by reason of the payment of the
Merger Consideration to a person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.2, each Certificate (other
than Certificates representing Dissenting Shares) shall be deemed at any time
after the Effective Time to represent only the right to receive the Merger
Consideration in cash as contemplated by this Section 2.2.
(c) No Further Ownership Rights in Company Common Stock. All
cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of the
rights pertaining to the shares of Company Common Stock theretofore represented
by such Certificates. At the Effective Time, the stock transfer books of the
Company shall be closed, and there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the
shares of Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Paying Agent or the Surviving Corporation, they shall be cancelled and
exchanged for the Merger Consideration as provided in this Article II.
(d) Termination of Payment Fund. Any portion of the funds
held by the Paying Agent pursuant to this Section 2.2 which remain
undistributed to the holders of Company Common Stock for
<PAGE> 9
5
six months after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of Company Common Stock who have not
theretofore complied with this Article II shall thereafter look only to the
Surviving Corporation (subject to abandoned property, escheat or other similar
laws) for payment of the Merger Consideration to which they are entitled.
(e) No Liability. None of Parent, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any holder of shares of
Company Common Stock for any cash delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any Certificates
shall not have been surrendered prior to five years after the Effective Time
(or immediately prior to such earlier date on which any payment in respect
thereof would otherwise escheat to or become the property of any Governmental
Entity (as defined in Section 3.1(e)), the payment in respect of such
Certificates shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
(f) Withholding Rights. The Paying Agent or the Surviving
Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as the Paying Agent or the Surviving Corporation is
required to deduct and withhold with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of state, local or foreign tax law, or any court order, provided,
however, there shall be no withholding pursuant to section 1445 of the Code if
the Company or its shareholders deliver appropriate certification pursuant to
section 1445 of the Code. To the extent that amounts are so withheld by the
Paying Agent or the Surviving Corporation, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Company Common Stock in respect of which such deduction and
withholding was made by the Paying Agent or the Surviving Corporation.
SECTION II.3 Treatment of Employee Options. (a) Prior to
the Effective Time, the Board of Directors of the Company (or, if appropriate,
any committee thereof) shall adopt appropriate resolutions and take all other
actions reasonably necessary to (i) provide for the cancellation, effective at
the Effective Time, of all the outstanding stock options, stock appreciation
rights, limited stock appreciation rights and performance units (the "Options")
heretofore granted under any stock option, performance unit or similar plan of
the Company (the "Stock Plans"), (ii) provide that immediately prior to the
Effective Time, each Option, whether or not then vested or exercisable, shall
no longer be exercisable but shall entitle each holder thereof (subject to
applicable withholding taxes), in cancellation and settlement therefor, to a
cash payment at the Effective Time equal to (x) the excess, if any, of the
Merger Consideration over the exercise price of each Option held by the holder,
whether or not then vested or exercisable, multiplied by (y) the number of
shares of Company Common Stock subject to such Option and (iii) provide that
all Stock Plans will terminate as of or prior to the Effective Time.
(b) As provided herein, the Stock Plans and any other plan,
program or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of the Company or any subsidiary
(collectively with the Stock Plans, referred to as the "Stock Incentive Plans")
shall terminate as of the Effective Time. The Company will take all action
reasonably necessary to ensure that, as of the Effective Time, none of Parent,
the Company, the Surviving Corporation or any of their respective subsidiaries
is or will be bound by any Options, other options, warrants, rights or
agreements which would entitle any person, other than Parent or its affiliates,
to own any capital stock of the Company or the Surviving Corporation or any of
their respective subsidiaries or to receive any payment in respect thereof
after the Effective Time.
SECTION II.4 Termination of Private Market Value Guarantee.
At the Effective Time, without further action on the part of any of the parties
hereto or any shareholders of the Company (including the Public Stockholders
(as defined in Section 8.3)), the Television Private Market Value Guarantee
dated December 28, 1994 between the Company and AT&T Wireless Services, Inc.
(as successor) (the "Principal Company Shareholder"), as the same may be
further amended or supplemented (the "PMVG"), shall terminate and be of no
further force or effect.
<PAGE> 10
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1 Representations and Warranties of the Company.
The Company hereby represents and warrants to Parent and Sub as follows:
(a) Organization and Qualification; Subsidiaries. Each of
the Company and each of its Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (as defined below) or to prevent or materially delay the ability
of the Company to consummate the transactions contemplated hereby. Each of the
Company and each of its Significant Subsidiaries is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
When used in connection with the Company or any of its
subsidiaries, the term "Material Adverse Effect" means any event, change or
effect that, individually or together with all other events, changes or
effects, is materially adverse to the properties, business, financial condition
or results of operations of the Company and its subsidiaries taken as a whole
(other than changes in general economic conditions or in economic conditions
generally affecting the television broadcasting industry). Notwithstanding the
preceding sentence, the parties hereto agree that for purposes of this
Agreement (i) (provided that the Company has complied with its obligations
under Section 5.6(a)(ii)) any modification of, or any payments made or other
arrangements entered into, in connection with obtaining any consent to the
transactions contemplated hereby under any Material Contract (as defined in
Section 3.1(t)) and (ii) (subject to Section 6.2(e)) any modification or
termination of any LMA Agreement (as defined in Section 3.1(t)) to comply with
any FCC rule making proceeding or other action, in each case shall not be taken
into account in determining whether there has been or may be a Material Adverse
Effect.
(b) Certificates of Incorporation and By-Laws. The Company
has heretofore furnished to Parent a complete and correct copy of the
certificate of incorporation and the by-laws of the Company and each
Significant Subsidiary of the Company as currently in effect. The certificate
of incorporation and by-laws of the Company and each Significant Subsidiary are
in full force and effect and no other organizational documents are applicable
to or binding upon the Company or any Significant Subsidiary. Neither the
Company nor any Significant Subsidiary is in violation of any of the provisions
of its certificate of incorporation or by-laws.
(c) Capitalization. The authorized capital stock of the
Company consists of 90,000,000 shares of Company Common Stock and 15,000,000
shares of Preferred Stock, $.01 par value per share ("Company Preferred
Stock"). As of August 1, 1997, (i) 29,782,664 shares of Company Common Stock
were issued and outstanding, all of which were validly issued, fully paid and
nonassessable and were issued free of preemptive (or similar) rights, (ii)
3,956 shares of Company Common Stock were owned by the Company or by
subsidiaries of the Company and (iii) an aggregate of 2,455,231 shares of
Company Common Stock were reserved for issuance and issuable upon or otherwise
deliverable in connection with the exercise of outstanding employee Options
issued pursuant
<PAGE> 11
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to the Plans (as defined in Section 3.1(m)). Since June 30, 1997, no options
to purchase shares of Company Common Stock have been granted and no shares of
Company Common Stock have been issued except for shares issued pursuant to the
exercise of employee Options outstanding as of June 30, 1997. Section 3.1(c)
of the Disclosure Schedule sets forth a true and complete list of the
subsidiaries and associated entities of the Company which evidences, among
other things, the capitalization of, and the amount of capital stock or other
equity interests owned by the Company, directly or indirectly, in, such
subsidiaries or associated entities. As of the date hereof, no shares of
Company Preferred Stock are issued and outstanding. Except as set forth above
and except as a result of the exercise of employee Options outstanding as of
June 30, 1997, there are outstanding (i) no shares of capital stock or other
voting securities of the Company or any subsidiary, (ii) no securities of the
Company or any subsidiary convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of the Company or any subsidiary,
(iii) no options or other rights to acquire from the Company or any subsidiary,
and no obligation of the Company or any subsidiary to issue, any capital stock,
voting securities or securities convertible into or exchangeable or exercisable
for capital stock or voting securities of the Company or any subsidiary and
(iv) no equity equivalents, interests in the ownership or earnings of the
Company or any subsidiary, stock appreciation rights or other similar rights
(collectively, "Company Securities"). Except as set forth in Section 3.1(c) of
the Disclosure Schedule of the Company dated the date hereof and delivered to
Parent (the "Disclosure Schedule"), there are no outstanding obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any Company Securities, and there are no other options, calls, warrants or
other rights, agreements, arrangements or commitments of any character relating
to the issued or unissued capital stock of the Company or any of its
subsidiaries to which the Company or any of its subsidiaries is a party.
Except as set forth in Section 3.1(c) of the Disclosure Schedule, there are no
stockholder agreements (other than the Shareholders Agreements), voting trusts
or other agreements or understandings to which the Company or any of its
subsidiaries is a party or by which any of them is bound relating to the voting
of any shares of capital stock of the Company or any such subsidiary. All
shares of Company Common Stock subject to issuance as aforesaid, upon issuance
on the terms and conditions specified in the instruments pursuant to which they
are issuable, will be duly authorized, validly issued, fully paid and
nonassessable and free of preemptive (or similar) rights. There are no
outstanding contractual obligations of the Company or any of its subsidiaries
to repurchase, redeem or otherwise acquire any shares of Company Common Stock
or the capital stock of any subsidiary or, except as described in Section
3.1(c) of the Disclosure Schedule, to provide funds to or make any investment
(in the form of a loan, capital contribution, guarantee or otherwise) in any
such subsidiary or any other entity. Except as set forth in Section 3.1(c) of
the Disclosure Schedule, each of the outstanding shares of capital stock of
each of the Company's subsidiaries is duly authorized, validly issued, fully
paid and nonassessable and is owned directly or indirectly by the Company free
and clear of any Liens (as defined in Section 8.3).
(d) Authority Relative to Agreements. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and, subject to approval of the Merger and this Agreement by (i) the holders of
a majority of the issued and outstanding Company Common Stock and (ii) a
Majority Vote of the Public Stockholders (as defined in Section 8.3), in each
case as set forth herein (collectively, the "Required Vote"), to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of the Company (subject to the approval
and adoption of the Merger and this Agreement by the Required Vote, and, with
respect to the Merger, the filing of appropriate merger documents as required
by the DGCL). The Board of Directors of the Company has unanimously resolved
to recommend that the shareholders of the Company approve and adopt this
Agreement, provided, that such approval and recommendation may be withdrawn or
modified if permitted pursuant to Section 5.3. This Agreement has been duly
executed and delivered by the Company and, assuming the valid authorization,
execution and delivery hereof by each of Parent and Sub, constitutes the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
fraudulent conveyance,
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reorganization, moratorium and other similar laws affecting or relating to the
enforcement of creditors' rights generally and by general principles of equity.
The action of the Board of Directors of the Company in approving the Merger and
this Agreement and the transactions contemplated by this Agreement is
sufficient to render inapplicable to the Merger and this Agreement the
provisions of Section 203 of the DGCL and to the knowledge of the Company no
other state takeover statute or similar statute or regulation applies to the
Merger, this Agreement or any of the transactions contemplated hereby.
(e) Consents and Approvals; No Violations. Except as set
forth in Section 3.1(e) of the Disclosure Schedule, the execution and delivery
by the Company of this Agreement do not, and the consummation by the Company of
the transactions contemplated hereby and compliance by the Company with the
provisions hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or
the loss of a benefit under, or result in the creation of any Lien upon or
right of first refusal with respect to any of the properties or assets of the
Company or any of its subsidiaries under, (i) any provision of the certificate
of incorporation, by-laws or comparable organization documents of the Company
or any of its Significant Subsidiaries, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement (other than, with
respect to termination, agreements terminable without material penalty either
at will or upon 90 days' or less notice by the terminating party), obligation,
instrument, permit, concession, franchise or license applicable to the Company
or any of its Significant Subsidiaries or (iii) assuming all the consents,
filings and registrations referred to in the next sentence are obtained and
made, any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its Significant Subsidiaries or any of
their respective properties or assets, other than, in the case of clause (ii)
or (iii), any such violations, defaults, rights, losses or liens, that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. No filing or registration with, or authorization,
consent or approval of, any domestic (federal and state) or foreign court,
commission, governmental body, regulatory agency, authority or tribunal (a
"Governmental Entity") is required by or with respect to the Company or any of
its subsidiaries in connection with the execution and delivery of this
Agreement by the Company or is necessary for the consummation of the Merger and
the other transactions contemplated by this Agreement, except (i) the filing
with the Securities and Exchange Commission (the "SEC") of (1) a proxy
statement in definitive form relating to the Shareholders' Meeting (such proxy
statement, as amended or supplemented from time to time, the "Proxy Statement")
and (2) such other filings under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"), as may be required in connection with this Agreement and the
transactions contemplated hereby and the obtaining from the SEC of such orders
as may be required in connection therewith, (ii) applicable filings, if any,
pursuant to the provisions of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (iii) such filings with, and orders of,
the Federal Communications Commission (the "FCC") as may be required under the
Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Communications Act") (iv) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which
the Company or any of its subsidiaries is qualified to do business, (v) such
filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or the other transactions contemplated by this
Agreement, (vi) such filings as may be required in connection with statutory
provisions and regulations relating to real property transfer gains taxes and
real property transfer taxes, and (vii) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or prevent or materially delay the
ability of the Company to consummate the transactions contemplated by this
Agreement.
(f) Licenses. (i) Each of the Company and its Significant
Subsidiaries has all permits, licenses, waivers and authorizations (other than
FCC Licenses (as defined in Section 8.3), but including
<PAGE> 13
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licenses, authorizations and certificates of public convenience and necessity
from applicable state and local authorities), which are necessary for it to
conduct its business, including its television broadcast operations, in the
manner in which they are presently being conducted (collectively, "Licenses"),
other than any Licenses the failure of which to have would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Each of the Company and its Significant Subsidiaries is in compliance with the
terms of all Licenses (other than FCC Licenses), except for such failures so to
comply which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Company and its Significant
Subsidiaries have duly performed their respective obligations under and are in
compliance with the terms of such Licenses, except for such non-performance or
non-compliance as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. There is no pending or, to the
knowledge of the Company, threatened application, petition, objection or other
pleading with any Governmental Entity other than the FCC which challenges or
questions the validity of, or any rights of the holder under, any License
(other than an FCC License), except for such applications, petitions,
objections or other pleadings, that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or that are
applicable to the broadcast industry generally. No representation or warranty
is made in this Section 3.1(f) with respect to Licenses required by
Environmental Laws (as defined in Section 3.1(p)).
(ii) Section 3.1(f)(ii) of the Disclosure Schedule sets forth
all material FCC Licenses held by or in respect of each Company Station and to
the knowledge of the Company (without investigation) all material FCC Licenses
held by or in respect of each LMA Station. Except as set forth in Section
3.1(f)(ii) of the Disclosure Schedule and except as does not materially
adversely affect the operation by the Company or any subsidiary of the Company
of any of the Company Stations or the operation of the LMA Stations (as defined
in Section 8.3) to which the FCC Licenses listed in Section 3.1(f)(ii) of the
Disclosure Schedule apply: (A) the Company and those of its subsidiaries that
are required to hold FCC Licenses with respect to Company Stations, or that
control FCC Licenses with respect to Company Stations, are financially
qualified and, to the knowledge of the Company, are otherwise qualified to hold
such FCC Licenses or to control such FCC Licenses, as the case may be; (B) the
Company and those of its subsidiaries that are required to hold FCC Licenses
with respect to Company Stations hold such FCC Licenses; (C) the Company is not
aware of any facts or circumstances relating to the FCC qualifications of the
Company or any of its subsidiaries that would prevent the FCC's granting the
FCC Form 315 Transfer of Control Application to be filed with respect to the
Merger (the "FCC Application"); (D) each Company Station and to the knowledge
of the Company (without investigation) each LMA Station is in material
compliance with all FCC Licenses held by it and with the Communications Act;
and (E) there is not pending or, to the knowledge of the Company (without
investigation in respect of LMA Stations), threatened any application,
petition, objection or other pleading with the FCC or other Governmental Entity
which challenges the validity of, or any rights of the holder under, any FCC
License held by the Company Stations, the LMA Stations, the Company or any of
its subsidiaries, except for rule making or similar proceedings of general
applicability to persons engaged in substantially the same business conducted
by the Company Stations.
(g) SEC Documents and Other Reports. The Company has filed
all required documents with the SEC since January 1, 1995 (the "SEC Reports").
Except as set forth in Section 3.1(g) of the Disclosure Schedule, as of their
respective filing dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act"), or the Exchange Act, as the case
may be, each as in effect on the date so filed, and at the time filed with SEC
none of the SEC Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. Except as set forth in Section 3.1(g) of the
Disclosure Schedule, the financial statements of the Company included in the
SEC Reports comply as of their respective dates as to form in all material
respects with the then applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted
<PAGE> 14
10
accounting principles (except, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly present the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and their consolidated cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein).
(h) Information Supplied. The Proxy Statement (or any
amendment thereof or supplement thereto) will, at the date of mailing to
shareholders of the Company and at the time of the Shareholders' Meeting to be
held in connection with the Merger, not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to statements made based on
information supplied by Parent or Sub in writing specifically for inclusion in
the Proxy Statement. The Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
(i) Absence of Certain Changes or Events. Since June 30,
1997, except as contemplated by this Agreement, as set forth in Section 3.1(i)
of the Disclosure Schedule or disclosed in the SEC Reports filed since that
date and up to the date of this Agreement, the Company and its subsidiaries
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (i) any
condition, event or occurrence which, individually or in the aggregate, has
had, or would reasonably be expected to have, a Material Adverse Effect, (ii)
any termination or cancellation of, or any modification to, any agreement,
arrangement or understanding which has had or would reasonably be expected to
have a Material Adverse Effect, (iii) any material change by the Company in its
accounting methods, principles or practices, (iv) any revaluation by the
Company of any of its material assets other than in the ordinary course of
business, consistent with past practice, (v) any entry by the Company or any of
its subsidiaries into any commitment or transactions material to the Company,
(vi) any declaration, setting aside or payment of any dividends or
distributions in respect of the shares of Company Common Stock or any
redemption, purchase or other acquisition of any of its securities, (vii) any
increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan or agreement or arrangement, or any other increase in the
compensation payable or to become payable to any officers or key employees of
the Company or any of its subsidiaries other than in the ordinary course of
business consistent with past practice or as was required under employment,
severance or termination agreements in effect as of June 30, 1997, (viii) any
bonus paid to the employees of the Company or its subsidiaries other than in
the ordinary course of business and consistent with past practice, (ix) any
sale or transfer of any material assets of the Company or its subsidiaries
other than in the ordinary course of business and consistent with past practice
or (x) any loan, advance or capital contribution to or investment in any person
in an aggregate amount in excess of $100,000 by the Company or any subsidiary
(excluding any loan, advance or capital contribution to, or investment in, the
Company or any wholly owned subsidiary and except for drawdowns by the Company
under its credit facility).
(j) Liabilities. Except (a) for liabilities incurred in the
ordinary course of business consistent with past practice, (b) for transaction
expenses incurred in connection with this Agreement, (c) for liabilities which
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, (d) for liabilities set forth on any balance sheet
(including the notes thereto) included in the Company's financial statements
included in the SEC Reports filed prior to the date hereof, or (e) as set forth
in Section 3.1(j) of the Disclosure Schedule, since December 31, 1996 neither
the Company nor any of its subsidiaries has incurred any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, and
whether due or to become due, that would be required to be reflected or
reserved against in a consolidated balance sheet of the Company and its
subsidiaries
<PAGE> 15
11
(including the notes thereto) prepared in accordance with generally accepted
accounting principles as applied in preparing the consolidated balance sheet of
the Company and its subsidiaries as of December 31, 1996 contained in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996.
(k) Absence of Litigation. Except as disclosed in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996 or in Section 3.1(k) of the Disclosure Schedule, there are no suits,
claims, actions, proceedings or investigations pending or, to the knowledge of
the Company, threatened against the Company or any of its subsidiaries, or any
properties or rights of the Company or any of its subsidiaries, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that (i) individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, (ii) as of the date
of this Agreement question the validity of this Agreement or any action to be
taken by the Company in connection with the consummation of the transactions
contemplated hereby or (iii) as of the date of this Agreement would prevent or
result in a material delay of the consummation of the transactions contemplated
hereby. As of the date hereof, neither the Company nor any of its subsidiaries
nor any of their respective properties is or are subject to any order, writ,
judgment, injunction, decree, determination or award having, or which would
reasonably be expected to have, a Material Adverse Effect or which would
prevent or result in a material delay of the consummation of the transactions
contemplated hereby.
(l) Labor Matters. Except as set forth in Section 3.1(l) of
the Disclosure Schedule or in the SEC Reports filed prior to the date hereof,
(i) neither the Company nor any of its subsidiaries is a party to any labor or
collective bargaining agreement, and no employees of the Company or any of its
subsidiaries are represented by any labor organization, (ii) to the knowledge
of the Company there are no material representation or certification
proceedings, or petitions seeking a representation proceeding pending or
threatened to be brought or filed with the National Labor Relations Board or
any other labor relations tribunal or authority and (iii) to the knowledge of
the Company there are no material organizing activities involving the Company
or any of its subsidiaries with respect to any group of employees of the
Company or its subsidiaries.
(m) Employee Arrangements and Benefit Plans. (i) Section
3.1(m) of the Disclosure Schedule sets forth a complete and correct list of (i)
all employee benefit plans within the meaning of Section 3(3) of ERISA and all
bonus or other incentive compensation, deferred compensation, salary
continuation, severance, disability, stock award, stock option, stock purchase,
tuition assistance, or vacation pay plans or programs (collectively the
"Plans") and (ii) all written employment, severance, termination,
change-in-control, or indemnification agreements (collectively, the "Employment
Arrangements"), in each case (i) or (ii) under which the Company or any of its
subsidiaries has any obligation or liability (contingent or otherwise), except
for any Employment Arrangement which provides for annual compensation
(excluding benefits) of $150,000 or less or has an unexpired term of and can be
terminated (before, on or after a change in control) in less than one year from
the date hereof without additional cost or penalty. Except as set forth in the
SEC Reports filed prior to the date of this Agreement or in Section 3.1(m) of
the Disclosure Schedule and except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect: (A) each
Plan has been administered and is in compliance with the terms of such Plan and
all applicable laws, rules and regulations, (B) no "reportable event" (as such
term is used in section 4043 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (other than those events for which the 30 day
notice has been waived pursuant to the regulations), "prohibited transaction"
(as such term is used in section 406 of ERISA or section 4975 of the Code) or
"accumulated funding deficiency" (as such term is used in section 412 or 4971
of the Code) has heretofore occurred with respect to any Plan and (C) each Plan
intended to qualify under Section 401(a) of the Code has received a favorable
determination from the IRS regarding its qualified status and no notice has
been received from the IRS with respect to the revocation of such
qualification.
<PAGE> 16
12
(ii) There is no litigation or administrative or other
proceeding involving any Plan or Employment Arrangement nor has the Company
received written notice that any such proceeding is threatened, in each case
where an adverse determination would reasonably be expected to have a Material
Adverse Effect. Except as set forth in Section 3.1(m) of the Disclosure
Schedule, the Company has not contributed to any "multiemployer plan" (within
the meaning of section 3(37) of ERISA) and neither the Company nor any of its
subsidiaries has incurred, nor, to the best of the Company's knowledge, is
reasonably likely to incur any withdrawal liability which remains unsatisfied
in an amount which would reasonably be expected to have a Material Adverse
Effect. The termination of, or withdrawal from, any Plan or multiemployer plan
to which the Company contributes, on or prior to the Closing Date, will not
subject the Company to any liability under Title IV of ERISA that would
reasonably be expected to have a Material Adverse Effect.
(iii) With respect to each Plan and Employment Arrangement
(other than any Employment Arrangement which provides for annual compensation
(excluding benefits) of $150,000 or less or has an unexpired term of and can be
terminated (before, on or after a change in control) in less than one year from
the date hereof without additional cost or penalty), a complete and correct
copy of each of the following documents (if applicable) have been provided by
the Company: (i) the most recent Plan or Employment Arrangement, and all
amendments thereto and related trust documents; (ii) the most recent summary
plan description, and all related summaries of material modifications; (iii)
the most recent Form 5500 (including schedules); (iv) the most recent IRS
determination letter; (v) the most recent actuarial reports (including for
purposes of Financial Accounting Standards Board report no. 87, 106 and 112)
and (vi) the most recent estimate of withdrawal liability from any Plan
constituting a multiemployer plan if any.
(iv) Except as disclosed in Section 3.1(m) of the Disclosure
Schedule, in the SEC Reports or in connection with equity compensation, neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee (current, former or retired) or consultant of Company or any or
its subsidiaries, (ii) increase any benefits under any Plan or Employment
Arrangement or (iii) result in the acceleration of the time of payment or
vesting of any rights under any Plan or Employment Arrangement.
(n) Tax Matters. (i) Except as set forth in Section 3.1(n)
of the Disclosure Schedule, (A) the Company and each of its subsidiaries have
timely filed with the appropriate taxing authorities all material Tax Returns
(as defined below) required to be filed through the date hereof and will timely
file any such material Tax Returns required to be filed on or prior to the
Closing Date (except those under valid extension) and all such Tax Returns are
and will be true and correct in all material respects, (B) all Taxes (as
defined below) of the Company and each of its subsidiaries shown to be due on
the Tax Returns described in (A) above have been timely paid or adequately
reserved for in accordance with GAAP (except to the extent that such Taxes are
being contested in good faith, which contested Taxes are set forth in Section
3.1(n) of the Disclosure Schedule, (C) no material deficiencies for any Taxes
have been proposed, asserted or assessed against the Company or any of its
subsidiaries that have not been fully paid or adequately provided for in the
appropriate financial statements of the Company and its subsidiaries, and no
power of attorney with respect to any Taxes has been executed or filed with any
taxing authority and no material issues relating to Taxes have been raised in
writing by any governmental authority during any presently pending audit or
examination, (D) the Company and its subsidiaries are not now subject to audit
by any taxing authority and no waivers of statutes of limitation with respect
to the Tax Returns have been given by or requested in writing from the Company,
(E) there are no material liens for Taxes (other than for Taxes not yet due and
payable) on any assets of the Company or any of its subsidiaries, (F) neither
the Company nor any of its subsidiaries is a party to or bound by (nor will any
of them become a party to or bound by) any tax indemnity, tax sharing, tax
allocation agreement, or similar agreement, arrangement or practice with
respect to taxes, (G) neither the Company nor any of its Subsidiaries has ever
been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code, other than the affiliated group of which the Company
<PAGE> 17
13
is the common parent, (H) neither the Company nor any of its subsidiaries has
filed a consent pursuant to the collapsible corporation provisions of Section
341(f) of the Code (or any corresponding provision of state or local law) or
agreed to have Section 341(f)(2) of the Code (or any corresponding provisions
of state or local law) apply to any disposition of any asset owned by the
Company or any of its subsidiaries, as the case may be, (I) neither the Company
nor any of its subsidiaries has agreed to make, nor is any required to make any
adjustment under Section 481(a) of Code by reason of a change in accounting
method or otherwise, (J) the Company and its subsidiaries have complied in all
material respects with all applicable laws, rules and regulations relating to
withholding of Taxes and (K) no property owned by the Company or any of its
subsidiaries (i) is property required to be treated as being owned by another
person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue
Code of 1954, as amended and in effect immediately prior to the enactment of
the Tax Reform Act of 1986; (ii) constitutes "tax exempt use property" within
the meaning of Section 168(h)(1) of the Code; or (iii) is tax exempt bond
financed property within the meaning of Section 168(g) of the Code.
(ii) As used in this Agreement, "Tax Return" shall mean any
return, report or statement required to be filed with any governmental
authority with respect to Taxes. As used in this Agreement, "Taxes" shall mean
taxes of any kind, including but not limited to those measured by or referred
to as income, gross receipts, sales, use, ad valorem, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, value added, property or windfall profits taxes, customs,
duties or similar fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any governmental authority, domestic or foreign.
(o) Intellectual Property. Except as set forth in Section
3.1(o) of the Disclosure Schedule and except to the extent that the inaccuracy
of any of the following (or the circumstances giving rise to such inaccuracy),
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect: (a) the Company and each of its subsidiaries owns, or
is licensed to use (in each case, clear of any Liens), all Intellectual
Property (as defined below) used in or necessary for the conduct of its
business as currently conducted; (b) the use of any Intellectual Property by
the Company and its subsidiaries does not infringe on or otherwise violate the
rights of any person and is in accordance with any applicable license pursuant
to which the Company or any subsidiary acquired the right to use any
Intellectual Property; and (c) to the knowledge of the Company, no person is
challenging, infringing on or otherwise violating any right of the Company or
any of its subsidiaries with respect to any Intellectual Property owned by
and/or licensed to the Company or its subsidiaries and (d) neither the Company
nor any of its subsidiaries has received any written notice of any pending
claim with respect to any Intellectual Property used by the Company and its
subsidiaries and to its knowledge no Intellectual Property owned and/or
licensed by the Company or its subsidiaries is being used or enforced in a
manner that would result in the abandonment, cancellation or unenforceability
of such Intellectual Property. For purposes of this Agreement, "Intellectual
Property" shall mean trademarks, service marks, brand names and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of
any such registration or application; inventions, discoveries and ideas,
whether patentable or not, in any jurisdiction; patents, applications for
patents (including, without limitation, divisions, continuations, continuations
in part and renewal applications), and any renewals, extensions or reissues
thereof, in any jurisdiction; nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any person; writings and other works, whether
copyrightable or not, in any jurisdiction; registrations or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights; and any
claims or causes of action arising out of or relating to any infringement or
misappropriation of any of the foregoing.
(p) Environmental Matters. Except as disclosed in the SEC
Reports filed prior to the date of this Agreement or in Section 3.1(p) of the
Disclosure Schedule and except as would not
<PAGE> 18
14
reasonably be expected to have a Material Adverse Effect (i) the operations of
the Company and its subsidiaries have been and are in compliance with all
Environmental Laws and with all Licenses required by Environmental Laws, (ii)
there are no pending or, to the knowledge of the Company, threatened, actions,
suits, claims, investigations or other proceedings (collectively, "Actions")
under or pursuant to Environmental Laws against the Company or its subsidiaries
or involving any real property currently or, to the knowledge of the Company,
formerly owned, operated or leased by the Company or its subsidiaries, (iii)
the Company and its subsidiaries are not subject to any Environmental
Liabilities, and, to the knowledge of the Company, no facts, circumstances or
conditions relating to, arising from, associated with or attributable to any
real property currently or, to the knowledge of the Company, formerly owned,
operated or leased by the Company or its subsidiaries or operations thereon
that could reasonably be expected to result in Environmental Liabilities, (iv)
all real property owned and to the knowledge of the Company all real property
operated or leased by the Company or its subsidiaries is free of contamination
from Hazardous Material and (v) there is not now, nor, to the knowledge of the
Company, has there been in the past, on, in or under any real property owned,
leased or operated by the Company or any of its predecessors (a) any
underground storage tanks, above-ground storage tanks, dikes or impoundments
containing Hazardous Materials, (b) any asbestos-containing materials, (c) any
polychlorinated biphenyls, or (d) any radioactive substances.
As used in this Agreement, "Environmental Laws" means any and
all federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decisions, injunctions, orders, decrees,
requirements of any Governmental Entity, any and all common law requirements,
rules and bases of liability regulating, relating to or imposing liability or
standards of conduct concerning pollution, Hazardous Materials or protection of
human health or the environment, as currently in effect and includes, but is
not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the Hazardous
Materials Transportation Act 49 U.S.C. Section 1801 et seq., the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 33 U.S.C.
Section 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.,
Section 136 et seq., and the Oil Pollution Act of 1990, 33 U.S.C. Section
2701 et seq., as such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and all analogous state or local
statutes. As used in this Agreement, "Environmental Liabilities" with respect
to any person means any and all liabilities of or relating to such person or
any of its subsidiaries (including any entity which is, in whole or in part, a
predecessor of such person or any of such subsidiaries), whether vested or
unvested, contingent or fixed, actual or potential, known or unknown, which (i)
arise under or relate to matters covered by Environmental Laws and (ii) relate
to actions occurring or conditions existing on or prior to the Closing Date.
As used in this Agreement, "Hazardous Materials" means any hazardous or toxic
substances, materials or wastes, defined, listed, classified or regulated as
such in or under any Environmental Laws which includes, but is not limited to,
petroleum, petroleum products, friable asbestos, urea formaldehyde and
polychlorinated biphenyls.
(q) Transactions with Affiliates. Except as set forth in the
SEC Reports filed prior to the date of this Agreement or in Section 3.1(q) of
the Disclosure Schedule, there are no contracts, agreements, arrangements or
understandings of any kind between any affiliate of the Company, on the one
hand, and the Company or any subsidiary of the Company, on the other hand.
(r) Opinion of Financial Advisor. On the date hereof, the
Company has received the opinions of Wasserstein Perella & Co., Inc.
("Wasserstein") and Morgan Stanley, Dean Witter, Discover & Co. ("Morgan
Stanley") to the effect that the Merger Consideration is fair to the holders of
the Company Common Stock from a financial point of view and the Independent
Directors (as defined in Section 8.3) have received the opinions of Wasserstein
to the effect that (i) the amendment to the PMVG dated as of the date hereof is
not materially adverse to the holders of the Public Shares (as defined in
Section 8.3) from a financial point of view (ii) the provisions of this
Agreement relating to the Termination Fee (as defined in Section 7.3) and the
fees and expenses of the transactions contemplated hereby are not likely to
depress the value of the Company on the Initiation Date (as
<PAGE> 19
15
defined in the amendment to the PMVG described in the preceding clause (i)) and
(iii) the Asset Purchase Agreement dated as of the date hereof among Parent,
the Company, LIN Broadcasting Corporation and LCH Communications, Inc. (the
"WOOD Agreement") and the transactions contemplated thereby are not likely to
depress the value of the Company on the Initiation Date. Copies of each such
opinion have been made available to Parent.
(s) Brokers. No broker, finder, financial advisor or
investment banker (other than each of Wasserstein and Morgan Stanley) is
entitled to any brokerage, finder's or other fee, commission or expense
reimbursement in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of the Company. The
Company has heretofore furnished to Parent a complete and correct copy of all
agreements between the Company and each of Wasserstein and Morgan Stanley
pursuant to which each such firm would be entitled to any payment or
reimbursement relating to the transactions contemplated by this Agreement. The
Company shall be responsible for the payment of all such payments or
reimbursements.
(t) Material Agreements. (i) From and after December 31,
1996, neither the Company nor any of its subsidiaries has entered into any
contract, agreement or other document or instrument (other than this Agreement
and the WOOD Agreement) that is required to be filed with the SEC that has not
been so filed on or before the date of this Agreement or any material
amendment, modification or waiver under any contract, agreement or other
document or instrument (other than the WOOD Agreement and any amendments to
agreements related thereto, any amendment relating to the PMVG entered into in
connection with this Agreement, any amendment to the LIN Television
Stockholders Agreement dated as of December 28, 1994 among the Company, the
Principal Company Shareholder and CI or any amendments to any Stock Incentive
Plan) that was previously so filed.
(ii) Except as filed as an exhibit to the SEC Reports
filed prior to the date hereof or as set forth in Section 3.1(t) of the
Disclosure Schedule, neither the Company nor any of its subsidiaries is a party
to or has entered into or as of the date hereof made any material amendment or
modification to or granted any material waiver under the following
(collectively, "Material Contracts"): (A) any network affiliation agreement
for any Company Station (a "Network Agreement"), (B) any material sports
broadcasting agreement (a "Sports Agreement"), (C) any main transmitter site or
main studio lease for any Company Station or LMA Station (a "Necessary Lease"),
(D) any agreement pursuant to which the Company agrees to provide programming
to an LMA Station, or pursuant to which the Company has either a contingent
obligation or the right to purchase the assets of an LMA Station or any shares
of capital stock of any corporation holding any assets relating to an LMA
Station (an "LMA Agreement"), or (E) any partnership or joint venture agreement
obligating the Company to contribute cash in excess of $200,000 per year.
(iii) Each of the Material Contracts is valid and
enforceable against the Company in accordance with its terms, and there is no
default under any Material Contract either by the Company or any of its
subsidiaries which is a party to such Material Contract or, to the knowledge of
the Company, by any other party thereto, and no event has occurred that with
the lapse of time or the giving of notice or both would constitute a default
thereunder by the Company or, to the knowledge of the Company, any other party
thereto, in any such case in which such default or event would reasonably be
expected to have a Material Adverse Effect. In addition, neither the Company
nor any subsidiary is in material breach of any Network Agreement, Sports
Agreement or LMA Agreement (including any breach which would give rise to a
right to terminate any such agreement). Neither the Company nor any subsidiary
has received any written notice (or to the knowledge of the Company any other
notice) of default or termination under any Material Contract, and to the
knowledge of the Company, there exists no basis for any assertion of a right of
default or termination under such agreements, except as set forth in Section
3.1(t) of the Disclosure Schedule. Neither the Company nor any subsidiary has
received any written notice (or to the knowledge of the Company any other
notice) of the exercise of a put option or other right pursuant to which the
Company would be obligated to purchase capital stock or assets relating to any
LMA Station.
<PAGE> 20
16
(iv) Neither the Company nor any of its subsidiaries is
in breach of any material agreement other than any Material Contract, except for
breaches which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(u) Compliance with Applicable Law. Except as set forth in
Section 3.1(u) of the Disclosure Schedule or as disclosed by the Company in the
SEC Reports filed prior to the date hereof, the Company and its subsidiaries
are not in violation of any law, ordinance or regulation of any Governmental
Entity, except that no representation or warranty is made in this Section 3.1
(u) with respect to Environmental Laws, the Communications Act and FCC rules,
regulations and policies and except for violations or possible violations which
would not reasonably be expected to have a Material Adverse Effect. Except as
set forth in Section 3.1(u) of the Disclosure Schedule or as disclosed by the
Company in the SEC Reports filed prior to the date hereof, to the knowledge of
the Company no investigation or review by any Governmental Entity with respect
to the Company or its subsidiaries is pending or threatened, nor, to the
knowledge of the Company, has any Governmental Entity indicated an intention to
conduct the same, other than, in each case, any such action or intention of the
FCC and those which would not reasonably be expected to have a Material Adverse
Effect.
(v) Tangible Property. All of the assets of the Company and
its subsidiaries are in good operating condition, reasonable wear and tear
excepted, and usable in the ordinary course of business, except where the
failure to be in such condition or so usable would not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.
SECTION III.2 Representations and Warranties of Parent and
Sub. Each of Parent and Sub hereby represents and warrants to the Company as
follows:
(a) Corporate Organization. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority and any necessary governmental authority to own, operate or lease its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing and in good standing or to have
such power, authority and governmental approvals would not, individually or in
the aggregate, reasonably be expected to prevent or materially delay the
ability of Parent or Sub to consummate the transactions contemplated hereby.
All of the issued and outstanding capital stock of Sub is owned directly by
Parent free and clear of any Lien. Parent has provided the Company with
complete and correct copies of the certificate of incorporation and by-laws of
Parent and Sub as currently in effect.
(b) Authority Relative to Agreements. Each of Parent and Sub
has all necessary corporate power and authority to enter into this Agreement to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by each of Parent and Sub and the consummation by Parent and Sub of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Parent and Sub and no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or to consummate such transactions, other than filing and recordation
of appropriate merger documents as required by the DGCL. This Agreement has
been duly executed and delivered by each of Parent and Sub and, assuming due
authorization, execution and delivery by the Company, constitutes a legal,
valid and binding obligation of each of Parent and Sub enforceable against
Parent and Sub in accordance with its terms, except as may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting or relating to the enforcement of creditors'
rights generally and by general principles of equity.
(c) Consents and Approvals; No Violations. The execution and
delivery by each of Parent and Sub of this Agreement do not, and the
consummation by Parent and Sub of the transactions contemplated hereby and
compliance by Parent and Sub with the provisions hereof will not, conflict
<PAGE> 21
17
with, or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a benefit under,
or result in the creation of any Lien upon or right of first refusal with
respect to any of the properties or assets of either Parent or Sub under, (i)
any provision of the certificate of incorporation or by-laws of Parent or Sub,
(ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, obligation, instrument, permit, concession, franchise or
license applicable to Parent or Sub or (iii) assuming all the consents, filings
and registrations referred to in the next sentence are obtained and made, any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Parent or Sub (or any of their affiliates) or any of its properties or
assets, other than, in the case of clause (ii) or (iii), any such violations,
defaults, rights, losses or liens, that, individually or in the aggregate,
would not reasonably be expected to prevent or result in a material delay of
the consummation of the transactions contemplated hereby. No filing or
registration with, or authorization, consent or approval of, any Governmental
Entity is required by or with respect to Parent or Sub (or any of their
affiliates) in connection with the execution and delivery of this Agreement by
Parent or Sub or is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement, except (i) applicable filings, if
any, pursuant to the HSR Act, (ii) such filings with, and orders of, the FCC as
may be required under the Communications Act, (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware,
(iv) such filings as may be required with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws, (v) such
filings as may be required in connection with statutory provisions and
regulations relating to real property transfer gains taxes and real property
transfer taxes, and (vi) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, reasonably be
expected to prevent or result in a material delay of the consummation of the
transactions contemplated hereby.
(d) Information Supplied. None of the information supplied
or to be supplied by Parent or Sub for inclusion or incorporation by reference
in the Proxy Statement will, at the date of mailing to shareholders and at the
time of the Shareholders' Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) Financing. Prior to the date hereof, Parent and Sub
have delivered to the Company true and complete copies of: (i) a binding
commitment letter from Hicks, Muse, Tate & Furst Equity Fund III, L.P., a
Delaware limited partnership ("Fund III"), to provide equity financing in an
amount not less than $630 million to provide Parent and Sub a portion of the
funds necessary to consummate the transactions contemplated hereby and (ii) a
binding commitment letter or letters from The Chase Manhattan Bank, N.A. and/or
Chase Securities, Inc. to provide debt financing in an amount not less than
$1.215 billion in the aggregate to provide Parent and Sub all remaining funds
necessary to consummate the transactions contemplated hereby (collectively, the
"Commitment Letters"). Fund III shall on the date hereof and immediately prior
to the Effective Time have subscription commitments for unallocated capital
equal to at least the amount set forth in clause (i) above and, immediately
prior to the Effective Time, there shall be no restrictions on Fund III's
ability to call such capital. Parent is not aware of any facts or
circumstances that would cause Parent to be unable to obtain financing in
accordance with the terms of the Commitment Letters. Parent agrees to promptly
notify the Company if at any time prior to the Closing Date it no longer
believes in good faith that it will be able to obtain any of the financing
substantially on the terms described in the Commitment Letters.
(f) Brokers. No broker, finder, financial advisor or
investment banker is entitled to any brokerage, finder's or other fee,
commission or expense reimbursement in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on behalf of
Parent or Sub except for The Chase Manhattan Bank and Chase Securities, Inc.,
whose fees and expenses will be paid by Parent in accordance with Parent's
agreements with such firms.
<PAGE> 22
18
(g) FCC Licenses of Parent and Affiliates. To the knowledge
of Parent (without investigation) as of the date of this Agreement but subject
to the disclosure provisions of Section 4.4 hereof: (i) Parent and its
affiliates hold or control all FCC Licenses necessary to the lawful operation
of their business and have the requisite FCC qualifications to hold or control
such FCC Licenses, (ii) each broadcast station owned, controlled or operated by
Parent or any of its affiliates is in material compliance with its FCC Licenses
and with the Communications Act, (iii) there are no facts or circumstances
relating to the FCC qualifications of Parent or any of its affiliates that
would prevent the FCC's granting the FCC Application under Current FCC Policy
(as defined in Section 8.3) and (iv) there is not pending or threatened any
application, petition, objection or other pleading with the FCC or other
Governmental Entity challenging the FCC qualifications of Parent or any of its
affiliates to hold any of their FCC Licenses, except for rule making or similar
proceedings of general applicability to persons engaged in substantially the
same business conducted by the broadcast stations owned, controlled or operated
by Parent or any of its affiliates.
(h) FCC Application. To Parent's knowledge and except as set
forth in the Disclosure Schedule of Parent dated the date hereof and delivered
to the Company (the "Parent Disclosure Schedule"), Parent and its affiliates
are qualified under Current FCC Policy to hold, or control the entities which
hold or will hold, the FCC Licenses currently held or controlled by the Company
and to be held by Parent or any person under common control with Parent after
the Effective Time. Except as set forth in the Parent Disclosure Schedule,
Parent is not aware of any facts or circumstances relating to Parent or any of
its affiliates that would, under Current FCC Policy, prevent or materially
delay the FCC's granting of the FCC Application.
(i) Ownership and Operations of Parent and Sub. Each of
Parent and Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. As of the date hereof and as of
the Effective Time, except for obligations or liabilities incurred in
connection with its incorporation or organization and the transactions
contemplated by this Agreement and except for this Agreement and any other
agreements or arrangements contemplated by this Agreement, each of Parent and
Sub has no and will not have incurred, directly or indirectly, through any
subsidiary or affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person or own or lease any real property.
(j) Attributable Interests and Meaningful Relationships.
Parent has provided to the Company in writing a list of all media properties in
which Parent or any of its affiliates have any "attributable interest" or any
"meaningful relationship" under Current FCC Policy.
<PAGE> 23
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ARTICLE IV
CONDUCT OF BUSINESSES PENDING THE MERGER
SECTION IV.1 Conduct of Business of the Company. The Company
covenants and agrees that, during the period from the date hereof to the
Effective Time, except as set forth in Section 4.1 of the Disclosure Schedule
or unless Parent shall otherwise agree in writing, the businesses of the
Company and its subsidiaries shall be conducted only in, and the Company shall
not take any action and its subsidiaries shall not take any action except in,
the ordinary course of business; and the Company and each of its subsidiaries
shall use its reasonable best efforts to preserve intact the business
organization of the Company and its subsidiaries, to keep available the
services of the present officers, employees and consultants of the Company and
its subsidiaries and to preserve the present relationships of the Company and
its subsidiaries with customers, suppliers and other persons with which the
Company or any of its subsidiaries has significant business relationships.
Without limiting the generality of the foregoing, except as expressly provided
in this Agreement (including Section 4.3), neither the Company nor any of its
subsidiaries shall, between the date of this Agreement and the Effective Time,
directly or indirectly do, or propose or commit to do, any of the following
without the prior written consent of Parent (which may not be unreasonably
delayed or withheld):
(a) (i) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock
(except dividends and distributions by a wholly owned subsidiary of
the Company to its parent), (ii) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock or (iii) purchase, redeem or otherwise acquire any
shares of capital stock of the Company or any of its subsidiaries or
any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities (other than in connection
with its employee stock purchase plan consistent with past practice);
(b) except as set forth in Schedule 3.1(m) of the Disclosure
Schedule and except as permitted under existing Plans or Employment
Arrangements in effect on the date of this Agreement (including,
without limitation, any Stock Incentive Plans) and consistent with
past practice, authorize for issuance, issue, deliver, sell or agree
or commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise), pledge or otherwise encumber any shares of its
capital stock or the capital stock of any of its subsidiaries, any
other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting
securities or convertible securities or any other securities or equity
equivalents (including without limitation stock appreciation rights)
(other than sales of capital stock of any wholly owned subsidiary of
the Company to the Company or another wholly owned subsidiary of the
Company);
(c) except as set forth in Section 3.1(m) of the Disclosure
Schedule and except to the extent required under existing Plans or
Employment Arrangements as in effect on the date of this Agreement,
(i) increase the compensation or fringe benefits of any of its
directors, officers or employees, except for periodic increases in
salary or wages of officers or employees of the Company or its
subsidiaries in the ordinary course of business consistent with past
practice, or (ii) grant any severance or termination pay not currently
required to be paid under existing Plans other than in the ordinary
course of business consistent with past practice, or (iii) enter into
any Employment Arrangement or similar agreement or arrangement with
any present or former director level or other equivalent or more
senior officer or employee, or, other than in the ordinary course of
business, any other employee of the Company or any of its
subsidiaries, or (iv) establish, adopt, enter into or amend in any
material respect or terminate any Plan or Employment Arrangement or
other plan, agreement, trust, fund, policy or arrangement for the
benefit of any directors, officers or employees; provided that this
Section 4.1(c) shall not apply
<PAGE> 24
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to (A) any employment or consulting arrangement providing for annual
compensation (excluding benefits) of $200,000 or less which is entered
into in the ordinary course of business or (B) any renewal of any
existing employment or consulting arrangement that provides for an
increase in annual compensation (excluding benefits) of 10% or less
than the immediately preceding year or (C) any amendment or
termination of the Stock Incentive Plans necessary or desirable to
effectuate the purposes of Section 2.3;
(d) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents or alter through
merger, liquidation, reorganization, restructuring or in any other
fashion the corporate structure or ownership of any Significant
Subsidiary of the Company;
(e) acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of the
stock or assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other business
organization or division thereof or (ii) any assets that are material,
individually or in the aggregate, to the Company and its subsidiaries
taken as a whole;
(f) sell, lease, dispose of, license, mortgage or otherwise
encumber or subject to any lien or otherwise dispose of any of its
properties or assets, except (i) in the ordinary course of business,
and (ii) in connection with capital expenditures permitted to be
expended by the Company pursuant to Section 4.1(h);
(g) (i) incur or assume any indebtedness for borrowed money
or guarantee any such indebtedness of another person (other than
guarantees by the Company in favor of any of its wholly owned
subsidiaries or by any of its subsidiaries in favor of the Company),
issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any debt securities of another person, enter into any "keep
well" or other agreement to maintain any financial statement condition
of another person or enter into any arrangement having the economic
effect of any of the foregoing, except for borrowings incurred in the
ordinary course of business under existing lines of credit, or (ii)
make any loans, advances or capital contributions to, or investments
in, any other person, other than to the Company or any direct or
indirect wholly owned subsidiary of the Company;
(h) authorize or expend funds for capital expenditures other
than in accordance with the Company's current capital expenditure
plans and budgets (which plans and budgets shall have been disclosed
in writing to Parent on or prior to the date hereof);
(i) enter into, amend in any material respect, terminate,
rescind, waive in any material respect or release any of the terms or
provisions of any (i) Material Contract or (ii) any other agreement
which is material to the business of the Company and its subsidiaries
taken as a whole other than in the ordinary course of business, in
each case other than (A) any modification in compliance with the terms
of Section 5.6(a)(ii), (B) any modification or termination of an LMA
Agreement to comply with any FCC rule making proceeding or other
action, (C) any programming agreement entered into after the date
hereof in the ordinary course of business and which provides for
annual payments by a Company Station of $400,000 or less and has a
term of 2 years or less and (D) any modification of the PMVG approved
by the Independent Directors;
(j) knowingly violate or fail to perform any material
obligation or duty imposed upon it by any applicable material federal,
state or local law, rule, regulation, guideline or ordinance;
(k) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
<PAGE> 25
21
(l) recognize any labor union (unless legally required to do
so) or enter into or materially amend any collective bargaining
agreement;
(m) except as may be required as a result of a change in law
or in generally accepted accounting principles, make any material
change in its method of accounting;
(n) revalue in any material respect any of its material
assets, including, without limitation, writing down the value of
inventory or writing-off notes or accounts receivable other than in
the ordinary course of business or as required by generally accepted
accounting principles;
(o) except to the extent required by law, make or revoke any
Tax election or settle or compromise any Tax liability that is, in the
case of any of the foregoing, material to the business, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole or change (or make a request to any taxing authority
to change) any material aspect of its method of accounting for tax
purposes;
(p) except for claims covered by insurance, settle or
compromise any litigation in which the Company or any subsidiary is a
defendant (whether or not commenced prior to the date of this
Agreement) or settle, pay or compromise any claims not required to be
paid, which payments are individually in an amount in excess of
$500,000 and in the aggregate in an amount in excess of $1,000,000, or
settle or compromise any pending or threatened suit, action or claim
which would prevent or materially delay the ability of the Company to
consummate the transactions contemplated hereby;
(q) pay any liabilities or obligations (absolute, accrued,
asserted, contingent or otherwise), other than any payment, discharge
or satisfaction in the ordinary course of business consistent with
past practice, any payment for the prepaid insurance and
indemnification policy referred to in the second proviso of Section
5.5 and any payment of expenses arising in connection with the
transactions contemplated hereby;
(r) knowingly violate or fail to perform any material
obligation under the consulting agreement with WOOD-TV, Grand Rapids,
Michigan; and
(s) take, propose to take, or agree in writing or otherwise
to take, any of the foregoing actions.
SECTION IV.2 Control of Company Operations. Notwithstanding
Section 4.1, prior to the Effective Time, control of the Company's television
broadcast operations, along with all of the Company's other operations, shall
remain with the Company. The Company, Parent and Sub acknowledge and agree
that neither Parent nor Sub nor any of their employees, affiliates, agents or
representatives, directly or indirectly, shall, or have any right to, control,
direct or otherwise supervise, or attempt to control, direct or otherwise
supervise, such broadcast and other operations, it being understood that
supervision of all programs, equipment, operations and other activities of such
broadcast and other operations shall be the sole responsibility, and at all
times prior to the Effective Time remain within the complete control and
discretion, of the Company, subject to the terms of Section 4.1.
SECTION IV.3 Conduct of Business of Parent and Sub. During
the period from the date of this Agreement to the Effective Time, neither
Parent nor Sub shall engage in any activities of any nature except as provided
in, or in connection with the transactions contemplated by, this Agreement.
<PAGE> 26
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SECTION IV.4 Notification of Certain Matters. If Parent (or
its affiliates) or the Company receives an administrative or other order or
notification relating to any violation or claimed violation of the rules and
regulations of the FCC, or of any Governmental Entity, that could affect
Parent's, Sub's or the Company's ability to consummate the transactions
contemplated hereby, or should Parent (or its affiliates) or the Company become
aware of any fact (including any change in law or regulations (or any
interpretation thereof by the FCC)) relating to the qualifications of Parent
(and its controlling persons) that reasonably could be expected to cause the
FCC to withhold its consent to the transfer of control of the FCC Licenses,
Parent or the Company, as the case may be, shall promptly notify the other
party thereof and shall use all reasonable efforts to take such steps as may be
necessary to remove any such impediment to the transactions contemplated by
this Agreement. In addition, Parent or the Company, as the case may be, shall
give to the other party prompt written notice of (a) the occurrence, or failure
to occur, of any event of which it becomes aware that has caused or that would
be likely to cause any representation or warranty of Parent and Sub or the
Company, as the case may be, contained in this Agreement to be untrue or
inaccurate at any time from the date hereof to the Closing Date, and (b) the
failure of Parent and Sub or the Company, as the case may be, or any officer,
director, employee or agent thereof, to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied
by it hereunder. No such notification shall affect the representations or
warranties of the parties or the conditions to their respective obligations
hereunder.
SECTION IV.5 Assistance. If Parent requests, the Company
will cooperate, and will cause Ernst & Young LLP to cooperate, in all
reasonable respects with the efforts of Parent to finance the transactions
contemplated by this Agreement, including without limitation, providing
assistance in the preparation of one or more offering documents relating to
debt financing to be obtained by Parent, all at the sole expense of Parent.
The Company (a) shall furnish to Ernst & Young LLP, as independent accountants
to the Company, such customary management representation letters as Ernst &
Young LLP may require of the Company in connection with the delivery of any
customary "comfort" letters requested by Parent's financing sources and (b)
shall furnish to Parent all financial statements (audited and unaudited) and
other information in the possession of the Company or its representatives or
agents as Parent shall reasonably determine is necessary or appropriate for the
preparation of such offering documents. Notwithstanding the foregoing, prior
to the Closing, the Company shall not be required to file or assist Parent in
filing any registration statement with the SEC in connection with Parent's
efforts to finance the transactions contemplated hereby. Parent and Sub will
indemnify and hold harmless the Company and its officers, directors and
controlling persons against any and all claims, losses, liabilities, damages,
costs or expenses (including reasonable attorneys' fees and expenses) that may
arise out of or with respect to the efforts by Parent to finance the
transactions contemplated hereby, including, without limitation, any offering
documents and other documents related thereto.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION V.1 Shareholder Approval; Preparation of Proxy
Statement. (a) On or prior to December 31, 1997, the Company shall duly call,
give notice of, convene and hold a meeting of holders of the Company Common
Stock (the "Shareholders Meeting") for the purpose of obtaining the Required
Vote. Without limiting the generality of the foregoing but subject to Section
5.3(b), the Company agrees that its obligations pursuant to the first sentence
of this Section 5.1(a) shall not be affected by (i) the commencement, public
proposal, public disclosure or communication to the Company of any Transaction
Proposal or (ii) the withdrawal or modification by the Board of Directors of
the Company of its approval or recommendation of this Agreement or the Merger.
The Company shall, through its Board of Directors (but subject to the right of
the Board of Directors to withdraw or
<PAGE> 27
23
modify its approval or recommendation of the Merger and this Agreement as set
forth in Section 5.3(b)), recommend to its shareholders that the Required Vote
be given.
(b) The Company shall prepare and file a preliminary Proxy
Statement with the SEC and shall use its reasonable best efforts to respond to
any comments of the SEC or its staff, and, to the extent permitted by law, to
cause the Proxy Statement to be mailed to the Company's shareholders as
promptly as practicable after responding to all such comments to the
satisfaction of the staff and in any event at least 20 days prior to the
Shareholders Meeting. The Company shall notify Parent promptly of the receipt
of any comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all correspondence between
the Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement or the Merger.
If at any time prior to the Shareholders Meeting there shall occur any event
that should be set forth in an amendment or supplement to the Proxy Statement,
the Company shall promptly prepare and mail to its shareholders such an
amendment or supplement. The Company shall not mail any Proxy Statement, or
any amendment or supplement thereto, to which Parent reasonably objects.
Parent shall cooperate with and provide such information as is reasonably
requested by the Company in the preparation of the Proxy Statement or any
amendment or supplement thereto.
(c) Parent, in its capacity as the sole shareholder of Sub,
by its execution hereof, approves and adopts this Agreement and the
transactions contemplated hereby.
SECTION V.2 Access to Information; Confidentiality. The
Company shall, and shall cause each of its subsidiaries to, upon reasonable
notice, afford to Parent and to the officers, employees, accountants, counsel,
actuaries, financial advisors and other representatives of Parent and Parent's
financing sources with respect to the transactions contemplated by this
Agreement, reasonable access to, and permit them to make such inspections as
they may reasonably require of, during normal business hours during the period
from the date of this Agreement through the Effective Time, all their
respective properties, books, contracts, commitments, documents and records
and, during such period, the Company shall, and shall cause each of its
subsidiaries to, furnish promptly to Parent (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and
(ii) all other information concerning its business, properties and personnel as
Parent may reasonably request. All information obtained by or on behalf of
Parent pursuant to this Section 5.2 shall be kept confidential in accordance
with the Confidentiality Agreement (as defined in Section 8.3). The Company
shall use reasonable best efforts to cause its senior management to cooperate
with any reasonable request by Parent relating to Parent obtaining the
financing described in the Financing Documents (as defined in Section 5.11),
including the attendance and participation by such senior management in
meetings with prospective members of and participants in any syndicate of
financial institutions being assembled to provide such financing.
SECTION V.3 No Solicitation. (a) The Company and its
subsidiaries shall, and the Company shall direct and use its best efforts to
cause the officers, directors, employees, representatives, agents and
affiliates of the Company and its subsidiaries to, immediately cease any
discussions or negotiations with any parties that may be ongoing with respect
to any Transaction Proposal (as hereinafter defined). The Company shall not,
nor shall it permit any of its subsidiaries to, nor shall it authorize or
permit any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its subsidiaries to, directly or indirectly, (i) solicit, initiate or
knowingly encourage (including by way of furnishing information or assistance)
any inquiries or the making of any proposal which constitutes, or may
reasonably be expected to lead to, any Transaction Proposal or (ii) enter into
or participate in any discussions or negotiations regarding any Transaction
Proposal; provided, however, that at any time prior to the receipt of the
Required Vote the Company may, in response to a Transaction Proposal which was
not solicited subsequent to the date hereof, (x) furnish information with
respect to the Company to any person pursuant to a confidentiality agreement on
terms no less favorable to the
<PAGE> 28
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Company than the Confidentiality Agreement (unless the Company also agrees to
amend the Confidentiality Agreement in the same manner); provided that
provisions similar to Section 4 thereof need not be included and (y) enter into
or participate in discussions, investigations and/or negotiations regarding
such Transaction Proposal. The Company shall promptly give notice to Parent of
the names of the person or persons with respect to which it takes any action
pursuant to subclauses (x) or (y) of the preceding sentence and a general
description of the actions taken.
(b) Except as set forth in this Section 5.3, the Board of
Directors of the Company shall not (i) withdraw or modify, or propose publicly
to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such Board of Directors of the Merger or this Agreement, (ii)
approve or recommend, or propose publicly to approve or recommend, any
Transaction Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement related to any Transaction Proposal. Notwithstanding the foregoing,
if the Board of Directors of the Company determines in good faith that it has
received a Superior Proposal, the Board of Directors of the Company may, prior
to the receipt of the Required Vote, withdraw or modify its approval or
recommendation of the Merger and this Agreement, approve or recommend a
Superior Proposal (as defined below) or terminate this Agreement, but in each
case, only at a time that is at least five business days after Parent's receipt
of written notice advising Parent that the Board of Directors of the Company
has received a Transaction Proposal that may constitute a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal and the
names of the person or persons making such Superior Proposal.
(c) Nothing contained in this Section 5.3 shall prohibit the
Company from taking and disclosing to its shareholders a position contemplated
by Rules 14d-9 and 14e-2 promulgated under the Exchange Act or from making any
disclosure to the Company's shareholders if, in the good faith judgment of the
Board of Directors of the Company, after consultation with outside counsel,
such disclosure is necessary in order to comply with its fiduciary duties to
the Company's shareholders under applicable law or is otherwise required under
applicable law.
(d) (i) For purposes of this Agreement, "Transaction
Proposal" means any bona fide inquiry, proposal or offer from any person
relating to any direct or indirect acquisition or purchase of more than 50% of
the aggregate assets of the Company and its subsidiaries, taken as a whole, or
more than 50% of the voting power of the shares of Company Common Stock then
outstanding or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company, other than the transactions contemplated by this Agreement.
(ii) For purposes of this Agreement, a "Superior Proposal"
means any proposal determined by the Board of Directors of the Company in good
faith, after consultation with outside counsel, to be a bona fide proposal and
made by a third party (other than the Principal Company Shareholder) to
acquire, directly or indirectly, for consideration consisting of cash, property
and/or securities, more than 50% of the voting power of the shares of Company
Common Stock then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Board of Directors of the Company
determines in its good faith judgment, after consultation with outside counsel
and with a financial advisor of nationally recognized reputation (such as the
financial advisor(s) identified in Section 3.1(r)), to be more favorable to the
Company's shareholders (taking into account all factors relating to such
proposal deemed relevant by the Board of Directors of the Company, including,
without limitation, the financing of such proposal, any regulatory issues
related thereto and all other conditions to closing) than the Merger.
SECTION V.4 Employee Benefits Matters. (a) During the
period from the Effective Time until January 1, 2000, the Surviving Corporation
shall maintain wages, compensation levels, employee pension and welfare plans
for the benefit of employees and former employees of the Company and its
subsidiaries, which in the aggregate are equal or greater than those wages,
compensation levels and other benefits provided under the Plans and Employment
Arrangements that are in effect on the date hereof.
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(b) (i) With respect to any officer or employee who is
covered by a severance compensation agreement, employment agreement or other
severance policy or plan separate from the standard severance policy for the
employees of the Company or any of its subsidiaries, the Surviving Corporation
shall maintain or cause to be maintained such severance compensation agreement,
employment agreement or other separate policy or plan as in effect as of the
date hereof (except as may be otherwise agreed by such officer or employee),
and as to all other officers and employees, the Surviving Corporation shall
maintain or cause to be maintained the standard severance policy of the Company
and its subsidiaries as in effect as of the date hereof until January 1, 2000.
(ii) The Surviving Corporation shall honor or cause to be
honored all severance agreements and employment agreements with the directors,
officers and employees of the Company and its subsidiaries.
(c) The Surviving Corporation will maintain the bonus
practices of the Company and its subsidiaries, as in effect on the date hereof,
through the end of the 1998 fiscal year, with bonuses to be paid to the
employee participating thereunder at levels consistent with past practice.
(d) The Surviving Corporation will (i) waive all limitations
as to preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the employees of the
Company or any of its subsidiaries under any welfare plan that such employees
may be eligible to participate in after the Effective Time, and (ii) provide
each employee of the Company and its subsidiaries with credit for any
co-payments and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Effective Time.
SECTION V.5 Directors' and Officers' Indemnification and
Insurance. From and after the Effective Time, the Surviving Corporation will
exculpate, indemnify and hold harmless all past and present employees,
officers, agents and directors of the Company and its subsidiaries (the
"Indemnified Parties") to the same extent such persons are currently exculpated
and indemnified by the Company pursuant to the Company's certificate of
incorporation and by-laws for any acts or omissions occurring at or prior to
the Effective Time and the Surviving Corporation's certificate of incorporation
and by-laws will continue to include provisions to such effect. The Surviving
Corporation will provide, for an aggregate period of not less than six years
from the Effective Time, the directors and officers of the Company or any of
its subsidiaries who are currently covered by the Company's existing insurance
and indemnification policy an insurance and indemnification policy that
provides coverage for events occurring prior to the Effective Time (the "D&O
Insurance") that is no less favorable than the Company's existing policy or, if
substantially equivalent insurance coverage is unavailable, the best available
coverage; provided that the Surviving Corporation shall not be required to pay
an annual premium for the D&O Insurance in excess of 200 percent of the last
annual premium paid prior to the date hereof (which the Company represents and
warrants to be approximately $218,000), but in such case shall purchase as much
coverage as possible for such amount; provided further, that the Surviving
Corporation shall not be obligated to provide such insurance if the Company or
the Surviving Corporation shall have obtained for the benefit of the directors
and officers of the Company and its subsidiaries who are covered by the
Company's existing insurance and indemnification policy a prepaid policy that
provides coverage for the six year period for events occurring prior to the
Effective Time that is no less favorable than the Company's existing policy.
SECTION V.6 Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things reasonably necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions
<PAGE> 30
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contemplated by this Agreement, including (i) the obtaining of all necessary
actions, waivers, consents, licenses and approvals from Governmental Entities
and the making of all necessary registrations and filings (including filings
with Governmental Entities) and the taking of all reasonable steps as may be
necessary to obtain an approval, waiver or license from, or to avoid an action
or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties (and in furtherance thereof
the Company, with the consent of Parent (which consent may not be unreasonably
withheld), may make and commit to make payments to third parties and enter into
or modify agreements), (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement, or
the consummation of the transactions contemplated by this Agreement, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to carry out fully the purposes of, this Agreement.
Without limiting the foregoing, each of the parties hereto shall use its
reasonable best efforts and cooperate in promptly preparing and filing as soon
as practicable, and in any event within 20 business days after executing this
Agreement, (i) notifications under the HSR Act and (ii) the FCC Application and
related filings in connection with the Merger and the other transactions
contemplated hereby, and to respond as promptly as practicable to any inquiries
or requests received from the Federal Trade Commission (the "FTC"), the
Antitrust Division of the United States Department of Justice (the "Antitrust
Division"), the FCC and any other Governmental Entities for additional
information or documentation and to respond as promptly as practicable to all
inquiries and requests received from any State Attorney General or other
Governmental Entity in connection with antitrust matters or matters relating to
the FCC Application. Each of the parties hereto, to the extent applicable,
further agrees (i) to file (and, in the case of Parent to cause its affiliates
to file) contemporaneously with the filing of the FCC Application any requests
for temporary or permanent waivers of applicable FCC rules and regulations or
rules and regulations of other Governmental Entities and in furtherance of
those waiver requests to pledge to hold separate, to place in trust and/or to
divest any of the businesses, product lines or assets of (A) the Company or any
of its subsidiaries at any time after the Effective Time or (B) Parent or any
of its affiliates at any time prior to, on or after the Effective Time, in each
case as may be required under Current FCC Policy to obtain approval of the FCC
Application (collectively, "Divestitures") in order to permit consummation of
the Merger and the other transactions contemplated by this Agreement prior to
the Termination Date (as defined in Section 7.1(e)) and (ii) to expeditiously
prosecute such waiver requests and to diligently submit any additional
information or amendments for which the FCC or any other relevant Governmental
Entity may ask with respect to such waiver requests. Parent further covenants
that, prior to the Effective Time, neither it nor any of its affiliates shall
acquire any new or increased "attributable interest" or "meaningful
relationship", each as defined in the FCC rules, in any media property
("Further Media Interest"), which Further Media Interest could not be held in
common control with any Company Station by the Surviving Corporation following
the Effective Time (including by virtue of the FCC's multiple ownership
limits), without the prior written consent of the Company.
(b) In connection with, but without limiting, the foregoing,
the Company and its Board of Directors shall (i) use reasonable best efforts to
ensure that no state takeover statute or similar statute or regulation is or
becomes applicable to this Agreement, the Merger or any of the other
transactions contemplated by this Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to this Agreement,
the Merger or any of the transactions contemplated by this Agreement, use
reasonable best efforts to ensure that the Merger and the other transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise to minimize the effect
of such statute or regulation on the Merger and the other transactions
contemplated by this Agreement.
(c) In connection with, but without limiting, the foregoing,
Parent shall use its reasonable best efforts to resolve such objections, if
any, as may be asserted with respect to the transactions contemplated by this
Agreement under any antitrust, competition or trade regulatory laws, rules or
regulations of any Governmental Entity ("Antitrust Laws") or any laws, rules or
regulations of
<PAGE> 31
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the FCC or other Governmental Entities relating to the broadcast, newspaper,
mass media or communications industries (collectively, "Communications Laws")
and will take all necessary and proper steps (including, without limitation,
any Divestitures) as may be required (i) for securing the termination of any
applicable waiting period or for the approval of the FCC Application under the
Antitrust Laws or Communications Laws, in each case in order to permit the
consummation of the Merger and the other transactions contemplated hereby prior
to the Termination Date or (ii) by any domestic or foreign court or similar
tribunal, in any suit brought by a private party or Governmental Entity
challenging the transactions contemplated by this Agreement as violative of any
Antitrust Law or Communications Law, in order to avoid the entry of, or to
effect the dissolution of, any injunction, temporary restraining order or other
order that has the effect of preventing the consummation of any of such
transactions.
(d) Each of the parties hereto shall promptly provide the
others with a copy of any inquiry or request for information (including any
oral request for information), pleading, order or other document either party
receives from any Governmental Entities with respect to the matters referred to
in Section 5.6.
(e) The Company shall give prompt notice to Parent and Sub,
and Parent and Sub shall give prompt notice to the Company, of (i) any notice
of, or other communication relating to, a default or event which, with notice
or lapse of time or both, would become a default, if received by it or any of
its subsidiaries subsequent to the date of this Agreement and prior to the
Effective Time, under any Material Contract or (ii) any written notice or other
communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated by
this Agreement; provided, however, that the delivery of any notice pursuant to
this Section 5.6 shall not cure such breach or non-compliance or limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
(f) Parent agrees to assume and become bound by the terms of
any of the Network Agreements if and to the extent required thereby in
connection with the transactions contemplated by this Agreement.
SECTION V.7 Public Announcements. Each of the parties hereto
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to the Merger and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by law, fiduciary duties or any listing
agreement with any national securities exchange or quotation system.
SECTION V.8 Taxes. Any liability with respect to taxes
specified in Section 5.9 hereof that are incurred in connection with the Merger
shall be borne by the Surviving Corporation and expressly shall not be a
liability of the shareholders of the Company.
SECTION V.9 Conveyance Taxes. Each of the parties hereto
shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real property
transfer gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes that become payable in connection with the transactions contemplated
hereby that are required or permitted to be filed on or before the Effective
Time.
SECTION V.10 Solvency Letter. (a) Parent shall use all
reasonable efforts to deliver to the Board of Directors of the Company a letter
(the "Solvency Letter") from an independent third party selected by the Board
of Directors and reasonably satisfactory to Parent (the "Appraiser") attesting
that, immediately after the Effective Time, the Surviving Corporation: (i)
will be solvent (in that both the fair value of its assets will not be less
than the sum of its debts and that the present fair
<PAGE> 32
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saleable value of its assets will not be less than the amount required to pay
its probable liability on its debts as they become absolute and matured), (ii)
will have adequate capital with which to engage in its business; and (iii) will
not have incurred and does not plan to incur debts beyond its ability to pay as
they become absolute and matured, based upon the proposed financing structure
for the Merger and certain other financial information to be provided to the
Appraiser by Parent and the Company and after giving effect to any changes in
the Surviving Corporation's assets and liabilities as a result of the Merger
and the financing relating thereto. Subject to the foregoing, the Solvency
Letter shall be in form and substance reasonably satisfactory to the Board of
Directors of the Company. Except with the prior written consent of the
Company's Board of Directors, Parent will not consummate the Merger unless and
until such Board of Directors shall have received the Solvency Letter.
(b) Parent will request the Appraiser to promptly deliver the
Solvency Letter and in any event, Parent will cause the Solvency Letter to be
delivered prior to the Shareholders Meeting. The parties agree to cooperate
with the Appraiser in connection with the preparation of the Solvency Letter,
including, without limitation, providing the Appraiser with any information
reasonably available to them necessary for the Appraiser's preparation of such
letter.
SECTION V.11 Definitive Financing Documents. Not later than
10 business days prior to the Shareholders Meeting, Parent and Sub shall
provide the Company with the then agreed upon forms of the documentation, which
must be in form and substance reasonably satisfactory to the Company, relating
to the financing commitments described in the Commitment Letters (the
"Financing Documents"); provided that Parent and Sub shall not be required to
provide forms of documentation relating to the "bridge" financing described
therein unless and until such documentation is prepared. Parent will promptly
provide to the Company any amendments, modifications, supplements or other
changes ("Financing Changes") to the Financing Documents. Parent agrees to
confirm in writing to the Company from time to time upon request that Parent
believes in good faith that it will be able to obtain financing substantially
on the terms described in the Financing Documents.
ARTICLE VI
CONDITIONS OF MERGER
SECTION VI.1 Conditions to Obligation of Each Party to Effect
the Merger. The respective obligations of each party to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Shareholder Approval. The Merger and this Agreement
shall have been approved by the Required Vote.
(b) HSR Approval. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have been terminated
or shall have expired, and no restrictive order or other requirements pursuant
to the HSR Act shall have been placed on the Company, Parent, Sub or the
Surviving Corporation in connection therewith.
(c) FCC Approval. The FCC shall have approved the FCC
Application and such approval shall have become final; provided, that such
approval may be subject to Parent (or its affiliates) or the Surviving
Corporation making Divestitures as set forth in Section 5.6 or to changes being
made in the terms and conditions of any contracts to which the Company is a
party. For purposes of this Agreement, FCC approval of the FCC Application
shall be deemed to be final if the FCC has taken action approving the transfer
of the FCC Licenses for the operation of the Company Stations pursuant to the
Merger which, except in each case as may be waived in writing by Parent, has
not been reversed, stayed, enjoined, set aside, annulled or suspended, with
respect to which no timely
<PAGE> 33
29
request for stay, petition for reconsideration or appeal or sua sponte action
of the FCC with comparable effect is pending and as to which the time for
filing any such request, petition or appeal or for the taking of any such sua
sponte action by the FCC has expired.
(d) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect, nor shall any
proceeding by any Governmental Entity seeking any of the foregoing be pending.
There shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger illegal.
SECTION VI.2 Conditions to Obligations of Parent and Sub.
The obligations of Parent and Sub to effect the Merger are subject to the
satisfaction of the following additional conditions unless waived by Parent:
(a) Representations and Warranties of the Company. The
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all respects (provided that any representation or
warranty of the Company contained herein that is subject to a materiality,
Material Adverse Effect or similar qualification shall not be so qualified for
purposes of determining the existence of any breach thereof on the part of the
Company) as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except for such breaches
that would not, individually or in the aggregate with any other breaches on the
part of the Company, reasonably be expected to have a Material Adverse Effect
on the Company, and Parent shall have received a certificate signed on behalf
of the Company by the Chief Executive Officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by the
Chief Executive Officer of the Company to such effect.
(c) Financing. Parent shall have received the debt and
equity financing for the transactions contemplated hereby on terms
substantially as outlined in the Financing Documents.
(d) Consents. The Company shall have obtained the consent or
approval of each person (other than any Governmental Entity) whose consent or
approval shall be required in connection with the transactions contemplated
hereby under any Material Contract.
(e) LMA Agreements; Waiver Requests. There shall not have
been any material modification or termination of any LMA Agreement which
individually or in the aggregate would reasonably be expected to have a
materially adverse economic effect on the business, financial condition or
results of operations of the Company and its subsidiaries taken as a whole or a
denial by the FCC of any of the waiver requests referred to in the Parent
Disclosure Schedule (provided that Parent has made and/or agreed to make any
necessary Divestitures pursuant to Section 5.6), in each case other than as
directed by the FCC under Current FCC Policy. For purposes of this Agreement,
the FCC shall be deemed to have acted under Current FCC Policy except to the
extent that its action is the result of (i) legislative change enacted after
the date of this Agreement, (ii) FCC action taken after the date of this
Agreement in a rule making proceeding or (iii) application by the FCC Staff of
interim decisions, policies or processing guidelines adopted by the FCC Staff
with respect to requests for waivers of the duopoly rule, 47 C.F.R. Section
73.3555(b) or the one-to-a-market rule, 47 C.F.R. Section 73.3555(c), or to
local marketing agreements, not heretofore applied to transfer applications for
stations similarly situated to the stations whose licenses are to be
transferred pursuant to the FCC Application.
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(f) Dissenting Shares. No more than five percent (5%) of the
shares of Company Common Stock outstanding immediately prior to the Effective
Time shall be Dissenting Shares.
(g) Options and Convertible Securities. All Stock Incentive
Plans shall have been or will be as of the Effective Time duly cancelled by the
Company and each Option and all securities convertible into or exchangeable or
exercisable for shares of capital stock or voting securities of the Company
shall be or will be as of the Effective Time cancelled, exercised or expired,
with the effect that, upon consummation of the Merger, Parent will own 100% of
the capital stock and voting securities of the Surviving Corporation on a fully
diluted basis.
SECTION VI.3 Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is subject to the satisfaction
of the following additional conditions unless waived by the Company:
(a) Representations and Warranties of Parent and Sub. The
representations and warranties of each of Parent and Sub set forth in this
Agreement shall be true and correct in all respects (provided that any
representation or warranty of Parent and Sub contained herein that is subject
to a materiality, Material Adverse Effect or similar qualification shall not be
so qualified for purposes of determining the existence of any breach thereof on
the part of Parent and/or Sub) as of the date of this Agreement and (except to
the extent such representations and warranties speak as of an earlier date) as
of the Closing Date as though made on and as of the Closing Date, except for
such breaches that would not, individually or in the aggregate with other
breaches on the part of Parent and/or Sub, materially adversely affect the
ability of Parent or Sub to consummate the transactions contemplated hereby,
and the Company shall have received a certificate signed on behalf of each of
Parent and Sub by the Chief Executive Officer of each of Parent and Sub to such
effect.
(b) Performance of Obligations of Parent and Sub. Each of
Parent and Sub shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate signed on behalf of
each of Parent and Sub by the Chief Executive Officer of each of Parent and Sub
to such effect.
(c) Solvency Letter. The Board of Directors of the Company
shall have received the Solvency Letter referred to in Section 5.10.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION VII.1 Termination. This Agreement may be terminated
and the Merger contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the shareholders of the
Company:
(a) by mutual written consent of Parent, Sub and the Company;
or
(b) by Parent, so long as neither Parent nor Sub is then in
material breach of its obligations hereunder, upon a breach of any material
representation, warranty, covenant or agreement on the part of the Company set
forth in this Agreement, or if any such representation or warranty of the
Company shall have been or become untrue, in each case such that the conditions
set forth in Section 6.2(a) or Section 6.2(b), as the case may be, would not be
satisfied and such breach or untruth (i) cannot be cured by the Closing Date or
(ii) has not been cured within 30 days of the date on which the Company
receives written notice thereof from Parent;
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(c) by the Company, so long as the Company is not then in
material breach of its obligations hereunder, upon a breach of any material
representation, warranty, covenant or agreement on the part of Parent or Sub
set forth in this Agreement, or if any such representation or warranty of
Parent or Sub shall have been or become untrue, in each case such that the
conditions set forth in Section 6.3(a) or Section 6.3(b), as the case may be,
would not be satisfied and such breach or untruth (i) cannot be cured by the
Closing Date or (ii) has not been cured within 30 days of the date on which
Parent or Sub receives written notice thereof from the Company;
(d) by either Parent or the Company if any permanent
injunction or other order, decree, ruling or action by any Governmental Entity
preventing the consummation of the Merger shall have become final and
nonappealable; provided that such right of termination shall not be available
to any party if such party shall have failed to make reasonable efforts to
prevent or contest the imposition of such injunction or other order, decree,
ruling or action and such failure materially contributed to such imposition;
(e) by either Parent or the Company if (other than due to the
willful failure of the party seeking to terminate this Agreement to perform its
obligations hereunder required to be performed at or prior to the Effective
Time) the Merger shall not have been consummated on or prior to May 12, 1998
(the "Termination Date"); provided that such right of termination shall not be
available to Parent if Parent (or its affiliates) have not taken necessary
action pursuant to Section 5.6 in order for the FCC Application to be approved;
(f) by either Parent or the Company, if the approval of the
shareholders of the Company of this Agreement and the Merger required for the
consummation of the Merger shall not have been obtained by reason of the
failure to obtain the Required Vote at a duly held meeting of shareholders or
at any adjournment thereof;
(g) by Parent, if (i) the Board of Directors of the Company
(A) shall have withdrawn, modified or changed its approval or recommendation of
this Agreement or the Merger in any manner which is adverse to Parent, (B)
shall have approved or have recommended to the shareholders of the Company a
Transaction Proposal or (C) shall have resolved to do the foregoing; or (ii)
the Company shall have wilfully failed to hold the Shareholders Meeting on or
prior to January 15, 1998 (the "Delayed Date"); provided that the Delayed Date
shall be automatically extended for each day with respect to which the failure
to hold the Shareholders Meeting (x) is attributable to a lack of cooperation
and assistance by Parent, Sub or their affiliates or (y) is the result of any
injunction or similar action or any action of the SEC, in each case preventing
or delaying the holding of such meeting; or
(h) by the Company prior to the receipt of the Required Vote
in accordance with Section 5.3; provided, that Parent receives at least the
five business days' prior written notice specified in Section 5.3(b) and,
during such five business day period, the Company shall, and shall cause its
financial and legal advisors to, consider any adjustment in the terms and
conditions of this Agreement that Parent may propose; provided, further, that
the Company may not effect such termination pursuant to this Section 7.1(h)
unless the Company has contemporaneously with such termination tendered payment
to Parent or Parent's designee of the amounts, if any, that are due to Parent
under Section 7.3(b)(ii).
(i) by the Company if there is no reasonable possibility that
(A) the FCC Application will receive final approval on or prior to the
Termination Date or (B) the funding of any of the financing commitments
described in the Financing Documents will be available to Parent or Sub
substantially on the terms set forth therein; or
(j) by the Company (i) if a Solvency Letter reasonably
satisfactory to the Company has not been delivered to the Company within the
period described in Section 5.10(b) or (ii) if (A) Parent
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has not provided the Company with reasonably satisfactory Financing Documents
within the period described in Section 5.11, (B) the Company objects in writing
to Parent to any material Financing Change provided to the Company pursuant to
Section 5.11, and in each case (A) and (B) Parent has not taken action which
reasonably satisfies such objection within ten business days of notice thereof
or (iii) if Parent does not confirm in writing to the Company that Parent
believes in good faith that it will be able to obtain financing substantially
on the terms set forth in the Financing Documents within five business days of
being requested to do so by the Company pursuant to Section 5.11.
SECTION VII.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and there shall be no liability on the part of any party
hereto except as set forth in Section 7.3, Section 5.2 and Section 8.1;
provided, however, that nothing herein shall relieve any party from liability
for any breach hereof.
SECTION VII.3 Fees and Expenses. (a) Except as provided
below in this Section 7.3, all fees and expenses incurred in connection with
the Merger, this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees or expenses, whether or not the Merger is
consummated.
(b) The Company shall pay, or cause to be paid, in same day
funds to Parent the amounts set forth below (which amounts shall constitute
full satisfaction of all of the Company's obligations and liabilities to Parent
and Sub under this Agreement) under the circumstances and at the times
specified:
(i) if Parent terminates this Agreement under Section
7.1(g), the Company shall pay Parent $32 million as an alternative
transaction fee and as reimbursement of the expenses of Parent and Sub
(the "Termination Fee") upon demand;
(ii) if the Company terminates this Agreement under
Section 7.1(h), the Company shall pay the Termination Fee upon such
termination;
(iii) if Parent or the Company terminates this
Agreement under Section 7.1(f), the Company shall reimburse Parent for
its documented out-of-pocket expenses incurred in connection with the
transactions contemplated hereby, up to a maximum reimbursement of $4
million, promptly upon presentment of statements documenting such
expenses;
(iv) if (1) Parent or the Company terminates this
Agreement under Section 7.1(f) or (2) Parent terminates this Agreement
under Section 7.1(b) as a result of a willful breach of a material
representation, warranty or covenant by the Company, and within 320
days thereafter, (A) the Company enters into a merger agreement,
acquisition agreement or similar agreement (including, without
limitation, a letter of intent) with respect to a Transaction
Proposal, or a Transaction Proposal is consummated, or (B) the Company
enters into a merger agreement, acquisition agreement or similar
agreement (including, without limitation, a letter of intent) with
respect to a Superior Proposal, or a Superior Proposal is consummated,
which in the case of either (A) or (B) above will result in
shareholders of the Company becoming entitled to receive upon
consummation of such Transaction Proposal or Superior Proposal
consideration with a value (determined in good faith by the Board of
Directors of the Company) per share of Company Common Stock greater
than (i) the cash price specified in Section 2.1(c) plus (ii) the
Additional Amounts described in Section 2.1(e) accruing from the
Accretion Start Date through the date of the consummation of such
Transaction Proposal or Superior Proposal, then, in the case of either
(A) or (B) above, the Company shall pay to Parent upon the
consummation of such Transaction Proposal or Superior Proposal the
difference between the Termination Fee and the amounts previously paid
to Parent pursuant to Section 7.3(b)(iii).
<PAGE> 37
33
SECTION VII.4 Brokers. Except as otherwise provided in
Section 7.3, the Company agrees to indemnify and hold harmless Parent and Sub,
and Parent and Sub agree to indemnify and hold harmless the Company, from and
against any and all liability to which Parent and Sub, on the one hand, or the
Company, on the other hand, may be subjected by reason of any brokers, finders
or similar fees or expenses with respect to the transactions contemplated by
this Agreement to the extent such similar fees and expenses are attributable to
any action undertaken by or on behalf of the Company, Parent or Sub, as the
case may be.
SECTION VII.5 Amendment. This Agreement may be amended by
the parties hereto by action taken by the respective Boards of Directors of
Parent, Sub and the Company at any time prior to the Effective Time; provided,
however, that, after approval of the Merger by the shareholders of the Company,
no amendment may be made which would reduce the amount or change the type of
consideration into which each share of Company Stock shall be converted upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION VII.6 Waiver. At any time prior to the Effective
Time, any party hereto, to the extent lawful, may (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
ARTICLE VIII
GENERAL PROVISIONS
SECTION VIII.1 Non-Survival of Representations, Warranties
and Agreements. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Section 7.1, except that (i) those agreements set forth
in Section 2.1, Section 2.2, Section 5.2, Section 5.4, Section 5.5, Section
7.2, Section 7.3, Section 7.4 and Article VIII shall survive the Effective Time
and those agreements set forth in Section 5.2, Section 7.2, Section 7.3,
Section 7.4 and Article VIII shall survive termination (in each of (i) and (ii)
in accordance with the terms of such provisions).
SECTION VIII.2 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by cable, telecopy, telegram or telex or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
if to Parent or Sub:
Ranger Holdings Corp.
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence Stuart
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen E. Jacobs, Esq.
Howard Chatzinoff, Esq.
<PAGE> 38
34
if to the Company:
LIN Television Corporation
#1 Richmond Square, Suite 230E
Providence, Rhode Island 02906
Attention: Peter E. Maloney
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: David B. Chapnick, Esq.
SECTION VIII.3 Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
(b) "beneficial owner" with respect to any shares of Company
Common Stock means a person who shall be deemed to be the beneficial
owner of such shares of Company Common Stock (i) which such person or
any of its affiliates or associates beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or
associates (as such term is defined in Rule 12b-2 of the Exchange Act)
has, directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon
the exercise of consideration rights, exchange rights, warrants or
options, or otherwise, or (B) the right to vote pursuant to any
agreement, arrangement or understanding or (iii) which are
beneficially owned, directly or indirectly, by any other persons with
whom such person or any of its affiliates or person with whom such
person or any of its affiliates or associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares;
(c) "Company Station" means each broadcast television station
owned by the Company or a subsidiary of the Company and shall not
include any broadcast television station operated by the Company or a
subsidiary of the Company pursuant to a local marketing agreement;
(d) "Confidentiality Agreement" means the confidentiality
agreement dated June 13, 1997 between the Company and Hicks, Muse,
Tate & Furst Incorporated, as amended, modified or supplemented from
time to time;
(e) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management policies of a person, whether through the ownership
of stock, as trustee or executor, by contract or credit arrangement or
otherwise;
(f) "Current FCC Policy" means the Communications Act and FCC
rules, regulations and policies in effect on the date of this
Agreement;
<PAGE> 39
35
(g) "FCC License" means any permit, license, waiver or
authorization that a person is required by the FCC to hold in
connection with the operation of its business;
(h) "generally accepted accounting principles" shall mean the
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a
significant segment of the accounting profession in the United States,
in each case applied on a basis consistent with the manner in which
the audited financial statements for the fiscal year of the Company
ended December 31, 1996 were prepared;
(i) "Independent Directors" means the three members of the
Company's Board of Directors designated as such pursuant to the PMVG;
(j) "knowledge" means, with respect to any entity, knowledge
of any officer of an entity after reasonable inquiry (except as
otherwise set forth herein);
(k) "Lien" means, with respect to any asset (including,
without limitation, any security) any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest or
encumbrance of any kind in respect of such asset;
(l) "LMA Station" means each broadcast television station for
which the Company or a subsidiary of the Company provides programming
and advertising services pursuant to a local marketing agreement;
(m) "Majority Vote of the Public Stockholders" means (i) the
affirmative vote of the holders of at least a majority of the Public
Shares present and entitled to vote at any meeting at which the
holders of a majority of the Public Shares are present or (ii) the
action by written consent (in accordance with applicable provisions of
Delaware law and the Company's certificate of incorporation and
by-laws) of the holders of a majority of the Public Shares;
(n) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group
(as defined in Section 13(d)(3) of the Exchange Act);
(o) "Public Shares" means shares of Company Common Stock not
owned by the Principal Company Shareholder or any of its affiliates;
(p) "Significant Subsidiary" means, with respect to the
Company, each of the Company's subsidiaries through which the Company
operates, or holds an FCC License with respect to the operation of, a
Company Station and any other subsidiary which is a party to a
Material Contract; and
(q) "subsidiary" or "subsidiaries" of the Company, the
Surviving Corporation, Parent, Sub or any other person means any
corporation, partnership, joint venture or other legal entity of which
the Company, the Surviving Corporation, Parent, Sub or such other
person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, 50% or more of
the stock or other equity interests the holder of which is generally
entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
SECTION VIII.4 Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions
<PAGE> 40
36
and provisions of this Agreement shall nevertheless remain in full force and
effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
SECTION VIII.5 Entire Agreement; Assignment. Except for the
Confidentiality Agreement and the WOOD Agreement, this Agreement constitutes
the entire agreement among the parties with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof; provided however that it is expressly agreed that the transactions
contemplated by this Agreement do not violate Section 4 of the Confidentiality
Agreement. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the
other parties, except that Sub may assign, in its sole discretion, any or all
of its rights, interest and obligations hereunder to any newly-formed direct
wholly owned Subsidiary of Parent or Sub. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
SECTION VIII.6 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and (other
than Sections 2.2(a), 5.4 and 5.5) nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION VIII.7 Director and Officer Liability. The
directors, officers, stockholders and other controlling persons of each of the
parties and their affiliates acting in such capacity shall not in such capacity
have any personal liability or obligation arising under this Agreement
(including any claims that the other parties may assert) other than as an
assignee of this Agreement.
SECTION VIII.8 Enforcement of Agreement. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having jurisdiction, such remedy
being in addition to any other remedy to which any party is entitled at law or
in equity.
SECTION VIII.9 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION VIII.10 Headings. The descriptive headings contained
in this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION VIII.11 Counterparts. This Agreement may be executed
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
<PAGE> 41
37
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
RANGER HOLDINGS CORP.
By: /s/ Michael J. Levitt
----------------------------
Name: Michael J. Levitt
Title: Vice President
RANGER ACQUISITION COMPANY
By: /s/ Michael J. Levitt
----------------------------
Name: Michael J. Levitt
Title: Vice President
LIN TELEVISION CORPORATION
By: /s/ Gregory M. Schmidt
----------------------------
Name: Gregory M. Schmidt
Title: Vice President and General
Counsel
<PAGE> 1
EXHIBIT 3.1.1
CERTIFICATE OF INCORPORATION
OF
RANGER HOLDINGS CORP.
- ------------------------------------------------------------------------------
I, the undersigned natural person acting as an incorporator of a
corporation (hereinafter called the "Corporation") under the General Corporation
Law of the State of Delaware, do hereby adopt the following Certificate of
Incorporation for the Corporation:
FIRST: The name of the Corporation is Ranger Holdings Corp.
SECOND: The registered office of the Corporation in the State of Delaware
is located at 1013 Centre Road, the City of Wilmington, County of New Castle.
The name of the registered agent of the Corporation at such address is The
Corporation Service Company.
THIRD: The purpose for which the Corporation is organized is to engage in
any and all lawful acts and activity for which corporations may be organized
under the General Corporation Law of Delaware. The Corporation will have
perpetual existence.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 1,000 shares, par value $.01 per share, designated
Common Stock.
FIFTH: The name of the incorporator of the Corporation is Richard A.
Ginsburg, and the mailing address of such incorporator is 100 Crescent Court,
Suite 1300, Dallas, Texas 75201-6950.
SIXTH: The number of directors constituting the initial board of directors
is one, and the name and mailing address of each person who is to serve as
director until the first annual meeting of stockholders or until his successor
is elected and qualified are as follows:
Eric C. Neuman 200 Crescent Court, Suite 1600
Dallas, Texas 75201
SEVENTH: Directors of the Corporation need not be elected by written ballot
unless the bylaws of the Corporation otherwise provide.
EIGHTH: The directors of the Corporation shall have the power to adopt,
amend, and repeal the bylaws of the Corporation.
<PAGE> 2
NINTH: No contract or transaction between the Corporation and one or more
of its directors, officers, or stockholders or between the Corporation and any
person (as used herein "person" means other corporation, partnership,
association, firm, trust, joint venture, political subdivision, or
instrumentality) or other organization in which one or more of its directors,
officers, or stockholders are directors, officers, or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee which authorizes the contract or transaction, or solely
because his, her, or their votes are counted for such purpose, if: (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved, or ratified by the board of directors, a committee thereof, or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
TENTH: The Corporation shall indemnify any person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by reason
of the fact that he or she (i) is or was a director or officer of the
Corporation or (ii) while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
fullest extent permitted under the Delaware General Corporation Law, as the same
exists or may hereafter be amended. Such right shall be a contract right and as
such shall run to the benefit of any director or officer who is elected and
accepts the position of director or officer of the Corporation or elects to
continue to serve as a director or officer of the Corporation while this Article
Tenth is in effect. Any repeal or amendment of this Article Tenth shall be
prospective only and shall not limit the rights of any such director or officer
or the obligations of the Corporation with respect to any claim arising from or
related to the services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Article Tenth. Such
right shall include the right to be paid by the Corporation expenses incurred in
defending any such proceeding in advance of its final disposition to the maximum
extent permitted under the Delaware General Corporation Law, as the same exists
or may hereafter be amended. If a claim for indemnification or advancement of
expenses hereunder is not paid in full by the Corporation
2
<PAGE> 3
within sixty (60) days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense are not permitted under the
Delaware General Corporation Law, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
board of directors or any committee thereof, independent legal counsel, or
stockholders) to have made its determination prior to the commencement of such
action that indemnification of, or advancement of costs of defense to, the
claimant is permissible in the circumstances nor an actual determination by the
Corporation (including its board of directors or any committee thereof,
independent legal counsel, or stockholders) that such indemnification or
advancement is not permissible shall be a defense to the action or create a
presumption that such indemnification or advancement is not permissible. In the
event of the death of any person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or her heirs,
executors, administrators, and personal representatives. The rights conferred
above shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, by-law, resolution of stockholders or
directors, agreement, or otherwise.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
ELEVENTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. Any repeal or amendment of this Article Eleventh by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation arising from an act or omission occurring prior to the time of such
repeal or amendment. In addition to the circumstances in which a director of the
Corporation is not personally liable as set forth in the foregoing provisions of
this Article Eleventh, a director shall not be liable to the Corporation or its
stockholders to such further extent as permitted by any law hereafter enacted,
including without limitation any subsequent amendment to the Delaware General
Corporation Law.
3
<PAGE> 4
TWELFTH: The Corporation expressly elects not to be governed by Section 203
of the General Corporation Law of Delaware.
I, the undersigned, for the purpose of forming the Corporation under the
laws of the State of Delaware, do make, file, and record this Certificate of
Incorporation and do certify that this is my act and deed and that the facts
stated herein are true and, accordingly, I do hereunto set my hand on this 18th
day of July, 1997.
------------------------------
Richard A. Ginsburg
4
<PAGE> 1
EXHIBIT 3.1.2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
RANGER HOLDINGS CORP.
(Pursuant to Section 242 of the General
Corporation Law of the State of Delaware)
Ranger Holdings Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify as follows:
FIRST: The name of the Corporation is Ranger Holdings Corp.
SECOND: The First Article of the Corporation's Certificate of Incorporation
is amended in its entirety to read as follows:
"The name of the Corporation is LIN Holdings Corp."
THIRD: A majority of the stockholders of the Corporation entitled to vote
on this amendment executed a written consent in accordance with the provisions
of Section 228 of the General Corporation Law of the State of Delaware.
FOURTH: Said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment as of the 9th day of February, 1998.
RANGER HOLDINGS CORP.
By:
-----------------------------
Eric C. Neuman
Vice President and Secretary
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
RANGER HOLDINGS CORP.
A Delaware Corporation
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE ONE: OFFICES
<S> <C> <C>
1.1 Registered Office and Agent..................................... 1
1.2 Other Offices................................................... 1
ARTICLE TWO: MEETINGS OF STOCKHOLDERS
2.1 Annual Meeting.................................................. 1
2.2 Special Meeting................................................. 2
2.3 Place of Meetings............................................... 2
2.4 Notice.......................................................... 2
2.5 Voting List..................................................... 3
2.6 Quorum.......................................................... 3
2.7 Required Vote; Withdrawal of Quorum............................. 4
2.8 Method of Voting; Proxies....................................... 4
2.9 Record Date..................................................... 4
2.10 Conduct of Meeting.............................................. 6
2.11 Inspectors...................................................... 6
ARTICLE THREE: DIRECTORS
3.1 Management...................................................... 7
3.2 Number; Qualification; Election; Term........................... 7
3.3 Change in Number................................................ 7
3.4 Removal......................................................... 7
3.5 Vacancies....................................................... 8
3.6 Meetings of Directors........................................... 8
3.7 First Meeting................................................... 9
3.8 Election of Officers............................................ 9
3.9 Regular Meetings................................................ 9
3.10 Special Meetings................................................ 9
3.11 Notice.......................................................... 9
3.12 Quorum; Majority Vote........................................... 9
3.13 Procedure....................................................... 10
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
3.14 Presumption of Assent........................................... 10
3.15 Compensation.................................................... 10
ARTICLE FOUR: COMMITTEES
4.1 Designation..................................................... 11
4.2 Number; Qualification; Term..................................... 11
4.3 Authority....................................................... 11
4.4 Committee Changes............................................... 11
4.5 Alternate Members of Committees................................. 11
4.6 Regular Meetings................................................ 12
4.7 Special Meetings................................................ 12
4.8 Quorum; Majority Vote........................................... 12
4.9 Minutes......................................................... 12
4.10 Compensation.................................................... 12
4.11 Responsibility.................................................. 12
ARTICLE FIVE: NOTICE
5.1 Method.......................................................... 13
5.2 Waiver.......................................................... 13
ARTICLE SIX: OFFICERS
6.1 Number; Titles; Term of Office.................................. 13
6.2 Removal......................................................... 14
6.3 Vacancies....................................................... 14
6.4 Authority....................................................... 14
6.5 Compensation.................................................... 14
6.6 Chairman of the Board........................................... 14
6.7 President....................................................... 15
6.8 Vice Presidents................................................. 15
6.9 Treasurer....................................................... 15
6.10 Assistant Treasurers............................................ 15
6.11 Secretary....................................................... 16
6.12 Assistant Secretaries........................................... 16
</TABLE>
ii
<PAGE> 4
ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS
<TABLE>
<S> <C> <C>
7.1 Certificates for Shares......................................... 16
7.2 Replacement of Lost or Destroyed Certificates................... 17
7.3 Transfer of Shares.............................................. 17
7.4 Registered Stockholders......................................... 17
7.5 Regulations..................................................... 18
7.6 Legends......................................................... 18
ARTICLE EIGHT: MISCELLANEOUS PROVISIONS
8.1 Dividends....................................................... 18
8.2 Reserves........................................................ 18
8.3 Books and Records............................................... 18
8.4 Fiscal Year..................................................... 19
8.5 Seal............................................................ 19
8.6 Resignations.................................................... 19
8.7 Securities of Other Corporations................................ 19
8.8 Telephone Meetings.............................................. 19
8.9 Action Without a Meeting........................................ 20
8.10 Invalid Provisions.............................................. 21
8.11 Mortgages, etc.................................................. 21
8.12 Headings........................................................ 21
8.13 References...................................................... 21
8.14 Amendments...................................................... 21
</TABLE>
iii
<PAGE> 5
BYLAWS
OF
RANGER HOLDINGS CORP.
A Delaware Corporation
PREAMBLE
These bylaws are subject to, and governed by, the General Corporation Law
of the State of Delaware (the "Delaware General Corporation Law") and the
certificate of incorporation of Ranger Holdings, Corp., a Delaware corporation
(the "Corporation"). In the event of a direct conflict between the provisions of
these bylaws and the mandatory provisions of the Delaware General Corporation
Law or the provisions of the certificate of incorporation of the Corporation,
such provisions of the Delaware General Corporation Law or the certificate of
incorporation of the Corporation, as the case may be, will be controlling.
ARTICLE ONE: OFFICES
1.1 Registered Office and Agent. The registered office and registered
agent of the Corporation shall be as designated from time to time by the
appropriate filing by the Corporation in the office of the Secretary of State of
the State of Delaware.
1.2 Other Offices. The Corporation may also have offices at such other
places, both within and without the State of Delaware, as the board of directors
may from time to time determine or as the business of the Corporation may
require.
ARTICLE TWO: MEETINGS OF STOCKHOLDERS
2.1 Annual Meeting. An annual meeting of stockholders of the Corporation
shall be held each calendar year on such date and at such time as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting or in a duly executed waiver of notice of such meeting. At such
meeting, the stockholders shall elect directors and transact such other business
as may properly be brought before the meeting.
1
<PAGE> 6
2.2 Special Meeting. A special meeting of the stockholders may be called
at any time by the Chairman of the Board, the President, the board of directors,
and shall be called by the President or the Secretary at the request in writing
of the stockholders of record of not less than ten percent of all shares
entitled to vote at such meeting or as otherwise provided by the certificate of
incorporation of the Corporation. A special meeting shall be held on such date
and at such time as shall be designated by the person(s) calling the meeting and
stated in the notice of the meeting or in a duly executed waiver of notice of
such meeting. Only such business shall be transacted at a special meeting as may
be stated or indicated in the notice of such meeting or in a duly executed
waiver of notice of such meeting.
2.3 Place of Meetings. An annual meeting of stockholders may be held at
any place within or without the State of Delaware designated by the board of
directors. A special meeting of stockholders may be held at any place within or
without the State of Delaware designated in the notice of the meeting or a duly
executed waiver of notice of such meeting. Meetings of stockholders shall be
held at the principal office of the Corporation unless another place is
designated for meetings in the manner provided herein.
2.4 Notice. Written or printed notice stating the place, day, and time
of each meeting of the stockholders and, in case of a special meeting, the
purpose or purposes for which the meeting is called shall be delivered not less
than ten nor more than 60 days before the date of the meeting, either personally
or by mail, by or at the direction of the President, the Secretary, or the
officer or person(s) calling the meeting, to each stockholder of record entitled
to vote at such meeting. If such notice is to be sent by mail, it shall be
directed to such stockholder at his address as it appears on the records of the
Corporation, unless he shall have filed with the Secretary of the Corporation a
written request that notices to him be mailed to some other address, in which
case it shall be directed to him at such other address. Notice of any meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy and shall not, at the beginning of
such meeting, object to the transaction of any business because the meeting is
not lawfully called or convened, or who shall, either before or after the
meeting, submit a signed waiver of notice, in person or by proxy.
2.5 Voting List. At least ten days before each meeting of stockholders,
the Secretary or other officer of the Corporation who has charge of the
Corporation's stock ledger, either directly or through another officer appointed
by him or through a transfer agent appointed by the board of directors, shall
prepare a complete list of stockholders entitled to vote thereat, arranged in
alphabetical order and showing the address of each stockholder and number of
shares registered in the name of each stockholder. For a period of ten days
prior to such meeting, such list shall be kept on file at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of meeting or a duly executed waiver of notice of such meeting or, if not
so specified, at the place where the meeting is to be held and shall be open to
examination by any stockholder
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during ordinary business hours. Such list shall be produced at such meeting and
kept at the meeting at all times during such meeting and may be inspected by any
stockholder who is present.
2.6 Quorum. The holders of a majority of the outstanding shares entitled
to vote on a matter, present in person or by proxy, shall constitute a quorum at
any meeting of stockholders, except as otherwise provided by law, the
certificate of incorporation of the Corporation, or these by-laws. If a quorum
shall not be present, in person or by proxy, at any meeting of stockholders, the
stockholders entitled to vote thereat who are present, in person or by proxy,
or, if no stockholder entitled to vote is present, any officer of the
Corporation may adjourn the meeting from time to time, without notice other than
announcement at the meeting (unless the board of directors, after such
adjournment, fixes a new record date for the adjourned meeting), until a quorum
shall be present, in person or by proxy. At any adjourned meeting at which a
quorum shall be present, in person or by proxy, any business may be transacted
which may have been transacted at the original meeting had a quorum been
present; provided that, if the adjournment is for more than 30 days or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the adjourned meeting.
2.7 Required Vote; Withdrawal of Quorum. When a quorum is present at any
meeting, the vote of the holders of at least a majority of the outstanding
shares entitled to vote who are present, in person or by proxy, shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of statute, the certificate of incorporation of the
Corporation, or these bylaws, a different vote is required, in which case such
express provision shall govern and control the decision of such question. The
stockholders present at a duly constituted meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
2.8 Method of Voting; Proxies. Except as otherwise provided in the
certificate of incorporation of the Corporation or by law, each outstanding
share, regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a meeting of stockholders. Elections of directors need
not be by written ballot. At any meeting of stockholders, every stockholder
having the right to vote may vote either in person or by a proxy executed in
writing by the stockholder or by his duly authorized attorney-in-fact. Each such
proxy shall be filed with the Secretary of the Corporation before or at the time
of the meeting. No proxy shall be valid after three years from the date of its
execution, unless otherwise provided in the proxy. If no date is stated in a
proxy, such proxy shall be presumed to have been executed on the date of the
meeting at which it is to be voted. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and coupled with an interest
sufficient in law to support an irrevocable power or unless otherwise made
irrevocable by law.
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2.9 Record Date. (a) For the purpose of determining stockholders entitled
to notice of or to vote at any meeting of stockholders, or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion, or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the board of directors, for any such determination of stockholders, such date
in any case to be not more than 60 days and not less than ten days prior to such
meeting nor more than 60 days prior to any other action. If no record date is
fixed:
(i) The record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the day next preceding the
day on which the meeting is held.
(ii) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
(iii) A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the board of directors may fix a new
record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the board of
directors. If no record date has been fixed by the board of directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the board of directors is
required by law or these bylaws, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
in the State of Delaware, principal place of business, or such officer or agent
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior action by
the board of directors is required by law or these bylaws, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
board of directors adopts the resolution taking such prior action.
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2.10 Conduct of Meeting. The Chairman of the Board, if such office has
been filled, and, if not or if the Chairman of the Board is absent or otherwise
unable to act, the President shall preside at all meetings of stockholders. The
Secretary shall keep the records of each meeting of stockholders. In the absence
or inability to act of any such officer, such officer's duties shall be
performed by the officer given the authority to act for such absent or
non-acting officer under these bylaws or by some person appointed by the
meeting.
2.11 Inspectors. The board of directors may, in advance of any meeting
of stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If any of the inspectors so appointed shall fail to appear
or act, the chairman of the meeting shall, or if inspectors shall not have been
appointed, the chairman of the meeting may, appoint one or more inspectors. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors
shall determine the number of shares of capital stock of the Corporation
outstanding and the voting power of each, the number of shares represented at
the meeting, the existence of a quorum, and the validity and effect of proxies
and shall receive votes, ballots, or consents, hear and determine all challenges
and questions arising in connection with the right to vote, count and tabulate
all votes, ballots, or consents, determine the results, and do such acts as are
proper to conduct the election or vote with fairness to all stockholders. On
request of the chairman of the meeting, the inspectors shall make a report in
writing of any challenge, request, or matter determined by them and shall
execute a certificate of any fact found by them. No director or candidate for
the office of director shall act as an inspector of an election of directors.
Inspectors need not be stockholders.
ARTICLE THREE: DIRECTORS
3.1 Management. The business and property of the Corporation shall be
managed by the board of directors. Subject to the restrictions imposed by law,
the certificate of incorporation of the Corporation, or these bylaws, the board
of directors may exercise all the powers of the Corporation.
3.2. Number; Qualification; Election; Term. The number of directors which
shall constitute the entire board of directors shall be not less than one. The
first board of directors shall consist of the number of directors named in the
certificate of incorporation of the Corporation or, if no directors are so
named, shall consist of the number of directors elected by the incorporator(s)
at an organizational meeting or by unanimous written consent in lieu thereof.
Thereafter, within the limits above specified, the number of directors which
shall constitute the entire board of directors shall be determined by resolution
of the board of directors or by resolution of the stockholders at
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the annual meeting thereof or at a special meeting thereof called for that
purpose. Except as otherwise required by law, the certificate of incorporation
of the Corporation, or these bylaws, the directors shall be elected at an annual
meeting of stockholders at which a quorum is present. Directors shall be elected
by a plurality of the votes of the shares present in person or represented by
proxy and entitled to vote on the election of directors. Each director so chosen
shall hold office until the first annual meeting of stockholders held after his
election and until his successor is elected and qualified or, if earlier, until
his death, resignation, or removal from office. None of the directors need be a
stockholder of the Corporation or a resident of the State of Delaware. Each
director must have attained the age of majority.
3.3 Change in Number. No decrease in the number of directors
constituting the entire board of directors shall have the effect of shortening
the term of any incumbent director.
3.4 Removal. Except as otherwise provided in the certificate of
incorporation of the Corporation or these by-laws, at any meeting of
stockholders called expressly for that purpose, any director or the entire board
of directors may be removed, with or without cause, by a vote of the holders of
a majority of the shares then entitled to vote on the election of directors;
provided, however, that so long as stockholders have the right to cumulate votes
in the election of directors pursuant to the certificate of incorporation of the
Corporation, if less than the entire board of directors is to be removed, no one
of the directors may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board of directors.
3.5 Vacancies. Vacancies and newly-created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, though less than a quorum, or by the sole
remaining director, and each director so chosen shall hold office until the
first annual meeting of stockholders held after his election and until his
successor is elected and qualified or, if earlier, until his death, resignation,
or removal from office. If there are no directors in office, an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly-created directorship, the directors then in
office shall constitute less than a majority of the whole board of directors (as
constituted immediately prior to any such increase), the Court of Chancery may,
upon application of any stockholder or stockholders holding at least 10% of the
total number of the shares at the time outstanding having the right to vote for
such directors, summarily order an election to be held to fill any such
vacancies or newly-created directorships or to replace the directors chosen by
the directors then in office. Except as otherwise provided in these bylaws, when
one or more directors shall resign from the board of directors, effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have the power to fill such vacancy or vacancies, the
vote thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in these
bylaws with respect to
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the filling of other vacancies.
3.6 Meeting of Directors. The directors may hold their meetings and may
have an office and keep the books of the Corporation, except as otherwise
provided by statute, in such place or places within or without the State of
Delaware as the board of directors may from time to time determine or as shall
be specified in the notice of such meeting or duly executed waiver of notice of
such meeting.
3.7 First Meeting. Each newly elected board of directors may hold its
first meeting for the purpose of organization and the transaction of business,
if a quorum is present, immediately after and at the same place as the annual
meeting of stockholders, and no notice of such meeting shall be necessary.
3.8 Election of Officers. At the first meeting of the board of directors
after each annual meeting of stockholders at which a quorum shall be present,
the board of directors shall elect the officers of the Corporation.
3.9 Regular Meetings. Regular meetings of the board of directors shall
be held at such times and places as shall be designated from time to time by
resolution of the board of directors. Notice of such regular meetings shall not
be required.
3.10 Special Meetings. Special meetings of the board of directors shall
be held whenever called by the Chairman of the Board, the President, or any
director.
3.11 Notice. The Secretary shall give notice of each special meeting to
each director at least 24 hours before the meeting. Notice of any such meeting
need not be given to any director who shall, either before or after the meeting,
submit a signed waiver of notice or who shall attend such meeting without
protesting, prior to or at its commencement, the lack of notice to him. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
3.12 Quorum; Majority Vote. At all meetings of the board of directors, a
majority of the directors fixed in the manner provided in these bylaws shall
constitute a quorum for the transaction of business. If at any meeting of the
board of directors there be less than a quorum present, a majority of those
present or any director solely present may adjourn the meeting from time to time
without further notice. Unless the act of a greater number is required by law,
the certificate of incorporation of the Corporation, or these bylaws, the act of
a majority of the directors present at a meeting at which a quorum is in
attendance shall be the act of the board of directors. At any time that the
certificate of incorporation of the Corporation provides that directors elected
by the holders of a class or series of stock shall have more or less than one
vote per director
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on any matter, every reference in these bylaws to a majority or other proportion
of directors shall refer to a majority or other proportion of the votes of such
directors.
3.13 Procedure. At meetings of the board of directors, business shall
be transacted in such order as from time to time the board of directors may
determine. The Chairman of the Board, if such office has been filled, and, if
not or if the Chairman of the Board is absent or otherwise unable to act, the
President shall preside at all meetings of the board of directors. In the
absence or inability to act of either such officer, a chairman shall be chosen
by the board of directors from among the directors present. The Secretary of the
Corporation shall act as the secretary of each meeting of the board of directors
unless the board of directors appoints another person to act as secretary of the
meeting. The board of directors shall keep regular minutes of its proceedings
which shall be placed in the minute book of the Corporation.
3.14 Presumption of Asset. A director of the Corporation who is present
at the meeting of the board of directors at which action on any corporate matter
is taken shall be presumed to have assented to the action unless his dissent
shall be entered in the minutes of the meeting or unless he shall file his
written dissent to such action with the person acting as secretary of the
meeting before the adjournment thereof or shall forward any dissent by certified
or registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
3.15 Compensation. The board of directors shall have the authority to
fix the compensation, including fees and reimbursement of expenses, paid to
directors for attendance at regular or special meetings of the board of
directors or any committee thereof; provided, that nothing contained herein
shall be construed to preclude any director from serving the Corporation in any
other capacity or receiving compensation therefor.
ARTICLE FOUR: COMMITTEES
4.1 Designation. The board of directors may, by resolution adopted by a
majority of the entire board of directors, designate one or more committees.
4.2 Number; Qualification; Term. Each committee shall consist of one or
more directors appointed by resolution adopted by a majority of the entire board
of directors. The number of committee members may be increased or decreased from
time to time by resolution adopted by a majority of the entire board of
directors. Each committee member shall serve as such until the earliest of (i)
the expiration of his term as director, (ii) his resignation as a committee
member or as a director, or (iii) his removal as a committee member or as a
director.
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4.3 Authority. Each committee, to the extent expressly provided in the
resolution establishing such committee, shall have and may exercise all of the
authority of the board of directors in the management of the business and
property of the Corporation except to the extent expressly restricted by law,
the certificate of incorporation of the Corporation, or these bylaws.
4.4 Committee Changes. The board of directors shall have the power at
any time to fill vacancies in, to change the membership of, and to discharge any
committee.
4.5 Alternate Members of Committees. The board of directors may
designate one or more directors as alternate members of any committee. Any such
alternate member may replace any absent or disqualified member at any meeting of
the committee. If no alternate committee members have been so appointed to a
committee or each such alternate committee member is absent or disqualified, the
member or members of such committee present at any meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the board of directors to act at the meeting in the
place of any such absent or disqualified member.
4.6 Regular Meetings. Regular meetings of any committee may be held
without notice at such time and place as may be designated from time to time by
the committee and communicated to all members thereof.
4.7 Special Meetings. Special meetings of any committee may be held
whenever called by any committee member. The committee member calling any
special meeting shall cause notice of such special meeting, including therein
the time and place of such special meeting, to be given to each committee member
at least two days before such special meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting of any committee need be
specified in the notice or waiver of notice of any special meeting.
4.8 Quorum; Majority Vote. At meetings of any committee, a majority of
the number of members designated by the board of directors shall constitute a
quorum for the transaction of business. If a quorum is not present at a meeting
of any committee, a majority of the members present may adjourn the meeting from
time to time, without notice other than an announcement at the meeting, until a
quorum is present. The act of a majority of the members present at any meeting
at which a quorum is in attendance shall be the act of a committee, unless the
act of a greater number is required by law, the certificate of incorporation of
the Corporation, or these bylaws.
4.9 Minutes. Each committee shall cause minutes of its proceedings to
be prepared and shall report the same to the board of directors upon the request
of the board of directors. The minutes of the proceedings of each committee
shall be delivered to the Secretary of the Corporation
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for placement in the minute books of the Corporation.
4.10 Compensation. Committee members may, by resolution of the board
of directors, be allowed a fixed sum and expenses of attendance, if any, for
attending any committee meetings or a stated salary.
4.11 Responsibility. The designation of any committee and the
delegation of authority to it shall not operate to relieve the board of
directors or any director of any responsibility imposed upon it or such director
by law.
ARTICLE FIVE: NOTICE
5.1 Method. Whenever by statute, the certificate of incorporation of
the Corporation, or these bylaws, notice is required to be given to any
committee member, director, or stockholder and no provision is made as to how
such notice shall be given, personal notice shall not be required and any such
notice may be given (a) in writing, by mail, postage prepaid, addressed to such
committee member, director, or stockholder at his address as it appears on the
books or (in the case of a stockholder) the stock transfer records of the
Corporation, or (b) by any other method permitted by law (including but not
limited to overnight courier service, telegram, telex, or telefax). Any notice
required or permitted to be given by mail shall be deemed to be delivered and
given at the time when the same is deposited in the United States mail as
aforesaid. Any notice required or permitted to be given by overnight courier
service shall be deemed to be delivered and given at the time delivered to such
service with all charges prepaid and addressed as aforesaid. Any notice required
or permitted to be given by telegram, telex, or telefax shall be deemed to be
delivered and given at the time transmitted with all charges prepaid and
addressed as aforesaid.
5.2 Waiver. Whenever any notice is required to be given to any
stockholder, director, or committee member of the Corporation by statute, the
certificate of incorporation of the Corporation, or these bylaws, a waiver
thereof in writing signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be equivalent to the
giving of such notice. Attendance of a stockholder, director, or committee
member at a meeting shall constitute a waiver of notice of such meeting, except
where such person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
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ARTICLE SIX: OFFICERS
6.1 Number; Titles; Term of Office. The officers of the Corporation shall
be a President, a Secretary, and such other officers as the board of directors
may from time to time elect or appoint, including a Chairman of the Board, one
or more Vice Presidents (with each Vice President to have such descriptive
title, if any, as the board of directors shall determine), and a Treasurer. Each
officer shall hold office until his successor shall have been duly elected and
shall have qualified, until his death, or until he shall resign or shall have
been removed in the manner hereinafter provided. Any two or more offices may be
held by the same person. None of the officers need be a stockholder or a
director of the Corporation or a resident of the State of Delaware.
6.2 Removal. Any officer or agent elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interest of the Corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
6.3 Vacancies. Any vacancy occurring in any office of the Corporation (by
death, resignation, removal, or otherwise) may be filled by the board of
directors.
6.4 Authority. Officers shall have such authority and perform such
duties in the management of the Corporation as are provided in these bylaws or
as may be determined by resolution of the board of directors not inconsistent
with these bylaws.
6.5 Compensation. The compensation, if any, of officers and agents shall
be fixed from time to time by the board of directors; provided, however, that
the board of directors may delegate the power to determine the compensation of
any officer and agent (other than the officer to whom such power is delegated)
to the Chairman of the Board or the President.
6.6 Chairman of the Board. The Chairman of the Board, if elected by the
board of directors, shall have such powers and duties as may be prescribed by
the board of directors. Such officer shall preside at all meetings of the
stockholders and of the board of directors. Such officer may sign all
certificates for shares of stock of the Corporation.
6.7 President. The President shall be the chief executive officer of the
Corporation and, subject to the board of directors, he shall have general
executive charge, management, and control of the properties and operations of
the Corporation in the ordinary course of its business, with all such powers
with respect to such properties and operations as may be reasonably incident to
such responsibilities. If the board of directors has not elected a Chairman of
the Board or in the absence or inability to act of the Chairman of the Board,
the President shall exercise all of the powers and
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discharge all of the duties of the Chairman of the Board. As between the
Corporation and third parties, any action taken by the President in the
performance of the duties of the Chairman of the Board shall be conclusive
evidence that there is no Chairman of the Board or that the Chairman of the
Board is absent or unable to act.
6.8 Vice Presidents. Each Vice President shall have such powers and
duties as may be assigned to him by the board of directors, the Chairman of the
Board, or the President, and (in order of their seniority as determined by the
board of directors or, in the absence of such determination, as determined by
the length of time they have held the office of Vice President) shall exercise
the powers of the President during that officer's absence or inability to act.
As between the Corporation and third parties, any action taken by a Vice
President in the performance of the duties of the President shall be conclusive
evidence of the absence or inability to act of the President at the time such
action was taken.
6.9 Treasurer. The Treasurer shall have custody of the Corporation's
funds and securities, shall keep full and accurate account of receipts and
disbursements, shall deposit all monies and valuable effects in the name and to
the credit of the Corporation in such depository or depositories as may be
designated by the board of directors, and shall perform such other duties as may
be prescribed by the board of directors, the Chairman of the Board, or the
President.
6.10 Assistant Treasurers. Each Assistant Treasurer shall have such
powers and duties as may be assigned to him by the board of directors, the
Chairman of the Board, or the President. The Assistant Treasurers (in the order
of their seniority as determined by the board of directors or, in the absence of
such a determination, as determined by the length of time they have held the
office of Assistant Treasurer) shall exercise the powers of the Treasurer during
that officer's absence or inability to act.
6.11 Secretary. Except as otherwise provided in these bylaws, the
Secretary shall keep the minutes of all meetings of the board of directors and
of the stockholders in books provided for that purpose, and he shall attend to
the giving and service of all notices. He may sign with the Chairman of the
Board or the President, in the name of the Corporation, all contracts of the
Corporation and affix the seal of the Corporation thereto. He may sign with the
Chairman of the Board or the President all certificates for shares of stock of
the Corporation, and he shall have charge of the certificate books, transfer
books, and stock papers as the board of directors may direct, all of which shall
at all reasonable times be open to inspection by any director upon application
at the office of the Corporation during business hours. He shall in general
perform all duties incident to the office of the Secretary, subject to the
control of the board of directors, the Chairman of the Board, and the President.
6.12 Assistant Secretaries. Each Assistant Secretary shall have such
powers and duties as
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may be assigned to him by the board of directors, the Chairman of the Board, or
the President. The Assistant Secretaries (in the order of their seniority as
determined by the board of directors or, in the absence of such a determination,
as determined by the length of time they have held the office of Assistant
Secretary) shall exercise the powers of the Secretary during that officer's
absence or inability to act.
ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS
7.1 Certificates for Shares. Certificates for shares of stock of the
Corporation shall be in such form as shall be approved by the board of
directors. The certificates shall be signed by the Chairman of the Board or the
President or a Vice President and also by the Secretary or an Assistant
Secretary or by the Treasurer or an Assistant Treasurer. Any and all signatures
on the certificate may be a facsimile and may be sealed with the seal of the
Corporation or a facsimile thereof. If any officer, transfer agent, or registrar
who has signed, or whose facsimile signature has been placed upon, a certificate
has ceased to be such officer, transfer agent, or registrar before such
certificate is issued, such certificate may be issued by the Corporation with
the same effect as if he were such officer, transfer agent, or registrar at the
date of issue. The certificates shall be consecutively numbered and shall be
entered in the books of the Corporation as they are issued and shall exhibit the
holder's name and the number of shares.
7.2 Replacement of Lost or Destroyed Certificates. The board of
directors may direct a new certificate or certificates to be issued in place of
a certificate or certificates theretofore issued by the Corporation and alleged
to have been lost or destroyed, upon the making of an affidavit of that fact by
the person claiming the certificate or certificates representing shares to be
lost or destroyed. When authorizing such issue of a new certificate or
certificates the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the Corporation a bond with a
surety or sureties satisfactory to the Corporation in such sum as it may direct
as indemnity against any claim, or expense resulting from a claim, that may be
made against the Corporation with respect to the certificate or certificates
alleged to have been lost or destroyed.
7.3 Transfer of Shares. Shares of stock of the Corporation shall be
transferable only on the books of the Corporation by the holders thereof in
person or by their duly authorized attorneys or legal representatives. Upon
surrender to the Corporation or the transfer agent of the Corporation of a
certificate representing shares duly endorsed or accompanied by proper evidence
of succession, assignment, or authority to transfer, the Corporation or its
transfer agent shall issue a new certificate to the person entitled thereto,
cancel the old certificate, and record the transaction upon its books.
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7.4 Registered Stockholders. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.
7.5 Regulations. The board of directors shall have the power and
authority to make all such rules and regulations as they may deem expedient
concerning the issue, transfer, and registration or the replacement of
certificates for shares of stock of the Corporation.
7.6 Legends. The board of directors shall have the power and authority
to provide that certificates representing shares of stock bear such legends as
the board of directors deems appropriate to assure that the Corporation does not
become liable for violations of federal or state securities laws or other
applicable law.
ARTICLE EIGHT: MISCELLANEOUS PROVISIONS
8.1 Dividends. Subject to provisions of law and the certificate of
incorporation of the Corporation, dividends may be declared by the board of
directors at any regular or special meeting and may be paid in cash, in
property, or in shares of stock of the Corporation. Such declaration and payment
shall be at the discretion of the board of directors.
8.2 Reserves. There may be created by the board of directors out of
funds of the Corporation legally available therefor such reserve or reserves as
the directors from time to time, in their discretion, consider proper to provide
for contingencies, to equalize dividends, or to repair or maintain any property
of the Corporation, or for such other purpose as the board of directors shall
consider beneficial to the Corporation, and the board of directors may modify or
abolish any such reserve in the manner in which it was created.
8.3 Books and Records. The Corporation shall keep correct and complete
books and records of account, shall keep minutes of the proceedings of its
stockholders and board of directors and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.
8.4 Fiscal Year. The fiscal year of the Corporation shall be fixed by
the board of directors; provided, that if such fiscal year is not fixed by the
board of directors and the selection of the fiscal year is not expressly
deferred by the board of directors, the fiscal year shall be the calendar year.
14
<PAGE> 19
8.5 Seal. The seal of the Corporation shall be such as from time to time
may be approved by the board of directors.
8.6 Resignations. Any director, committee member, or officer may resign
by so stating at any meeting of the board of directors or by giving written
notice to the board of directors, the Chairman of the Board, the President, or
the Secretary. Such resignation shall take effect at the time specified therein
or, if no time is specified therein, immediately upon its receipt. Unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
8.7 Securities of Other Corporations. The Chairman of the Board, the
President, or any Vice President of the Corporation shall have the power and
authority to transfer, endorse for transfer, vote, consent, or take any other
action with respect to any securities of another issuer which may be held or
owned by the Corporation and to make, execute, and deliver any waiver, proxy, or
consent with respect to any such securities.
8.8 Telephone Meetings. Stockholders (acting for themselves or through a
proxy), members of the board of directors, and members of a committee of the
board of directors may participate in and hold a meeting of such stockholders,
board of directors, or committee by means of a conference telephone or similar
communications equipment by means of which persons participating in the meeting
can hear each other, and participation in a meeting pursuant to this section
shall constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
8.9 Action Without a Meeting. (a) Unless otherwise provided in the
certificate of incorporation of the Corporation, any action required by the
Delaware General Corporation Law to be taken at any annual or special meeting of
the stockholders, or any action which may be taken at any annual or special
meeting of the stockholders, may be taken without a meeting, without prior
notice, and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders (acting for themselves or
through a proxy) of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which the holders of all shares entitled to vote thereon were present and voted
and shall be delivered to the Corporation by delivery to its registered office
in the State of Delaware, its principal place of business, or an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Every written consent of stockholders
shall bear the date of signature of each stockholder who signs the consent and
no written consent shall be effective to take the corporate action referred to
therein unless, within sixty
15
<PAGE> 20
days of the earliest dated consent delivered in the manner required by this
Section 8.9(a) to the Corporation, written consents signed by a sufficient
number of holders to take action are delivered to the Corporation by delivery to
its registered office in the State of Delaware, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office, principal place of business, or such officer or
agent shall be by hand or by certified or registered mail, return receipt
requested.
(b) Unless otherwise restricted by the certificate of incorporation of the
Corporation or by these bylaws, any action required or permitted to be taken at
a meeting of the board of directors, or of any committee of the board of
directors, may be taken without a meeting if a consent or consents in writing,
setting forth the action so taken, shall be signed by all the directors or all
the committee members, as the case may be, entitled to vote with respect to the
subject matter thereof, and such consent shall have the same force and effect as
a vote of such directors or committee members, as the case may be, and may be
stated as such in any certificate or document filed with the Secretary of State
of the State of Delaware or in any certificate delivered to any person. Such
consent or consents shall be filed with the minutes of proceedings of the board
or committee, as the case may be.
8.10 Invalid Provisions. If any part of these bylaws shall be held
invalid or inoperative for any reason, the remaining parts, so far as it is
possible and reasonable, shall remain valid and operative.
8.11 Mortgages, etc. With respect to any deed, deed of trust, mortgage,
or other instrument executed by the Corporation through its duly authorized
officer or officers, the attestation to such execution by the Secretary of the
Corporation shall not be necessary to constitute such deed, deed of trust,
mortgage, or other instrument a valid and binding obligation against the
Corporation unless the resolutions, if any, of the board of directors
authorizing such execution expressly state that such attestation is necessary.
16
<PAGE> 21
8.12 Headings. The headings used in these bylaws have been inserted for
administrative convenience only and do not constitute matter to be construed in
interpretation.
8.13 References. Whenever herein the singular number is used, the same
shall include the plural where appropriate, and words of any gender should
include each other gender where appropriate.
8.14 Amendments. These bylaws may be altered, amended, or repealed or
new bylaws may be adopted by the stockholders or by the board of directors at
any regular meeting of the stockholders or the board of directors or at any
special meeting of the stockholders or the board of directors if notice of such
alteration, amendment, repeal, or adoption of new bylaws be contained in the
notice of such special meeting.
The undersigned, the Secretary of the Corporation, hereby certifies that
the foregoing bylaws were adopted by unanimous consent by the directors of the
Corporation as of July 18, 1997.
-----------------------------
Eric C. Neuman, Secretary
17
<PAGE> 1
EXHIBIT 3.3
RESTATED CERTIFICATE OF INCORPORATION
OF
LIN TELEVISION CORPORATION
LIN Television Corporation, a corporation organized and existing under
the Delaware General Corporation Law (the "DGCL"), does hereby certify:
1. The original Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on June 18, 1990.
2. The following Restated Certificate of Incorporation was duly
proposed by this corporation's Board of Directors pursuant to the applicable
provisions of Section 242 and Section 245 of the DGCL. In lieu of a meeting of
the stockholders, written consent has been given for the adoption of said
Restated Certificate of Incorporation and the amendments to be made thereby
pursuant to the applicable provisions of Sections 242 and 245 of the DGCL.
ARTICLE 1. NAME
The name of this corporation is LIN Television Corporation.
ARTICLE 2. REGISTERED OFFICE AND AGENT
The address of the initial registered office of this
corporation is Suite L-100, 32 Loockerman Square, Dover, County of Kent,
Delaware 19901, and the name of its initial registered agent at such address is
The Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSES
The purpose of this corporation is to engage in any lawful act
or activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which this corporation
shall have authority to issue is 105,000,000 shares, of which 90,000,000 shares
shall be shares of common stock, par value $0.01 per share, and 15,000,000
shares shall be shares of preferred stock, par value $0.01 per share. Authority
is hereby expressly granted to the Board of Directors to fix by resolution or
resolutions any of the designations and the powers, preferences and rights, and
the qualifications, limitations or restrictions which are permitted by the DGCL
in respect of any class or classes of stock or any series of any class of stock
of the corporation.
<PAGE> 2
ARTICLE 5. BY-LAWS
The Board of Directors shall have the power to adopt, amend or
repeal the By-laws of this corporation; provided, however, that the Board of
Directors may not repeal or amend any by-law that the stockholders have
expressly provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 6. BOARD OF DIRECTORS
The number of Directors of this corporation shall be
determined in the manner provided by the By-laws and may be increased or
decreased from time to time in the manner provided therein. Written ballots are
not required in the election of Directors.
ARTICLE 7. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of
stock or securities convertible into shares of stock of this corporation.
ARTICLE 8. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall
not exist with respect to shares of stock of this corporation.
ARTICLE 9. AMENDMENTS TO CERTIFICATE OF INCORPORATION
This corporation reserves the right to amend or repeal any of
the provisions contained in this Certificate of Incorporation in any manner now
or hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 10. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date
hereof or may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 10
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal. In addition to any requirements or
any other provisions herein or in the terms of any class or series of capital
stock having a preference over the common stock of this corporation as to
dividends or upon liquidation (and notwithstanding that a lesser percentage may
be specified by law), the affirmative vote of the holders of 80% or more of the
voting power of the outstanding
-2-
<PAGE> 3
voting stock of this corporation, voting together as a single class, shall be
required to amend, alter or repeal any provision of this Article 10.
ARTICLE 11. ACTION BY STOCKHOLDERS WITHOUT A MEETING
Action may be taken by the stockholders of this corporation
without a meeting, without prior notice and without a vote, in accordance with
the terms of Section 228 of the DGCL.
ARTICLE 12. FOREIGN OWNERSHIP
To the extent deemed necessary or appropriate by the Board of
Directors to enable this corporation to engage in any business or activity
directly or indirectly conducted by it in compliance with the laws of the United
States of America as now in effect or as they may hereafter from time to time be
amended, this corporation may adopt such by-laws as may be necessary or
advisable to comply with the provisions and avoid the prohibitions of any such
law. Without limiting the generality of the foregoing, such by-laws may restrict
or prohibit the transfer of shares of capital stock of this corporation to, and
the voting of such stock by, aliens or their representatives, or corporation
organized under the laws of any foreign country or their representatives, or
corporations directly or indirectly controlled by aliens or by any such
corporation or representative.
IN WITNESS WHEREOF, the undersigned has executed this document
and affirms, under penalties of perjury, that the statements herein are true and
that this instrument is the act and deed of LIN Television Corporation as of
this 17th day of November, 1994.
LIN TELEVISION CORPORATION
By [ILLEGIBLE]
---------------------------
ATTEST:
/s/ GAYLE C. JONES
- ---------------------------
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<PAGE> 1
EXHIBIT 3.4
RESTATED BY-LAWS
OF
LIN TELEVISION CORPORATION
Originally adopted on November 15, 1994
Amendments are listed on p. i
<PAGE> 2
LIN TELEVISION CORPORATION
AMENDMENTS
<TABLE>
<CAPTION>
Date of
Section Effect of Amendment Amendment
- ----------- ------------------------------ -----------------
<S> <C> <C>
</TABLE>
-i-
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Business for Stockholders' Meetings . . . . . . . . . . . . . . . . . . . . . 2
2.5.1 Business at Annual Meetings . . . . . . . . . . . . . . . . . . 2
2.5.2 Business at Special Meetings . . . . . . . . . . . . . . . . . 3
2.5.3 Notice to Corporation . . . . . . . . . . . . . . . . . . . . . 3
2.6 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6.1 Waiver in Writing . . . . . . . . . . . . . . . . . . . . . . . 4
2.6.2 Waiver by Attendance . . . . . . . . . . . . . . . . . . . . . 4
2.7 Fixing of Record Date for Determining Stockholders . . . . . . . . . . . . . 4
2.7.1 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7.2 Consent to Corporate Action Without a Meeting . . . . . . . . . . 4
2.7.3 Dividends, Distributions and Other Rights . . . . . . . . . . . 5
2.8 Voting List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11.2 Delivery to Corporation; Duration . . . . . . . . . . . . . . . . 7
2.12 Voting of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Voting for Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.14 Action by Stockholders Without a Meeting. . . . . . . . . . . . . . . . . . . . 7
2.15 Inspectors of Election. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.15.1 Appointment.. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.15.2 Duties . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3. BOARD OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Number and Tenure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Nomination and Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3.1 Nomination . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3.2 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 Annual and Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
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<TABLE>
<S> <C>
3.6 Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8.1 In Writing . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8.2 By Attendance . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.11 Action by Board or Committees Without a Meeting . . . . . . . . . . . . . . 12
3.12 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Chairman and Vice Chairman of the Board . . . . . . . . . . . . . . . . . . 12
3.16 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.16.1 Creation and Authority of Committees. . . . . . . . . . . . . . 13
3.16.2 Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . 14
3.16.3 Compensation Committee. . . . . . . . . . . . . . . . . . . . . 14
3.16.4 Retirement Benefit Plans Committee. . . . . . . . . . . . . . . 14
3.16.5 Minutes of Meetings . . . . . . . . . . . . . . . . . . . . . . 15
3.16.6 Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . 15
3.16.7 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.16.8 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.17 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1 Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Election and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.7 Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.8 Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.9 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.10 Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . . . . . . . . . . 18
5.1 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Loans to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Checks, Drafts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
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<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER. . . . . . . . . . . . . . . . . . 19
6.1 Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Certificates for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Stock Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Restriction on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Shares of Another Corporation . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 7. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8. ACCOUNTING YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 10. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.2 Insurance, Contracts and Funding . . . . . . . . . . . . . . . . . . . . . . 22
10.3 Indemnification; Not Exclusive Right . . . . . . . . . . . . . . . . . . . . 22
10.4 Advancement of Expenses; Procedures; Presumptions
and Effect of Certain Proceedings; Remedies . . . . . . . . . . . . . . . . 23
10.5 Effect of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.7 Indemnification of Employees and Agents . . . . . . . . . . . . . . . . . . 25
10.8 Persons Serving Other Entities . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11. AMENDMENTS OR REPEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 12. OWNERSHIP OR VOTING BY ALIENS . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
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RESTATED BY-LAWS
OF
LIN TELEVISION CORPORATION
SECTION 1. OFFICES
The principal office of the corporation shall be located at its principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The corporation may have such other offices, either within or
without the State of Delaware, as the Board may designate or as the business of
the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
May in each year at the principal office of the corporation or such other place
designated by the Board for the purpose of electing Directors and transacting
such other business as may properly come before the meeting. If the day fixed
for the annual meeting is a legal holiday at the place of the meeting, the
meeting shall be held on the next succeeding business day. If the annual
meeting is not held on the date designated therefor, the Chairman of the Board,
the President or the Board shall cause the meeting to be held on such other
date as may be convenient. At any time prior to the commencement of the annual
meeting, the Board may postpone the annual meeting for a period of up to 120
days from the date fixed for such meeting in accordance with this subsection
2.1.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President or the Board may call special
meetings of the stockholders for any purpose. Holders of at least a majority of
all the outstanding shares of the corporation entitled to vote at the meeting
may call special meetings of the stockholders for any purpose by giving notice
to the corporation, as specified in subsection 2.5.3 hereof.
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or
at such other place within or without the State of Delaware designated by the
Board, by any
<PAGE> 7
persons entitled to call a meeting hereunder or in a waiver of notice signed
by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary or the Board
calling an annual or special meeting of stockholders as provided for herein,
shall cause to be delivered to each stockholder entitled to notice of or to
vote at the meeting either personally or by mail, not less than 20 nor more
than 60 days before the meeting, written notice stating the place, day and hour
of the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called. Upon written request of the holders of not
less than the number of outstanding shares of the corporation specified in
subsection 2.2 hereof, the stockholders may request that the corporation call a
special meeting of stockholders. Upon such a request, it shall be the duty of
the Secretary to give notice, within 60 days after receipt of said request, of a
special meeting of stockholders to be held on such date and at such place and
hour as the Secretary may fix, and if the Secretary shall neglect or refuse to
issue such notice, the person making the request may do so and may fix the date
for such meeting. If such notice of any stockholders' meeting is mailed, it
shall be deemed delivered when deposited in the official government mail
properly addressed to the stockholder at such stockholder's address as it
appears on the stock transfer books of the corporation with postage prepaid. If
the notice is telegraphed, it shall be deemed delivered when the content of the
telegram is delivered to the telegraph company. Notice given in any other
manner shall be deemed delivered when dispatched to the stockholder's address,
telephone number or other number appearing on the stock transfer records of the
corporation.
2.5 BUSINESS FOR STOCKHOLDERS' MEETINGS
2.5.1 BUSINESS AT ANNUAL MEETINGS
In addition to the election of directors, other proper business may be
transacted at an annual meeting of stockholders, provided that such business is
properly brought before such meeting. To be properly brought before an annual
meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto), (b) otherwise brought before the meeting by or at the
direction of the Board or the chairman of the meeting or (c) otherwise properly
brought before the meeting by a stockholder. For business to be properly
brought before an annual meeting by a stockholder, the stockholder must have
given timely notice thereof in writing to the Secretary of the corporation. To
be timely, a stockholder's notice must be delivered to, or mailed and received
at, the principal executive offices of the corporation, not less than 60 days
or more than 90 days prior to the meeting; provided, however, that in the event
that less
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than 70 days notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder must be received not
later than the close of business on the 10th day following the date on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. Any such stockholder notice shall set forth (i) the name
and address of the stockholder proposing such business; (ii) a representation
that the stockholder is entitled to vote at such meeting and a statement of the
number of shares of the corporation which are beneficially owned by the
stockholder; (iii) a representation that the stockholder intends to appear in
person or by proxy at the meeting to propose such business; and (iv) as to each
matter the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting, the language of the
proposal (if appropriate), and any material interest of the stockholder in such
business. No business shall be conducted at any annual meeting of stockholders
except in accordance with this subsection 2.5.1. If the facts warrant, the
Board, or the chairman of an annual meeting of stockholders, may determine and
declare (a) that a proposal does not constitute proper business to be
transacted at the meeting or (b) that business was not properly brought before
the meeting in accordance with the provisions of this subsection 2.5.1 and, if,
in either case, it is so determined, any such business shall not be transacted.
The procedures set forth in this subsection 2.5.1 for business to be properly
brought before an annual meeting by a stockholder are in addition to, and not
in lieu of, the requirements set forth in Rule 14a-8 under Section 14 of the
Securities Exchange Act of 1934, as amended, or any successor provision.
2.5.2 BUSINESS AT SPECIAL MEETINGS
At any special meeting of the stockholders, only such business as is
specified in the notice of such special meeting given by or at the direction of
the person or persons calling such meeting, in accordance with subsection 2.4
hereof, shall come before such meeting.
2.5.3 NOTICE TO CORPORATION
Any written notice required to be delivered by a stockholder to the
corporation pursuant to subsection 2.4, subsection 2.5.1 or subsection 2.5.2
hereof must be given, either by personal delivery or by registered or certified
mail, postage prepaid, to the Secretary at the corporation's executive offices.
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2.6 WAIVER OF NOTICE
2.6.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of these By-laws, the Restated Certificate of Incorporation or the
General Corporation Law of the State of Delaware, as now or hereafter amended
(the "DGCL"), a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.
2.6.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.7 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.7.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record
date shall not be more than 60 (or the maximum number permitted by applicable
law) nor less than 10 days before the date of such meeting. If no record date
is fixed by the Board, the record date for determining stockholders entitled to
notice of and to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled
to notice of and to vote at the meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.7.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be more than
10 (or the maximum number permitted by applicable law) days after the date upon
which the resolution
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fixing the record date is adopted by the Board. If no record date has been
fixed by the Board, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting, when no prior action
by the Board is required by Chapter 1 of the DGCL, shall be the first date on
which a signed written consent setting forth the action taken or proposed to be
taken is delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested. If no record date has been fixed by the Board and prior action by
the Board is required by Chapter 1 of the DGCL, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board adopts
the resolution taking such prior action.
2.7.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than 60 (or the maximum number permitted by applicable
law) days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
2.8 VOTING LIST
At least 10 days before each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
shall be made, arranged in alphabetical order, with the address of and number
of shares held by each stockholder. This list shall be open to examination by
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of 10 days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. This list shall also be produced and kept at such
meeting for inspection by any stockholder who is present.
2.9 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
present in person or represented by proxy at the meeting, shall constitute a
quorum at a
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meeting of the stockholders; provided, that where a separate vote by a class or
classes is required, a majority of the outstanding shares of such class or
classes, present in person or represented by proxy at the meeting, shall
constitute a quorum entitled to take action with respect to that vote on that
matter. If less than a majority of the outstanding shares entitled to vote are
represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. If a quorum is present
or represented at a reconvened meeting following such an adjournment, any
business may be transacted that might have been transacted at the meeting as
originally called. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.10 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Restated Certificate of
Incorporation or the DGCL. Where a separate vote by a class or classes is
required, if a quorum of such class or classes is present, the affirmative vote
of the majority of outstanding shares of such class or classes present in
person or represented by proxy at the meeting shall be the act of such class or
classes. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote
on the election of Directors.
2.11 PROXIES
2.11.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by proxy. Such
authorization may be accomplished by (a) the stockholder or such stockholder's
authorized officer, director, employee or agent executing a writing or causing
his or her signature to be affixed to such writing by any reasonable means,
including facsimile signature or (b) by transmitting or authorizing the
transmission of a telegram, cablegram or other means of electronic transmission
to the intended holder of the proxy or to a proxy solicitation firm, proxy
support service or similar agent duly authorized by the intended proxy holder
to receive such transmission; provided, that any such telegram, cablegram or
other electronic transmission must either set forth or be accompanied by
information from which it can be determined that the telegram, cablegram or
other
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electronic transmission was authorized by the stockholder. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or transmission
by which a stockholder has authorized another person to act as proxy for such
stockholder may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of
the entire original writing or transmission.
2.11.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action
in writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
2.12 VOTING OF SHARES
Unless otherwise provided in the Restated Certificate of Incorporation
and subject to the provisions of the DGCL, each stockholder shall be entitled
to one vote for each share of capital stock held by such stockholder.
2.13 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may vote,
in person or by proxy, the number of shares owned by such stockholder for as
many persons as there are Directors to be elected and for whose election such
stockholder has a right to vote.
2.14 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Action may be taken by the stockholders of the corporation without a
meeting, without prior notice and without a vote, in accordance with the terms
of Section 228 of the DGCL.
2.15 INSPECTORS OF ELECTION
2.15.1 APPOINTMENT
In advance of any meeting of stockholders, the Board shall appoint one or
more persons to act as inspectors of election at such meeting and to make a
written report thereof. The Board may designate one or more persons to serve as
alternate inspectors to serve in place of any inspector who is unable or fails
to act. If no
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inspector or alternate is able to act at a meeting of stockholders, the
chairman of such meeting shall appoint one or more persons to act as inspector
of elections at such meeting.
2.15.2 DUTIES
The inspectors of election shall:
(a) ascertain the number of shares of the corporation outstanding
and the voting power of each such share;
(b) determine the shares represented at the meeting and the
validity of proxies and ballots;
(c) count all votes and ballots;
(d) determine and retain for a reasonable period of time a record
of the disposition of any challenges made to any determination by them;
and
(e) certify their determination of the number of shares
represented at the meeting and their count of the votes and ballots.
The validity of any proxy or ballot shall be determined by the inspectors
of election in accordance with the applicable provisions of these By-laws and
the DGCL as then in effect. In determining the validity of any proxy
transmitted by telegram, cablegram or other electronic transmission, the
inspectors shall record in writing the information upon which they relied in
making such determination. Each inspector of elections shall, before entering
upon the discharge of his or her duties, take and sign an oath to faithfully
execute the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspectors of election may appoint or retain
other persons or entities to assist them in the performance of their duties.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the
Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than three nor more than 15
Directors, the specific number to be set by resolution of the Board, provided
that the Board may consist of fewer than three Directors until vacancies are
filled. The maximum and minimum numbers of Directors may be changed from time
to time by amendment to
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these By-laws, but no decrease in the number of Directors shall have the effect
of shortening the term of any incumbent Director. Unless a Director resigns or
is removed, his or her term of office shall expire at the next annual meeting
of stockholders or upon the election of his or her successor. Directors need
not be stockholders of the corporation or residents of the State of Delaware.
3.3 NOMINATION AND ELECTION
3.3.1 NOMINATION
Only persons who are nominated in accordance with the following
procedures shall be eligible for election as Directors at a meeting of
stockholders. Nominations for the election of Directors may be made (a) by or
at the direction of the Board or (b) by any stockholder of record entitled to
vote for the election of Directors at such meeting. Any stockholder entitled to
vote for the election of directors at a meeting may nominate persons for
election as directors only if written notice of such nomination is given in a
timely manner. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the corporation, (i)
with respect to an election to be held at an annual meeting of stockholders,
not less than 60 days or more than 90 days prior to the meeting, provided,
however, that in the event that less than 70 days notice or prior public
disclosure of the date of the annual meeting is given or made to stockholders,
notice by the stockholder must be received not later than the close of business
on the 10th day following the date on which such notice of the date of such
meeting was mailed or such public disclosure was made and (ii) with respect to
an election to be held at a special meeting of stockholders for the election of
directors, not later than the close of business on the 7th day following the
date on which notice of the date of such meeting was mailed or public
disclosure of the date of such meeting was made. Any such stockholder's notice
shall set forth (a) the name and address of the stockholder who intends to make
a nomination; (b) a representation that the stockholder is entitled to vote at
such meeting and a statement of the number of shares of the corporation which
are beneficially owned by the stockholder; (c) a representation that the
stockholder intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice; (d) as to each person the
stockholder proposes to nominate for election or re-election as a Director, the
name and address of such person and such other information regarding such
nominee as would be required in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had such nominee been nominated
by the Board, and a description of any arrangements or understandings, between
the stockholder and such nominee and any other persons (including their names),
pursuant to which the nomination is to be made; and (e) the consent of each
such nominee to serve as a Director if elected. If the facts warrant, the
Board, or the chairman of a stockholders' meeting at which
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Directors are to be elected, may determine and declare that a nomination was
not made in accordance with the foregoing procedure and, if it is so
determined, the defective nomination shall be disregarded. The right of
stockholders to make nominations pursuant to the foregoing procedure is subject
to the rights of the holders of any class or series of stock having a
preference over the common stock as to dividends or upon liquidation. The
procedures set forth in this subsection 3.3 for nomination for the election of
Directors by stockholders are in addition to, and not in limitation of, any
procedures now in effect or hereafter adopted by or at the direction of the
Board or any committee thereof. The procedures set forth in this subsection 3.3
shall not apply to election of Directors by written consent without a meeting.
3.3.2 ELECTION
At each election of Directors the persons receiving the greatest number
of votes, up to the number of Directors to be elected, shall be the Directors,
except that the election of any Director by written consent without a meeting
shall require the consent of the holders of a majority of the outstanding
shares entitled to vote on the election of Directors.
3.4 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after
and at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.5 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board may
be called by or at the request of the Chairman of the Board, the President or,
in the case of special Board meetings, any two Directors and, in the case of
any special meeting of any committee appointed by the Board, by the Chairman
thereof. The person or persons authorized to call special meetings may fix any
place either within or without the State of Delaware as the place for holding
any special meeting called by them.
3.6 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
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participating in the meeting can hear one another. Participation by such means
shall constitute presence in person at a meeting.
3.7 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally by
telephone or in person and received at least two days before the meeting.
Neither the business to be transacted at, nor the purpose of, any special
meeting need be specified in the notice of such meeting. Each Director shall
promptly confirm to the Company, in writing or orally, receipt of any such
notice and may designate in writing to the Company one or more agents empowered
to confirm receipt of such notice by such Director. The notice shall be
effective if receipt of such notice by a Director is confirmed, orally or in
writing, by the Director or any agent so designated by such Director.
3.8 WAIVER OF NOTICE
3.8.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provisions of these By-laws, the Restated Certificate of Incorporation or the
DGCL, a waiver thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.8.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened.
3.9 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of
the total number of Directors then serving on the Board, provided, however,
that such number may be not less than one-third of the total number of
Directors fixed by or in the manner provided in these By-laws, shall constitute
a quorum for the transaction of business at any Board meeting. If less than a
majority are present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
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3.10 MANNER OF ACTING
The act of the majority of the Directors present at a Board or committee
meeting at which there is a quorum shall be the act of the Board or committee,
unless the vote of a greater number is required by these By-laws, the Restated
Certificate of Incorporation or the DGCL.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to
the Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, or by
written consent without a meeting, one or more members of the Board
(including the entire Board) may be removed, with or without cause, by a vote
of the holders of a majority of the shares then entitled to vote on the
election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative
vote of a majority of the remaining Directors though less than a quorum of the
Board. A Director elected to fill a vacancy shall be elected for the unexpired
term of his or her predecessor in office. Any directorship to be filled by
reason of an increase in the number of Directors may be filled by the Board.
3.15 CHAIRMAN AND VICE CHAIRMAN OF THE BOARD
The Board shall elect a Chairman of the Board who shall preside over
all meetings of the Board and the stockholders of the corporation. The Chairman
shall provide advice and counsel to the Board and the chief executive officer
with respect
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to the development, implementation and performance of the policies and
strategic plans of the corporation and shall participate in the affairs of the
corporation with its senior management to the extent he or she determines such
participation to be advisable in order to fulfill such duties as may be related
to his or her position as Chairman of the Board.
The Board may also elect one or more Vice Chairmen of the Board. In
the absence of the Chairman of the Board, the Vice Chairmen of the Board in
order of their rank as fixed-by the Board or, if not ranked, the Vice Chairman
of the Board designated by the Board, shall, if present, preside at all
meetings of the Board and the stockholders of the corporation. The Vice
Chairmen of the Board shall have such other duties as from time to time may be
prescribed for them, respectively, by the Board or the Chairman of the Board.
3.16 COMMITTEES
3.16.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed in the manner provided in these By-laws, appoint standing or
temporary committees, each committee to consist of one or more Directors of the
corporation. The Board may designate one or more Directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board establishing
such committee or as otherwise provided in these By-laws, shall have and may
exercise all the powers and authority of the Board in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which require it; but no such committee
shall have power or authority in reference to (a) amending the Restated
Certificate of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of
shares of stock adopted by the Board as provided in Section 15.1 (a) of the
DGCL, fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger
or consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these By-laws; and, unless
expressly provided by
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resolution of the Board, no such committee shall have the power or authority to
declare a dividend, to authorize the issuance of stock or to adopt a
certificate of ownership and merger pursuant to Section 253 of the DGCL.
3.16.2 AUDIT COMMITTEE
In addition to any committees appointed pursuant to this subsection
3.16, there shall be an Audit Committee, appointed annually by the Board,
consisting of at least two Directors who are not members of management. It
shall be the responsibility of the Audit Committee to review the scope and
results of the annual independent audit of books and records of the
corporation, to review the accounting principles, policies and practices of the
corporation and to discharge such other responsibilities as may from time to
time be assigned to it by the Board. The Audit Committee shall meet at such
times and places as the members deem advisable, and shall make such
recommendations to the Board as they consider appropriate.
3.16.3 COMPENSATION COMMITTEE
The Board may, in its discretion, designate a Compensation Committee
consisting of not less than two Directors who are not employees, for the
purposes of determining and administering the compensation program for the
executive officers of the Company, including determining overall philosophy,
policies and objectives, evaluating performances and approving all salaries,
bonuses, options and other elements of compensation for executive officers of
the corporation, and for the purposes of granting and administering all stock
options, stock appreciation rights and restricted stock for, any eligible
parties that may be issued under any plan for the corporation now existing or
adopted in the future. The Compensation Committee shall also perform such other
duties as shall be assigned to it by the Board.
3.16.4 RETIREMENT BENEFIT PLANS COMMITTEE
The Board may, in its discretion, designate a Retirement Benefit Plans
Committee consisting of three Directors as it may from time to time determine.
The duties of the Retirement Benefit Plans Committee shall consist of the
following: (a) adopting amendments to the corporation's tax-qualified plans;
(b) appointing and removing trustees, and amending and entering into trust
agreements with respect to such plans; (c) terminating any of the corporation's
tax-qualified plans and/or related trust agreements; (4) approving the merger
or consolidation of any of the corporation's tax-qualified plans into another
plan, and approving the participation of other control group employers in such
plans; (e) appointing an internal Administrative Committee to be responsible
for the day to day administration of such plans and for the investment of the
assets thereof, and (f) redelegating any of the above functions to other
fiduciaries.
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3.16.5 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their
meetings and shall cause them to be recorded in books kept for that purpose.
3.16.6 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the
Board, as established and fixed by resolution of the Board, shall constitute a
quorum for the transaction of business at any meeting of such committee but, if
less than a majority are present at a meeting, a majority of such Directors
present may adjourn the meeting from time to time without further notice. The
act of a majority of the members of a committee present at a meeting at which a
quorum is present shall be the act of such committee.
3.16.7 RESIGNATION
Any member of any committee may resign at any time by delivering
written notice thereof to the Chairman of the Board, the President, the
Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.16.8 REMOVAL
The Board may remove from office any member of any committee elected
or appointed by it, but only by the affirmative vote of not less than a
majority of the number of Directors fixed by or in the manner provided in these
By-laws.
3.17 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, a fixed sum
for attendance at each Board or committee meeting or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
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SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President and a Secretary,
each of whom shall be elected by the Board. One or more Vice Presidents
(including Executive and Senior Vice Presidents), a Treasurer and such other
officers and assistant officers may be elected or appointed by the Board, such
officers and assistant officers to hold office for such period, have such
authority and perform such duties as are provided in these By-laws or as may be
provided by resolution of the Board. Any officer may be assigned by the Board
any additional title that the Board deems appropriate. The Board may delegate
to any officer or agent the power to appoint any such subordinate officers or
agents and to prescribe their respective terms of office, authority and duties.
Any two or more offices may be held by the same person.
4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board
at the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held
as soon thereafter as a Board meeting conveniently may be held. Unless an
officer dies, resigns or is removed from office, he or she shall hold office
until the next annual meeting of the Board or until his or her successor is
elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed
by the Board with or without cause, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the
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Board for the unexpired portion of the term, or for a new term established by
the Board.
4.6 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board. The President shall
supervise and control all of the assets, business and affairs of the
corporation and shall have the direction of all other officers, employees and
agents. The President may sign, with the Secretary or any Assistant Secretary
or with the Treasurer or an Assistant Treasurer, certificates for shares of the
corporation, deeds, mortgages, bonds, contracts or other instruments. In
general, the President shall perform all duties incident to the office of the
chief executive officer of a corporation and such other duties as are
prescribed by the Board from time to time.
4.7 VICE PRESIDENT
In the event of the death of the President or his or her inability to
act, the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may be limited by
resolution of the Board, with all the powers of and subject to all the
restrictions upon the President. Any Vice President may sign with the Secretary
or any Assistant Secretary certificates for shares of the corporation. Vice
Presidents shall have, to the extent authorized by the President or the Board,
the same powers as the President to sign deeds, mortgages, bonds, contracts or
other instruments. Vice Presidents shall perform such other duties as from time
to time may be assigned to them by the President or the Board.
4.8 SECRETARY
The Secretary shall be responsible for preparation of minutes of
meetings of the Board and stockholders) maintenance of the corporation's
records and stock registers, and authentication of the corporation's records
and shall in general perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him or her by the
President or the Board. In the absence of the Secretary, an Assistant Secretary
may perform the duties of the Secretary.
4.9 TREASURER
If required by the Board, the Treasurer shall give a bond for the
faithful discharge of his or her duties in such amount and with such surety or
sureties as the Board shall determine. The Treasurer shall: have charge and
custody of and be
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responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in
banks, trust companies or other depositories selected in accordance with the
provisions of these By-laws; sign certificates for shares of the corporation;
and in general perform all of the duties, incident to the office of Treasurer
and such other duties as from time to time may be assigned to him or her by the
President or the Board. In the absence of the Treasurer, an Assistant Treasurer
may perform the duties of the Treasurer.
4.10 SALARIES
The salaries of the officers shall be fixed from time to time by the
Board or by any person or persons to whom the Board has delegated such
authority. No officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, employee or
employees, or agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation and may
authorize such officers, employees and agents to delegate such power (including
power to redelegate) by written instrument to other officers, employees or
agents of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board. Such authority may be general or confined to specific
instances.
5.3 CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, or agent or agents, of the corporation and
in such manner as is from time to time determined by resolution of the Board.
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5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by
the Chairman of the Board or a Vice Chairman of the Board, if any, or the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, any of whose signatures may be a
facsimile. The Board may in its discretion appoint responsible banks or trust
companies from time to time to act as transfer agents and registrars of the
stock of the corporation; and, when such appointments shall have been made, no
stock certificate shall be valid until countersigned by one of such transfer
agents and registered by one of such registrars. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person was such officer, transfer
agent or registrar at the date of issue. All certificates shall include on
their face written notice of any restrictions which may be imposed on the
transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
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<PAGE> 25
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restrictions are not required, all certificates representing
shares of the corporation' shall bear a legend on the face of the certificate,
or on the reverse of the certificate if a reference to the legend is contained
on the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged
or otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering
any such transaction involving said securities or (b) this corporation
receives an opinion of legal counsel for the holder of these
securities (concurred in by legal counsel for this corporation)
stating that such transaction is exempt from registration or this
corporation otherwise satisfies itself that such transaction is exempt
from registration. Neither the offering of the securities nor any
offering materials have been reviewed by any administrator under the
Securities Act of 1933 or any applicable state law."
6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the
stock transfer books of the corporation pursuant to authorization or document
of transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed
and filed with the Secretary of the corporation. All certificates surrendered
to the corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificates for a like number of shares shall have
been surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
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6.7 SHARES OF ANOTHER CORPORATION
Shares owned by the corporation in another corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the Board may
determine or, in the absence of such determination, by the Chairman of the
Board, the Vice Chairman of the Board, the President or any Vice President of
the corporation.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account stock transfer books, minutes of the proceedings of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year,
provided that if a different accounting year is at any time selected for
purposes of federal income taxes, the accounting year shall be the year so
selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
SECTION 10. INDEMNIFICATION
10.1 INDEMNIFICATION
The corporation shall to the fullest extent permitted by the DGCL as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the corporation to
provide broader indemnification rights than permitted prior thereto) or by
applicable law as then in effect indemnify and hold harmless any person (the
"Indemnitee") who is or was a director or officer of the corporation and who is
or was involved in any manner (including, without limitation, as a party or a
witness) or is threatened to be made so involved in any threatened, pending or
completed investigation, claim, action, suit or proceeding, whether civil,
criminal, administrative or investigative (including, without limitation, any
action, suit or proceeding by or in the right of the corporation to procure a
judgment in its favor) (a "Proceeding") by reason of the fact that such person
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan) whether
the basis of such Proceeding is
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alleged action in an official capacity as such a director, officer, employee or
agent or in any other capacity while serving as such a director, officer,
employee or agent, against all expenses (including attorneys' fees and ERISA
excise taxes or penalties), liabilities, losses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such Proceeding and such indemnification shall continue as to
an Indemnitee who has ceased to be a director, officer, employee or agent;
provided, however, except as provided in subsection 10.4(d) hereof, the
foregoing shall not apply to a director or officer of the corporation with
respect to a Proceeding (or part thereof) that was commenced by such director
or officer unless the Proceeding (or part thereof) was authorized or ratified
by the Board. Such indemnification shall be a contract right and shall include
the right to receive payment in advance for any expenses incurred by the
Indemnitee in accordance with subsection 10.4 hereof
10.2 INSURANCE, CONTRACTS AND FUNDING
The corporation may purchase and maintain insurance to protect itself
and any director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise, including,
without limitation, any employee benefit plan, against any expenses,
liabilities, losses, judgments, fines and amounts paid in settlement whether or
not the corporation would have the power to indemnify such person against such
expenses, liabilities, losses, judgments, fines or amounts paid in settlement
under the DGCL. The corporation may enter into contracts with any person
entitled to indemnification under this Section 10 in furtherance of the
provisions of this Section 10 and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Section 10.
10.3 INDEMNIFICATION; NOT EXCLUSIVE RIGHT
The indemnification provided for in this Section 10 shall not be
exclusive of any other rights to which those seeking indemnification may
otherwise be entitled, and the provisions of this Section 10 shall inure to the
benefit of the heirs and legal representatives of any person entitled to
indemnity under this Section 10 and shall be applicable to Proceedings
commenced or continuing after the adoption of this Section 10, whether arising
from acts or omissions occurring before or after such adoption.
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10.4 ADVANCEMENT OF EXPENSES; PROCEDURES; PRESUMPTIONS AND EFFECT
OF CERTAIN PROCEEDINGS; REMEDIES
In furtherance, but not in limitation, of the foregoing provisions,
the following procedures, presumptions and remedies shall apply with respect to
advancement of expenses and the right to indemnification under this Section 10:
(a) Advancement of Expenses. All reasonable expenses
incurred by or on behalf of the Indemnitee in connection with any
Proceeding shall be advanced to the Indemnitee by the corporation
within 20 days after the receipt by the corporation of a statement or
statements from the Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of
such Proceeding. Such statement or statements shall reasonably
evidence the expenses incurred by the Indemnitee and, if required by
law at the time of such advance, shall include or be accompanied by an
undertaking by or on behalf of the Indemnitee to repay the amounts
advanced if it should ultimately be determined by final judicial
decision from which there is no further right to appeal that the
Indemnitee is not entitled to be indemnified against such expenses
pursuant to this Section 10.
(b) Procedure for Determination of Entitlement to
Indemnification. To obtain indemnification under this Section 10, an
Indemnitee shall submit to the Secretary of the corporation a written
request, including such documentation and information as is reasonably
available to the Indemnitee and reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to
indemnification (the "Supporting Documentation"). The determination of
the Indemnitee's entitlement to indemnification shall be made not
later than 60 days after receipt by the corporation of the written
request for indemnification together with the Supporting
Documentation. The Secretary of the corporation shall, promptly upon
receipt of such a request for indemnification, advise the Board in
writing that the Indemnitee has requested indemnification.
(c) Presumptions. The Indemnitee shall be presumed to be
entitled to indemnification under this Section 10 upon submission of a
request for indemnification together with the Supporting Documentation
in accordance with subsection 10.4(b) hereof, and the corporation
shall have the burden of proof to overcome that presumption in
reaching a contrary determination. Neither the failure of the
corporation (including its Board, independent legal counsel or its
stockholders) to have made a determination that indemnification of the
Indemnitee is proper in the circumstances prior to the commencement of
a judicial proceeding under the provisions of subsection 10.4(d)
hereof nor an
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actual determination by the corporation (including its Board,
independent legal counsel or its stockholders) that the Indemnitee is
not entitled to indemnification shall be a defense to the judicial
proceeding or create a presumption that the Indemnitee is not so
entitled. The termination of any Proceeding described in subsection
10.1 hereof, or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, adversely affect the right of
the Indemnitee to indemnification or create a presumption that the
Indemnitee did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the corporation or, with respect to any criminal Proceeding, that the
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
(d) Remedies of Indemnitee.
(i) If a claim under this Section 10 is not paid
in full by the corporation within 60 days after a written request has
been submitted to the corporation in accordance with the provisions of
subsection 10.4(b) hereof or, in the case of a claim for an
advancement of expenses, 20 days after the receipt by the corporation
of a statement requesting such advance in accordance with the
provisions of subsection 10.4(a) hereof, then the Indemnitee shall be
entitled to seek an adjudication of his entitlement to such
indemnification in an appropriate court of the State of Delaware or
any other court of competent jurisdiction.
(ii) The corporation shall be precluded from
asserting in any judicial proceeding commenced pursuant to this
subsection 10.4(d) that the procedures and presumptions of this
Section 10 are not valid, binding and enforceable and shall stipulate
in any such court that the corporation is bound by all the provisions
of this Section 10.
(iii) In the event that the Indemnitee, pursuant to
this subsection 10.4(d), seeks a judicial adjudication to enforce his
rights under, or to recover damages for breach of, this Section 10, the
Indemnitee shall be entitled to recover from the corporation, and
shall be indemnified by the corporation against, any expenses actually
and reasonably incurred by the Indemnitee if the Indemnitee prevails
in such judicial adjudication in whole or in part.
10.5 EFFECT OF AMENDMENTS
Neither the amendment or repeal of, nor the adoption of a provision
inconsistent with, any provision of this Section 10 (including, without
limitation, this
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subsection 10.5) shall adversely affect the rights of any director or officer
under this Section 10 with respect to any Proceeding arising out of any action
or omission occurring prior to such amendment, repeal or adoption of an
inconsistent provision, in either case without the written consent of such
director or officer.
10.6 SEVERABILITY
If any provision or provisions of this Section 10 shall be held to be
invalid, illegal or unenforceable for any reason whatsoever, (a) the validity,
legality and enforceability of the remaining provisions of this Section 10
(including, without limitation, all portions of any paragraph of this Section
10 containing any such provision held to be invalid, illegal or unenforceable
that are not themselves invalid, illegal or unenforceable) shall not in any way
be affected or impaired thereby and (b) to the fullest extent possible, the
provisions of this Section 10 (including, without limitation, all portions of
any paragraph of this Section 10 containing any such provision held to be
invalid, illegal or unenforceable that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
10.7 INDEMNIFICATION OF EMPLOYEES AND AGENTS
Notwithstanding any other provision or provisions of this Section 10,
the corporation may indemnify any person (other than a director or officer of
the corporation) who is or was involved in any manner (including, without
limitation, as a party or a witness) or is threatened to be made so involved in
any Proceeding by reason of the fact that such person is or was an employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including, without
limitation, any employee benefit plan) against all expenses (including
attorneys' fees and ERISA excise taxes or penalties), liabilities, losses,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such Proceeding.
10.8 PERSONS SERVING OTHER ENTITIES
Any person who is or was a director, officer or employee of the
corporation who is or was serving (a) as a director or officer of another
corporation of which a majority of the shares entitled to vote in the election
of its directors is held by the corporation or (b) in an executive or
management capacity in a partnership, joint venture, trust or other enterprise
of which the corporation or a wholly owned subsidiary of the corporation is a
general partner or has a majority ownership shall be deemed to be so serving at
the request of the corporation and entitled to indemnification and advancement
of expenses as provided under this Section 10.
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SECTION 11. AMENDMENTS OR REPEAL
The Board shall have the power to adopt, amend or repeal these
By-laws; provided, however, that the Board may not repeal or amend any by-law
that the stockholders have expressly provided may not be amended or repealed by
the Board. The stockholders shall also have the power to adopt, amend or repeal
these By-laws.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed
to include the following and their representatives: an individual not a citizen
of the United States of America; a partnership unless a majority of the
partners are citizens of the United States of America and have a majority
interest in the partnership profits; a foreign government; a corporation,
joint-stock company or association organized under the laws of a foreign
country; and any other corporation, joint-stock company or association directly
or indirectly controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of
voting stock of the corporation of any class outstanding shall at any time be
owned of record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by or for the
account of Aliens, and the citizenship of transferees thereof, shall be
determined in conformity with regulations prescribed by the Board. There shall
be maintained separate stock records, a domestic record of shares of stock held
by citizens and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to
an Alien shall be marked "Foreign Share Certificate," but under no
circumstances shall certificates representing more than one-fifth of the
aggregate number of shares of voting stock of any class outstanding at any one
time be so marked, nor shall the total amount of voting stock represented by
Foreign Share Certificates, plus the amount of voting stock owned by or for the
account of Aliens and represented by certificates not so marked, exceed
one-fifth of the aggregate number of shares of voting stock of any class
outstanding. Every certificate issued not marked "Foreign Share Certificate"
shall be marked "Domestic Share Certificate." Any stock represented by Foreign
Share Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the
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holder of such stock shall not be entitled to vote, to receive dividends or to
have any other rights, except the right to transfer such stock to a citizen of
the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than
one-fourth of the directors are Aliens, or of which more than one-fourth of the
stock is owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such
other provisions as the Board may deem necessary or desirable to comply with
the provisions of Section 310(a) of the Federal Communications Act as now in
effect or as it may hereafter from time to time be amended, and to carry out
the provisions of this Section 12 and of Article 12 of the Restated Certificate
of Incorporation.
* * * * *
The foregoing Amended and Restated By-laws were adopted by the Board
of Directors on November 15, 1994. Section 10 hereof ("Indemnification") was
approved by the sole stockholder on November 16, 1994.
/s/ ROBERT R. KATZ
-----------------------------
Secretary
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EXHIBIT 3.5
CERTIFICATE OF INCORPORATION
OF
AIRWAVES, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code, and
the acts amendatory thereof and supplemental thereto, and known, identified,
and referred to as the "General Corporation Law of the State of Delaware"),
hereby certifies that:
ARTICLE 1. NAME
The name of this corporation is Airwaves, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
Suite L-100, 32 Loockerman Square, City of Dover, County of Kent, Delaware,
19904; and the name of the registered agent of the corporation in the State of
Delaware is The Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have
the authority to issue is 1,000. The par value of each such shares is $.01. All
such shares are of one class and are shares of Common Stock.
<PAGE> 2
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Broadcasting Corporation, 5295 Carillon Point,
Kirkland, WA 98033
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation; provided, however, that the Board of Directors
may not repeal or amend any By-law that the stockholders have expressly
provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
2
<PAGE> 3
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or
may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 11
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts of omissions of such director
occurring prior to such amendment or repeal. In addition to any requirements or
any other provisions herein or in the terms of any class or series of capital
stock having a preference over the common stock of this corporation as to
dividends or upon liquidation (and notwithstanding that a lesser percentage may
be specified by law), the affirmative vote of the holders of 80% or more of the
voting power of the outstanding voting stock of this corporation, voting
together as a single class, shall be required to amend, alter or repeal any
provision of this Article 11.
Signed on June 20, 1995.
-----------------------------------------
Gayle C. Toney, Incorporator
3
<PAGE> 1
EXHIBIT 3.6
BY-LAWS
OF
AIRWAVES, INC.
<PAGE> 2
AIRWAVES, INC.
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SECTION 1. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1. Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3. Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4. Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.1. Waiver in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.2. Waiver by Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6. Fixing of Record Date for Determining Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.1. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.2. Consent to Corporate Action Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.3. Dividends, Distributions and Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7. Voting List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.9. Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.2. Delivery to Corporation; Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.11. Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.12. Voting for Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.13. Action by Stockholders Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1. General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2. Number and Tenure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3. Annual and Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5. Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6. Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6.1. Personal Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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3.6.2.Delivery by Mail 8
3.6.3. Delivery by Private Carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6.4. Facsimile Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6.5. Delivery by Telegraph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6.6. Oral Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7.1. In Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7.2. By Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9. Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10. Presumption of Assent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11. Action by Board or Committees Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15. Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15.1. Creation and Authority of Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15.2. Minutes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15.3. Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15.4. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.5. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.6. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1. Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2. Election and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.4. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.5. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.6. Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.7. President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.8. Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.9. Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.10. Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.11. Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1. Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2. Loans to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3. Check, Drafts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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5.4. Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6. CERTIFICATES FOR SHARES AND THEIR
TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1. Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.2. Certificates for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3. Stock Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4. Restriction on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.5. Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.6. Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8. ACCOUNTING YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 10. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.1. Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.2. Right of Indemnitee to Bring Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.3. Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.4. Insurance, Contracts and Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.5. Indemnification of Employees and Agents of the Corporation . . . . . . . . . . . . . . . . . . . . . 20
10.6. Persons Serving other Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 11. AMENDMENTS OR REPEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 12. OWNERSHIP OR VOTING BY ALIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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BY-LAWS
OF
AIRWAVES, INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at its
principal place of business or such other place as the Board of Directors (the
"Board") may designate. The corporation may have such other offices, either
within or without the State of Delaware, as the Board may designate or as the
business of the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1. ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday
in March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If
the day fixed for the annual meeting is a legal holiday at the place of the
meeting, the meeting shall be held on the next succeeding business day. If the
annual meeting is not held on the date designated therefor, the Board shall
cause the meeting to be held as soon thereafter as may be convenient.
2.2. SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of
not less than one-tenth of all the outstanding shares of the corporation
entitled to vote at the meeting may call special meetings of the stockholders
for any purpose.
2.3. PLACE OF MEETING
All meetings shall be held at the principal office of the corporation
or at such other place within or without the State of Delaware designated by
the Board, by any persons entitled to call a meeting hereunder or in a waiver
of notice signed by all of the stockholders entitled to notice of the meeting.
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2.4. NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5. WAIVER OF NOTICE
2.5.1. WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under
the provisions of the By-laws, the Certificate of Incorporation or the General
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled
to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
2.5.2. WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver
of notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
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2.6. FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1. MEETINGS
For the purpose of determining stockholders entitled to notice of and
to vote at any meeting of stockholders or any adjournment thereof, the Board
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board, and which record
date shall not be more than sixty (or the maximum number permitted by
applicable law) nor less than ten days before the date of such meeting. If no
record date is fixed by the Board, the record date for determining stockholders
entitled to notice of and to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of stockholders of record
entitled to notice of and to vote at the meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2. CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be more than
ten (or the maximum number permitted by applicable law) days after the date
upon which the resolution fixing the record date is adopted by the Board. If
no record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter I of the
DGCL, shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to a corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board and prior action by the Board is required by Chapter I of the DGCL,
the record date for determining stockholders entitled to consent to corporate
action is writing without a meeting shall be at the close of business on the
day on which the Board adopts the resolution taking such prior action.
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2.6.3. DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by
applicable law) days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto.
2.7. VOTING LIST
At least ten days before each meeting of stockholders, a complete list
of the stockholders entitled to vote at such meeting, or any adjournment
thereof, shall be made, arranged in alphabetical order, with the address of and
number of shares held by each stockholder. This list shall be open to
examination by any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period often days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. This list shall also be produced and
kept at such meeting for inspection by any stockholder who is present.
2.8. QUORUM
A majority of the outstanding shares of the corporation entitled to
vote, present in person or represented by proxy at the meeting, shall
constitute a quorum at a meeting of the stockholders; provided, that where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy at
the meeting, shall constitute a quorum entitled to take action with respect to
that vote on that matter. If less than a majority of the outstanding shares
entitled to vote are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
If a quorum is present or represented at a reconvened meeting following such an
adjournment, any business may be transacted that might have been transacted at
the meeting as originally called. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
4
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2.9. MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation
or the DGCL. Where a separate vote by a class or classes is required, if a
quorum of such class or classes is present, the affirmative vote of the
majority of outstanding shares of such class or classes present in person or
represented by proxy at the meeting shall be the act of such class or classes.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of Directors.
2.10. PROXIES
2.10.1. APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to,
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by proxy. Such
authorization may be accomplished by (a) the stockholder or such stockholder's
authorized officer, director, employee or agent executing a writing or causing
his or her signature to be affixed to such writing by any reasonable means,
including facsimile signature or (b) by transmitting or authorizing the
transmission to the intended holder of the proxy or to a proxy solicitation
firm, proxy support service or similar agent duly authorized by the intended
proxy holder to receive such transmission; provided, that any such telegram,
cablegram or other electronic transmission must either set forth or be
accompanied by information from which it can be determined that the telegram,
cablegram or other electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission by which a stockholder has authorized another person to
act as proxy for such stockholder may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the
original writing or transmission could be used, provided that such copy,
facsimile telecommunication or other reproduction shall e a complete
reproduction of the entire original writing or transmission.
2.10.2. DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action
in writing. A proxy shall
5
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become invalid three years after the date of its execution unless otherwise
provided in the proxy. A proxy with respect to a specified meeting shall
entitle the holder thereof to vote at any reconvened meeting following
adjournment of such meeting but shall not be valid after the final adjournment
thereof.
2.11. VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject
matter of an issue submitted to a meeting of stockholders shall be entitled to
one vote upon each issue.
2.12. VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may
vote, in person or by proxy, the number of shares owned by such stockholder for
as many persons as there are Directors to be elected and for whose election
such stockholder has a right to vote.
2.13. ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof
are delivered to the corporation, in the manner required by this Section,
within sixty (or the maximum number permitted by applicable law) days of the
earliest dated consent delivered to the corporation in the manner required by
this Section. The validity of any consent executed by a proxy for a
stockholder pursuant to a telegram, cablegram or other means of electronic
transmission transmitted to such proxy holder by or upon the authorization of
the stockholder shall be determined by or at the direction of the Secretary. A
written record of the information upon which the person making such
determination relied shall be made and kept in the records of the proceedings
of the stockholders. Any such consent shall be inserted in the minute book as
if it were the minutes of the stockholders.
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SECTION 3. BOARD OF DIRECTORS
3.1. GENERAL POWERS
The business and affairs of the corporation shall be managed by the
Board.
3.2. NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The
number of Directors may be changed from time to time by amendment to these
By-laws, but no decrease in the number of Directors shall have the effect of
shortening the term of any incumbent Director. Unless a Director dies,
resigns, or is removed, he or she shall hold office until the next annual
meeting of stockholders or until his or her successor is elected, whichever is
later. Directors need not be stockholders of the corporation or residents of
the State of Delaware.
3.3. ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after
and at the same place as the annual meeting of stockholders. By resolution,
the Board or any committee designated by the Board may specify the time and
place either within or without the State of Delaware for holding regular
meetings thereof without other notice than such resolution.
3.4. SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board
may be called by or at the request of the Chairman of the Board, the President,
the Secretary or, in the case of special Board meetings, any Director and, in
the case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings
may fix any place either within or without the State of Delaware as the place
for holding any special meeting called by them.
3.5. MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can
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hear each other. Participation by such means shall constitute presence in
person at a meeting.
3.6. NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day
and hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such
meeting.
3.6.1. PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective
if delivered to a Director at least two days before the meeting.
3.6.2. DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective
if deposited in the official government mail properly address to a Director at
his or her address shown on the records of the corporation with postage prepaid
at least five days before the meeting.
3.6.3. DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed
effective when dispatched to a Director at his or her address shown on the
records of the corporation at least three days before the meeting.
3.6.4. FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5. DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed
effective if the content thereof is delivered to the telegraph company at least
two days before the meeting for delivery to a Director at his or her address
shown on the records of the cooperation.
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3.6.6. ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice
shall be deemed effective if personally given to the Director at least two days
before the meeting.
3.7. WAIVER OF NOTICE
3.7.1. IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2. BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened.
3.8. QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of
ilie total number of Directors then serving on the Board, provided, however,
that such number may not be less than one-third of the total number of
Directors fixed by or in the manner provided in these By-laws, shall constitute
a quorum for the transaction of business at any Board meeting. If less than a
majority are present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
3.9. MANNER OF ACTING
The act of the majority of the Directors present at a Board or
committee meeting at which there is a quorum shall be the act of the or
committee, unless the vote of a greater number is required by these By-laws,
the Certificate of Incorporation or the DGCL.
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3.10. PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his or her dissent is entered in the
minutes of the meeting, or unless such Director files a written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the meeting.
A Director who voted in favor of such action may not dissent.
3.11. ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
3.12. RESIGNATION
Any Director may resign at any Wine by delivering written notice to
the Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect
at the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13. REMOVAL
At a meeting of stockholders called expressly for that purpose, one or
more members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14. VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative
vote of a majority of the remaining Directors though less than a quorum of the
Board. A Director elected to fill a vacancy shall be elected for the unexpired
term of his or her predecessor in office. Any directorship to be filled by
reason of an increase in the number of Directors may be filled by the Board.
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3.15. COMMITTEES
3.15.1. CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member
of a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board establishing
such committee or as otherwise provided in these By-laws, shall have and may
exercise all the powers and authority of the Board in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which require it, but no such committee
shall have the power to authority in reference to (a) amending the Certificate
of Incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the Board as provided in Section 151(a) of the DGCL, fix the designations,
preferences or rights of such shares to the extent permitted under Section 141
of the DGCL), (b) adopting an agreement of merger or consolidation under
Sections 251 or 252 of the DGCL, (c) recommending to the stockholders the sale,
lease or exchange or other disposition of all or substantially all of the
property and assets of the corporation, (d) recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or (e)
amending these Bylaws; and, unless expressly provided by resolution of the
Board, no such committee shall have the power or authority to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the DGCL.
3.15.2. MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their
meetings and shall cause them to be recorded in book kept for that purpose.
3.15.3. QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the
Board, as established and fixed by resolution of the Board, shall constitute a
quorum for the transaction
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of business at any meeting of such committee but, if less than a majority are
present at a meeting, a majority of such Directors present may adjourn the
meeting from time to time without further notice. The act of a majority of the
members of a committee present at a meeting at which a quorum is present shall
be the act of such committee.
3.15.4. RESIGNATION
Any member of any committee may resign at any time by delivering
written notice thereof to the Chairman of the Board, the President, the
Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5. REMOVAL
The Board may remove from office any member of any committee elected
or appointed by it, but only by the affirmative vote of not less than a
majority of the number of Directors fixed by or in the manner provided in these
By-laws.
3.15.6. COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1. NUMBER
The officers of the corporation shall be a President, a Secretary and
a Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any
additional title that the Board deems appropriate. The Board may delegate to
any officer or agent the power to
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appoint any such subordinate officers or agents and to prescribe their
respective terms of office, authority and duties. Any two or more offices may
be held by the same person.
4.2. ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board
at the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held
as soon thereafter as a Board meeting conveniently may be held. Unless an
officer dies, resigns or is removed from office, he or she shall hold office
until the next annual meeting of the Board or until his or her successor is
elected.
4.3. RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein,
or if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4. REMOVAL
Any officer or agent elected or appointed by the Board may be removed
by the Board whenever in its Judgment the best interests of the corporation
would be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
4.5. VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6. CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as
shall be assigned to him or her by the Board from time to time and shall
preside over meetings of the Board and stockholders unless another officer is
appointed or designated by the Board as Chairman of such meeting.
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4.7. PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over of
the Board and stockholders in the absence of a Chairman of the Board and,
subject to the Board's control, shall supervise and control all of the assets,
business and affairs of the corporation. The President may sign certificates
for shares of the corporation, deeds, mortgages, bonds, contracts or other
instruments, except when the signing and execution thereof have been expressly
delegated by the Board or by these By-laws to some other officer or agent of
the corporation or are required by law to be otherwise signed or executed by
some other officer or in some other manner. In general, the President shall
perform all duties incident to the office of President and such other duties as
are prescribed by the Board from time to time.
4.8. VICE PRESIDENT
In the event of the death of the President or his or her inability to
act, the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the
corporation. Vice Presidents shall have, to the extent authorized by the
President of the Board, the same powers as the President to sign deeds,
mortgages, bonds, contracts or other instruments. Vice Presidents shall
perform such other duties as from time to time may be assigned to them by the
President or by the Board.
4.9. SECRETARY
The Secretary shall be responsible for preparation of minutes of
meetings of the Board and stockholders, maintenance of the corporation's
records and stock registers, and authentication of the corporation's records
and shall in general perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him or her by the
president or by the Board. In absence of the Secretary, an Assistant Secretary
may perform the duties of the Secretary.
4.10. TREASURER
If required by the Board, the Treasurer shall give a bond for the
faithful discharge of his or her duties in such amount and with such surety or
sureties as the Board shall determine. The Treasurer shall have charge and
custody of and be responsible for all funds
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and securities of the corporation; receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, and deposit all such
moneys in the name of the corporation in banks, trust companies or other
depositories selected in accordance with the provision of these By-laws; sign
certificates for shares of the corporation, and in general perform all of the
duties incident to the office of Treasurer and such other duties as from time
to time may be assigned to him or her by the President or by the Board. In the
absence of the Treasurer, an Assistant Treasurer may perform the duties of the
Treasurer.
4.11. SALARIES
The salaries of the officers shall be fixed from time to time by the
Board or by any person or person to whom the Board has delegated such
authority. No officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1. CONTRACTS
The Board may authorize any officer or officers, or agent or agents,
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2. LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board. Such authority may be general or confined to specific
instances.
5.3. CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, or agent or agents, of the corporation and
in such manner as is from time to time determined by resolution of the Board.
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5.4. DEPOSITS
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR
TRANSFER
6.1. ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2. CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by
the Chairman of the Board or a Vice Chairman of the Board, if any, or the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, any of whose signatures may be a
facsimile. The Board may in its discretion appoint responsible banks or trust
companies from time to time to act as transfer agents and registrars of the
stock of the corporation; and, when such appointments shall have been made, no
stock certificate shall be valid until countersigned by one of such transfer
agents and registered by one of such registrars. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person was such officer, transfer
agent or registrar at the date of issue. All certificates shall include on
their face written notice of any restriction which may be imposed on the
transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3. STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose
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name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4. RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate,
or on the reverse of the certificate if a reference to the legend is contained
on the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933 or any applicable
state law, and no interest therein may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (a)
there is an effective registration statement under such Act
and applicable state securities laws covering any such
transaction involving said securities or (b) this corporation
receives an opinion of legal counsel for the holder of these
securities (concurred in by legal counsel for this
corporation) stating that such transaction is exempt from
registration or (c) this corporation otherwise satisfies
itself that such transaction is exempt from registration.
Neither the offering of the securities nor any offering
materials have been reviewed by any administrator under the
Securities Act of 1933 or any applicable state law.
6.5. TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the
stock transfer books of the corporation pursuant to authorization or document
of transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed
and filed with the Secretary of the corporation. All certificates surrendered
to the corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificates for a like number of shares shall have
been surrendered and canceled.
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6.6. LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year,
provided that if a different accounting year is at any time selected for
purposes of federal income taxes, the accounting year shall be the year so
selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
SECTION 10. INDEMNIFICATION
10.1. RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved (including, without limitation, as a witness)
in any actual or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a Director or officer of the
corporation or that, being or having been such a Director or officer or an
employee of the corporation, he or she is or was serving at the request of the
corporation as a Director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as such
a Director, officer, employee or agent, shall be indemnified and held harmless
by the corporation to the full extent permitted by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment
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permits the corporation to provide broader indemnification rights than
permitted prior thereto), or by other applicable law, as then in effect,
against all expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement) actually
and reasonably incurred or suffered by such indemnitee in connection therewith
and such indemnification shall continue as to an indemnitee who has ceased to
be a Director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that
except as provided in subsection 10.2 hereof with respect to proceedings
seeking to enforce rights to indemnification, the corporation shall indemnify
any such indemnitee in connection with a proceeding (or part thereof) was
authorized or ratified by the Board. The right to indemnification conferred in
this subsection 10.1 shall be a contract right and shall include the right to
be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter and "advancement of
expenses"); provided, however, that if the DGCL requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the corporation of an undertaking
(hereinafter an undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final Judicial
decision from which there is no further right to appeal that such indemnitee is
not entitled to be indemnified for such expenses under this subsection 10.1 or
otherwise.
10.2. RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in
a suit brought by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. The indemnitee
shall be presumed to be entitled to indemnification under this Section upon
submission of a written claim (and, in an action brought to enforce a claim for
an advancement of expenses, where the required undertaking, if any is required,
has been tendered to the corporation), and thereafter the corporation shall
have the burden of proof to overcome the presumption that the indemnitee is not
so entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee
is proper in the circumstances nor an actual determination by the corporation
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(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the Indemnitee is not so entitled.
10.3. NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses
conferred in this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, agreement, vote of
stockholders or disinterested Directors, provision of the Certificate of
Incorporation or By-laws of the corporation or otherwise. Notwithstanding any
amendment to or repeal of this Section, any indemnitee shall be entitled to
indemnification in accordance with the provision hereof with respect to any
acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4. INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect
itself and any Director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the DGCL. The corporation, without further stockholder approval, may
enter into contracts with any Director, officer, employee or agent in
furtherance of the provisions of this Section and may create a trust fund,
grant a security interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such amounts as may be necessary to
effect indemnification as provided in this Section.
10.5. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement
of expenses of Directors and officers of the corporation; provided, however,
that an undertaking shall be made by an employee or agent only if required by
the Board.
10.6. PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the
corporation who is or was serving (a) as a Director or officer of another
corporation of which a majority of the
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shares entitled to vote in the election of its Directors is held by the
corporation or (b) in an executive or management capacity in a partnership,
joint venture, trust or other enterprise of which the corporation or a wholly
owned subsidiary of the corporation is a general partner or has a majority
ownership shall be deemed to be so serving at the request of the corporation
and entitled to indemnification and advancement of expenses under subsection
10.1 hereof.
SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be
adopted by the Board. The stockholders may also amend and repeal these By-laws
or adopt new By-laws. All By-laws made by the Board may be amended or repealed
by the stockholders. notwithstanding any amendment to Section 10 hereof or
repeal of these By-laws, or of any amendment or repeal of any of the procedures
that may be established by the Board pursuant to Section 10 hereof, any
indemnitee shall be entitled to indemnification in accordance with the
provisions hereof and thereof with respect to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Allen" shall be construed
to include the following and their representatives: an individual not a citizen
of the United States of America, a partnership unless a majority of the
partners are citizens of the United States of America and have a majority
interest in the partnership profits; a foreign government, a corporation,
joint-stock company or association organized under the laws of a foreign
country; and any other corporation, joint-stock company or association directly
or indirectly controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of
voting stock of the corporation of any stock outstanding shall at any time be
owned of record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the
account of Aliens, and the citizenship of transferees thereof, shall be
determined in conformity with regulation prescribed by the Board. There shall
be maintained separate stock records, a domestic record of shares of stock held
by citizens and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to
an Allen shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing
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more than one-fifth of the aggregate number of shares of voting stock of any
class outstanding at any one time be so marked, nor shall the total amount of
voting stock represented by Foreign Share Certificates, plus the amount of
voting stock owned by or for the account of Aliens and represented by
certificates not so marked, exceed one-fifth of the aggregate number of shares
of voting stock of any class outstanding. Every certificate issued not marked
"Foreign Share Certificate" shall be marked "Domestic Share Certificate." Any
stock represented by Foreign Share Certificates may be transferred to either
Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Allen, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than one
fourth of the directors are Aliens, or of which more than one-fourth of the
stock is owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such
other provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in effect
or as it may hereafter from time to time be amended, and to carry out the
provisions of this Section 12 and of Article 12 of the Restated Certificate of
Incorporation.
*****
The foregoing By-laws were adopted by the Board of Directors on June
26th, 1995. Section 10 hereof ("Indemnification") was approved by the sole
stockholder on June 27th, 1995.
-------------------------
Assistant Secretary
22
<PAGE> 1
EXHIBIT 3.7
CERTIFICATE OF FORMATION
OF
INDIANA BROADCASTING, LLC
NAME
The name of the limited liability corporation is Indiana Broadcasting,
LLC.
REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
1013 Centre Road, Wilmington, Delaware, 19805; and the name of the registered
agent of the corporation in the State of Delaware is the Corporation Service
Company.
Dated: January 23, 1998
-----------------------------------------
Gayle C. Toney
<PAGE> 1
EXHIBIT 3.8
LIMITED LIABILITY COMPANY AGREEMENT
OF
INDIANA BROADCASTING, LLC
THE UNDERSIGNED is executing this Limited Liability Company Agreement
(this "Agreement") for the purpose of forming a limited liability company (the
"Company") pursuant to the provisions of the Delaware Limited Liability Company
Act (6 Del. C. Sections 18-101, et seq.) (the "Act"), and do hereby certify and
agree as follows:
1. Name. The name of the Company shall be Indiana Broadcasting,
LLC, or such other name as the Managing Member may from time to time hereafter
designate.
2. Definitions. In addition to terms otherwise defined herein,
the following terms are used herein as defined below:
"Managing Member" means LIN Television Corporation, a Delaware
corporation ("LIN"), and all other persons or entities
admitted as additional or substitute Managing Members pursuant
to this Agreement, so long as they remain Managing Members.
"Non-Managing Members" means all persons or entities admitted
as additional or substitute Non-Managing Members pursuant to
this Agreement, so long as they remain Non-Managing Members
and are so listed on Schedule A, if any.
"Members" means those persons or entities who from time to
time are the Managing Member and the Non-Managing Members, if
any.
<PAGE> 2
3. Purpose. The purpose of the Company shall be, directly or
indirectly through subsidiaries or affiliates, to serve as the entity
designated as the licensee for television broadcast stations owned by LIN in
the State of Indiana and to engage in any lawful act or activity which limited
liability corporations may be organized under the Delaware General Corporation
Law.
4. Offices.
(a) The principal place of business and office of the
Company shall be located at, and the Company's business shall be conducted
from, such place or places as the Managing Member may from time to time
designate to the Non-Managing Members.
(b) The registered office of the Company in the State of
Delaware shall be located at 1013 Centre Road, Wilmington, County of New
Castle, Delaware 19805. The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware shall be
The Corporation Service Company.
5. Members. The name and business or residence address of each
Member of the Company is set forth on Schedule A attached hereto.
6. Term. The term of the Company commenced on the date of filing
of the Certificate of Formation of the Company in accordance with the Act and
shall continue until dissolution of the Company in accordance with Section 15
of this Agreement.
7. Management of the Company.
(a) The Managing Member shall have the exclusive right to
manage the business of the Company, and shall have all powers and rights
necessary, appropriate or advisable to effectuate and carry out the purposes
and business of the Company and, in general, all powers
2
<PAGE> 3
permitted to be exercised by a managing member under the Act, including,
without limitation, the power to (i) open, maintain and close bank accounts and
to take all actions it deems necessary or advisable for the administration of
such accounts, (ii) appoint and designate the responsibilities of such officers
of the Company from time to time as the Managing Member deems necessary or
desirable and (iii) appoint, employ, or otherwise contract with any persons or
entities for the transaction of the business of the Company or the performance
of services for or on behalf of the Company; and the Managing Member may
delegate to any such person or entity described in subclauses (i) and (ii) such
authority to act on behalf of the Company as the Managing Member may from time
to time deem appropriate.
(b) No Non-Managing Member, in his status as such, shall
have the right to take part in the management or control of the business of the
Company or to act for or bind the Company or otherwise to transact any business
on behalf of the Company.
8. Liability of Members; Indemnification.
(a) Neither a Member (including the Managing Member) nor
any officer, employee or agent of the Company (including a person having more
than one such capacity) shall be personally liable for any expenses,
liabilities, debts or obligations of the Company solely by reason of acting in
such capacity except as provided in the Act.
(b) To the fullest extent permitted by law, the Company
shall indemnify and hold harmless the Managing Member, each Member and any
officer, employee or agent of the Company from and against any and all losses,
claims, damages, liabilities or expenses of whatever nature (each a "Claim"),
as incurred, arising out or of relating to the management or
3
<PAGE> 4
business of the Company; provided that such indemnification shall not apply to
any such person if a court of competent jurisdiction has made a final
determination that such Claim resulted directly from the gross negligence, bad
faith or willful misconduct of such person.
9. Capital Contributions. Members shall make capital
contributions to the Company in such amounts and at such times as they shall
mutually agree.
10. Assignments of Membership Interest.
(a) No Non-Managing Member may sell, assign, pledge or
otherwise transfer or encumber (collectively "transfer") all or any part of his
interest in the Company, nor shall any Non-Managing Member have the power to
substitute a transferee in his place as a substitute Non-Managing Member,
without, in either event, having obtained the prior written consent of the
Managing Member, which consent may be given or withheld in its sole discretion.
(b) The Managing Member may not transfer all or any part
of its interest in the Company, nor shall the Managing Member have the power to
substitute a transferee in its place as a substitute Managing Member, without,
in either event, having obtained the consent of all of the Non-Managing
Members.
11. Withdrawal. No Non-Managing Member shall have the right to
withdraw from the Company except with the consent of the Managing Member and
upon such terms and conditions as may be specifically agreed upon between the
Managing Member and the withdrawing Non-Managing Member. The provisions hereof
with respect to distributions upon withdrawal are exclusive and no Non-Managing
Member shall be entitled to
4
<PAGE> 5
claim any further or different distribution upon withdrawal under Section
18-604 of the Act or otherwise.
12. Additional Members. The Managing Member shall have the right
to admit additional Non-Managing Members upon such terms and conditions, at
such time or times, and for such capital contributions as shall be determined
by the Managing Member; and in connection with any such admission, the Managing
Member shall have the right to amend Schedule A hereof to reflect the name,
address and capital contribution of the admitted Non-Managing Member.
13. Allocations and Distributions. Distributions of cash or other
assets of the Company shall be made at such times and in such amounts as the
Managing Member may determine. Distributions shall be made to (and profits and
losses shall be allocated among) Members pro rata in accordance with the amount
of their contributions to the Company as set forth on Schedule A hereto.
14. Return of Capital. No Non-Managing Member has the right to
receive, and the Managing Member has absolute discretion to make, any
distributions to a Non-Managing Member, which include a return of all or any
part of such Non-Managing Member's capital contribution, provided that upon the
dissolution of the Company, the assets of the Company shall be distributed as
provided in Section 18-804 of the Act.
15. Dissolution. The Company shall be dissolved and its affairs
wound up and terminated upon the first to occur of the following:
(a) December 31, 2030
(b) The determination of the Managing Member to dissolve
the Company; or
5
<PAGE> 6
(c) The bankruptcy or dissolution of the Managing Member
or the occurrence of any other event which terminates the continued membership
of the Managing Member in the Company, provided, however, the Company shall not
be dissolved if, within ninety (90) days after the occurrence of such event,
all remaining Members agree in writing to continue the business of the Company
and to the appointment, effective as of the date of such event, of one (1) or
more additional Members of the Company.
16. Amendments. This Agreement may be amended only upon the
written consent of all Members.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of February 3, 1998.
LIN TELEVISION CORPORATION
By:
--------------------------------
Peter E. Maloney, Vice President
6
<PAGE> 7
SCHEDULE A
INDIANA BROADCASTING, LLC
MEMBERS
<TABLE>
<CAPTION>
CAPITAL
NAME ADDRESS CONTRIBUTION
- ---- ------- ------------
<S> <C> <C>
MANAGING MEMBER:
LIN Television Corporation Four Richmond Square $1,000.00
Suite 200
Providence, RI 02906
NON-MANAGING MEMBERS:
None
</TABLE>
7
<PAGE> 1
EXHIBIT 3.9.1
CERTIFICATE OF INCORPORATION
OF
C.& W.A., INC.
* * * * *
1. The name of the corporation is
C.& W.A., INC.
2. The address of its registered office in the State of Delaware is
No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The
name of its registered agent at such address is The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall
have authority to issue is one thousand (1,000) and the par value of each of
such shares is One Dollar ($1.00) amounting in the aggregate to One Thousand
Dollars ($1,000.00).
<PAGE> 2
5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
100 West Tenth Street
B. J. Consono Wilmington, Delaware 19899
100 West Tenth Street
F. J. Obara, Jr. Wilmington, Delaware 19899
J. L. Rivera 100 West Tenth Street
Wilmington, Delaware 19899
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized.
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the
real and personal property of the corporation.
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
By a majority of the whole board, to designate one or more committees,
each committee to consist of one or more of the directors of the corporation.
The board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. The by-laws may provide that in the absence or disqualification
of a member of a committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or
2
<PAGE> 3
not he or they constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the by-laws of the corporation,
shall have and may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in
reference to amending the certificate of incorporation, adopting an agreement
of merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or by-laws, expressly so provide, no such committee shall
have the power or authority to declare a dividend or to authorize the issuance
of stock.
When and as authorized by the stockholders in accordance with
statute, to sell, lease or exchange all or substantially all of the property
and assets of the corporation, including its good will and its corporate
franchises, upon such terms and conditions and for such consideration, which may
consist in whole or in part of money or property including shares of stock in,
and/or other securities of, any other corporation or corporations, as its
board of directors shall deem expedient and for the best interests of the
corporation.
3
<PAGE> 4
8. Meetings of stockholders may be held within or without the Sate
of Delaware, as the by-laws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation. Elections of
directors need not be by written ballot unless the by-laws of the corporation
shall so provide.
9. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, hereby
declaring and certifying that this is our act and deed and the facts herein
stated are true, and accordingly have hereunto set our hands this 11th day of
September 1970.
/s/ B J. CONSONO
----------------------
/s/ F. J. OBARA, JR.
----------------------
/s/ J. L. RIVERA
----------------------
4
<PAGE> 5
STATE OF DELAWARE )
) ss:
COUNTY OF NEW CASTLE )
BE IT REMEMBERED that on this 11th day of September 1979,
personally came before me, a Notary Public for the State of Delaware, B. J.
Consono, F. J. Obara, Jr. and J. L. Rivera, all of the parties to the foregoing
certificate of incorporation, known to me personally to be such, and severally
acknowledged the said certificate to be the act and deed of the signers
respectively and that the facts stated therein are true.
GIVEN under my hand and seal of office the day and year aforesaid.
/s/ [ILLEGIBLE]
---------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.9.2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
C.W.A., INC.
C.W.A., Nc. a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY.
FIRST: That the Board of Directors of said corporation, by
the unanimous written consent of its members, filed with the minutes of the
board adopted a resolution proposing and declaring advisable the following
amendment to the Certificate of Incorporation of said corporation:
RESOLVED, that the Certificate of Incorporation of C.W.A.,
Inc. be amended by changing the Articles thereof numbered "1" and "3"
so that, as amended, said Articles shall be and read as follows:
"1. The name of the corporation is WFIL, INC.
"3. To purchase, own and operate radio and television
broadcast stations and to be a licensee of the Federal Communications
Commission.
To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware."
<PAGE> 2
SECOND: That in lieu of a meeting and vote of stockholders,
the sole corporate stockholder has given its written consent to said amendment
in accordance with the provisions of Section 228 of The General Corporation Law
of the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Sections 242 and 228 of The
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said C.W.A., Inc., has caused its
corporated seal to be hereunto affixed and this certificate to be signed by
Donald A. Pels, its President, and attested by John D. Diamond, its Secretary,
this 20th day of October, 1970.
C.W.A., INC.
By:
------------------------------
President
(CORPORATE SEAL)
ATTEST:
By:
------------------------
Secretary
<PAGE> 1
EXHIBIT 3.9.3
CERTIFICATE OF AMENDMENT
OF
WFIL INC.
Certificated of Amendment of the Certificate of Incorporation of
WFIL Inc., a corporation organized and existing under the laws of the
State of Delaware, are herein executed in duplicate by said
corporation, pursuant to the provisions of the General Corporation
Law of the State of Delaware, as follows:
1. The name of the corporation is WFIL, Inc.
2. The amendment to the Certificate of Incorporation of said
corporation is as follows: Article No. 1 shall be amended to read:
"The name of the corporation Is KXAN, Inc."
3. The board of directors of the corporation has adopted a
resolution by unanimous written consent, pursuant to Section 141 of
the General Corporation Law of the State of Delaware, direction that
aforesaid amendment to the certificate of incorporation of the
corporation be presented to the sole stockholder of the corporation
for its consideration.
4. The sole stockholder of the corporation has given its
written consent to the aforesaid amendment to the certificate of
incorporation in accordance with the provisions of Section 228 of the
General Corporation Law of the State of Delaware.
<PAGE> 2
5. The aforesaid amendment to the certificate of Incorporation
of the corporation was duly adopted in accordance with the provisions
of Sections 242 and 228 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, WFIL, INC. has caused this certificate to be
signed by Peter E. Maloney, its Vice President and attested by Andrew
A. Quartner, its Assistant Secretary, this 28th day of December,
1990.
WFIL, Inc.
By /s/ PETER E. MALONEY
----------------------------
Vice President
ATTEST:
By /s/ ANDREW A. QUARTNER
--------------------------
Assistant Secretary
<PAGE> 1
EXHIBIT 3.10
BY-LAWS OF
KXAN, INC (CHANGED NAME 12/28/90)
ARTICLE I
Offices
SECTION 1.01. Registered Office. The registered office of WFIL, INC.
(hereinafter called the Corporation) in the State of Delaware shall be at 1209
Orange Street, c/o Corporation Trust Center, Wilmington, Delaware 19801, and
the registered agent in charge thereof shall be The Corporation Trust Company.
SECTION 1.02. Other Offices. The Corporation may also have an office
or offices at any other place or places within or without the State of
Delaware.
ARTICLE II
Meetings of Stockholders; Stockholders'
Consent in Lieu of Meeting
SECTION 2.01. Annual Meetings. The annual meeting of the stockholders
for the election of directors, and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, date and
hour as shall be fixed by the Board of Directors (hereinafter called the Board)
and designated in the notice or waiver of notice thereof; provided, however,
that no annual meeting need be held if all actions, including the election of
directors, required by the
<PAGE> 2
2
General Corporation Law of the State of Delaware to be taken at a stockholders'
annual meeting are taken by written consent in lieu of a meeting pursuant to
Section 2.03 of this Article.
SECTION 2.02. Special Meetings. A special meeting of the stockholders
for any purpose or purposes may be called by the Board, the Chairman of the
Board, the President or the Secretary of the Corporation or one or more
stockholders holding of record at least a majority of the shares of Common
Stock of the Corporation issued and outstanding, such meeting to be held at
such place, date and hour as shall be designated in the notice or waiver of
notice thereof.
SECTION 2.03. Stockholders' Consent in Lieu of Meeting. Any action
required by the laws of the State of Delaware to be taken at any annual or
special meeting of the stockholders of the Corporation, or any action which may
be taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by all of the
stockholders entitled to vote on the action to be taken.
ARTICLE III
Board of Directors
SECTION 3.01. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board, which may
exercise all such powers of
<PAGE> 3
3
the Corporation and do all such lawful acts and things as are not by law or by
the Certificate of Incorporation directed or required to be exercised or done
by the stockholders.
SECTION 3.02. Number and Term of Office. The number of directors which
shall constitute the whole Board shall be three (3) or such other number as may
be fixed from time to time by a vote of a majority of the whole Board. The term
"whole Board" is used herein to refer to the number of directors from time to
time authorized to be on the Board regardless of the number of directors then
in office. Directors need not be stockholders. Each director shall hold office
until his successor is elected and qualified, or until his earlier death or
resignation or removal in the manner hereinafter provided.
SECTION 3.03. Resignation, Removal and Vacancies. Any director may
resign at any time by giving written notice of his resignation to the Board,
the Chairman of the Board, the President or the Secretary of the Corporation.
Such resignation shall take effect at the time specified therein or, if the
time be not specified, upon receipt thereof; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
Any director or the entire Board may be removed, with or without
cause, at any time by the holders of a majority of the shares then entitled to
vote at an election of directors or by written consent of the stockholders
pursuant to Section 2.03 of Article II hereof.
<PAGE> 4
4
Vacancies in the Board and newly-created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, although less than a quorum, or by a sole
remaining director.
SECTION 3.04. Meetings.
(a) Annual Meetings. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of organization and
the transaction of other business, unless it shall have transacted all such
business by written consent pursuant to Section 3.05 of this Article.
(b) Other Meetings. Other meetings of the Board shall be held at
such times and places as the Board, the Chairman of the Board or the President
shall from time to time determine.
(c) Notice of Meetings. The Secretary shall give notice to each
director of each meeting, including the time and place of such meeting. Notice
of each such meeting shall be mailed to each director, addressed to him at his
residence or usual place of business, at least two days before the day on which
such meeting is to be held, or shall be sent to him at such place by telegraph,
cable, wireless or other form of recorded communication, or be delivered
personally or by telephone not later than the day before the day on which such
meeting is to be held, but notice need not be given to any director who shall
attend such meeting. A written waiver of notice, signed by the person entitled
thereto, whether before or after the time of the meeting stated therein, shall
be deemed equivalent to notice.
<PAGE> 5
5
(d) Place of Meetings. The Board may hold its meetings at such
place or places within or without the State of Delaware as the Board may from
time to time determine, or as shall be designated in the respective notices or
waivers of notice thereof.
(e) Quorum and Manner of Acting. A majority of the total number
of directors then in office (but not less than two) shall be present in person
at any meeting of the Board in order to constitute a quorum for the transaction
of business at such meeting, and the vote of a majority of those directors
present at any such meeting at which a quorum is present shall be necessary for
the passage of any resolution or act of the Board, except as otherwise
expressly required by law or these By-laws. In the absence of a quorum for any
such meeting, a majority of the directors present thereat may adjourn such
meeting from time to time until a quorum shall be present.
(f) Organization. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside, in the following
order of precedence:
(i) the Chairman of the Board;
(ii) the President;
(iii) any director chosen by a majority of the directors present.
The Secretary or, in the case of his absence, any person (who shall be an
Assistant Secretary, if an Assistant Secretary is present whom the Chairman
shall appoint shall act as secretary of such meeting and keep the minutes
thereof.
<PAGE> 6
6
SECTION 3.05. Directors' Consent in Lieu of Meeting. Action required
or permitted to be taken at any meeting of the Board, or of any committee
thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing and the writing or
writings are filed with the minutes of the proceedings of the Board or
committee.
SECTION 3.06. Action by Means of Conference Telephone or Similar
Communications Equipment. Any one or more members of the Board, or any
committee designated by the Board, may participate in a meeting of the Board or
any such committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting by such means shall constitute
presence in person at such meeting.
ARTICLE IV
Committees of the Board
SECTION 4.01. Appointment of Executive Committee. The Board may from
time to time by resolution passed by a majority of the whole Board designate
from its members an Executive Committee to serve at the pleasure of the Board.
The Chairman of the Executive Committee shall be designated by the Board.
The Board may designate one or more directors as
<PAGE> 7
7
alternate members of the Executive Committee, who may replace any absent or
disqualified member or members at any meeting of the Executive Committee. The
Board shall have power at any time to change the membership of the Executive
Committee, to fill all vacancies in it and to discharge it, either with or
without cause.
SECTION 4.02. Procedures of Executive Committee. The Executive
committee, by a vote of a majority of its members, shall fix by whom its
meetings may be called and the manner of calling and holding its meetings,
shall determine the number of its members requisite to constitute a quorum for
the transaction of business and shall prescribe its own rules of procedure, no
change in which shall be made except by a majority vote of its members or by
the Board.
SECTION 4.03. Powers of Executive Committee. During the intervals
between the meetings of the Board, unless otherwise determined from time to
time by resolution passed by the whole Board, the Executive Committee shall
possess and may exercise all the powers and authority of the Board in the
management and direction of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it, except that the Executive Committee shall not have power or
authority in reference to:
(a) amending the Certificate of Incorporation;
(b) adopting an agreement of merger or consolidation;
<PAGE> 8
8
(c) recommending to the stockholders the sale, lease or
exchange of all or substantially all the Corporation's property and
assets;
(d) recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution;
(e) amending the By-laws;
(f) declaring a dividend or authorizing the issuance of stock;
(g) filling any vacancy on the Board or any, committee of the
Board;
(h) electing or removing officers or members of such committee;
or
(i) fixing the compensation for the members of such committee.
SECTION 4.04. Reports of Executive Committee. The Executive Committee
shall keep regular minutes of its proceedings, and all action by the Executive
Committee shall be reported promptly to the Board. Such action shall be subject
to review by the Board, provided that no rights of third parties shall be
affected by such review.
SECTION 4.05. Other Committees. The Board, by resolution adopted by a
majority of the whole Board, may designate from among its members one or more
other committees, each of which shall have such authority of the Board as may
be specified in the resolution of the Board designating such committee;
provided, however, that any such committee so
<PAGE> 9
9
designated shall not have any powers not allowed to the Executive Committee
under Section 4.03 of this Article IV. The Board shall have power at any time
to change the members of any such committee, designate alternate members of any
such committee and fill vacancies therein; and any such committee shall serve
at the pleasure of the Board.
ARTICLE V
Officers
SECTION 5.01. Executive Officers. The executive officers of the
Corporation shall be a President, a Secretary and a Treasurer and may include a
Chairman of the Board, one or more Vice Presidents or one or more Assistant
Secretaries or Assistant Treasurers. Any two or more offices may be held by the
same person, except that the president and secretary shall not be the same
person.
SECTION 5.02. Authority and Duties. All officers, as between
themselves and the Corporation, shall have such authority and perform such
duties in the management of the Corporation as may be provided in these By-laws
or, to the extent not so provided, by the Board.
SECTION 5.03. Term of Office, Resignation and Removal. All officers
shall be elected or appointed by the Board and shall hold office for such term
as may be prescribed by the Board. The Chairman of the Board shall be elected
or appointed from among the members of the Board. Each officer
<PAGE> 10
10
shall hold office until his successor has been elected or appointed and
qualified or until his earlier death or resignation or removal in the manner
hereinafter provided. The Board may require any officer to give security for
the faithful performance of his duties.
Any officer may resign at any time by giving written notice to the
President or the Secretary of the Corporation, and such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective is not specified therein, at the time it is accepted by action of the
Board. Except as aforesaid, the acceptance of such resignation shall not be
necessary to make it effective.
All officers and agents elected or appointed by the Board shall be
subject to removal at any time by the Board or by the stockholders of the
Corporation with or without cause.
SECTION 5.04. Vacancies. If an office becomes vacant for any reason,
the Board shall fill such vacancy. Any officer so appointed or elected by the
Board shall serve only until such time as the unexpired term of his predecessor
shall have expired unless reelected or reappointed by the Board.
SECTION 5.05. Chairman of the Board. There shall be a Chairman of the
Board and he shall preside at meetings of the Board and of the stockholders at
which he is present, and shall give counsel and advice to the Board and the
officers of the Corporation on all subjects touching the welfare of the
Corporation and the conduct of its business. He shall perform
<PAGE> 11
11
such other duties as the Board may from time to time determine. Except as
otherwise provided by resolution of the Board he shall be ex officio a member
of all committees of the Board.
SECTION 5.06. The President. The President shall be the Chief
Executive Officer of the Corporation and unless the Chairman of the Board be
present or the Board has provided otherwise by resolution, he shall preside at
all meetings of the stockholders at which he is present. He shall have general
and active management and control of the business and affairs of the
Corporation subject to the control of the Board and the Executive Committee, if
any, and shall see that all orders and resolutions of the Board and the
Executive Committee, if any, are carried into effect.
SECTION 5.07. Vice Presidents. The Vice President or, if there be more
than one, the Vice Presidents in the order of their seniority (Executive,
Senior, Group, etc.) or in any other order determined by the Board, shall, in
the absence or disability of the President, perform the duties and exercise the
powers of the President, and shall generally assist the President and perform
such other duties as the Board or the President shall prescribe.
SECTION 5.08. The Secretary. The Secretary shall, to the extent
practicable, attend all meetings of the Board and all meetings of the
stockholders and shall record all votes and the minutes of all proceedings in a
book to be kept for that purpose, and shall perform like duties for the
standing
<PAGE> 12
12
committees when required. He shall give, or cause to be given, notice of all
meetings of the stockholders and of the Board, and shall perform such other
duties as may be prescribed by the Board or the President, under whose
supervision he shall act. He shall keep in safe custody the seal of the
Corporation and affix the same to any duly authorized instrument requiring it
and, when so affixed, it shall be attested by his signature or by the signature
of the Treasurer or an Assistant Secretary or Assistant Treasurer. He shall
keep in safe custody the certificate books and stockholder records and such
other books and records as the Board may direct and shall perform all other
duties as from time to time may be assigned to him by the Chairman of the
Board, the President or the Board.
SECTION 5.09. Assistant Secretaries. The Assistant Secretaries, if any,
in order of their seniority or in any other order determined by the Board
shall, in the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary and shall perform such other duties as the
Board or the Secretary shall prescribe.
SECTION 5.10. The Treasurer. The Treasurer shall have the care and
custody of the corporate funds and other valuable effects, including
securities, and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation, and shall deposit all
moneys and other valuable effects to the name and to the credit of the
Corporation in such depositories as may be designated by the Board. The
Treasurer
<PAGE> 13
13
shall disburse the funds of the Corporation as may be ordered by the Board,
taking proper vouchers for such disbursements, and shall render to the
President and directors, at the regular meetings of the Board, or whenever they
may require it, an account of all his transactions as Treasurer and of the
financial condition of the Corporation; and, in general, perform all the duties
incident to the office of Treasurer and such other duties as from time to time
may be assigned to him by the President or the Board.
SECTION 5.11. Assistant Treasurers. The Assistant Treasurers, if any, in
the order of their seniority or in any other order determined by the Board,
shall in the absence or disability of the Treasurer perform the duties and
exercise the powers of the Treasurer and shall perform such other duties as the
Board or the Treasurer shall prescribe.
ARTICLE VI
Contracts, Checks, Drafts, Bank Accounts, etc.
SECTION 6.01. Execution of Documents. The Board shall designate (either
by name or office) the officers, employees and agents of the Corporation who
shall have power to execute and deliver deeds, contracts, mortgages, bonds,
debentures, checks, drafts and other orders for the payment of money and other
documents for and in the name of the Corporation, and may authorize such
officers, employees and agents to delegate such power (including authority to
redelegate) by written instrument
<PAGE> 14
14
to other officers, employees or agents of the Corporation; and, unless so
designated or expressly authorized by these By-laws, no officer or agent or
employee shall have any power or authority to bind the Corporation by any
contract or engagement or to pledge its credit or to render it liable
pecuniarily for any purpose or to any amount.
SECTION 6.02. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board or Treasurer or any other officer of the Corporation
to whom power in this respect shall have been given by the Board shall select.
SECTION 6.03. Proxies in Respect of Stock or Other Securities of Other
Corporations. The Board shall designate the officers of the Corporation who
shall have authority from time to time to appoint an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the powers
and rights which the Corporation may have as the holder of stock or other
securities in any other corporation, and to vote or consent in respect of such
stock or securities; such designated officers may instruct the person or
persons so appointed as to the manner of exercising such powers and rights; and
such designated officers may execute or cause to be executed in the name and on
behalf of the Corporation and under its corporate seal, or otherwise, such
written proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise its said powers
and rights.
<PAGE> 15
15
ARTICLE VII
Shares and Their Transfer; Fixing Record Date
SECTION 7.01. Certificates for Shares. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number and
class of shares owned by him in the Corporation, which shall otherwise be in
such form as shall be prescribed by the Board. Certificates of each class shall
be issued in consecutive order and shall be numbered in the order of their
issue, shall be signed by or in the name of the Corporation by the Chairman of
the Board, the President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary.
SECTION 7.02. Record. A record (herein called the stock record) in one
or more counterparts shall be kept of the name of the person, firm or
corporation owning the shares represented by each certificate for stock of the
Corporation issued, the number of shares represented by each such certificate,
the date thereof and, in the case of cancellation, the date of cancellation.
Except as otherwise expressly required by law, the person in whose name shares
of stock stand on the stock record of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation.
SECTION 7.03. Transfer and Registration of Stock.
(a) The transfer of shares of stock and certificates for stock which
represent the shares of stock of the Corporation shall be governed by the
General Corporation Law of the State of Delaware, as amended from time to time.
<PAGE> 16
16
(b) Registration of transfers of shares of the Corporation shall be
made only on the books of the Corporation upon request of the registered holder
thereof, or of his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, and upon the
surrender of the certificate or certificates for such shares properly endorsed
or accompanied by a stock power duly executed.
SECTION 7.04. Addresses of Stockholders. Each stockholder shall
designate to the Secretary of the Corporation an address at which notices of
meetings and all other corporate notices may be served or mailed to him, and,
if any stockholder shall fail to designate such address, corporate notices may
be served upon him by mail directed to him at his post office address, if any,
as the same appears on the share record books of the Corporation or at his last
known post office address.
SECTION 7.05. Lost, Destroyed and Mutilated Certificates. The Board or a
committee designated thereby with power so to act may, in its discretion, cause
to be issued a new certificate or certificates for stock of the Corporation in
place of any certificate issued by it and reported to have been lost, destroyed
or mutilated, upon the surrender of the mutilated certificates or, in the case
of loss or destruction of the certificate, upon satisfactory proof of such loss
or destruction, and the Board or such committee may, in its
<PAGE> 17
17
discretion, require the owner of the lost or destroyed certificate or his legal
representative to give the Corporation a bond in such sum and with such surety
or sureties as it may direct to indemnify the Corporation against any claim
that may be made against it on account of the alleged loss or destruction of
any such certificate.
SECTION 7.06. Regulations. The Board may make such rules and regulations
as it may deem expedient, not inconsistent with these By-laws, concerning the
issue, transfer and registration of certificates for stock of the Corporation.
SECTION 7.07. Fixing Date for Determination of Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or to receive
payment of any dividend or other distribution or allotment or any rights, or to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board may fix, in advance, a
record date, which shall not be more than 60 or less than 10 days before the
date of any such meeting, or more than 60 days prior to any such other action.
A determination of stockholders entitled to notice of or to vote at a meeting
of the stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board may fix a new record date for the adjourned meeting.
<PAGE> 18
18
ARTICLE VIII
Seal
The Board shall provide a corporate seal, which shall be in the form of
a circle and shall bear the full name of the Corporation and the words and
figures "Corporate Seal 1970 Delaware".)
ARTICLE IX
Fiscal Year
The fiscal year of the Corporation shall end on the 31st day of December
in each year unless changed by resolution of the Board.
ARTICLE X
Indemnification and Insurance
SECTION 10.01. Indemnification. (a) (i) Any person made, or threatened
to be made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he, his testator or intestate is or was a director, officer,
employee or agent of the Corporation or any corporation which may be absorbed
in a consolidation or merger with the Corporation and which if its separate
existence had continued would have had power and authority to indemnify such
person (a "Predecessor"), or by reason of the fact that he, his testator or
intestate is or was serving at the request of the Corporation
<PAGE> 19
19
as a director, officer, employee or agent of any other corporation or any
partnership, joint venture, trust or other enterprise (an "Affiliate"), shall
be indemnified by the Corporation against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding, or in
connection with any appeal therein; provided that such person acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Corporation, Predecessor or Affiliate, as the case may
be, and that with respect to any criminal action or proceeding such person had
no reasonable cause to believe his conduct unlawful; except, in the case of an
action, suit or proceeding by or in the right of the Corporation, in relation
to matters as to which it shall be adjudged in such action, suit or proceeding
that such director, officer, employee or agent is liable for negligence or
misconduct in the performance of his duties, unless a court having jurisdiction
shall determine that, despite such adjudication, such person is fairly and
reasonably entitled to indemnification.
(b) The foregoing rights of indemnification shall not be deemed
exclusive of any other rights to which any director, officer, employee or agent
may be entitled or of any power of the Corporation apart from the provisions of
this Section 10.01.
<PAGE> 20
20
SECTION 10.02. Insurance for Indemnification. The Corporation may
purchase and maintain insurance for the indemnification of the Corporation and
the directors, officers, employees and agents of the Corporation to the full
extent and in the manner permitted by the applicable laws of the United States
and the State of Delaware from time to time in effect.
ARTICLE XI
Waiver of Notice
Whenever any notice whatever is required to be given by these By-laws or
the Certificate of Incorporation of the Corporation or the laws of the State of
Delaware, the person entitled thereto may, in person or by attorney thereunto
authorized, in writing or by telegraph, cable or other form of recorded
communication, waive such notice, whether before or after the meeting or other
matter in respect of which such notice is given, and in such event such notice
need not be given to such person and such waiver shall be deemed equivalent to
such notice.
ARTICLE XII
Amendments
Any By-law (including these By-laws) may be adopted, amended or repealed
by the Board in any manner not inconsistent with the laws of the State of
Delaware or the Certificate of Incorporation.
<PAGE> 1
EXHIBIT 3.11
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 10/19/1994
944198751 - 2445125
CERTIFICATE OF INCORPORATION
OF
KXAS HOLDINGS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
ARTICLE 1. NAME
The name of this corporation is KXAS Holdings, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
Suite L-100, 32 Loockerman Square, City of Dover, County of Kent, Delaware,
19904; and the name of the registered agent of the corporation in the State of
Delaware is The Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have
authority to issue is 1,000. The par value of each of such shares is $.01
dollars. All such shares are of one class and are shares of Common Stock.
ARTICLE 5. INCORPORATOR
The name and address of the Incorporator are as follows:
Gayle C. Toney, c/o LIN Broadcasting Corporation, 5295 Carillon Point,
Kirkland, Washington 98033
<PAGE> 2
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation; provided, however, that the Board of Directors
may not repeal or amend any By-law that the stockholders have expressly
provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or
may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 11
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal. In addition to any requirements
or any other provisions herein or in the terms of any class or series of capital
stock having a preference over the common stock of this corporation as to
dividends or upon liquidation (and notwithstanding that a
-2-
<PAGE> 3
lesser percentage may be specified by law), the affirmative vote of the holders
of 80% or more of the voting power of the outstanding voting stock of this
corporation, voting together as a single class, shall be required to amend,
alter or repeal any provision of this Article 11.
Signed on October 14, 1994
/s/ GAYLE C. TONEY
--------------------------------------
Gayle C. Toney, Incorporator
-3-
<PAGE> 1
EXHIBIT 3.12
BY-LAWS
OF
KXTX HOLDINGS, INC.
(FORMERLY KXAS HOLDINGS, INC.)
Originally adopted on October 31, 1994
Amendments are listed on p. i
<PAGE> 2
KXTX HOLDINGS, INC.
(FORMERLY KXAS HOLDINGS, INC.)
AMENDMENTS
<TABLE>
<CAPTION>
DATE OF
SECTION EFFECT OF AMENDMENT AMENDMENT
------- ------------------- ---------
<S> <C> <C>
</TABLE>
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.1 Waiver in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.2 Waiver by Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6 Fixing of Record Date for Determining Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.1 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.2 Consent to Corporate Action Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.3 Dividends, Distributions and Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 Voting List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.2 Delivery to Corporation; Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.12 Voting for Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Action by Stockholders Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Number and Tenure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Annual and Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.1 Personal Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.2 Delivery by Mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.3 Delivery by Private Carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.4 Facsimile Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.5 Delivery by Telegraph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
3.6.6 Oral Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.1 In Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.2 By Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Action by Board or Committees Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.1 Creation and Authority of Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.2 Minutes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.3 Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.4 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.5 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.16 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Election and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.7 President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.10 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Loans to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Check, Drafts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Certificates for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Stock Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Restriction on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8. ACCOUNTING YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.1 Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.2 Right of Indemnitee to Bring Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.3 Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.4 Insurance, Contracts and Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.5 Indemnification of Employees and Agents of the Corporation . . . . . . . . . . . . . . . . . . . . . 23
10.6 Persons Serving other Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11. AMENDMENTS OR REPEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
iv
<PAGE> 6
BY-LAWS
OF
KXTX HOLDINGS, INC.
(FORMERLY KXAS HOLDINGS, INC.)
SECTION 1. OFFICES
The principal office of the corporation shall be located at its principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The corporation may have such other offices, either within or
without the State of Delaware, as the Board may designate or as the business of
the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the
meeting, the meeting shall be held on the next succeeding business day. If the
annual meeting is not held on the date designated therefor, the Board shall
cause the meeting to be held as soon thereafter as may be convenient.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled
to vote at the meeting may call special meetings of the stockholders for any
purpose.
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or
at such other place within or without the State of Delaware designated by the
<PAGE> 7
Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of the By-laws, the Certificate of Incorporation or the General
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled
to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
2
<PAGE> 8
2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record
date shall not be more than sixty (or the maximum number permitted by
applicable law) nor less than ten days before the date of such meeting. If no
record date is fixed by the Board, the record date for determining stockholders
entitled to notice of and to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of stockholders of record
entitled to notice of and to vote at the meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be more than
ten (or the maximum number permitted by applicable law) days after the date
upon which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter 1
3
<PAGE> 9
of the DGCL, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to a corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board and prior action by the Board is required by
Chapter 1 of the DGCL, the record date for determining stockholders entitled to
consent to corporate action is writing without a meeting shall be at the close
of business on the day on which the Board adopts the resolution taking such
prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by
applicable law) days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
shall be made, arranged in alphabetical order, with the address of and number
of shares held by each stockholder. This list shall be open to examination by
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. This list shall also be produced and kept at
such meeting for inspection by any stockholder who is present.
4
<PAGE> 10
2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
present in person or represented by proxy at the meeting, shall constitute a
quorum at a meeting of the stockholders; provided, that where a separate vote
by a class or classes is required, a majority of the outstanding shares of such
class or classes, present in person or represented by proxy at the meeting,
shall constitute a quorum entitled to take action with respect to that vote on
that matter. If less than a majority of the outstanding shares entitled to vote
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. If a quorum is
present or represented at a reconvened meeting following such an adjournment,
any business may be transacted that might have been transacted at the meeting
as originally called. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation
or the DGCL. Where a separate vote by a class or classes is required, if a
quorum of such class or classes is present, the affirmative vote of the
majority of outstanding shares of such class or classes present in person or
represented by proxy at the meeting shall be the act of such class or classes.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of Directors.
2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting
5
<PAGE> 11
may authorize another person or persons to act for such stockholder by proxy.
Such authorization may be accomplished by (a) the stockholder or such
stockholder's authorized officer, director, employee or agent executing a
writing or causing his or her signature to be affixed to such writing by any
reasonable means, including facsimile signature or (b) by transmitting or
authorizing the transmission to the intended holder of the proxy or to a proxy
solicitation firm, proxy support service or similar agent duly authorized by
the intended proxy holder to receive such transmission; provided, that any such
telegram, cablegram or other electronic transmission must either set forth or
be accompanied by information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by the
stockholder. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission by which a stockholder has
authorized another person to act as proxy for such stockholder may be
substituted or used in lieu of the original writing or transmission for any and
all purposes for which the original writing or transmission could be used,
provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or
transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action
in writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
6
<PAGE> 12
2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject
matter of an issue submitted to a meeting of stockholders shall be entitled to
one vote upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may vote,
in person or by proxy, the number of shares owned by such stockholder for as
many persons as there are Directors to be elected and for whose election such
stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof
are delivered to the corporation, in the manner required by this Section,
within sixty (or the maximum number permitted by applicable law) days of the
earliest dated consent delivered to the corporation in the manner required by
this Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the
stockholder shall be determined by or at the direction of the Secretary. A
written record of the information upon which the person making such
determination relied shall be made and kept in the records of the proceedings
7
<PAGE> 13
of the stockholders. Any such consent shall be inserted in the minute book as
if it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the
Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws,
but no decrease in the number of Directors shall have the effect of shortening
the term of any incumbent Director. Unless a Director dies, resigns, or is
removed, he or she shall hold office until the next annual meeting of
stockholders or until his or her successor is elected, whichever is later.
Directors need not be stockholders of the corporation or residents of the State
of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after
and at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board may
be called by or at the request of the Chairman of the Board, the President, the
Secretary or, in the case of special Board meetings, any Director and, in the
case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
8
<PAGE> 14
3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such
meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective if
delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective if
deposited in the official government mail properly address to a Director at
his or her address shown on the records of the corporation with postage prepaid
at least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed
effective when dispatched to a Director at his or her address shown on the
records of the corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
9
<PAGE> 15
at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed effective
if the content thereof is delivered to the telegraph company at least two days
before the meeting for delivery to a Director at his or her address shown on
the records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice
shall be deemed effective if personally given to the Director at least two days
before the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened.
10
<PAGE> 16
3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of
the total number of Directors then serving on the Board, provided, however,
that such number may not be less than one-third of the total number of
Directors fixed by or in the manner provided in these By-laws, shall constitute
a quorum for the transaction of business at any Board meeting. If less than a
majority are present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or committee
meeting at which there is a quorum shall be the act of the or committee, unless
the vote of a greater number is required by these By-laws, the Certificate of
Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting at
which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his or her dissent is entered in the
minutes of the meeting, or unless such Director files a written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the meeting.
A Director who voted in favor of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
11
<PAGE> 17
3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to the
Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or
more members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative vote
of a majority of the remaining Directors though less than a quorum of the
Board. A Director elected to fill a vacancy shall be elected for the unexpired
term of his or her predecessor in office. Any directorship to be filled by
reason of an increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint
standing or temporary committees, each committee to consist of one or more
Directors of the corporation. The Board may designate one or more Directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not such member or members constitute
a quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the
12
<PAGE> 18
resolution of the Board establishing such committee or as otherwise provided in
these By-laws, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which require
it; but no such committee shall have the power to authority in reference to (a)
amending the Certificate of Incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance
of shares of stock adopted by the Board as provided in Section 151(a) of the
DGCL, fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger
or consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these Bylaws; and, unless
expressly provided by resolution of the Board, no such committee shall have the
power or authority to declare a dividend, to authorize the issuance of stock or
to adopt a certificate of ownership and merger pursuant to Section 253 of the
DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their meetings
and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the
Board, as established and fixed by resolution of the Board, shall constitute a
quorum for the transaction of business at any meeting of such committee but, if
less than a majority are present at a meeting, a majority of such Directors
present may adjourn the meeting from time to time without further notice. The
act of a majority of the members of a committee present at a meeting at which a
quorum is present shall be the act of such committee.
3.15.4 RESIGNATION
Any member of any committee may resign at any time by delivering written
notice thereof to the Chairman of the Board, the President, the
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<PAGE> 19
Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected or
appointed by it, but only by the affirmative vote of not less than a majority
of the number of Directors fixed by or in the manner provided in these By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any
additional title that the Board deems appropriate. The Board may delegate to
any officer or agent the power to appoint any such subordinate officers or
agents and to prescribe their respective terms of office, authority and duties.
Any two or more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board at
the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held
as soon thereafter as a Board meeting conveniently may be held. Unless an
officer dies, resigns or is removed from office, he or she shall hold office
until the next annual meeting of the Board or until his or her successor is
elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed by
the Board whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as shall
be assigned to him or her by the Board from time to time and shall preside over
meetings of the Board and stockholders unless another officer is appointed or
designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the
Board and, subject to the Board's control, shall supervise and control all of
the assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to
act, the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the
corporation. Vice Presidents shall have, to the extent authorized by the
President of the Board, the same powers as the President to sign deeds,
mortgages, bonds, contracts or other instruments. Vice Presidents shall perform
such other duties as from time to time may be assigned to them by the President
or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of meetings
of the Board and stockholders, maintenance of the corporation's records and
stock registers, and authentication of the corporation's records and shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the president or
by the Board. In absence of the Secretary, an Assistant Secretary may perform
the duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the
faithful discharge of his or her duties in such amount and with such surety or
sureties as the Board shall determine. The Treasurer shall have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in banks, trust companies or other depositories selected in
accordance with the provision of these By-laws; sign certificates for shares of
the corporation; and in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to Wine may be assigned
to him or her by the President or by the Board. In the absence of the
Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the
Board or by any person or person to whom the Board has delegated such
authority. No officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents, to
enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board. Such authority may be general or confined to specific
instances.
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5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, or agent or agents, of the corporation and
in such manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by
the Chairman of the Board or a Vice Chairman of the Board, if any, or the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, any of whose signatures may be a
facsimile. The Board may in its discretion appoint responsible banks or trust
companies from time to time to act as transfer agents and registrars of the
stock of the corporation; and, when such appointments shall have been made, no
stock certificate shall be valid until countersigned by one of such transfer
agents and registered by one of such registrars. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person was such officer, transfer
agent or registrar at the date of issue. All certificates shall include on
their face written notice of any restriction which may be imposed on the
18
<PAGE> 24
transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate,
or on the reverse of the certificate if a reference to the legend is contained
on the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged or
otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering
any such transaction involving said securities or (b) this corporation
receives an opinion of legal counsel for the holder of these securities
(concurred in by legal counsel for this corporation) stating that such
transaction is exempt from registration or (c) this corporation otherwise
satisfies itself that such transaction is exempt from registration.
Neither the offering of the securities nor any offering materials have
been reviewed by any administrator under the Securities Act of 1933 or
any applicable state law."
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6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed
and filed with the Secretary of the corporation. All certificates surrendered
to the corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificates for a like number of shares shall have
been surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year,
provided that if a different accounting year is at any time selected for
purposes of federal income taxes, the accounting year shall be the year so
selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
20
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SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved (including, without limitation, as a witness)
in any actual or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a Director or officer of the
corporation or that, being or having been such a Director or officer or an
employee of the corporation, he or she is or was serving at the request of the
corporation as a Director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as such
a Director, officer, employee or agent, shall be indemnified and held harmless
by the corporation to the fall extent permitted by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the corporation to provide broader
indemnification rights than permitted prior thereto), or by other applicable
law as then in effect, against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) actually and reasonably incurred or suffered by such
indemnitee in connection therewith and such indemnification shall continue as
to an indemnitee who has ceased to be a Director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that except as provided in subsection 10.2
hereof with respect to proceedings seeking to enforce rights to
indemnification, the corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) was authorized or ratified by
the Board. The right to indemnification conferred in this subsection 10.1 shall
be a contract right and shall include the right to be paid by the corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter and "advancement of expenses"); provided, however,
that if the DGCL requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a Director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the corporation of an undertaking (hereinafter an
21
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"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in
a suit brought by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. The indemnitee
shall be presumed to be entitled to indemnification under this Section upon
submission of a written claim (and, in an action brought to enforce a claim for
an advancement of expenses, where the required undertaking, if any is required,
has been tendered to the corporation), and thereafter the corporation shall
have the burden of proof to overcome the presumption that the indemnitee is not
so entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee
is proper in the circumstances nor an actual determination by the corporation
(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the indemnitee is not so entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses
conferred in this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, agreement, vote of
stockholders or disinterested Directors, provision of the Certificate of
Incorporation or By-laws of the corporation or otherwise. Notwithstanding any
amendment to or repeal of this Section, any indemnitee shall be entitled to
indemnification in accordance with the provision hereof with respect to any
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acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the
DGCL. The corporation, without further stockholder approval, may enter into
contracts with any Director, officer, employee or agent in furtherance of the
provisions of this Section and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement
of expenses of Directors and officers of the corporation; provided, however,
that an undertaking shall be made by an employee or agent only if required by
the Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the
corporation who is or was serving (a) as a Director or officer of another
corporation of which a majority of the shares entitled to vote in the election
of its Directors is held by the corporation or (b) in an executive or
management capacity in a partnership, joint venture, trust or other enterprise
of which the corporation or a wholly owned subsidiary of the corporation is a
general partner or has a majority ownership shall be deemed to be so serving at
the request of the corporation and entitled to indemnification and advancement
of expenses under subsection 10.1 hereof.
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SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be adopted
by the Board. The stockholders may also amend and repeal these By-laws or adopt
new By-laws. All By-laws made by the Board may be amended or repealed by the
stockholders. Notwithstanding any amendment to Section 10 hereof or repeal of
these By-laws, or of any amendment or repeal of any of the procedures that may
be established by the Board pursuant to Section 10 hereof, any indemnitee shall
be entitled to indemnification in accordance with the provisions hereof and
thereof with respect to any acts or omissions of such indemnitee occurring
prior to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed to
include the following and their representatives: an individual not a citizen of
the United States of America; a partnership unless a majority of the partners
are citizens of the United States of America and have a majority interest in
the partnership profits; a foreign government; a corporation, joint-stock
company or association organized under the laws of a foreign country; and any
other corporation, joint-stock company or association directly or indirectly
controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of voting
stock of the corporation of any stock outstanding shall at any time be owned of
record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the account of
Aliens, and the citizenship of transferees thereof, shall be determined in
conformity with regulation prescribed by the Board. There shall be maintained
separate stock records, a domestic record of shares of stock held by citizens
and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to an
Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
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Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than one
fourth of the directors are Aliens, or of which more than one-fourth of the
stock is owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such other
provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in
effect or as it may hereafter from time to time be amended, and to carry out
the provisions of this Section 12 and of Article 12 of the Restated Certificate
of Incorporation.
*****
The foregoing By-laws were adopted by the Board of Directors on October
31, 1994. Section 10 hereof ("Indemnification") was approved by the sole
stockholder on October 31, 1994.
-------------------------
Secretary
25
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EXHIBIT 3.13
CERTIFICATE OF INCORPORATION
OF
LINBENCO, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code, and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
ARTICLE 1. NAME
The name of this corporation is Linbenco, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is 1013
Centre Road, City of Wilmington, County of New Castle, Delaware, 19805; and the
name of the registered agent of the corporation in the State of Delaware is The
Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or activity
for which corporations may be organized under the Delaware General Corporation
Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have the
authority to issue is 1,000. The par value of each such shares is $.01. All such
shares are of one class and are shares of Common Stock.
<PAGE> 2
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Television Corporation, 1001 G Street, N.W., Suite
700E, Washington, DC 20001
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal the
By-laws of this corporation; provided, however, that the Board of Directors may
not repeal or amend any By-law that the stockholders have expressly provided may
not be amended or repealed by the Board of Directors. The stockholders shall
also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not exist
with respect to shares of stock of this corporation.
2
<PAGE> 3
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
Article 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or may
hereafter be amended, permits the limitation or elimination of the liability of
directors, a director of this corporation shall not be liable to this
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director. Any amendment to or repeal of this Article 11 shall not
adversely affect any right or protection of a director of this corporation for
or with respect to any acts of omissions of such director occurring prior to
such amendment or repeal. In addition to any requirements or any other
provisions herein or in the terms of any class or series of capital stock having
a preference over the common stock of this corporation as to dividends or upon
liquidation (and notwithstanding that a lesser percentage may be specified by
law), the affirmative vote of the holders of 80% or more of the voting power of
the outstanding voting stock of this corporation, voting together as a single
class, shall be required to amend, alter or repeal any provision of this Article
11.
Signed on November 18, 1995.
-------------------------------
Gayle C. Toney, Incorporator
3
<PAGE> 1
EXHIBIT 3.14
BY-LAWS
OF
LINBENCO, INC.
Originally adopted on November 23, 1995
Amendments are listed on p. i
<PAGE> 2
LINBENCO, INC.
AMENDMENTS
<TABLE>
<CAPTION>
DATE OF
SECTION EFFECT OF AMENDMENT AMENDMENT
- ------- ------------------- ---------
<S> <C> <C>
</TABLE>
i
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES............................................................ 1
SECTION 2. STOCKHOLDERS....................................................... 1
2.1 Annual Meeting......................................................... 1
2.2 Special Meetings....................................................... 1
2.3 Place of Meeting....................................................... 2
2.4 Notice of Meeting...................................................... 2
2.5 Waiver of Notice....................................................... 2
2.5.1 Waiver in Writing.................................................. 2
2.5.2 Waiver by Attendance............................................... 3
2.6 Fixing of Record Date for Determining Stockholders..................... 3
2.6.1 Meetings........................................................... 3
2.6.2 Consent to Corporate Action Without a Meeting...................... 3
2.6.3 Dividends, Distributions and Other Rights.......................... 4
2.7 Voting List............................................................ 4
2.8 Quorum................................................................. 5
2.9 Manner of Acting....................................................... 5
2.10 Proxies................................................................ 6
2.10.1 Appointment........................................................ 6
2.10.2 Delivery to Corporation; Duration.................................. 6
2.11 Voting of Shares....................................................... 7
2.12 Voting for Directors................................................... 7
2.13 Action by Stockholders Without a Meeting............................... 7
SECTION 3. BOARD OF DIRECTORS................................................. 8
3.1 General Powers......................................................... 8
3.2 Number and Tenure...................................................... 8
3.3 Annual and Regular Meetings............................................ 8
3.4 Special Meetings....................................................... 8
3.5 Meetings by Telephone.................................................. 9
3.6 Notice of Special Meetings............................................. 9
3.6.1 Personal Delivery.................................................. 9
3.6.2 Delivery by Mail................................................... 9
3.6.3 Delivery by Private Carrier........................................ 9
3.6.4 Facsimile Notice................................................... 9
3.6.5 Delivery by Telegraph..............................................10
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
3.6.6 Oral Notice........................................................10
3.7 Waiver of Notice.......................................................10
3.7.1 In Writing.........................................................10
3.7.2 By Attendance......................................................10
3.8 Quorum.................................................................11
3.9 Manner of Acting.......................................................11
3.10 Presumption of Assent..................................................11
3.11 Action by Board or Committees Without a Meeting........................11
3.12 Resignation............................................................12
3.13 Removal................................................................12
3.14 Vacancies..............................................................12
3.15 Committees.............................................................12
3.15.1 Creation and Authority of Committees...............................12
3.15.2 Minutes of Meetings................................................13
3.15.3 Quorum and Manner of Acting........................................13
3.15.4 Resignation........................................................13
3.15.5 Removal............................................................14
3.16 Compensation...........................................................14
SECTION 4. OFFICERS...........................................................14
4.1 Number.................................................................14
4.2 Election and Term of Office............................................15
4.3 Resignation............................................................15
4.4 Removal................................................................15
4.5 Vacancies..............................................................15
4.6 Chairman of the Board..................................................15
4.7 President..............................................................16
4.8 Vice President.........................................................16
4.9 Secretary..............................................................16
4.10 Treasurer..............................................................17
4.11 Salaries...............................................................17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS..............................17
5.1 Contracts..............................................................17
5.2 Loans to the Corporation...............................................17
5.3 Check, Drafts, Etc.....................................................18
5.4 Deposits...............................................................18
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR
TRANSFER......................................................................18
6.1 Issuance of Shares.....................................................18
6.2 Certificates for Shares................................................18
6.3 Stock Records..........................................................19
6.4 Restriction on Transfer................................................19
6.5 Transfer of Shares.....................................................20
6.6 Lost or Destroyed Certificates.........................................20
SECTION 7. BOOKS AND RECORDS..................................................20
SECTION 8. ACCOUNTING YEAR....................................................20
SECTION 9. SEAL...............................................................20
SECTION 10. INDEMNIFICATION...................................................21
10.1 Right to Indemnification..............................................21
10.2 Right of Indemnitee to Bring Suit.....................................22
10.3 Nonexclusivity of Rights..............................................22
10.4 Insurance, Contracts and Funding......................................23
10.5 Indemnification of Employees and Agents of the Corporation............23
10.6 Persons Serving other Entities........................................23
SECTION 11. AMENDMENTS OR REPEAL..............................................24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS.....................................24
</TABLE>
iv
<PAGE> 6
BY-LAWS
OF
LINBENCO, INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at its principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The corporation may have such other offices, either within or
without the State of Delaware, as the Board may designate or as the business of
the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the meeting,
the meeting shall be held on the next succeeding business day. If the annual
meeting is not held on the date designated therefor, the Board shall cause the
meeting to be held as soon thereafter as may be convenient.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled to
vote at the meeting may call special meetings of the stockholders for any
purpose.
<PAGE> 7
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or at
such other place within or without the State of Delaware designated by the
Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of the By-laws, the Certificate of Incorporation or the General
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<PAGE> 8
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record date
shall not be more than sixty (or the maximum number permitted by applicable law)
nor less than ten days before the date of such meeting. If no record date is
fixed by the Board, the record date for determining stockholders entitled to
notice of and to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of and to vote at the meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be
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<PAGE> 9
more than ten (or the maximum number permitted by applicable law) days after the
date upon which the resolution fixing the record date is adopted by the Board.
If no record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter 1 of the DGCL,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
a corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board
and prior action by the Board is required by Chapter 1 of the DGCL, the record
date for determining stockholders entitled to consent to corporate action is
writing without a meeting shall be at the close of business on the day on which
the Board adopts the resolution taking such prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by applicable
law) days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
shall be made, arranged in alphabetical order, with the address of and number of
shares held by each stockholder. This list shall be open to examination by any
stockholder, for any purpose germane to the meeting,
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<PAGE> 10
during ordinary business hours, for a period of ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. This list shall also be produced and kept
at such meeting for inspection by any stockholder who is present.
2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
present in person or represented by proxy at the meeting, shall constitute a
quorum at a meeting of the stockholders; provided, that where a separate vote by
a class or classes is required, a majority of the outstanding shares of such
class or classes, present in person or represented by proxy at the meeting,
shall constitute a quorum entitled to take action with respect to that vote on
that matter. If less than a majority of the outstanding shares entitled to vote
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. If a quorum is
present or represented at a reconvened meeting following such an adjournment,
any business may be transacted that might have been transacted at the meeting as
originally called. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation or
the DGCL. Where a separate vote by a class or classes is required, if a quorum
of such class or classes is present, the affirmative vote of the majority of
outstanding shares of such class or classes present in person or represented by
proxy at the meeting shall be the act of such class or classes. Directors shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
Directors.
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<PAGE> 11
2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by proxy. Such
authorization may be accomplished by (a) the stockholder or such stockholder's
authorized officer, director, employee or agent executing a writing or causing
his or her signature to be affixed to such writing by any reasonable means,
including facsimile signature or (b) by transmitting or authorizing the
transmission to the intended holder of the proxy or to a proxy solicitation
firm, proxy support service or similar agent duly authorized by the intended
proxy holder to receive such transmission; provided, that any such telegram,
cablegram or other electronic transmission must either set forth or be
accompanied by information from which it can be determined that the telegram,
cablegram or other electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission by which a stockholder has authorized another person to
act as proxy for such stockholder may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action in
writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
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<PAGE> 12
2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject matter
of an issue submitted to a meeting of stockholders shall be entitled to one vote
upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may vote, in
person or by proxy, the number of shares owned by such stockholder for as many
persons as there are Directors to be elected and for whose election such
stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof are
delivered to the corporation, in the manner required by this Section, within
sixty (or the maximum number permitted by applicable law) days of the earliest
dated consent delivered to the corporation in the manner required by this
Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the stockholder
shall be determined by or at the direction of the Secretary. A written record of
the information upon which the person making such determination relied shall be
made and kept in the records of the proceedings
7
<PAGE> 13
of the stockholders. Any such consent shall be inserted in the minute book as if
it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws, but
no decrease in the number of Directors shall have the effect of shortening the
term of any incumbent Director. Unless a Director dies, resigns, or is removed,
he or she shall hold office until the next annual meeting of stockholders or
until his or her successor is elected, whichever is later. Directors need not be
stockholders of the corporation or residents of the State of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after and
at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board may
be called by or at the request of the Chairman of the Board, the President, the
Secretary or, in the case of special Board meetings, any Director and, in the
case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
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<PAGE> 14
3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective if
delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective if
deposited in the official government mail properly address to a Director at his
or her address shown on the records of the corporation with postage prepaid at
least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed effective
when dispatched to a Director at his or her address shown on the records of the
corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
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<PAGE> 15
at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed effective
if the content thereof is delivered to the telegraph company at least two days
before the meeting for delivery to a Director at his or her address shown on the
records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice shall
be deemed effective if personally given to the Director at least two days before
the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
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3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of the
total number of Directors then serving on the Board, provided, however, that
such number may not be less than one-third of the total number of Directors
fixed by or in the manner provided in these By-laws, shall constitute a quorum
for the transaction of business at any Board meeting. If less than a majority
are present at a meeting, a majority of the Directors present may adjourn the
meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or committee
meeting at which there is a quorum shall be the act of the or committee, unless
the vote of a greater number is required by these By-laws, the Certificate of
Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless his or her dissent is entered in the minutes of the
meeting, or unless such Director files a written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof, or
forward such dissent by registered mail to the Secretary of the corporation
immediately after the adjournment of the meeting. A Director who voted in favor
of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
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<PAGE> 17
3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to the
Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or more
members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative vote of
a majority of the remaining Directors though less than a quorum of the Board. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his or her predecessor in office. Any directorship to be filled by reason of an
increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the
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resolution of the Board establishing such committee or as otherwise provided in
these By-laws, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which require
it; but no such committee shall have the power to authority in reference to (a)
amending the Certificate of Incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance
of shares of stock adopted by the Board as provided in Section 151(a) of the
DGCL, fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger or
consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these Bylaws; and, unless expressly
provided by resolution of the Board, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock or to adopt
a certificate of ownership and merger pursuant to Section 253 of the DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their meetings
and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the
Board, as established and fixed by resolution of the Board, shall constitute a
quorum for the transaction of business at any meeting of such committee but, if
less than a majority are present at a meeting, a majority of such Directors
present may adjourn the meeting from time to time without further notice. The
act of a majority of the members of a committee present at a meeting at which a
quorum is present shall be the act of such committee.
3.15.4 RESIGNATION
Any member of any committee may resign at any time by delivering written
notice thereof to the Chairman of the Board, the President, the
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<PAGE> 19
Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected or
appointed by it, but only by the affirmative vote of not less than a majority of
the number of Directors fixed by or in the manner provided in these By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any additional
title that the Board deems appropriate. The Board may delegate to any officer or
agent the power to appoint any such subordinate officers or agents and to
prescribe their respective terms of office, authority and duties. Any two or
more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board at
the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held as
soon thereafter as a Board meeting conveniently may be held. Unless an officer
dies, resigns or is removed from office, he or she shall hold office until the
next annual meeting of the Board or until his or her successor is elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed by
the Board whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as shall be
assigned to him or her by the Board from time to time and shall preside over
meetings of the Board and stockholders unless another officer is appointed or
designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the Board
and, subject to the Board's control, shall supervise and control all of the
assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to act,
the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the corporation.
Vice Presidents shall have, to the extent authorized by the President of the
Board, the same powers as the President to sign deeds, mortgages, bonds,
contracts or other instruments. Vice Presidents shall perform such other duties
as from time to time may be assigned to them by the President or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of meetings
of the Board and stockholders, maintenance of the corporation's records and
stock registers, and authentication of the corporation's records and shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the president or by
the Board. In absence of the Secretary, an Assistant Secretary may perform the
duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the faithful
discharge of his or her duties in such amount and with such surety or sureties
as the Board shall determine. The Treasurer shall have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in banks,
trust companies or other depositories selected in accordance with the provision
of these By-laws; sign certificates for shares of the corporation; and in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him or her by the President
or by the Board. In the absence of the Treasurer, an Assistant Treasurer may
perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the Board
or by any person or person to whom the Board has delegated such authority. No
officer shall be prevented from receiving such salary by reason of the fact that
he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board. Such authority may be general or confined to specific instances.
17
<PAGE> 23
5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, or agent or agents, of the corporation and in such
manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by the
Chairman of the Board or a Vice Chairman of the Board, if any, or the President
or a Vice President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, any of whose signatures may be a facsimile.
The Board may in its discretion appoint responsible banks or trust companies
from time to time to act as transfer agents and registrars of the stock of the
corporation; and, when such appointments shall have been made, no stock
certificate shall be valid until countersigned by one of such transfer agents
and registered by one of such registrars. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if such person was such officer, transfer agent or registrar at
the date of issue. All certificates shall include on their face written notice
of any restriction which may be imposed on the
18
<PAGE> 24
transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate, or
on the reverse of the certificate if a reference to the legend is contained on
the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged or
otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering any
such transaction involving said securities or (b) this corporation receives
an opinion of legal counsel for the holder of these securities (concurred
in by legal counsel for this corporation) stating that such transaction is
exempt from registration or (c) this corporation otherwise satisfies itself
that such transaction is exempt from registration. Neither the offering of
the securities nor any offering materials have been reviewed by any
administrator under the Securities Act of 1933 or any applicable state
law."
19
<PAGE> 25
6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed and
filed with the Secretary of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificates for a like number of shares shall have been
surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders and
Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year, provided
that if a different accounting year is at any time selected for purposes of
federal income taxes, the accounting year shall be the year so selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
20
<PAGE> 26
SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved (including, without limitation, as a witness) in any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a Director or officer of the corporation or that,
being or having been such a Director or officer or an employee of the
corporation, he or she is or was serving at the request of the corporation as a
Director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as such a Director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the full extent permitted by the DGCL, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than permitted prior thereto), or by other applicable law as then in
effect, against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) actually and reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue as to an indemnitee
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and administrators; provided,
however, that except as provided in subsection 10.2 hereof with respect to
proceedings seeking to enforce rights to indemnification, the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
was authorized or ratified by the Board. The right to indemnification conferred
in this subsection 10.1 shall be a contract right and shall include the right to
be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter and "advancement of
expenses"); provided, however, that if the DGCL requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the corporation of an undertaking
(hereinafter an
21
<PAGE> 27
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at any
time thereafter bring suit against the corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Section upon submission of a
written claim (and, in an action brought to enforce a claim for an advancement
of expenses, where the required undertaking, if any is required, has been
tendered to the corporation), and thereafter the corporation shall have the
burden of proof to overcome the presumption that the indemnitee is not so
entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances nor an actual determination by the corporation
(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the indemnitee is not so entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses conferred
in this Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, agreement, vote of stockholders or
disinterested Directors, provision of the Certificate of Incorporation or
By-laws of the corporation or otherwise. Notwithstanding any amendment to or
repeal of this Section, any indemnitee shall be entitled to indemnification in
accordance with the provision hereof with respect to any
22
<PAGE> 28
acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the DGCL.
The corporation, without further stockholder approval, may enter into contracts
with any Director, officer, employee or agent in furtherance of the provisions
of this Section and may create a trust fund, grant a security interest or use
other means (including, without limitation, a letter of credit) to ensure the
payment of such amounts as may be necessary to effect indemnification as
provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement of
expenses of Directors and officers of the corporation; provided, however, that
an undertaking shall be made by an employee or agent only if required by the
Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the corporation
who is or was serving (a) as a Director or officer of another corporation of
which a majority of the shares entitled to vote in the election of its Directors
is held by the corporation or (b) in an executive or management capacity in a
partnership, joint venture, trust or other enterprise of which the corporation
or a wholly owned subsidiary of the corporation is a general partner or has a
majority ownership shall be deemed to be so serving at the request of the
corporation and entitled to indemnification and advancement of expenses under
subsection 10.1 hereof.
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SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be adopted by
the Board. The stockholders may also amend and repeal these By-laws or adopt new
By-laws. All By-laws made by the Board may be amended or repealed by the
stockholders. notwithstanding any amendment to Section 10 hereof or repeal of
these By-laws, or of any amendment or repeal of any of the procedures that may
be established by the Board pursuant to Section 10 hereof, any indemnitee shall
be entitled to indemnification in accordance with the provisions hereof and
thereof with respect to any acts or omissions of such indemnitee occurring prior
to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed to
include the following and their representatives: an individual not a citizen of
the United States of America; a partnership unless a majority of the partners
are citizens of the United States of America and have a majority interest in the
partnership profits; a foreign government; a corporation, jointstock company or
association organized under the laws of a foreign country; and any other
corporation, joint-stock company or association directly or indirectly
controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of voting
stock of the corporation of any stock outstanding shall at any time be owned of
record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the account of
Aliens, and the citizenship of transferees thereof, shall be determined in
conformity with regulation prescribed by the Board. There shall be maintained
separate stock records, a domestic record of shares of stock held by citizens
and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to an
Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
24
<PAGE> 30
Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than one-fourth
of the directors are Aliens, or of which more than one-fourth of the stock is
owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such other
provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in effect
or as it may hereafter from time to time be amended, and to carry out the
provisions of this Section 12 and of Article 12 of the Restated Certificate of
Incorporation.
****
The foregoing By-laws were adopted by the Board of Directors on
November 23, 1995. Section 10 hereof ("Indemnification") was approved by
the sole stockholder on November 24, 1995.
-----------------------------
Assistant Secretary
25
<PAGE> 1
EXHIBIT 3.15
CERTIFICATE OF INCORPORATION
OF
LIN SPORTS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code, and
the acts amendatory thereof and supplemental thereto, and known, identified,
and referred to as the "General Corporation Law of the State of Delaware"),
hereby certifies that:
ARTICLE 1. NAME
The name of this corporation is LIN Sports, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
1013 Centre Road, City of Wilmington, County of New Castle, Delaware, 19805;
and the name of the registered agent of the corporation in the State of
Delaware is The Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have
the authority to issue is 1,000. The par value of each such shares is $.01. All
such shares are of one class and are shares of Common Stock.
<PAGE> 2
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Television Corporation, 1001 G Street, N.W.,
Suite 700E, Washington, DC 20001
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation; provided, however, that the Board of Directors
may not repeal or amend any By-law that the stockholders have expressly
provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
2
<PAGE> 3
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or
may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 11
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts of omissions of such director
occurring prior to such amendment or repeal. In addition to any requirements or
any other provisions herein or in the terms of any class or series of capital
stock having a preference over the common stock of this corporation as to
dividends or upon liquidation (and notwithstanding that a lesser percentage may
be specified by law), the affirmative vote of the holders of 80% or more of the
voting power of the outstanding voting stock of this corporation, voting
together as a single class, shall be required to amend, alter or repeal any
provision of this Article 11.
Signed on November 18, 1995.
--------------------------------
Gayle C. Toney, Incorporator
3
<PAGE> 1
EXHIBIT 3.16
BY-LAWS
OF
LIN SPORTS, INC.
Originally adopted on November 23, 1995
Amendments are listed on p. i
<PAGE> 2
LIN SPORTS, INC.
AMENDMENTS
<TABLE>
<CAPTION>
DATE OF
SECTION EFFECT OF AMENDMENT AMENDMENT
- ------- ------------------- ---------
<S> <C> <C>
</TABLE>
i
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES............................................................ 1
SECTION 2. STOCKHOLDERS....................................................... 1
2.1 Annual Meeting......................................................... 1
2.2 Special Meetings....................................................... 1
2.3 Place of Meeting....................................................... 2
2.4 Notice of Meeting...................................................... 2
2.5 Waiver of Notice....................................................... 2
2.5.1 Waiver in Writing.................................................. 2
2.5.2 Waiver by Attendance............................................... 3
2.6 Fixing of Record Date for Determining Stockholders..................... 3
2.6.1 Meetings........................................................... 3
2.6.2 Consent to Corporate Action Without a Meeting...................... 3
2.6.3 Dividends, Distributions and Other Rights.......................... 4
2.7 Voting List............................................................ 4
2.8 Quorum................................................................. 5
2.9 Manner of Acting....................................................... 5
2.10 Proxies................................................................ 6
2.10.1 Appointment........................................................ 6
2.10.2 Delivery to Corporation; Duration.................................. 6
2.11 Voting of Shares....................................................... 7
2.12 Voting for Directors................................................... 7
2.13 Action by Stockholders Without a Meeting............................... 7
SECTION 3. BOARD OF DIRECTORS................................................. 8
3.1 General Powers......................................................... 8
3.2 Number and Tenure...................................................... 8
3.3 Annual and Regular Meetings............................................ 8
3.4 Special Meetings....................................................... 8
3.5 Meetings by Telephone.................................................. 9
3.6 Notice of Special Meetings............................................. 9
3.6.1 Personal Delivery.................................................. 9
3.6.2 Delivery by Mail................................................... 9
3.6.3 Delivery by Private Carrier........................................ 9
3.6.4 Facsimile Notice................................................... 9
3.6.5 Delivery by Telegraph..............................................10
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
3.6.6 Oral Notice........................................................10
3.7 Waiver of Notice.......................................................10
3.7.1 In Writing.........................................................10
3.7.2 By Attendance......................................................10
3.8 Quorum.................................................................11
3.9 Manner of Acting.......................................................11
3.10 Presumption of Assent..................................................11
3.11 Action by Board or Committees Without a Meeting........................11
3.12 Resignation............................................................12
3.13 Removal................................................................12
3.14 Vacancies..............................................................12
3.15 Committees.............................................................12
3.15.1 Creation and Authority of Committees...............................12
3.15.2 Minutes of Meetings................................................13
3.15.3 Quorum and Manner of Acting........................................13
3.15.4 Resignation........................................................13
3.15.5 Removal............................................................14
3.16 Compensation..........................................................14
SECTION 4. OFFICERS...........................................................14
4.1 Number.................................................................14
4.2 Election and Term of Office............................................15
4.3 Resignation............................................................15
4.4 Removal................................................................15
4.5 Vacancies..............................................................15
4.6 Chairman of the Board..................................................15
4.7 President..............................................................16
4.8 Vice President.........................................................16
4.9 Secretary..............................................................16
4.10 Treasurer..............................................................17
4.11 Salaries...............................................................17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS..............................17
5.1 Contracts..............................................................17
5.2 Loans to the Corporation...............................................17
5.3 Check, Drafts, Etc.....................................................18
5.4 Deposits...............................................................18
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER.........................18
6.1 Issuance of Shares.....................................................18
6.2 Certificates for Shares................................................18
6.3 Stock Records..........................................................19
6.4 Restriction on Transfer................................................19
6.5 Transfer of Shares.....................................................20
6.6 Lost or Destroyed Certificates.........................................20
SECTION 7. BOOKS AND RECORDS..................................................20
SECTION 8. ACCOUNTING YEAR....................................................20
SECTION 9. SEAL...............................................................20
SECTION 10. INDEMNIFICATION...................................................21
10.1 Right to Indemnification..............................................21
10.2 Right of Indemnitee to Bring Suit.....................................22
10.3 Nonexclusivity of Rights..............................................22
10.4 Insurance, Contracts and Funding......................................23
10.5 Indemnification of Employees and Agents of the Corporation............23
10.6 Persons Serving other Entities........................................23
SECTION 11. AMENDMENTS OR REPEAL..............................................24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS.....................................24
</TABLE>
iv
<PAGE> 6
BY-LAWS
OF
LIN SPORTS, INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at its principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The corporation may have such other offices, either within or
without the State of Delaware, as the Board may designate or as the business of
the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the meeting,
the meeting shall be held on the next succeeding business day. If the annual
meeting is not held on the date designated therefor, the Board shall cause the
meeting to be held as soon thereafter as may be convenient.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled to
vote at the meeting may call special meetings of the stockholders for any
purpose.
<PAGE> 7
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or at
such other place within or without the State of Delaware designated by the
Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of the By-laws, the Certificate of Incorporation or the General
2
<PAGE> 8
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the of such notice.
2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record date
shall not be more than sixty (or the maximum number permitted by applicable law)
nor less than ten days before the date of such meeting. If no record date is
fixed by the Board, the record date for determining stockholders entitled to
notice of and to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of and to vote at the meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be
3
<PAGE> 9
more than ten (or the maximum number permitted by applicable law) days after the
date upon which the resolution fixing the record date is adopted by the Board.
If no record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter 1 of the DGCL,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
a corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board
and prior action by the Board is required by Chapter 1 of the DGCL, the record
date for determining stockholders entitled to consent to corporate action is
writing without a meeting shall be at the close of business on the day on which
the Board adopts the resolution taking such prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by applicable
law) days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
shall be made, arranged in alphabetical order, with the address of and number of
shares held by each stockholder. This list shall be open to examination by any
stockholder, for any purpose germane to the meeting,
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during ordinary business hours, for a period of ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. This list shall also be produced and kept
at such meeting for inspection by any stockholder who is present.
2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
present in person or represented by proxy at the meeting, shall constitute a
quorum at a meeting of the stockholders; provided, that where a separate vote by
a class or classes is required, a majority of the outstanding shares of such
class or classes, present in person or represented by proxy at the meeting,
shall constitute a quorum entitled to take action with respect to that vote on
that matter. If less than a majority of the outstanding shares entitled to vote
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. If a quorum is
present or represented at a reconvened meeting following such an adjournment,
any business may be transacted that might have been transacted at the meeting as
originally called. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation or
the DGCL. Where a separate vote by a class or classes is required, if a quorum
of such class or classes is present, the affirmative vote of the majority of
outstanding shares of such class or classes present in person or represented by
proxy at the meeting shall be the act of such class or classes. Directors shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
Directors.
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2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by proxy. Such
authorization may be accomplished by (a) the stockholder or such stockholder's
authorized officer, director, employee or agent executing a writing or causing
his or her signature to be affixed to such writing by any reasonable means,
including facsimile signature or (b) by transmitting or authorizing the
transmission to the intended holder of the proxy or to a proxy solicitation
firm, proxy support service or similar agent duly authorized by the intended
proxy holder to receive such transmission; provided, that any such telegram,
cablegram or other electronic transmission must either set forth or be
accompanied by information from which it can be determined that the telegram,
cablegram or other electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission by which a stockholder has authorized another person to
act as proxy for such stockholder may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action in
writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
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2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject matter
of an issue submitted to a meeting of stockholders shall be entitled to one vote
upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may vote, in
person or by proxy, the number of shares owned by such stockholder for as many
persons as there are Directors to be elected and for whose election such
stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof are
delivered to the corporation, in the manner required by this Section, within
sixty (or the maximum number permitted by applicable law) days of the earliest
dated consent delivered to the corporation in the manner required by this
Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the stockholder
shall be determined by or at the direction of the Secretary. A written record of
the information upon which the person making such determination relied shall be
made and kept in the records of the proceedings
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of the stockholders. Any such consent shall be inserted in the minute book as if
it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws, but
no decrease in the number of Directors shall have the effect of shortening the
term of any incumbent Director. Unless a Director dies, resigns, or is removed,
he or she shall hold office until the next annual meeting of stockholders or
until his or her successor is elected, whichever is later. Directors need not be
stockholders of the corporation or residents of the State of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after and
at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board may
be called by or at the request of the Chairman of the Board, the President, the
Secretary or, in the case of special Board meetings, any Director and, in the
case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
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3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective if
delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective if
deposited in the official government mail properly address to a Director at his
or her address shown on the records of the corporation with postage prepaid at
least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed effective
when dispatched to a Director at his or her address shown on the records of the
corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
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at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed effective
if the content thereof is delivered to the telegraph company at least two days
before the meeting for delivery to a Director at his or her address shown on the
records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice shall
be deemed effective if personally given to the Director at least two days before
the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
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3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of the
total number of Directors then serving on the Board, provided, however, that
such number may not be less than one-third of the total number of Directors
fixed by or in the manner provided in these By-laws, shall constitute a quorum
for the transaction of business at any Board meeting. If less than a majority
are present at a meeting, a majority of the Directors present may adjourn the
meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or committee
meeting at which there is a quorum shall be the act of the or committee, unless
the vote of a greater number is required by these By-laws, the Certificate of
Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless his or her dissent is entered in the minutes of the
meeting, or unless such Director files a written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof, or
forward such dissent by registered mail to the Secretary of the corporation
immediately after the adjournment of the meeting. A Director who voted in favor
of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
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3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to the
Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or more
members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative vote of
a majority of the remaining Directors though less than a quorum of the Board. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his or her predecessor in office. Any directorship to be filled by reason of an
increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the
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resolution of the Board establishing such committee or as otherwise provided in
these By-laws, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which require
it; but no such committee shall have the power to authority in reference to (a)
amending the Certificate of Incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance of
shares of stock adopted by the Board as provided in Section 151(a) of the DGCL,
fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger or
consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these By-laws; and, unless
expressly provided by resolution of the Board, no such committee shall have the
power or authority to declare a dividend, to authorize the issuance of stock or
to adopt a certificate of ownership and merger pursuant to Section 253 of the
DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their meetings
and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the Board,
as established and fixed by resolution of the Board, shall constitute a quorum
for the transaction of business at any meeting of such committee but, if less
than a majority are present at a meeting, a majority of such Directors present
may adjourn the meeting from time to time without further notice. The act of a
majority of the members of a committee present at a meeting at which a quorum is
present shall be the act of such committee.
3.15.4 RESIGNATION
Any member of any committee may resign at any time by delivering written
notice thereof to the Chairman of the Board, the President, the
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Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected or
appointed by it, but only by the affirmative vote of not less than a majority of
the number of Directors fixed by or in the manner provided in these By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any additional
title that the Board deems appropriate. The Board may delegate to any officer or
agent the power to appoint any such subordinate officers or agents and to
prescribe their respective terms of office, authority and duties. Any two or
more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board at
the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held as
soon thereafter as a Board meeting conveniently may be held. Unless an officer
dies, resigns or is removed from office, he or she shall hold office until the
next annual meeting of the Board or until his or her successor is elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed by
the Board whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as shall be
assigned to him or her by the Board from time to time and shall preside over
meetings of the Board and stockholders unless another officer is appointed or
designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the Board
and, subject to the Board's control, shall supervise and control all of the
assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to act,
the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the corporation.
Vice Presidents shall have, to the extent authorized by the President of the
Board, the same powers as the President to sign deeds, mortgages, bonds,
contracts or other instruments. Vice Presidents shall perform such other duties
as from time to time may be assigned to them by the President or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of meetings
of the Board and stockholders, maintenance of the corporation's records and
stock registers, and authentication of the corporation's records and shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the president or by
the Board. In absence of the Secretary, an Assistant Secretary may perform the
duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the faithful
discharge of his or her duties in such amount and with such surety or sureties
as the Board shall determine. The Treasurer shall have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in banks,
trust companies or other depositories selected in accordance with the provision
of these By-laws; sign certificates for shares of the corporation; and in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him or her by the President
or by the Board. In the absence of the Treasurer, an Assistant Treasurer may
perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the Board
or by any person or person to whom the Board has delegated such authority. No
officer shall be prevented from receiving such salary by reason of the fact that
he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation. Such authority may be general or confined to
specific instances,
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board. Such authority may be general or confined to specific instances.
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5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, or agent or agents, of the corporation and in such
manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by the
Chairman of the Board or a Vice Chairman of the Board, if any, or the President
or a Vice President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, any of whose signatures may be a facsimile.
The Board may in its discretion appoint responsible banks or trust companies
from time to time to act as transfer agents and registrars of the stock of the
corporation; and, when such appointments shall have been made, no stock
certificate shall be valid until countersigned by one of such transfer agents
and registered by one of such registrars. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if such person was such officer, transfer agent or registrar at
the date of issue. All certificates shall include on their face written notice
of any restriction which may be imposed on the
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transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate, or
on the reverse of the certificate if a reference to the legend is contained on
the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged or
otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering any
such transaction involving said securities or (b) this corporation receives
an opinion of legal counsel for the holder of these securities (concurred
in by legal counsel for this corporation) stating that such transaction is
exempt from registration or (c) this corporation otherwise satisfies itself
that such transaction is exempt from registration. Neither the offering of
the securities nor any offering materials have been reviewed by any
administrator under the Securities Act of 1933 or any applicable state
law."
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6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed and
filed with the Secretary of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificates for a like number of shares shall have been
surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders and
Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year, provided
that if a different accounting year is at any time selected for purposes of
federal income taxes, the accounting year shall be the year so selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
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SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved (including, without limitation, as a witness) in any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a Director or officer of the corporation or that,
being or having been such a Director or officer or an employee of the
corporation, he or she is or was serving at the request of the corporation as a
Director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as such a Director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the full extent permitted by the DGCL, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the corporation to provide broader
indemnification rights than permitted prior thereto), or by other applicable law
as then in effect, against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) actually and reasonably incurred or suffered by such
indemnitee in connection therewith and such indemnification shall continue as to
an indemnitee who has ceased to be a Director, officer, employee or agent and
shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that except as provided in subsection 10.2
hereof with respect to proceedings seeking to enforce rights to indemnification,
the corporation shall indemnify any such indemnitee in connection with a
proceeding (or part thereof) was authorized or ratified by the Board. The right
to indemnification conferred in this subsection 10.1 shall be a contract right
and shall include the right to be paid by the corporation the expenses incurred
in defending any such proceeding in advance of its final disposition
(hereinafter and "advancement of expenses"); provided, however, that if the DGCL
requires, an advancement of expenses incurred by an indemnitee in his or her
capacity as a Director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
corporation of an undertaking (hereinafter an
21
<PAGE> 27
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at any
time thereafter bring suit against the corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Section upon submission of a
written claim (and, in an action brought to enforce a claim for an advancement
of expenses, where the required undertaking, if any is required, has been
tendered to the corporation), and thereafter the corporation shall have the
burden of proof to overcome the presumption that the indemnitee is not so
entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances nor an actual determination by the corporation
(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the indemnitee is not so entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses conferred
in this Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, agreement, vote of stockholders or
disinterested Directors, provision of the Certificate of Incorporation or
By-laws of the corporation or otherwise. Notwithstanding any amendment to or
repeal of this Section, any indemnitee shall be entitled to indemnification in
accordance with the provision hereof with respect to any
22
<PAGE> 28
acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the DGCL.
The corporation, without further stockholder approval, may enter into contracts
with any Director, officer, employee or agent in furtherance of the provisions
of this Section and may create a trust fund, grant a security interest or use
other means (including, without limitation, a letter of credit) to ensure the
payment of such amounts as may be necessary to effect indemnification as
provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement of
expenses of Directors and officers of the corporation; provided, however, that
an undertaking shall be made by an employee or agent only if required by the
Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the corporation
who is or was serving (a) as a Director or officer of another corporation of
which a majority of the shares entitled to vote in the election of its Directors
is held by the corporation or (b) in an executive or management capacity in a
partnership, joint venture, trust or other enterprise of which the corporation
or a wholly owned subsidiary of the corporation is a general partner or has a
majority ownership shall be deemed to be so serving at the request of the
corporation and entitled to indemnification and advancement of expenses under
subsection 10.1 hereof.
23
<PAGE> 29
SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be adopted by
the Board. The stockholders may also amend and repeal these By-laws or adopt new
By-laws. All By-laws made by the Board may be amended or repealed by the
stockholders, notwithstanding any amendment to Section 10 hereof or repeal of
these By-laws, or of any amendment or repeal of any of the procedures that may
be established by the Board pursuant to Section 10 hereof, any indemnitee shall
be entitled to indemnification in accordance with the provisions hereof and
thereof with respect to any acts or omissions of such indemnitee occurring prior
to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed to
include the following and their representatives: an individual not a citizen of
the United States of America; a partnership unless a majority of the partners
are citizens of the United States of America and have a majority interest in the
partnership profits; a foreign government; a corporation, joint-stock company or
association organized under the laws of a foreign country; and any other
corporation, joint-stock company or association directly or indirectly
controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of voting
stock of the corporation of any stock outstanding shall at any time be owned of
record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the account of
Aliens, and the citizenship of transferees thereof, shall be determined
conformity with regulation prescribed by the Board. There shall be maintained
separate stock records, a domestic record of shares of stock held by citizens
and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to an
Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
24
<PAGE> 30
Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than one-fourth
of the directors are Aliens, or of which more than one-fourth of the stock is
owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such other
provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in effect
or as it may hereafter from time to time be amended, and to carry out the
provisions of this Section 12 and of Article 12 of the Restated Certificate of
Incorporation.
*****
The foregoing By-laws were adopted by the Board of Directors on November
23, 1995. Section 10 hereof ("Indemnification") was approved by the sole
stockholder on November 24, 1995.
-----------------------------------
Assistant Secretary
25
<PAGE> 1
EXHIBIT 3.17
CERTIFICATE OF INCORPORATION
OF
LIN TELEVISION OF TEXAS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code, and
the acts amendatory thereof and supplemental thereto, and known, identified,
and referred to as the "General Corporation Law of the State of Delaware"),
hereby certifies that:
ARTICLE 1. NAME
The name of this corporation is LIN Television of Texas, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
Suite L-100, 32 Loockerman Square, City of Dover, County of Kent, Delaware,
19904; and the name of the registered agent of the corporation in the State of
Delaware is The Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have
the authority to issue is 1,000. The par value of each such shares is $.01. All
such shares are of one class and are shares of Common Stock.
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Broadcasting Corporation, 5295 Carillon Point,
Kirkland, Washington 98033
<PAGE> 2
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation; provided, however, that the Board of Directors
may not repeal or amend any By-law that the stockholders have expressly
provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or
may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 11
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts of omissions of such director
occurring prior to such amendment or repeal. In
2
<PAGE> 3
addition to any requirements or any other provisions herein or in the terms of
any class or series of capital stock having a preference over the common stock
of this corporation as to dividends or upon liquidation (and notwithstanding
that a lesser percentage may be specified by law), the affirmative vote of the
holders of 80% or more of the voting power of the outstanding voting stock of
this corporation, voting together as a single class, shall be required to
amend, alter or repeal any provision of this Article 11.
Signed on October 14, 1994.
--------------------------------
Gayle C. Toney, Incorporator
3
<PAGE> 1
EXHIBIT 3.18
BY-LAWS
OF
LIN TELEVISION OF TEXAS, INC.
Originally adopted on October 31, 1994
Amendments are listed on p. i
<PAGE> 2
LIN TELEVISION OF TEXAS, INC.
AMENDMENTS
<TABLE>
<CAPTION>
DATE OF
SECTION EFFECT OF AMENDMENT AMENDMENT
- ------- ------------------- ---------
<S> <C> <C>
</TABLE>
i
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES...................................................................1
SECTION 2. STOCKHOLDERS..............................................................1
2.1 Annual Meeting................................................................1
2.2 Special Meetings..............................................................1
2.3 Place of Meeting..............................................................1
2.4 Notice of Meeting.............................................................2
2.5 Waiver of Notice..............................................................2
2.5.1 Waiver in Writing.........................................................2
2.5.2 Waiver by Attendance......................................................3
2.6 Fixing of Record Date for Determining Stockholders............................3
2.6.1 Meetings..................................................................3
2.6.2 Consent to Corporate Action Without a Meeting.............................3
2.6.3 Dividends, Distributions and Other Rights.................................4
2.7 Voting List...................................................................4
2.8 Quorum........................................................................5
2.9 Manner of Acting..............................................................5
2.10 Proxies.......................................................................5
2.10.1 Appointment...............................................................5
2.10.2 Delivery to Corporation; Duration.........................................6
2.11 Voting of Shares..............................................................7
2.12 Voting for Directors..........................................................7
2.13 Action by Stockholders Without a Meeting......................................7
SECTION 3. BOARD OF DIRECTORS........................................................8
3.1 General Powers................................................................8
3.2 Number and Tenure.............................................................8
3.3 Annual and Regular Meetings...................................................8
3.4 Special Meetings..............................................................8
3.5 Meetings by Telephone.........................................................9
3.6 Notice of Special Meetings....................................................9
3.6.1 Personal Delivery.........................................................9
3.6.2 Delivery by Mail..........................................................9
3.6.3 Delivery by Private Carrier...............................................9
3.6.4 Facsimile Notice..........................................................9
3.6.5 Delivery by Telegraph....................................................10
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
3.6.6 Oral Notice.....................................................10
3.7 Waiver of Notice....................................................10
3.7.1 In Writing......................................................10
3.7.2 By Attendance...................................................10
3.8 Quorum..............................................................11
3.9 Manner of Acting....................................................11
3.10 Presumption of Assent...............................................11
3.11 Action by Board or Committees Without a Meeting.....................11
3.12 Resignation.........................................................12
3.13 Removal.............................................................12
3.14 Vacancies...........................................................12
3.15 Committees..........................................................12
3.15.1 Creation and Authority of Committees............................12
3.15.2 Minutes of Meetings.............................................13
3.15.3 Quorum and Manner of Acting.....................................13
3.15.4 Resignation.....................................................13
3.15.5 Removal.........................................................14
3.16 Compensation........................................................14
SECTION 4. OFFICERS........................................................14
4.1 Number..............................................................14
4.2 Election and Term of Office.........................................15
4.3 Resignation.........................................................15
4.4 Removal.............................................................15
4.5 Vacancies...........................................................15
4.6 Chairman of the Board...............................................15
4.7 President...........................................................16
4.8 Vice President......................................................16
4.9 Secretary...........................................................16
4.10 Treasurer...........................................................17
4.11 Salaries............................................................17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS...........................17
5.1 Contracts...........................................................17
5.2 Loans to the Corporation............................................17
5.3 Check, Drafts, Etc..................................................18
5.4 Deposits............................................................18
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR
TRANSFER........................................................................18
6.1 Issuance of Shares.......................................................18
6.2 Certificates for Shares..................................................18
6.3 Stock Records............................................................19
6.4 Restriction on Transfer..................................................19
6.5 Transfer of Shares.......................................................20
6.6 Lost or Destroyed Certificates...........................................20
SECTION 7. BOOKS AND RECORDS....................................................20
SECTION 8. ACCOUNTING YEAR......................................................20
SECTION 9. SEAL.................................................................20
SECTION 10. INDEMNIFICATION.....................................................21
10.1 Right to Indemnification.................................................21
10.2 Right of Indemnitee to Bring Suit........................................22
10.3 Nonexclusivity of Rights.................................................22
10.4 Insurance, Contracts and Funding.........................................23
10.5 Indemnification of Employees and Agents of the Corporation...............23
10.6 Persons Serving other Entities...........................................23
SECTION 11. AMENDMENTS OR REPEAL................................................24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS.......................................24
</TABLE>
iv
<PAGE> 6
BY-LAWS
OF
LIN TELEVISION OF TEXAS INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at its principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The corporation may have such other offices, either within or
without the State of Delaware, as the Board may designate or as the business of
the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the meeting,
the meeting shall be held on the next succeeding business day. If the annual
meeting is not held on the date designated therefor, the Board shall cause the
meeting to be held as soon thereafter as may be convenient.
2.2 Special Meetings
The Chairman of the Board, the President, the Board or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled to
vote at the meeting may call special meetings of the stockholders for any
purpose.
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or at
such other place within or without the State of Delaware designated by the
<PAGE> 7
Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of the By-laws, the Certificate of Incorporation or the General
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
2
<PAGE> 8
2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record date
shall not be more than sixty (or the maximum number permitted by applicable law)
nor less than ten days before the date of such meeting. If no record date is
fixed by the Board, the record date for determining stockholders entitled to
notice of and to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of and to vote at the meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be more than
ten (or the maximum number permitted by applicable law) days after the date upon
which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter
3
<PAGE> 9
1 of the DGCL, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the corporation
by delivery to its registered office in the State of Delaware, its principal
place of business, or an officer or agent of the corporation having custody of
the book in which proceedings of meetings of stockholders are recorded. Delivery
made to a corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board and prior action by the Board is required by Chapter 1 of the DGCL,
the record date for determining stockholders entitled to consent to corporate
action is writing without a meeting shall be at the close of business on the day
on which the Board adopts the resolution taking such prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by applicable
law) days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
shall be made, arranged in alphabetical order, with the address of and number of
shares held by each stockholder. This list shall be open to examination by any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of ten days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. This list shall also be produced and kept at such meeting for
inspection by any stockholder who is present.
4
<PAGE> 10
2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
present in person or represented by proxy at the meeting, shall constitute a
quorum at a meeting of the stockholders; provided, that where a separate vote by
a class or classes is required, a majority of the outstanding shares of such
class or classes, present in person or represented by proxy at the meeting,
shall constitute a quorum entitled to take action with respect to that vote on
that matter. If less than a majority of the outstanding shares entitled to vote
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. If a quorum is
present or represented at a reconvened meeting following such an adjournment,
any business may be transacted that might have been transacted at the meeting as
originally called. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation or
the DGCL. Where a separate vote by a class or classes is required, if a quorum
of such class or classes is present, the affirmative vote of the majority of
outstanding shares of such class or classes present in person or represented by
proxy at the meeting shall be the act of such class or classes. Directors shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
Directors.
2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting
5
<PAGE> 11
may authorize another person or persons to act for such stockholder by proxy.
Such authorization may be accomplished by (a) the stockholder or such
stockholder's authorized officer, director, employee or agent executing a
writing or causing his or her signature to be affixed to such writing by any
reasonable means, including facsimile signature or (b) by transmitting or
authorizing the transmission to the intended holder of the proxy or to a proxy
solicitation firm, proxy support service or similar agent duly authorized by the
intended proxy holder to receive such transmission; provided, that any such
telegram, cablegram or other electronic transmission must either set forth or be
accompanied by information from which it can be determined that the telegram,
cablegram or other electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission by which a stockholder has authorized another person to
act as proxy for such stockholder may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action in
writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
6
<PAGE> 12
2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject matter
of an issue submitted to a meeting of stockholders shall be entitled to one vote
upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may vote, in
person or by proxy, the number of shares owned by such stockholder for as many
persons as there are Directors to be elected and for whose election such
stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware,, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof are
delivered to the corporation, in the manner required by this Section, within
sixty (or the maximum number permitted by applicable law) days of the earliest
dated consent delivered to the corporation in the manner required by this
Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the stockholder
shall be determined by or at the direction of the Secretary. A written record of
the information upon which the person making such determination relied shall be
made and kept in the records of the proceedings
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of the stockholders. Any such consent shall be inserted in the minute book as if
it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws, but
no decrease in the number of Directors shall have the effect of shortening the
term of any incumbent Director. Unless a Director dies, resigns, or is removed,
he or she shall hold office until the next annual meeting of stockholders or
until his or her successor is elected, whichever is later. Directors need not be
stockholders of the corporation or residents of the State of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after and
at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board may
be called by or at the request of the Chairman of the Board, the President the
Secretary or, in the case of special Board meetings, any Director and, in the
case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
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3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective if
delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective if
deposited in the official government mail properly address to a Director at his
or her address shown on the records of the corporation with postage prepaid at
least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed effective
when dispatched to a Director at his or her address shown on the records of the
corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
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at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed effective
if the content thereof is delivered to the telegraph company at least two days
before the meeting for delivery to a Director at his or her address shown on the
records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice shall
be deemed effective if personally given to the Director at least two days before
the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
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3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of the
total number of Directors then serving on the Board, provided, however, that
such number may not be less than one-third of the total number of Directors
fixed by or in the manner provided in these By-laws, shall constitute a quorum
for the transaction of business at any Board meeting. If less than a majority
are present at a meeting, a majority of the Directors present may adjourn the
meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or committee
meeting at which there is a quorum shall be the act of the or committee, unless
the vote of a greater number is required by these By-laws, the Certificate of
Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless his or her dissent is entered in the minutes of the
meeting, or unless such Director files a written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof, or
forward such dissent by registered mail to the Secretary of the corporation
immediately after the adjournment of the meeting. A Director who voted in favor
of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such Written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
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3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to the
Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or more
members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative vote of
a majority of the remaining Directors though less than a quorum of the Board. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his or her predecessor in office. Any directorship to be filled by reason of an
increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the
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resolution of the Board establishing such committee or as otherwise provided in
these By-laws, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which require
it; but no such committee shall have the power to authority in reference to (a)
amending the Certificate of Incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance of
shares of stock adopted by the Board as provided in Section 151(a) of the DGCL,
fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger or
consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these Bylaws; and, unless expressly
provided by resolution of the Board, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock or to adopt
a certificate of ownership and merger pursuant to Section 253 of the DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their meetings
and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the Board,
as established and fixed by resolution of the Board, shall constitute a quorum
for the transaction of business at any meeting of such committee but, if less
than a majority are present at a meeting, a majority of such Directors present
may adjourn the meeting from time to time without further notice. The act of a
majority of the members of a committee present at a meeting at which a quorum is
present shall be the act of such committee.
3.15.4 RESIGNATION
Any member of any committee may resign at any time by delivering written
notice thereof to the Chairman of the Board, the President, the
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Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected or
appointed by it, but only by the alternative vote of not less than a majority of
the number of Directors fixed by or in the manner provided in these By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any additional
title that the Board deems appropriate. The Board may delegate to any officer or
agent the power to appoint any such subordinate officers or agents and to
prescribe their respective terms of office, authority and duties. Any two or
more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board at
the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held as
soon thereafter as a Board meeting conveniently may be held. Unless an officer
dies, resigns or is removed from office, he or she shall hold office until the
next annual meeting of the Board or until his or her successor is elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed by
the Board whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as shall be
assigned to him or her by the Board from time to time and shall preside over
meetings of the Board and stockholders unless another officer is appointed or
designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the Board
and, subject to the Board's control, shall supervise and control all of the
assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to act,
the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the corporation.
Vice Presidents shall have, to the extent authorized by the President of the
Board, the same powers as the President to sip deeds, mortgages, bonds,
contracts or other instruments. Vice Presidents shall perform such other duties
as from time to time may be assigned to them by the President or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of meetings
of the Board and stockholders, maintenance of the corporation's records and
stock registers, and authentication of the corporation's records and shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the president or by
the Board. In absence of the Secretary, an Assistant Secretary may perform the
duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the faithful
discharge of his or her duties in such amount and with such surety or sureties
as the Board shall determine. The Treasurer shall have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in banks,
trust companies or other depositories selected in accordance with the provision
of these By-laws; sign certificates for shares of the corporation; and in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him or her by the President
or by the Board. In the absence of the Treasurer, an Assistant Treasurer may
perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the Board
or by any person or person to whom the Board has delegated such authority. No
officer shall be prevented from receiving such salary by reason of the fact that
he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board. Such authority may be general or confined to specific instances.
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5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, or agent or agents, of the corporation and in such
manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by the
Chairman of the Board or a Vice Chairman of the Board, if any, or the President
or a Vice President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, any of whose signatures may be a facsimile.
The Board may in its discretion appoint responsible banks or trust companies
from time to time to act as transfer agents and registrars of the stock of the
corporation; and, when such appointments shall have been made, no stock
certificate shall be valid until countersigned by one of such transfer agents
and registered by one of such registrars. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if such person was such officer, transfer agent or registrar at
the date of issue. All certificates shall include on their face written notice
of any restriction which may be imposed on the
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transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate, or
on the reverse of the certificate if a reference to the legend is contained on
the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged or
otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering any
such transaction involving said securities or (b) this corporation receives
an opinion of legal counsel for the holder of these securities (concurred
in by legal counsel for this corporation) stating that such transaction is
exempt from registration or (c) this corporation otherwise satisfies itself
that such transaction is exempt from registration. Neither the offering of
the securities nor any offering materials have been reviewed by any
administrator under the Securities Act of 1933 or any applicable state
law."
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6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed and
filed with the Secretary of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificates for a like number of shares shall have been
surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year, provided
that if a different accounting year is at any time selected for purposes of
federal income taxes, the accounting year shall be the year so selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
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SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved (including, without limitation, as a witness) in any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a Director or officer of the corporation or that,
being or having been such a Director or officer or an employee of the
corporation, he or she is or was serving at the request of the corporation as a
Director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as such a Director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the full extent permitted by the DGCL, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than permitted prior thereto), or by other applicable law as then in
effect, against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) actually and reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue as to an indemnitee
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and administrators; provided,
however, that except as provided in subsection 10.2 hereof with respect to
proceedings seeking to enforce rights to indemnification, the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
was authorized or ratified by the Board. The right to indemnification conferred
in this subsection 10.1 shall be a contract right and shall include the right to
be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter and "advancement of
expenses"); provided, however, that if the DGCL requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the corporation of an undertaking
(hereinafter an
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"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at any
time thereafter bring suit against the corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Section upon submission of a
written claim (and, in an action brought to enforce a claim for an advancement
of expenses, where the required undertaking, if any is required, has been
tendered to the corporation), and thereafter the corporation shall have the
burden of proof to overcome the presumption that the indemnitee is not so
entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances nor an actual determination by the corporation
(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the indemnitee is not so entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses conferred
in this Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, agreement, vote of stockholders or
disinterested Directors, provision of the Certificate of Incorporation or
By-laws of the corporation or otherwise. Notwithstanding any amendment to or
repeal of this Section, any indemnitee shall be entitled to indemnification in
accordance with the provision hereof with respect to any
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acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the DGCL.
The corporation, without further stockholder approval, may enter into contracts
with any Director, officer, employee or agent in furtherance of the provisions
of this Section and may create a trust fund, grant a security interest or use
other means (including, without limitation, a letter of credit) to ensure the
payment of such amounts as may be necessary to effect indemnification as
provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement of
expenses of Directors and officers of the corporation; provided, however, that
an undertaking shall be made by an employee or agent only if required by the
Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the corporation
who is or was serving (a) as a Director or officer of another corporation of
which a majority of the shares entitled to vote in the election of its Directors
is held by the corporation or (b) in an executive or management capacity in a
partnership, joint venture, trust or other enterprise of which the corporation
or a wholly owned subsidiary of the corporation is a general partner or has a
majority ownership shall be deemed to be so serving at the request of the
corporation and entitled to indemnification and advancement of expenses under
subsection 10.1 hereof.
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SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be adopted by
the Board. The stockholders may also amend and repeal these By-laws or adopt new
By-laws. All By-laws made by the Board may be amended or repealed by the
stockholders. Notwithstanding any amendment to Section 10 hereof or repeal of
these By-laws, or of any amendment or repeal of any of the procedures that may
be established by the Board pursuant to Section 10 hereof, any indemnitee shall
be entitled to indemnification in accordance with the provisions hereof and
thereof with respect to any acts or omissions of such indemnitee occurring prior
to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed to
include the following and their representatives: an individual not a citizen of
the United States of America; a partnership unless a majority of the partners
are citizens of the United States of America and have a majority interest in the
partnership profits; a foreign government; a corporation, joint-stock company or
association organized under the laws of a foreign country; and any other
corporation, joint-stock company or association directly or indirectly
controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of voting
stock of the corporation of any stock outstanding shall at any time be owned of
record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the account of
Aliens, and the citizenship of transferees thereof, shall be determined in
conformity with regulation prescribed by the Board. There shall be maintained
separate stock records, a domestic record of shares of stock held by citizens
and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to an
Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
24
<PAGE> 30
Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than one-fourth
of the directors are Aliens, or of which more than one-fourth of the stock is
owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such other
provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in effect
or as it may hereafter from time to time be amended, and to carry out the
provisions of this Section 12 and of Article 12 of the Restated Certificate of
Incorporation.
*****
The foregoing By-laws were adopted by the Board of Directors on October 31,
1994. Section 10 hereof ("Indemnification") was approved by the sole stockholder
on October 31, 1994.
------------------------------
Secretary
25
<PAGE> 1
EXHIBIT 3.19
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 11:45 AM
12/30/1994
944261309 - 2464388
AMENDED AND RESTATED CERTIFICATE
OF LIMITED PARTNERSHIP
OF
LIN TELEVISION OF TEXAS, L.P.
The undersigned officer of LIN Television of Texas, Inc., as the sole
general partner of LIN Television of Texas, L.P., a limited partnership
organized and existing under the laws of the State of Delaware (the
"Partnership"), does hereby certify the following:
ONE: That the original Certificate of Limited Partnership of the
Partnership was filed with the Secretary of State of the State of Delaware on
December 22, 1994.
TWO: That this Amended and Restated Certificate of Limited Partnership
has been duly executed and acknowledged by LIN Television of Texas, Inc., as
the sole general partner of the Partnership, in accordance with Section 17.210
of the Revised Uniform Limited Partnership Act of the State of Delaware.
THREE: That the Certificate of Limited Partnership of the Partnership is
hereby amended and restated in its entirety to read as follows:
AMENDED AMD RESTATED
CERTIFICATE OF LIMITED PARTNERSHIP
OF
LIN TELEVISION OF TEXAS, L.P.
1. The name of the limited partnership is LIN Television of Texas, L.P.
2. The address of the registered office of the limited partnership is
The Prentice-Hall Corporation System, Inc., Suite L-100, 32 Loockerman Square,
Dover, Kent County, Delaware 19904, and the name of the limited partnership's
registered agent at such address is The Prentice-Hall Corporation System, Inc.
3. The name and address of the sole general partner of the limited
partnership is
LIN Television of Texas, Inc.
5295 Carillon Point
Kirkland, Washington 98033
<PAGE> 2
IN WITNESS WHEREOF, this Amended and Restated Certificate of Limited
Partnership of LIN Television of Texas, L.P. has been duly executed by the
sole general partner thereof as of December 28, 1994.
LIN TELEVISION OF TEXAS, INC.
By: /s/ [ILLEGIBLE]
----------------------------
Name: [ILLEGIBLE]
--------------------------
Title: VP
-------------------------
<PAGE> 1
EXHIBIT 3.20
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LIN TELEVISION OF TEXAS, L.P.
dated as of
December 28, 1994
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
I. Organizational Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Formation of Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Purpose of the Partnership; Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Principal Place of Business, Office and Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Term of Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Foreign Qualification; Fictitious Business Name Statement; Other Certificates . . . . . . . . . . . . . . 2
II. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
III. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Additional Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
IV. Capital Accounts and Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Allocations of Book Income and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Tax Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
V. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Set Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
VI. Powers and Duties of and Limitations Upon the General Partner . . . . . . . . . . . . . . . . . . . . . . . . 8
6.1 Powers of the General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 Duties of the General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Reimbursement of the General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
VII. Standard of Care and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Standard of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
- i -
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
VIII. Powers and Duties of and Limitations Upon the Limited Partners . . . . . . . . . . . . . . . . . . . . . . . 15
8.1 Rights of the Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.2 Limitations on the Rights of the Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.3 Limited Liability of the Limited Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.4 Voting Rights of the Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
IX. Additional Rights of and Limitations On Partners and Their Affiliates . . . . . . . . . . . . . . . . . . . 16
9.1 Certain Agreements with Partners and Affiliates of Partners . . . . . . . . . . . . . . . . . . . . . . 16
9.2 Partnership Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
X. Issuance of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.1 Issuance of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.2 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.3 Lost, Stolen or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.4 Registered Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
XI. Transfers of Interests; Additional Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.1 Consent Required for Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.2 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
XII. Dissolution of the Partnership and Distributions Upon Dissolution . . . . . . . . . . . . . . . . . . . . . 21
12.1 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12.2 Winding-Up and Liquidation of the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12.3 Election to Continue the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.4 Time for Winding-Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.5 Final Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
XIII. Amendment of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13.1 Amendment by General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13.2 Amendment by Unanimous Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13.3 Other Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13.4 Execution of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
XIV. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.1 Grant of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.2 Irrevocable Nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14.3 Transfer of Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
XV. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.3 Notice of Tax Examinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.4 Foreign Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.5 Whole Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.7 Binding Nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.8 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.9 Counterparts; Further Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.10 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
- iii -
<PAGE> 5
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LIN TELEVISION OF TEXAS, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement") is entered into as of December 28, 1994 by and between LIN
Television of Texas, Inc., a Delaware corporation ("LIN TV"), as general
partner, and KXAS Holdings, Inc., a Delaware corporation ("KXAS") and KXAN,
Inc., a Delaware corporation ("KXAN") as limited partners (KXAN and KXAS are
sometimes referred to herein individually as a "Limited Partner" and
collectively as the "Limited Partners").
WHEREAS, the Partnership was formed by KXAN pursuant to a Certificate
of Limited Partnership dated as of, and filed with the Secretary of State of
the State of Delaware on December 22, 1994;
WHEREAS, KXAN, as general partner, and KXAN and North Texas
Broadcasting Corporation ("North Texas") as limited partners entered into that
certain Agreement of Limited Partnership ("Original Agreement") dated December
23, 1994;
WHEREAS, KXAN assigned its general partner interest in the Partnership
to LIN TV pursuant to that certain Assignment of Partnership Interest dated
December 28, 1994 by and between KXAN and LIN TV;
WHEREAS, North Texas assigned its limited partner interest in the
Partnership to KXAS pursuant to that certain Assignment of Partnership Interest
dated December 28, 1994, by and between KXAS and North Texas;
WHEREAS, KXAN, KXAS and LIN TV desire to amend and restate the
Original Agreement in its entirety;
NOW, THEREFORE, in consideration of the mutual covenants and subject
to the terms and conditions of this Agreement, the Partners do hereby agree as
set forth below. (Unless the context otherwise requires, terms which are
capitalized and not otherwise defined in context shall have the meanings set
forth or cross-referenced in Article II of this Agreement.)
I. ORGANIZATIONAL MATTERS
1.1 Formation of Partnership. The Partnership was formed as a
limited partnership upon the execution and filing of a Certificate of Limited
Partnership with the Secretary of State of the State of Delaware. The Partners
do hereby agree to continue
<PAGE> 6
the Partnership pursuant to this Agreement for the purposes and upon the terms
and conditions hereinafter set forth.
1.2 Name. The name of the Partnership is: "LIN Television of Texas,
L.P."
1.3 Purpose of the Partnership: Business. The Partnership has been
formed for the purposes of (i) owning and operating that certain television
station located in the Austin, Texas area commonly known as KXAN (ii) owning
and operating that certain television station located in Fort Worth, Texas and
commonly known as KXAS, (iii) operating and managing that certain television
station commonly known as KXTX in the Dallas, Texas area, (iv) operating and
managing that certain television station commonly known as KNVA in the Austin,
Texas area, (v) any other businesses or activities that the Partnership
determines to pursue, from time to time, and (vi) the performance of all things
necessary or incidental to or connected with or growing out of such activities
in accordance with the terms and conditions of this Agreement.
1.4 Principal Place of Business, Office and Agent. The principal
place of business of the Partnership and office where the records described in
Section 6.2(j) shall be kept shall be located at LIN Television Corporation,
3900 Barnett St., Forth Worth, Texas, 76103, or at such other location as shall
be specified from time to time by the Partnership. The registered office of the
Partnership in the State of Delaware shall be at the offices of the registered
agent of the Partnership in Delaware. The registered agent of the Partnership in
Delaware shall be The Prentice Hall Corporation System, Inc., Suite L-100, 32
Loockerman Square, Dover, Delaware, 19904. The Partnership, with prior notice
to the Partners, from time to time may change the registered office or agent in
Delaware or the principal place of business of the Partnership. The Partnership
may also establish additional places of business or offices for maintenance of
records as it may determine are necessary or appropriate. This Agreement shall
be amended by the Partnership without the consent of the Limited Partners to
reflect each change in the identity or address of the registered agent in
Delaware.
1.5 Term of Partnership. The term of the Partnership shall commence
upon the execution by the Partners of this Agreement and the filing with the
Secretary of State of Delaware of the Certificate of Limited Partnership, and
shall continue until December 31, 2033, unless sooner terminated as provided in
this Agreement or pursuant to the Act.
1.6 Foreign Qualification; Fictitious Business Name Statement; Other
Certificates. The Partnership promptly shall execute, deliver and file, where
required, all certificates, consents to and appointments of agents for service
of process, and other documents or instruments and perform such acts as may
- 2 -
<PAGE> 7
be necessary or appropriate to register the Partnership as a foreign limited
partnership authorized to do business in such jurisdictions as the Partnership
shall deem necessary or appropriate in connection with the business of the
Partnership. The Partnership shall, from time to time, file such fictitious or
trade name statements or certificates in such jurisdictions and offices as the
Partnership considers necessary or appropriate. The Partnership may do business
under any fictitious business names deemed desirable by the Partnership. The
Partnership shall also, from time to time, file such certificates of amendment,
certificates of cancellation, or other certificates as the Partnership deems
necessary under the Act or under the laws of any jurisdiction in which the
Partnership is doing business to establish and continue the Partnership as a
limited partnership or to protect the limited liability of the Limited
Partners.
II. DEFINITIONS
"Act" means the Delaware Limited Partnership Act as amended from time
to time. Any reference to the Act shall automatically include a reference to
any subsequent or successor limited partnership law in Delaware.
"Adjusted Book Income" or "Adjusted Book Loss" for any Fiscal Year
means Book income or loss remaining after any special allocations made for such
Fiscal Year pursuant to Sections 3.02, 3.03, and 3.04 of Appendix A.
"Adjusted Capital Account Balance" means a Partner's Capital Account
balance increased by the sum of (i) such Partner's share of Partnership Minimum
Gain (as defined in Appendix A) and (ii) such Partner's share of Partner
Nonrecourse Minimum Gain (as defined in Appendix A).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the
"controlled" Person, whether through ownership of voting securities, by
contract, or otherwise. Affiliate shall also include any Person who is related
by blood or marriage to the Person in question.
"Agreement" means this Agreement as amended from time to time.
"Bankruptcy" means, with respect to any Person, such Person's filing a
petition or otherwise voluntarily commencing a case or proceeding or filing an
answer not denying the material allegations of a complaint in any proceeding
seeking relief under
- 3 -
<PAGE> 8
any federal or state bankruptcy, insolvency or debtors' reorganization law,
being the voluntary or involuntary subject of an order for relief by any court
under any such law, or being adjudicated a "bankrupt," "debtor" or "insolvent"
under any such law, or there being appointed under any such law a "trustee,"
"receiver" or "custodian" to manage his or its business or properties, or there
being commenced under any such law a case or proceeding proposing such an order
for relief, adjudication or appointment with respect to such Person or his or
its business, which proceeding is consented to by such Person or which is not
dismissed within 90 days after being commenced.
"Book" means the method of accounting prescribed for compliance with
the capital account maintenance rules set forth in Appendix A, as distinguished
from any accounting method which the Partnership may adopt for other purposes
such as financial reporting.
"Capital Account" means the capital account of a Partner maintained in
accordance with Section 4.1.
"Certificate of Limited Partnership Interest" means a written
instrument designated by its terms as a Certificate of Limited Partnership
Interest, issued by the Partnership, and evidencing the Interest of a Limited
Partner, substantially in the form of EXHIBIT B to this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended. References
to specific sections of the Code shall be deemed to include references to
corresponding provisions of any succeeding internal revenue law of the United
States of America.
"Fiscal Year" means the fiscal year of the Partnership and,
initially, means a fiscal year ending on December 31, 1994.
"Foreign Partner" -- see Section 3.2.
"General Partner" means LIN TV, or any additional, successor or
substitute general partner in its capacity as general partner of the
Partnership.
"General Partnership Interest" means an Interest in the Partnership as
a general partner.
"General Partnership Share" means, with respect to any General
Partner, the percentage set forth in Section 3.1 as such General Partner's
Share.
"Indemnitee" -- see Section 7.2.
"Interest" means each Partner's ownership interest, as a Partner, in
the Partnership at any particular time, including any and all benefits to which
the Partner may be entitled under this Agreement and the obligations of the
Partner under this Agreement, whether as a General Partner or Limited Partner.
- 4 -
<PAGE> 9
"Limited Partners" means KXAS and KXAN or any additional, successor or
substitute limited partner in its capacity as limited partner of the
Partnership.
"Limited Partnership Interest" means an Interest in the Partnership as
a Limited Partner.
"Majority" means, with respect to the Limited Partners, those Limited
Partners holding more than 50% of the Limited Partnership Interests.
"Partners" means and includes both the General Partner and the Limited
Partners. Reference to a "Partner" means any one of the Partners. A General
Partner having or acquiring an Interest as a Limited Partner shall also
constitute such a Limited Partner and, for all purposes of this Agreement,
references to Partners of any class or their Interests do not include such
Partners in their capacities as Partners of another class or their Interests as
another class of Partner.
"Partnership" means the limited partnership formed under this
Agreement and any successor partnership succeeding to its assets and business
pursuant to Section 12.3.
"Permitted Transferee" means any Person acquiring a Partnership
Interest under Section 11.1
"Person" or "person" means and includes any natural person and any
corporation, firm, partnership, trust, estate or other entity resulting from
any form of association.
"Record Holder" means the person in whose name the Certificate of
Limited Partnership Interest evidencing an Interest is issued and in whose name
such Interest is registered on the books of the Partnership as of the close of
business on a particular day.
"Related Person" means with respect to any Person, a Person bearing a
relationship described in Section 267(b) or Section 707(b)(1) of the Code.
"Share" means a General Partnership Share or a Limited Partnership
Share, or both, as the context requires.
"Tax Matters Partner" -- see Section 6.4.
"Transfer" means any sale, assignment, pledge, hypothecation,
encumbrance, disposition, transfer (including, without limitation, a transfer
by will or intestate distribution), gift or attempt to create or grant a
security interest in any Interest or interest therein or portion thereof,
whether voluntary or involuntary, by operation of law or otherwise.
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<PAGE> 10
"Unauthorized General Partner" -- see Section 12.3.
"Voting Rights" -- see Section 8.4.
III. CAPITALIZATION
3.1 Capital Contributions. (a) Except as expressly provided herein or
with the prior written consent of all of the Partners, no Partner shall be
required or entitled to make capital contributions to the Partnership.
(b) on the date of execution of the original Agreement the General
Partner contributed cash to the capital of the Partnership, and the Limited
Partners contributed cash to the capital of the Partnership. On December 28,
1994, KXAN and North Texas contributed certain non-cash assets more
particularly described on Exhibit A attached hereto to the Partnership in
proportion to their respective Shares as of the date thereof. Following these
contributions, the respective shares of the partners are:
<TABLE>
<CAPTION>
Name and Address Share
- ---------------- -----
<S> <C>
General Partner:
LIN Television of 1%
Texas, Inc.
5925 Carillon Point
Kirkland, Washington 98033
Limited Partner:
KXAS Holdings, Inc. 92%
5925 Carillon Point
Kirkland, Washington 98033
KXAN, Inc. 7%
5925 Carillon Point
Kirkland, Washington 98033
</TABLE>
In the event that the values assigned to the assets contributed are at any time
determined to be improper, the percentage Shares of the Partners will be
adjusted accordingly; provided that, in all cases, any interest originally
received by KXAN for its contributions will consist of a General Partner
Interest with a 1% General Partner Share and a Limited Partner Interest with a
Limited Partner Share equal to the balance of the General Partner's appropriate
Share.
(c) [DELIBERATELY OMITTED]
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<PAGE> 11
(d) The General Partner and any additional or substituted general
partners shall be general partners, and the Limited Partners and any additional
or substituted limited partners shall be limited partners, as those terms are
used in the Act, subject to the terms and provisions of this Agreement.
3.2 Additional Contributions. No Partner shall be obligated to or
shall make any additional capital contribution to the Partnership except as
specifically provided in this Agreement. Notwithstanding the preceding
sentence, if the Partnership determines that any Partner is a "foreign person"
as provided in Section 15.4, such Partner (a "Foreign Partner") shall
contribute to the Partnership, as and when requested by the General Partner, an
amount equal to the amount of tax the Partnership will be required to pay over
to the internal Revenue Service under Section 1446 of the Code by reason of
such Foreign Partner's status as a "foreign person."
3.3 Interest. No Partner shall be paid interest on capital
contributions to the Partnership.
3.4 Withdrawal. No Partner shall be entitled to withdraw any portion
of his paid-in capital contribution and no Partner shall have any right to a
return of capital except through distributions as provided in Article V of this
Agreement.
IV. CAPITAL ACCOUNTS AND ALLOCATIONS
4.1 Capital Accounts. A Capital Account shall be maintained for each
Partner in the manner set forth in Appendix A, which is attached to and is a
part of this Agreement.
4.2 Allocations of Book Income and Loss. Subject to the provisions
of Appendix A:
(a) Adjusted Book Income: The Partnership's Adjusted Book Income
for any Fiscal Year shall be allocated as follows:
(i) First, to the General Partner, until the cumulative
amount of income allocated under this Section
4.2(a)(i) equals the cumulative amount of loss, if
any, previously allocated to the General Partner
under Section 4.2 (b)(ii); and
(ii) Second, to the Partners in proportion to their
respective Shares.
(b) Adjusted Book Loss: The Partnership's Adjusted Book Loss for
any Fiscal Year shall be allocated as follows:
(i) First, to the Partners in proportion to their
respective Adjusted Capital Account Balances until
the Adjusted Capital Account Balances of all Partners
equal zero; and
(ii) Second, 100% to the General Partner.
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4.3 Tax Allocations. Except as otherwise provided in Appendix A, all
items of income, gain, loss, and deduction shall be allocated for federal
income tax purposes in the same manner as the corresponding allocation for Book
purposes.
V. DISTRIBUTIONS
5.1 Distributions. Subject to the provisions of Appendix A, and except
as otherwise provided in this Section 5.1 or in Section 12.2, all distributions
made by the Partnership shall be made in the following order and proportions:
(i) First, to the Partners in proportion to and to the
extent of their respective Adjusted Capital Account
Balances; and
(ii) Second, to the Partners in proportion to their Shares.
All distributions under this Section 5.1 shall be subject to any restrictions
in agreements for money borrowed to which the Partnership is a party and, prior
to the period for the liquidation and winding-up of the Partnership following
dissolution, to the priorities specified in this Section 5.1.
5.2 Set Off. The Partnership shall be entitled to set off against any
distribution by the Partnership to any Partner any amounts due and owing by
such Partner to the Partnership.
VI. POWERS AND DUTIES OF AND LIMITATIONS
UPON THE GENERAL PARTNER
6.1 Powers of the General Partner. Subject to the limitations imposed
by the Act and this Agreement, including, without limitation, the limitations
in Section 6.2, the General Partner shall have the power to conduct, manage,
and control the conduct of the ordinary business of the Partnership including,
without limitation, the power to:
(1) approve the annual operating and capital budgets and
strategic plans of the Partnership;
(2) appoint or remove any officer of the Partnership,
establish compensation for each officer of the Partnership, and
establish, alter or amend the power and authority of any officer of
the Partnership;
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<PAGE> 13
(3) authorize any commitment for a capital expenditure;
(4) approve any obligation of the Partnership for borrowed money and
make, issue, accept, endorse and execute promissory notes, drafts, bills
of exchange, letters of credit, guarantees and other instruments and evidences
of indebtedness or of contingent liability and approve the granting of any
security therefor;
(5) authorize any commitment relating to a loan by the Partnership to
any Person or a guarantee by the Partnership of any obligation of any Person;
(6) authorize any sale, lease, transfer or other disposition of any
asset of the Partnership or any group of assets including the disposition of
substantially all of the assets of the Partnership;
(7) approve the acquisition of any business or a business division
from any Person whether by asset purchase, stock purchase, merger or other
business combination including the creation and issuance of additional limited
partner interests of any class in connection therewith;
(8) approve any purchase of lease of real property;
(9) adopt, approve or terminate any individual or group employee
retirement plan or any other welfare benefit plan or policy or any
modifications thereto;
(10) authorize the making, modification, amendment, or termination of
any agreement with any Partner or an Affiliate of a Partner;
(11) authorize any distribution to Partners;
(12) change the Fiscal Year of the Partnership or make or modify any
tax elections as the General Partner believes to be in the best interests of
the Partnership and the Partners;
(13) make any determination to indemnify any Person as contemplated by
Article VII;
(14) authorize the creation of any subsidiaries or any other
investment in, or the acquisition of stocks or bonds of, other Persons or any
equity interest in any other Person;
(15) approve any change of the location of the headquarters of the
Partnership;
(16) approve any license or other grant of rights to or from the
Partnership with respect to any patents.
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<PAGE> 14
trademarks, trade names, service marks, know-how, trade secrets or other
proprietary information;
(17) open, conduct and close checking, savings, custodial and other
accounts on behalf of the Partnership in such banks or other financial
institutions as the General Partner may select from time to time;
(18) negotiate, enter into, execute and exercise the Partnership's
rights under any and all contracts necessary, desirable or convenient with
respect to its business and affairs;
(19) execute any notifications, statements, reports, returns,
registrations or other filings that are necessary or desirable to be filed with
any state or Federal agency, commission, or authority, including, without
limitation, any registration of securities with any state or Federal securities
commission, and appear before such agency, commission or authority on behalf of
the Partnership;
(20) purchase or bear the cost of any insurance covering the potential
liabilities of the Partnership, Partners, any officer or employee of the
Partnership and any other Person acting on behalf of the Partnership;
(21) commence, defend or settle litigation pertaining to the
Partnership, its business or assets, provided that the Partnership shall not
bear the expenses of any litigation brought against any Partner acting in such
capacity, any officer or employee of the Partnership or any other Person acting
on behalf of the Partnership except in accordance with Section 7.2;
(22) employ accountants, attorneys, contractors, brokers, investment
managers, engineers, consultants or other persons, firms, corporations or
entities on such terms and for such compensation as it shall determine is
proper, including, without limitation, persons and entities who may be Partners
or Affiliates, or who perform services for, or have business, financial, family
or other relationships with any Partner, Officer or employee;
(23) determine the fair market value of all Partnership property upon
a Revaluation Event (as defined in Appendix A) or otherwise; provided that, if
the General Partner is unable to determine the fair market value of all
Partnership property, such value shall be determined by an independent
appraisal firm whose determination shall be binding on all Partners;
(24) admit additional Limited or General Partners or approve any
transfer of a General or Limited Partnership Interest in accordance with this
Agreement;
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<PAGE> 15
(25) enter into, make and perform such contracts, agreements and other
undertakings, to execute, acknowledge and deliver such instruments, and to do
such other acts, as it may deem necessary or advisable for, or as may be
incidental to, the conduct of the business contemplated by this Section 6.1
(a), including, without limitation, contracts, agreements, undertakings and
transactions with any Partner or with any other person firm or corporation
which is an Affiliate or which performs services for or has any business,
financial, family or other relationship with any Partner;
(26) amend this Agreement in accordance with Article XIII.
None of the powers granted in this Section 6.1 shall be interpreted as
broadening or extending powers which are specifically limited by other
provisions of this Agreement.
6.2 Duties of the General Partner. In addition to obligations
imposed by other provisions of this Agreement, the General Partner shall devote
to the Partnership such of its time as is reasonably necessary and its best
efforts in carrying out the business of the Partnership in order to accomplish
its purposes. The General Partner, on behalf of the Partnership and at the
expense of the Partnership, shall:
(a) execute, acknowledge and certify all documents and
instruments and take or cause to be taken all actions which may be
necessary or appropriate (i) for the continuation of the Partnership's
valid existence as a limited partnership under the laws of the State
of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Limited Partners,
(ii) to effectuate the provisions of this Agreement or (iii) to enable
the Partnership to conduct its business;
(b) to the extent reasonably deemed necessary or appropriate
by the General Partner, cause all persons dealing with the
Partnership, the General Partner, or any officer, agent or employee of
the Partnership acting on behalf of the Partnership, to be aware of
the character of the Partnership as a Delaware limited partnership;
(c) conduct the affairs of the Partnership in compliance with
the applicable laws and in the best interests of the Partnership and
of the Partners;
(d) not permit the use of Partnership funds or assets for
other than the benefit of the Partnership and of the Partners;
(e) not withdraw as a General Partner if such General Partner
is the last remaining General Partner;
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<PAGE> 16
(f) arrange for the preparation of all necessary
informational federal income tax forms on behalf of the Partnership
and for the preparation and filing of any and all state and local
income and franchise tax returns required to be filed by the
Partnership;
(g) obtain and maintain on behalf of the Partnership such
all-risk, public liability, workmen's compensation, general partner's,
liability, fidelity, forgery and other insurance, if any, as may be
available on commercially reasonable terms and as may be deemed
necessary or appropriate by the General Partner;
(h) hold all Partnership property in the Partnership name or,
in the case of cash or cash equivalents, in one or more depository
accounts as to which the Partnership is a beneficial owner;
(i) use reasonable efforts not to cause the Partnership to
incur debts or other liabilities obligations beyond the Partnership's
ability to pay such liabilities; and
(j) maintain and preserve during the term of the Partnership
and for five (5) years thereafter, or for such longer time as is
necessary to determine the cost basis of the Partnership assets, at
the Partnership's office designated pursuant to Section 1.4 (or, if
the Partnership has been terminated, at the location designated by the
General Partner in written notice to the Limited Partners to be the
Partnership office), complete and accurate books of account in
accordance with the provisions of this Agreement, a list of the names
and addresses of each Partner, copies of the Certificate, this
Agreement, and copies of all financial statements and tax returns of
the Partnership for the most recent five-year period during the term
of the Partnership.
6.3 Reimbursement of the General Partner. The General Partner shall be
entitled, in addition to all other distributions and reimbursements to which it
is entitled hereunder by reason of its Interest in the Partnership, to
reimbursement for all Partnership expenses reasonably incurred on behalf of the
Partnership and paid by the General Partner from its own funds.
6.4 Tax Matters Partner. (a) The General Partner hereby is designated
as the Tax Matters Partner under Section 6231(a) (7) of the Code. The Tax
Matters Partner shall have the rights and duties specifically granted or
delegated under the Code and applicable Treasury Regulations and this
Agreement. Any vacancy in the office of the Tax Matters Partner shall be filled
from among the Partners.
(b) The Tax Matters Partner shall have the power to (i) enter into a
settlement agreement with the Internal Revenue Service with respect to
determinations of Partnership tax items
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<PAGE> 17
which shall bind each Partner who is not entitled to receive notice of the
proceedings from the Service, who is not a member of a notice group defined in
Section 6223(b)(2) of the Code, and who has not timely filed a statement with
the Secretary of Treasury (or his delegate) providing that the Tax Matters
Partner shall not have authority to bind the Partner, which settlement may be
on such terms as the Tax Matters Partner shall determine in its sole discretion
to be in the best interests of the Limited Partners; (ii) in its sole
discretion, decide whether or not to commence judicial action for review of
Partnership items included in a notice of final Partnership administrative
adjustment, with the selection of the appropriate court and the Partnership
items to be contested to be determined in the sole discretion of the Tax
Matters Partner; (iii) in its sole discretion, determine whether to appeal from
an adverse decision in an action commenced pursuant to clause (ii) immediately
preceding and prosecute any such appeal; (iv) in its sole discretion, intervene
on behalf of the Partnership in any judicial action commenced by any other
Partner or notice group defined in Section 6223(b)(2) of the Code as to
Partnership tax items; (v) file a request with the Service for an
administrative adjustment as a substituted Partnership return, or otherwise,
and to request judicial review on behalf of the Partnership as to any part of a
request for administrative adjustment not allowed by the Service, with the
selection of the appropriate court, the Partnership items to be contested and
the decision whether to appeal from an adverse decision in any such action to
be determined in the sole discretion of the Tax Matters Partner; (vi) in its
sole discretion, enter into an agreement with respect to all present or former
Partners to extend the period for assessing any tax which is attributable to
any Partnership item (and no other person shall be authorized to enter into
such an agreement) ; (vii) upon receipt of a notice of the commencement of
administrative proceedings by the Service, furnish to the Service the name,
address, profits interest and taxpayer identification number of each person who
was a Partner in the Partnership at any time during the applicable Partnership
taxable year and such revised or additional information as may be required by
law; and (viii) conform to any tax administrative requirements as may be placed
on Tax Matters Partners by Treasury Regulations adopted after the date hereof
as to income tax or any other federal tax applicable to the Partnership.
VII. STANDARD OF CARE AND INDEMNIFICATION
7.1 Standard of Care. (a) The General Partner or any director,
officer, partner, employee or Affiliate of the General Partner serving on
behalf of the Partnership, and any officer or employee of the Partnership in
the performance of his duties, shall be fully protected in relying in good
faith on information, opinions, reports, or statements, including financial
statements, books of account and other financial data, if prepared or presented
by: (i) one or more officers or employees of the Partnership; or (ii) legal
counsel, public accountants, or other persons which he reasonably believes have
professional or expert competence.
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<PAGE> 18
(b) Neither the General Partner nor any director, officer, partner,
employee or Affiliate of the General Partner serving on behalf of the
Partnership, nor any officer or employee of the Partnership shall be liable for
damages to the Partnership or any Partner with respect to claims relating to
his conduct for or on behalf of the Partnership, except that any of the
foregoing persons shall be liable to the Partnership for damages to the extent
that it is proved by clear and convincing evidence (i) that his or its conduct
was not taken (A) in good faith, (B) in a manner reasonably believed to be in
or not opposed to the best interests of the Partnership, or (C) with the care
that an ordinarily prudent person in a like position would use under similar
circumstances; or (ii) with respect to any criminal action, proceeding or
investigation, he or it had no reasonable cause to believe his or its conduct
was unlawful.
7.2 Indemnification. (a) If any Partner or any director, officer or
partner of any Partner serving on behalf of the Partnership, or any officer of
the Partnership (an "Indemnitee") was or is a party or is threatened to be made
a party in any threatened, pending or completed action, suit, proceeding or
investigation involving a cause of action or alleged cause of action for
damages or other relief arising from or related to the business or affairs of
the Partnership, the Partnership (but without recourse to the separate assets
of any Partner) shall indemnify such Indemnitee against all losses, costs and
expenses, including attorney's fees, judgments and amounts paid in settlement
actually and reasonably incurred by the Indemnitee in connection with such
action, suit, proceeding or investigation, so long as such Indemnitee has met
the standard set forth in Section 7.1. The termination of any action, suit,
proceeding or investigation by judgment, order, settlement or conviction upon a
plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that an Indemnitee did not act in good faith and in a manner he or
it reasonably believed to be in or not opposed to the best interests of the
Partnership and with the care that an ordinarily prudent person in a like
position would use under similar circumstances and, with respect to any
criminal action, proceeding or investigation, that he or it had reasonable
cause to believe his or its conduct was unlawful.
(b) Any indemnification under this Section 7.2, unless ordered by a
court, shall be determined in the specific case by the General Partner.
(c) Expenses, including attorneys' fees, incurred by any Indemnitee in
defending an action, suit, proceeding or investigation shall be paid by the
Partnership as they are incurred, in advance of the final disposition of the
action, suit, proceeding or investigation, upon such terms and conditions as
the General Partner shall determine.
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<PAGE> 19
(d) Notwithstanding the foregoing, indemnification under this
Section 7.2 shall be provided only with respect to such losses, costs,
expenses, judgments and amounts which otherwise are not compensated for by
insurance carried for the benefit of the Partnership.
(e) Any indemnification pursuant to this Section 7.2 shall not
be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any rule of law (whether common law or statutory),
agreement or arrangement, whether as to action in an official capacity and as
to action in another capacity while holding such position or while employed by
or acting as agent for the Partnership, and shall continue as to an Indemnitee
who has ceased to serve in any capacity on behalf of the Partnership and shall
inure to the benefit of the heirs, successors, executors and administrators of
the Indemnitee.
(f) The Partnership may indemnify any employee or agent of the
Partnership and any employee or Affiliate of any Partner serving on behalf of
the Partnership upon such terms and conditions, if any, as the General Partner
considers appropriate.
(g) The Partnership may purchase and maintain insurance on
behalf of the General Partner against any liability asserted against it and
incurred by it or on it's behalf arising out of it's status as such, whether or
not the Partnership would have the power to indemnify it against such liability
under the provisions of this Section 7.2; provided, that insurance is available
on acceptable terms as determined by the General Partner.
(h) If this Section 7.2 or any portion of this Section 7.2
shall be invalidated on any ground by any court of competent jurisdiction, then
the Partnership shall nevertheless indemnify each Indemnitee of the Partnership
as to costs, charges and expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement with respect to any action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
including any action by or in the right of the Partnership, to the full extent
permitted by any applicable portion of this Section 7.2 that shall not have
been invalidated and to the fullest extent permitted by applicable law.
VIII. POWERS AND DUTIES OF AND LIMITATIONS
UPON THE LIMITED PARTNERS
8.1 Rights of the Limited Partners. The Limited Partners shall be
entitled (i) to require a dissolution of the Partnership in accordance with
Article XII and (ii) to have such additional rights as are elsewhere provided
in this Agreement or by mandatory requirements of applicable law.
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<PAGE> 20
8.2 Limitations on the Rights of the Limited Partners. Subject to
any mandatory requirements of applicable law, the Limited Partners shall not
have the right to take any part whatsoever in the management and control of the
ordinary business of the Partnership, sign for or bind the Partnership, compel
a sale or appraisal of Partnership assets, or sell or assign their Interests in
the Partnership, except as provided in this Agreement.
8.3 Limited Liability of the Limited Partners. Except for
contributions specifically required under Sections 3.1 and 3.2 of this
Agreement, the Limited Partners shall have no obligation to contribute to the
Partnership and no liability for any Partnership obligations. Any liability to
return distributions from the Partnership shall be limited to mandatory
requirements of the Act or of any other applicable law.
8.4 Voting Rights of the Limited Partners. (a) A Majority of the
Limited Partners may: (i) elect a liquidating trustee to act as provided in
Section 12.2 if, at the time of dissolution and winding-up of the Partnership,
the General Partner is not authorized to act as such; (ii) elect to continue
the business of the Partnership and designate one or more substituted General
Partner upon and within 90 days after a dissolution caused by an event
described in Section 12.1(e), (f) or (g); (iii) approve any amendment to this
Agreement to the extent required pursuant to Section 13.3; and (iv) consent or
withhold consent with respect to such matters (in addition to those described
in this Section 8.4(a)) as the Limited Partners may consent to under the
provisions of this Agreement or, under the Act, must give consent to in order
for the General Partner's actions to be authorized.
(b) The rights and powers of the Limited Partners pursuant to
Section 8.4(a) is herein referred to as "Voting Rights". The Limited Partners
shall exercises their Voting Rights by written action which may consist of one
or more counterparts delivered to the Partnership, which counterpart or
counterparts shall set forth the proposed action to be taken and contain the
signatures of a Majority of the Limited Partners or all of the Limited
Partners, as the case may be, at such time approving such action.
(c) Upon any exercise of the Voting Rights as provided for in
this Section 8.4, the Partnership shall keep complete and accurate records and
notify all Partners of the substance thereof.
IX. ADDITIONAL RIGHTS OF AND LIMITATIONS
ON PARTNERS AND THEIR AFFILIATES
9.1 Certain Agreements with Partners and Affiliates of Partners.
The Partnership may purchase or sell goods or other services from any Partner
or its Affiliates, and any profits or
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<PAGE> 21
income earned by such Partner or its Affiliates as the result of such
transaction shall belong to it and not the Partnership; provided, however, that
amounts paid for, and other terms relating to the furnishing of, such goods or
services may not be materially less advantageous to the Partnership than the
amounts and terms for and upon which similar goods or services could be
obtained in the same geographic area from corporations or business enterprises
which are not Partners or Affiliates of Partners.
9.2 Partnership Property. Except as otherwise expressly set forth
by the General Partner in writing, no Partner shall use or possess Partnership
property except for a Partnership purpose.
9.3 Confidentiality. (a) Except as provided in Section 9.3 (b),
any information identified by the Partnership as confidential ("Confidential
Information") shall be treated by the Partners as confidential. Each Partner
shall hold Confidential Information in strict confidence and restrict its
disclosure to only such of its Affiliates, officers, employees and agents as
have a proper need to know such information. Each Partner shall make all
reasonable efforts and take all reasonable precautions as may be appropriate to
maintain the confidentiality of all Confidential Information (including,
without limitation, obtaining the agreement of Persons to whom the Partner
properly discloses Confidential Information that they agree to be bound by the
provisions of this Section 9.3). To the extent any Partner proposes to disclose
to any Person Confidential Information in connection with a proposed Transfer
of all or any part of a Partnership Interest, the Partner shall require that
each prospective transferee agree in writing to be bound by a confidentiality
agreement approved by the Partnership.
(b) No Partner shall be subject to Section 9.3(a) to the
extent that: (i) the Partner or any of its Affiliates is required by law
(including, without limitation, any requirement under the Securities Act of
1933 or the Securities Exchange Act of 1934 or any regulations promulgated
thereunder), in the reasonable judgment of such Partner, to make disclosure of
information relating to the Partnership or (ii) any information is or becomes
publicly available without breach of that Partner's obligations under this
Section.
X. ISSUANCE OF CERTIFICATES
10.1 Issuance of Certificates. Upon the issuance of an Interest,
the General Partner shall cause the Partnership to issue one or more
Certificates of Limited Partnership Interest in the name of the Limited Partner
owning such Interest. Upon the transfer of an Interest, the General Partner
shall cause the Partnership to issue a replacement Certificate of Limited
Partnership Interest, according to such procedures as the General Partner may
establish.
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<PAGE> 22
10.2 Register. The Partnership shall cause to be kept at its
principal place of business a register in which the Partnership shall provide
for the registration of the Certificates of Limited Partnership Interests and
of transfers of the Certificates of Limited Partnership Interests. The General
Partner is hereby appointed registrar for the purpose of registering the
Certificates of Limited Partnership Interests.
10.3 Lost, Stolen or Destroyed Certificates. The Partnership shall
issue a new Certificate of Limited Partnership Interest in place of any
Certificate of Limited Partnership Interest previously issued if the registered
owner of the Certificate of Limited Partnership Interest:
(a) makes proof by affidavit, in form and substance
satisfactory to the General Partner, that a previously issued
Certificate of Limited Partnership Interest has been lost, destroyed
or stolen;
(b) requests the issuance of a new Certificate of
Limited Partnership Interest before the Partnership has notice that
the Certificate of Limited Partnership Interest has been acquired by a
purchaser for value in good faith and without notice of an adverse
claim;
(c) if requested by the General Partner, delivers to the
Partnership a bond, in form and substance satisfactory to the General
Partner, with such surety or sureties and with fixed or open penalty,
as the General Partner may direct to indemnify the Partnership against
any claim that may be made on account of the alleged loss, destruction
or theft of a Certificate of Limited Partnership Interest; and
(d) satisfies any other reasonable requirements imposed
by the General Partner.
When a Certificate of Limited Partnership Interest has been lost,
destroyed or stolen, and the Partner fails to notify the Partnership
within a reasonable time after he has notice of it, and a transfer of
the Interests represented by the Certificate of Limited Partnership
Interest is registered before the Partnership receives such
notification, the Partner shall be precluded from making any claim
against the Partnership for such transfer or for a new Certificate of
Limited Partnership Interest.
10.4 Registered Owner. The Partnership shall be entitled to treat
the Record Holder as the Limited Partner or assignee in fact of any Interest
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such Interest on the part of any other person, regardless of
whether it shall have actual or other notice thereof, except as otherwise
provided by law. Without limiting the foregoing, when a person (such as a
broker, dealer, bank, trust company or clearing corporation, or an agent of any
of the foregoing) is acting as a
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<PAGE> 23
nominee, agent or in some other representative capacity for another person in
acquiring or holding an Interest, as between the Partnership on the one hand
and such persons on the other hand, such representative (i) shall be the
Limited Partner or assignee (as the case may be) of record and beneficially,
and (ii) shall be bound by this Agreement and shall have the obligations of a
Limited Partner or assignee (as the case may be) hereunder and as provided for
herein.
XI. TRANSFERS OF INTERESTS; ADDITIONAL INTERESTS
11.1 Consent Required for Transfers. No Partner shall Transfer its
interest in the Partnership or any interest therein to any Person unless and
until (i) the Partner proposing to make the Transfer has given notice to all
non-transferring Partners stating the name of the Person (s) to whom the
proposed Transfer will be made and the material terms and conditions of the
proposed Transfer; and (ii) written consent to the proposed Transfer has been
given by all non-transferring Partners, which consent may be granted or
withheld in the sole discretion of each such Partner.
11.2 General Provisions. Notwithstanding any other provision of
this Agreement:
(a) Each Transfer otherwise permitted hereunder, must be
effected with documentation approved in form and substance by the
General Partner. Such documentation shall include an agreement by the
transferee to be bound by all of the terms and provisions of this
Agreement including, without limitation, an acknowledgment and
agreement that the Partnership Interest or portion of or interest in
the Partnership Interest transferred shall be and remain subject to
the restrictions set forth in this Article XI and in Article XII to
the extent it was subject to such restrictions when held by the
transferor. Such documentation and such other information as the
General Partner shall reasonably request shall be submitted to the
General Partner at least thirty (30) days prior to any proposed
Transfer and such proposed Transfer may not be effected if the
transferor is given written notice by the General Partner within
thirty (30) days after such submission that: (i) additional material
or information is required, (ii) the documentation submitted is not
satisfactory or (iii) there has been an adverse determination under
Section 11.2(c).
(b) Each transferee shall reimburse or cause the reimbursement
of the Partnership for all expenses incurred by the Partnership
relating to the Transfer, including, without limitation, all
reasonable attorney's fees, filing fees and similar expenses.
- 19 -
<PAGE> 24
(c) No Transfer of an Interest by a Limited Partner shall be
permitted if, in the opinion of the General Partner, such Transfer
alone or in conjunction with one or more other Transfers, would (i)
result in a violation of applicable securities laws, (ii) cause a
termination of the Partnership under Section 708 (b) (1) (B) or any
other Section of the Code, (iii) be an event which would constitute a
violation or breach (or with the giving of notice or passage of time
would constitute a violation or breach) of any law, regulation,
ordinance, agreement or instrument by which the Partnership, any
business or other enterprise or entity in which it has an interest,
any of its property, or any property of any such enterprise or entity
is bound, or (iv) require the Partnership to register under the
Investment Company Act of 1940, or require the General Partner or any
officer or partner of the General Partner to register as an investment
advisor under the Investment Advisors Act of 1940 or otherwise subject
the Partnership or its Partners to burdensome requirements.
(d) Any Partner who voluntarily Transfers or attempts to
Transfer all or any portion of or interest in his Interest or to
effect the admission of a successor Limited Partner if the Partnership
concludes that such a Transfer or admission would have an adverse
impact of the type described in Section 11. 2 (c), shall be liable to
the other Partners for any taxes, fines, penalties, damages or losses
which may be due from them or the Partnership or suffered by the
Partnership or the Partners if such Transfer actually has an adverse
impact of the type described in Section 11. 2 (c).
(e) Upon any Transfer of a Limited Partnership Interest or
General Partnership Interest in compliance with this Article XI, the
transferee shall be admitted as a Limited Partner unless the
instruments of Transfer indicate that the transferee shall not be
admitted as a Limited Partner but shall be a mere assignee. The
Limited Partnership Interest or interest therein which was the subject
of a Transfer to an assignee shall remain subject to all of the
restrictions of this Agreement, including this Article XI, as if the
transferee were a Limited Partner, but such transferee shall have none
of the powers or rights of a Limited Partner except to make a Transfer
in accordance with this Article XI.
(f) No Transfer of all or any portion of or interest in the
Interest of any General Partner or Limited Partner in compliance 'with
this Article XI, even if it results in the substitution of the
transferee as a Partner, shall release the transferor from those
liabilities of the Partnership existing on the date of the Transfer
which survive such Transfer.
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<PAGE> 25
(g) Any attempted Transfer which is not made in accordance
with, or which violates any of, the provisions of this Article XI,
shall be null and void and have no effect and the Partnership shall be
under no obligation to recognize any such Transfer or recognize the
transferee as a Limited Partner.
XII. DISSOLUTION OF THE PARTNERSHIP AND
DISTRIBUTIONS UPON DISSOLUTION
12.1 Dissolution. The Partnership shall be dissolved upon the
occurrence of any of the following events, whether or not such occurrences
would cause dissolution under the Act:
(a) the expiration of the term of the Partnership as provided
in Section 1.5;
(b) the sale or other disposition of all or substantially all
of the assets of the Partnership and the failure of the Partnership,
within six months thereafter, to acquire any other assets through the
reinvestment of proceeds of such disposition or otherwise, provided
that if such a sale or disposition of the Property constitutes an
"installment sale" for purposes of Section 453 of the Code, the right
to receive future payments shall constitute Partnership property and
the Partnership shall not be dissolved so long as: (i) it retains an
interest in any such property, and (ii) the distribution of such
property upon termination would cause recognition of gain in the year
of distribution measured in whole or in part by amounts to be received
in future years;
(c) the agreement of the General Partner and a Majority of the
Limited Partners to dissolve the Partnership;
(d) the entry of a decree of judicial dissolution;
(e) the dissolution followed by winding-up or liquidation or
other termination of existence of the General Partner;
(f) the Bankruptcy of the General Partner; or
(g) the withdrawal of the General Partner from the
Partnership.
The death, Bankruptcy, incompetency, dissolution or cessation of
existence of a Limited Partner shall not dissolve or terminate the
Partnership.
12.2 Winding-Up and Liquidation of the Partnership. (a) Upon an
event of dissolution described in Section 12.1(e), (f) or (g) the Limited
Partner may exercise Voting Rights to appoint a
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<PAGE> 26
liquidating trustee who shall have all the rights and powers (other than rights
to allocations and distributions) granted to the General Partner hereunder. The
Partnership shall then be continued as a continuing limited partnership, the
continuing limited partnership shall succeed to all Partnership assets, the
business of the Partnership shall be continued, and the liquidating trustee
shall have the right to do all acts authorized by law for the purpose of
winding-up the affairs of the Partnership. The liquidating trustee shall
diligently proceed to wind-up the affairs of the Partnership. The liquidating
trustee shall do no act within 90 days after dissolution that would adversely
affect the rights given to the Limited Partners in Sections 8.4 and 12.3.
(b) Upon a dissolution pursuant to Section 12.1 (b), (c) or
(d), if the Limited Partners did not exercise Voting Rights, the
General Partner shall be the liquidating trustee and shall diligently
proceed to wind-up the affairs of the Partnership. During the time
prior to liquidation, the Partnership shall be continued as a
continuing limited partnership bound by the terms hereof, the
continuing limited partnership shall succeed to all Partnership
assets, the business of the Partnership shall be continued, and the
General Partner shall have the right to do all acts authorized by law
for the purpose of winding-up the affairs of the Partnership.
(c) In the event of liquidation of the Partnership, the
liquidating trustee shall take the following steps:
(i) first, use its best efforts to sell the business
of the Partnership as a going concern;
(ii) second, to the extent the business of the
Partnership cannot be sold in its entirety as a going concern,
determine which Partnership properties and assets should be
distributed in kind, and dispose of all other Partnership
properties and assets at the best cash price obtainable
therefor;
(iii) third, apply Partnership property to the
payment of the debts and liabilities of the Partnership, the
expenses of liquidation and the establishment of any reserves
deemed necessary by the liquidating trustee;
(iv) fourth, repay all loans and advances (other than
capital contributions) by Partners and all accrued interest
thereon; and
(v) fifth, distribute any remaining Partnership
assets to the Partners in accordance with their positive
Capital Account balances as determined pursuant to Section
4.1.
- 22 -
<PAGE> 27
If any reserves are established in connection with the foregoing, the
liquidating trustee may pay over said amounts to an escrow agent to be held by
it for the purposes of disbursing such reserves in payment of any contingencies
which may arise and, at the expiration of such period as or the liquidating
trustee may deem advisable, for distribution of the balance thereof in the same
manner and with the same priorities as are provided in (v) above. The Limited
Partners shall look solely to the assets of the Partnership for the return of
their capital contributions.
12.3 Election to Continue the Partnership. (a) Notwithstanding
Section 12.1, upon an event of dissolution described in Section 12.1 (e), (f)
or (g), the General Partner then remaining shall cease to be authorized to act
as General Partner hereunder ("Unauthorized General Partner") and the
Partnership shall be dissolved and wound-up and liquidated pursuant to Section
12.2, unless the Limited Partners exercise the Voting Rights, within 90 days
after such event, to continue the business of the Partnership and designate a
substitute General Partner(s). Upon the occurrence of the above, the continuing
limited partnership shall be on substantially identical terms to the
Partnership and shall carry on the business of the Partnership. The continuing
limited partnership shall succeed to all rights and assets of the Partnership
and shall by this Agreement (and without the need for any further act or
instrument) assume the liabilities thereof.
(b) Any designated substitute General Partner(s) becoming a
General Partner pursuant to the Limited Partners' exercise of the Voting Rights
shall, upon becoming a party to this Agreement, have the rights, powers and
obligations of a General Partner under this Agreement (other than rights to
allocations and distributions). If such designee was a Limited Partner, all or
a portion of his Interest shall be converted to that of a General Partner and
shall otherwise remain identical as to its Share. If such designee was not
previously a Partner, he or it shall be required to acquire all or a portion of
an Interest having at least a 1% interest in all allocable items of the
Partnership from any Partner on such terms as he can, which Interest, if it was
a Limited Partnership Interest, shall be converted to a General Partnership
Interest and shall otherwise remain identical to a Limited Partnership Interest
as to its Share.
(c) A Majority of the Limited Partners shall have the right to
purchase, or designate a purchaser (which may be the Partnership) of, the
Partnership Interest of the Unauthorized General Partner. Any exercise of the
right to purchase the Unauthorized General Partner's Partnership Interest under
this paragraph shall be made by written notice delivered to the Unauthorized
General Partner and the Partnership and dated not later than 45 days after the
determination of the fair market value of Partnership property as provided
below. Any purchase of
- 23 -
<PAGE> 28
the Unauthorized General Partner's Partnership Interest by the Partnership
under this Section 12.3 (c) shall be subject to any restrictions in any
agreements of the Partnership for borrowed money. As promptly as practicable
following any event of dissolution described in Section 12.3 (a), the Limited
Partners shall unanimously determine the fair market value of all Partnership
property. If the Limited Partners are unable to unanimously agree on the fair
market value of all Partnership property (including, without limitation,
goodwill and other intangible assets), such value shall be determined by a firm
of independent investment bankers or appraisers. Upon the determination of the
fair market value of Partnership property, the Capital Accounts of the Partners
as determined pursuant to Section 4.1 (including that of the Unauthorized
General Partner) shall then be adjusted to reflect the fair market value of all
Partnership property. Unless otherwise agreed, the purchase price of the
Unauthorized General Partner's Interest shall be paid in cash in the amount of
his positive Capital Account balance.
12.4 Time for Winding-Up. A reasonable time, up to three years,
shall be allowed for the orderly liquidation of assets of the Partnership and
the discharge of liabilities to creditors so as to enable the General
Partner(s) or the liquidating trustee, as the case may be, to minimize the
normal losses attendant upon a liquidation.
12.5 Final Accounting. Each of the Partners shall be furnished with
a statement setting forth the assets and liabilities, if any, of the
Partnership as of the date of the complete liquidation. Upon the compliance by
the General Partner (s) or the liquidating trustee, as the case may be, with
the distribution provisions of this Agreement, the Limited Partners shall cease
to be such, and the General Partner(s) or the liquidating trustee, as the case
may be, shall execute and cause to be filed a Certificate of Cancellation of
the Partnership and any and all other documents necessary with respect to
termination and cancellation.
XIII. AMENDMENT OF AGREEMENT
13.1 Amendment by General Partner. Except as otherwise specifically
provided in this Agreement, any amendment to this Agreement may be effected by
the General Partner without the approval of any Limited Partner, including,
without limitation, the following:
(a) to implement or effectuate the provisions of any part of
this Agreement or to continue the Partnership for the term provided
herein under the laws of the State of Delaware and of any state or
jurisdiction in which it shall do business;
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<PAGE> 29
(b) to take any action, on the advice of counsel, for the
Partnership, necessary or appropriate to satisfy then current
requirements of the Code with respect to partnerships or any
applicable laws or regulations;
(c) to cure any ambiguity, defect or inconsistency; or
(d) to effect any amendment which is fair to all partners and
consistent with the economic terms provided in this Agreement.
All Partners shall be furnished with a copy of such amendment prior to its
adoption. No amendment shall become effective if Limited Partners possessing
Limited Partnership Interests aggregating 25% or more of the total Limited
Partnership Interests deliver to the Partnership, within 30 calendar days
following delivery of such amendment to the Limited their written objection to
such amendment.
13.2 Amendment by Unanimous Approval. An amendment to any
provision of this Agreement, which provision specifies that action pursuant
thereto may only be taken upon the affirmative approval of all of the Limited
Partners (including without limitation this Section 13.2), shall be made only
upon such approval and the approval of the General Partner.
13.3 Other Amendments. Except as specifically provided in Section
13.2 or otherwise in this Agreement
(a) any amendment that would result in a Limited Partner
becoming liable as a general partner, increase any Limited Partner's
obligations to make contributions to the capital of the Partnership or
further limit a Limited Partner's ability to hold or make a Transfer
of his Interest, may be adopted only if such Limited Partner does not
exercise Voting Rights to disapprove such amendment by returning,
within 30 days after the request is made, an executed counterpart of a
proposed form of consent to amendment approving such amendment,
indicating his disapproval of such action.
13.4 Execution of Amendments. All Partners hereby agree to execute
all documents and instruments necessary to evidence their approval of all
actions, including, without limitation, amendments to this Agreement, taken or
authorized pursuant to an exercise of Voting Rights by the Limited Partners,
which if exercised in favor of such an amendment, shall constitute the approval
of the Limited Partners.
XIV. POWER OF ATTORNEY
14.1 Grant of Power. Each Partner by his or its signature below
irrevocably makes, constitutes and appoints the General Partner, his or its
true and lawful attorney in his or its name,
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<PAGE> 30
place and stead, with the power from time to time to substitute or resubstitute
one or more others as such attorney, and to make, execute, swear-to,
acknowledge, verify, deliver, file, record and publish any and all documents,
certificates or other instruments which may be required or deemed desirable by
the General Partner to (a) effectuate the provisions of any part of this
Agreement or any amendments to this Agreement, (b) enable the Partnership to
conduct its business or (c) comply with any applicable law in connection with
the Partnership's conduct of its business.
14.2 Irrevocable Nature. It is expressly intended by each Partner
that the foregoing power of attorney is a special power of attorney coupled
with an interest in favor of each of those appointed as attorney-in-fact on his
or its behalf, and as such shall be irrevocable and shall survive such
Partner's death, incompetence (including an adjudication of insanity) or, in
the case of a Limited Partner which is not a natural person, its merger,
dissolution or other termination of existence.
14.3 Transfer of Partnership Interests. The foregoing power of
attorney shall survive the delivery of an instrument of Transfer by any Partner
of the whole or any portion of or interest in his Interest, except that where a
transferee of such Interest has been approved as a successor Partner and the
transferee shall thereupon cease being a Partner (all in accordance with this
Agreement), then the power of attorney of the transferor Partner shall survive
the delivery of such instrument of Transfer for the sole purpose of enabling
the attorneys-in-fact for such transferor Partner (or any of them) to execute,
swear to, acknowledge and file any and all instruments necessary to effectuate
such Transfer and succession.
XV. MISCELLANEOUS
15.1 Notices. All notices to the Partnership shall be sent
registered or certified mail, return receipt requested, addressed to the
Partnership at the Partnership's principal place of business at the address set
forth in Section 1.4 and to the General Partner at the address listed in
Section 3.1. All notices to the General Partner or to a Limited Partner shall
be sent addressed to such Partner at the address listed in Section 3.1 or after
its name on the signature page or such other address as may be specified by the
Partner from time to time in a notice to the Partnership. All notices shall be
deemed given or served five days after deposit in the United States mail,
postage prepaid, properly addressed and return receipt requested.
15.2 Waiver. Each of the Partners hereby irrevocably waives any and
all rights, duties, obligations and benefits with respect to any action for
partition of Partnership property or to compel any sale or appraisal thereof.
15.3 Notice of Tax Examinations. Any Partner receiving advice that
the Internal Revenue Service intends to examine any
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<PAGE> 31
income tax return of the Partnership shall promptly notify the other Partners.
15.4 Foreign Investors. Each Partner hereby agrees to deliver to the
Partnership such documentation as may be required by the Partnership to
determine to the satisfaction of the Partnership (and as may otherwise be
required by law) whether such Partner is a "foreign person" or a "United States
Person," as those terms are described and defined in Code Section 7701(a)(30).
If a Partner fails to execute and deliver to the Partnership a non-foreign
affidavit or provide the Partnership with other satisfactory evidence as to its
foreign status in accordance with the provisions of this Section 15.4, the
Partnership shall withhold from distributions to that Partner the amounts
required by the Code and that Partner shall be required to make contributions
under Section 3.2.
15.5 Whole Agreement. This Agreement and any other agreements referenced
herein contain the entire understanding between the parties and supersede any
prior understanding and agreements between them respecting the within subject
matter. There are no agreements, arrangements or understandings, oral or
written, between and among the parties hereto relating to the subject matter of
this Agreement which are not set forth or expressly referred to herein.
15.6 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
15.7 Binding Nature. Except as otherwise provided in this Agreement,
this Agreement shall be binding upon and inure to the benefit of the Partners
and their successors, personal representatives, heirs, devises, guardians and
assigns.
15.8 Invalidity. In the event that any provision of this Agreement
shall be held to be invalid, the validity of the remaining provisions of the
Agreement shall not in any way be affected thereby.
15.9 Counterparts; Further Documents. This Agreement and any amendment
may be executed in multiple counterparts, each of which shall be deemed an
original and all of which shall constitute one agreement or amendment, as the
case may be, notwithstanding that all of the parties are not signatories to the
original or the same counterpart, or that signature pages from different
counterparts are combined, and the signature of any party to any counterpart
shall be deemed to be a signature to and may be appended to any other
counterpart. At any time or times upon the request of the General Partner, the
parties agree to sign, swear to and/or acknowledge certificates or affidavits
to certificates or statements of fictitious name, trade name or the like (and
any amendments or cancellations thereof) required by the laws of or applicable
to any jurisdiction in which the Partnership does or proposes to do business,
or deemed necessary
<PAGE> 32
by the General Partner; and to cause the filing of any of the same for record
wherever such filing shall be required by law.
15.10 Construction. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. All personal pronouns used in this Agreement, whether used in
the masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural and vice versa. Unless otherwise specifically
stated, references to Sections, Subsections, Articles, Exhibits or Appendices
refer to the Sections, Subsections, Articles, Exhibits and Appendices of this
Agreement.
IN WITNESS WHEREOF, the General Partner and each of the Limited Partner
have duly executed this Agreement as of the date first above written.
GENERAL PARTNER:
LIN TELEVISION OF TEXAS, INC.,
a Delaware Corporation
By: /s/ PETER E. MALONEY
--------------------------
Name: Peter E. Maloney
-------------------------
Title: Vice President
-------------------------
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<PAGE> 33
LIMITED PARTNERS:
KXAS HOLDINGS, INC., a Delaware
Corporation
By: /s/ PETER E. MALONEY
--------------------------
Name: Peter E. Maloney
-------------------------
Title: Vice President
-------------------------
KXAN, INC., a Delaware
corporation
By: /s/ PETER E. MALONEY
--------------------------
Name: Peter E. Maloney
-------------------------
Title: Vice President
-------------------------
THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS DOCUMENT IS SUBJECT TO
RESTRICTIONS ON ITS ASSIGNMENT AND TRANSFER SET FORTH HEREIN. THE SUBJECT
INTEREST HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAW AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNTIL IT HAS BEEN
SO REGISTERED OR UNTIL THE GENERAL PARTNER HAS RECEIVED AN OPINION OF LEGAL
COUNSEL OR OTHER ASSURANCES SATISFACTORY TO IT, THAT SUCH INTEREST M&Y LEGALLY
BE SOLD OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION, ALL AS PROVIDED IN
THIS DOCUMENT.
- 29 -
<PAGE> 34
EXHIBIT A
KXAN-TV
Schedule of Property
A. REAL PROPERTY
1. Royal Oaks Estate
Llano County, Texas
Description: Royal Oaks Country Club, Lot 180
2. Parking Lot
1904 Pearl St.
Travis County, Texas
Description: 60'x150' on Pearl St.
Lot 3, Block 25 John Opr Addn
3. Studio
910 W. MLK Blvd.
Travis County, Texas
Description: Lot 7 & E. 33' of Lot 8
O/L 25 Div D. John Orr Addn
4. Studio
908 W. MLK Blvd.
Travis County, Texas
Description: W1 of Lot 5, All Lot 6,
O/L 25 Div John Orr Addn
5. Studio
908 W. MLK Blvd.
Travis County, Texas
Description Lot 2, E 49 of Lot 5
O/L 25 Div John Orr Addn
<PAGE> 35
6. Transmitter/3500 Toro Can
Travis County, Texas
Description: Abst 329, 6.58 acres
Thomas J. Gray Survey
7. Transmitter/3500 Toro Can
Travis County, Texas
Description: Abst. 72, 2.42 Acres
Wm. Brown Survey
8. Transmitter/3500 Toro Can
Travis County, Texas
Description: Abst. 329, 21.71 Acres
Thomas J. Gray Survey
9. Circle D Country Acres
Bastrop County, Texas
Description: Lot 28, Sec 3 Circle D Country Acres
(4.62 Acres)
10. Silent Valley Subdivision
Bastrop County, Texas
Description: Lot 1, Block 1, Silent Valley
(.05 Acres)
11. Lake Bastrop Club Subdivision
Bastrop County, Texas
Description: Lot 62, Block 1, Acres .5184
B. RENTAL REAL ESTATE
Lessor
1. Crow-Gottesman-Buchanan #6
(Antenna Site 301 Congress,
Austin, Texas)
2. City of San Marcos
(Antenna Site)
<PAGE> 36
3. Bluebonnet Electric Cooperative, Inc. (Antenna Site 426 East
Austin, Giddings, Texas)
4. Kenneth Ulrich dba Electric Motor Service Co. (Antenna Site 840
N. Jefferson, La Grange, Texas)
5. Arrowhead West, Inc.
(Llano News Bureau - Southwest Center
Round Mountain, Texas)
6. Arrowhead West, Inc.
(Llano Office Space - no address)
7. Allen Keller Company
(Antenna Site - no address)
C. PERSONAL PROPERTY LEASED
Lessor
1. Sharp Business Products
(1 Copier)
D. TITLED PROPERTY
1. Vehicles (15 total)
E. ALL GENERAL INTANGIBLES, INVENTORY, FURNITURE, FIXTURES AND
EQUIPMENT, LICENSES AND PERMITS, AND ALL OTHER PROPERTY OWNED,
INCLUDING REAL PROPERTY, EXCLUDING ANY LICENSES ISSUED BY THE
FEDERAL COMMUNICATIONS COMMISSION.
<PAGE> 37
Exhibit A
KXAS - TV
Schedule of Property
A. REAL PROPERTY
1. Fort Worth Studio
3910 Barnett Street
Fort Worth, Texas 76103
Description: 41.34 acres, Johnson, Enoch S. Survey
A-852 Tr-2A Tarrant County, Texas
2. Transmitter Site
213 Little Creek
Cedar Hill, Texas
Description: South Hills Park 1, Block D,, Lot 13
Dallas County, Texas
B. RENTAL REAL ESTATE.
Landlord
1. Bramlea Texas Inc.
(Microwave Facility Lease at 901 Main Street, Dallas, Texas)
2. Trisept, Inc.
(Antenna Site at Continental Plaza, Fort Worth, Texas
3. Bell Communications (Antenna Site)
4. Sheraton Hotel
(Airport Camera)
5. KXTX-TV
(News and Sales)
<PAGE> 38
C. PERSONAL PROPERTY LEASED
LESSOR
Eastman Kodak
(11 Copy Machines)
Tokai Financial Services, Inc.
(1 Copy Machine)
Pitney Bowes, Inc.
(Postage Meter)
D. TRADEMARKS/COPYRIGHTS
1. Winning Moms
2. Remote Control Reading
3. NBC
E. TITLED PROPERTY
1. Vehicles (30 total)
F. ALL GENERAL INTANGIBLES, INVENTORY, FURNITURE, FIXTURES AND
EQUIPMENT, LICENSES AND PERMITS, AND ALL OTHER PROPERTY OWNED,
INCLUDING REAL PROPERTY, EXCLUDING ANY LICENSES ISSUED BY THE
FEDERAL COMMUNICATIONS COMMISSION.
<PAGE> 39
EXHIBIT B
CERTIFICATE
FOR
LIMITED PARTNERSHIP INTEREST
IN
LIN TELEVISION OF TEXAS, L.P.
% Limited Partnership Interest
No.________________ ______________________________
__________________________________, as the general partner of LIN Television of
Texas, L.P. ("Partnership") a Delaware limited partnership, hereby certifies
that ____________________________________ is the registered owner of a
___________ % limited partnership interest in the Partnership ("Ownership
Interest"). The rights, preferences and limitations of the Ownership Interests
are set forth in the Agreement of Limited Partnership ("Partnership Agreement")
as the same may, from time to time, be amended and restated, under which the
Partnership was formed and is existing, copies of which are on file at the
principal office of the general partner. This Certificate is not transferable
except as provided in the Partnership Agreement.
-----------------------------,
general partner
By:
---------------------------
Name:
----------------------
Title:
---------------------
Dated:
------------------------------------
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<PAGE> 40
LIN TELEVISION OF TEXAS, L.P.
APPENDIX A
TAX MATTERS
This Appendix is attached to and is a part of the partnership agreement
(the "Agreement") of LIN TELEVISION OF TEXAS, L.P. (the "Partnership") . The
provisions of this Appendix are intended to comply with the requirements of
Treas. Reg. Section 1.704-1(b)(2)(iv) and Treas. Reg. Section 1.704-2 with
respect to maintenance of capital accounts and partnership allocations, and
shall be interpreted and applied accordingly.
ARTICLE I
DEFINITIONS
1.01. Definitions. For purposes of this Appendix, the capitalized terms
listed below shall have the meanings indicated. Capitalized terms not listed
below and not otherwise defined in this Appendix shall have the meanings
specified in the Agreement.
"Account Reduction Item" " means (i) any adjustment described in Treas.
Reg. Section 1.704 - 1(b)(2)(ii)(d)(4); (ii) any allocation described in
Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(5), other than a Nonrecourse
Deduction or a Partner Nonrecourse Deduction; or (iii) any distribution
described in Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(6), other than a
Nonrecourse Distribution or a Partner Nonrecourse Distribution.
"Adjusted Capital Account Balance" means a Partner's Capital Account
balance increased by the sum of (i) such Partner's share of Partnership Minimum
Gain and (ii) such Partner's share of Partner Nonrecourse Debt Minimum Gain.
"Adjusted Fair Market Value* of an item of Partnership property means the
greater of (i) the fair market value of such property or (ii) the amount of any
nonrecourse indebtedness to which such property is subject within the meaning of
section 7701(g) of the Code.
Applicable Federal Rate" means the applicable Federal rate within the
meaning of section 1274(d) of the Code.
"Books" means the method of accounting prescribed for compliance with the
capital account maintenance rules set forth in Treas. Reg. Section 1.704-1(b)
(2)(iv) as reflected in Articles II and III of this Appendix, as distinguished
from any accounting
<PAGE> 41
method which the Partnership may adopt for other purposes such as financial
reporting.
"Book Value" means, with respect to any item of Partnership property, the
book value of such property within the meaning of Treas. Reg. Section
1.7041(b)(2)(iv)(g)(3); provided, however, that if the Partnership adopts the
remedial allocation method described in Treas. Reg. Section 1.704-3T(d) with
respect to any item of Partnership property, the Book Value of such property
shall be its book basis determined in accordance with Treas. Reg. Section
1.704-3T(d)(2).
"Capital Account" means the capital account of a Partner maintained in
accordance with Article III of this Appendix.
"Code" means the Internal Revenue Code of 1986, as amended. References to
specific sections of the Code shall be deemed to include references to
corresponding provisions of succeeding internal revenue law.
"Deemed Liquidation" means a liquidation of the Partnership that is deemed
to occur pursuant to Treas. Reg. Section 1.708-1(b)(1)(iv) in the event of a
termination of the Partnership pursuant to section 708(b)(1)(B) of the Code.
"Excess Deficit Balance" means the amount, if any, by which the balance in
a Partner's Capital Account as of the end of the relevant taxable year is more
negative than the amount, if any, of such negative balance that such Partner is
obligated to restore to the Partnership or is treated as obligated to restore to
the Partnership pursuant to Treas. Reg. Section 1.704-1(b)(2)(ii)(c), Treas.
Reg. Section 1.704-1(b)(2)(ii)(h), Treas. Reg. Section 1.704-2(g), or Treas.
Reg. Section 1.704-2(i)(5). Solely for purposes of computing a Partner's Excess
Deficit Balance, such Partner's Capital Account shall be reduced by the amount
of any Account Reduction Items that are reasonably expected as of the end of
such taxable year.
"Excess Nonrecourse Liabilities" means excess nonrecourse liabilities
within the meaning of Treas. Reg. 1.752-3(a)(3).
"Nonrecourse Deduction" means a nonrecourse deduction determined pursuant
to Treas. Reg. Section 1.704-2(c).
"Nonrecourse Distribution" means a distribution to a Partner that is
allocable to a net increase in Partnership Minimum Gain pursuant to Treas. Reg.
Section 1.704-2(h)(2).
"Partner Nonrecourse Debt" means any liability of the Partnership to the
extent that (i) the liability is nonrecourse for purposes of Treas. Reg.
Section 1.1001-2 and (ii) a Partner or a
<PAGE> 42
Related Person bears the economic risk of loss under Treas. Reg. Section
1.752-2.
"Partner Nonrecourse Debt Minimum Gain" means minimum gain attributable to
Partner Nonrecourse Debt pursuant to Treas. Reg. Section 1.704-2(1)(2).
"Partner Nonrecourse Deduction" means any item of Book loss or deduction
that is attributable to a Partner Nonrecourse Debt pursuant to Treas. Reg.
Section 1.704-2(1).
"Partner Nonrecourse Distribution" means a distribution to a Partner that
is allocable to a net increase in such Partner's share of Partner Nonrecourse
Debt Minimum Gain pursuant to Treas. Reg. Section 1.704-2(i)(6).
"Partnership Minimum Gain" means partnership minimum gain determined
pursuant to Treas. Reg. Section 1.704-2(d).
"Regulatory Allocation" means (i) any allocation made pursuant to Section
3.04(a) to the extent that such allocation is attributable to a prior
distribution that is treated as a Nonrecourse Distribution (after taking into
account Section 5.02(a)); (ii) any allocation made pursuant to Section 3.04(b)
to the extent that such allocation is attributable to a prior distribution that
is treated as a Partner Nonrecourse Distribution (after taking into account
Section 5.02(b)); (iii) any reallocation made pursuant to Section 3.04(d) or
(e); or (iv) any allocation or reallocation made pursuant to Section 3.05.
"Related Person" means, with respect to a Partner, a person that is related
to such Partner pursuant to Treas. Reg. Section 1.752-4(b).
"Revaluation Event" means (i) a liquidation of the Partnership (within the
meaning of Treas. Reg. Section 1.704-1(b)(2)(ii)(g)); or (ii) a contribution of
more than a de minimis amount of money or other property to the Partnership by a
new or existing Partner or a distribution of more than a de minimis amount of
money or other property to a retiring or continuing Partner where such
contribution or distribution alters the (profits interest] of any Partner.
"Section 705(a)(2)(B) Expenditures" means non-deductible expenditures of
the Partnership that are described in section 705(a)(2)(B) of the Code, and
organization and syndication expenditures and disallowed losses to the extent
that such expenditures or losses are treated as expenditures described in
section 705(a)(2)(B) of the Code pursuant to Treas. Reg. Section
1.704-1(b)(2)(iv)(i).
<PAGE> 43
"Section 751 Property" means unrealized receivables and substantially
appreciated inventory items within the meaning of Treas. Reg. Section
1.751-1(a)(1).
"Tax Basis" means, with respect to any item of Partnership property, the
adjusted basis of such property as determined in accordance with the Code.
"Treasury Regulation" or "Treas., Reg." means the temporary or final
regulation(s) promulgated pursuant to the Code by the U.S. Department of the
Treasury, as amended, and any successor regulation(s).
ARTICLE II
CAPITAL ACCOUNTS
2.01. Maintenance. A single Capital Account shall be maintained for
each Partner in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv).
2.02. Revaluation of Partnership Property. (a) Upon the occurrence of a
Revaluation Event, the General Partner, in its sole discretion, may revalue
all Partnership property (whether tangible or intangible) for Book purposes to
reflect the Adjusted Fair Market Value of Partnership property immediately
prior to the Revaluation Event. In the event that Partnership property is so
revalued, the Capital Accounts of the Partners shall be adjusted in accordance
with Treas. Reg. Section 1.704-1(b)(2)(iv)(f).
(b) Upon the distribution of Partnership property to a Partner, if
Partnership property is not revalued pursuant to Section 2.02(a), the property
to be distributed shall be revalued for Book purposes to reflect the Adjusted
Fair Market Value of such property immediately prior to such distribution, and
the Capital Accounts of all Partners shall be adjusted in accordance with
Treas. Reg. Section 1.704-1(b)(2)(iv)(e).
2.03. Restoration of Negative Balances. (a) Upon the occurrence of a
distribution in complete liquidation of the General Partner's interest in the
Partnership, or upon the liquidation of the Partnership (within the meaning of
Treas. Reg. Section 1.704-1(b)(2)(ii)(g)), the General Partner shall contribute
to the Partnership an amount equal to the deficit balance, if any, of such
General Partner's Capital Account.
(b) For purposes of this Section 2.03, the amount of the General Partner's
Capital Account shall be computed after taking into account (i) the General
Partner's distributive share of the Partnership's income, deductions, gains and
losses (as determined in a manner consistent with section 706(d) of the Code)
for the taxable year in which such liquidation occurs, and
<PAGE> 44
(ii) any other adjustments to the General Partner's Capital Account arising as
a result of such liquidation.
(c) Any contribution required by this Section 2.03 in the event of a
liquidation of the Partnership or of the General Partner's interest in the
Partnership shall be made not later than the later of (i) the end of the taxable
year in which such liquidation occurs, or (ii) a date which is 90 days after the
date of such liquidation. Such contribution shall be in the form of cash, except
that in the event of a Deemed Liquidation, such contribution may be in the form
of a negotiable promissory note of which such Partner is the maker, bearing
interest at no less than the Applicable Federal Rate at the time of
contribution.
(d) Any amounts contributed to the Partnership pursuant to this Section
2.03 shall, upon liquidation of the Partnership, be paid to the creditors of the
Partnership or distributed to the Partners in accordance with their positive
Capital Account balances.
2.04. Transfers of Partnership Interests. (a) Upon the transfer of a
Partner's entire partnership interest, the Capital Account of such Partner shall
carry over to the transferee.
(b) Upon the transfer of a portion of a Partner's partnership interest, the
portion of such Partner's Capital Account attributable to the transferred
portion shall carry over to the transferee. In the event that the document
effecting such transfer specifies the portion of such Partner's Capital Account
to be transferred, such portion shall be deemed to be the portion attributable
to the transferred portion of such Partner's partnership interest for purposes
of this Section 2.04(b).
ARTICLE III
ALLOCATION OF BOOK INCOME AND LOSS
3.01. Book Income and Loss. (a) The Book income or loss of the Partnership
for purposes of determining allocations to the Capital Accounts of the Partners
shall be determined in the same manner as the determination of the Partnership's
taxable income, except that (i) items that are required by section 703(a)(1)
of the Code to be separately stated shall be included; (ii) items of income that
are exempt from inclusion in gross income for federal income tax purposes shall
be treated as Book income, and related deductions that are disallowed under
section 265 of the Code shall be treated as Book deductions; (iii) Section
7.05(a)(2)(B) Expenditures shall be treated as deductions; (iv) items of gain,
loss, depreciation, amortization, or depletion that would be computed for
federal income tax purposes by reference to the Tax Basis of an item of
Partnership property shall be determined by reference to the Book Value of such
item
<PAGE> 45
of property; and (v) the effects of upward and downward revaluations of
Partnership property pursuant to Section 2.02 shall be treated as gain or loss
respectively from the sale of such property.
(b) In the event that the Book Value of any item of Partnership property
differs from its Tax Basis, the amount of Book depreciation, depletion, or
amortization for a period with respect to such property shall be computed so as
to bear the same relationship to the Book Value of such property as the
depreciation, depletion, or amortization computed for tax purposes with respect
to such property for such period bears to the Tax Basis of such property. If the
Tax Basis of such property is zero, the Book depreciation, depletion, or
amortization with respect to such property shall be computed by using a method
consistent with the method that would be used for tax purposes if the Tax Basis
of such property were greater than zero.
(c) Allocations to the Capital Accounts of the Partners shall be based on
the Book income or loss of the Partnership as determined pursuant to this
Section 3.01. Such allocations shall be made as provided in the Agreement except
to the extent modified by the provisions of this Article III.
3.02 Allocation of Nonrecourse Deductions. Nonrecourse Deductions shall be
allocated among the Partners in the same manner as deductions that are not
Nonrecourse Deductions.
3.03. Allocation of Partner Nonrecourse Deductions. Notwithstanding any
other provisions of the Agreement, any item of Partner Nonrecourse Deduction
with respect to a Partner Nonrecourse Debt shall be allocated to the Partner or
Partners who bear the economic risk loss for such Partner Nonrecourse Debt in
accordance with Treas. Reg. Section 1.704-2(i).
3.04. Chargebacks of Income and Gain. Notwithstanding any other provisions
of the Agreement:
(a) Partnership Minimum Gain. In the event that there is a net decrease in
Partnership Minimum Gain for a taxable year of the Partnership, then before any
other allocations are made for such Taxable Year, each Partner shall be
allocated items of Book income and gain for such year (and, if necessary, for
subsequent years) to the extent required by Treas. Reg. Section 1.704-2(f).
(b) Partner Nonrecourse Debt Minimum Gain. In the event that there is a
net decrease in Partner Nonrecourse Debt Minimum Gain for a taxable year of the
Partnership, then after taking into account allocations pursuant to paragraph
(a) immediately preceding, but before any other allocations are made for such
taxable year, each Partner with a share of Partner
<PAGE> 46
Nonrecourse Debt Minimum Gain at the beginning of such year shall be allocated
items of Book income and gain for such year (and, if necessary, for subsequent
years) to the extent required by Treas. Reg. Section 1.704-2(1)(4).
(c) Application for Waiver. In the event that the General Partner
determines, in its sole discretion, that the application of the provisions of
Section 3.04(a) or Section 3.04(b) would cause a distortion in the economic
arrangement among the Partners, the General Partner may, on behalf of the
Partnership, request a waiver of the application of either or both of such
provisions pursuant to Treas. Reg. Section 1.704-2(f)(4) or Treas. Reg. Section
1.704-2(1)(4).
(d) Qualified Income Offset. In the event that any Partner unexpectedly
receives any Account Reduction Item that results in an Excess Deficit Balance at
the end of any taxable year after taking into account all other allocations and
adjustments under this Agreement other than allocations under Section 3.04(e),
then items of Book income and gain for such year (and, if necessary, for
subsequent years) will be reallocated to each such Partner in the amount and in
the proportions needed to eliminate such Excess Deficit Balance as quickly as
possible.
(e) Gross Income Allocation. If, at the end of any taxable year, the
Capital Accounts of any Partners have Excess Deficit Balances after taking into
account all other allocations and adjustments under this Agreement, then items
of Book income and gain for such year will be reallocated to such Partners in
the amount and in the proportions needed to eliminate such Excess Deficit
Balances as quickly as possible.
3.05 Reallocation to Avoid Excess Deficit Balances. Notwithstanding any
other provisions of the Agreement, no Book loss or deduction shall be allocated
to any Partner to the extent that such allocation would cause or increase an
Excess Deficit Balance in the Capital Account of such Partner. Such Book loss or
deduction shall be reallocated away from such Partner and to the other Partners
in accordance with the Agreement, but only to the extent that such reallocation
would not cause or increase excess deficit balances in the Capital Accounts of
such other Partners.
3.06. Corrective Allocation. Subject to the provisions of Sections 3.02,
3.03, 3.04, and 3.05, but notwithstanding any other provision of the Agreement,
in the event that any Regulatory Allocation is made pursuant to this Appendix
for any taxable year, then remaining Book items for such year (and, if
necessary, Book items for subsequent years) shall be allocated or reallocated in
such amounts and proportions as are appropriate to restore the Adjusted Capital
Account Balances of the Partners to the position in which such Adjusted Capital
Account Balances would have been if such Regulatory Allocation had not been
made.
<PAGE> 47
3.07 Other Allocations. (a) If during any taxable year of the Partnership
there is a change in any Partner's interest in the Partnership, allocations of
Book income or loss for such taxable year shall take into account the varying
interests of the Partners in the Partnership in a manner consistent with the
requirements of Section 706 of the Code.
(b) If and to the extent that any distribution of Section 751 Property to a
Partner in exchange for property other than Section 751 Property is treated as a
sale or exchange of such Section 751 Property by the Partnership pursuant to
Treas. Reg. Section 1.751-1(b)(2), any Book gain or loss attributable to such
deemed sale or exchange shall be allocated only to Partners other than the
distributee Partner.
(c) If and to the extent that any distribution of property other than
Section 751 Property to a Partner in exchange for Section 751 Property is
treated as a sale or exchange of such other property by the Partnership pursuant
to Treas. Reg. 1.751-1(b)(3), any Book gain or loss attributable to such deemed
sale or exchange shall be allocated only to Partners other than the distributee
Partner.
ARTICLE IV
ALLOCATION OF TAX ITEMS
4.01. In General. Except as otherwise provided in this Article IV, all
items of income, gain, loss, and deduction shall be allocated among the Partners
for federal income tax purposes in the same manner as the corresponding
allocation for Book purposes.
4.02. Section 704(c) Allocations. In the event that the Book Value of an
item of Partnership property differs from its Tax Basis, allocations of
depreciation, depletion, amortization, gain, and loss with respect to such
property will be made for federal income tax purposes in a manner that takes
account of the variation between the Tax Basis and Book Value of such property
in accordance with section 704(c)(1)(A) of the Code and Treas. Reg. Section
1.704-1(b)(4)(1). The General Partner may select any-reasonable method or
methods for making such allocations, including, without limitation, any method
described in Treas. Reg. Section 1.704-3(b) or (c), or Treas. Reg. Section 1.
704-3T(d).
4.03. Tax Credits. Tax credits shall be allocated among the Partners in
accordance with Treas. Reg. Section 1.704-1(b)(4)(ii).
<PAGE> 48
ARTICLE V
OTHER TAX MATTERS
5.01 Excess Nonrecourse Liabilities. For the purpose of determining the
Partners' shares of the Partnership's Excess Nonrecourse Liabilities pursuant to
Treas. Reg. Sections 1.752-3 (a)(3) and 1.707-5(a)(2)(ii), and solely for such
purpose, the Partners' interests in partnership profits are hereby specified to
be their respective Shares.
5.02 Treatment of Certain Distributions. (a) In the event that (i) the
Partnership makes a distribution that would (but for this Subsection (a)) be
treated as a Nonrecourse Distribution; and (ii) such distribution does not cause
or increase a deficit balance in the Capital Account of the Partner receiving
such distribution in excess of the amount, if any, that such Partner is
otherwise obligated to restore (within the meaning of Treas. Reg. 5 Section
1.704-1(b)(2)(ii)(c)) as of the end of the Partnership's taxable year in which
such distribution occurs; then the Partnership shall treat such distribution as
not constituting a Nonrecourse Distribution to the extent permitted by Treas.
Reg. Section 1.704-2(h)(3).
(b) In the event that (i) the Partnership makes a distribution that would
(but for this Subsection (b)) be treated as a Partner Nonrecourse Distribution;
and (ii) such distribution does not cause or increase a deficit balance in the
Capital Account of the Partner receiving such distribution in excess of the
amount, if any, that such Partner is otherwise obligated to restore (within the
meaning of Treas. Reg. Section 1.704 -1(b)(2)(ii)(c)) as of the end of the
Partnership's taxable year in which such distribution occurs; then the
Partnership shall treat such distribution as not constituting a Partner
Nonrecourse Distribution to the extent permitted by Treas. Reg. Section
1.704-2(i)(6).
5.03 Reduction of Basis. In the event that a Partner's interest in the
Partnership may be treated in whole or in part as depreciable property for
purposes of reducing such Partner's basis in such interest pursuant to section
1017(b)(3)(C) of the Code, the Partnership shall, upon the request of such
Partner, make a corresponding reduction in the basis of its depreciable property
with respect to such Partner. Such request shall be submitted to the Partnership
in writing, and shall include such information as may be reasonably required in
order to effect such reduction in basis.
(End of Appendix A]
<PAGE> 1
EXHIBIT 3.21
FILED
SEP 1, 1983 10 AM
GLENN C. KEATON
SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
of
LWWI BROADCASTING INC.
Pursuant to the General Corporation
Law of the State of Delaware
I, the undersigned, for the purpose of incorporating and organizing a
corporation under the General Corporation Law of the State of Delaware, do
hereby certify as follows:
ARTICLE I
The name of the corporation (hereinafter called the "Corporation") is
LWWI Broadcasting Inc.
ARTICLE II
The address of the registered office of the Corporation in the State of
Delaware is 100 West Tenth Street, in the City of Wilmington, County of New
Castle. The name of the registered agent of the Corporation at such address is
The Corporation Trust Company.
ARTICLE III
The purposes of the Corporation are to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
<PAGE> 2
2
ARTICLE IV
This total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1,000 shares of Common
Stock, par value $1 per share.
ARTICLE V
The name and mailing address of the incorporator is Morris
Berkowitz, 1370 Avenue of the Americas, New York, New York 10019.
ARTICLE VI
The names and mailing addresses of the persons who are to serve as
directors of the Corporation until their successors ate elected and qualified
are as follows:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Donald A. Pels 1370 Avenue of the Americas
New York, N. Y.10019
Arnold S. Blauweiss 1370 Avenue of the Americas
New York, N. Y.10019
E. Blake Byrne 1370 Avenue of the Americas
New York, N. Y.10019
</TABLE>
The election of directors of the Corporation need not be by written
ballot, unless and except to the extent that the By-laws of the Corporation
shall so require.
ARTICLE VII
In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of
<PAGE> 3
3
Directors is expressly authorized and empowered:
(a) to make, alter and repeal the By-laws of the corporation,
subject to the power of the stockholders of the Corporation to alter
or repeal any By-law or By-laws made by the Board of Directors: and
(b) in addition to the powers and authorities herein or by the
laws of the State of Delaware conferred upon the Board of Directors,
to exercise all such powers and do all such acts and powers as may be
exercised or done by the Corporation subject nevertheless, to the
provisions of the said laws, of the Certificate of incorporation, as
from time to time amended by the Corporation and of its By-laws.
ARTICLE VIII
Any director or any officer of the Corporation elected or appointed by
the stockholders of the Corporation or by its Board of Directors may be removed
at any time in such manner as shall be provided in the By-laws of the
Corporation.
ARTICLE IX
The Corporation reserves the right at any time and from time to time to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation and other provisions authorized by the laws of the State of
<PAGE> 4
4
Delaware at the time in force may be added or inserted in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the right reserved in this
Article.
IN WITNESS WHEREOF, I, the undersigned, being the incorporator
hereinabove named, do hereby execute this Certificate of Incorporation this
30th day of August 1983.
/s/ MORRIS BERKOWITZ
-----------------------------
Morris Berkowitz
<PAGE> 5
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
On the 30th day of August 1983, personally appeared before me, Peter E.
Maloney, a notary Public in and for the County and State aforesaid and a person
who is authorized by the laws of the State of New York to take acknowledgment of
deeds, Morris Berkowitz, known to me and known to me to be the person who signed
the foregoing Certificate of Incorporation and he acknowledged that said
Certificate was his act and deed and that the facts stated therein are true.
/s/ PETER C. MALONEY
---------------------------
Notary Public
PETER C. MALONEY
Notary Public State of New York
No. 41 1181512
Qualified in Queens County
Commission Expires March 30, 1985
<PAGE> 1
EXHIBIT 3.22
BY-LAWS
OF
LWWI BROADCASTING INC.
(a Delaware corporation)
ARTICLE I
Offices
SECTION 1. Registered Office. The registered office of the Corporation
in the State of Delaware shall be 1209 Orange Street, City of Wilmington,
County of New Castle. The name of the registered agent in charge thereof is The
Corporation Trust Company.
SECTION 2. Other Offices. The Corporation may also have offices at
other places, either within or without the State of Delaware, as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE II
Meeting of Stockholders
SECTION 1. Annual Meetings. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such place (within or without
the State of Delaware), date and hour as shall be designated in the notice
thereof, except that no annual meeting need be held if all actions, including
the election of directors, required by the General Corporation Law of Delaware
to be taken at a stockholders' annual meeting are taken by written consent in
lieu of a meeting pursuant to Section 9 of this Article II.
SECTION 2. Special Meetings. Special meetings of the Stockholders for
any purpose or purposes may be called by the Board, the Executive Committee, or
the President or by a stockholder or stockholders holding of record at least
25% of all shares of the Corporation entitled to vote
<PAGE> 2
2
thereat to be held at such place (within or without the State of Delaware),
date and hour as shall be designated in the notice thereof.
SECTION 3. Notice of Meetings. Except as otherwise expressly required
by law, notice of each meeting of the stockholders shall be given not less than
10 nor more than 60 calendar days before the date of the meeting to each
stockholder entitled to vote at such meeting by mailing such notice, postage
prepaid, directed to each stockholder at the address thereof as it appears on
the records of the Corporation. Every such notice shall state the place, date
and hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Except as provided in the
immediately succeeding sentence or as otherwise expressly required by law,
notice of any adjourned meeting of the stockholders need not be given if the
time and place thereof are announced at the meeting at which the adjournment is
taken. If the adjournment is for more than 30 calendar days, or if after the
adjournment a new record date is fixed for the adjourned meeting, notice of the
adjourned meeting shall be given to each stockholder entitled to vote at such
adjourned meeting.
A written waiver of notice, signed by a stockholder entitled thereto,
whether before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a stockholder in person or by proxy at a stockholders'
meeting shall constitute a waiver of notice to such stockholder of such
meeting, except when such stockholder attends the meeting for the express
purpose of objecting at the beginning of the meeting to the transaction of any
business because the meeting is not lawfully called or convened.
SECTION 4. List of Stockholders. It shall be the duty of the Secretary
or other officer of the Corporation who shall have charge of its stock ledger
to prepare and make, at least 10 calendar days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a
period of at least 10 calendar days prior to the meeting either at a place
specified in the notice of the meeting within the city where the meeting is to
be held, or, if not so specified, at the place where the
<PAGE> 3
3
meeting is to be held. Such list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be inspected by
any stockholder who is present.
SECTION 5. Quorum. At each meeting of the stockholders, except as
otherwise expressly required by law, stockholders holding a majority of the
shares of stock of the Corporation issued and outstanding, and entitled to be
voted at the meeting, shall be present in person or by proxy to constitute a
quorum for the transaction of business. In the absence of a quorum at any such
meeting or any adjournment or adjournments thereof, a majority in voting
interest of those present in person or by proxy and entitled to vote thereat,
or, in the absence therefrom of all the stockholders, any officer entitled to
preside at, or to act as secretary of, such meeting may adjourn such meeting
from time to time until stockholders holding the amount of stock requisite for
a quorum shall be present in person or by proxy. At any such adjourned meeting
at which a quorum may be present, any business may be transacted that might
have been transacted at the meeting as originally called.
SECTION 6. Organization. At each meeting of the stockholders, one of
the following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:
(a) the Chairman of the Board;
(b) if there is no Chairman of the Board or if the Chairman
of the Board shall be absent from such meeting, the President;
(c) if the Chairman of the Board and the President shall be
absent from such meeting, any other officer of the Corporation
designated by the Board or the Executive Committee to act as chairman
of such meeting and to preside thereat; or
(d) a stockholder of record of the Corporation who shall be
chosen chairman of such meeting by a majority in voting interest of
the stockholders present in person or by proxy and entitled to vote
thereat.
The Secretary or, if he shall be presiding over the meeting in accordance with
the provisions of this Section or if he shall be absent from such meeting, the
person (who shall be an Assistant Secretary, if an Assistant Secretary shall be
<PAGE> 4
4
present thereat) whom the chairman of such meeting shall appoint, shall act as
secretary of such meeting and keep the minutes thereof.
SECTION 7. Order of Business. The order of business at each meeting of
the stockholders shall be determined by the chairman of such meeting, but such
order of business may be changed by a majority in voting interest of those
present in person or by proxy at such meeting and entitled to vote thereat.
SECTION 8. Voting. Each holder of voting stock of the Corporation
shall, at each meeting of the stockholders, be entitled to one vote in person
or by proxy for each share of stock of the Corporation held by him and
registered in his name on the books of the Corporation
(a) on the date fixed pursuant to the provisions of
Section 4 of Article VIII of these By-laws as the record date for the
determination of stockholders who shall be entitled to receive notice
of and to vote at such meeting, or
(b) if no record date shall have been so fixed, then at
the close of business on the day next preceding the day on which notice
of the meeting shall be given or, if notice shall be waived, at the
close of business on the day next preceding the day on which the
meeting shall be held.
Shares of its own stock belonging to the Corporation or to another corporation,
if a majority of the shares entitled to vote in the election of directors of
such other corporation is held by the Corporation, shall neither be entitled to
vote nor be counted for quorum purposes. Any vote of stock of the Corporation
may be given at any meeting of the stockholders by the stockholders entitled to
vote thereon either in person or by proxy appointed by an instrument in writing
delivered to the Secretary or an Assistant Secretary of the Corporation or the
secretary of the meeting. The attendance at any meeting of a stockholder who
may theretofore have given a proxy shall not have the effect of revoking the
same unless he shall in writing so notify the secretary of the meeting prior to
the voting of the proxy. At all meetings of the stockholders, all matters,
except as otherwise provided by law or in these By-laws, shall be decided by
the vote of a majority of the votes cast by stockholders present in person or
by proxy and entitled to vote thereat, a quorum being present. Except as
otherwise
<PAGE> 5
5
expressly required by law, the vote at any meeting of the stockholders on any
question need not be by ballot, unless so directed by the chairman of the
meeting. On a vote by ballot, each ballot shall be signed by the stockholder
voting, or by his proxy, if there be such proxy, and shall state the number of
shares voted.
SECTION 9. Action by Written Consent. Except as otherwise provided by
law or by the Certificate of Incorporation, any action required or permitted to
be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a vote if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock of the Corporation having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares of stock of the Corporation entitled to
vote thereon were present and voted, provided that prompt notice (in the manner
provided in Section 3 of this Article II) of the taking of the action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
Board of Directors
SECTION 1. General Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.
SECTION 2. Number and Term of Office. The Board of Directors shall
consist of three members, but the number of members constituting the Board of
Directors may be increased or decreased from time to time by resolution adopted
by a majority of the whole Board. Directors need not be stockholders or
citizens or residents of the United States of America. Each of the directors of
the Corporation shall hold office until the annual meeting of the stockholders
held next after his election at which his term expires and until his successor
is elected and qualified or until his earlier death or until his earlier
resignation or removal in the manner hereinafter provided.
SECTION 3. Election. At each meeting of the stockholders for the
election of directors at which a quorum is present, the persons receiving the
greatest number of
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votes, up to the number of directors to be elected, shall be the directors.
SECTION 4. Resignation, Removal and Vacancies. Any director may resign
at any time by giving written notice of his resignation to the Chairman of
the Board, the President or the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein, or, if the time
when it shall become effective shall not be specified therein, then it shall
take effect when accepted by action of the Board. Except as aforesaid, the
acceptance of such resignation shall not be necessary to make it effective.
A director may be removed, either with or without cause, at any time
by a vote of a majority in voting interest of the stockholders.
Any vacancy occurring on the Board for any reason may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director. The director elected to fill such vacancy shall hold
office for the unexpired term in respect of which such vacancy occurred.
SECTION 5. Meetings. (a) Annual Meetings. As soon as practicable after
each annual election of directors, the Board shall meet for the purpose
of organization and the transaction of other business.
(b) Regular Meetings. Regular meetings of the Board shall be held
at such times and places as the Board shall from time to time determine.
(c) Special Meetings. Special meetings of the Board shall be held
whenever called by the Chairman of the Board or the President or a majority of
the directors at the time in office. Any and all business may be transacted at
a special meeting that may be transacted at a regular meeting of the Board.
(d) Place of Meeting. The Board may hold its meetings at such place
or places within or without the State of Delaware as the Board may from time to
time by resolution determine or as shall be designated in the respective
notices or waivers of notice thereof.
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(e) Notice of Meetings. Notices of regular meetings of the Board or
of any adjourned meeting need not be given.
Notices of special meetings of the Board, or of any meeting of any
committee of the Board that has not been fixed in advance as to time and place
by such committee, shall be mailed by the Secretary or an Assistant Secretary
to each director or member of such committee, addressed to him at his residence
or usual place of business, at least two calendar days before the day on which
such meeting is to be held, or shall be sent to him by telegraph, cable or
other form of recorded communication or be delivered personally or by telephone
not later than one calendar day before the day on which such meeting is to be
held. Such notice shall include the time and place of such meeting. Notice of
any such meeting need not be given to any director or member of any committee,
however, if waived by him in writing or by telegraph, cable or other form of
recorded communication, whether before or after such meeting shall be held, or
if he shall be present at such meeting.
(f) Quorum and Manner of Acting. Except as otherwise provided by
law, the Certificate of Incorporation or these By-laws, one-half of the total
number of directors shall be present in person at any meeting of the Board in
order to constitute a quorum for the transaction of business at such meeting.
In each case the vote of a majority of those directors present at any such
meeting at which a quorum is present shall be necessary for the passage of any
resolution or any act of the Board, except as otherwise expressly required by
law or these By-laws. In the absence of a quorum for any such meeting, a
majority of the directors present thereat may adjourn such meeting from time to
time until a quorum shall be present thereat.
(g) Action by Communication Equipment. The directors, or the
members of any committee of the Board, may participate in a meeting of the
Board, or of such committee, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence
in person at such meeting.
(h) Action by Consent. Any action required or permitted to be taken
at any meeting of the Board, or of any committee thereof, may be taken without
a meeting if all members of the Board or committee, as the case may be consent
thereto in writing and such writing is filed with
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the minutes of the proceedings of the Board or such committee.
(i) Organization. At each meeting of the Board, one of the
following shall act as chairman of the meeting and preside thereat, in the
following order of precedence: (a) the Chairman of the Board; (b) the
President; or (c) any director chosen by a majority of the directors present
thereat. The Secretary or, in case of his absence, any person (who shall be an
Assistant Secretary, if an Assistant Secretary shall be present thereat) whom
the chairman shall appoint, shall act as secretary of such meeting and keep the
minutes thereof.
SECTION 6. Compensation. Directors, as such, shall not receive any
stated salary for their services, but by resolution of the Board may receive a
fixed sum and expenses incurred in performing the functions of director and
member of any committee of the Board. Nothing herein contained shall be
construed so as to preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.
ARTICLE IV
Committees
SECTION 1. Executive Committee. (a) Designation and Membership. The
Board may, by resolution passed by a majority of the whole Board, designate an
Executive Committee consisting of the President and such number of other
directors, not less than one, as the Board shall appoint. Vacancies occurring
on the Executive Committee for any reason may be filled by the Board at any
time. Any member of the Executive Committee shall be subject to removal, with
or without cause, at any time by the Board or by a majority in voting interest
of the stockholders.
(b) Functions and Powers. The Executive Committee, subject to any
limitations prescribed by the Board, shall possess and may exercise, during the
intervals between meetings of the Board, all the powers and authority of the
Board in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers that may
require it; provided, however, that the Executive Committee shall not have such
power or authority in reference to amending the Certificate of Incorporation of
the Corporation (except that the
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Executive Committee may, to the extent authorized in resolutions providing for
the issuance of shares of stock adopted by the Board of Directors, fix any of
the preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the Corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
Corporation), adopting an agreement of merger or consolidation under Section
251 or Section 252 of the General Corporation Law of the State of Delaware,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
filling vacancies on the Board, changing the membership or filling vacancies on
the Executive Committee or amending these By-laws. The Executive Committee
shall not have the power and authority to declare dividends, to authorize the
issuance of stock of the Corporation or to adopt a certificate of ownership and
merger pursuant to Section 253 of the General Corporation Law of the State of
Delaware unless such power and authority shall be expressly delegated to it by
a resolution passed by a majority of the whole Board. At each meeting of the
Board, the Executive Committee shall make a report of all action taken by it
since its last report to the Board.
(c) Meetings, Quorum and Manner of Acting. The Executive Committee
shall meet annually immediately after the annual meeting of the Board if
necessary to elect officers not elected by the Board and shall meet at such
other times and as often as may be deemed necessary and expedient and at such
places as shall be determined by the Executive Committee. A majority of the
Executive Committee shall constitute a quorum, and the vote of a majority of
those members of the Executive Committee present at any meeting thereof at
which a quorum is present shall be necessary for the passage of any resolution
or act of the Executive Committee. The Board may designate a chairman for the
Executive Committee, who shall preside at meetings thereof, and a vice
chairman, who shall preside at such meetings in the absence of the chairman.
SECTION 2. Other Committees. The Board may, by resolution passed by a
majority of the whole Board, designate other committees of the Board, each such
committee to consist of two or more directors and to have such duties and
functions as shall be provided in such resolution. The
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Board shall have the power to change the members of any such committee at any
time, to fill vacancies and to discharge any such committee, either with or
without cause, at any time.
ARTICLE V
Officers
SECTION 1. Election, Appointment and Term of Office. The officers of
the Corporation shall be a Chairman of the Board, a President, who shall also
be the Chief Executive Officer, such number of Vice Chairmen of the Board and
Vice Presidents (including any Executive, Senior and/or First Vice Presidents)
as the Board may determine from time to time, a Treasurer and a Secretary. Any
two or more offices may be held by the same person. Officers need not be
stockholders of the Corporation or citizens or residents of the United States
of America. The Chairman of the Board, any Vice Chairman of the Board and the
President shall be elected by the Board from among its members at its annual
meeting, and all other officers may be elected by the Board or Executive
Committee, and each such officer shall hold office until the next annual
meeting of the Board or the Executive Committee, as the case may be, and until
his successor is elected or until his earlier death or until his earlier
resignation or removal in the manner hereinafter provided.
The Board or the Executive Committee may elect or appoint such other
officers as it deems necessary, including a Corporate General Counsel and one
or more Associate or Assistant Corporate General Counsels, Assistant Vice
Presidents, Assistant Treasurers and Assistant Secretaries. Each such officer
shall have such authority and shall perform such duties as may be provided
herein or as the Board or Executive Committee may prescribe.
If additional officers are elected or appointed during the year, each
of them shall hold office until the next annual meeting of the Board or
Executive Committee at which officers are regularly elected or appointed and
until his successor is elected or appointed or until his earlier death or until
his earlier resignation or removal in the manner hereinafter provided.
SECTION 2. Resignation, Removal and Vacancies. Any officer may resign
at any time by giving written notice
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to the President or the Secretary of the Corporation, and such resignation
shall take effect at the time specified therein or, if the time when it shall
become effective shall not be specified therein, then it shall take effect when
accepted by action of the Board or Executive Committee. Except as aforesaid,
the acceptance of such resignation shall not be necessary to make it effective.
All officers and agents elected or appointed by the Board or Executive
Committee shall be subject to removal at any time by the Board or the Executive
Committee, as the case may be, with or without cause.
A vacancy in any office may be filled for the unexpired portion of the
term in the same manner as provided for election or appointment to such office.
SECTION 3. Duties and Functions. (a) Chairman of the Board. The
Chairman of the Board, who shall be a member thereof, shall preside at all
meetings of the Board and of the stockholders at which he shall be present and
shall perform such other duties and exercise such powers as may from time to
time be prescribed by the Board of Directors or the Executive Committee.
(b) Vice Chairmen of the Board. Each Vice Chairman of the Board
shall be a member thereof and shall have such powers and duties as may from
time to time be prescribed by the Board or the Executive Committee.
(c) President. The President shall be a member of the Board, shall
be the Chief Executive Officer of the Corporation and shall perform such duties
and exercise such powers as are incident to the office of chief executive, and
shall perform such other duties and exercise such other powers as may from time
to time be prescribed by the Board or the Executive Committee.
(d) Vice Presidents. Each Vice President shall have such powers and
duties as shall be prescribed by the Board or the Executive Committee.
(e) Treasurer. The Treasurer shall have charge and custody of, and
be responsible for, all funds and securities of the Corporation and shall
deposit all such funds to the credit of the Corporation in such banks, trust
companies or other depositaries as shall be selected in accordance with the
provisions of these By-laws; he shall disburse the funds of the Corporation as
may be ordered by
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the Board or the Executive Committee, making proper vouchers for such
disbursements, and shall render to the President, the Board or the Executive
Committee, whenever the President, the Board or the Executive Committee may
require, and shall present at all annual meetings of the stockholders, a
statement of all his transactions as Treasurer; and, in general, he shall
perform all the duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him by the Board, the Executive
Committee or the President. To such extent as the Board or Executive Committee
shall deem proper, the duties of the Treasurer may be performed by one or more
assistants, to be appointed by the Board or Executive Committee.
(f) Secretary. The Secretary shall keep the records of all
meetings of the stockholders and of the Board and committees of the Board. He
shall affix the seal of the Corporation to all instruments requiring the
corporate seal when the same shall have been signed on behalf of the
Corporation by a duly authorized officer. The Secretary shall be the custodian
of all contracts, deeds, documents and all other indicia of title to properties
owned by the Corporation and of its other corporate records and in general
shall perform all duties and have all powers incident to the office of
Secretary. To such extent as the Board or Executive Committee shall deem
proper, the duties of Secretary may be performed by one or more assistants, to
be appointed by the Board or Executive Committee.
(g) Corporate General Counsel. The Corporate General Counsel, if
any, shall have supervision of such legal matters concerning the Corporation as
may be designated by the Board and shall perform such duties as from time to
time may be assigned to him by the Board, the Executive Committee or the
President.
ARTICLE VI
Contracts, Checks, Drafts,
Bank Accounts, Proxies, etc.
SECTION 1. Execution of Documents. The President or any other officer,
employee or agent of the Corporation designated by the Board, or designated in
accordance with corporate policy as approved by the Board, shall have power to
execute and deliver deeds, leases, contracts, mortgages, bonds, debentures,
checks, drafts and other orders for the payment of money and other documents
for and in the name of the Corporation, and such power may be delegated
(including power to redelegate) by written instrument to other officers,
employees or agents of the Corporation.
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SECTION 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise in accordance with corporate policy as approved by the Board.
SECTION 3. Proxies in Respect of Stock or Other Securities of Other
Corporations. The President or any other officer of the Corporation designated
by the Board shall have the authority (a) to appoint from time to time an agent
or agents of the Corporation to exercise in the name and on behalf of the
Corporation the powers and rights which the Corporation may have as the holder
of stock or other securities in any other corporation, (b) to vote or consent
in respect of such stock or securities and (c) to execute or cause to be
executed in the name and on behalf of the Corporation and under its corporate
seal, or otherwise, such written proxies, powers of attorney or other
instruments as he may deem necessary or proper in order that the Corporation
may exercise such powers and rights. The President or any such designated
officer may instruct any person or persons appointed as aforesaid as to the
manner of exercising such powers and rights.
ARTICLE VII
Books and Records
The books and records of the Corporation may be kept at such places
within or without the State of Delaware as the Board may from time to time
determine.
ARTICLE VIII
Shares and Their Transfer; Fixing Record Date
SECTION 1. Certificate for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number of
shares owned by him in the Corporation and designating the class of stock to
which such shares belong, which shall otherwise be in such form as the Board
shall prescribe. Each such certificate shall be signed by, or in the name of
the Corporation by, the Chairman of the Board or the President or a Vice
President and by
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the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer before such certificate is issued, it may nevertheless be issued
by the Corporation with the same effect as if he were such officer at the date
of issue.
SECTION 2. Record. A record shall be kept of the name of the person,
firm or corporation owning the stock represented by each certificate for stock
of the Corporation issued, the number of shares represented by each such
certificate and the date thereof, and, in the case of cancellation, the date of
cancellation. Except as otherwise expressly required by law, the person in
whose name shares of stock stand on the books of the Corporation shall be
deemed the owner thereof for all purposes as regards the Corporation.
SECTION 3. Lost, Stolen, Destroyed or Mutilated Certificates. The
holder of any stock of the Corporation shall immediately notify the Corporation
of any loss, theft, destruction or mutilation of the certificate therefor. The
Corporation may issue a new certificate for stock in the place of any
certificate theretofore issued by it and alleged to have been lost, stolen,
destroyed or mutilated, and the Board or the President or the Secretary may, in
its or his discretion, require the owner of the lost, stolen, mutilated or
destroyed certificate or his legal representatives to give the Corporation a
bond in such sum, limited or unlimited, in such form and with such surety or
sureties as the Board shall in its discretion determine, to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss, theft, mutilation or destruction of any such certificate or the
issuance of any such new certificate.
SECTION 4. Fixing Date for Determination of Stockholders of Record.
(a) In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board may fix a record date, which shall not precede the date upon which
the resolution fixing the record date is adopted by the Board, and which shall
not be more than 60 nor less than 10 calendar days before the date of such
meeting. If no record date is fixed by the Board, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the
day on which
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notice is given, or, if notice is waived, at the close of business on the day
next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; providing, however,
that the Board may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board and which date
shall not be more than 10 calendar days after the date upon which the
resolution fixing the record date is adopted by the Board. If no record date
has been fixed by the Board, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the Board is otherwise required, shall be the first date on
which a signed written consent setting forth the action taken or proposed to be
taken is delivered to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the registered office of the
Corporation shall be by hand or by certified or registered mail, return receipt
requested. If no record date has been fixed by the Board and prior action by
the Board is required, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the day on which the Board adopts the resolution taking such
prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than 60 calendar days prior to such
action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board adopts the resolution relating thereto.
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ARTICLE IX
Seal
The Board shall provide a corporate seal, which shall be in the form
of a circle and shall bear the full name of the Corporation, the words
"Corporate Seal Delaware" and in figures the year of its incorporation.
ARTICLE X
Fiscal Year
The fiscal year of the Corporation shall end December 31 in each year,
or on such other date as the Board of Directors shall determine.
ARTICLE XI
Indemnification
SECTION 1. Right to Indemnification. The Corporation shall to the
fullest extent permitted by applicable law as then in effect indemnify any
person (the "Indemnitee") who is or was involved in any manner (including,
without limitation, as a party or a witness) or is threatened to be made so
involved in any threatened, pending or completed investigation, claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including without limitation, any action, suit or proceeding by or in the
right of the Corporation to procure a judgment in its favor) (a "Proceeding")
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (including, without limitation, any employee
benefit plan) against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such Proceeding; provided, however, that, except as
provided in Section 4(d), the foregoing shall not apply to a director or
officer of the Corporation with respect to a Proceeding that was commenced by
such director or officer prior to a Change in Control (as hereinafter defined).
Such indemnification shall be a contract right and shall include the right to
receive payment in advance of any expenses incurred by the Indemnitee in
connection with such Proceeding, consistent with the provisions of applicable
law as then in effect.
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SECTION 2. Insurance, Contracts and Funding. The Corporation may
purchase and maintain insurance to protect itself and any person entitled to
indemnification under this Article XI against any expenses, judgments, fines
and amounts paid in settlement as specified in this Article XI, to the fullest
extent permitted by applicable law as then in effect. The Corporation may enter
into contracts with any person entitled to indemnification under this Article
XI in furtherance of the provisions of this Article XI and may create a trust
fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification as provided in this Article XI.
SECTION 3. Indemnification; Not Exclusive Right. The right of
indemnification provided in this Article XI shall not be exclusive of any other
rights to which those seeking indemnification may otherwise be entitled, and
the provisions of this Article XI shall inure to the benefit of the heirs and
legal representatives of any person entitled to indemnity under this Article XI
and shall be applicable to Proceedings commenced or continuing after the
adoption of this Article XI, whether arising from acts or omissions occurring
before or after such adoption.
SECTION 4. Advancement of Expenses; Procedures; Presumptions and
Effect of Certain Proceedings; Remedies. In furtherance, but not in limitation
of the foregoing provisions, the following procedures, presumptions and
remedies shall apply with respect to advancement of expenses and the right to
indemnification under this Article XI:
(a) Advancement of Expenses. All reasonable expenses incurred by
or on behalf of the Indemnitee in connection with any Proceeding shall be
advanced to the Indemnitee by the Corporation within 20 calendar days after the
receipt by the Corporation of a statement or statements from the Indemnitee
requesting such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the expenses incurred by the Indemnitee and, if required by
law at the time of such advance, shall include or be accompanied by an
undertaking by or on behalf of the Indemnitee to repay the amounts advanced if
it should ultimately be determined that the Indemnitee is not entitled to be
indemnified against such expenses pursuant to this Article XI.
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(b) Procedure for Determination of Entitlement to Indemnification.
(i) To obtain indemnification under this Article XI, an Indemnitee shall
submit to the Secretary of the Corporation a written request, including such
documentation and information as is reasonably available to the Indemnitee and
reasonably necessary to determine whether and to what extent the Indemnitee is
entitled to indemnification (the "Supporting Documentation"). The determination
of the Indemnitee's entitlement to indemnification shall be made not later than
60 calendar days after receipt by the Corporation of the written request for
indemnification together with the Supporting Documentation. The Secretary of
the Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that the Indemnitee
has requested indemnification.
(ii) The Indemnitee's entitlement to indemnification under this
Article XI shall be determined in one of the following ways: (A) by a majority
vote of the Disinterested Directors (as hereinafter defined), if they
constitute a quorum of the Board of Directors; (B) by a written opinion of
Independent Counsel (as hereinafter defined) if (x) a Change in Control (as
hereinafter defined) shall have occurred and the Indemnitee so requests or (y)
a quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, a majority of such Disinterested Directors
so directs; (C) by the stockholders of the Corporation (but only if a majority
of the Disinterested Directors, if they constitute a quorum of the Board of
Directors, presents the issue of entitlement to indemnification to the
stockholders for their determination); or (D) as provided in Section 4(c).
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section
4(b)(ii), a majority of the Disinterested Directors shall select the
Independent Counsel, but only an Independent Counsel to which the Indemnitee
does not reasonably object; provided, however, that if a Change in Control
shall have occurred, the Indemnitee shall select such Independent Counsel, but
only an Independent Counsel to which the Board of Directors does not reasonably
object.
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(c) Presumptions and Effect of Certain Proceedings. Except as
otherwise expressly provided in this Article XI, the Indemnitee shall be
presumed to be entitled to indemnification under this Article XI upon
submission of a request for indemnification together with the Supporting
Documentation in accordance with Section 4(b)(i), and thereafter the
Corporation shall have the burden of proof to overcome that presumption in
reaching a contrary determination. In any event, if the person or persons
empowered under Section 4(b) to determine entitlement to indemnification shall
not have been appointed or shall not have made a determination within 60
calendar days after receipt by the Corporation of the request therefor together
with the Supporting Documentation, the Indemnitee shall be deemed to be
entitled to indemnification and the Indemnitee shall be entitled to such
indemnification unless (A) the Indemnitee misrepresented or failed to disclose
a material fact in making the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law. The termination
of any Proceeding described in Section 1, or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, adversely affect the right
of the Indemnitee to indemnification or create a presumption that the
Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation or,
with respect to any criminal Proceeding, that the Indemnitee had reasonable
cause to believe that his conduct was unlawful.
(d) Remedies of Indemnitee. (i) In the event that a determination
is made pursuant to Section 4(b) that the Indemnitee is not entitled to
indemnification under this Article XI, (A) the Indemnitee shall be entitled to
seek an adjudication of his entitlement to such indemnification either, at the
Indemnitee's sole option, in (x) an appropriate court of the State of Delaware
or any other court of competent jurisdiction or (y) an arbitration to be
conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association; (B) any such judicial proceeding or arbitration shall
be de novo and the Indemnitee shall not be prejudiced by reason of such adverse
determination; and (C) in any such judicial proceeding or arbitration the
Corporation shall have the burden of proving that the Indemnitee is not
entitled to indemnification under this Article XI.
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(ii) If a determination shall have been made or deemed to have been
made, pursuant to Section 4(b) or Section 4(c), that the Indemnitee is entitled
to indemnification, the Corporation shall be obligated to pay the amounts
constituting such indemnification within five calendar days after such
determination has been made or deemed to have been made and shall be
conclusively bound by such determination unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making the request for
indemnification or in the Supporting Documentation or (B) such indemnification
is prohibited by law. In the event that (x) advancement of expenses is not
timely made pursuant to Section 4(a) or (y) payment of indemnification is not
made within five calendar days after a determination of entitlement to
indemnification has been made or deemed to have been made pursuant to Section
4(b) or 4(c), the Indemnitee shall be entitled to seek judicial enforcement of
the Corporation's obligation to pay to the Indemnitee such advancement of
expenses or indemnification. Notwithstanding the foregoing, the Corporation may
bring an action, in an appropriate court in the State of Delaware or any other
court of competent jurisdiction, contesting the right of the Indemnitee to
receive indemnification hereunder due to the occurrence of an event described
in subclause (A) or (B) of this clause (ii) (a "Disqualifying Event");
provided, however, that in any such action the Corporation shall have the
burden of proving the occurrence of such Disqualifying Event.
(iii) The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 4(d) that
the procedures and presumptions of this Article XI are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Corporation is bound by all the provisions of this Article XI.
(iv) In the event that the Indemnitee, pursuant to this Section
4(d), seeks a judicial adjudication of or an award in arbitration to enforce
his rights under, or to recover damages for breach of, this Article XI, the
Indemnitee shall be entitled to recover from the Corporation, and shall be
indemnified by the Corporation against, any expenses actually and reasonably
incurred by him if the Indemnitee prevails in such judicial adjudication or
arbitration. If it shall be determined in such judicial adjudication or
arbitration that the Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses incurred by the
Indemnitee in connection with such judicial adjudication or arbitration shall
be prorated accordingly.
<PAGE> 21
21
(e) Definitions. For purposes of this Section 4:
(i) "Change in Control" means a change in control of the
Corporation of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934 (the "Act"), whether or not the Corporation is then
subject to such reporting requirement; provided that, without limitation, such
a change in control shall be deemed to have occurred if (A) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities without
the prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such acquisition; (B) the Corporation
is a party to a merger or consolidation in which the Corporation is not the
continuing or surviving corporation or pursuant to which shares of the
Corporation's Common Stock would be converted into cash, securities or other
property, other than a merger of the Corporation in which the holders of the
Corporation's Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; (C) there is a sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, the assets of the Corporation, or a liquidation or
dissolution of the Corporation; or (D) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election or
nomination for election by the Corporation's stockholders was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute
at least a majority of the Board of Directors.
(ii) "Disinterested Director" means a director of the Corporation
who is not or was not a party to the Proceeding in respect of which
indemnification is sought by the Indemnitee.
(iii) "Independent Counsel" means a law firm or a member of a law
firm that neither presently is, nor in the past five years has been, retained
to represent: (a) the Corporation or the Indemnitee in any matter material to
either such party or (b) any other party to the Proceeding
<PAGE> 22
22
giving rise to a claim for indemnification under this Article XI.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing under the law of the State of Delaware, would have a conflict of
interest in representing either the Corporation or the Indemnitee in an action
to determine the Indemnitee's rights under this Article XI.
SECTION 5. Effects of Amendments. Neither the amendment or repeal of,
nor the adoption of a provision inconsistent with, any provision of this
Article XI (including, without limitation, this Section 5) shall adversely
affect the rights of any director or officer under this Article XI (i) with
respect to any Proceeding commenced or threatened prior to such amendment,
repeal or adoption of an inconsistent provision or (ii) after the occurrence of
a Change in Control, with respect to any Proceeding arising out of any action
or omission occurring prior to such amendment, repeal or adoption of an
inconsistent provision, in either case, without the written consent of such
director or officer.
SECTION 6. Severability. If any provision or provisions of this
Article XI shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Article XI (including, without limitation, all portions of
any paragraph of this Article XI containing any such provision held to be
invalid, illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (b) to
the fullest extent possible, the provisions of this Article XI (including,
without limitation, all portions of any paragraph of this Article XI containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.
SECTION 7. Indemnification of Employees and Agents. Notwithstanding
any other provision or provisions of this Article XI, the Corporation may
indemnify (including, without limitation, by direct payment) any person (other
than a director or officer of the Corporation) who is or was involved in any
manner (including, without limitation, as a party or a witness) or is
threatened to be made so involved in any Proceeding by reason of the fact
<PAGE> 23
23
that such person is or was an employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit plan) against
any or all expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement incurred in connection with such Proceeding.
ARTICLE XII
Amendments
These By-laws may be amended or repealed by the Board at any regular
or special meeting thereof, subject to the power of the holders of a majority
of the outstanding stock of the Corporation entitled to vote in respect
thereof, by their vote given at an annual meeting or at any special meeting, to
amend or repeal any By-law.
<PAGE> 1
EXHIBIT 3.23
CERTIFICATE OF INCORPORATION
OF
NORTH TEXAS BROADCASTING, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code, and
the acts amendatory thereof and supplemental thereto, and known, identified,
and referred to as the "General Corporation Law of the State of Delaware"),
hereby certifies that:
ARTICLE 1. NAME
The name of this corporation is North Texas Broadcasting, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
Suite L-100, 32 Loockerman Square, City of Dover, County of Kent, Delaware,
19904; and the name of the registered agent of the corporation in the State of
Delaware is The Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have
the authority to issue is 1,000. The par value of each such shares is $.01. All
such shares are of one class and are shares of Common Stock.
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Broadcasting Corporation, 5295 Carillon Point,
Kirkland, Washington 98033
<PAGE> 2
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation; provided, however, that the Board of Directors
may not repeal or amend any By-law that the stockholders have expressly
provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or
may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 11
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts of omissions of such director
occurring prior to such amendment or repeal. In
2
<PAGE> 3
addition to any requirements or any other provisions herein or in the terms of
any class or series of capital stock having a preference over the common stock
of this corporation as to dividends or upon liquidation (and notwithstanding
that a lesser percentage may be specified by law), the affirmative vote of the
holders of 80% or more of the voting power of the outstanding voting stock of
this corporation, voting together as a single class, shall be required to
amend, alter or repeal any provision of this Article 11.
Signed on December 13, 1994.
----------------------------------
Gayle C. Toney, Incorporator
3
<PAGE> 1
EXHIBIT 3.24
BY-LAWS
OF
NORTH TEXAS BROADCASTING CORPORATION
Originally adopted on December 14, 1994
Amendments are listed on p.i
<PAGE> 2
NORTH TEXAS BROADCASTING CORPORATION
AMENDMENTS
<TABLE>
<CAPTION>
Date of
Section Effect of Amendment Amendment
------- ------------------- ---------
<S> <C> <C>
</TABLE>
i
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.1 Waiver in Writing . . . . . . . . . . . . . . . . . . . . . . 2
2.5.2 Waiver by Attendance . . . . . . . . . . . . . . . . . . . . 3
2.6 Fixing of Record Date for Determining Stockholders . . . . . . . . 3
2.6.1 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.2 Consent to Corporate Action Without a Meeting . . . . . . . . 3
2.6.3 Dividends, Distributions and Other Rights . . . . . . . . . . 4
2.7 Voting List . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.2 Delivery to Corporation; Duration . . . . . . . . . . . . . 6
2.11 Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.12 Voting for Directors . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Action by Stockholders Without a Meeting . . . . . . . . . . . . . 7
SECTION 3. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . 8
3.1 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Number and Tenure . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Annual and Regular Meetings . . . . . . . . . . . . . . . . . . . . 8
3.4 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . 9
3.6.1 Personal Delivery . . . . . . . . . . . . . . . . . . . . . . 9
3.6.2 Delivery by Mail . . . . . . . . . . . . . . . . . . . . . . 9
3.6.3 Delivery by Private Carrier . . . . . . . . . . . . . . . . . 9
3.6.4 Facsimile Notice . . . . . . . . . . . . . . . . . . . . . . 9
3.6.5 Delivery by Telegraph . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
3.6.6 Oral Notice . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.1 In Writing . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.2 By Attendance . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Action by Board or Committees Without a Meeting . . . . . . . . . 11
3.12 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.1 Creation and Authority of Committees . . . . . . . . . . . . 12
3.15.2 Minutes of Meetings . . . . . . . . . . . . . . . . . . . . 13
3.15.3 Quorum and Manner of Acting . . . . . . . . . . . . . . . . 13
3.15.4 Resignation . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.5 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.16 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Election and Term of Office . . . . . . . . . . . . . . . . . . . . 15
4.3 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . 15
4.7 President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.10 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . . 17
5.1 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Loans to the Corporation . . . . . . . . . . . . . . . . . . . . . 17
5.3 Check, Drafts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER . . . . . . . . . . 18
6.1 Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Certificates for Shares . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Stock Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Restriction on Transfer . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . 20
SECTION 7. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8. ACCOUNTING YEAR . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . 21
10.1 Right to Indemnification . . . . . . . . . . . . . . . . . . . . . 21
10.2 Right of Indemnitee to Bring Suit . . . . . . . . . . . . . . . . 22
10.3 Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . 22
10.4 Insurance, Contracts and Funding . . . . . . . . . . . . . . . . . 23
10.5 Indemnification of Employees and Agents of the Corporation . . . . 23
10.6 Persons Serving other Entities . . . . . . . . . . . . . . . . . . 23
SECTION 11. AMENDMENTS OR REPEAL . . . . . . . . . . . . . . . . . . . . 24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS . . . . . . . . . . . . . . . . 24
</TABLE>
iv
<PAGE> 6
BY-LAWS
OF
NORTH TEXAS BROADCASTING CORPORATION
SECTION 1. OFFICES
The principal office of the corporation shall be located at its
principal place of business or such other place as the Board of Directors (the
"Board") may designate. The corporation may have such other offices, either
within or without the State of Delaware, as the Board may designate or as the
business of the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the
meeting, the meeting shall be held on the next succeeding business day. If the
annual meeting is not held on the date designated therefor, the Board shall
cause the meeting to be held as soon thereafter as may be convenient.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled
to vote at the meeting may call special meetings of the stockholders for any
purpose.
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or
at such other place within or without the State of Delaware designated by the
<PAGE> 7
Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meetings.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of the By-laws, the Certificate of Incorporation or the General
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled
to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
2
<PAGE> 8
2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record
date shall not be more than sixty (or the maximum number permitted by
applicable law) nor less than ten days before the date of such meeting. If no
record date is fixed by the Board, the record date for determining stockholders
entitled to notice of and to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of stockholders of record
entitled to notice of and to vote at the meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be more than
ten (or the maximum number permitted by applicable law) days after the date
upon which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter
3
<PAGE> 9
1 of the DGCL, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to a corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board and prior action by the Board is required by
Chapter 1 of the DGCL, the record date for determining stockholders entitled to
consent to corporate action is writing without a meeting shall be at the close
of business on the day on which the Board adopts the resolution taking such
prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by
applicable law) days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
shall be made, arranged in alphabetical order, with the address of and number
of shares held by each stockholder. This list shall be open to examination by
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. This list shall also be produced and kept at
such meeting for inspection by any stockholder who is present.
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2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
present in person or represented by proxy at the meeting, shall constitute a
quorum at a meeting of the stockholders; provided, that where a separate vote
by a class or classes is required, a majority of the outstanding shares of such
class or classes, present in person or represented by proxy at the meeting,
shall constitute a quorum entitled to take action with respect to that vote on
that matter. If less than a majority of the outstanding shares entitled to vote
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. If a quorum is
present or represented at a reconvened meeting following such an adjournment,
any business may be transacted that might have been transacted at the meeting
as originally called. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation
or the DGCL. Where a separate vote by a class or classes is required, if a
quorum of such class or classes is present, the affirmative vote of the
majority of outstanding shares of such class or classes present in person or
represented by proxy at the meeting shall be the act of such class or classes.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of Directors.
2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting
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may authorize another person or persons to act for such stockholder by proxy.
Such authorization may be accomplished by (a) the stockholder or such
stockholder's authorized officer, director, employee or agent executing a
writing or causing his or her signature to be affixed to such writing by any
reasonable means, including facsimile signature or (b) by transmitting or
authorizing the transmission to the intended holder of the proxy or to a proxy
solicitation firm, proxy support service or similar agent duly authorized by
the intended proxy holder to receive such transmission; provided, that any such
telegram, cablegram or other electronic transmission must either set forth or
be accompanied by information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by the
stockholder. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission by which a stockholder has
authorized another person to act as proxy for such stockholder may be
substituted or used in lieu of the original writing or transmission for any and
all purposes for which the original writing or transmission could be used,
provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or
transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action
in writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof
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2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject matter
of an issue submitted to a meeting of stockholders shall be entitled to one
vote upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may vote, in
person or by proxy, the number of shares owned by such stockholder for as many
persons as there are Directors to be elected and for whose election such
stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof
are delivered to the corporation, in the manner required by this Section,
within sixty (or the maximum number permitted by applicable law) days of the
earliest dated consent delivered to the corporation in the manner required by
this Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the
stockholder shall be determined by or at the direction of the Secretary. A
written record of the information upon which the person making such
determination relied shall be made and kept in the records of the proceedings
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of the stockholders. Any such consent shall be inserted in the minute book as
if it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws, but
no decrease in the number of Directors shall have the effect of shortening the
term of any incumbent Director. Unless a Director dies, resigns, or is removed,
he or she shall hold office until the next annual meeting of stockholders or
until his or her successor is elected, whichever is later. Directors need not be
stockholders of the corporation or residents of the State of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after and
at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board may
be called by or at the request of the Chairman of the Board, the President, the
Secretary or, in the case of special Board meetings, any Director and, in the
case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
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3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such
meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective if
delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective if
deposited in the official government mail properly address to a Director at his
or her address shown on the records of the corporation with postage prepaid at
least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed
effective when dispatched to a Director at his or her address shown on the
records of the corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
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at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed effective
if the content thereof is delivered to the telegraph company at least two days
before the meeting for delivery to a Director at his or her address shown on
the records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice
shall be deemed effective if personally given to the Director at least two days
before the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened.
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3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of
the total number of Directors then serving on the Board, provided, however,
that such number may not be less than one-third of the total number of
Directors fixed by or in the manner provided in these By-laws, shall constitute
a quorum for the transaction of business at any Board meeting. If less than a
majority are present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or committee
meeting at which there is a quorum shall be the act of the or committee, unless
the vote of a greater number is required by these By-laws, the Certificate of
Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting at
which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his or her dissent is entered in the
minutes of the meeting, or unless such Director files a written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the meeting.
A Director who voted in favor of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
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3.12 RESIGNATION
Any Director my resign at any time by delivering written notice to the
Chairman of the Board, the President, the Secretary or the Board or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or more
members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative vote of
a majority of the remaining Directors though less than a quorum of the Board. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his or her predecessor in office. Any directorship to be filled by reason of an
increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent on disqualified member. Any such
committee, to the extent provided in the
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resolution of the Board establishing such committee or as otherwise
provided in these By-laws, shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which require it; but no such committee shall have the power to authority
in reference to (a) amending the Certificate of Incorporation (except that a
committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board as provided
in Section 151(a) of the DGCL, fix the designations, preferences or rights of
such shares to the extent permitted under Section 141 of the DGCL), (b) adopting
an agreement of merger or consolidation under Sections 251 or 252 of the DGCL,
(c) recommending to the stockholders the sale, lease or exchange or other
disposition of all or substantially all of the property and assets of the
corporation, (d) recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or (e) amending these By-laws;
and, unless expressly provided by resolution of the Board, no such committee
shall have the power or authority to declare a dividend, to authorize the
issuance of stock or to adopt a certificate of ownership and merger pursuant to
Section 253 of the DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their meetings
and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing my committee of the Board,
as established and fixed by resolution of the Board, shall constitute a quorum
for the transaction of business at any meeting of such committee but, if less
than a majority are present at a meeting, a majority of such Directors present
may adjourn the meeting from time to time without further notice. The act of a
majority of the members of a committee present at a meeting at which a quorum is
present shall be the act of such committee.
3.15.4 Resignation
Any member of any committee may resign at any time by delivering written
notice thereof to do Chairman of the Board, the President, the
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Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected or
appointed by it, but only by the affirmative vote of not less than a majority
of the number of Directors fixed by or in the manner provided in these By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any
additional title that the Board deems appropriate. The Board may delegate to
any officer or agent the power to appoint any such subordinate officers or
agents and to prescribe their respective terms of office, authority and duties.
Any two or more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board at
the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held
as soon thereafter as a Board meeting conveniently may be held. Unless an
officer dies, resigns or is removed from office, he or she shall hold office
until the next annual meeting of the Board or until his or her successor is
elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed by
the Board whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as shall
be assigned to him or her by the Board from time to time and shall preside over
meetings of the Board and stockholders unless another officer is appointed or
designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the
Board and, subject to the Board's control, shall supervise and control all of
the assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to act,
the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the
corporation. Vice Presidents shall have, to the extent authorized by the
President of the Board, the same powers as the President to sign deeds,
mortgages, bonds, contracts or other instruments. Vice Presidents shall perform
such other duties as from time to time may be assigned to them by the President
or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of meetings
of the Board and stockholders, maintenance of the corporation's records and
stock registers, and authentication of the corporation's records and shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the president or
by the Board. In absence of the Secretary, an Assistant Secretary may perform
the duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the faithful
discharge of his or her duties in such amount and with such surety or sureties
as the Board shall determine. The Treasurer shall have charge and custody of
and be responsible for all funds and securities of the corporation; receive and
give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in
banks, trust companies or other depositories selected in accordance with the
provision of these By-laws; sign certificates for shares of the corporation;
and in general perform all of the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him or her by the
President or by the Board. In the absence of the Treasurer, an Assistant
Treasurer may perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the Board
or by any person or person to whom the Board has delegated such authority. No
officer shall be prevented from receiving such salary by reason of the fact
that he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents, to
enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution
of the Board. Such authority may be general or confined to specific instances.
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5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, or agent or agents, of the corporation and
in such manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by the
Chairman of the Board or a Vice Chairman of the Board, if any, or the President
or a Vice President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, any of whose signatures may be a
facsimile. The Board may in its discretion appoint responsible banks or trust
companies from time to time to act as transfer agents and registrars of the
stock of the corporation; and, when such appointments shall have been made, no
stock certificate shall be valid until countersigned by one of such transfer
agents and registered by one of such registrars. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person was such officer, transfer
agent or registrar at the date of issue. All certificates shall include on
their face written notice of any restriction which may be imposed on the
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transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate,
or on the reverse of the certificate if a reference to the legend is contained
on the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged or
otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering any
such transaction involving said securities or (b) this corporation
receives an opinion of legal counsel for the holder of these securities
(concurred in by legal counsel for this corporation) stating that such
transaction is exempt from registration or (c) this corporation otherwise
satisfies itself that such transaction is exempt from registration.
Neither the offering of the securities nor any offering materials have
been reviewed by any administrator under the Securities Act of 1933 or any
applicable state law."
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6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the stock
transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed
and filed with the Secretary of the corporation. All certificates surrendered
to the corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificates for a like number of shares shall have
been surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year,
provided that if a different accounting year is at any time selected for
purposes of federal income taxes, the accounting year shall be the year so
selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
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SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved (including, without limitation, as a witness) in any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a Director or officer of the corporation or that,
being or having been such a Director or officer or an employee of the
corporation, he or she is or was serving at the request of the corporation as a
Director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as such a Director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the full extent permitted by the DGCL, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than permitted prior thereto), or by other applicable law as then in
effect, against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) actually and reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue as to an indemnitee
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and administrators; provided,
however, that except as provided in subsection 10.2 hereof with respect to
proceedings seeking to enforce rights to indemnification, the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
was authorized or ratified by the Board. The right to indemnification conferred
in this subsection 10.1 shall be a contract right and shall include the right to
be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter and "advancement of
expenses"); provided, however, that if the DGCL requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the corporation of an undertaking
(hereinafter an
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"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in
a suit brought by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. The indemnitee
shall be presumed to be entitled to indemnification under this Section upon
submission of a written claim (and, in an action brought to enforce a claim
for an advancement of expenses, where the required undertaking, if any is
required, has been tendered to the corporation), and thereafter the corporation
shall have the burden of proof to overcome the presumption that the indemnitee
is not so entitled. Neither the failure of the corporation (including its
Board, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances nor an actual determination by
the corporation (including its Board, independent legal counsel or its
stockholders) that the indemnitee is not entitled to indemnification shall be a
defense to the suit or create a presumption that the indemnitee is not so
entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses conferred
in this Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, agreement, vote of stockholders or
disinterested Directors, provision of the Certificate of Incorporation or
By-laws of the corporation or otherwise. Notwithstanding any amendment to or
repeal of this Section, any indemnitee shall be entitled to indemnification in
accordance with the provision hereof with respect to any
22
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acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the
DGCL. The corporation, without further stockholder approval, may enter into
contracts with any Director, officer, employee or agent in furtherance of the
provisions of this Section and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement
of expenses of Directors and officers of the corporation; provided, however,
that an undertaking shall be made by an employee or agent only if required by
the Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the
corporation who is or was serving (a) as a Director or officer of another
corporation of which a majority of the shares entitled to vote in the election
of its Directors is held by the corporation or (b) in an executive or
management capacity in a partnership, joint venture, trust or other enterprise
of which the corporation or a wholly owned subsidiary of the corporation is a
general partner or has a majority ownership shall be deemed to be so serving at
the request of the corporation and entitled to indemnification and advancement
of expenses under subsection 10.1 hereof.
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SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be adopted by
the Board. The stockholders may also amend and repeal these By-laws or adopt
new By-laws. All By-laws made by the Board may be amended or repealed by the
stockholders. notwithstanding any amendment to Section 10 hereof or repeal of
these By-laws, or of any amendment or repeal of any of the procedures that may
be established by the Board pursuant to Section 10 hereof, any indemnitee shall
be entitled to indemnification in accordance with the provisions hereof and
thereof with respect to any acts or omissions of such indemnitee occurring
prior to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed to
include the following and their representatives: an individual not a citizen
of the United States of America; a partnership unless a majority of the
partners are citizens of the United States of America and have a majority
interest in the partnership profits; a foreign government; a corporation,
jointstock company or association organized under the laws of a foreign
country; and any other corporation, joint-stock company or association directly
or indirectly controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of voting
stock of the corporation of any stock outstanding shall at any time be owned of
record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the account of
Aliens, and the citizenship of transferees thereof, shall be determined in
conformity with regulation prescribed by the Board. There shall be maintained
separate stock records, a domestic record of shares of stock held by citizens
and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to an
Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
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Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or indirectly
by any other corporation of which any officer or more than one-fourth of the
directors are Aliens, or of which more than one-fourth of the stock is owned of
record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such other
provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in
effect or as it may hereafter from time to time be amended, and to carry out
the provisions of this Section 12 and of Article 12 of the Restated Certificate
of Incorporation.
*****
The foregoing By-laws were adopted by the Board of Directors on December
14, 1994. Section 10 hereof ("Indemnification") was approved by the sole
stockholder on December 14, 1994.
------------------------------
Secretary
25
<PAGE> 1
EXHIBIT 3.25
CERTIFICATE OF INCORPORATION
OF
WAND TELEVISION, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code, and
the acts amendatory thereof and supplemental thereto, and known, identified,
and referred to as the "General Corporation Law of the State of Delaware"),
hereby certifies that:
ARTICLE 1. NAME
The name of this corporation is WAND Television, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
Suite L-100, 32 Loockerman Square, City of Dover, County of Kent, Delaware,
19904; and the name of the registered agent of the corporation in the State of
Delaware is The Prentice-Hall Corporation System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have
the authority to issue is 5,000. The par value of each such shares is $.01. All
such shares are of one class and are shares of Common Stock.
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Broadcasting Corporation, 5295 Carillon Point,
Kirkland, Washington 98033
1
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ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation; provided, however, that the Board of Directors
may not repeal or amend any By-law that the stockholders have expressly
provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or
may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 11
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts of omissions of such director
occurring prior to such amendment or repeal. In
2
<PAGE> 3
addition to any requirements or any other provisions herein or in the terms of
any class or series of capital stock having a preference over the common stock
of this corporation as to dividends or upon liquidation (and notwithstanding
that a lesser percentage may be specified by law), the affirmative vote of the
holders of 80% or more of the voting power of the outstanding voting stock of
this corporation, voting together as a single class, shall be required to
amend, alter or repeal any provision of this Article II.
Signed on December 14, 1994.
________________________________
Gayle C. Toney, Incorporator
<PAGE> 1
EXHIBIT 3.26
BY-LAWS
OF
WAND TELEVISION, INC.
Originally adopted on December 17, 1994
Amendments are listed on p. i
<PAGE> 2
WAND TELEVISION, INC.
AMENDMENTS
<TABLE>
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DATE OF
SECTION EFFECT OF AMENDMENT AMENDMENT
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<S> <C> <C> <C>
</TABLE>
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CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.1 Waiver in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.2 Waiver by Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6 Fixing of Record Date for Determining Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.1 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.2 Consent to Corporate Action Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.3 Dividends, Distributions and Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 Voting List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.2 Delivery to Corporation; Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.12 Voting for Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Action by Stockholders Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Number and Tenure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Annual and Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.1 Personal Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.2 Delivery by Mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.3 Delivery by Private Carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.4 Facsimile Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.5 Delivery by Telegraph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
ii
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<TABLE>
<S> <C>
3.6.6 Oral Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.1 In Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.2 By Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Action by Board or Committees Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.1 Creation and Authority of Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.2 Minutes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.3 Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.4 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.5 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.16 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Election and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.7 President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.10 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Loans to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Check, Drafts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Certificates for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Stock Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Restriction on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8. ACCOUNTING YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.1 Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.2 Right of Indemnitee to Bring Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.3 Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.4 Insurance, Contracts and Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.5 Indemnification of Employees and Agents of the Corporation . . . . . . . . . . . . . . . . . . . . . 23
10.6 Persons Serving other Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11. AMENDMENTS OR REPEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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BY-LAWS
OF
WAND TELEVISION, INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at its
principal place of business or such other place as the Board of Directors (the
"Board") may designate. The corporation may have such other offices, either
within or without the State of Delaware, as the Board may designate or as the
business of the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday
in March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the
meeting, the meeting shall be held on the next succeeding business day. If the
annual meeting is not held on the date designated therefor, the Board shall
cause the meeting to be held as soon thereafter as may be convenient.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of
not less than one-tenth of all the outstanding shares of the corporation
entitled to vote at the meeting may call special meetings of the stockholders
for any purpose.
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation
or at such other place within or without the State of Delaware designated by
the
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Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under
the provisions of the By-laws, the Certificate of Incorporation or the General
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled
to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
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2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver
of notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and
to vote at any meeting of stockholders or any adjournment thereof, the Board
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board, and which record
date shall not be more than sixty (or the maximum number permitted by
applicable law) nor less than ten days before the date of such meeting. If no
record date is fixed by the Board, the record date for determining stockholders
entitled to notice of and to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of stockholders of record
entitled to notice of and to vote at the meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be more than
ten (or the maximum number permitted by applicable law) days after the date
upon which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter
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1 of the DGCL, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to a corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board and prior action by the Board is required by
Chapter 1 of the DGCL, the record date for determining stockholders entitled to
consent to corporate action is writing without a meeting shall be at the close
of business on the day on which the Board adopts the resolution taking such
prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by
applicable law) days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list
of the stockholders entitled to vote at such meeting, or any adjournment
thereof, shall be made, arranged in alphabetical order, with the address of and
number of shares held by each stockholder. This list shall be open to
examination by any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. This list shall also be produced and
kept at such meeting for inspection by any stockholder who is present.
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2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to
vote, present in person or represented by proxy at the meeting, shall
constitute a quorum at a meeting of the stockholders; provided, that where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy at
the meeting, shall constitute a quorum entitled to take action with respect to
that vote on that matter. If less than a majority of the outstanding shares
entitled to vote are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
If a quorum is present or represented at a reconvened meeting following such an
adjournment, any business may be transacted that might have been transacted at
the meeting as originally called. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation
or the DGCL. Where a separate vote by a class or classes is required, if a
quorum of such class or classes is present, the affirmative vote of the
majority of outstanding shares of such class or classes present in person or
represented by proxy at the meeting shall be the act of such class or classes.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of Directors.
2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting
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may authorize another person or persons to act for such stockholder by proxy.
Such authorization may be accomplished by (a) the stockholder or such
stockholder's authorized officer, director, employee or agent executing a
writing or causing his or her signature to be affixed to such writing by any
reasonable means, including facsimile signature or (b) by transmitting or
authorizing the transmission to the intended holder of the proxy or to a proxy
solicitation firm, proxy support service or similar agent duly authorized by
the intended proxy holder to receive such transmission; provided, that any such
telegram, cablegram or other electronic transmission must either set forth or
be accompanied by information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by the
stockholder. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission by which a stockholder has
authorized another person to act as proxy for such stockholder may be
substituted or used in lieu of the original writing or transmission for any and
all purposes for which the original writing or transmission could be used,
provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or
transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action
in writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
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2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject
matter of an issue submitted to a meeting of stockholders shall be entitled to
one vote upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may
vote, in person or by proxy, the number of shares owned by such stockholder for
as many persons as there are Directors to be elected and for whose election
such stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof
are delivered to the corporation, in the manner required by this Section,
within sixty (or the maximum number permitted by applicable law) days of the
earliest dated consent delivered to the corporation in the manner required by
this Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the
stockholder shall be determined by or at the direction of the Secretary. A
written record of the information upon which the person making such
determination relied shall be made and kept in the records of the proceedings
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of the stockholders. Any such consent shall be inserted in the minute book as
if it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the
Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws,
but no decrease in the number of Directors shall have the effect of shortening
the term of any incumbent Director. Unless a Director dies, resigns, or is
removed, he or she shall hold office until the next annual meeting of
stockholders or until his or her successor is elected, whichever is later.
Directors need not be stockholders of the corporation or residents of the State
of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after
and at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board
may be called by or at the request of the Chairman of the Board, the President,
the Secretary or, in the case of special Board meetings, any Director and, in
the case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
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3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day
and hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such
meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective
if delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective
if deposited in the official government mail properly address to a Director at
his or her address shown on the records of the corporation with postage prepaid
at least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed
effective when dispatched to a Director at his or her address shown on the
records of the corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
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at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed
effective if the content thereof is delivered to the telegraph company at least
two days before the meeting for delivery to a Director at his or her address
shown on the records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice
shall be deemed effective if personally given to the Director at least two days
before the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened.
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3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of
the total number of Directors then serving on the Board, provided, however,
that such number may not be less than one-third of the total number of
Directors fixed by or in the manner provided in these By-laws, shall constitute
a quorum for the transaction of business at any Board meeting. If less than a
majority are present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or
committee meeting at which there is a quorum shall be the act of the or
committee, unless the vote of a greater number is required by these By-laws,
the Certificate of Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his or her dissent is entered in the
minutes of the meeting, or unless such Director files a written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the meeting.
A Director who voted in favor of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
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3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to
the Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or
more members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative
vote of a majority of the remaining Directors though less than a quorum of the
Board. A Director elected to fill a vacancy shall be elected for the unexpired
term of his or her predecessor in office. Any directorship to be filled by
reason of an increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the
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resolution of the Board establishing such committee or as otherwise provided in
these By-laws, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which require
it; but no such committee shall have the power to authority in reference to (a)
amending the Certificate of Incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance
of shares of stock adopted by the Board as provided in Section 151(a) of the
DGCL, fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger
or consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these By-laws; and, unless
expressly provided by resolution of the Board, no such committee shall have the
power or authority to declare a dividend, to authorize the issuance of stock or
to adopt a certificate of ownership and merger pursuant to Section 253 of the
DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their
meetings and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the
Board, as established and fixed by resolution of the Board, shall constitute a
quorum for the transaction of business at any meeting of such committee but, if
less than a majority are present at a meeting, a majority of such Directors
present may adjourn the meeting from time to time without further notice. The
act of a majority of the members of a committee present at a meeting at which a
quorum is present shall be the act of such committee.
3.15.4 RESIGNATION
Any member of any committee may resign at any time by delivering
written notice thereof to the Chairman of the Board, the President, the
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Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected
or appointed by it, but only by the affirmative vote of not less than a
majority of the number of Directors fixed by or in the manner provided in these
By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and
a Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any
additional title that the Board deems appropriate. The Board may delegate to
any officer or agent the power to appoint any such subordinate officers or
agents and to prescribe their respective terms of office, authority and duties.
Any two or more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board
at the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held
as soon thereafter as a Board meeting conveniently may be held. Unless an
officer dies, resigns or is removed from office, he or she shall hold office
until the next annual meeting of the Board or until his or her successor is
elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed
by the Board whenever in its judgment the best interests of the corporation
would be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as
shall be assigned to him or her by the Board from time to time and shall
preside over meetings of the Board and stockholders unless another officer is
appointed or designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the
Board and, subject to the Board's control, shall supervise and control all of
the assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to
act, the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the
corporation. Vice Presidents shall have, to the extent authorized by the
President of the Board, the same powers as the President to sign deeds,
mortgages, bonds, contracts or other instruments. Vice Presidents shall perform
such other duties as from time to time may be assigned to them by the President
or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of
meetings of the Board and stockholders, maintenance of the corporation's
records and stock registers, and authentication of the corporation's records
and shall in general perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him or her by the
president or by the Board. In absence of the Secretary, an Assistant Secretary
may perform the duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the
faithful discharge of his or her duties in such amount and with such surety or
sureties as the Board shall determine. The Treasurer shall have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in banks, trust companies or other depositories selected in
accordance with the provision of these By-laws; sign certificates for shares of
the corporation; and in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him or her by the President or by the Board. In the absence of the
Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the
Board or by any person or person to whom the Board has delegated such
authority. No officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents,
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board. Such authority may be general or confined to specific
instances.
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5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, or agent or agents, of the corporation and
in such manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by
the Chairman of the Board or a Vice Chairman of the Board, if any, or the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, any of whose signatures may be a
facsimile. The Board may in its discretion appoint responsible banks or trust
companies from time to time to act as transfer agents and registrars of the
stock of the corporation; and, when such appointments shall have been made, no
stock certificate shall be valid until countersigned by one of such transfer
agents and registered by one of such registrars. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person was such officer, transfer
agent or registrar at the date of issue. All certificates shall include on
their face written notice of any restriction which may be imposed on the
18
<PAGE> 24
transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate,
or on the reverse of the certificate if a reference to the legend is contained
on the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged
or otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering
any such transaction involving said securities or (b) this corporation
receives an opinion of legal counsel for the holder of these
securities (concurred in by legal counsel for this corporation)
stating that such transaction is exempt from registration or (c) this
corporation otherwise satisfies itself that such transaction is exempt
from registration. Neither the offering of the securities nor any
offering materials have been reviewed by any administrator under the
Securities Act of 1933 or any applicable state law."
19
<PAGE> 25
6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the
stock transfer books of the corporation pursuant to authorization or document
of transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed
and filed with the Secretary of the corporation. All certificates surrendered
to the corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificates for a like number of shares shall have
been surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year,
provided that if a different accounting year is at any time selected for
purposes of federal income taxes, the accounting year shall be the year so
selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
20
<PAGE> 26
SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved (including, without limitation, as a witness)
in any actual or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a Director or officer of the
corporation or that, being or having been such a Director or officer or an
employee of the corporation, he or she is or was serving at the request of the
corporation as a Director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as such
a Director, officer, employee or agent, shall be indemnified and held harmless
by the corporation to the full extent permitted by the DGCL, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the corporation to provide
broader indemnification rights than permitted prior thereto), or by other
applicable law as then in effect, against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) actually and reasonably incurred or suffered by
such indemnitee in connection therewith and such indemnification shall continue
as to an indemnitee who has ceased to be a Director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that except as provided in subsection 10.2
hereof with respect to proceedings seeking to enforce rights to
indemnification, the corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) was authorized or ratified by
the Board. The right to indemnification conferred in this subsection 10.1 shall
be a contract right and shall include the right to be paid by the corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter and "advancement of expenses"); provided, however,
that if the DGCL requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a Director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the corporation of an undertaking (hereinafter an
21
<PAGE> 27
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in
a suit brought by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. The indemnitee
shall be presumed to be entitled to indemnification under this Section upon
submission of a written claim (and, in an action brought to enforce a claim for
an advancement of expenses, where the required undertaking, if any is required,
has been tendered to the corporation), and thereafter the corporation shall
have the burden of proof to overcome the presumption that the indemnitee is not
so entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee
is proper in the circumstances nor an actual determination by the corporation
(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the indemnitee is not so entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses
conferred in this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, agreement, vote of
stockholders or disinterested Directors, provision of the Certificate of
Incorporation or By-laws of the corporation or otherwise. Notwithstanding any
amendment to or repeal of this Section, any indemnitee shall be entitled to
indemnification in accordance with the provision hereof with respect to any
22
<PAGE> 28
acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect
itself and any Director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the DGCL. The corporation, without further stockholder approval, may
enter into contracts with any Director, officer, employee or agent in
furtherance of the provisions of this Section and may create a trust fund,
grant a security interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such amounts as may be necessary to
effect indemnification as provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement
of expenses of Directors and officers of the corporation; provided, however,
that an undertaking shall be made by an employee or agent only if required by
the Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the
corporation who is or was serving (a) as a Director or officer of another
corporation of which a majority of the shares entitled to vote in the election
of its Directors is held by the corporation or (b) in an executive or
management capacity in a partnership, joint venture, trust or other enterprise
of which the corporation or a wholly owned subsidiary of the corporation is a
general partner or has a majority ownership shall be deemed to be so serving at
the request of the corporation and entitled to indemnification and advancement
of expenses under subsection 10.1 hereof.
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<PAGE> 29
SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be
adopted by the Board. The stockholders may also amend and repeal these By-laws
or adopt new By-laws. All By-laws made by the Board may be amended or repealed
by the stockholders. Notwithstanding any amendment to Section 10 hereof or
repeal of these By-laws, or of any amendment or repeal of any of the procedures
that may be established by the Board pursuant to Section 10 hereof, any
indemnitee shall be entitled to indemnification in accordance with the
provisions hereof and thereof with respect to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed
to include the following and their representatives: an individual not a citizen
of the United States of America; a partnership unless a majority of the
partners are citizens of the United States of America and have a majority
interest in the partnership profits; a foreign government; a corporation,
joint-stock company or association organized under the laws of a foreign
country; and any other corporation, joint-stock company or association directly
or indirectly controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of
voting stock of the corporation of any stock outstanding shall at any time be
owned of record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the
account of Aliens, and the citizenship of transferees thereof, shall be
determined in conformity with regulation prescribed by the Board. There shall
be maintained separate stock records, a domestic record of shares of stock held
by citizens and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to
an Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
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<PAGE> 30
Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than
one-fourth of the directors are Aliens, or of which more than one-fourth of the
stock is owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such
other provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in effect
or as it may hereafter from time to time be amended, and to carry out the
provisions of this Section 12 and of Article 12 of the Restated Certificate of
Incorporation.
*****
The foregoing By-laws were adopted by the Board of Directors on
December 17, 1994. Section 10 hereof ("Indemnification") was approved by the
sole stockholder on December 17, 1994.
-----------------------------------------
Secretary
25
<PAGE> 1
EXHIBIT 3.27
CERTIFICATE OF FORMATION
OF
WAVY BROADCASTING, LLC
NAME
The name of the limited liability corporation is WAVY Broadcasting, LLC.
REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is 1013
Centre Road, Wilmington, Delaware, 19805; and the name of the registered agent
of the corporation in the State of Delaware is the Corporation Service
Company.
Dated: January 23, 1998
------------------------------
Gayle C. Toney
<PAGE> 1
EXHIBIT 3.28
LIMITED LIABILITY COMPANY AGREEMENT
OF
WAVY BROADCASTING, LLC
THE UNDERSIGNED is executing this Limited Liability Company Agreement (this
"Agreement") for the purpose of forming a limited liability company (the
"Company") pursuant to the provisions of the Delaware Limited Liability Company
Act (6 Del. C. Sections 18-101, et seq.)(the "Act"'), and do hereby certify and
agree as follows:
1. Name. The name of the Company shall be WAVY Broadcasting, LLC, or
such other name as the Managing Member may from time to time hereafter
designate.
2. Definitions. In addition to terms otherwise defined herein, the
following terms are used herein as defined below:
"Managing Member" means LIN Television Corporation, a Delaware
corporation ("LIN"), and all other persons or entities admitted as
additional or substitute Managing Members pursuant to this Agreement,
so long as they remain Managing Members.
"Non-Managing Members" means all persons or entities admitted as
additional or substitute Non-Managing Members pursuant to this
Agreement, so long as they remain Non-Managing Members and are so
listed on Schedule A, if any.
"Members" means those persons or entities who from time to time are
the Managing Member and the Non-Managing Members, if any.
<PAGE> 2
3. Purpose. The purpose of the Company shall be, directly or indirectly
through subsidiaries or affiliates, to serve as the entity designated as the
licensee for television broadcast stations owned by LIN in the State of Virginia
and to engage in any lawful act or activity which limited liability corporations
may be organized under the Delaware General Corporation Law.
4. Offices.
(a) The principal place of business and office of the Company shall
be located at, and the Company's business shall be conducted from, such place or
places as the Managing Member may from time to time designate to the
Non-Managing Members.
(b) The registered office of the Company in the State of Delaware
shall be located at 1013 Centre Road, Wilmington, County of New Castle, Delaware
19805. The name and address of the registered agent of the Company for service
of process on the Company in the State of Delaware shall be The Corporation
Service Company.
5. Members. The name and business or residence address of each Member of
the Company is set forth on Schedule A attached hereto.
6. Term. The term of the Company commenced on the date of filing of the
Certificate of Formation of the Company in accordance with the Act and shall
continue until dissolution of the Company in accordance with Section 15 of this
Agreement.
7. Management of the Company.
(a) The Managing Member shall have the exclusive right to manage the
business of the Company, and shall have all powers and rights necessary,
appropriate or advisable to effectuate and carry out the purposes and business
of the Company and, in general, all powers
2
<PAGE> 3
permitted to be exercised by a managing member under the Act, including, without
limitation, the power to (i) open, maintain and close bank accounts and to take
all actions it deems necessary or advisable for the administration of such
accounts, (ii) appoint and designate the responsibilities of such officers of
the Company from time to time as the Managing Member deems necessary or
desirable and (iii) appoint, employ, or otherwise contract with any persons or
entities for the transaction of the business of the Company or the performance
of services for or on behalf of the Company; and the Managing Member may
delegate to any such person or entity described in subclauses (i) and (ii) such
authority to act on behalf of the Company as the Managing Member may from time
to time deem appropriate.
(b) No Non-Managing Member, in his status as such, shall have the right
to take part in the management or control of the business of the Company or to
act for or bind the Company or otherwise to transact any business on behalf of
the Company.
8. Liability of Members, Indemnification.
(a) Neither a Member (including the Managing Member) nor any
officer, employee or agent of the Company (including a person having more than
one such capacity) shall be personally liable for any expenses, liabilities,
debts or obligations of the Company solely by reason of acting in such capacity
except as provided in the Act.
(b) To the fullest extent permitted by law, the Company shall
indemnify and hold harmless the Managing Member, each Member and any officer,
employee or agent of the Company from and against any and all losses, claims,
damages, liabilities or expenses of whatever nature (each a "Claim"'), as
incurred, arising out or of relating to the management or
3
<PAGE> 4
business of the Company; provided that such indemnification shall not apply to
any such person if a court of competent jurisdiction has made a final
determination that such Claim resulted directly from the gross negligence, bad
faith or willful misconduct of such person.
9. Capital Contributions. Members shall make capital contributions to the
Company in such amounts and at such times as they shall mutually agree.
10. Assignments of Membership Interest.
(a) No Non-Managing Member may sell, assign, pledge or otherwise
transfer or encumber (collectively "transfer") all or any part of his interest
in the Company, nor shall any Non-Managing Member have the power to substitute a
transferee in his place as a substitute Non-Managing Member, without, in either
event, having obtained the prior written consent of the Managing Member, which
consent may be given or withheld in its sole discretion.
(b) The Managing Member may not transfer all or any part of its
interest in the Company, nor shall the Managing Member have the power to
substitute a transferee in its place as a substitute Managing Member, without,
in either event, having obtained the consent of all of the Non-Managing Members.
11. Withdrawal. No Non-Managing Member shall have the right to withdraw
from the Company except with the consent of the Managing Member and upon such
terms and conditions as may be specifically agreed upon between the Managing
Member and the withdrawing Non-Managing Member. The provisions hereof with
respect to distributions upon withdrawal are exclusive and no Non-Managing
Member shall be entitled to
4
<PAGE> 5
claim any further or different distribution upon withdrawal under Section
18-604 of the Act or otherwise.
12. Additional Members. The Managing Member shall have the right to admit
additional Non-Managing Members upon such terms and conditions, at such time or
times, and for such capital contributions as shall be determined by the Managing
Member; and in connection with any such admission, the Managing Member shall
have the right to amend Schedule A hereof to reflect the name, address and
capital contribution of the admitted Non-Managing Member.
13. Allocations and Distributions. Distributions of cash or other assets
of the Company shall be made at such times and in such amounts as the Managing
Member may determine. Distributions shall be made to (and profits and losses
shall be allocated among) Members pro rata in accordance with the amount of
their contributions to the Company as set forth on Schedule A hereto.
14. Return of Capital. No Non-Managing Member has the right to receive,
and the Managing Member has absolute discretion to make, any distributions to a
Non-Managing Member, which include a return of all or any part of such
Non-Managing Member's capital contribution, provided that upon the dissolution
of the Company, the assets of the Company shall be distributed as provided in
Section 18-804 of the Act.
15. Dissolution. The Company shall be dissolved and its affairs wound up
and terminated upon the first to occur of the following:
(a) December 31, 2030
(b) The determination of the Managing Member to dissolve the
Company; or
5
<PAGE> 6
(c) The bankruptcy or dissolution of the Managing Member or the
occurrence of any other event which terminates the continued membership of the
Managing Member in the Company, provided, however, the Company shall not be
dissolved if, within ninety (90) days after the occurrence of such event, all
remaining Members agree in writing to continue the business of the Company and
to the appointment, effective as of the date of such event, of one (1) or more
additional Members of the Company.
16. Amendments. This Agreement may be amended only upon the written
consent of all Members.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
February 3, 1998.
LIN TELEVISION CORPORATION
By:
--------------------------------
Peter E. Maloney, Vice President
6
<PAGE> 7
SCHEDULE A
WAVY BROADCASTING, LLC
MEMBERS
CAPITAL
NAME ADDRESS CONTRIBUTION
- ---- ------- ------------
MANAGING MEMBER:
LIN Television Corporation Four Richmond Square $1,000.00
Suite 200
Providence, RI 02906
NON-MANAGING MEMBERS:
None
7
<PAGE> 1
EXHIBIT 3.29
CERTIFICATE OF FORMATION
OF
WIVB BROADCASTING, LLC
NAME
The name of the limited liability corporation is WIVB Broadcasting,
LLC.
REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
1013 Centre Road, Wilmington, Delaware, 19805; and the name of the registered
agent of the corporation in the State of Delaware is the Corporation Service
Company.
Dated: January 23, 1998
--------------------------------
Gayle C. Toney
<PAGE> 1
EXHIBIT 3.30
LIMITED LIABILITY COMPANY AGREEMENT
OF
WIVB BROADCASTING, LLC
THE UNDERSIGNED is executing this Limited Liability Company Agreement
(this "Agreement") for the purpose of forming a limited liability company (the
"Company") pursuant to the provisions of the Delaware Limited Liability Company
Act (6 Del. C. Sections 18-101, et seq.) (the "Act"), and do hereby certify and
agree as follows:
1 . Name. The name of the Company shall be WIVB Broadcasting, LLC,
or such other name as the Managing Member may from time to time hereafter
designate.
2. Definitions. In addition to terms otherwise defined herein, the
following terms are used herein as defined below:
"Managing Member" means LIN Television Corporation, a Delaware
corporation ("LIN"), and all other persons or entities admitted as
additional or substitute Managing Members pursuant to this
Agreement, so long as they remain Managing Members.
"Non-Managing Members" means all persons or entities admitted as
additional or substitute Non-Managing Members pursuant to this
Agreement, so long as they remain Non-Managing Members and are so
listed on Schedule A, if any.
"Members" means those persons or entities who from time to time
are the Managing Member and the Non-Managing Members, if any.
<PAGE> 2
3. Purpose. The purpose of the Company shall be, directly or indirectly
through subsidiaries or affiliates, to serve as the entity designated as the
licensee for television broadcast stations owned by LIN in the State of New York
and to engage in any lawful act or activity which limited liability corporations
may be organized under the Delaware General Corporation Law.
4. Offices.
(a) The principal place of business and office of the Company
shall be located at, and the Company's business shall be conducted from, such
place or places as the Managing Member may from time to time designate to the
Non-Managing Members.
(b) The registered office of the Company in the State of Delaware
shall be located at 1013 Centre Road, Wilmington, County of New Castle,
Delaware 19805. The name and address of the registered agent of the Company for
service of process on the Company in the State of Delaware shall be The
Corporation Service Company.
5. Members. The name and business or residence address of each Member
of the Company is set forth on Schedule A attached hereto.
6. Term. The term of the Company commenced on the date of filing of the
Certificate of Formation of the Company in accordance with the Act and shall
continue until dissolution of the Company in accordance with Section 15 of this
Agreement.
7. Management of the Company.
(a) The Managing Member shall have the exclusive right to manage
the business of the Company, and shall have all powers and rights necessary,
appropriate or advisable to effectuate and carry out the purposes and business
of the Company and, in general, all powers
2
<PAGE> 3
permitted to be exercised by a managing member under the Act, including,
without limitation, the power to (1) open, maintain and close bank accounts
and to take all actions it deems necessary or advisable for the administration
of such accounts, (ii) appoint and designate the responsibilities of such
officers of the Company from time to time as the Managing Member deems
necessary or desirable and (iii) appoint, employ, or otherwise contract with
any persons or entities for the transaction of the business of the Company or
the performance of services for or on behalf of the Company; and the Managing
Member may delegate to any such person or entity described in subclauses (i)
and (ii) such authority to act on behalf of the Company as the Managing Member
may from time to time deem appropriate.
(b) No Non-Managing Member, in his status as such, shall have the
right to take part in the management or control of the business of the Company
or to act for or bind the Company or otherwise to transact any business on
behalf of the Company.
8. Liability of Members; Indemnification.
(a) Neither a Member (including the Managing Member) nor any
officer, employee or agent of the Company (including a person having more than
one such capacity) shall be personally liable for any expenses, liabilities,
debts or obligations of the Company solely by reason of acting in such capacity
except as provided in the Act.
(b) To the fullest extent permitted by law, the Company shall
indemnify and hold harmless the Managing Member, each Member and any officer,
employee or agent of the Company from and against any and all losses, claims,
damages, liabilities or expenses of whatever nature (each a "Claim"), as
incurred, arising out or of relating to the management or
3
<PAGE> 4
business of the Company; provided that such indemnification shall not apply to
any such person if a court of competent jurisdiction has made a final
determination that such Claim resulted directly from the gross negligence, bad
faith or willful misconduct of such person.
9. Capital Contributions. Members shall make capital contributions to
the Company in such amounts and at such times as they shall mutually agree.
10. Assignments of Membership Interest.
(a) No Non-Managing Member may sell, assign, pledge or otherwise
transfer or encumber (collectively "transfer") all or any part of his interest
in the Company, nor shall any Non-Managing Member have the power to substitute a
transferee in his place as a substitute Non-Managing Member, without, in either
event, having obtained the prior written consent of the Managing Member, which
consent may be given or withheld in its sole discretion.
(b) The Managing Member may not transfer all or any part of its
interest in the Company, nor shall the Managing Member have the power to
substitute a transferee in its place as a substitute Managing Member, without,
in either event, having obtained the consent of all of the Non-Managing Members.
11. Withdrawal. No Non-Managing Member shall have the right to
withdraw from the Company except with the consent of the Managing Member and
upon such terms and conditions as may be specifically agreed upon between the
Managing Member and the withdrawing Non-Managing Member. The provisions hereof
with respect to distributions upon withdrawal are exclusive and no Non-Managing
Member shall be entitled to
4
<PAGE> 5
claim any further or different distribution upon withdrawal under Section
18-604 of the Act or otherwise.
12. Additional Members. The Managing Member shall have the right to
admit additional Non-Managing Members upon such terms and conditions, at such
time or times, and for such capital contributions as shall be determined by the
Managing Member; and in connection with any such admission, the Managing Member
shall have the right to amend Schedule A hereof to reflect the name, address and
capital contribution of the admitted Non-Managing Member.
13. Allocations and Distributions. Distributions of cash or other
assets of the Company shall be made at such times and in such amounts as the
Managing Member may determine. Distributions shall be made to (and profits and
losses shall be allocated among) Members pro rata in accordance with the amount
of their contributions to the Company as set forth on Schedule A hereto.
14. Return of Capital. No Non-Managing Member has the right to receive,
and the Managing Member has absolute discretion to make, any distributions to a
Non-Managing Member, which include a return of all or any part of such
Non-Managing Member's capital contribution, provided that upon the dissolution
of the Company, the assets of the Company shall be distributed as provided in
Section 18-804 of the Act.
15 Dissolution. The Company shall be dissolved and its affairs wound up
and terminated upon the first to occur of the following:
(a) December 31, 2030
(b) The determination of the Managing Member to dissolve the
Company; or
5
<PAGE> 6
(c) The bankruptcy or dissolution of the Managing Member or the
occurrence of any other event which terminates the continued membership of the
Managing Member in the Company, provided, however, the Company shall not be
dissolved if, within ninety (90) days after the occurrence of such event, all
remaining Members agree in writing to continue the business of the Company and
to the appointment, effective as of the date of such event, of one (1) or more
additional Members of the Company.
16. Amendments. This Agreement may be amended only upon the written
consent of all Members.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of February 3, 1998.
LIN TELEVISION CORPORATION
By:
----------------------------
Peter E. Maloney, Vice
President
6
<PAGE> 7
SCHEDULE A
WIVB BROADCASTING, LLC
MEMBERS
CAPITAL
NAME ADDRESS CONTRIBUTION
- ---- ------- ------------
MANAGING MEMBER:
LIN Television Corporation Four Richmond Square $1,000.00
Suite 200
Providence, RI 02906
NON-MANAGING MEMBERS:
None
7
<PAGE> 1
EXHIBIT 3.31
CERTIFICATE OF FORMATION
OF
WOOD LICENSE CO., LLC
NAME
The name of the limited liability corporation is WOOD License Co.,
LLC.
REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
1013 Centre Road, Wilmington, Delaware, 19805; and the name of the registered
agent of the corporation in the State of Delaware is the Corporation Service
Company.
Dated: January 23, 1998
--------------------------------
Gayle C. Toney
<PAGE> 1
EXHIBIT 3.32
LIMITED LIABILITY COMPANY AGREEMENT
OF
WOOD LICENSE CO., LLC
THE UNDERSIGNED is executing this Limited Liability Company Agreement
(this "Agreement") for the purpose of forming a limited liability company (the
"Company") pursuant to the provisions of the Delaware Limited Liability Company
Act (6 Del. C. Sections 18-101, et seq.) (the "Act"), and do hereby certify and
agree as follows:
1. Name. The name of the Company shall be WOOD License Co., LLC,
or such other name as the Managing Member may from time to time hereafter
designate.
2. Definitions. In addition to terms otherwise defined herein,
the following terms are used herein as defined below:
"Managing Member" means LIN Television Corporation, a Delaware
corporation ("LIN"), and all other persons or entities
admitted as additional or substitute Managing Members pursuant
to this Agreement, so long as they remain Managing Members.
"Non-Managing Members" means all persons or entities admitted
as additional or substitute Non-Managing Members pursuant to
this Agreement, so long as they remain Non-Managing Members
and are so listed on Schedule A, if any.
"Members" means those persons or entities who from time to
time are the Managing Member and the Non-Managing Members, if
any.
<PAGE> 2
3. Purpose. The purpose of the Company shall be, directly or
indirectly through subsidiaries or affiliates, to serve as the entity
designated as the licensee for television broadcast stations owned by LIN in
the State of Michigan and to engage in any lawful act or activity which limited
liability corporations may be organized under the Delaware General Corporation
Law.
4. Offices.
(a) The principal place of business and office of the Company
shall be located at, and the Company's business shall be conducted from, such
place or places as the Managing Member may from time to time designate to the
Non-Managing Members.
(b) The registered office of the Company in the State of
Delaware shall be located at 1013 Centre Road, Wilmington, County of New
Castle, Delaware 19805. The name and address of the registered agent of the
Company for service of process on the Company in the State of Delaware shall be
The Corporation Service Company.
5. Members. The name and business or residence address of each
Member of the Company is set forth on Schedule A attached hereto.
6. Term. The term of the Company commenced on the date of filing
of the Certificate of Formation of the Company in accordance with the Act and
shall continue until dissolution of the Company in accordance with Section 15
of this Agreement.
7. Management of the Company.
(a) The Managing Member shall have the exclusive right to
manage the business of the Company, and shall have all powers and rights
necessary, appropriate or advisable to effectuate and carry out the purposes
and business of the Company and, in general, all powers
2
<PAGE> 3
permitted to be exercised by a managing member under the Act, including,
without limitation, the power to (i) open, maintain and close bank accounts and
to take all actions it deems necessary or advisable for the administration of
such accounts, (ii) appoint and designate the responsibilities of such officers
of the Company from time to time as the Managing Member deems necessary or
desirable and (iii) appoint, employ, or otherwise contract with any persons or
entities for the transaction of the business of the Company or the performance
of services for or on behalf of the Company; and the Managing Member may
delegate to any such person or entity described in subclauses (i) and (ii) such
authority to act on behalf of the Company as the Managing Member may from time
to time deem appropriate.
(b) No Non-Managing Member, in his status as such, shall
have the right to take part in the management or control of the business of
the Company or to act for or bind the Company or otherwise to transact any
business on behalf of the Company.
8. Liability of Members, Indemnification.
(a) Neither a Member (including the Managing Member) nor
any officer, employee or agent of the Company (including a person having more
than one such capacity) shall be personally liable for any expenses,
liabilities, debts or obligations of the Company solely by reason of acting in
such capacity except as provided in the Act.
(b) To the fullest extent permitted by law, the Company
shall indemnify and hold harmless the Managing Member, each Member and any
officer, employee or agent of the Company from and against any and all losses,
claims, damages, liabilities or expenses of whatever nature (each a "Claim 1"),
as incurred, arising out or of relating to the management or
3
<PAGE> 4
business of the Company; provided that such indemnification shall not apply to
any such person if a court of competent jurisdiction has made a final
determination that such Claim resulted directly from the gross negligence, bad
faith or willful misconduct of such person.
9. Capital Contributions. Members shall make capital contributions
to the Company in such amounts and at such times as they shall mutually agree.
10. Assignments of Membership Interest.
(a) No Non-Managing Member may sell, assign, pledge or
otherwise transfer or encumber (collectively "transfer") all or any part of
his interest in the Company, nor shall any Non-Managing Member have the power
to substitute a transferee in his place as a substitute Non-Managing Member,
without, in either event, having obtained the prior written consent of the
Managing Member, which consent may be given or withheld in its sole discretion.
(b) The Managing Member may not transfer all or any part
of its interest in the Company, nor shall the Managing Member have the power to
substitute a transferee in its place as a substitute Managing Member, without,
in either event, having obtained the consent of all of the Non-Managing
Members.
11. Withdrawal. No Non-Managing Member shall have the right to
withdraw from the Company except with the consent of the Managing Member and
upon such terms and conditions as may be specifically agreed upon between the
Managing Member and the withdrawing Non-Managing Member. The provisions hereof
with respect to distributions upon withdrawal are exclusive and no Non-Managing
Member shall be entitled to
4
<PAGE> 5
claim any further or different distribution upon withdrawal under Section
18-604 of the Act or otherwise.
12. Additional Members. The Managing Member shall have the right
to admit additional Non-Managing Members upon such terms and conditions, at
such time or times, and for such capital contributions as shall be determined
by the Managing Member; and in connection with any such admission, the Managing
Member shall have the right to amend Schedule A hereof to reflect the name,
address and capital contribution of the admitted Non-Managing Member.
13. Allocations and Distributions. Distributions of cash or other
assets of the Company shall be made at such times and in such amounts as the
Managing Member may determine. Distributions shall be made to (and profits and
losses shall be allocated among) Members pro rata in accordance with the amount
of their contributions to the Company as set forth on Schedule A hereto.
14. Return of Capital. No Non-Managing Member has the right to
receive, and the Managing Member has absolute discretion to make, any
distributions to a Non-Managing Member, which include a return of all or any
part of such Non-Managing Member's capital contribution, provided that upon the
dissolution of the Company, the assets of the Company shall be distributed as
provided in Section 18-804 of the Act.
15. Dissolution. The Company shall be dissolved and its affairs
wound up and terminated upon the first to occur of the following:
(a) December 31, 2030
(b) The determination of the Managing Member to dissolve
the Company; or
5
<PAGE> 6
(c) The bankruptcy or dissolution of the Managing Member
or the occurrence of any other event which terminates the continued membership
of the Managing Member in the Company, provided, however, the Company shall not
be dissolved if, within ninety (90) days after the occurrence of such event,
all remaining Members agree in writing to continue the business of the Company
and to the appointment, effective as of the date of such event, of one (1) or
more additional Members of the Company.
16. Amendments. This Agreement may be amended only upon the
written consent of all Members.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of February 3, 1998.
LIN TELEVISION CORPORATION
By:
-----------------------------------
Peter E. Maloney, Vice President
6
<PAGE> 7
SCHEDULE A
WOOD LICENSE CO., LLC
MEMBERS
<TABLE>
<CAPTION>
Capital
Name Address Contribution
- ---- ------- ------------
<S> <C> <C>
MANAGING MEMBER:
LIN Television Corporation Four Richmond Square $1,000.00
Suite 200
Providence, RI 02906
NON-MANAGING MEMBERS:
None
</TABLE>
7
<PAGE> 1
EXHIBIT 3.33
CERTIFICATE OF INCORPORATION
OF
WOOD TELEVISION, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code, and
the acts amendatory thereof and supplemental thereto, and known, identified,
and referred to as the "General Corporation Law of the State of Delaware"),
hereby certifies that:
ARTICLE 1. NAME
The name of this corporation is WOOD Television, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this corporation is
1013 Centre Road, Wilmington, Delaware, 19805; and the name of the registered
agent of the corporation in the State of Delaware is Corporation Service
Company.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation shall have
the authority to issue is 1,000. The par value of each such shares is $.01. All
such shares are of one class and are shares of Common Stock.
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Television Corporation, 1001 G Street, N.W.,
Suite 700E, Washington, DC 20001
<PAGE> 2
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation; provided, however, that the Board of Directors
may not repeal or amend any By-law that the stockholders have expressly
provided may not be amended or repealed by the Board of Directors. The
stockholders shall also have the power to adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be determined in the
manner provided by the By-laws and may be increased or decreased from time to
time in the manner provided therein. Written ballots are not required in the
election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 9. CUMULATIVE VOTING
The night to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Certificate of Incorporation in any manner now or
hereafter permitted by law, and the rights of the stockholders of this
corporation are granted subject to this reservation.
ARTICLE 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date hereof or
may hereafter be amended, permits the limitation or elimination of the
liability of directors, a director of this corporation shall not be liable to
this corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. Any amendment to or repeal of this Article 10
shall not adversely affect any right or protection of a director of this
corporation for or with respect to any acts of omissions of such director
occurring prior to such amendment or repeal. In
2
<PAGE> 3
addition to any requirements or any other provisions herein or in the terms of
any class or series of capital stock having a preference over the common stock
of this corporation as to dividends or upon liquidation (and notwithstanding
that a lesser percentage may be specified by law), the affirmative vote of the
holders of 80% or more of the voting power of the outstanding voting stock of
this corporation, voting together as a single class, shall be required to
amend, alter or repeal any provision of this Article 11.
Signed on January 23, 1998.
----------------------------------------
Gayle C. Toney, Incorporator
3
<PAGE> 1
EXHIBIT 3.34
BY-LAWS
OF
WOOD TELEVISION, INC.
Originally adopted on January 28, 1998
Amendments are listed on p. i
<PAGE> 2
WOOD TELEVISION, INC.
AMENDMENTS
DATE OF
SECTION EFFECT OF AMENDMENT AMENDMENT
- ------- ------------------- ---------
i
<PAGE> 3
CONTENTS
<TABLE>
<S> <C> <C>
SECTION 1. OFFICES ...................................................................................1
SECTION 2. STOCKHOLDERS ..............................................................................1
2.1 Annual Meeting ...............................................................................1
2.2 Special Meetings .............................................................................1
2.3 Place of Meeting .............................................................................2
2.4 Notice of Meeting ............................................................................2
2.5 Waiver of Notice .............................................................................2
2.5.1 Waiver in Writing ........................................................................2
2.5.2 Waiver by Attendance .....................................................................3
2.6 Fixing of Record Date for Determining Stockholders ...........................................3
2.6.1 Meetings .................................................................................3
2.6.2 Consent to Corporate Action Without a Meeting ............................................3
2.6.3 Dividends, Distributions and Other Rights ................................................4
2.7 Voting List .....................................................................................4
2.8 Quorum ..........................................................................................5
2.9 Manner of Acting ................................................................................5
2.10 Proxies ........................................................................................6
2.10.1 Appointment ................................................................................6
2.10.2 Delivery to Corporation; Duration ..........................................................6
2.11 Voting of Shares ...............................................................................7
2.12 Voting for Directors ...........................................................................7
2.13 Action by Stockholders Without a Meeting .......................................................7
SECTION 3. BOARD OF DIRECTORS ........................................................................8
3.1 General Powers ..................................................................................8
3.2 Number and Tenure ...............................................................................8
3.3 Annual and Regular Meetings .....................................................................8
3.4 Special Meetings ................................................................................8
3.5 Meetings by Telephone ...........................................................................9
3.6 Notice of Special Meetings ......................................................................9
3.6.1 Personal Delivery ...........................................................................9
3.6.2 Delivery by Mail ...........................................................................9
3.6.3 Delivery by Private Carrier .................................................................9
3.6.4 Facsimile Notice ............................................................................9
3.6.5 Delivery by Telegraph ......................................................................10
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
3.6.6 Oral Notice ...........................................................10
3.7 Waiver of Notice ............................................................10
3.7.1 In Writing ............................................................10
3.7.2 By Attendance .........................................................10
3.8 Quorum ......................................................................11
3.9 Manner of Acting ............................................................11
3.10 Presumption of Assent .......................................................11
3.11 Action by Board or Committees Without a Meeting .............................11
3.12 Resignation .................................................................12
3.13 Removal .....................................................................12
3.14 Vacancies ...................................................................12
3.15 Committees ..................................................................12
3.15.1 Creation and Authority of Committees ..................................12
3.15.2 Minutes of Meetings ..................................................13
3.15.3 Quorum and Manner of Acting ...........................................13
3.15.4 Resignation ...........................................................13
3.15.5 Removal ...............................................................14
3.16 Compensation ...............................................................14
SECTION 4. OFFICERS ...............................................................14
4.1 Number .....................................................................14
4.2 Election and Term of Office .................................................15
4.3 Resignation ................................................................15
4.4 Removal .....................................................................15
4.5 Vacancies ...................................................................15
4.6 Chairman of the Board .......................................................15
4.7 President ..................................................................16
4.8 Vice President ..............................................................16
4.9 Secretary ..................................................................16
4.10 Treasurer ..................................................................17
4.11 Salaries ..................................................................17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS ...................................17
5.1 Contracts ...................................................................17
5.2 Loans to the Corporation ....................................................17
5.3 Check, Drafts, Etc ..........................................................18
5.4 Deposits ...................................................................18
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR
TRANSFER .............................................................................18
6.1 Issuance of Shares.............................................................18
6.2 Certificates for Shares .......................................................18
6.3 Stock Records................................................................. 19
6.4 Restriction on Transfer .......................................................19
6.5 Transfer of Shares ...........................................................20
6.6 Lost or Destroyed Certificates ...............................................20
SECTION 7. BOOKS AND RECORDS .........................................................20
SECTION 8. ACCOUNTING YEAR .........................................................20
SECTION 9. SEAL ......................................................................20
SECTION 10. INDEMNIFICATION .........................................................21
10.1 Right to Indemnification .....................................................21
10.2 Right of Indemnitee to Bring Suit ............................................22
10.3 Nonexclusivity of Rights ....................................................22
10.4 Insurance, Contracts and Funding .............................................23
10.5 Indemnification of Employees and Agents of the Corporation ..................23
10.6 Persons Serving other Entities ..............................................23
SECTION 11. AMENDMENTS OR REPEAL ....................................................24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS ............................................24
</TABLE>
iv
<PAGE> 6
BY-LAWS
OF
WOOD TELEVISION, INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at its principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The corporation may have such other offices, either within or
without the State of Delaware, as the Board may designate or as the business of
the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the meeting,
the meeting shall be held on the next succeeding business day. If the annual
meeting is not held on the date designated therefor, the Board shall cause the
meeting to be held as soon thereafter as may be convenient.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled to
vote at the meeting may call special meetings of the stockholders for any
purpose.
<PAGE> 7
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or at
such other place within or without the State of Delaware designated by the
Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of the By-laws, the Certificate of Incorporation or the General
2
<PAGE> 8
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled
to such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record date
shall not be more than sixty (or the maximum number permitted by applicable law)
nor less than ten days before the date of such meeting. If no record date is
fixed by the Board, the record date for determining stockholders entitled to
notice of and to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of and to vote at the meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be
3
<PAGE> 9
more than ten (or the maximum number permitted by applicable law) days after the
date upon which the resolution fixing the record date is adopted by the Board.
If no record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter 1 of the DGCL,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
a corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board
and prior action by the Board is required by Chapter 1 of the DGCL, the record
date for determining stockholders entitled to consent to corporate action is
writing without a meeting shall be at the close of business on the day on which
the Board adopts the resolution taking such prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by applicable
law) days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
shall be made, arranged in alphabetical order, with the address of and number of
shares held by each stockholder. This list shall be open to examination by any
stockholder, for any purpose germane to the meeting,
4
<PAGE> 10
during ordinary business hours, for a period of ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. This list shall also be produced and kept
at such meeting for inspection by any stockholder who is present.
2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to vote,
present in person or represented by proxy at the meeting, shall constitute a
quorum at a meeting of the stockholders; provided, that where a separate vote by
a class or classes is required, a majority of the outstanding shares of such
class or classes, present in person or represented by proxy at the meeting,
shall constitute a quorum entitled to take action with respect to that vote on
that matter. If less than a majority of the outstanding shares entitled to vote
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. If a quorum is
present or represented at a reconvened meeting following such an adjournment,
any business may be transacted that might have been transacted at the meeting as
originally called. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation or
the DGCL. Where a separate vote by a class or classes is required, if a quorum
of such class or classes is present, the affirmative vote of the majority of
outstanding shares of such class or classes present in person or represented by
proxy at the meeting shall be the act of such class or classes. Directors shall
be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
Directors.
5
<PAGE> 11
2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by proxy. Such
authorization may be accomplished by (a) the stockholder or such stockholder's
authorized officer, director, employee or agent executing a writing or causing
his or her signature to be affixed to such writing by any reasonable means,
including facsimile signature or (b) by transmitting or authorizing the
transmission to the intended holder of the proxy or to a proxy solicitation
firm, proxy support service or similar agent duly authorized by the intended
proxy holder to receive such transmission; provided, that any such telegram,
cablegram or other electronic transmission must either set forth or be
accompanied by information from which it can be determined that the telegram,
cablegram or other electronic transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable reproduction of the
writing or transmission by which a stockholder has authorized another person to
act as proxy for such stockholder may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action in
writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
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2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject matter
of an issue submitted to a meeting of stockholders shall be entitled to one vote
upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may vote, in
person or by proxy, the number of shares owned by such stockholder for as many
persons as there are Directors to be elected and for whose election such
stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware,its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof are
delivered to the corporation, in the manner required by this Section, within
sixty (or the maximum number permitted by applicable law) days of the earliest
dated consent delivered to the corporation in the manner required by this
Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the stockholder
shall be determined by or at the direction of the Secretary. A written record of
the information upon which the person making such determination relied shall be
made and kept in the records of the proceedings
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of the stockholders. Any such consent shall be inserted in the minute book as if
it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws, but
no decrease in the number of Directors shall have the effect of shortening the
term of any incumbent Director. Unless a Director dies, resigns, or is removed,
he or she shall hold office until the next annual meeting of stockholders or
until his or her successor is elected, whichever is later. Directors need not be
stockholders of the corporation or residents of the State of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after and
at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board may
be called by or at the request of the Chairman of the Board, the President, the
Secretary or, in the case of special Board meetings, any Director and, in the
case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
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3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day and
hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective if
delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective if
deposited in the official government mail properly address to a Director at his
or her address shown on the records of the corporation with postage prepaid at
least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed effective
when dispatched to a Director at his or her address shown on the records of the
corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
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at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed effective
if the content thereof is delivered to the telegraph company at least two days
before the meeting for delivery to a Director at his or her address shown on the
records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice shall
be deemed effective if personally given to the Director at least two days before
the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice,, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
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3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of the
total number of Directors then serving on the Board, provided, however, that
such number may not be less than one-third of the total number of Directors
fixed by or in the manner provided in these By-laws, shall constitute a quorum
for the transaction of business at any Board meeting. If less than a majority
are present at a meeting, a majority of the Directors present may adjourn the
meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or committee
meeting at which there is a quorum shall be the act of the or committee, unless
the vote of a greater number is required by these By-laws, the Certificate of
Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting at
which action on any corporate matter is taken shall be presumed to have assented
to the action taken unless his or her dissent is entered in the minutes of the
meeting, or unless such Director files a written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof, or
forward such dissent by registered mail to the Secretary of the corporation
immediately after the adjournment of the meeting. A Director who voted in favor
of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
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3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to the
Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or more
members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative vote of
a majority of the remaining Directors though less than a quorum of the Board. A
Director elected to fill a vacancy shall be elected for the unexpired term of
his or her predecessor in office. Any directorship to be filled by reason of an
increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the
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resolution of the Board establishing such committee or as otherwise provided in
these By-laws, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which require
it; but no such committee shall have the power to authority in reference to (a)
amending the Certificate of Incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance of
shares of stock adopted by the Board as provided in Section 151(a) of the DGCL,
fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger
or consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these Bylaws; and, unless expressly
provided by resolution of the Board, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock or to adopt
a certificate of ownership and merger pursuant to Section 253 of the DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their meetings
and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the Board,
as established and fixed by resolution of the Board, shall constitute a quorum
for the transaction of business at any meeting of such committee but, if less
than a majority are present at a meeting, a majority of such Directors present
may adjourn the meeting from time to time without further notice. The act of a
majority of the members of a committee present at a meeting at which a quorum is
present shall be the act of such committee.
3.15.4 RESIGNATION
Any member of any committee may resign at any time by delivering written
notice thereof to the Chairman of the Board, the President, the
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Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected or
appointed by it, but only by the affirmative vote of not less than a majority of
the number of Directors fixed by or in the manner provided in these By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any additional
title that the Board deems appropriate. The Board may delegate to any officer or
agent the power to appoint any such subordinate officers or agents and to
prescribe their respective terms of office, authority and duties. Any two or
more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board at
the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held as
soon thereafter as a Board meeting conveniently may be held. Unless an officer
dies, resigns or is removed from office, he or she shall hold office until the
next annual meeting of the Board or until his or her successor is elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed by
the Board whenever in its judgment the best interests of the corporation would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
4.5 Vacancies
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as shall be
assigned to him or her by the Board from time to time and shall preside over
meetings of the Board and stockholders unless another officer is appointed or
designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the Board
and, subject to the Board's control, shall supervise and control all of the
assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to act,
the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the corporation.
Vice Presidents shall have, to the extent authorized by the President of the
Board, the same powers as the President to sign deeds, mortgages, bonds,
contracts or other instruments. Vice Presidents shall perform such other duties
as from time to time may be assigned to them by the President or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of meetings
of the Board and stockholders, maintenance of the corporation's records and
stock registers, and authentication of the corporation's records and shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the president or by
the Board. In absence of the Secretary, an Assistant Secretary may perform the
duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the faithful
discharge of his or her duties in such amount and with such surety or sureties
as the Board shall determine. The Treasurer shall have charge and custody of and
be responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in banks,
trust companies or other depositories selected in accordance with the provision
of these By-laws; sign certificates for shares of the corporation; and in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him or her by the President
or by the Board. In the absence of the Treasurer, an Assistant Treasurer may
perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the Board
or by any person or person to whom the Board has delegated such authority. No
officer shall be prevented from receiving such salary by reason of the fact that
he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board. Such authority may be general or confined to specific instances.
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5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, or agent or agents, of the corporation and in such
manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by the
Chairman of the Board or a Vice Chairman of the Board, if any, or the President
or a Vice President and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, any of whose signatures may be a facsimile.
The Board may in its discretion appoint responsible banks or trust companies
from time to time to act as transfer agents and registrars of the stock of the
corporation; and, when such appointments shall have been made, no stock
certificate shall be valid until countersigned by one of such transfer agents
and registered by one of such registrars. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if such person was such officer, transfer agent or registrar at
the date of issue. All certificates shall include on their face written notice
of any restriction which may be imposed on the
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transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate, or
on the reverse of the certificate if a reference to the legend is contained on
the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933 or any applicable
state law, and no interest therein may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (a)
there is an effective registration statement under such Act and
applicable state securities laws covering any such transaction
involving said securities or (b) this corporation receives an
opinion of legal counsel for the holder of these securities
(concurred in by legal counsel for this corporation) stating that
such transaction is exempt from registration or (c) this
corporation otherwise satisfies itself that such transaction is
exempt from registration. Neither the offering of the securities
nor any offering materials have been reviewed by any
administrator under the Securities Act of 1933 or any applicable
state law."
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6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the
stock transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed and
filed with the Secretary of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificates for a like number of shares shall have been
surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year,
provided that if a different accounting year is at any time selected for
purposes of federal income taxes, the accounting year shall be the year so
selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
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SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved (including, without limitation, as a witness)
in any actual or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a Director or officer of the corporation or that,
being or having been such a Director or officer or an employee of the
corporation, he or she is or was serving at the request of the corporation as a
Director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as such a Director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the full extent permitted by the DGCL, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than permitted prior thereto), or by other applicable law as then in
effect, against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) actually and reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue as to an indemnitee
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and administrators; provided,
however, that except as provided in subsection 10.2 hereof with respect to
proceedings seeking to enforce rights to indemnification, the corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
was authorized or ratified by the Board. The right to indemnification conferred
in this subsection 10.1 shall be a contract right and shall include the right
to be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter and "advancement of
expenses"); provided, however, that if the DGCL requires, an advancement of
expenses incurred by an indemnitee in his or her capacity as a Director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the corporation of an undertaking
(hereinafter an
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"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at any
time thereafter bring suit against the corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall be entitled to be paid also the
expense of prosecuting or defending such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Section upon submission of a
written claim (and, in an action brought to enforce a claim for an advancement
of expenses, where the required undertaking, if any is required, has been
tendered to the corporation), and thereafter the corporation shall have the
burden of proof to overcome the presumption that the indemnitee is not so
entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances nor an actual determination by the corporation
(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the indemnitee is not so entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses
conferred in this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, agreement, vote of
stockholders or disinterested Directors, provision of the Certificate of
Incorporation or By-laws of the corporation or otherwise. Notwithstanding any
amendment to or repeal of this Section, any indemnitee shall be entitled to
indemnification in accordance with the provision hereof with respect to any
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acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect
itself and any Director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the DGCL. The corporation, without further stockholder approval, may enter
into contracts with any Director, officer, employee or agent in furtherance of
the provisions of this Section and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement of
expenses of Directors and officers of the corporation; provided, however, that
an undertaking shall be made by an employee or agent only if required by the
Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the
corporation who is or was serving (a) as a Director or officer of another
corporation of which a majority of the shares entitled to vote in the election
of its Directors is held by the corporation or (b) in an executive or management
capacity in a partnership, joint venture, trust or other enterprise of which the
corporation or a wholly owned subsidiary of the corporation is a general partner
or has a majority ownership shall be deemed to be so serving at the request of
the corporation and entitled to indemnification and advancement of expenses
under subsection 10.1 hereof.
23
<PAGE> 29
SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be adopted
by the Board. The stockholders may also amend and repeal these By-laws or adopt
new By-laws. All By-laws made by the Board may be amended or repealed by the
stockholders. notwithstanding any amendment to Section 10 hereof or repeal of
these By-laws, or of any amendment or repeal of any of the procedures that may
be established by the Board pursuant to Section 10 hereof, any indemnitee shall
be entitled to indemnification in accordance with the provisions hereof and
thereof with respect to any acts or omissions of such indemnitee occurring prior
to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed to
include the following and their representatives: an individual not a citizen of
the United States of America; a partnership unless a majority of the partners
are citizens of the United States of America and have a majority interest in the
partnership profits; a foreign government; a corporation, jointstock company or
association organized under the laws of a foreign country; and any other
corporation, joint-stock company or association directly or indirectly
controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of voting
stock of the corporation of any stock outstanding shall at any time be owned of
record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the account of
Aliens, and the citizenship of transferees thereof, shall be determined in
conformity with regulation prescribed by the Board. There shall be maintained
separate stock records, a domestic record of shares of stock held by citizens
and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to an
Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
24
<PAGE> 30
Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than one-fourth
of the directors are Aliens, or of which more than one-fourth of the stock is
owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such other
provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in effect
or as it may hereafter from time to time be amended, and to carry out the
provisions of this Section 12 and of Article 12 of the Restated Certificate of
Incorporation.
*****
The foregoing By-laws were adopted by the Board of Directors on January
27, 1998. Section 10 hereof ("Indemnification") was approved by the sole
stockholder on January 28, 1998.
----------------------------
Assistant Secretary
25
<PAGE> 1
EXHIBIT 3.35
CERTIFICATE OF INCORPORATION
OF
WTNH BROADCASTING, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware (particularly Chapter
1, Title 8 of the Delaware Code, and the acts amendatory thereof and
supplemental thereto, and known, identified, and referred to as the
"General Corporation Law of the State of Delaware"), hereby certifies
that:
ARTICLE 1. NAME
The name of this corporation is WTNH Broadcasting, Inc.
ARTICLE 2. REGISTERED AGENT AND OFFICE
The address of the initial registered office of this
corporation is Suite L-100, 32 Loockerman Square, City of Dover, County
of Kent, Delaware, 19904; and the name of the registered agent of the
corporation in the State of Delaware is The Prentice-Hall Corporation
System, Inc.
ARTICLE 3. PURPOSE
The purpose of this corporation is to engage in any lawful act
or activity for which corporations may be organized under the Delaware
General Corporation Law (the "DGCL").
ARTICLE 4. SHARES
The total number of shares of stock which the corporation
shall have the authority to issue is 1,000. The par value of each such
shares is $.01. All such shares are of one class and are shares of
Common Stock.
ARTICLE 5. INCORPORATOR
The name and address of the incorporator are as follows:
Gayle C. Toney, c/o LIN Broadcasting Corporation, 5295
Carillon Point,
Kirkland, Washington 98033
<PAGE> 2
ARTICLE 6. BY-LAWS
The Board of Directors shall have the power to adopt, amend or
repeal the By-laws of this corporation; provided, however, that the
Board of Directors may not repeal or amend any By-law that the
stockholders have expressly provided may not be amended or repealed by
the Board of Directors. The stockholders shall also have the power to
adopt, amend or repeal the By-laws.
ARTICLE 7. BOARD OF DIRECTORS
The number of Directors of this corporation shall be
determined in the manner provided by the By-laws and may be increased
or decreased from time to time in the manner provided therein. Written
ballots are not required in the election of Directors.
ARTICLE 8. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of
stock or securities convertible into shares of stock of this
corporation.
ARTICLE 9. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall
not exist with respect to shares of stock of this corporation.
ARTICLE 10. AMENDMENTS TO CERTIFICATE OF
INCORPORATION
This corporation reserves the right to amend or repeal any of
the provisions contained in this Certificate of Incorporation in any
manner now or hereafter permitted by law, and the rights of the
stockholders of this corporation are granted subject to this
reservation.
Article 11. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the DGCL, as it exists on the date
hereof or may hereafter be amended, permits the limitation or
elimination of the liability of directors, a director of this
corporation shall not be liable to this corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director. Any
amendment to or repeal of this Article 11 shall not adversely affect
any right or protection of a director of this corporation for or with
respect to any acts of omissions of such director occurring prior to
such amendment or repeal. In
2
<PAGE> 3
addition to any requirements or any other provisions herein or in the
terms of any class or series of capital stock having a preference over
the common stock of this corporation as to dividends or upon
liquidation (and notwithstanding that a lesser percentage may be
specified by law), the affirmative vote of the holders of 80% or more
of the voting power of the outstanding voting stock of this
corporation, voting together as a single class, shall be required to
amend, alter or repeal any provision of this Article 11.
Signed on September 28, 1994.
----------------------------------
Gayle C. Toney, Incorporator
3
<PAGE> 1
EXHIBIT 3.36
BY-LAWS
OF
WTNH BROADCASTING, INC.
Originally adopted on October 3, 1994
Amendments are listed on p. i
<PAGE> 2
WTNH BROADCASTING, INC.
AMENDMENTS
Date of
Section Effect of Amendment Amendment
- ------- ------------------- ---------
i
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SECTION 1. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.4 Notice of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.1 Waiver in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5.2 Waiver by Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6 Fixing of Record Date for Determining Stockholders . . . . . . . . . . . . . . . 3
2.6.1 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.6.2 Consent to Corporate Action Without a Meeting . . . . . . . . . . . . . . . . 3
2.6.3 Dividends, Distributions and Other Rights . . . . . . . . . . . . . . . . . . 4
2.7 Voting List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10.2 Delivery to Corporation; Duration . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.12 Voting for Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.13 Action by Stockholders Without a Meeting . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 General Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Number and Tenure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Annual and Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Meetings by Telephone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Notice of Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.1 Personal Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.2 Delivery by Mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.3 Delivery by Private Carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.4 Facsimile Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6.5 Delivery by Telegraph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
3.6.6 Oral Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.1 In Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7.2 By Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.8 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Presumption of Assent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Action by Board or Committees Without a Meeting . . . . . . . . . . . . . . . . . 11
3.12 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.14 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15.1 Creation and Authority of Committees . . . . . . . . . . . . . . . . . . . 12
3.15.2 Minutes of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.3 Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.4 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.15.5 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.16 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Election and Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.7 President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.10 Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . . . . . . . . . . 17
5.1 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Loans to the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Check, Drafts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 6. CERTIFICATES FOR SHARES AND THEIR
TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Issuance of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Certificates for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Stock Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Restriction on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.6 Lost or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8. ACCOUNTING YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 10. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.1 Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.2 Right of Indemnitee to Bring Suit . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.3 Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.4 Insurance, Contracts and Funding . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.5 Indemnification of Employees and Agents of the Corporation . . . . . . . . . . . . 23
10.6 Persons Serving other Entities . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 11. AMENDMENTS OR REPEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12. OWNERSHIP OR VOTING BY ALIENS . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
iv
<PAGE> 6
BY-LAWS
OF
WTNH BROADCASTING, INC.
SECTION 1. OFFICES
The principal office of the corporation shall be located at its principal
place of business or such other place as the Board of Directors (the "Board")
may designate. The corporation may have such other offices, either within or
without the State of Delaware, as the Board may designate or as the business of
the corporation may require from time to time.
SECTION 2. STOCKHOLDERS
2.1 ANNUAL MEETING
The annual meeting of the stockholders shall be held the first Tuesday in
March in each year at the principal office of the corporation or such other
place designated by the Board for the purpose of electing Directors and
transacting such other business as may properly come before the meeting. If the
day fixed for the annual meeting is a legal holiday at the place of the meeting,
the meeting shall be held on the next succeeding business day. If the annual
meeting is not held on the date designated therefor, the Board shall cause the
meeting to be held as soon thereafter as may be convenient.
2.2 SPECIAL MEETINGS
The Chairman of the Board, the President, the Board or the holders of not
less than one-tenth of all the outstanding shares of the corporation entitled to
vote at the meeting may call special meetings of the stockholders for any
purpose.
2.3 PLACE OF MEETING
All meetings shall be held at the principal office of the corporation or at
such other place within or without the State of Delaware designated by the
<PAGE> 7
Board, by any persons entitled to call a meeting hereunder or in a waiver of
notice signed by all of the stockholders entitled to notice of the meeting.
2.4 NOTICE OF MEETING
The Chairman of the Board, the President, the Secretary, the Board, or
stockholders calling an annual or special meeting of stockholders as provided
for herein, shall cause to be delivered to each stockholder entitled to notice
of or to vote at the meeting, either personally or by mail, not less than ten
nor more than sixty days before the meeting, written notice stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. At any time, upon written request
of the holders of not less than the number of outstanding shares of the
corporation specified in subsection 2.2 hereof and entitled to vote at the
meeting, it shall be the duty of the Secretary to give notice of a special
meeting of stockholders to be held on such date and at such place and hour as
the Secretary may fix, not less than ten nor more than sixty days after receipt
of said request, and if the Secretary shall neglect or refuse to issue such
notice, the person making the request may do so and may fix the date for such
meeting. If such notice is mailed, it shall be deemed delivered when deposited
in the official government mail properly addressed to the stockholder at such
stockholder's address as it appears on the stock transfer books of the
corporation with postage prepaid. If the notice is telegraphed, it shall be
deemed delivered when the content of the telegram is delivered to the telegraph
company. Notice given in any other manner shall be deemed delivered when
dispatched to the stockholder's address, telephone number or other number
appearing on the stock transfer records of the corporation.
2.5 WAIVER OF NOTICE
2.5.1 WAIVER IN WRITING
Whenever any notice is required to be given to any stockholder under the
provisions of the By-laws, the Certificate of Incorporation or the General
Corporation Law of the State of Delaware, as now or hereafter amended (the
"DGCL"), a waiver thereof in writing, signed by the person or person entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
2
<PAGE> 8
2.5.2 WAIVER BY ATTENDANCE
The attendance of a stockholder at a meeting shall constitute a waiver of
notice of such meeting, except when a stockholder attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
2.6 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
2.6.1 MEETINGS
For the purpose of determining stockholders entitled to notice of and to
vote at any meeting of stockholders or any adjournment thereof, the Board may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which record date
shall not be more than sixty (or the maximum number permitted by applicable
law) nor less than ten days before the date of such meeting. If no record date
is fixed by the Board, the record date for determining stockholders entitled to
notice of and to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of and to vote at the meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board may fix a new
record date for the adjourned meeting.
2.6.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING
For the purpose of determining stockholders entitled to consent to
corporate action in writing without a meeting, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board, and which date shall not be more than
ten (or the maximum number permitted by applicable law) days after the date upon
which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by Chapter
3
<PAGE> 9
1 of the DGCL, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to a corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board and prior action by the Board is required by
Chapter 1 of the DGCL, the record date for determining stockholders entitled to
consent to corporate action is writing without a meeting shall be at the close
of business on the day on which the Board adopts the resolution taking such
prior action.
2.6.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS
For the purpose of determining stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty (or the maximum number permitted by
applicable law) days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto.
2.7 VOTING LIST
At least ten days before each meeting of stockholders, a complete list
of the stockholders entitled to vote at such meeting, or any adjournment
thereof, shall be made, arranged in alphabetical order, with the address of and
number of shares held by each stockholder. This list shall be open to
examination by any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. This list shall also be produced and
kept at such meeting for inspection by any stockholder who is present.
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2.8 QUORUM
A majority of the outstanding shares of the corporation entitled to
vote, present in person or represented by proxy at the meeting, shall
constitute a quorum at a meeting of the stockholders; provided, that where a
separate vote by a class or classes is required, a majority of the outstanding
shares of such class or classes, present in person or represented by proxy at
the meeting, shall constitute a quorum entitled to take action with respect to
that vote on that matter. If less than a majority of the outstanding shares
entitled to vote are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
If a quorum is present or represented at a reconvened meeting following such an
adjournment, any business may be transacted that might have been transacted at
the meeting as originally called. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
2.9 MANNER OF ACTING
In all matters other than the election of Directors, if a quorum is
present, the affirmative vote of the majority of the outstanding shares present
in person or represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these By-laws, the Certificate of Incorporation
or the DGCL. Where a separate vote by a class or classes is required, if a
quorum of such class or classes is present, the affirmative vote of the
majority of outstanding shares of such class or classes present in person or
represented by proxy at the meeting shall be the act of such class or classes.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of Directors.
2.10 PROXIES
2.10.1 APPOINTMENT
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting
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may authorize another person or persons to act for such stockholder by proxy.
Such authorization may be accomplished by (a) the stockholder or such
stockholder's authorized officer, director, employee or agent executing a
writing or causing his or her signature to be affixed to such writing by any
reasonable means, including facsimile signature or (b) by transmitting or
authorizing the transmission to the intended holder of the proxy or to a proxy
solicitation firm, proxy support service or similar agent duly authorized by
the intended proxy holder to receive such transmission; provided, that any such
telegram, cablegram or other electronic transmission must either set forth or
be accompanied by information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by the
stockholder. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission by which a stockholder has
authorized another person to act as proxy for such stockholder may be
substituted or used in lieu of the original writing or transmission for any and
all purposes for which the original writing or transmission could be used,
provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or
transmission.
2.10.2 DELIVERY TO CORPORATION; DURATION
A proxy shall be filed with the Secretary before or at the time of the
meeting or the delivery to the corporation of the consent to corporate action
in writing. A proxy shall become invalid three years after the date of its
execution unless otherwise provided in the proxy. A proxy with respect to a
specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
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2.11 VOTING OF SHARES
Each outstanding share entitled to vote with respect to the subject
matter of an issue submitted to a meeting of stockholders shall be entitled to
one vote upon each issue.
2.12 VOTING FOR DIRECTORS
Each stockholder entitled to vote at an election of Directors may
vote, in person or by proxy, the number of shares owned by such stockholder for
as many persons as there are Directors to be elected and for whose election
such stockholder has a right to vote.
2.13 ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action which could be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by all stockholders entitled to vote with respect to the
subject matter thereof (as determined in accordance with subsection 2.6.2
hereof) and (b) be delivered to the corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the corporation having custody of the records of proceeding of
meetings of stockholders. Delivery made to the corporation's registered office
shall be by hand or by certified mail or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless written consents signed by
all stockholders entitled to vote with respect to the subject matter thereof
are delivered to the corporation, in the manner required by this Section,
within sixty (or the maximum number permitted by applicable law) days of the
earliest dated consent delivered to the corporation in the manner required by
this Section. The validity of any consent executed by a proxy for a stockholder
pursuant to a telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization of the
stockholder shall be determined by or at the direction of the Secretary. A
written record of the information upon which the person making such
determination relied shall be made and kept in the records of the proceedings
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of the stockholders. Any such consent shall be inserted in the minute book as
if it were the minutes of the stockholders.
SECTION 3. BOARD OF DIRECTORS
3.1 GENERAL POWERS
The business and affairs of the corporation shall be managed by the Board.
3.2 NUMBER AND TENURE
The Board shall be composed of not less than two nor more than five
Directors, the specific number to be set by resolution of the Board. The number
of Directors may be changed from time to time by amendment to these By-laws,
but no decrease in the number of Directors shall have the effect of shortening
the term of any incumbent Director. Unless a Director dies, resigns, or is
removed, he or she shall hold office until the next annual meeting of
stockholders or until his or her successor is elected, whichever is later.
Directors need not be stockholders of the corporation or residents of the State
of Delaware.
3.3 ANNUAL AND REGULAR MEETINGS
An annual Board meeting shall be held without notice immediately after
and at the same place as the annual meeting of stockholders. By resolution, the
Board or any committee designated by the Board may specify the time and place
either within or without the State of Delaware for holding regular meetings
thereof without other notice than such resolution.
3.4 SPECIAL MEETINGS
Special meetings of the Board or any committee appointed by the Board
may be called by or at the request of the Chairman of the Board, the President,
the Secretary or, in the case of special Board meetings, any Director and, in
the case of any special meeting of any committee appointed by the Board, by the
Chairman thereof. The person or persons authorized to call special meetings may
fix any place either within or without the State of Delaware as the place for
holding any special meeting called by them.
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3.5 MEETINGS BY TELEPHONE
Members of the Board or any committee designated by the Board may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation by such means
shall constitute presence in person at a meeting.
3.6 NOTICE OF SPECIAL MEETINGS
Notice of a special Board or committee meeting stating the place, day
and hour of the meeting shall be given to a Director in writing or orally by
telephone or in person. Neither the business to be transacted at, nor the
purpose of, any special meeting need be specified in the notice of such
meeting.
3.6.1 PERSONAL DELIVERY
If notice is given by personal delivery, the notice shall be effective
if delivered to a Director at least two days before the meeting.
3.6.2 DELIVERY BY MAIL
If notice is delivered by mail, the notice shall be deemed effective if
deposited in the official government mail properly address to a Director at his
or her address shown on the records of the corporation with postage prepaid at
least five days before the meeting.
3.6.3 DELIVERY BY PRIVATE CARRIER
If notice is given by private carrier, the notice shall be deemed
effective when dispatched to a Director at his or her address shown on the
records of the corporation at least three days before the meeting.
3.6.4 FACSIMILE NOTICE
If notice is delivered by wire or wireless equipment which transmits a
facsimile of the notice, the notice shall be deemed effective when dispatched
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at least two days before the meeting to a Director at his or her telephone
number or other number appearing on the records of the corporation.
3.6.5 DELIVERY BY TELEGRAPH
If notice is delivered by telegraph, the notice shall be deemed
effective if the content thereof is delivered to the telegraph company at least
two days before the meeting for delivery to a Director at his or her address
shown on the records of the cooperation.
3.6.6 ORAL NOTICE
If notice is delivered orally, by telephone or in person, the notice
shall be deemed effective if personally given to the Director at least two days
before the meeting.
3.7 WAIVER OF NOTICE
3.7.1 IN WRITING
Whenever any notice is required to be given to any Director under the
provision of these By-laws, the Certificate of Incorporation or the DGCL, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the waiver of notice of
such meeting.
3.7.2 BY ATTENDANCE
The attendance of a Director at a Board or committee meeting shall
constitute a waiver of notice of such meeting, except when a Director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened.
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3.8 QUORUM
A majority of the total number of Directors fixed by or in the manner
provided in these By-laws or, if vacancies exist on the Board, a majority of
the total number of Directors then serving on the Board, provided, however,
that such number may not be less than one-third of the total number of
Directors fixed by or in the manner provided in these By-laws, shall constitute
a quorum for the transaction of business at any Board meeting. If less than a
majority are present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
3.9 MANNER OF ACTING
The act of the majority of the Directors present at a Board or
committee meeting at which there is a quorum shall be the act of the or
committee, unless the vote of a greater number is required by these By-laws,
the Certificate of Incorporation or the DGCL.
3.10 PRESUMPTION OF ASSENT
A Director of the corporation present at a Board or committee meeting
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his or her dissent is entered in the
minutes of the meeting, or unless such Director files a written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof, or forward such dissent by registered mail to the
Secretary of the corporation immediately after the adjournment of the meeting.
A Director who voted in favor of such action may not dissent.
3.11 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING
Any action which could be taken at a meeting of the Board or of any
committee appointed by the Board may be taken without a meeting if a written
consent setting forth the action so taken is signed by each of the Directors or
by each committee member. Any such written consent shall be inserted in the
minute book as if it were the minutes of a Board or a committee meeting.
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3.12 RESIGNATION
Any Director may resign at any time by delivering written notice to
the Chairman of the Board, the President, the Secretary or the Board, or to the
registered office of the corporation. Any such resignation shall take effect at
the time specified therein, or if the time is not specified, upon delivery
thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
3.13 REMOVAL
At a meeting of stockholders called expressly for that purpose, one or
more members of the Board (including the entire Board) may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote on the election of Directors.
3.14 VACANCIES
Any vacancy occurring on the Board may be filled by the affirmative
vote of a majority of the remaining Directors though less than a quorum of the
Board. A Director elected to fill a vacancy shall be elected for the unexpired
term of his or her predecessor in office. Any directorship to be filled by
reason of an increase in the number of Directors may be filled by the Board.
3.15 COMMITTEES
3.15.1 CREATION AND AUTHORITY OF COMMITTEES
The Board may, by resolution passed by a majority of the number of
Directors fixed by or in the manner provided in these By-laws, appoint standing
or temporary committees, each committee to consist of one or more Directors of
the corporation. The Board may designate one or more Directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the
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resolution of the Board establishing such committee or as otherwise provided in
these By-laws, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which require
it; but no such committee shall have the power to authority in reference to (a)
amending the Certificate of Incorporation (except that a committee may, to the
extent authorized in the resolution or resolutions providing for the issuance
of shares of stock adopted by the Board as provided in Section 151(a) of the
DGCL, fix the designations, preferences or rights of such shares to the extent
permitted under Section 141 of the DGCL), (b) adopting an agreement of merger
or consolidation under Sections 251 or 252 of the DGCL, (c) recommending to the
stockholders the sale, lease or exchange or other disposition of all or
substantially all of the property and assets of the corporation, (d)
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or (e) amending these Bylaws; and, unless
expressly provided by resolution of the Board, no such committee shall have the
power or authority to declare a dividend, to authorize the issuance of stock or
to adopt a certificate of ownership and merger pursuant to Section 253 of the
DGCL.
3.15.2 MINUTES OF MEETINGS
All committees so appointed shall keep regular minutes of their
meetings and shall cause them to be recorded in book kept for that purpose.
3.15.3 QUORUM AND MANNER OF ACTING
A majority of the number of Directors composing any committee of the
Board,, as established and fixed by resolution of the Board, shall constitute a
quorum for the transaction of business at any meeting of such committee but, if
less than a majority are present at a meeting, a majority of such Directors
present may adjourn the meeting from time to time without further notice. The
act of a majority of the members of a committee present at a meeting at which a
quorum is present shall be the act of such committee.
3.15.4 RESIGNATION
Any member of any committee may resign at any time by delivering
written notice thereof to the Chairman of the Board, the President, the
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Secretary, the Board or the Chairman of such committee. Any such resignation
shall take effect at the time specified therein, or if the time is not
specified, upon delivery thereof and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
3.15.5 REMOVAL
The Board may remove from office any member of any committee elected
or appointed by it, but only by the affirmative vote of not less than a
majority of the number of Directors fixed by or in the manner provided in these
By-laws.
3.16 COMPENSATION
By Board resolution, Directors and committee members may be paid their
expenses, if any, of attendance at each Board or committee meeting, or a fixed
sum for attendance at each Board or committee meeting, or a stated salary as
Director or a committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 4. OFFICERS
4.1 NUMBER
The officers of the corporation shall be a President, a Secretary and
a Treasurer, each of whom shall be elected by the Board. One or more Vice
Presidents and such other officers and assistant officers, including a Chairman
of the Board, may be elected or appointed by the Board, such officers and
assistant officers to hold office for such period, have such authority and
perform such duties as are provided in these By-laws or as may be provided by
resolution of the Board. Any officer may be assigned by the Board any
additional title that the Board deems appropriate. The Board may delegate to
any officer or agent the power to appoint any such subordinate officers or
agents and to prescribe their respective terms of office, authority and duties.
Any two or more offices may be held by the same person.
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4.2 ELECTION AND TERM OF OFFICE
The officers of the corporation shall be elected annually by the Board
at the Board meeting held after the annual meeting of the stockholders. If the
election of officers is not held at such meeting, such election shall be held
as soon thereafter as a Board meeting conveniently may be held. Unless an
officer dies, resigns or is removed from office, he or she shall hold office
until the next annual meeting of the Board or until his or her successor is
elected.
4.3 RESIGNATION
Any officer may resign at any time by delivering written notice to the
Chairman of the Board, the President, a Vice President, the Secretary or the
Board. Any such resignation shall take effect at the time specified therein, or
if the time is not specified, upon delivery thereof and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
4.4 REMOVAL
Any officer or agent elected or appointed by the Board may be removed
by the Board whenever in its judgment the best interests of the corporation
would be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
4.5 VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, creation of a new office or any other cause may be filled by
the Board for the unexpired portion of the term, or for a new term established
by the Board.
4.6 CHAIRMAN OF THE BOARD
If elected, the Chairman of the Board shall perform such duties as
shall be assigned to him or her by the Board from time to time and shall
preside over meetings of the Board and stockholders unless another officer is
appointed or designated by the Board as Chairman of such meeting.
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4.7 PRESIDENT
The President shall be the chief executive officer of the corporation
unless some other officer is so designated by the Board, shall preside over
meetings of the Board and stockholders in the absence of a Chairman of the
Board and, subject to the Board's control, shall supervise and control all of
the assets, business and affairs of the corporation. The President may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these By-laws to some other officer or
agent of the corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In general, the
President shall perform all duties incident to the office of President and such
other duties as are prescribed by the Board from time to time.
4.8 VICE PRESIDENT
In the event of the death of the President or his or her inability to
act, the Vice President (or if there is more than one Vice President, the Vice
President who was designated by the Board as the successor to the President, or
if no Vice President is so designated, the Vice President first elected to such
office) shall perform the duties of the President, except as may sign with the
Secretary or any Assistant Secretary certificates for shares of the
corporation. Vice Presidents shall have, to the extent authorized by the
President of the Board, the same powers as the President to sign deeds,
mortgages, bonds, contracts or other instruments. Vice Presidents shall perform
such other duties as from time to time may be assigned to them by the President
or by the Board.
4.9 SECRETARY
The Secretary shall be responsible for preparation of minutes of
meetings of the Board and stockholders, maintenance of the corporation's
records and stock registers, and authentication of the corporation's records
and shall in general perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him or her by the
president or by the Board. In absence of the Secretary, an Assistant Secretary
may perform the duties of the Secretary.
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4.10 TREASURER
If required by the Board, the Treasurer shall give a bond for the
faithful discharge of his or her duties in such amount and with such surety or
sureties as the Board shall determine. The Treasurer shall have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in banks, trust companies or other depositories selected in
accordance with the provision of these By-laws; sign certificates for shares of
the corporation; and in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him or her by the President or by the Board. In the absence of the
Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.
4.11 SALARIES
The salaries of the officers shall be fixed from time to time by the
Board or by any person or person to whom the Board has delegated such
authority. No officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a Director of the corporation.
SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 CONTRACTS
The Board may authorize any officer or officers, or agent or agents,
to enter into any contract or execute and deliver any instrument in the name of
and on behalf of the corporation. Such authority may be general or confined to
specific instances.
5.2 LOANS TO THE CORPORATION
No loans shall be contracted on behalf of the corporation and no
evidences of indebtedness shall be issued in its name unless authorized by a
resolution of the Board. Such authority may be general or confined to specific
instances.
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5.3 CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, or agent or agents, of the corporation and
in such manner as is from time to time determined by resolution of the Board.
5.4 DEPOSITS
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositories as the Board may select.
SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 ISSUANCE OF SHARES
No shares of the corporation shall be issued unless authorized by the
Board, which authorization shall include the maximum number of shares to be
issued and the consideration to be received for each share.
6.2 CERTIFICATES FOR SHARES
Certificates representing shares of the corporation shall be signed by
the Chairman of the Board or a Vice Chairman of the Board, if any, or the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, any of whose signatures may be a
facsimile. The Board may in its discretion appoint responsible banks or trust
companies from time to time to act as transfer agents and registrars of the
stock of the corporation; and, when such appointments shall have been made, no
stock certificate shall be valid until countersigned by one of such transfer
agents and registered by one of such registrars. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person was such officer, transfer
agent or registrar at the date of issue. All certificates shall include on
their face written notice of any restriction which may be imposed on the
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transferability of such shares and shall be consecutively numbered or otherwise
identified.
6.3 STOCK RECORDS
The stock transfer books shall be kept at the registered office or
principal place of business of the corporation or at the office of the
corporation's transfer agent or registrar. The name and address of each person
to whom certificates for shares are issued, together with the class and number
of shares represented by each such certificate and the date of issue thereof,
shall be entered on the stock transfer books of the corporation. The person in
whose name shares stand on the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.4 RESTRICTION ON TRANSFER
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, or has otherwise satisfied itself
that such transfer restriction are not required, all certificates representing
shares of the corporation shall bear a legend on the face of the certificate,
or on the reverse of the certificate if a reference to the legend is contained
on the face, which reads substantially as follows:
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law, and no
interest therein may be sold, distributed, assigned, offered, pledged
or otherwise transferred unless (a) there is an effective registration
statement under such Act and applicable state securities laws covering
any such transaction involving said securities or (b) this corporation
receives an opinion of legal counsel for the holder of these
securities (concurred in by legal counsel for this corporation)
stating that such transaction is exempt from registration or (c) this
corporation otherwise satisfies itself that such transaction is exempt
from registration. Neither the offering of the securities nor any
offering materials have been reviewed by any administrator under the
Securities Act of 1933 or any applicable state law."
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6.5 TRANSFER OF SHARES
The transfer of shares of the corporation shall be made only on the
stock transfer books of the corporation pursuant to authorization or document
of transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed
and filed with the Secretary of the corporation. All certificates surrendered
to the corporation for transfer shall be canceled and no new certificate shall
be issued until the former certificates for a like number of shares shall have
been surrendered and canceled.
6.6 LOST OR DESTROYED CERTIFICATES
In the case of a lost, destroyed or mutilated certificate, a new
certificate may be issued therefor upon such terms and indemnity to the
corporation as the Board may prescribe.
SECTION 7. BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account, stock transfer books, minutes of the proceeding of its stockholders
and Board and such other records as may be necessary or advisable.
SECTION 8. ACCOUNTING YEAR
The accounting year of the corporation shall be the calendar year,
provided that if a different accounting year is at any time selected for
purposes of federal income taxes, the accounting year shall be the year so
selected.
SECTION 9. SEAL
The seal of the corporation, if any, shall consist of the name of the
corporation, the state of its incorporation and the year of its incorporation.
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SECTION 10. INDEMNIFICATION
10.1 RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved (including, without limitation, as a witness)
in any actual or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a Director or officer of the
corporation or that, being or having been such a Director or officer or an
employee of the corporation, he or she is or was serving at the request of the
corporation as a Director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as such
a Director, officer, employee or agent, shall be indemnified and held harmless
by the corporation to the full extent permitted by the DGCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to
the extent that such amendment permits the corporation to provide broader
indemnification rights than permitted prior thereto), or by other applicable
law as then in effect, against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) actually and reasonably incurred or suffered by such
indemnitee in connection therewith and such indemnification shall continue as
to an indemnitee who has ceased to be a Director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that except as provided in subsection 10.2
hereof with respect to proceedings seeking to enforce rights to
indemnification, the corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) was authorized or ratified by
the Board. The right to indemnification conferred in this subsection 10.1 shall
be a contract right and shall include the right to be paid by the corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter and "advancement of expenses"); provided, however,
that if the DGCL requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a Director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the corporation of an undertaking (hereinafter an
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"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled
to be indemnified for such expenses under this subsection 10.1 or otherwise.
10.2 RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under subsection 10.1 hereof is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in
a suit brought by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. The indemnitee
shall be presumed to be entitled to indemnification under this Section upon
submission of a written claim (and, in an action brought to enforce a claim for
an advancement of expenses, where the required undertaking, if any is required,
has been tendered to the corporation), and thereafter the corporation shall
have the burden of proof to overcome the presumption that the indemnitee is not
so entitled. Neither the failure of the corporation (including its Board,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee
is proper in the circumstances nor an actual determination by the corporation
(including its Board, independent legal counsel or its stockholders) that the
indemnitee is not entitled to indemnification shall be a defense to the suit or
create a presumption that the indemnitee is not so entitled.
10.3 NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses
conferred in this Section shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, agreement, vote of
stockholders or disinterested Directors, provision of the Certificate of
Incorporation or By-laws of the corporation or otherwise. Notwithstanding any
amendment to or repeal of this Section, any indemnitee shall be entitled to
indemnification in accordance with the provision hereof with respect to any
22
<PAGE> 28
acts or omissions of such indemnitee occurring prior to such amendment or
repeal.
10.4 INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect
itself and any Director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the DGCL. The corporation, without further stockholder approval, may
enter into contracts with any Director, officer, employee or agent in
furtherance of the provisions of this Section and may create a trust fund,
grant a security interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such amounts as may be necessary to
effect indemnification as provided in this Section.
10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION
The corporation may, by action of the Board, grant rights to
indemnification and advancement of expenses to employees or agents or groups of
employees or agents of the corporation with the same scope and effect as the
provision of this Section with respect to the indemnification and advancement
of expenses of Directors and officers of the corporation; provided, however,
that an undertaking shall be made by an employee or agent only if required by
the Board.
10.6 PERSONS SERVING OTHER ENTITIES
Any person who is or was a Director, officer or employee of the
corporation who is or was serving (a) as a Director or officer of another
corporation of which a majority of the shares entitled to vote in the election
of its Directors is held by the corporation or (b) in an executive or
management capacity in a partnership, joint venture, trust or other enterprise
of which the corporation or a wholly owned subsidiary of the corporation is a
general partner or has a majority ownership shall be deemed to be so serving at
the request of the corporation and entitled to indemnification and advancement
of expenses under subsection 10.1 hereof.
23
<PAGE> 29
SECTION 11. AMENDMENTS OR REPEAL
These By-laws may be amended or repealed and new By-laws may be
adopted by the Board. The stockholders may also amend and repeal these By-laws
or adopt new By-laws. All By-laws made by the Board may be amended or repealed
by the stockholders. notwithstanding any amendment to Section 10 hereof or
repeal of these By-laws, or of any amendment or repeal of any of the procedures
that may be established by the Board pursuant to Section 10 hereof, any
indemnitee shall be entitled to indemnification in accordance with the
provisions hereof and thereof with respect to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
SECTION 12. OWNERSHIP OR VOTING BY ALIENS
(a) As used in these By-laws, the word "Alien" shall be construed
to include the following and their representatives: an individual not a citizen
of the United States of America; a partnership unless a majority of the
partners are citizens of the United States of America and have a majority
interest in the partnership profits; a foreign government; a corporation,
joint-stock company or association organized under the laws of a foreign
country; and any other corporation, joint-stock company or association directly
or indirectly controlled by one or more of the foregoing.
(b) Not more than one-fifth of the aggregate number of shares of
voting stock of the corporation of any stock outstanding shall at any time be
owned of record or voted by or for the account of Aliens.
(c) The ownership of record of shares of stock by of for the
account of Aliens, and the citizenship of transferees thereof, shall be
determined in conformity with regulation prescribed by the Board. There shall
be maintained separate stock records, a domestic record of shares of stock held
by citizens and a foreign record of shares of stock held by Aliens.
(d) Every certificate representing stock issued or transferred to
an Alien shall be marked "Foreign Share Certificate, but under no circumstances
shall certificates representing more than one-fifth of the aggregate number of
shares of voting stock of any class outstanding at any one time be so marked,
nor shall the total amount of voting stock represented by Foreign Share
Certificates, plus the amount of voting stock owned by or for the account of
24
<PAGE> 30
Aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of shares of voting stock of any class outstanding. Every
certificate issued not marked "Foreign Share Certificate" shall be marked
"Domestic Share Certificate." Any stock represented by Foreign Share
Certificates may be transferred to either Aliens or non-Aliens.
(e) If, and so long as, the stock records of the corporation shall
disclose that one-fifth of the outstanding shares of voting stock of any class
is owned by Aliens, no transfer of shares of such class represented by Domestic
Share Certificates shall be made to Aliens, and if it shall be found by the
corporation that stock represented by a Domestic Share Certificate is, in fact,
held by or for the account of an Alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to have other right, except the right
to transfer such stock to a citizen of the United States of America.
(f) The corporation shall not be owned or controlled directly or
indirectly by any other corporation of which any officer or more than
one-fourth of the directors are Aliens, or of which more than one-fourth of
the stock is owned of record or voted by Aliens.
(g) The Board may, at any time and from time to time, adopt such
other provision as the Board may deem necessary or desirable to comply with the
provisions of Section 310(a) of the Federal Communications Act as now in
effect or as it may hereafter from time to time be amended, and to carry out
the provisions of this Section 12 and of Article 12 of the Restated Certificate
of Incorporation.
****
The foregoing By-laws were adopted by the Board of Directors on
October 3, 1994. Section 10 hereof ("Indemnification") was approved by the sole
stockholder on October 3, 1994.
---------------------------
Secretary
25
<PAGE> 1
EXHIBIT 4.1
================================================================================
INDENTURE
DATED AS OF MARCH 3, 1998
AMONG
LIN ACQUISITION COMPANY, AS ISSUER,
AND
THE GUARANTORS NAMED HEREIN
AND
UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE
------------------
$300,000,000
8 3/8% SENIOR SUBORDINATED NOTES DUE 2008, SERIES A
8 3/8% SENIOR SUBORDINATED NOTES DUE 2008, SERIES B
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
- --------------- ---------
<S> <C>
ss.310(a)(1)....................................................................... 8.10
(a)(2)........................................................................ 8.10
(a)(3)........................................................................ N.A.
(a)(4)........................................................................ N.A.
(a)(5)........................................................................ 8.08, 8.10
(b)........................................................................... 8.08; 8.10; 13.02
(c)........................................................................... N.A.
ss.311(a).......................................................................... 8.11
(b)........................................................................... 8.11
(c)........................................................................... N.A.
ss.312(a)........................................................................... 2.05
(b)........................................................................... 13.03
(c)........................................................................... 13.03
ss.313(a)........................................................................... 8.06
(b)(1)........................................................................ N.A.
(b)(2)........................................................................ 8.06
(c)........................................................................... 8.06; 13.02
(d)........................................................................... 8.06
ss.314(a)........................................................................... 4.11; 4.12, 13.02
(b)........................................................................... N.A.
(c)(1)........................................................................ 13.04
(c)(2)........................................................................ 13.04
(c)(3)........................................................................ N.A.
(d)........................................................................... N.A.
(e)........................................................................... 13.05
(f)........................................................................... N.A.
ss.315(a)........................................................................... 8.01(b)
(b)........................................................................... 8.05; 13.02
(c)........................................................................... 8.01(a)
(d)........................................................................... 8.01(c)
(e)........................................................................... 6.11
ss.316(a)(last sentence)............................................................ 2.09
(a)(1)(A)..................................................................... 6.05
(a)(1)(B)..................................................................... 6.04
(a)(2)........................................................................ N.A.
(b)........................................................................... 6.07
(c)........................................................................... 10.04
ss.317(a)(1)........................................................................ 6.08
(a)(2)........................................................................ 6.09
(b)........................................................................... 2.04
ss.318(a)........................................................................... 13.01
- ----------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
SECTION 1.01. Definitions.....................................................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act..............................................17
SECTION 1.03. Rules of Construction..........................................................................17
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating................................................................................18
SECTION 2.02. Execution and Authentication...................................................................18
SECTION 2.03. Registrar and Paying Agent.....................................................................19
SECTION 2.04. Paying Agent To Hold Assets in Trust...........................................................20
SECTION 2.05. Holder Lists...................................................................................20
SECTION 2.06. Transfer and Exchange..........................................................................20
SECTION 2.07. Replacement Securities.........................................................................21
SECTION 2.08. Outstanding Securities.........................................................................21
SECTION 2.09. Treasury Securities............................................................................21
SECTION 2.10. Temporary Securities...........................................................................22
SECTION 2.11. Cancellation...................................................................................22
SECTION 2.12. Defaulted Interest.............................................................................22
SECTION 2.13. CUSIP Number...................................................................................23
SECTION 2.14. Deposit of Moneys..............................................................................23
SECTION 2.15. Book-Entry Provisions for Global Securities....................................................23
SECTION 2.16. Registration of Transfers and Exchanges........................................................24
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.............................................................................27
SECTION 3.02. Selection of Securities To Be Redeemed.........................................................28
SECTION 3.03. Notice of Redemption...........................................................................28
SECTION 3.04. Effect of Notice of Redemption.................................................................29
SECTION 3.05. Deposit of Redemption Price....................................................................29
SECTION 3.06. Securities Redeemed in Part....................................................................29
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities..........................................................................30
SECTION 4.02. Maintenance of Office or Agency................................................................30
SECTION 4.03. Limitation on Transactions with Affiliates.....................................................30
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness and Issuance of
Capital Stock..........................................................................31
</TABLE>
-i-
<PAGE> 4
<TABLE>
PAGE
----
<S> <C> <C>
SECTION 4.05. Limitation on Layering.........................................................................31
SECTION 4.06. Payments for Consents..........................................................................31
SECTION 4.07. Limitation on Investment Company Status........................................................31
SECTION 4.08. Limitation on Asset Sales......................................................................32
SECTION 4.09. Limitation on Asset Swaps......................................................................33
SECTION 4.10. Limitation on Restricted Payments..............................................................33
SECTION 4.11. Notice of Defaults.............................................................................35
SECTION 4.12. Reports........................................................................................35
SECTION 4.13. Limitations on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.......35
SECTION 4.14. Subsidiary Guarantees by Restricted Subsidiaries...............................................36
SECTION 4.15. Change of Control..............................................................................36
SECTION 4.16. Limitation on Liens............................................................................38
SECTION 4.17. Compliance Certificate.........................................................................39
SECTION 4.18. Corporate Existence............................................................................39
SECTION 4.19. Maintenance of Properties and Insurance........................................................39
SECTION 4.20. Payment of Taxes and Other Claims..............................................................39
SECTION 4.21. Waiver of Stay, Extension or Usury Laws........................................................40
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc...................................................................40
SECTION 5.02. Successor Corporation Substituted..............................................................41
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default..............................................................................41
SECTION 6.02. Acceleration...................................................................................42
SECTION 6.03. Other Remedies.................................................................................43
SECTION 6.04. Waiver of Past Default.........................................................................43
SECTION 6.05. Control by Majority............................................................................44
SECTION 6.06. Limitation on Suits............................................................................44
SECTION 6.07. Rights of Holders To Receive Payment...........................................................44
SECTION 6.08. Collection Suit by Trustee.....................................................................45
SECTION 6.09. Trustee May File Proofs of Claim...............................................................45
SECTION 6.10. Priorities.....................................................................................45
SECTION 6.11. Undertaking for Costs..........................................................................46
ARTICLE SEVEN
SUBORDINATION OF SECURITIES
SECTION 7.01. Agreement To Subordinate.......................................................................46
SECTION 7.02. Liquidation, Dissolution, Bankruptcy...........................................................46
SECTION 7.03. Default on Senior Indebtedness.................................................................47
SECTION 7.04. Acceleration of Payment of Securities..........................................................47
SECTION 7.05. When Distribution Must Be Paid Over............................................................48
SECTION 7.06. Subrogation....................................................................................48
SECTION 7.07. Relative Rights................................................................................48
</TABLE>
-ii-
<PAGE> 5
<TABLE>
PAGE
----
<S> <C> <C>
SECTION 7.08. Subordination May Not Be Impaired by Company...................................................48
SECTION 7.09. Rights of Trustee and Paying Agent.............................................................49
SECTION 7.10. Distribution or Notice to Representative.......................................................49
SECTION 7.11. Article Seven Not To Prevent Events of Default or Limit Right To Accelerate....................49
SECTION 7.12. Trust Moneys Not Subordinated..................................................................49
SECTION 7.13. Trustee Entitled To Rely.......................................................................49
SECTION 7.14. Trustee To Effectuate Subordination............................................................50
SECTION 7.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.......................................50
SECTION 7.16. Reliance by Holders of Senior Indebtedness on Subordination Provisions.........................50
ARTICLE EIGHT
TRUSTEE
SECTION 8.01. Duties of Trustee..............................................................................50
SECTION 8.02. Rights of Trustee..............................................................................51
SECTION 8.03. Individual Rights of Trustee...................................................................52
SECTION 8.04. Trustee's Disclaimer...........................................................................53
SECTION 8.05. Notice of Defaults.............................................................................53
SECTION 8.06. Reports by Trustee to Holders..................................................................53
SECTION 8.07. Compensation and Indemnity.....................................................................53
SECTION 8.08. Replacement of Trustee.........................................................................54
SECTION 8.09. Successor Trustee by Merger, etc...............................................................55
SECTION 8.10. Eligibility; Disqualification..................................................................55
SECTION 8.11. Preferential Collection of Claims Against the Company..........................................56
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Termination of the Company's Obligations.......................................................56
SECTION 9.02. Legal Defeasance and Covenant Defeasance.......................................................56
SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance..........................................57
SECTION 9.04. Application of Trust Money; Trustee Acknowledgment and Indemnity...............................58
SECTION 9.05. Repayment to Company...........................................................................59
SECTION 9.06. Reinstatement..................................................................................59
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders....................................................................59
SECTION 10.02. With Consent of Holders.......................................................................60
SECTION 10.03. Compliance with Trust Indenture Act...........................................................61
SECTION 10.04. Record Date for Consents and Effect of Consents...............................................61
SECTION 10.05. Notation on or Exchange of Securities.........................................................62
SECTION 10.06. Trustee To Sign Amendments, etc...............................................................62
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.......................................................................62
</TABLE>
-iii-
<PAGE> 6
<TABLE>
PAGE
----
<S> <C> <C>
SECTION 11.02. Severability..................................................................................63
SECTION 11.03. Release of a Guarantor........................................................................63
SECTION 11.04. Limitation of Guarantor's Liability...........................................................63
SECTION 11.05. Contribution..................................................................................64
SECTION 11.06. Execution of Subsidiary Guarantee.............................................................64
SECTION 11.07. Subordination of Subrogation and Other Rights.................................................64
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Agreement To Subordinate......................................................................64
SECTION 12.02. Liquidation, Dissolution, Bankruptcy..........................................................65
SECTION 12.03. Default on Guarantor Senior Indebtedness......................................................65
SECTION 12.04. Acceleration of Payment of Securities.........................................................66
SECTION 12.05. When Distribution Must Be Paid Over...........................................................66
SECTION 12.06. Subrogation...................................................................................66
SECTION 12.07. Relative Rights...............................................................................67
SECTION 12.08. Subordination May Not Be Impaired by Guarantor................................................67
SECTION 12.09. Rights of Trustee and Paying Agent............................................................67
SECTION 12.10. Distribution or Notice to Representative......................................................67
SECTION 12.11. Article Twelve Not To Prevent Events of Default or Limit Right To Accelerate..................67
SECTION 12.12. Trust Moneys Not Subordinated.................................................................68
SECTION 12.13. Trustee Entitled To Rely......................................................................68
SECTION 12.14. Trustee To Effectuate Subordination...........................................................68
SECTION 12.15. Trustee Not Fiduciary for Holders of Guarantor Senior Indebtedness............................68
SECTION 12.16. Reliance by Holders of Guarantor Senior Indebtedness on Subordination Provisions..............69
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls..................................................................69
SECTION 13.02. Notices.......................................................................................69
SECTION 13.03. Communications by Holders with Other Holders..................................................70
SECTION 13.04. Certificate and Opinion as to Conditions Precedent............................................70
SECTION 13.05. Statements Required in Certificate............................................................71
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.....................................................71
SECTION 13.07. Governing Law.................................................................................71
SECTION 13.08. No Recourse Against Others....................................................................71
SECTION 13.09. Successors....................................................................................71
SECTION 13.10. Counterpart Originals.........................................................................72
SECTION 13.11. Severability..................................................................................72
SECTION 13.12. No Adverse Interpretation of Other Agreements.................................................72
SECTION 13.13. Legal Holidays................................................................................72
SIGNATURES..................................................................................................S-1
EXHIBIT A Form of Series A Security.................................................................A-1
EXHIBIT B Form of Series B Security.................................................................B-1
</TABLE>
-iv-
<PAGE> 7
<TABLE>
PAGE
----
<S> <C> <C>
EXHIBIT C Form of Legend for Global Securities......................................................C-1
EXHIBIT D Form of Transfer Certificate..............................................................D-1
EXHIBIT E Form of Transfer Certificate for Institutional Accredited Investors.......................E-1
EXHIBIT F Form of Transfer Certificate for Regulation S Transfers...................................F-1
- -----------------
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part of this Indenture.
</TABLE>
-v-
<PAGE> 8
INDENTURE dated as of March 3, 1998, among LIN ACQUISITION
COMPANY, a Delaware corporation (the "Company"), the Guarantors named herein,
and UNITED STATES TRUST COMPANY OF NEW YORK, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Restricted Subsidiaries or assumed in connection with the
acquisition of assets from such Person and not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"Acquired Preferred Stock" means the Preferred Stock of any Person
at such time as such Person becomes a Restricted Subsidiary of the Company or at
the time it merges or consolidates with the Company or any of its Restricted
Subsidiaries and not issued by such Person in connection with, or in
anticipation or contemplation of, such acquisition, merger or consolidation.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Chase and its
Affiliates shall not be deemed Affiliates of the Company by reason of the Senior
Credit Facilities or their direct or indirect investments in any fund managed by
Hicks Muse or any Person in which any such fund is invested.
"Affiliate Transaction" has the meaning provided in Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Applicable Premium" has the meaning provided in paragraph 5 on
the reverse of each Security.
"Asset Acquisition" means (i) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or shall be
consolidated or merged with the Company or any Restricted Subsidiary of the
Company or (ii) the acquisition by the Company or any Restricted Subsidiary of
the Company of assets of any Person comprising a division or line of business of
such Person.
<PAGE> 9
-2-
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (excluding any sale and leaseback
transaction or any pledge of assets or stock by the Company or any of its
Restricted Subsidiaries) to any Person other than the Company or a Restricted
Subsidiary of the Company of (i) any Capital Stock of any Restricted Subsidiary
of the Company or (ii) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; provided, however, that for purposes of Section 4.08, Asset Sales
shall not include (a) a transaction or series of related transactions in which
the Company or any of its Restricted Subsidiaries receives aggregate
consideration of less than $1,000,000, (b) transactions permitted under Section
4.09, (c) transactions covered by Section 5.01, (d) a Restricted Payment that
otherwise qualifies under Section 4.10, (e) any disposition of obsolete or worn
out equipment or equipment that is no longer useful in the conduct of the
business of the Company and its Subsidiaries and that is disposed of, in each
case, in the ordinary course of business and (f) any transaction that
constitutes a Change of Control. Solely for purposes of Section 11.03 an Asset
Sale is deemed to include a sale, conveyance or transfer by the Representative
following a foreclosure on such assets.
"Asset Swap" means the execution of a definitive agreement,
subject only to FCC approval, if applicable, and other customary closing
conditions that the Company in good faith believes will be satisfied, for a
substantially concurrent purchase and sale, or exchange, of Productive Assets
between the Company or any of its Restricted Subsidiaries and another Person or
group of affiliated Persons; provided that any amendment to or waiver of any
closing condition that individually or in the aggregate is material to the Asset
Swap shall be deemed to be a new Asset Swap; it being understood that an Asset
Swap may include a cash equalization payment made in connection therewith
provided that such cash payment, if received by the Company or its Subsidiaries,
shall be deemed to be proceeds received from an Asset Sale and shall be applied
in accordance with Section 4.08.
"Bankruptcy Law" means Title 11, United States Code or any similar
federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors or other
governing body charged with the ultimate management of any Person, or any duly
authorized committee thereof.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person or a duly authorized
committee of such Board of Directors.
"Business Day" means any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York, New York.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease to which
such Person is a party that is required to be classified and accounted for as a
capital lease obligation under GAAP, and for purposes of this definition, the
amount of such obligation at any date shall be the capitalized amount of such
obligation at such date, determined in accordance with GAAP.
<PAGE> 10
-3-
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
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 political subdivision 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, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or 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, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from Moody's
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of not
less than $200,000,000; (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (iv)
above; and (vi) investments in money market funds that invest substantially all
their assets in securities of the types described in clauses (i) through (v)
above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group") (whether or not otherwise in
compliance with the provisions of this Indenture), other than to Hicks Muse or
any of its Affiliates, officers or directors (the "Permitted Holders"); or (ii)
a majority of the board of directors of the Company or Holdings shall consist of
Persons who are not Continuing Directors; or (iii) the acquisition by any Person
or Group (other than the Permitted Holders or any direct or indirect subsidiary
of any Permitted Holder, including without limitation Holdings) of the power,
directly or indirectly, to vote or direct the voting of securities having more
than 50% of the ordinary voting power for the election of directors of the
Company.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section
4.15.
"Change of Control Payment Date" has the meaning provided in
Section 4.15.
"Change of Control Redemption" has the meaning specified in
paragraph 5 of the Securities.
"Chase" means Chase Securities Inc. or any successor corporation
thereto.
"Commodity Agreement" means any commodity futures contract,
commodity option or other similar agreement or arrangement.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice
<PAGE> 11
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President or its Treasurer, and by its Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any Person, for
any period, the sum (without duplication) of (i) Consolidated Net Income, (ii)
to the extent Consolidated Net Income has been reduced thereby, (a) all income
taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary or nonrecurring gains or losses), (b) Consolidated Interest
Expense and (c) Consolidated Non-Cash Charges, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in conformity
with GAAP, and (iii) the lesser of (x) dividends or distributions paid in cash
to such Person or its Restricted Subsidiaries by any other Person whose results
are reflected as a minority interest in the consolidated financial statements of
such first Person and (y) such Person's equity interest in the Consolidated Cash
Flow of such other Person (but in no event less than zero), except, that in the
case of the Joint Venture, (I) such amount shall not exceed 10% of the
Consolidated Cash Flow of the Company for such period and (II) such first Person
shall be deemed to have received by dividend its proportionate share of
distributable cash retained by the Joint Venture to fund the interest reserve.
"Consolidated Interest Expense" means, with respect to any Person
for any period, without duplication, the sum of (i) the interest expense of such
Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including, without limitation, (a)
any amortization of debt discount, (b) the net cost under Interest Swap
Agreements (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit, bankers' acceptance
financing or similar facilities, and (e) all accrued interest and (ii) the
interest component of Capitalized Lease Obligations paid or accrued by such
Person and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or loss) of such Person and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall be excluded therefrom, without duplication,
(a) gains and losses from Asset Sales (without regard to the $1,000,000
limitation set forth in the definition thereof) or abandonments or reserves
relating thereto and the related tax effects, (b) items classified as
extraordinary or nonrecurring gains and losses, and the related tax effects
according to GAAP, (c) the net income (or loss) of any Person acquired in a
pooling of interests transaction accrued prior to the date it becomes a
Restricted Subsidiary of such first referred to Person or is merged or
consolidated with it or any of its Restricted Subsidiaries, (d) the net income
of any Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is restricted
by contract, operation of law or otherwise, and (e) the net income or loss of
any Person, other than a Restricted Subsidiary; and provided, further, however,
that (i) there shall be added to net income an amount equal to the consolidated
cash flow losses attributable to stations which the Company or any of its
Restricted Subsidiaries operates pursuant to local marketing agreements provided
that such addback shall not exceed $3,000,000 in any Four Quarter Period and
(ii) in determining net income, pro forma effect shall be given to the
reimbursement of promotional expenses as if such reimbursement obligation were
in effect for the entire period with respect to periods ending prior to March
31, 1999 (but only if such reimbursement obligation is then in effect).
"Consolidated Non-Cash Charges" means, with respect to any Person
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Restricted Subsidiaries (excluding any such
charges constituting an extraordinary or nonrecurring item) reducing
Consolidated Net
<PAGE> 12
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Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Continuing Director" means, as of the date of determination, any
Person who (i) was a member of the Board of Directors of the Company or Holdings
on the Issue Date, (ii) was nominated for election or elected to the Board of
Directors of the Company or Holdings, as the case may be, with the affirmative
vote of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election or (iii) is a
representative of a Permitted Holder.
"Corporate Trust Office of the Trustee" means the principal office
of the Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of original execution of this
Indenture is located at 114 West 47th Street, New York, New York 10036,
Attention: Corporate Trust Department.
"Credit Agreement" means the credit agreement dated as of March 3,
1998, among Holdings, the Company, The Chase Manhattan Bank, as administrative
agent and collateral agent, The Bank of New York, as syndication agent, National
Westminster Bank PLC, as documentation agent, Chase Securities Inc., as
exclusive arranger and advisor, and the other financial institutions from time
to time party thereto, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including by way of adding Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders (or other
institutions).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is,
or with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness" means (i) all obligations under
the Senior Credit Facilities and (ii) any other Senior Indebtedness of the
Company which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $20,000,000 and is specifically
designated by the Company in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture.
<PAGE> 13
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"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, or transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Capital Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control), in whole or in part, on or prior to
the Final Maturity Date of the Securities; provided that only the portion of
Capital Stock which so matures or is mandatorily redeemable or is so redeemable
at the sole option of the holder thereof prior to March 1, 2008 shall be deemed
Disqualified Capital Stock.
"Equity Contributions" means the $555.0 million common equity to
be provided by affiliates of Hicks Muse, management and other co-investors to
the equity of the corporate parents of Holdings, which will in turn, through
Holdings, contribute such amount to the common equity of the Company.
"Equity Offering" means a private sale or public offering of
Capital Stock (other than Disqualified Capital Stock) of the Company or a
Holding Company (to the extent, in the case of a Holding Company, that the net
cash proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of the Company).
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 8 3/8% Senior Subordinated Notes
due 2008, Series B, to be issued in exchange for the Initial Securities pursuant
to the Registration Rights Agreement.
"Final Maturity Date" means March 1, 2008.
"Financial Advisory Agreement" means the Financial Advisory
Agreement by and among the Company, Holdings, certain of their affiliates and
Hicks Muse Partners, as in effect on the Issue Date.
"Funding Guarantor" has the meaning provided in Section 11.05.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of this Indenture,
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or the
Commission or in such other statements by such other entity as approved by a
significant segment of the accounting profession. All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP.
"GECC Note" means the debt financing for the Joint Venture
provided by General Electric Capital Corporation in the form of an $815.5
million 25-year non-amortizing senior secured note initially bearing an interest
rate of 8% per annum, the obligations in respect of which will be assumed by the
Joint Venture.
<PAGE> 14
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"Global Securities" means one or more 144A Global Securities,
Regulation S Global Securities or IAI Global Securities.
"Grand Rapids Acquisition" means the acquisition from AT&T
Corporation of the assets of television station WOOD-TV and the local marketing
agreement rights related to television station WOTV-TV.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof), of all or any part of any Indebtedness.
"Guarantor" means each of the Company's direct and indirect,
existing and future Restricted Subsidiaries, other than a Subsidiary organized
under the laws of a jurisdiction other than the United States or any state
thereof, provided that such Subsidiary's assets and principal place of business
are located outside the United States.
"Guarantor Senior Indebtedness" means, as to any Guarantor, Senior
Indebtedness of such Guarantor, it being understood that for the purpose of this
definition, all references to the Company in the definition of Senior
Subordinated Indebtedness shall be deemed references to such Guarantor.
"Guarantor Senior Subordinated Indebtedness" means, as to any
Guarantor, Senior Subordinated Indebtedness of such Guarantor, it being
understood that for purposes of this definition, all references to the Company
in the definition of Senior Subordinated Indebtedness shall be deemed references
to such Guarantor.
"Hicks Muse" means Hicks, Muse, Tate & Furst Incorporated, a
Delaware corporation.
"Hicks Muse Partners" means Hicks, Muse & Co. Partners, L.P., an
affiliate of Hicks Muse.
"Holders" means the registered holders of the Securities.
"Holdings" means LIN Holdings Corp., a Delaware corporation, and
any successor in interest thereto.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities
transferred after the Issue Date to Institutional Accredited Investors.
"Incremental Term Facility" means the $225 million of incremental
term loans under the Senior Credit Agreement that is available to the Company to
finance acquisitions or pay interest or make any mandatory redemptions or
principal payments in respect of the Senior Discount Notes.
"incur" has the meaning set forth in Section 4.04.
"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person (i) for borrowed money, (ii) evidenced
by bonds, debentures, notes or other similar instruments, (iii) constituting
Capitalized Lease Obligations, (iv) incurred or assumed as the deferred purchase
price of property, or pursuant to conditional sale obligations and title
retention agreements (but excluding trade accounts payable arising in the
ordinary course of business), (v) for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, (vi) for
Indebtedness of others guaranteed by such Person,
<PAGE> 15
-8-
(vii) for Interest Swap Agreements, Commodity Agreements and Currency Agreements
and (viii) for Indebtedness of any other Person of the type referred to in
clauses (i) through (vii) which is secured by any Lien on any property or asset
of such first referred to Person, the amount of such Indebtedness being deemed
to be the lesser of the value of such property or asset or the amount of the
Indebtedness so secured. The amount of Indebtedness of any Person at any date
shall be (i) the outstanding principal amount of all unconditional obligations
described above, as such amount would be reflected on a balance sheet prepared
in accordance with GAAP, and the maximum liability at such date of such Person
for any contingent obligations described above, (ii) the accreted value thereof,
in the case of any Indebtedness issued with original issue discount, and (iii)
the principal amount thereof, together with any interest thereon that is more
than 30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Purchasers" means Chase Securities Inc., Bear, Stearns &
Co. Inc., Morgan Stanley & Co. Incorporated, NatWest Capital Markets Limited and
BNY Capital Markets, Inc.
"Initial Securities" means the 8 3/8% Senior Subordinated Notes
due 2008, Series A, of the Company.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of any
cash interest and any Liquidated Damages (as defined in the Registration Rights
Agreement) on the Securities.
"Interest Payment Date" means March 1 and September 1 of each
year, commencing on September 1, 1998.
"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the
February 15 or August 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Interest Swap Agreements" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement.
"Investment" in any Person means any direct or indirect advance,
loan or other extension of credit (in each case, including by way of Guarantee
or similar arrangement, but excluding (i) any debt or extension of credit
represented by a bank deposit other than a time deposit and (ii) advances to
customers in the ordinary course of business) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by such Person. For purposes of Section 4.10, (A) "Investment" shall include the
portion (proportionate to the Company's equity interest in a Restricted
Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market
value of the net assets of such Restricted Subsidiary of the Company at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Unrestricted Subsidiary as
a Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" (if positive) equal to (1) the Company's "Investment" in
such Unrestricted Subsidiary at the time of such redesignation less (2) the
portion (proportionate to the Company's equity interest in such Unrestricted
Subsidiary) of the fair market value of
<PAGE> 16
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the net assets of such Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is so redesignated from an Unrestricted Subsidiary to a
Restricted Subsidiary; and (B) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the board of
directors of the Company.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Joint Venture" means the television station joint venture to be
formed in connection with and prior to the Merger pursuant to an agreement dated
January 15, 1998, as amended, by and between Holdings, the National Broadcast
Company Inc. ("NBC"), LIN Television and certain affiliates of Holdings, NBC and
LIN Television party thereto, pursuant to which both LIN Television and NBC will
contribute television stations to the Joint Venture in exchange for equity
interests therein.
"Leverage Ratio" means, as to any Person, the ratio of (i) the
aggregate outstanding amount of Indebtedness of such Person and its Restricted
Subsidiaries as of the date of calculation on a consolidated basis in accordance
with GAAP plus the aggregate liquidation preference of all Disqualified Capital
Stock of such Person and of all outstanding Preferred Stock of Restricted
Subsidiaries of such Person (other than any such Disqualified Capital Stock or
Preferred Stock held by such Person or any of its Restricted Subsidiaries) to
(ii) the Consolidated Cash Flow of such Person for the four full fiscal quarters
(the "Four Quarter Period") ending on or prior to the date of determination.
For purposes of this definition, the aggregate outstanding
principal amount of Indebtedness of the Person and its Restricted Subsidiaries
for which such calculation is made shall be determined on a pro forma basis as
if the Indebtedness giving rise to the need to perform such calculation had been
incurred and the proceeds therefrom had been applied, and all other transactions
in respect of which such Indebtedness is being incurred has occurred, on the
last day of the Four Quarter Period. In addition to the foregoing, for purposes
of this definition, "Consolidated Cash Flow" shall be calculated on a pro forma
basis after giving effect to (i) the Transactions, (ii) the incurrence of the
Indebtedness of such Person and its Restricted Subsidiaries (and the application
of the proceeds therefrom) giving rise to the need to make such calculation and
any incurrence (and the application of the proceeds therefrom) or repayment of
other Indebtedness, other than the incurrence or repayment of Indebtedness
pursuant to working capital facilities, at any time subsequent to the beginning
of the Four Quarter Period and on or prior to the date of determination, as if
such incurrence (and the application of the proceeds thereof), or the repayment,
as the case may be, occurred on the first day of the Four Quarter Period, (iii)
any Asset Sales (including those excluded from the definition thereof by clause
(b), (c) or (d) of the definition thereof) or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Subsidiaries (including any
Person that becomes a Restricted Subsidiary as a result of such Asset
Acquisition) incurring, assuming or otherwise becoming liable for Indebtedness)
or Asset Swaps at any time on or subsequent to the first day of the Four Quarter
Period and on or prior to the date of determination, as if such Asset Sale,
Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness and also including any Consolidated Cash Flow associated with
such Asset Acquisition) or Asset Swap occurred on the first day of the Four
Quarter Period and (iv) cost savings resulting from employee termination,
facilities consolidations and closings, standardization of employee benefits and
compensation practices, consolidation of property, casualty and other insurance
coverage and policies, standardization of sales representation commissions and
other contract rates, and reductions in taxes other than income taxes
(collectively, "Cost Savings Measures"), which cost savings the Company
reasonably believes in good faith could have been achieved during the Four
Quarter Period as a result of such Asset Acquisition or Asset Swap (regardless
of whether such cost savings could then be reflected in pro forma financial
statements under GAAP, Regulation S-X promulgated by the Commission or any other
regulation or
<PAGE> 17
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policy of the Commission), less the amount of any additional expenses that the
Company reasonably estimates would result from anticipated replacement of any
items constituting Cost Savings Measures in connection with such Asset
Acquisition or Asset Swap; provided, however, that both (A) such cost savings
and Cost Savings Measures were identified and such cost savings were quantified
in an officer's certificate delivered to the Trustee at the time of the
consummation of the Asset Acquisition or Asset Swap and (B) with respect to each
Asset Acquisition or Asset Swap completed prior to the 90th day preceding such
date of determination, actions were commenced or initiated by the Company within
90 days of such Asset Acquisition or Asset Swap to effect the Cost Savings
Measures identified in such officer's certificate (regardless, however, of
whether the corresponding cost savings have been achieved). Furthermore, in
calculating "Consolidated Interest Expense" for purposes of the calculation of
"Consolidated Cash Flow," (i) interest on Indebtedness determined on a
fluctuating basis as of the date of determination (including Indebtedness
actually incurred on the date of the transaction giving rise to the need to
calculate the Leverage Ratio) and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness as in effect on the date of
determination and (ii) notwithstanding (i) above, interest determined on a
fluctuating basis, to the extent such interest is covered by Interest Swap
Agreements, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Lien" means, with respect to any asset, any lien, mortgage, deed
of trust, pledge, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof and any agreement to give any security interest).
"LIN Television" means LIN Television Corporation, a Delaware
corporation, or any successor in interest thereto.
"LMA" means a station operated by the Company pursuant to a local
marketing agreement and with respect to which the Company has a purchase option
exercisable under certain circumstances.
"Merger" means the merger of the Company with and into LIN
Television pursuant to an Agreement and Plan of Merger dated August 12, 1997, as
amended, among the Company, Holdings and LIN Television.
"Monitoring and Oversight Agreement" means the Monitoring and
Oversight Agreement by and among the Company, Holdings, certain of their
affiliates and Hicks Muse Partners, as in effect on the Issue Date.
"NBC" means the National Broadcasting Company, Inc.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents (including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents) received by the Company or any of its Subsidiaries from such Asset
Sale net of (i) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions, recording fees, relocation costs, title
insurance premiums, appraisers fees and costs reasonably incurred in preparation
of any asset or property for sale), (ii) taxes paid or reasonably estimated to
be payable (calculated based on the combined state, federal and foreign
statutory tax rates applicable to the Company or the Restricted Subsidiary
engaged in such Asset Sale), (iii) all distributions and other payments required
to be made to any Person owning a beneficial interest in the assets subject to
sale or minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Sale and (iv) any reserves established in accordance with GAAP for
adjustment in respect of the sales price of the asset or assets subject to such
Asset Sale or for any liabilities associated with such Asset Sale and (v)
repayment of
<PAGE> 18
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Indebtedness secured by assets subject to such Asset Sale; provided, however,
that if the instrument or agreement governing such Asset Sale requires the
transferor to maintain a portion of the purchase price in escrow (whether as a
reserve for adjustment of the purchase price or otherwise) or to indemnify the
transferee for specified liabilities in a maximum specified amount, the portion
of the cash or Cash Equivalents that is actually placed in escrow or segregated
and set aside by the transferor for such indemnification obligation shall not be
deemed to be Net Cash Proceeds until the escrow terminates or the transferor
ceases to segregate and set aside such funds, in whole or in part, and then only
to the extent of the proceeds released from escrow to the transferor or that are
no longer segregated and set aside by the transferor.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating to,
any Indebtedness.
"Offerings" means the initial offerings of the Securities and the
Senior Discount Notes.
"Offering Memorandum" means the final offering memorandum dated
February 18, 1998 setting forth information concerning the Company, Holdings,
the Securities and the Senior Discount Notes.
"Officer" means the Chairman, any Vice Chairman, the President,
any Vice President, the Chief Financial Officer, the Treasurer or the Secretary
of the Company or any other officer designated by the Board of Directors serving
in a similar capacity.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or Assistant Secretary of the
Company complying with Sections 13.04 and 13.05.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Initial
Securities sold in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.
"Participants" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holders" has the meaning provided in the definition of
"Change of Control."
"Permitted Indebtedness" means, without duplication, (i)
Indebtedness outstanding on the Issue Date (including the Senior Discount
Notes); (ii) Indebtedness of the Company and any of its Restricted Subsidiaries
that is a Guarantor (a) outstanding under the Senior Credit Facilities
(including letter of credit obligations); provided that the aggregate principal
amount at any time outstanding does not exceed $570,000,000; provided that of
such amount (x) $125,000,000 may be used under the Delayed Tranche A Facility
(as defined in the Credit Agreement) only to finance the Grand Rapids
Acquisition (and refinancings of such borrowings) and (y) $225,000,000 may be
used under the Incremental Term Facility only to finance acquisitions of
Productive Assets or to make distributions to a Holding Company to enable a
Holding Company to make interest payments or mandatory redemptions or principal
payments in respect of the Senior Discount Notes (and refinancings of such
borrowings) or (b) incurred under the Senior Credit Facilities pursuant to and
in compliance with (x) clause (v) of this definition or (y) the proviso in
Section 4.04; (iii) Indebtedness evi-
<PAGE> 19
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denced by or arising under the Securities and this Indenture; (iv) Interest Swap
Agreements, Commodity Agreements and Currency Agreements; provided, however,
that such agreements are entered into for bona fide hedging purposes and not for
speculative purposes; (v) additional Indebtedness of the Company or any of its
Restricted Subsidiaries that is a Guarantor not to exceed $20,000,000 in
principal amount outstanding at any time (which amount may, but need not, be
incurred under the Senior Credit Facilities); (vi) Refinancing Indebtedness;
(vii) Indebtedness owed by the Company to any Restricted Subsidiary of the
Company or by any Restricted Subsidiary of the Company to the Company or any
Restricted Subsidiary of the Company; (viii) guarantees by the Company or
Restricted Subsidiaries of any Indebtedness permitted to be incurred pursuant to
this Indenture; (ix) Indebtedness in respect of performance bonds, bankers'
acceptances and surety or appeal bonds provided by the Company or any of its
Restricted Subsidiaries to their customers in the ordinary course of their
business; (x) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
guarantees or letters of credit, surety bonds or performance bonds securing any
obligations of the Company or any of its Restricted Subsidiaries pursuant to
such agreements, in each case incurred in connection with the disposition of any
business assets or Restricted Subsidiaries of the Company (other than guarantees
of Indebtedness or other obligations incurred by any Person acquiring all or any
portion of such business assets or Restricted Subsidiaries of the Company for
the purpose of financing such acquisition) in a principal amount not to exceed
the gross proceeds actually received by the Company or any of its Restricted
Subsidiaries in connection with such disposition; provided, however, that the
principal amount of any Indebtedness incurred pursuant to this clause (x), when
taken together with all Indebtedness incurred pursuant to this clause (x) and
then outstanding, shall not exceed $20,000,000; and (xi) Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations, in each case incurred for the purpose of financing all or any
part of the purchase price or cost of construction or improvement of property or
assets used in a related business or incurred to refinance any such purchase
price or cost of construction or improvement, in each case incurred no later
than 365 days after the date of such acquisition or the date of completion of
such construction or improvement; provided, however, that the principal amount
of any Indebtedness incurred pursuant to this clause (xi) shall not exceed
$7,500,000 at any time outstanding.
"Permitted Investments" means (i) Investments by the Company or
any Restricted Subsidiary of the Company to acquire the stock or assets of any
Person (or Acquired Indebtedness or Acquired Preferred Stock acquired in
connection with a transaction in which such Person becomes a Restricted
Subsidiary of the Company) engaged in the broadcast business or businesses
reasonably related thereto; provided, however, that if any such Investment or
series of related Investments involves an Investment by the Company in excess of
$10,000,000, the Company is able, at the time of such Investment and immediately
after giving effect thereto, to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.04, (ii)
Investments received by the Company or its Restricted Subsidiaries as
consideration for a sale of assets made in compliance with the other terms of
this Indenture, (iii) Investments by the Company or any Restricted Subsidiary of
the Company in any Restricted Subsidiary of the Company (whether existing on the
Issue Date or created thereafter) or any Person that after such Investments, and
as a result thereof, becomes a Restricted Subsidiary of the Company and
Investments in the Company or any Restricted Subsidiary by any Restricted
Subsidiary of the Company, (iv) Investments in cash and Cash Equivalents, (v)
Investments in securities of trade creditors, wholesalers or customers received
pursuant to any plan of reorganization or similar arrangement, (vi) loans or
advances to employees of the Company or any Restricted Subsidiary thereof for
purposes of purchasing the Company's or a Holding Company's Capital Stock and
other loans and advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary,
(vii) Investments in the Sports Joint Venture made at the time of the initial
formation of the Sports Joint Venture and (viii) additional Investments in an
aggregate amount not to exceed $5,000,000 at any time outstanding.
<PAGE> 20
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"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities in
registered form.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Private Exchange Securities" has the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on
the Initial Securities in the form set forth on Exhibit A hereto.
"Productive Assets" means assets of a kind used or usable by the
Company and its Restricted Subsidiaries in the broadcast business or businesses
reasonably related, ancillary or complementary thereto (including any
sports-related business acquired pursuant to the Sports Joint Venture), and
specifically includes assets acquired through Asset Acquisitions (it being
understood that "assets" may include Capital Stock of a Person that owns such
Productive Assets, provided that either (x) such assets consist of ownership
interests in the Sports Joint Venture or (y) after giving effect to such
transaction, such Person would be a Restricted Subsidiary of the Company).
"Public Equity Offering" means an underwritten public offering of
Capital Stock (other than Disqualified Capital Stock) of the Company or a
Holding Company (to the extent, in the case of a Holding Company, that the net
cash proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of the Company), pursuant to an effective registration statement
filed with the Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
"Refinancing Indebtedness" means any refinancing by the Company of
Indebtedness of the Company or any of its Restricted Subsidiaries incurred in
accordance with Section 4.04 (other than pursuant to clause (iii) or (iv) of the
definition of "Permitted Indebtedness") that does not (i) result in an increase
in the aggregate principal amount of Indebtedness (such principal amount to
include, for purposes of this definition, any premiums, penalties or accrued
interest paid with the proceeds of the Refinancing Indebtedness) of such Person
or (ii) create Indebtedness with (A) a Weighted Average Life to Maturity that is
less than the Weighted Average Life to Maturity of the Indebtedness being
refinanced or (B) a final maturity earlier than the final maturity of the
Indebtedness being refinanced.
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"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of the Issue Date by and among the
Company, the Guarantors and the Initial Purchasers.
"Registration" means a registered exchange offer for the
Securities by the Company or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of the Registration
Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent global security
in registered form representing the aggregate principal amount of Securities
sold in reliance on Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee,
agent or representative in respect of any Senior Indebtedness; provided,
however, that if, and for so long as, any issue of Senior Indebtedness lacks
such a representative, then the holders of a majority in outstanding principal
amount of such issue of Senior Indebtedness shall at all times constitute the
Representative for such issue of Senior Indebtedness.
"Restricted Payment" means (i) the declaration or payment of any
dividend or the making of any other distribution (other than dividends or
distributions payable in Qualified Capital Stock or in options, rights or
warrants to acquire Qualified Capital Stock) on shares of the Company's Capital
Stock, (ii) the purchase, redemption, retirement or other acquisition for value
of any Capital Stock of the Company, or any warrants, rights or options to
acquire shares of Capital Stock of the Company, other than through the exchange
of such Capital Stock or any warrants, rights or options to acquire shares of
any class of such Capital Stock for Qualified Capital Stock or warrants, rights
or options to acquire Qualified Capital Stock or (iii) the making of any
Investment (other than a Permitted Investment).
"Restricted Security" means a Security that is a "restricted
security" within the meaning set forth in Rule 144(a)(3) under the Securities
Act; provided, however, that the Trustee shall be entitled to request and
conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Restricted Subsidiary" means a Subsidiary of the Company other
than an Unrestricted Subsidiary and includes all of the Subsidiaries of the
Company existing as of the Issue Date. The Board of Directors of the Company may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having been incurred at the
time of such action), the Company could have incurred at least $1.00 of
additional indebtedness (other than Permitted Indebtedness) pursuant to Section
4.04.
"Rule 144A" means Rule 144A under the Securities Act.
"Secured Indebtedness" means any Indebtedness of the Company or a
Restricted Subsidiary secured by a Lien.
"SEC" or "Commission" means the Securities and Exchange
Commission.
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"Securities" means, collectively, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Senior Credit Facilities" means the credit facilities under the
Credit Agreement.
"Senior Discount Notes" means the 10% Senior Discount Notes due
2008 of Holdings issued under the Senior Discount Notes Indenture.
"Senior Discount Notes Indenture" means the indenture, as amended
or supplemented from time to time, dated March 3, 1998 between Holdings and
United States Trust Company of New York, as trustee.
"Senior Indebtedness" means, whether outstanding on the Issue Date
or thereafter issued, all Indebtedness of the Company, including interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Restricted
Subsidiary whether or not a claim for post-filing interest is allowed in such
proceeding) and premium, if any, thereon, and other monetary amounts (including
fees, expenses, reimbursement obligations under letters of credit and
indemnities) owing in respect thereof unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that the obligations in respect of such Indebtedness rank pari passu with the
Securities; provided, however, that Senior Indebtedness will not include (1) any
obligation of the Company to any Restricted Subsidiary, (2) any liability for
federal, state, foreign, local or other taxes owed or owing by the Company, (3)
any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness, Guarantee or obligation of
the Company that is expressly subordinate or junior in right of payment to any
other Indebtedness, Guarantee or obligation of the Company, including any Senior
Subordinated Indebtedness, or (5) obligations in respect of any Capital Stock.
"Senior Subordinated Indebtedness" means the Securities and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Securities in right of payment and
is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of the Company which is not Senior Indebtedness.
"Significant Restricted Subsidiary" means, at any date of
determination, any Restricted Subsidiary that would be a "significant
subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act, as such rule is in effect on the Issue Date.
"Sports Joint Venture" means any Hicks Muse affiliated entity to
which the Company contributes station KXTX-TV and related assets in exchange for
a minority ownership interest therein, cash or a combination thereof.
"Stated Maturity" means with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
<PAGE> 23
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"Subsidiary," with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly through one or
more intermediaries, by such Person or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly through one or more intermediaries, owned by such Person.
Notwithstanding anything in this Indenture to the contrary, all references to
the Company and its consolidated Subsidiaries or to financial information
prepared on a consolidated basis in accordance with GAAP shall be deemed to
include the Company and its Subsidiaries as to which financial statements are
prepared on a combined basis in accordance with GAAP and to financial
information prepared on such a combined basis. Notwithstanding anything in this
Indenture to the contrary, an Unrestricted Subsidiary shall not be deemed to be
a Restricted Subsidiary for purposes of this Indenture.
"Subsidiary Guarantees" means the Form of Subsidiary Guarantee of
each Guarantor to be endorsed on each of the Securities in the form of Exhibit A
(in the case of an Initial Security) or Exhibit B (in the case of an Exchange
Security) hereto.
"Surviving Person" means, with respect to any Person involved in
or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except as
provided in Section 10.03) until such time as this Indenture is qualified under
the TIA, and thereafter as in effect on the date on which this Indenture is
qualified under the TIA.
"Transactions" means the consummation of the Offerings, the
initial borrowings under the Senior Credit Facilities, the Merger, the Joint
Venture, the issuance of the GECC Note and the Equity Contribution.
"Treasury Rate" has the meaning provided in paragraph 5 on the
reverse of each Security.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of this Indenture and thereafter means such successor.
"Unrestricted Securities" means one or more Securities that do not
and are not required to bear the Private Placement Legend in the form set forth
in Exhibit A hereto, including, without limitation, the Exchange Securities and
any Securities registered under the Securities Act pursuant to and in accordance
with the Registration Rights Agreement.
"Unrestricted Subsidiary" means a Subsidiary of the Company
created after the Issue Date and so designated by a resolution adopted by the
Board of Directors of the Company; provided, however, that (a) neither the
Company nor any of its other Restricted Subsidiaries (1) provides any credit
support for any Indebtedness or other Obligations of such Subsidiary (including
any undertaking, agreement or instrument evi-
<PAGE> 24
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dencing such Indebtedness) or (2) is directly or indirectly liable for any
Indebtedness or other Obligations of such Subsidiary and (b) at the time of
designation of such Subsidiary, such Subsidiary has no property or assets (other
than de minimis assets resulting from the initial capitalization of such
Subsidiary). The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (x) the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.04
and (y) no Default or Event of Default shall have occurred or be continuing. Any
designation pursuant to this definition by the Board of Directors of the Company
shall be evidenced to the Trustee by the filing with the Trustee of a certified
copy of the resolution of the Company's Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complies with the foregoing conditions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" means the Company or any other obligor on the
Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
<PAGE> 25
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in effect
from time to time, and any other reference in this Indenture to "generally
accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements (including the Subsidiary Guarantee)
required by law, stock exchange rule or usage. The Company and the Trustee shall
approve the form of the Securities and any notation, legend or endorsement
(including the Subsidiary Guarantee) on them. Each Security shall be dated the
date of its issuance and shall show the date of its authentication.
Securities offered and sold in reliance on Rule 144A and
Securities offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more Global Securities, substantially in the
form set forth in Exhibit A hereto, deposited with the Trustee, as custodian for
the Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Exhibit C hereto.
The aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.
SECTION 2.02. Execution and Authentication.
Two Officers or an Officer and an Assistant Secretary shall sign,
or one Officer shall sign and one Officer and an Officer and an Assistant
Secretary (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Securities for the Company by
manual or facsimile signature.
<PAGE> 26
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If an Officer whose signature is on a Security or a Subsidiary
Guarantee, as the case may be, was an Officer at the time of such execution but
no longer holds that office at the time the Trustee authenticates the Security
or Subsidiary Guarantee, as the case may be, the Security or Subsidiary
Guarantee, as the case may be, shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount not to exceed $300,000,000, (ii) Private
Exchange Securities from time to time only in exchange for a like principal
amount of Initial Securities and (iii) Unrestricted Securities from time to time
only in exchange for (A) a like principal amount of Initial Securities or (B) a
like principal amount of Private Exchange Securities, in each case upon a
written order of the Company in the form of an Officers' Certificate. Each such
written order shall specify the amount of Securities to be authenticated and the
date on which the Securities are to be authenticated, whether the Securities are
to be Initial Securities, Private Exchange Securities or Unrestricted Securities
and whether the Securities are to be issued as Physical Securities or Global
Securities and such other information as the Trustee may reasonably request. The
aggregate principal amount of Securities outstanding at any time may not exceed
$300,000,000, except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency, which may be in
the Borough of Manhattan, The City of New York, where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Securities may be presented or surrendered for payment (the
"Paying Agent") and (c) notices and demands in respect of the Securities and
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company, upon notice to the
Trustee, may appoint one or more co-Registrars and one or more additional Paying
Agents. The term "Paying Agent" includes any additional Paying Agent. Except as
provided herein, the Company may act as Paying Agent, Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the
<PAGE> 27
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foregoing notice, the Trustee shall act as such and shall be entitled to
appropriate compensation in accordance with Section 8.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee of
any Default by the Company in making any such payment. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent (if
other than the Company), the Paying Agent shall have no further liability for
such assets. If the Company or any of their Affiliates acts as Paying Agent, it
shall, on or before each due date of the principal of or interest on the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee before each Interest Record Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, or
10.05). The Registrar or co-Registrar shall not be required to register the
transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
<PAGE> 28
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Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and none of the Company,
the Trustee nor any such Agent shall be affected by notice to the contrary. Any
consent, waiver or actions of a Holder shall be binding upon any subsequent
Holders of such Security or a Security received upon transfer. Any Holder of a
beneficial interest in a Global Security shall, by acceptance of such beneficial
interest in a Global Security, agree that transfers of beneficial interests in
such Global Security may be effected only through a book-entry system maintained
by the Depository (or its agent), and that ownership of a beneficial interest in
a Global Security shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of Securities
are met. If required by the Company or the Trustee, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of the Company and
the Trustee, to protect the Company, the Trustee and any Agent from any loss
which any of them may suffer if a Security is replaced. The Company may charge
such Holder for their reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any Affiliates of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Final Maturity Date the Paying
Agent holds money sufficient to pay all of the principal and interest due on the
Securities payable on that date, and is not prohibited from paying such money to
the Holders pursuant to the terms of this Indenture, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company, the Guarantors or any of their respective
Affiliates shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that a Trust Officer of the Trustee actually knows
are so owned shall be disregarded.
<PAGE> 29
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The Company shall notify the Trustee, in writing, when the Company
or any of its respective Affiliates repurchases or otherwise acquires
Securities, of the aggregate principal amount of such Securities so repurchased
or otherwise acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities upon receipt
of a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that they have paid
or delivered to the Trustee for cancellation. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to
time on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(a) shall be paid
to Holders as of the Interest Record Date for the Interest Payment Date for
which interest has not been paid.
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SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number
and the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities. The
Company shall promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each Interest Payment
Date, Redemption Date, and the Final Maturity Date, the Company shall deposit
with the Paying Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date, Redemption Date or
Final Maturity Date, as the case may be, in a timely manner which permits the
Paying Agent to remit payment to the Holders on such Interest Payment Date,
Redemption Date or Final Maturity Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
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(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal
principal amount of Physical Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in
writing; and
(II) in the case of Physical Securities the offer and sale of
which have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Company,
by the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the
Registrar or co-Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification
from such Holder to that effect (substantially in the form
of Exhibit D hereto); or
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and a transferee letter of representation
(substantially in the form of Exhibit E hereto) and, at the
option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such Physical Security is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company
to the effect that such transfer is in compliance with the
Securities Act; or
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(E) if such Physical Security is being transferred in reliance
on Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and a
transferor certificate for Regulation S transfers
(substantially in the form of Exhibit F hereto) and, at the
option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Physical Security is being transferred in reliance
on another exemption from the registration requirements of
the Securities Act, a certification to that effect
(substantially in the form of Exhibit D hereto) and, at the
option of the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer
is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a
Beneficial Interest in a Global Security. A Physical Security the offer and sale
of which has not been registered under the Securities Act may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D
hereto, that such Physical Security is being transferred
(I) to a QIB, (II) to an Institutional Accredited Investor
or (III) in an offshore transaction in reliance on
Regulation S and, with respect to (II) or (III), at the
option of the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer
is in compliance with the Securities Act; and
(B) written instructions directing the Registrar or
co-Registrar to make, or to direct the Depository to make,
an endorsement on the applicable Global Security to reflect
an increase in the aggregate amount of the Securities
represented by the Global Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Securities represented by the applicable
Global Security to be increased accordingly. If no 144A Global Security, IAI
Global Security or Regulation S Global Security, as the case may be, is then
outstanding, the Company shall, unless either of the events in the proviso to
Section 2.15(b) have occurred and are continuing, issue and the Trustee shall,
upon written instructions from the Company in accordance with Section 2.02,
authenticate such a Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written instructions,
or such other instruction as is customary for the Depository, from the
Depository or its nominee, requesting the registration of transfer of an
interest in a 144A Global Security, an IAI Global Security or a Regulation S
Global Security, as the case may be, to another type of Global Security,
together with the applicable Global Securities (or, if the applicable type of
Global Security required to represent the interest as requested to be obtained
is not then outstanding, only the Global Security
<PAGE> 33
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representing the interest being transferred), the Registrar or Co-Registrar
shall reflect on its books and records (and the applicable Global Security) the
applicable increase and decrease of the principal amount of Securities
represented by such types of Global Securities, giving effect to such transfer.
If the applicable type of Global Security required to represent the interest as
requested to be obtained is not outstanding at the time of such request, the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate a new Global Security of
such type in principal amount equal to the principal amount of the interest
requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Physical Security; provided, however, that prior to the Registration, a
transferee that is a QIB or Institutional Accredited Investor may not
exchange a beneficial interest in Global Security for a Physical
Security. Upon receipt by the Registrar or co-Registrar of written
instructions, or such other form of instructions as is customary for
the Depository, from the Depository or its nominee on behalf of any
Person having a beneficial interest in a Global Security and upon
receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such
transfer or exchange of a beneficial interest in Securities the offer
and sale of which have not been registered under the Securities Act,
the following additional information and documents:
(A) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (substantially in the form
of Exhibit D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company
to the effect that such transfer is in compliance with the
Securities Act; or
(B) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (substantially in the form of Exhibit D hereto) and,
at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository
and the Registrar or co-Registrar, the aggregate principal amount of
the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and deliver
to the transferee a Physical Security in the appropriate principal
amount.
(ii) Securities issued in exchange for a beneficial interest
in a Global Security pursuant to this Section 2.16(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar or co-Registrar
in writing. The Registrar or co-Registrar shall deliver such Physical
Securities to the Persons in whose names such Physical Securities are
so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a
<PAGE> 34
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nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private Placement
Legend if, (i) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act;(ii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act (including pursuant to a Registration); or (iii) the date of such
transfer, exchange or replacement is two years after the later of (x) the Issue
Date and (y) the last date that the Company or any affiliate (as defined in Rule
144 under the Securities Act) of the Company was the owner of such Securities
(or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to paragraph 5
of the Securities at the applicable redemption price set forth thereon, it shall
notify the Trustee in writing of the Redemption Date and the principal amount of
Securities to be redeemed. The Company shall give such notice to the Trustee at
least 45 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), to-
<PAGE> 35
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gether with an Officers' Certificate stating that such redemption will comply
with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, in the absence of such
requirements or if the Securities are not then listed on a national securities
exchange, on a pro rata basis, by lot or in such other manner as may be required
pursuant to this Indenture or otherwise as the Trustee shall deem fair and
appropriate. Selection of the Securities to be redeemed pursuant to paragraph
5(b) of the Securities shall be made by the Trustee only on a pro rata basis or
on as nearly a pro rata basis as is practicable (subject to the procedures of
the Depository) based on the aggregate principal amount of Securities held by
each Holder. The Trustee shall make the selection from the Securities then
outstanding, subject to redemption and not previously called for redemption.
The Trustee may select for redemption pursuant to paragraph 5 of
the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 5(b) of the
Securities shall be mailed to each Holder whose Securities are to be redeemed no
later than 60 days after the date of the closing of the relevant Equity Offering
of the Company.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the Securities
are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, as long as the Company has deposited with the Paying Agent
funds in satisfaction of the applicable redemption price pursuant to this
Indenture, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the Holders
is to receive payment of the redemption price upon surrender to the Paying
Agent;
<PAGE> 36
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(6) in the case of any redemption pursuant to paragraph 5 of the
Securities, if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will
be issued;
(7) the subparagraph of the Securities pursuant to which such
redemption is being made; and
(8) that no representation is made as to the accuracy of the CUSIP
number listed in such notice or printed on such Security.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption Date,
but interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the Redemption Date, the Company
shall deposit with the Paying Agent (or if the Company is its own Paying Agent,
it shall, on or before the Redemption Date, segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid on the Redemption Date due to the failure
of the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if any,
thereon shall, until paid or duly provided for, bear interest as provided in
Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
<PAGE> 37
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities and the Registration Rights
Agreement. An installment of principal or interest shall be considered paid on
the date due if the Trustee or Paying Agent (other than the Company or any
Affiliates of the Company) holds on that date money designated for and
sufficient to pay the installment in full and is not prohibited from paying such
money to the Holders of the Securities pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at the
same rate per annum borne by the Securities. The Company shall pay cash interest
on overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of any office or agency required by
Section 2.03. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 13. The Company hereby
initially designates the Trustee at its address set forth in Section 13.02 as
its office or agency in The Borough of Manhattan, The City of New York, for such
purposes.
SECTION 4.03. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease,
contribution or exchange of any property or the rendering of any service) with
or for the benefit of any of its Affiliates (other than transactions between the
Company and a Restricted Subsidiary of the Company or among Restricted
Subsidiaries of the Company) (an "Affiliate Transaction"), other than Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction on an arm's-length
basis from a person that is not an Affiliate; provided, however, that for a
transaction or series of related transactions involving value of $5,000,000 or
more, such determination shall be made in good faith by a majority of members of
the Board of Directors of the Company and by a majority of the disinterested
members of the Board of Directors of the Company, if any; provided, further,
that for a transaction or series of related transactions involving value of
$15,000,000 or more, the Board of Directors of the Company has received an
opinion from an independent investment banking firm of nationally recognized
standing that such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Restricted Subsidiary. The foregoing restrictions
shall not apply to (1) reasonable and customary directors' fees, indemnification
and similar arrangements and payments thereunder; (2) any obligations of the
Company under any employment agreement, noncompetition or confidentiality
agreement with any officer of the Company, as in effect on the Issue Date
(provided that each amendment of any of the foregoing agreements shall be
subject to the limitations of this covenant); (3) any Restricted Payment
permitted to be made pursuant Section 4.10; (4) any issuance of securities, or
other payments, awards or grants in cash, securities or otherwise pursuant to,
or the funding of, employment arrangements, stock options and stock ownership
plans approved by the Board of Directors of the
<PAGE> 38
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Company; (5) loans or advances to employees in the ordinary course of business
of the Company or any of its Restricted Subsidiaries consistent with past
practices; (6) payments made in connection with the Transactions and the Grand
Rapids Acquisition, including, without limitation, fees to Hicks Muse, as
described in the Offering Memorandum; and (7) payments by the Company to Hicks
Muse Partners in accordance with the terms of the Financial Advisory Agreement
and the Monitoring and Oversight Agreement.
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness and Issuance
of Capital Stock.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (other than
Permitted Indebtedness) and the Company shall not issue any Disqualified Capital
Stock and its Restricted Subsidiaries shall not issue any Preferred Stock
(except Preferred Stock issued to the Company or a Restricted Subsidiary of the
Company so long as it is so held); provided, however, that the Company and its
Restricted Subsidiaries that are Guarantors may incur Indebtedness or issue
shares of such Capital Stock if, in either case, the Company's Leverage Ratio at
the time of incurrence of such Indebtedness or the issuance of such Capital
Stock, as the case may be, after giving pro forma effect to such incurrence or
issuance as of such date and to the use of proceeds therefrom is less than 7.0
to 1.
(b) The Company shall not incur or suffer to exist, or permit any
of its Restricted Subsidiaries to incur or suffer to exist, any Obligations with
respect to an Unrestricted Subsidiary that would violate the provisions set
forth in the definition of Unrestricted Subsidiary.
SECTION 4.05. Limitation on Layering.
The Company shall not incur any Indebtedness if such Indebtedness
is subordinate or junior in ranking in any respect to any Senior Indebtedness
unless such Indebtedness is Senior Subordinated Indebtedness or is contractually
subordinated in right of payment to all Senior Subordinated Indebtedness
(including the Securities).
SECTION 4.06. Payments for Consents.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or is paid to all Holders of the Securities that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or agreement.
SECTION 4.07. Limitation on Investment Company Status.
The Company and its Subsidiaries shall not take any action, or
otherwise permit to exist any circumstance, that would require the Company to
register as an "investment company" under the Investment Company Act of 1940, as
amended.
<PAGE> 39
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SECTION 4.08. Limitation on Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by management
of the Company or, if such Asset Sale involves consideration in excess of
$10,000,000, by the board of directors of the Company, as evidenced by a board
resolution), (ii) at least 75% of the consideration received by the Company or
such Restricted Subsidiary, as the case may be, from such Asset Sale is in the
form of cash or Cash Equivalents and is received at the time of such disposition
and (iii) upon the consummation of an Asset Sale, the Company applies, or causes
such Restricted Subsidiary to apply, such Net Cash Proceeds within 180 days of
receipt thereof either (A) to repay any Senior Indebtedness of the Company or
any Indebtedness of a Restricted Subsidiary of the Company (and, to the extent
such Senior Indebtedness relates to principal under a revolving credit or
similar facility, to obtain a corresponding reduction in the commitments
thereunder, except that the Company may temporarily repay Senior Indebtedness
using the Net Cash Proceeds from such Asset Sale and thereafter use such funds
to reinvest pursuant to clause (B) below within the period set forth therein
without having to obtain a corresponding reduction in the commitments
thereunder), (B) to reinvest, or to be contractually committed to reinvest
pursuant to a binding agreement, in Productive Assets and, in the latter case,
to have so reinvested within 360 days of the date of receipt of such Net Cash
Proceeds or (C) to purchase Securities and other Senior Subordinated
Indebtedness, pro rata tendered to the Company for purchase at a price equal to
100% of the principal amount thereof (or the accreted value of such other Senior
Subordinated Indebtedness, if such other Senior Subordinated Indebtedness is
issued at a discount) plus accrued interest thereon, if any, to the date of
purchase pursuant to an offer to purchase made by the Company as set forth below
(a "Net Proceeds Offer"); provided, however, that the Company may defer making a
Net Proceeds Offer until the aggregate Net Cash Proceeds from Asset Sales not
otherwise applied in accordance with this covenant equal or exceed $15,000,000.
Subject to the deferral right set forth in the final proviso of
the preceding paragraph, each notice of a Net Proceeds Offer shall be mailed, by
first-class mail, to Holders not more than 180 days after the relevant Asset
Sale or, in the event the Company or a Restricted Subsidiary has entered into a
binding agreement as provided in (B) above, within 180 days following the
termination of such agreement but in no event later than 360 days after the
relevant Asset Sale. Such notice shall specify, among other things, the purchase
date (which shall be no earlier than 30 days nor later than 45 days from the
date such notice is mailed, except as otherwise required by law) and shall
otherwise comply with the procedures set forth in this Indenture. Upon receiving
notice of the Net Proceeds Offer, Holders may elect to tender their Securities
in whole or in part in integral multiples of $1,000. To the extent Holders
properly tender Securities in an amount which, together with all other Senior
Subordinated Indebtedness so tendered, exceeds the Net Proceeds Offer,
Securities and other Senior Subordinated Indebtedness of tendering Holders shall
be repurchased on a pro rata basis (based upon the aggregate principal amount
tendered, or, if applicable, the aggregate accreted value tendered). To the
extent that the aggregate principal amount of Securities tendered pursuant to
any Net Proceeds Offer, which, together with the aggregate principal amount or
aggregate accreted value, as the case may be, of all other Senior Subordinated
Indebtedness so tendered, is less than the amount of Net Cash Proceeds subject
to such Net Proceeds Offer, the Company may use any remaining portion of such
Net Cash Proceeds not required to fund the repurchase of tendered Securities and
other Senior Subordinated Indebtedness for any purposes not otherwise prohibited
by this Indenture. Upon the consummation of any Net Proceeds Offer, the amount
of Net Cash Proceeds subject to any future Net Proceeds Offer from the Asset
Sales giving rise to such Net Cash Proceeds shall be deemed to be zero.
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The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act to the extent applicable in connection with the repurchase of
Securities pursuant to a Net Proceeds Offer.
SECTION 4.09. Limitation on Asset Swaps.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Swap unless: (i) at the time of entering into
such Asset Swap, and immediately after giving effect to such Asset Swap, no
Default or Event of Default shall have occurred and be continuing, (ii) in the
event such Asset Swap involves an aggregate amount in excess of $10,000,000, the
terms of such Asset Swap have been approved by a majority of the members of the
Board of Directors of the Company and (iii) in the event such Asset Swap
involves an aggregate amount in excess of $50,000,000, the Company has received
a written opinion from an independent investment banking firm of nationally
recognized standing that such Asset Swap is fair to the Company or such
Restricted Subsidiary, as the case may be, from a financial point of view.
SECTION 4.10. Limitation on Restricted Payments.
(a) The Company shall not, and shall not cause or permit any of
its Restricted Subsidiaries, to, directly or indirectly, make any Restricted
Payment if at the time of such Restricted Payment and immediately after giving
effect thereto:
(i) a Default or Event of Default shall have occurred and
be continuing; or
(ii) the Company is not able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.04; or
(iii) the aggregate amount of Restricted Payments made
subsequent to the Issue Date (the amount expended for such purposes, if
other than in cash, being the fair market value of such property as
determined by the Board of Directors of the Company in good faith)
exceeds the sum of (a)(x) 100% of the aggregate Consolidated Cash Flow
of the Company (or, in the event such Consolidated Cash Flow shall be a
deficit, minus 100% of such deficit) accrued subsequent to the Issue
Date to the most recent date for which financial information is
available to the Company, taken as one accounting period, less (y) 1.4
times Consolidated Interest Expense for the same period, plus (b) 100%
of the aggregate net proceeds, including the fair market value of
property other than cash as determined by the Board of Directors of the
Company in good faith, received subsequent to the Issue Date by the
Company from any Person (other than a Restricted Subsidiary of the
Company) from the issuance and sale subsequent to the Issue Date of
Qualified Capital Stock of the Company (excluding (i) any net proceeds
from issuances and sales financed directly or indirectly using funds
borrowed from the Company or any Restricted Subsidiary of the Company,
until and to the extent such borrowing is repaid, but including the
proceeds from the issuance and sale of any securities convertible into
or exchangeable for Qualified Capital Stock to the extent such
securities are so converted or exchanged and including any additional
proceeds received by the Company upon such conversion or exchange and
(ii) any net proceeds received from issuances and sales that are used
to consummate a transaction described in clause (2) of paragraph (b)
below), plus (c) without duplication of any amount included in clause
(iii)(b) above, 100% of the aggregate net proceeds, including the fair
market value of property other than cash (valued as provided in clause
(iii)(b) above), received by the Company as a capital contribution
subsequent to the Issue Date, plus (d) the amount equal to the net
reduction in Investments (other than Permitted Investments) made by the
Company or any of its Restricted Subsidiaries in any Person resulting
from, and without duplication, (i) repurchases or redemptions of such
Investments by such Person, proceeds realized upon the sale of such
Investment to an unaffiliated purchaser and repayments of
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loans or advances or other transfers of assets by such Person to the
Company or any Restricted Subsidiary of the Company or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investment") not
to exceed, in the case of any Restricted Subsidiary, the amount of
Investments previously made by the Company or any of its Restricted
Subsidiaries in such Unrestricted Subsidiary, which amount was included
in the calculation of Restricted Payments; provided, however, that no
amount shall be included under this clause (d) to the extent it is
already included in Consolidated Cash Flow, plus (e) the aggregate net
cash proceeds received by a Person in consideration for the issuance of
such Person's Capital Stock (other than Disqualified Capital Stock)
that are held by such Person at the time such Person is merged with and
into the Company in accordance with Section 5.01 subsequent to the
Issue Date; provided, however, that concurrently with or immediately
following such merger the Company uses an amount equal to such net cash
proceeds to redeem or repurchase the Company's Capital Stock, plus (f)
$15,000,000.
(b) Notwithstanding the foregoing, these provisions will not
prohibit: (1) the payment of any dividend or the making of any distribution
within 60 days after the date of its declaration if such dividend or
distribution would have been permitted on the date of declaration; (2) the
purchase, redemption or other acquisition or retirement of any Capital Stock of
the Company or any warrants, options or other rights to acquire shares of any
class of such Capital Stock either (x) solely in exchange for shares of
Qualified Capital Stock or other rights to acquire Qualified Capital Stock or
(y) through the application of the net proceeds of a substantially concurrent
sale for cash (other than to a Restricted Subsidiary of the Company) of shares
of Qualified Capital Stock or warrants, options or other rights to acquire
Qualified Capital Stock or (z) in the case of Disqualified Capital Stock, solely
in exchange for, or through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a Restricted Subsidiary of
the Company) of, Disqualified Capital Stock; (3) payments made pursuant to any
merger, consolidation or sale of assets effected in accordance with Section
5.01; provided, however, that no such payment may be made pursuant to this
clause (3) unless, after giving effect to such transaction (and the incurrence
of any Indebtedness in connection therewith and the use of the proceeds
thereof), the Company would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.04 such that
after incurring that $1.00 of additional Indebtedness, the Leverage Ratio would
be less than 6.0 to 1; (4) payments to enable the Company or a Holding Company
(as hereinafter defined) to pay dividends on its Capital Stock (other than
Disqualified Capital Stock) after the first Public Equity Offering in an annual
amount not to exceed 6.0% of the gross proceeds (before deducting underwriting
discounts and commissions and other fees and expenses of the offering) received
from shares of Capital Stock (other than Disqualified Capital Stock) sold for
the account of the issuer thereof (and not for the account of any stockholder)
in such initial Public Equity Offering; (5) payments by the Company to fund the
payment by any company as to which the Company is, directly or indirectly, a
Subsidiary (a "Holding Company") of audit, accounting, legal or other similar
expenses, to pay franchise or other similar taxes and to pay other corporate
overhead expenses, so long as such dividends are paid as and when needed by its
respective direct or indirect Holding Company and so long as the aggregate
amount of payments pursuant to this clause (5) does not exceed $1,000,000 in any
calendar year; (6) payments by the Company to repurchase, or to enable a Holding
Company to repurchase, Capital Stock or other securities from employees of the
Company or a Holding Company in an aggregate amount not to exceed $15,000,000;
(7) payments by the Company to redeem or repurchase, or to enable a Holding
Company to redeem or repurchase, stock purchase or similar rights granted by the
Company or a Holding Company with respect to its Capital Stock in an aggregate
amount not to exceed $500,000; (8) payments, not to exceed $200,000 in the
aggregate, to enable the Company or a Holding Company to make cash payments to
holders of its Capital Stock in lieu of the issuance of fractional shares of its
Capital Stock; (9) payments by the Company to fund taxes of a Holding Company
for a given taxable year in an amount equal to the Company's "separate return
liability," as if the Company were the parent of a consolidated group (for
purposes of this clause (9) "separate return liability" for a given taxable year
shall mean the hypo-
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thetical United States tax liability of the Company defined as if the Company
had filed its own U.S. federal tax return for such taxable year); (10) the
payment of any dividend or the making of any distribution to a Holding Company
in amounts sufficient to permit a Holding Company (i) to pay interest when due
on the Senior Discount Notes and (ii) to make any mandatory redemption or
principal payments in respect of the Senior Discount Notes; and (11) payments by
the Company to Hicks Muse Partners in accordance with the terms of the Financial
Advisory Agreement and the Monitoring and Oversight Agreement; provided,
however, that in the case of clauses (3), (4), (6), (7), (8) and (10), no Event
of Default shall have occurred or be continuing at the time of such payment or
as a result thereof. In determining the aggregate amount of Restricted Payments
made subsequent to the Issue Date, amounts expended pursuant to clauses (1),
(4), (6), (7) and (8) shall be included in such calculation.
SECTION 4.11. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any of
its Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of the occurrence and continuation of any
Default or Event of Default, the Company shall promptly deliver an Officers'
Certificate to the Trustee specifying the Default or Event of Default.
SECTION 4.12. Reports.
So long as any of the Securities are outstanding, the Company
shall provide to the Trustee and the Holders and file with the Commission, to
the extent such submissions are accepted for filing by the Commission, copies of
the annual reports and of the information, documents and other reports that the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act, regardless of whether the Company is then
obligated to file such reports.
SECTION 4.13. Limitations on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause to permit to
exist or become effective, by operation of the charter of such Restricted
Subsidiary or by reason of any agreement, instrument, judgment, decree, rule,
order, statute or governmental regulation, any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock; (b) make loans or advances or pay any
Indebtedness or other obligation owed to the Company or any of its Restricted
Subsidiaries; or (c) transfer any of its property or assets to the Company,
except for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) customary nonassignment provisions of
any lease governing a leasehold interest of the Company or any Restricted
Subsidiary; (4) any instrument governing Acquired Indebtedness or Acquired
Preferred Stock, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; (5) agreements existing on the
Issue Date (including the Credit Agreement) as such agreements are from time to
time in effect; provided, however, that any amendments or modifications of such
agreements that affect the encumbrances or restrictions of the types subject to
this covenant shall not result in such encumbrances or restrictions being less
<PAGE> 43
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favorable to the Company in any material respect, as determined in good faith by
the Board of Directors of the Company, than the provisions as in effect before
giving effect to the respective amendment or modification; (6) any restriction
with respect to such a Restricted Subsidiary imposed pursuant to an agreement
entered into for the sale or disposition of all or substantially all the Capital
Stock or assets of such Restricted Subsidiary pending the closing of such sale
or disposition; (7) an agreement effecting a refinancing, replacement or
substitution of Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clause (2), (4) or (5) above or any other agreement
evidencing Indebtedness permitted under this Indenture; provided, however, that
the provisions relating to such encumbrance or restriction contained in any such
refinancing, replacement or substitution agreement or any such other agreement
are no less favorable to the Company in any material respect as determined in
good faith by the Board of Directors of the Company than the provisions relating
to such encumbrance or restriction contained in agreements referred to in such
clause (2), (4) or (5); (8) restrictions on the transfer of the assets subject
to any Lien imposed by the holder of such Lien; (9) a licensing agreement to the
extent such restrictions or encumbrances limit the transfer of property subject
to such licensing agreement; (10) restrictions relating to Subsidiary Preferred
Stock that require that due and payable dividends thereon to be paid in full
prior to dividends on such Subsidiary's common stock; or (11) any agreement or
charter provision evidencing Indebtedness or Capital Stock permitted under this
Indenture; provided, however, that the provisions relating to such encumbrance
or restriction contained in such agreement or charter provision are not less
favorable to the Company in any material respect as determined in good faith by
the Board of Directors of the Company than the provisions relating to such
encumbrance or restriction contained in this Indenture.
SECTION 4.14. Subsidiary Guarantees by Restricted Subsidiaries.
(a) The Company shall not create or acquire, nor cause or permit
any of its Restricted Subsidiaries, directly or indirectly, to create or
acquire, any Subsidiary other than (1) an Unrestricted Subsidiary in accordance
with the other terms of this Indenture or (2) a Restricted Subsidiary that,
simultaneously with such creation or acquisition, (x) executes and delivers to
the Trustee a supplemental indenture to this Indenture pursuant to which it will
become a Guarantor in accordance with Article Eleven hereof and (y) delivers to
the Trustee an Opinion of Counsel that such supplemental indenture has been duly
authorized, executed and delivered by such Restricted Subsidiary and constitutes
a valid, binding and enforceable obligation of such Restricted Subsidiary (which
opinion may be subject to customary assumptions and qualifications).
(b) Any Unrestricted Subsidiary that is redesignated as a
Restricted Subsidiary shall upon such redesignation be required to become a
Guarantor in accordance with the requirements of Section 4.14(a)(2).
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require that the Company purchase all or a portion of such
Holder's Securities in cash pursuant to the offer described below (the "Change
of Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in
any event within 30 days following the date on which the Company becomes aware
that a Change of Control has occurred (the "Change of Control Date"), the
Company covenants that if the purchase of the Securities would violate or
constitute a default under any other Indebtedness of the Company, then the
Company shall, to the extent needed to permit such purchase of Securities,
either (i) repay all such Indebtedness and terminate all commitments outstanding
thereunder or (ii) obtain the requisite consents, if any, under any such
Indebtedness to permit the purchase of the Securities as provided below. The
Company shall first comply with the covenant in the preceding sentence
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before it will be required to make the Change of Control Offer or purchase the
Securities pursuant to the provisions described below.
(c) Within 30 days following the date on which the Company becomes
aware that a Change of Control has occurred, the Company shall send, by first
class mail, postage prepaid, a notice to each Holder, which notice shall govern
the terms of the Change of Control Offer. The notice to the Holders shall
contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Change of Control Offer. Such notice shall
state:
(1) that the Change of Control Offer is being made pursuant
to this Section 4.15 and that all Securities validly tendered and not
withdrawn will be accepted for payment;
(2) the purchase price (including the amount of accrued
interest, if any) and the purchase date (which shall be no earlier than
30 days nor later than 45 days from the date such notice is mailed,
other than as may be required by law) (the "Change of Control Payment
Date");
(3) that any Security not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent and
Registrar for the Securities at the address specified in the notice
prior to the close of business on the Business Day prior to the Change
of Control Payment Date;
(6) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than five Business
Days prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(7) that Holders whose Securities are purchased only in
part shall be issued new Securities in a principal amount equal to the
unpurchased portion of the Securities surrendered; provided, however,
that each Security purchased and each new Security issued shall be in a
principal amount of $1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding such
Change of Control.
(d) On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Securities or portions thereof (in integral
multiples of $1,000) validly tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent in accordance with Section 2.14 cash in U.S.
dollars or United States Government Obligations sufficient to pay the purchase
price plus accrued and unpaid interest, if any, of all Securities so tendered
and (iii) deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof being purchased
by the Company. Upon receipt by the Paying Agent of the monies specified in
clause (ii) above and a copy of the Officers' Certificate specified in clause
(iii)
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above, the Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price plus accrued and
unpaid interest, if any, out of the funds deposited with the Paying Agent in
accordance with the preceding sentence. The Trustee shall promptly authenticate
and mail to such Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered. Upon the payment of the
purchase price for the Securities accepted for purchase, the Trustee shall
return the Securities purchased to the Company for cancellation. Any monies
remaining after the purchase of Securities pursuant to a Change of Control Offer
shall be returned within three Business Days by the Trustee to the Company
except with respect to monies owed as obligations to the Trustee pursuant to
Article Eight. For purposes of this Section 4.15, the Trustee shall, except with
respect to monies owed as obligations to the Trustee pursuant to Article Eight,
act as the Paying Agent.
(e) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
purchase of the Securities pursuant to a Change of Control Offer. To the extent
the provisions of any such rule conflict with the provisions of this Indenture
relating to a Change of Control Offer, the Company shall comply with the
provisions of such rule and be deemed not to have breached its obligations
relating to such Change of Control Offer by virtue thereof.
(f) Paragraphs (a)-(e) of this Section 4.15 notwithstanding, the
Company shall not be required to make a Change of Control Offer if, instead, the
Company elects to effect a Change of Control Redemption in compliance with the
requirements listed on the Securities in Exhibit A and Exhibit B hereof.
(g) Paragraphs (a)-(f) notwithstanding, the Company shall not be
required to make a Change of Control Offer or a Change of Control Redemption in
the event of (i) changes in a majority of the board of directors of the Company
so long as a majority of such board of directors continues to consist of
Continuing Directors and (ii) certain transactions with Permitted Holders
(including Hicks Muse, its officers and directors, and their respective
Affiliates).
SECTION 4.16. Limitation on Liens.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur or assume any
Lien securing Indebtedness on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, unless contemporaneously therewith effective provision is made, in
the case of the Company, to secure the Securities and all other amounts due
under this Indenture, and in the case of a Restricted Subsidiary which is a
Guarantor, to secure such Restricted Subsidiary's Subsidiary Guarantee of the
Securities and all other amounts due under this Indenture, equally and ratably
with such Indebtedness (or, in the event that such Indebtedness is subordinated
in right of payment to the Securities or such Subsidiary's Subsidiary Guarantee,
prior to such Indebtedness) with a Lien on the same properties and assets
securing such Indebtedness for so long as such Indebtedness is secured by such
Lien, except for (i) Liens securing Senior Indebtedness and Guarantor Senior
Indebtedness and (ii) Liens securing Indebtedness described in clause (xi) of
the definition of "Permitted Indebtedness"; provided that such Liens cover only
the property referred to in such definition.
SECTION 4.17. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officer
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with a view to determining whether a Default or Event of Default has occurred
and whether or not the signers know of any Default or Event of Default by the
Company that occurred during such fiscal year. If they do know of such a Default
or Event of Default, their status and the action the Company is taking or
proposes to take with respect thereto. The first certificate to be delivered by
the Company pursuant to this Section 4.17 shall be for the fiscal year ending
December 31, 1998.
SECTION 4.18. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Subsidiary in accordance with the respective organizational documents of each
such Subsidiary and the rights (charter and statutory) and material franchises
of the Company and the Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right or franchise, or the corporate
existence of any Subsidiary, if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and the Subsidiaries, taken as a whole; provided,
further, however, that a determination of the Board of Directors of the Company
shall not be required in the event of a merger of one or more Restricted
Subsidiaries of the Company with or into another Restricted Subsidiary of the
Company or another Person, if the surviving Person is a Restricted Subsidiary of
the Company organized under the laws of the United States or a State thereof or
of the District of Columbia. This Section 4.18 shall not prohibit the Company
from taking any other action otherwise permitted by, and made in accordance
with, the provisions of this Indenture.
SECTION 4.19. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its material properties in normal condition (subject
to ordinary wear and tear) and make all reasonably necessary repairs, renewals
or replacements thereto as in the judgment of the Company may be reasonably
necessary to the conduct of the business of the Company and its Restricted
Subsidiaries; provided, however, that nothing in this Section 4.19 shall prevent
the Company or any of its Restricted Subsidiaries from discontinuing the
operation and maintenance of any of its properties, if such properties are, in
the reasonable and good faith judgment of the Board of Directors of the Company
or the Restricted Subsidiary, as the case may be, no longer reasonably necessary
in the conduct of their respective businesses.
(b) The Company shall provide or cause to be provided, for itself
and each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company, are reasonably adequate and appropriate for
the conduct of the business of the Company and such Restricted Subsidiaries.
SECTION 4.20. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any of
its Restricted Subsidiaries or properties of it or any of its Restricted
Subsidiaries and (ii) all material lawful claims for labor, materials, supplies
and services that, if unpaid, might by law become a Lien upon the property of it
or any of its Restricted Subsidiaries; provided, however, that there shall not
be required to be paid or discharged any such tax, assessment or charge, the
amount, applicability or validity of which is being contested in good faith by
appropriate
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proceedings and for which adequate provision has been made or where the failure
to effect such payment or discharge is not adverse in any material respect to
the Holders.
SECTION 4.21. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of, premium or interest on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the obligations or the performance of this Indenture; and (to
the extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.
(a) The Company shall not, in a single transaction or a series of
related transactions, consolidate with or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
Company's or any Guarantor's assets determined on a consolidated basis for the
Company to another Person or adopt a plan of liquidation unless (i) either (1)
the Company is the surviving Person or (2) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or the
person that acquires by conveyance, transfer or lease the properties and assets
of the Company substantially as an entirety or in the case of a plan of
liquidation, the Person to which assets of the Company have been transferred,
shall be a corporation, partnership, limited liability company or trust
organized and existing under the laws of the United States or any State thereof
or the District of Columbia; (ii) such surviving person shall assume all of the
obligations of the Company under the Securities and this Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately after giving effect to such transaction and the use of the proceeds
therefrom (on a pro forma basis, including giving effect to any Indebtedness
incurred or anticipated to be incurred in connection with such transaction), (x)
no Default or Event of Default shall have occurred and be continuing and (y) the
Company (in the case of clause (1) of the foregoing clause (i)) or such Person
(in the case of clause (2) of the foregoing clause (i)) shall be able to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.04; and (iv) the Company has delivered to the Trustee
prior to the consummation of the proposed transaction an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer complies with this Indenture and that all conditions precedent in this
Indenture relating to such transaction have been satisfied.
(b) For purposes of the foregoing subsection (a), the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all the properties and assets of one or
more Restricted Subsidiaries, the Capital Stock of which constitutes all or
substantially all the properties and assets of the Company, shall be deemed to
be the transfer of all or substantially all the properties and assets of the
Company.
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(c) Notwithstanding clauses (ii) and (iii) in paragraph (a) above,
(1) any Restricted Subsidiary of the Company may consolidate with, merge into or
transfer all or part of its properties and assets to the Company and (2) the
Company may merge with an Affiliate thereof incorporated solely for the purpose
of reorganizing the Company in another jurisdiction in the U.S. to realize tax
or other benefits. Notwithstanding paragraph (a) above, clauses (iii) and (iv)
thereof shall not apply to the Merger.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in
and complying with the conditions listed in Section 5.01 in which the Company is
not the surviving person and the surviving person is to assume all the
Obligations of the Company under the Securities, this Indenture and the
Registration Rights Agreement pursuant to a supplemental indenture, such
surviving person shall succeed to, and be substituted for, and may exercise
every right and power of the Company, and the Company shall be discharged from
its Obligations under this Indenture, the Securities and the Registration Rights
Agreement.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes
of this Indenture:
(a) the failure to pay interest on any Security when the same
becomes due and payable and the Default continues for a period of 30
days (whether or not such payment is prohibited by Article Seven;
(b) the failure to pay principal of or premium, if any, on any
Security when such principal or premium, if any, becomes due and
payable, at maturity, upon redemption or otherwise (whether or not such
payment is prohibited by Article Seven);
(c) a default in the observance or performance of any other
covenant or agreement contained in the Securities or this Indenture,
which default continues for a period of 30 days after the Company
receives written notice thereof specifying the default from the Trustee
or Holders of at least 25% in aggregate principal amount of outstanding
Securities;
(d) the failure to pay at the final stated maturity (giving
effect to any extensions thereof) the principal amount of any
Indebtedness of the Company or any Restricted Subsidiary of the
Company, or the acceleration of the final stated maturity of any such
Indebtedness, if the aggregate principal amount of such Indebtedness,
together with the aggregate principal amount of any other such
Indebtedness in default for failure to pay principal at the final
stated maturity (giving effect to any extensions thereof) or which has
been accelerated, aggregates $10,000,000 or more at any time in each
case after a 10-day period during which such default shall not have
been cured or such acceleration rescinded;
(e) one or more judgments in an aggregate amount in excess of
$15,000,000 (which are not covered by insurance as to which the insurer
has not disclaimed coverage) being rendered against the
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Company or any of its Significant Restricted Subsidiaries and such
judgment or judgments remain undischarged or unstayed for a period of
60 days after such judgment or judgments become final and
nonappealable;
(f) the Company or any of its Significant Restricted
Subsidiaries (or one or more Restricted Subsidiaries that, taken
together would constitute a Significant Restricted Subsidiary) pursuant
to or within the meaning of any Bankruptcy Law: (i) admits in writing
its inability to pay its debts generally as they become due; (ii)
commences a voluntary case or proceeding; (iii) consents to the entry
of an order for relief against it in an involuntary case or proceeding;
(iv) consents or acquiesces in the institution of a bankruptcy or
insolvency proceeding against it; (v) consents to the appointment of a
Custodian of it or for all or substantially all of its property; or
(vi) makes a general assignment for the benefit of its creditors, or
any of them takes any action to authorize or effect any of the
foregoing;
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the
Company or any Significant Restricted Subsidiary (or one or more
Restricted Subsidiaries that, taken together would constitute a
Significant Restricted Subsidiary) of the Company in an involuntary
case or proceeding; (ii) appoints a Custodian of the Company or any
Significant Restricted Subsidiary (or one or more Restricted
Subsidiaries that, taken together would constitute a Significant
Restricted Subsidiary) of the Company for all or substantially all of
its property; or (iii) orders the liquidation of the Company or any
Significant Restricted Subsidiary (or one or more Restricted
Subsidiaries that, taken together would constitute a Significant
Restricted Subsidiary) of the Company; and in each case the order or
decree remains unstayed and in effect for 60 days; provided, however,
that if the entry of such order or decree is appealed and dismissed on
appeal, then the Event of Default hereunder by reason of the entry of
such order or decree shall be deemed to have been cured; or
(h) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in a judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or
any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than
an Event of Default specified in clause (f) or (g) of Section 6.01) occurs and
is continuing, the Trustee may, or the Trustee upon the request of Holders of
25% in principal amount of the outstanding Securities shall, or the Holders of
at least 25% in aggregate principal amount of the outstanding Securities may
declare the principal of all the Securities, together with all accrued and
unpaid interest and premium, if any, to be due and payable by notice in writing
to the Company and the Trustee specifying the respective Event of Default and
that it is a "notice of acceleration" (the "Acceleration Notice"), and the same
(i) shall become immediately due and payable or (ii) if there are any amounts
outstanding under the Senior Credit Facilities, will become due and payable upon
the first to occur of an acceleration under the Senior Credit Facilities or five
Business Days after receipt by the Company and the agent under the Senior Credit
Facilities of such Acceleration Notice (unless all Events of Default specified
in such Acceleration Notice have been cured or waived).
If an Event of Default specified in clause (f) or (g) of Section
6.01 occurs, all unpaid principal of and accrued interest on all outstanding
Securities shall ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
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At any time after such declaration with respect to the Securities,
the Holders of a majority in principal amount of Securities then outstanding (by
notice to the Trustee) may rescind and cancel such declaration and its
consequences if (i) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction, (ii) all existing Defaults and
Events of Default have been cured or waived except nonpayment of principal of or
interest on the Securities that has become due solely by such declaration of
acceleration, (iii) to the extent the payment of such interest is lawful,
interest (at the same rate specified in the Securities) on overdue installments
of interest and overdue payments of principal, which has become due otherwise
than by such declaration of acceleration has been paid, (iv) the Company has
paid the Trustee its reasonable compensation and reimbursed the Trustee for its
reasonable expenses, disbursements and advances and (v) in the event of the cure
or waiver of a Default or Event of Default of the type described in clause (f)
or (g) of Section 6.01, the Trustee has received an Officers' Certificate and
Opinion of Counsel that such Default or Event of Default has been cured or
waived. The Holders of a majority in principal amount of the Securities may
waive any existing Default or Event of Default under this Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any Securities. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the declaration
of acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (a), (b), (c) and (d) of Section 6.01 or a
Default in respect of any term or provision of this Indenture that may not be
amended or modified without the consent of each Holder affected as provided in
Section 10.02. The Company shall deliver to the Trustee an Officers' Certificate
stating that the requisite percentage of Holders have consented to such waiver
and attaching copies of such consents. In case of any such waiver, the Company,
the Trustee and the Holders shall be restored to their former positions and
rights hereunder and under the Securities, respectively. This paragraph of this
Section 6.04 shall be in lieu of ss. 316(a)(1)(B) of the TIA and such ss.
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
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SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of another Holder, it being
understood that the Trustee shall have no duty (subject to Section 8.01) to
ascertain whether or not such actions or forebearances are unduly prejudicial to
such Holders, or that may involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction. In the event the Trustee takes
any action or follows any direction pursuant to this Indenture, the Trustee
shall be entitled to indemnification satisfactory to it in its sole discretion
against any loss or expense caused by taking such action or following such
direction. This Section 6.05 shall be in lieu of ss. 316(a)(1)(A) of the TIA,
and such ss. 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to the
Trustee to pursue a remedy;
(iii) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee
a direction which, in the opinion of the Trustee, is inconsistent with
the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of or interest on a Security, on
or after the respective due dates expressed in the Security, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(a), (b), (c) or (d) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Securities for the whole amount
of principal and accrued interest remaining unpaid, together with interest
overdue on principal and to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by the
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Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 8.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and may be
a member of the creditors' committee.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 8.07;
Second: to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
<PAGE> 53
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ARTICLE SEVEN
SUBORDINATION OF SECURITIES
SECTION 7.01. Agreement To Subordinate.
The Company agrees, and each Holder by accepting any Security
agrees, that the Indebtedness evidenced by the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article
Seven, to the payment when due of all Senior Indebtedness of the Company and
that such subordination is for the benefit of and enforceable by the holders of
Senior Indebtedness. The Securities shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of the Company, and only Indebtedness
of the Company which is Senior Indebtedness will rank senior to the Securities
in accordance with the provisions set forth herein. Unsecured Indebtedness is
not deemed to be subordinate or junior to Secured Indebtedness merely because it
is unsecured, nor is any Indebtedness deemed to be subordinate or junior to
other Indebtedness merely because it matures after such other Indebtedness.
Secured Indebtedness is not deemed to be Senior Indebtedness merely because it
is secured. All provisions of this Article Seven shall be subject to Section
7.12.
SECTION 7.02. Liquidation, Dissolution, Bankruptcy.
Upon any payment or distribution of the assets of the Company upon
a total or partial liquidation or dissolution or reorganization or bankruptcy of
or similar proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash or Cash Equivalents of all
Senior Indebtedness of the Company before holders of Securities shall be
entitled to receive any payment of principal of or interest on or other
amounts with respect to the Securities from the Company; and
(2) until the Senior Indebtedness of the Company is paid in full,
in cash or Cash Equivalents, any payment or distribution to which Holders
would be entitled but for the provisions of this Article Seven shall be
made to holders of Senior Indebtedness as their interests may appear.
SECTION 7.03. Default on Senior Indebtedness.
The Company may not pay the principal of, premium (if any), or
interest on, and other obligations with respect to, the Securities or make any
deposit pursuant to Section 9.03 or repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities") if (i) any Senior Indebtedness
is not paid when due or (ii) any other default on Senior Indebtedness occurs and
the maturity of such Senior Indebtedness is accelerated in accordance with its
terms unless, in either case, (x) the default has been cured or waived or is no
longer continuing and/or any such acceleration has been rescinded or (y) such
Senior Indebtedness has been paid in full; provided, however, that the Company
may pay the Securities, subject to the provisions of Section 7.02, without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representatives of the Senior Indebtedness with
respect to which either of the events set forth in clause (i) or (ii) of this
sentence has occurred or is continuing. During the continuance of any default
(other than a default described in clause (i) or (ii) of the preceding sentence)
with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be accelerated immediately without further notice
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(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the
Securities (except (i) in Qualified Capital Stock issued by the Company to pay
interest on the Securities or issued in exchange for the Securities, (ii) in
securities substantially identical to the Securities issued by the Company in
payment of interest accrued thereon or (iii) in securities issued by the Company
which are subordinated to the Senior Indebtedness at least to the same extent as
the Securities and having a Weighted Average Life to Maturity at least equal to
the remaining Weighted Average Life to Maturity of the Securities) for a period
(a "Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to the Company) of written notice (a "Blockage Notice") of such default
from the Representative of the holders of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (i) by
written notice to the Trustee and the Company from the Person or Persons who
gave such Blockage Notice, (ii) because the default giving rise to such Blockage
Notice has been cured, waived or is no longer continuing or (iii) because such
Designated Senior Indebtedness has been repaid in full). Notwithstanding the
provisions of the immediately preceding sentence, but subject to the provisions
of the first sentence of this Section 7.03 and the provisions of Section 7.02,
the Company may resume payments on the Securities after the end of such Payment
Blockage Period. Not more than one Blockage Notice may be given, and not more
than one Payment Blockage Period may occur, in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period. However, if any Blockage Notice within such
360-day period is given by or on behalf of any holders of Designated Senior
Indebtedness (other than the agent under the Senior Credit Facilities), the
agent under the Senior Credit Facilities may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Payment Blockage Periods are in effect exceed 179
days in the aggregate during any 360 consecutive day period. No nonpayment
default that existed or was continuing on the date of delivery of any Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Blockage
Notice unless such default shall have been cured or waived for a period of not
less than 90 consecutive days.
SECTION 7.04. Acceleration of Payment of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company or the Trustee shall promptly notify the holders of the
Representative (if any) of any issue of Designated Senior Indebtedness which is
then outstanding; provided, however, that the Company and the Trustee shall be
obligated to notify such a Representative (other than with respect to the Senior
Credit Facilities) only if such Representative has delivered or caused to be
delivered an address for the service of such a notice to the Company and the
Trustee (and the Company and the Trustee shall be obligated only to deliver the
notice to the address so specified). If a notice is required pursuant to the
immediately preceding sentence, the Company may not pay the Securities (except
payment (i) in Qualified Capital Stock issued by the Company to pay interest on
the Securities or issued in exchange for the Securities, (ii) in securities
substantially identical to the Securities issued by the Company in payment of
interest accrued thereon or (iii) securities issued by the Company which are
subordinated to the Senior Indebtedness at least to the same extent as the
Securities and have a Weighted Average Life to Maturity at least equal to the
remaining Weighted Average Life to Maturity of the Securities), until five
Business Days after the respective Representative of the Designated Senior
Indebtedness receives notice (at the address specified in the preceding
sentence) of such acceleration and thereafter may pay the Securities only if the
provisions of this Article Seven otherwise permit payment at that time.
SECTION 7.05. When Distribution Must Be Paid Over.
If a distribution is made to the Trustee or to Holders that
because of this Article Seven should not have been made to them, the Trustee or
the Holders who receive such distribution shall hold it in trust for
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holders of Senior Indebtedness and promptly pay it over to them as their
respective interests may appear; provided, however, that the liabilities of the
Trustee under this Section 7.05 are limited by Section 7.15.
SECTION 7.06. Subrogation.
After all Senior Indebtedness is paid in full and until the
Securities are paid in full, Holders shall be subrogated to the rights of
holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness. A distribution made under this Article Seven to holders of Senior
Indebtedness which otherwise would have been made to Holders is not, as between
the Company and the Holders, a payment by the Company of Senior Indebtedness.
SECTION 7.07. Relative Rights.
This Article Seven defines the relative rights of Holders of the
Securities on the one hand and holders of Senior Indebtedness on the other hand.
Nothing in this Indenture shall:
(1) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
or
(2) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions otherwise
payable to Holders.
SECTION 7.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by the failure of the Company to
comply with this Indenture.
SECTION 7.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 7.03, the Trustee or Paying Agent may
continue to make payments on the Securities and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article Seven. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that if an issue of Senior
Indebtedness has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article Seven with respect to any Senior Indebtedness which may at any time be
held by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article Seven shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article Seven shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.07.
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SECTION 7.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders
of Senior Indebtedness, the distribution may be made and the notice given to
their Representative (if any).
SECTION 7.11. Article Seven Not To Prevent Events of Default or Limit Right To
Accelerate.
The failure to make a payment in respect of the Securities by
reason of any provision in this Article Seven shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article Seven shall have any effect on the right of the Holders or the Trustee
to accelerate the maturity of the Securities.
SECTION 7.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary,
payments from money or the proceeds of U.S. Government Obligations held in trust
under Article Nine by the Trustee for the payment of principal of and interest
on the Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article Seven, and
none of the Holders shall be obligated to pay over any such amount to the
Company, any holder of Senior Indebtedness of the Company, or any other creditor
of the Company.
SECTION 7.13. Trustee Entitled To Rely.
Upon any payment or distribution pursuant to this Article Seven,
the Trustee and the Holders shall be entitled to rely (i) upon any order or
decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 7.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Holders or (iii) upon the Representatives for the
holders of Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Seven. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness to participate in any payment
or distribution pursuant to this Article Seven, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article Seven, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The Trustee shall have the right to seek a declaratory judgment as to
any right of such Person to receive such payment. The provisions of Sections
8.01 and 8.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article Seven.
SECTION 7.14. Trustee To Effectuate Subordination.
Each Holder by accepting a Security authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holder and the holders
of Senior Indebtedness as provided in this Article Seven and appoints the
Trustee as attorney-in-fact for any and all such purposes.
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SECTION 7.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Holders or the Company, or any other
Person, money or assets to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article Seven or otherwise.
SECTION 7.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions.
Each Holder by accepting a Security acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE EIGHT
TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance
of such duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions conforming to
the requirements of this Indenture; provided, however, that in the case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 8.01;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
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(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02, 6.04 and 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 8.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 8.02. Rights of Trustee.
Subject to Section 8.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which
shall conform to the provisions of Section 13.05. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence
of any agent or attorney (other than an agent who is an employee of the
Trustee) appointed with due care and appointed with the consent of the
Company.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) Before the Trustee acts or refrains from acting, it may
consult with counsel and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution.
(g) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless
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such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney.
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless the Trustee shall have received written notice thereof
at the Corporate Trust Office of the Trustee, and such notice references
the Securities and this Indenture.
(j) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
(k) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty and the Trustee shall
not be answerable for other than its gross negligence or willful
misconduct.
SECTION 8.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or their
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
8.10 and 8.11.
SECTION 8.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company or any Guarantor in this Indenture or any document issued in connection
with the sale of Securities or any statement in the Securities other than the
Trustee's certificate of authentication.
SECTION 8.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and
the Trustee has actual knowledge of such Defaults or Events of Default, the
Trustee shall mail to each Holder notice of the Default or Event of Default
within 30 days after the occurrence thereof. Except in the case of a Default or
an Event of Default in payment of principal of or interest on any Security or a
Default or Event of Default in complying with Section 5.01, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interest of the Holders.
This Section 8.05 shall be in lieu of the proviso to ss. 315(b) of the TIA and
such proviso to ss. 315(b) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
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SECTION 8.06. Reports by Trustee to Holders.
If required by TIA ss. 313(a), within 60 days after each February
1 beginning with March 1, 1997, the Trustee shall mail to each Holder a report
dated as of such February 1 that complies with TIA ss. 313(a). The Trustee also
shall comply with TIA ss. 313(b), (c) and (d).
A copy of each such report at the time of its mailing to Holders
shall be filed with the Commission and each stock exchange, if any, on which the
Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 8.07. Compensation and Indemnity.
The Company and the Guarantors shall pay to the Trustee and the
Agents from time to time, and the Trustee and the Agents shall be entitled to,
such compensation as the Company and the Trustee and the Agents shall from time
to time agree in writing for their respective services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company and the Guarantors shall reimburse the Trustee and
the Agents upon request for all reasonable disbursements, expenses and advances,
including all costs and expenses of collection and reasonable fees,
disbursements and expenses of its agents and outside counsel incurred or made by
any of them in addition to the compensation for their respective services except
any such disbursements, expenses and advances as may be attributable to
negligence or willful misconduct of the party to be reimbursed. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents, accountants, experts and outside counsel and any taxes or
other expenses incurred by a trust created pursuant to Section 9.01 hereof.
The Company and the Guarantors shall indemnify the Trustee and the
Agents for, and hold them harmless against any and all loss, damage, claims,
liability or expense, including taxes (other than franchise taxes imposed on the
indemnified party and taxes based upon, measured by or determined by the income
of the indemnified party), arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending themselves against or investigating any claim or liability
in connection with the exercise or performance of any of their powers or duties
hereunder, except to the extent that such loss, damage, claim, liability or
expense is due to negligence or willful misconduct of the indemnified party. The
indemnified party shall notify the Company promptly of any claim asserted
against the indemnified party for which it may seek indemnity. However, the
failure by the indemnified party to so notify the Company shall not relieve the
Company and the Guarantors of their obligations hereunder unless the Company and
the Guarantors have been prejudiced thereby. The Company and the Guarantors
shall defend the claim and the indemnified party shall cooperate in the defense
at the expense of the Company and the Guarantors; provided that the Company and
the Guarantors shall not be liable in any action or for which they have assumed
the defense for the expenses of separate counsel to the indemnified party unless
(1) the employment of separate counsel has been authorized by the Company and
the Guarantors, (2) the indemnified party has reasonably concluded (based upon
advice of counsel to the indemnified party) that there may be legal defenses
available to the indemnified party that are different from or in addition to
those available to the Company and the Guarantors or (3) a conflict or potential
conflict exists (based upon advice of counsel to the indemnified party) between
the indemnified party, the Company and the Guarantors; provided further,
however, that in any such event the reimbursement obligation of the Company and
the Guarantors with respect to separate counsel of the indemnified party will be
limited to the reasonable fees and expenses of such counsel.
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The Company and the Guarantors need not pay for any settlement
made without their written consent, which consent shall not be unreasonably
withheld. The Company and the Guarantors need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee or an Agent as a
result of its own negligence or willful misconduct.
To secure the payment obligations of the Company and the
Guarantors in this Section 8.07, the Trustee shall have a Lien prior to the
Securities against all money or property held or collected by the Trustee, in
its capacity as Trustee, except money or property held in trust to pay principal
of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law.
SECTION 8.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 8.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 8.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 8.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Securities
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
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If the Trustee fails to comply with Section 8.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 8.08, the Company's obligations under Section 8.07 shall continue for
the benefit of the retiring Trustee.
SECTION 8.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee; provided, however, that such corporation shall be otherwise
qualified and eligible under this Article Eight.
SECTION 8.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible
to act as Trustee under TIA ss.ss. 310(a)(1) and 310(a)(2). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of TIA ss. 310(b), the
Trustee and the Company shall comply with the provisions of TIA ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.10, the Trustee shall resign
immediately in the manner and with the effect hereinbefore specified in this
Article Eight. The provisions of TIA ss. 310 shall apply to the Company and any
other obligor of the Securities.
SECTION 8.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Termination of the Company's Obligations.
The Company may terminate its obligations under the Securities and
this Indenture as well as the obligations of the Guarantors under their
respective Subsidiary Guarantees, except those obligations referred to in the
penultimate paragraph of this Section 9.01, if :
(i) either (a) all the Securities theretofore authenticated
and delivered (except lost, stolen or destroyed Securities which have
been replaced or paid and Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter
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repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or (b) all Securities not
theretofore delivered to the Trustee for cancellation have become due
and payable or have been called for redemption and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds
in an amount sufficient to pay and discharge the entire Indebtedness on
the Securities not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the
Securities to the date of deposit together with irrevocable
instructions from the Company directing the Trustee to apply such funds
to the payment thereof at maturity or redemption, as the case may be;
(ii) the Company has paid all other sums payable under this
Indenture by the Company; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the first paragraph of this Section 9.01, the
Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 8.07, 8.08, 9.05
and 9.06 shall survive until the Securities are no longer outstanding pursuant
to Section 2.08. After the Securities are no longer outstanding, the Company's
obligations in Sections 8.07, 8.08, 9.05 and 9.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon
request shall acknowledge in writing the discharge of the Company's and
Guarantors' obligations under the Securities, the Subsidiary Guarantees and this
Indenture except for those surviving obligations specified above.
SECTION 9.02. Legal Defeasance and Covenant Defeasance
(a) The Company may terminate its obligations in respect of the
Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing, the
Company may, at its option, at any time elect to have either paragraph (b) or
(c) below be applied to all outstanding Securities, subject in either case to
compliance with the conditions set forth in Section 9.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be deemed to have paid
and discharged the entire indebtedness represented by the outstanding
Securities, except for (i) the rights of Holders to receive payments in respect
of the principal of, premium, if any, and interest on the Securities when such
payments are due, (ii) the Company's obligations with respect to the Securities
under Sections 2.03 through 2.07, inclusive, and 4.02, (iii) the rights, powers,
trust, duties and immunities of the Trustee under this Indenture and the
Company's obligations in connection therewith and (iv) Article Nine of this
Indenture (hereinafter, "Legal Defeasance"). Subject to compliance with this
Article Nine, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be released from its
obligations under Sections 4.03 through 4.16, inclusive, 4.19 and Article Five
with respect to the outstanding Securities (hereinafter, "Covenant Defeasance")
and thereafter any omission to comply with such obligations shall not constitute
a Default or an Event of Default with respect to the Securities.
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SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance.
In order to exercise either Legal Defeasance pursuant to Section
9.02(b) or Covenant Defeasance pursuant to Section 9.02(c):
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars or United
States Government Obligations, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest on the Securities on the stated date for payment thereof or
on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 9.02(b), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there
has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(c) in the case of an election under Section 9.02(c), the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders
of the Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01(f) and 6.01(g) are concerned, at any
time in the period ending on the 91st day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of or constitute a Default under this Indenture
or any other material agreement or instrument to which the Company or any
of its Restricted Subsidiaries is a party or by which the Company or any
of its Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with; and
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(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that assuming no intervening bankruptcy or
insolvency of the Company between the date of deposit and the 91st day
following the deposit and that no Holder is an insider of the Company,
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (b) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (x) have become due and payable, (y)
will become due and payable on the Final Maturity Date within one year or (z)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.
SECTION 9.04. Application of Trust Money; Trustee Acknowledgment and Indemnity.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.03, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of, premium,
if any, and interest on the Securities.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to Section 9.03 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Securities.
SECTION 9.05. Repayment to Company.
Subject to Sections 8.07 and 9.04, the Trustee shall promptly pay
to the Company upon written request any excess money held by it at any time. The
Trustee shall pay to the Company upon written request any money held by it for
the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee before being required to make any payment
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining shall
be repaid to the Company. After payment to the Company, Holders entitled to
money must look solely to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and all liability of
the Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 9.06. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit
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had occurred pursuant to Section 9.02 until such time as the Trustee is
permitted to apply all such money or United States Government Obligations in
accordance with Section 9.02; provided, however, that if the Company has made
any payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or
United States Government Obligations held by the Trustee.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a resolution of
the Board of Directors, and the Trustee may amend or supplement this Indenture
or the Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(b) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to comply with any requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit
or rights to the Holders;
(f) to make any other change that does not adversely affect the
rights of any Holder under this Indenture;
(g) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company;
(h) to reflect the release of a Guarantor from its obligations
with respect to its Guarantee in accordance with the provisions of
Section 11.03 and to add a Guarantor pursuant to the requirements of
Section 4.14; or
(i) to secure the Securities pursuant to the requirements of
Section 4.16 or otherwise;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
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SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a Board Resolution, and the Trustee may modify, amend or
supplement, or waive compliance by the Company with any provision of, this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the outstanding Securities. However, without
the consent of each Holder affected, no such modification, amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may:
(a) [reserved];
(b) reduce the principal amount of or change the Stated Maturity
of any Security or alter the provisions with respect to the repurchase or
redemption of the Securities (other than provisions relating to Section
4.08 or 4.15);
(c) reduce the rate of or change the time for payment of interest
on any Security;
(d) make any Security payable in money other than that stated in
the Securities;
(e) make any change in the provisions of this Indenture relating
to the rights of Holders of Securities to receive payments of principal
of or premium, if any, or interest on the Securities;
(f) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07 or
this Section 10.02 (other than to add sections of this Indenture or the
Securities which may not be modified, amended, supplemented or waived
without the consent of each Holder affected);
(g) reduce the percentage of the principal amount of outstanding
Securities necessary for amendment to or waiver of compliance with any
provision of this Indenture or the Securities or for waiver of any
Default in respect thereof;
(h) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities (except a
rescission of acceleration of the Securities by the Holders thereof as
provided in Section 6.02 and a waiver of the payment default that
resulted from such acceleration);
(i) waive a mandatory repurchase or redemption payment with
respect to any Security required by Section 4.08 or 4.15; or
(j) modify the ranking or priority of any Security or the
Subsidiary Guarantee in respect thereof of any Guarantor in any manner
adverse to the Holders of the Securities.
It shall not be necessary for the consent of the Holders under
this Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
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SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 10.04. Record Date for Consents and Effect of Consents.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date. The Trustee is entitled to rely upon any electronic
instruction from beneficial owners to the Holders of any Global Security.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(a) through (j) of Section 10.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determine, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
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ARTICLE ELEVEN
SUBSIDIARY GUARANTEES
SECTION 11.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (each, a "Subsidiary Guarantee") to each Holder of a Security
authenticated by the Trustee and to the Trustee and its successors and assigns
that: the principal of and interest on the Securities will be promptly paid in
full when due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and interest on
any overdue interest on the Securities and all other obligations of the Company
to the Holders or the Trustee hereunder or under the Securities will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
subject, however, to the limitations set forth in Section 11.04. Each Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that the Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and this Subsidiary Guarantee. If any Holder or the Trustee is
required by any court or otherwise to return to the Company, any Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or any Guarantor, any amount paid by the Company or any Guarantor
to the Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between each Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six for
the purpose of this Subsidiary Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six, such obligations (whether or not due and payable)
shall forth become due and payable by each Guarantor for the purpose of this
Subsidiary Guarantee.
SECTION 11.02. Severability.
In case any provision of this Subsidiary Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Release of a Guarantor.
(a) If the Securities are defeased in accordance with the terms of
this Indenture, or if Section 5.01(b) is complied with, or if, subject to the
requirements of Section 5.01(a), all or substantially all of the assets of any
Guarantor or all of the equity interests of any Guarantor are sold (including by
issuance or otherwise) by the Company in a transaction constituting an Asset
Sale and (x) the Net Cash Proceeds from such Asset Sale are used in accordance
with Section
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4.08 or (y) the Company delivers to the Trustee an Officers' Certificate to the
effect that the Net Cash Proceeds from such Asset Sale shall be used in
accordance with Section 4.08 and within the time limits specified by Section
4.08, then each Guarantor (in the case of defeasance) or such Guarantor (in the
case of compliance with Section 5.01(b) or in the event of a sale or other
disposition of all of the equity interests of such Guarantor) or the Person
acquiring such assets (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be released and
discharged from all obligations under this Article Eleven without any further
action required on the part of the Trustee or any Holder. The Trustee shall, at
the sole cost and expense of the Company and upon receipt at the reasonable
request of the Trustee of an Opinion of Counsel that the provisions of this
Section 11.03 have been complied with, deliver an appropriate instrument
evidencing such release upon receipt of a request by the Company accompanied by
an Officers' Certificate certifying as to the compliance with this Section
11.03. Any Guarantor not so released remains liable for the full amount of
principal of and interest on the Securities and the other obligations of the
Company hereunder as provided in this Article Eleven.
(b) Any Guarantor that is designated an Unrestricted Subsidiary
shall upon such designation be released and discharged of all obligations under
this Article Eleven without any further action required on the part of the
Trustee or any Holder.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
Guarantee by such Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of title 11 of the United
States Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar U.S. Federal or state or other applicable
law. To effectuate the foregoing intention, the Holders and each Guarantor
hereby irrevocably agree that the obligations of each Guarantor under its
Subsidiary Guarantee shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the obligations of such other Guarantor
under its Subsidiary Guarantee or pursuant to Section 11.05, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting
such a fraudulent transfer or conveyance.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution
from all other Guarantors in a pro rata amount, based on the net assets of each
Guarantor (including the Funding Guarantor), determined in accordance with GAAP,
subject to Section 11.04, for all payments, damages and expenses incurred by
such Funding Guarantor in discharging the Company's obligations with respect to
the Securities or any other Guarantor's obligations with respect to the
Subsidiary Guarantee.
SECTION 11.06. Execution of Subsidiary Guarantee.
To further evidence their Guarantee to the Holders, each of the
Guarantors hereby agree to execute a Subsidiary Guarantee to be endorsed on each
Security ordered to be authenticated and delivered by the Trustee. Each
Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 11.01
shall remain in full force and effect notwithstanding any failure to endorse on
each Security a Subsidiary Guarantee. Each such Subsidiary Guarantee shall be
signed on behalf of each Guarantor by its Chairman of the Board, its President
or one of its Vice Presidents prior to the authentication of the Security on
which it is endorsed, and
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the delivery of such Security by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of such Subsidiary Guarantee on behalf
of such Guarantor. Such signature upon the Subsidiary Guarantee may be manual or
facsimile signature of such officer and may be imprinted or otherwise reproduced
on the Subsidiary Guarantee, and in case such officer who shall have signed the
Subsidiary Guarantee shall cease to be such officer before the Security on which
such Subsidiary Guarantee is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Security
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed the Subsidiary Guarantee had not ceased to be such officer of
such Guarantor.
SECTION 11.07. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company
that arises from the payment, performance or enforcement of such Guarantor's
obligations under its Subsidiary Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in accordance
with the provisions provided therefor in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF SUBSIDIARY GUARANTEE
SECTION 12.01. Agreement To Subordinate.
Each Guarantor agrees, and each Holder by accepting a Subsidiary
Guarantee agrees, that the Indebtedness of such Guarantor evidenced by the
Subsidiary Guarantee is subordinated in right of payment, to the extent and in
the manner provided in this Article Twelve, to the payment when due of all
Guarantor Senior Indebtedness of such Guarantor and that such subordination is
for the benefit of and enforceable by the holders of Guarantor Senior
Indebtedness. The Subsidiary Guarantee shall in all respects rank pari passu
with all other Guarantor Senior Subordinated Indebtedness of a Guarantor, and
only Indebtedness of a Guarantor which is Guarantor Senior Indebtedness will
rank senior to the Subsidiary Guarantee in accordance with the provisions set
forth herein. Unsecured Indebtedness is not deemed to be subordinate or junior
to Secured Indebtedness merely because it is unsecured, nor is any Indebtedness
deemed to be subordinate or junior to other Indebtedness merely because it
matures after such other Indebtedness. Secured Indebtedness is not deemed to be
Senior Indebtedness merely because it is secured. All provisions of this Article
Twelve shall be subject to Section 12.12.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.
Upon any payment or distribution of the assets of a Guarantor upon
a total or partial liquidation or dissolution or reorganization or bankruptcy of
or similar proceeding relating to a Guarantor or its property:
(1) holders of Guarantor Senior Indebtedness of such Guarantor
shall be entitled to receive payment in full in cash or Cash Equivalents
of all Guarantor Senior Indebtedness of such Guarantor before Holders
shall be entitled to receive any payment of principal of or interest on
or other amounts with respect to the Securities from such Guarantor; and
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(2) until the Guarantor Senior Indebtedness of such Guarantor is
paid in full, any payment or distribution to which Holders would be
entitled but for the provisions of this Article Twelve shall be made to
holders of Guarantor Senior Indebtedness as their interests may appear.
SECTION 12.03. Default on Guarantor Senior Indebtedness.
No Guarantor may pay the principal of, premium (if any), or
interest on, and other obligations with respect to, the Securities or make any
deposit pursuant to Section 9.03 or repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities") if (i) any Guarantor Senior
Indebtedness is not paid in cash or Cash Equivalents when due or (ii) any other
default on Guarantor Senior Indebtedness occurs and the maturity of such
Guarantor Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived or is no longer
continuing and/or any such acceleration has been rescinded or (y) such Guarantor
Senior Indebtedness has been paid in full; provided, however, that the Guarantor
may pay the Securities subject to the provisions of Section 12.02, without
regard to the foregoing if the Guarantor and the Trustee receive written notice
approving such payment from the Representatives of the Senior Indebtedness with
respect to which either of the events set forth in clause (i) or (ii) of this
sentence has occurred or is continuing. During the continuance of any default
(other than a default described in clause (i) or (ii) of the preceding sentence)
with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, a Guarantor may not pay the Securities (except (i)
in Qualified Capital Stock issued by such Guarantor to pay interest on the
Securities or issued in exchange for the Securities, (ii) in securities
substantially identical to the Securities issued by such Guarantor in payment of
interest accrued thereon or (iii) in securities issued by such Guarantor which
are subordinated to the Guarantor Senior Indebtedness at least to the same
extent as the Securities and having a Weighted Average Life to Maturity at least
equal to the remaining Weighted Average Life to Maturity of the Securities) for
a period (a "Guarantor Payment Blockage Period") commencing upon the receipt by
the Trustee (with a copy to the Guarantor) of written notice (a "Guarantor
Blockage Notice") of such default from the Representative of the holders of such
Designated Senior Indebtedness specifying an election to effect a Guarantor
Payment Blockage Period and ending 179 days thereafter (or earlier if such
Guarantor Payment Blockage Period is terminated (i) by written notice to the
Trustee and the Guarantor from the Person or Persons who gave such Guarantor
Blockage Notice, (ii) because the default giving rise to such Guarantor Blockage
Notice is no longer continuing) or (iii) because such Designated Senior
Indebtedness has been repaid in full. Notwithstanding the provisions of the
immediately preceding sentence, but subject to the provisions of the first
sentence of this Section 12.03 and the provisions of Section 12.02, the
Guarantor may resume payments on the Securities after the end of such Payment
Blockage Period. Not more than one Blockage Notice may be given, and not more
than one Payment Blockage Period may occur, in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period. However, if any Blockage Notice within such
360-day period is given by or on behalf of any holders of Designated Senior
Indebtedness (other than the agent under the Senior Credit Facilities), the
agent under the Senior Credit Facilities may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Payment Blockage Periods are in effect exceed 179
days in the aggregate during any 360 consecutive day period. No nonpayment
default that existed or was continuing on the date of delivery of any Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Blockage
Notice unless such default shall have been cured or waived for a period of not
less than 90 consecutive days.
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SECTION 12.04. Acceleration of Payment of Securities.
If a notice is required pursuant to the first sentence of Section
7.04, no Guarantor may pay the Securities (except payment (i) in Qualified
Capital Stock issued by the Guarantor to pay interest on the Securities or
issued in exchange for the Securities, (ii) in securities substantially
identical to the Securities issued by the Guarantor in payment of interest
accrued thereon or (iii) securities issued by the Guarantor which are
subordinated to the Guarantor Senior Indebtedness at least to the same extent as
the Securities and have a Weighted Average Life to Maturity at least equal to
the remaining Weighted Average Life to Maturity of the Securities), until five
Business Days after the respective Representative of the Designated Senior
Indebtedness receives notice (at the address specified in the preceding
sentence) of such acceleration and thereafter, may pay the Securities only if
the provisions of this Article Twelve otherwise permit payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over.
If a distribution is made to the Trustee or to Holders that
because of this Article Twelve should not have been made to them, the Trustee or
the Holders who receive such distribution shall hold it in trust for holders of
Guarantor Senior Indebtedness and promptly pay it over to them as their
respective interests may appear; provided, however, that the liabilities of the
Trustee under this Section 12.05 are limited by Section 12.15.
SECTION 12.06. Subrogation.
After all Guarantor Senior Indebtedness is paid in full and until
the Securities are paid in full, Holders shall be subrogated to the rights of
holders of Guarantor Senior Indebtedness to receive distributions applicable to
Guarantor Senior Indebtedness. A distribution made under this Article Twelve to
holders of Guarantor Senior Indebtedness which otherwise would have been made to
Holders is not, as between the Guarantor and the Holders, a payment by any
Guarantor of Guarantor Senior Indebtedness.
SECTION 12.07. Relative Rights.
This Article Twelve defines the relative rights of Holders of the
Securities on the one hand and holders of Guarantor Senior Indebtedness on the
other hand. Nothing in this Indenture shall:
(a) impair, as between the Guarantor and the Holders, the
obligations of any Guarantor, which are absolute and unconditional, in
respect of its Subsidiary Guarantee; or
(b) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Guarantor Senior Indebtedness to receive
distributions otherwise payable to Holders.
SECTION 12.08. Subordination May Not Be Impaired by Guarantor.
No right of any holder of Guarantor Senior Indebtedness to enforce
the subordination of the obligations under any Subsidiary Guarantee evidenced by
the Securities shall be impaired by any act or failure to act by any Guarantor
or by the failure of any Guarantor to comply with this Indenture.
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SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent may
continue to make payments on the Securities and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article Twelve. A Guarantor, the Registrar
or co-registrar, the Paying Agent, a Representative or a holder of Guarantor
Senior Indebtedness may give the notice; provided, however, that if an issue of
Guarantor Senior Indebtedness has a Representative, only the Representative may
give the notice.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article Twelve with respect to any Guarantor Senior Indebtedness which may
at any time be held by it, to the same extent as any other holder of Guarantor
Senior Indebtedness; and nothing in Article Twelve shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article Twelve shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 8.07.
SECTION 12.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders
of Guarantor Senior Indebtedness, the distribution may be made and the notice
given to their Representative, if any.
SECTION 12.11. Article Twelve Not To Prevent Events of Default or Limit Right To
Accelerate.
The failure to make a payment in respect of the Securities by
reason of any provision in this Article Twelve shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article Twelve shall have any effect on the right of the Holders or the Trustee
to enforce any Subsidiary Guarantee or to accelerate the maturity of the
Securities.
SECTION 12.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary,
payments from money or the proceeds of U.S. Government Obligations held in trust
under Article Eight by the Trustee for payment in respect of the Subsidiary
Guarantees shall not be subordinated to the prior payment of any Guarantor
Senior Indebtedness or subject to the restrictions set forth in this Article
Twelve, and none of the Holders shall be obligated to pay over any such amount
to such Guarantor, any holder of Guarantor Senior Indebtedness of such
Guarantor, or any other creditor of such Guarantor.
SECTION 12.13. Trustee Entitled To Rely.
Upon any payment or distribution pursuant to this Article Twelve,
the Trustee and the Holders shall be entitled to rely (i) upon any order or
decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 12.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Holders or (iii) upon the Representatives for the
holders of Guarantor Senior Indebtedness for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Guarantor Senior Indebtedness and other Indebtedness of any Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distrib-
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uted thereon and all other facts pertinent thereto or to this Article Twelve. In
the event that the Trustee determines, in good faith, that evidence is required
with respect to the right of any Person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Twelve, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article Twelve, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
Trustee shall have the right to seek a declaratory judgment as to any right of
such Person to receive such payment. The provisions of Sections 8.01 and 8.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article Twelve.
SECTION 12.14. Trustee To Effectuate Subordination.
Each Holder by accepting a Subsidiary Guarantee authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holder
and the holders of Guarantor Senior Indebtedness as provided in this Article
Twelve and appoints the Trustee as attorney-in-fact for any and all such
purposes.
SECTION 12.15. Trustee Not Fiduciary for Holders of Guarantor Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Holders or the
Guarantor, or any other Person, money or assets to which any holders of
Guarantor Senior Indebtedness shall be entitled by virtue of this Article Twelve
or otherwise.
SECTION 12.16. Reliance by Holders of Guarantor Senior Indebtedness on
Subordination Provisions.
Each Holder by accepting a Subsidiary Guarantee acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Guarantor Senior
Indebtedness, whether such Guarantor Senior Indebtedness was created or acquired
before or after the issuance of the Subsidiary Guarantee, to acquire and
continue to hold, or to continue to hold, such Guarantor Senior Indebtedness and
such holder of Guarantor Senior Indebtedness shall be deemed conclusively to
have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Guarantor Senior Indebtedness.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this In-
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denture as so modified. If any provision of this Indenture excludes any TIA
provision that may be so excluded, such TIA provision shall be excluded from
this Indenture.
The provisions of TIA ss.ss. 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company:
LIN Acquisition Company
1 Richmond Square, Suite 230E
Providence, Rhode Island 02906
Attention: Peter E. Maloney
Facsimile: (401) 454-0089
Telephone: (401) 457-9405
Copy to:
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawwrence D. Stuart, Jr.
Facsimile: (214) 740-7313
Telephone: (214) 740-7300
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Facsimile: (212) 852-1625
Telephone: (212) 852-1000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid,
to a Holder including any notice delivered in connection with TIA ss. 310(b),
TIA ss. 313(c), TIA ss. 314(a) and TIA ss. 315(b), shall be mailed to him at his
address as set forth on the Security register and shall be sufficiently given to
him if so
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mailed within the time prescribed. To the extent required by the TIA, any notice
or communication shall also be mailed to any Person described in TIA ss. 313(c).
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received, if
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 13.05. Statements Required in Certificate.
Each certificate with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate has read such
covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are
based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
<PAGE> 78
-71-
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.07. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE, THE
SECURITIES AND THE SUBSIDIARY GUARANTEES WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.08. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Subsidiary
Guarantees, as the case may be, or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Security and the Subsidiary Guarantees waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities and the Subsidiary Guarantees.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of each Guarantor in this Indenture
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in
the Subsidiary Guarantees shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and a Holder shall have no claim
therefor against any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
<PAGE> 79
-72-
SECTION 13.13. Legal Holidays.
If a payment date is not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day.
[Remainder of page intentionally left blank]
<PAGE> 80
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
LIN ACQUISITION COMPANY
By:
-------------------------------
Name:
Title:
INDIANA BROADCASTING, LLC
WAVY BROADCASTING, LLC
WOOD LICENSE CO., LLC
WIVB BROADCASTING, LLC,
as Guarantors
By: LIN Television Corporation,
its Managing Member
By:
-------------------------------
Name:
Title:
LIN TELEVISION OF TEXAS, L.P.,
as Guarantor
By: LIN Television of Texas, Inc.,
its General Partner
By:
-------------------------------
Name:
Title:
<PAGE> 81
S-2
AIRWAVES, INC.
BUFFALO BROADCASTING CO. INC.
BUFFALO MANAGEMENT ENTERPRISES
CO. INC.
KXAN, INC.
KXTX HOLDINGS, INC.
LINBENCO, INC.
LIN SPORTS, INC.
LIN TELEVISION OF TEXAS, INC.
LWWI BROADCASTING INC.
NORTH TEXAS BROADCASTING
CORPORATION
WAND TELEVISION, INC.
WOOD TELEVISION, INC.
WTNH BROADCASTING, INC.,
as Guarantors
By:
-------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
-------------------------------
Name:
Title:
<PAGE> 82
EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND, IN THE CASE OF THE
FOREGOING CLAUSE (D), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
ISSUERS AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-1
<PAGE> 83
LIN ACQUISITION COMPANY
8 3/8% Senior Subordinated Note due 2008
CUSIP No.:[ ]
No. [ ] $[ ]
LIN ACQUISITION COMPANY, a Delaware corporation (the "Company,"
which term includes any successor corporation), for value received, promise to
pay to [ ] or registered assigns the principal sum of [ ] Dollars, on March 1,
2008.
Interest Payment Dates: September 1 and March 1, commencing on
September 1, 1998
Interest Record Dates: February 15 and August 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
LIN ACQUISITION COMPANY
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Dated: March 3, 1998
A-2
<PAGE> 84
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 8 3/8% Senior Subordinated Notes due 2008,
described in the within-mentioned Indenture.
Dated: March 3, 1998
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
------------------------------------
Authorized Signatory
A-3
<PAGE> 85
(REVERSE OF SECURITY)
LIN ACQUISITION COMPANY
8 3/8% Senior Subordinated Note due 2008
1. Interest.
LIN ACQUISITION COMPANY promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from March 3, 1998. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing on
September 1, 1998. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to the Holders. The Company may, subject to certain
exceptions, act as Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 3, 1998 (the "Indenture"), by and among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. This Security is one of a duly
authorized issue of Securities of the Company designated as its 8 3/8% Senior
Subordinated Notes due 2008, Series A (the "Initial Securities"), limited in
aggregate principal amount to $300,000,000, which may be issued under the
Indenture. The Securities include the Initial Securities, the Private Exchange
Securities (as defined in the Indenture) and the Unrestricted Securities (as
defined in the Indenture). All Securities issued under the
A-4
<PAGE> 86
Indenture are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture
(except as otherwise indicated in the Indenture) until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of them. The Securities
are general unsecured obligations of the Company. The Securities are
subordinated in right of payment to all existing and future Senior Indebtedness
of the Company to the extent and in the manner provided in the Indenture. Each
Holder of a Security, by accepting a Security, agrees to such subordination,
authorizes the Trustee to give effect to such subordination and appoints the
Trustee as attorney-in-fact for such purpose.
5. Optional Redemption.
(a) The Securities will be redeemable at the option of the
Company, in whole or in part, at any time on or after March 1, 2003, at the
redemption prices (expressed as a percentage of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant Interest Record Date
to receive interest due on the relevant Interest Payment Date) if redeemed
during the 12-month period commencing on March 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- -----------
<S> <C>
2003 104.188%
2004 102.792%
2005 101.396%
2006 and thereafter 100.000%
</TABLE>
(b) Prior to March 1, 2001, the Company may, at its option, use
the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Securities at a redemption price equal to 108.375% of
the principal amount thereof plus accrued and unpaid interest to the redemption
date; provided, however, that after any such redemption, at least 65% of the
aggregate principal amount of the Securities originally issued would remain
outstanding immediately after giving effect to such redemption. Any such
redemption will be required to occur on or prior to the date that is one year
after the receipt by the Company of the proceeds of an Equity Offering. The
Company shall effect such redemption on a pro rata basis.
(c) Prior to March 1, 2003, upon the occurrence of a Change of
Control, the Company will have the option to redeem the Securities in whole but
not in part (a "Change of Control Redemption") at a redemption price equal to
100% of the principal amount thereof, plus accrued and unpaid interest to the
redemption date, plus the Applicable Premium. In order to effect a Change of
Control Redemption, the Company must send a notice to each Holder, which notice
shall govern the terms of the Change of Control Redemption. Such notice must
comply with the provisions of Section 3.03 of the Indenture; provided, however,
that such notice must be mailed to Holders within 30 days following the date the
Change of Control occurred (the "Change of Control Redemption Date") and state
that the Company is effecting a Change of Control Redemption in lieu of a Change
of Control Offer.
"Applicable Premium" means, with respect to a Security at any
Change of Control Redemption Date, the greater of (i) 1.0% of the principal
amount of such Security and (ii) the excess of (A) the present value at such
time of (1) the redemption price of such Security at March 1, 2003 (such
redemption price being described in paragraph (a) above) plus (2) all
semi-annual payments of interest through March 1, 2003 com-
A-5
<PAGE> 87
puted using a discount rate equal to the Treasury Rate plus 75 basis points over
(B) the principal amount of such Security.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury Securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) that has become publicly available at least two business days prior to
the Change of Control Redemption Date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Change of Control Redemption Date to March
1, 2003; provided, however, that if the period from the Change of Control
Redemption Date to March 1, 2003 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury Securities for which such yields are given except that if the period
from the Change of Control Redemption Date to March 1, 2003 is less than one
year, the weekly average yield on actually traded United States Treasury
Securities adjusted to a constant maturity of one year shall be used.
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
7. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, be required to offer to purchase all
Securities then outstanding at a purchase price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of such purchase (subject to the right of Holders of record on
the relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date).
8. Limitation on Disposition of Assets.
The Company is, subject to certain conditions and certain
exceptions, obligated to offer to purchase the Securities at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of such purchase (subject to the right of Holders
of record on the relevant Interest Record Date to receive interest due on the
relevant Interest Record Date) with the proceeds of certain asset dispositions.
A-6
<PAGE> 88
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at their written request. After that, all liability of the Trustee and
such Paying Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Subsidiary Guarantees,
except for certain provisions thereof, and may be discharged from obligations to
comply with certain covenants contained in the Indenture, the Securities and the
Subsidiary Guarantees, in each case upon satisfaction of certain conditions
specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities
(including the Subsidiary Guarantees) may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Securities and the Subsidiary Guarantees
to, among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to sell assets, to permit
restrictions on dividends and other payments by Subsidiaries to the Company, to
consolidate, merge or sell all or substantially all of its assets and to engage
in transactions with affiliates. The limitations are subject to a number of
important qualifications and exceptions. The Company must report annually to the
Trustee on compliance with such limitations.
A-7
<PAGE> 89
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Subsidiary Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Subsidiary Guarantees unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
16. Trustee Dealings with Company and Guarantors.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Subsidiary
Guarantees, as the case may be, or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and the
Subsidiary Guarantees.
18. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
A-8
<PAGE> 90
21. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will be obligated to consummate an exchange offer pursuant to which
the Holder of this Security shall have the right to exchange this Security for a
8 3/8% Senior Subordinated Note due 2008 of the Company which has been
registered under the Securities Act, in like principal amount and having terms
identical in all material respects to the Initial Securities. The Holders shall
be entitled to receive certain liquidated damages payments in the event such
exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
22. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee hereof without regard to principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.
A-9
<PAGE> 91
[FORM OF SUBSIDIARY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Each undersigned Guarantor (as defined in the Indenture referred
to in the Security upon which this notation is endorsed) hereby unconditionally
guarantees on a senior subordinated basis (such guaranty by such Guarantor being
referred to herein as the "Subsidiary Guarantee"), jointly and severally, the
due and punctual payment of the principal of, premium, if any, and interest on
the Securities, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal, premium and interest on
the Securities, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms set
forth in Article Eleven of the Indenture.
The obligations of each undersigned Guarantor to the Holders of
Securities and to the Trustee pursuant to its Guarantee and the Indenture are
expressly set forth in, and are expressly subordinated and subject in right of
payment to, the prior payment in full of all Guarantor Senior Indebtedness (as
defined in the Indenture) of such Guarantor, to the extent and in the manner
provided in Article Eleven and Article Twelve of the Indenture, and reference is
hereby made to such Indenture for the precise terms of such Guarantee therein
made.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Subsidiary Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Subsidiary Guarantee is subject to release upon the terms set
forth in the Indenture.
INDIANA BROADCASTING, LLC
WAVY BROADCASTING, LLC
WOOD LICENSE CO., LLC
WIVB BROADCASTING, LLC,
as Guarantors
By: LIN Television Corporation,
its Managing Member
By:
-------------------------------
Name:
Title:
A-10
<PAGE> 92
LIN TELEVISION OF TEXAS, L.P.,
as Guarantor
By: LIN Television of Texas, Inc.,
its General Partner
By:
--------------------------------
Name:
Title:
AIRWAVES, INC.
BUFFALO BROADCASTING CO. INC.
BUFFALO MANAGEMENT ENTERPRISES
CO. INC.
KXAN, INC.
KXTX HOLDINGS, INC.
LINBENCO, INC.
LIN SPORTS, INC.
LIN TELEVISION OF TEXAS, INC.
LWWI BROADCASTING INC.
NORTH TEXAS BROADCASTING
CORPORATION
WAND TELEVISION, INC.
WOOD TELEVISION, INC.
WTNH BROADCASTING, INC.,
as Guarantors
By:
--------------------------------
Name:
Title:
A-11
<PAGE> 93
ASSIGNMENT FORM
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
- --------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint --------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
------------------- -----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
----------------------------------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 94
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.08 or Section 4.15 of the Indenture, check the
appropriate box:
Section 4.08 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.08 or Section 4.15 of the Indenture, state
the amount: $_____________
Dated: Your Signature:
----------------- -----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
----------------------------------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 95
EXHIBIT B
[FORM OF SERIES B SECURITY]
LIN ACQUISITION COMPANY
8 3/8% Senior Subordinated Note due 2008, Series B
CUSIP No.:[ ]
No. [ ] $[ ]
LIN ACQUISITION COMPANY, a Delaware corporation (the "Company,"
which term includes any successor corporation), for value received, promise to
pay to [ ] or registered assigns the principal sum of [ ] Dollars, on March 1,
2008.
Interest Payment Dates: March 1 and September 1, commencing on
September 1, 1998.
Interest Record Dates: February 15 and August 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
LIN ACQUISITION COMPANY
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Dated:
B-1
<PAGE> 96
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 8 3/8% Senior Subordinated Notes due 2008,
Series B, described in the within-mentioned Indenture.
Dated:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
---------------------------------
Authorized Signatory
B-2
<PAGE> 97
(REVERSE OF SECURITY)
LIN ACQUISITION COMPANY
8 3/8% Senior Subordinated Note due 2008, Series B
1. Interest.
LIN ACQUISITION COMPANY promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from March 3, 1998. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing on
September 1, 1998. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to the Holders. The Company may, subject to certain
exceptions, act as Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 3, 1998 (the "Indenture"), by and among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. This Security is one of a duly
authorized issue of Securities of the Company designated as its 8 3/8% Senior
Subordinated Notes due 2008, Series B limited in aggregate principal amount to
$300,000,000, which may be issued under the Indenture. The Securities include
the Initial Securities (as defined in the Indenture), the Private Exchange
Securities (as defined in the Indenture) and the Unrestricted Securities (as
defined in the Indenture). All Securities issued
B-3
<PAGE> 98
under the Indenture are treated as a single class of securities under the
Indenture. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture (except as otherwise indicated in the Indenture) until such time as
the Indenture is qualified under the TIA, and thereafter as in effect on the
date on which the Indenture is qualified under the TIA. Notwithstanding anything
to the contrary herein, the Securities are subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of them. The
Securities are general unsecured obligations of the Company. The Securities are
subordinated in right of payment to all existing and future Senior Indebtedness
of the Company to the extent and in the manner provided in the Indenture. Each
Holder, by accepting a Security, agrees to such subordination, authorizes the
Trustee to give effect to such subordination and appoints the Trustee as
attorney-in-fact for such purpose.
5. Optional Redemption.
(a) The Securities will be redeemable at the option of the
Company, in whole or in part, at any time on or after March 1, 2003, at the
redemption prices (expressed as a percentage of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant Interest Record Date
to receive interest due on the relevant Interest Payment Date) if redeemed
during the 12-month period commencing on March 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
- ---- ----------
<S> <C>
2003 104.188%
2004 102.792%
2005 101.396%
2006 and thereafter 100.000%
</TABLE>
(b) Prior to March 1, 2001, the Company may, at its option, use
the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Securities at a redemption price equal to 108.375% of
the principal amount thereof plus accrued and unpaid interest to the redemption
date; provided, however, that after any such redemption, at least 65% of the
aggregate principal amount of the Securities originally issued would remain
outstanding immediately after giving effect to such redemption. Any such
redemption will be required to occur on or prior to the date that is one year
after the receipt by the Company of the proceeds of an Equity Offering. The
Company shall effect such redemption on a pro rata basis.
(c) Prior to March 1, 2003, upon the occurrence of a Change of
Control, the Company will have the option to redeem the Securities in whole but
not in part (a "Change of Control Redemption") at a redemption price equal to
100% of the principal amount thereof, plus accrued and unpaid interest to the
redemption date, plus the Applicable Premium. In order to effect a Change of
Control Redemption, the Company must send a notice to each Holder, which notice
shall govern the terms of the Change of Control Redemption. Such notice must
comply with the provisions of Section 3.03 of the Indenture; provided, however,
that such notice must be mailed to Holders within 30 days following the date the
Change of Control occurred (the "Change of Control Redemption Date") and state
that the Company is effecting a Change of Control Redemption in lieu of a Change
of Control Offer.
"Applicable Premium" means, with respect to a Security at any
Change of Control Redemption Date, the greater of (i) 1.0% of the principal
amount of such Security and (ii) the excess of (A) the present value at such
time of (1) the redemption price of such Security at March 1, 2003 (such
redemption price being described in paragraph (a) above) plus (2) all
semi-annual payments of interest through March 1, 2003 com-
B-4
<PAGE> 99
puted using a discount rate equal to the Treasury Rate plus 75 basis points over
(B) the principal amount of such Security.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury Securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) that has become publicly available at least two business days prior to
the Change of Control Redemption Date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Change of Control Redemption Date to March
1, 2003; provided, however, that if the period from the Change of Control
Redemption Date to March 1, 2003 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury Securities for which such yields are given except that if the period
from the Change of Control Redemption Date to March 1, 2003 is less than one
year, the weekly average yield on actually traded United States Treasury
Securities adjusted to a constant maturity of one year shall be used.
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
7. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, offer to purchase all Securities then
outstanding at a purchase price in cash equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the date of
such purchase (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
8. Limitation on Disposition of Assets.
The Company is, subject to certain conditions and certain
exceptions, obligated to offer to purchase the Securities at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of such purchase (subject to the right of Holders
of record on the relevant Interest Record Date to receive interest due on the
relevant Interest Payment Date) with the proceeds of certain asset dispositions.
B-5
<PAGE> 100
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner
of it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at their written request. After that, all liability of the Trustee and
such Paying Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Subsidiary Guarantees,
except for certain provisions thereof, and may be discharged from obligations to
comply with certain covenants contained in the Indenture, the Securities and the
Subsidiary Guarantees, in each case upon satisfaction of certain conditions
specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities
(including the Subsidiary Guarantees) may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Securities and the Subsidiary Guarantees
to, among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to sell assets, to permit
restrictions on dividends and other payments by Subsidiaries to the Company, to
consolidate, merge or sell all or substantially all of its assets and to engage
in transactions with affiliates. The limitations are subject to a number of
important qualifications and exceptions. The Company must report annually to the
Trustee on compliance with such limitations.
B-6
<PAGE> 101
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Subsidiary Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Subsidiary Guarantees unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
16. Trustee Dealings with Company and Guarantors.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Subsidiary
Guarantees, as the case may be, or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and the
Subsidiary Guarantees.
18. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
B-7
<PAGE> 102
21. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee hereof without regard to principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.
B-8
<PAGE> 103
[FORM OF SUBSIDIARY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Each undersigned Guarantor (as defined in the Indenture referred
to in the Security upon which this notation is endorsed) hereby unconditionally
guarantees on a senior subordinated basis (such guaranty by such Guarantor being
referred to herein as the "Subsidiary Guarantee"), jointly and severally, the
due and punctual payment of the principal of, premium, if any, and interest on
the Securities, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal, premium and interest on
the Securities, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms set
forth in Article Eleven of the Indenture.
The obligations of each undersigned Guarantor to the Holders of
Securities and to the Trustee pursuant to its Guarantee and the Indenture are
expressly set forth in, and are expressly subordinated and subject in right of
payment to, the prior payment in full of all Guarantor Senior Indebtedness (as
defined in the Indenture) of such Guarantor, to the extent and in the manner
provided in Article Eleven and Article Twelve of the Indenture, and reference is
hereby made to such Indenture for the precise terms of such Guarantee therein
made.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Subsidiary Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Subsidiary Guarantee is subject to release upon the terms set
forth in the Indenture.
INDIANA BROADCASTING, LLC
WAVY BROADCASTING, LLC
WOOD LICENSE CO., LLC
WIVB BROADCASTING, LLC,
as Guarantors
By: LIN Television Corporation,
its Managing Member
By:
------------------------------------
Name:
Title:
B-9
<PAGE> 104
LIN TELEVISION OF TEXAS, L.P.,
as Guarantor
By: LIN Television of Texas, Inc.,
its General Partner
By:
------------------------------------
Name:
Title:
AIRWAVES, INC.
BUFFALO BROADCASTING CO. INC.
BUFFALO MANAGEMENT ENTERPRISES
CO. INC.
KXAN, INC.
KXTX HOLDINGS, INC.
LINBENCO, INC.
LIN SPORTS, INC.
LIN TELEVISION OF TEXAS, INC.
LWWI BROADCASTING INC.
NORTH TEXAS BROADCASTING
CORPORATION
WAND TELEVISION, INC.
WOOD TELEVISION, INC.
WTNH BROADCASTING, INC.,
as Guarantors
By:
------------------------------------
Name:
Title:
B-10
<PAGE> 105
ASSIGNMENT FORM
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
- --------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint --------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
------------------------ -----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
----------------------------------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 106
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.08 or Section 4.15 of the Indenture, check the
appropriate box:
Section 4.08 [ ] Section 4.15 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.08 or Section 4.15 of the Indenture, state
the amount: $_____________
Dated: Signed:
------------------------ -----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
----------------------------------------------------------
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 107
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall
bear a legend (which would be in addition to any other legends required in the
case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
C-1
<PAGE> 108
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 8 3/8% Senior Subordinated Notes due 2008
(the "Securities") of LIN Acquisition Company
This Certificate relates to $_______ principal amount of
Securities held in the form of* ___ a beneficial interest in a Global Security
or* _______ Physical Securities by ______ (the "Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
[ ] has requested that the Registrar by written order exchange or
register the transfer of a Physical Security or Physical Securities.
[ ] In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of the Securities does not require registration under the
Securities Act of 1933, as amended (the "Act"), because*:
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[ ] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[ ] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture.
[ ] Such Security is being transferred in reliance on Rule 144 under
the Act.
[ ] Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act other
than Rule 144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
certification.]
-----------------------------------
[INSERT NAME OF TRANSFEROR]
By:
-------------------------------
[Authorized Signatory]
Date:
----------------------
*Check applicable box.
D-1
<PAGE> 109
EXHIBIT E
Form of Transferee Letter of Representation
LIN ACQUISITION COMPANY
One Richmond Square, Suite 230E
Providence, Rhode Island 02906
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 8 3/8% Senior Subordinated Notes due 2008 (the "Notes")
of LIN ACQUISITION COMPANY (the "Company"). Upon transfer, the Notes would be
registered in the name of the new beneficial owner as follows:
Name:
----------------------------------
Address:
------------------------------
Taxpayer ID Number:
-------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risk of our investment in the Notes and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own account
or for the account of a QIB and to whom notice is given that the transfer is
being made in reliance on Rule 144A, (d) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Notes of $250,000, (e) pursuant to offers and sales that occur outside
the United States within the meaning of Regulation S under the Securities Act or
(f) pursuant to any other available exemption from the registration requirements
of the Securities Act, subject in each of the foregoing cases to any requirement
of law that the disposition of our property or the property of such investor
account or accounts be at all times within
E-1
<PAGE> 110
our or their control and in compliance with any applicable state securities
laws. The foregoing restrictions on resale will not apply subsequent to the
Resale Restriction Termination Date. If any resale or other transfer of the
Notes is proposed to be made pursuant to clause (d) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Notes for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certificates and/or other
information satisfactory to the Company and the Trustee.
Dated: TRANSFEREE:
---------------------- -------------------------
By:
---------------------------------
E-2
<PAGE> 111
EXHIBIT F
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
---------------, ----
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Re: LIN ACQUISITION COMPANY (the "Company")
8 3/8% Senior Subordinated Notes due 2008, Series A and
8 3/8% Senior Subordinated Notes due 2008, Series B (collectively,
the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $____________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
F-1
<PAGE> 112
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------
[Authorized Signatory]
F-2
<PAGE> 1
EXHIBIT 4.4
================================================================================
INDENTURE
DATED AS OF MARCH 3, 1998
BETWEEN
LIN HOLDINGS CORP., AS ISSUER,
AND
UNITED STATES TRUST COMPANY OF NEW YORK, AS TRUSTEE
--------------------
$325,000,000
10% SENIOR DISCOUNT NOTES DUE 2008, SERIES A
10% SENIOR DISCOUNT NOTES DUE 2008, SERIES B
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
- ---------------- -----------
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08, 7.10.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 311(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 312(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
Section 313(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 10.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
Section 314(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10; 4.11; 10.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
Section 315(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
Section 316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
Section 318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
</TABLE>
--------------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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----
<S> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.02. Execution and Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.04. Paying Agent To Hold Assets in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.07. Replacement Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.08. Outstanding Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.09. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.10. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.13. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.14. Deposit of Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.15. Book-Entry Provisions for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.16. Registration of Transfers and Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.02. Selection of Securities To Be Redeemed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.03. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.04. Effect of Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.03. Limitation on Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness and Issuance of Capital Stock . . . . . . . . . . 31
</TABLE>
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<PAGE> 4
<TABLE>
<CAPTION>
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----
<S> <C>
SECTION 4.05. Payments for Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.06. Limitation on Investment Company Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.07. Limitation on Asset Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.08. Limitation on Asset Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.09. Limitation on Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.10. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.11. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.12. Limitations on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. . . . . . . . 35
SECTION 4.13. Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.14. Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.15. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.16. Maintenance of Properties and Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.17. Payment of Taxes and Other Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.18. Waiver of Stay, Extension or Usury Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidation and Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.02. Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.04. Waiver of Past Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.05. Control by Majority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.07. Rights of Holders To Receive Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.06. Reports by Trustee to Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<CAPTION>
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----
<S> <C>
SECTION 7.11. Preferential Collection of Claims Against Holdings. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Holdings' Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.02. Legal Defeasance and Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 8.04. Application of Trust Money; Trustee Acknowledgment and Indemnity. . . . . . . . . . . . . . . . . . . . 52
SECTION 8.05. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 8.06. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.02. With Consent of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.04. Record Date for Consents and Effect of Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.05. Notation on or Exchange of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.06. Trustee To Sign Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.03. Communications by Holders with Other Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 10.04. Certificate and Opinion as to Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 10.05. Statements Required in Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.07. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.08. No Recourse Against Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.09. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.10. Counterpart Originals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.12. No Adverse Interpretation of Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.13. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
EXHIBIT A Form of Series A Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Series B Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Legend for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D Form of Transfer Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E Form of Transfer Certificate for Institutional Accredited Investors . . . . . . . . . . . . . . . . . . . E-1
EXHIBIT F Form of Transfer Certificate for Regulation S Transfers . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>
- -----------------
NOTE: This Table of Contents shall not, for any purpose, be deemed to be a
part of this Indenture.
-iii-
<PAGE> 6
INDENTURE dated as of March 3, 1998, between LIN HOLDINGS
CORP., a Delaware corporation ("Holdings"), and United States Trust Company of
New York, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accreted Value" as of any date (the "Specified Date") means,
with respect to each $1,000 principal amount at maturity of Senior Discount
Notes:
(i) if the Specified Date is one of the following dates
(each a "Semi-Annual Accretion Date"), the amount set forth opposite
such date below:
<TABLE>
<CAPTION>
SEMI-ANNUAL ACCRETION DATE ACCRETED VALUE
-------------------------- --------------
<S> <C>
Issue Date . . . . . . . . . . . . . . . . . . . . . $ 614.25
September 1, 1998 . . . . . . . . . . . . . . . . . . 644.61
March 1, 1999 . . . . . . . . . . . . . . . . . . . . 676.84
September 1, 1999 . . . . . . . . . . . . . . . . . . 710.68
March 1, 2000 . . . . . . . . . . . . . . . . . . . . 746.22
September 1, 2000 . . . . . . . . . . . . . . . . . . 783.53
March 1, 2001 . . . . . . . . . . . . . . . . . . . . 822.70
September 1, 2001 . . . . . . . . . . . . . . . . . . 863.84
March 1, 2002 . . . . . . . . . . . . . . . . . . . . 907.03
September 1, 2002 . . . . . . . . . . . . . . . . . . 952.38
March 1, 2003 . . . . . . . . . . . . . . . . . . . . $1,000.00
</TABLE>
(ii) if the Specified Date occurs between two Semi-Annual
Accretion Dates, the sum of (a) the Accreted Value for the Semi-Annual
Accretion Date immediately preceding the Specified Date and (b) an
amount equal to the product of (x) the Accreted Value for the
immediately following Semi-Annual Accretion Date less the Accreted
Value for the immediately preceding Semi-Annual Accretion Date and (y)
a fraction, the numerator of which is the number of days actually
elapsed from the immediately preceding Semi-Annual Accretion Date to
the Specified Date and the denominator of which is 180, and
(iii) if the Specified Date is after March 1, 2003,
$1000.00.
"Acquired Indebtedness" means Indebtedness of a Person or any
of its Restricted Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary of Holdings or at the time it merges or consolidates with
Holdings or any of its Restricted Subsidiaries or assumed in connection with
the acquisition of assets from such Person and not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of Holdings or such acquisition, merger or consolidation.
<PAGE> 7
-2-
"Acquired Preferred Stock" means the Preferred Stock of any
Person at such time as such Person becomes a Restricted Subsidiary of Holdings
or at the time it merges or consolidates with Holdings or any of its Restricted
Subsidiaries and not issued by such Person in connection with, or in
anticipation or contemplation of, such acquisition, merger or consolidation.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Chase and its
Affiliates shall not be deemed Affiliates of the Company by reason of the
Senior Credit Facilities or their direct or indirect investments in any fund
managed by Hicks Muse or any Person in which any such fund is invested.
"Affiliate Transaction" has the meaning provided in Section
4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Applicable Premium" has the meaning provided in paragraph 5
on the reverse of each Security.
"Asset Acquisition" means (i) an Investment by Holdings or any
Restricted Subsidiary of Holdings in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of Holdings or shall be
consolidated or merged with Holdings or any Restricted Subsidiary of Holdings
or (ii) the acquisition by Holdings or any Restricted Subsidiary of Holdings of
assets of any Person comprising a division or line of business of such Person.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by
Holdings or any of its Restricted Subsidiaries (excluding any sale and
leaseback transaction or any pledge of assets or stock by Holdings or any of
its Restricted Subsidiaries) to any Person other than Holdings or a Restricted
Subsidiary of Holdings of (i) any Capital Stock of any Restricted Subsidiary of
Holdings or (ii) any other property or assets of Holdings or any Restricted
Subsidiary of Holdings other than in the ordinary course of business; provided,
however, that for purposes of Section 4.07, Asset Sales shall not include (a) a
transaction or series of related transactions in which Holdings or its
Restricted Subsidiaries receive aggregate consideration of less than
$1,000,000, (b) transactions permitted under Section 4.08, (c) transactions
covered by Section 5.01, (d) a Restricted Payment that otherwise qualifies
under Section 4.09, (e) any disposition of obsolete or worn out equipment or
equipment that is no longer useful in the conduct of the business of Holdings
and its Subsidiaries and that is disposed of, in each case, in the ordinary
course of business and (f) any transaction that constitutes a Change of
Control.
"Asset Swap" means the execution of a definitive agreement,
subject only to FCC approval, if applicable, and other customary closing
conditions that Holdings in good faith believes will be satisfied for a
substantially concurrent purchase and sale, or exchange, of Productive Assets
between Holdings and any of its Restricted Subsidiaries and another Person or
group of affiliated Persons; provided that any amendment to or waiver of any
closing condition that individually or in the aggregate is material to the
Asset Swap shall be deemed to be a new Asset Swap; it being understood that an
Asset Swap may include a cash equalization payment made in connection therewith
provided that such cash payment, if received by Holdings or its Subsidiaries,
shall be deemed to be proceeds received from an Asset Sale and shall be applied
in accordance with Section 4.07.
<PAGE> 8
-3-
"Bankruptcy Law" means Title 11, United States Code or any
similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors or other
governing body charged with the ultimate management of any Person, or any duly
authorized committee thereof.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person or a duly
authorized committee of such Board of Directors.
"Business Day" means any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York, New York.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease to which
such Person is a party that is required to be classified and accounted for as a
capital lease obligation under GAAP, and for purposes of this definition, the
amount of such obligation at any date shall be the capitalized amount of such
obligation at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, 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 political subdivision 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, having one of the two
highest ratings obtainable from either Standard & Poor's Corporation or 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, having a
rating of at least A-1 from Standard & Poor's Corporation or at least P-1 from
Moody's Investors Service, Inc.; (iv) certificates of deposit or bankers'
acceptances maturing within one year from the date of acquisition thereof
issued by any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia or any U.S. branch of
a foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $200,000,000; (v) repurchase obligations with a term
of not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications
specified in clause (iv) above; and (vi) investments in money market funds that
invest substantially all their assets in securities of the types described in
clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of Holdings to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group") (whether or not otherwise in
compliance with the provisions of this Indenture), other than to Hicks Muse or
any of its Affiliates, officers or directors (the "Permitted Holders"); or (ii)
a majority of the board of directors of the Company or Holdings shall consist
of Persons who are not Continuing Directors;
<PAGE> 9
-4-
or (iii) the acquisition by any Person or Group (other than the Permitted
Holders or any direct or indirect Subsidiary of any Permitted Holder) of the
power, directly or indirectly, to vote or direct the voting of securities
having more than 50% of the ordinary voting power for the election of directors
of the Company or Holdings.
"Change of Control Date" has the meaning provided in Section
4.13.
"Change of Control Offer" has the meaning provided in Section
4.13.
"Change of Control Payment Date" has the meaning provided in
Section 4.13.
"Chase" means Chase Securities Inc. or any successor
corporation thereto.
"Change of Control Redemption" has the meaning specified in
paragraph 5 of the Securities.
"Commodity Agreement" means any commodity futures contract,
commodity option or other similar agreement or arrangement.
"Company" means LIN Acquisition Company, a Delaware
corporation, and any successor in interest thereto.
"Consolidated Cash Flow" means, with respect to any Person,
for any period, the sum (without duplication) of (i) Consolidated Net Income,
(ii) to the extent Consolidated Net Income has been reduced thereby, (a) all
income taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary or nonrecurring gains or losses), (b) Consolidated Interest
Expense and (c) Consolidated Non-Cash Charges, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in
conformity with GAAP and (iii) the lesser of (x) dividends or distributions
paid to such first referred to Person or its Restricted Subsidiary by any other
Person whose results are reflected as a minority interest in the consolidated
financial statements of such Person and (y) such Person's equity interest in
the Consolidated Cash Flow of such other Person (but in no event less than
zero), except, that in the case of the Joint Venture, (I) such amount shall not
exceed 10% of the Consolidated Cash Flow of the Company for such period and
(II) such first Person shall be deemed to have received by dividend its
proportionate share of distributable cash retained by the Joint Venture to fund
the interest reserve.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the interest expense
of such Person and its Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP, including, without limitation,
(a) any amortization of debt discount, (b) the net cost under Interest Swap
Agreements (including any amortization of discounts), (c) the interest portion
of any deferred payment obligation, (d) all commissions, discounts and other
fees and charges owed with respect to letters of credit, bankers' acceptance
financing or similar facilities, and (e) all accrued interest and (ii) the
interest component of Capitalized Lease Obligations paid or accrued by such
Person and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period,
the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom, without
duplication, (a) gains and losses from Asset Sales (without regard to the
$1,000,000 limitation set forth in the definition thereof) or
<PAGE> 10
-5-
abandonments or reserves relating thereto and the related tax effects, (b)
items classified as extraordinary or nonrecurring gains and losses, and the
related tax effects according to GAAP, (c) the net income (or loss) of any
Person acquired in a pooling of interests transaction accrued prior to the date
it becomes a Restricted Subsidiary of such first referred to Person or is
merged or consolidated with it or any of its Restricted Subsidiaries, (d) the
net income of any Restricted Subsidiary to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is restricted by contract, operation of law or otherwise and (e) the net income
or loss of any Person, other than a Restricted Subsidiary; and provided,
further, however, that (i) there shall be added to net income an amount equal
to the Consolidated Cash Flow losses attributable to stations which Holdings or
any of its Restricted Subsidiaries operates pursuant to local market agreements
provided that such addback shall not exceed $3,000,000 in any Four Quarter
Period and (ii) in determining net income, pro forma effect shall be given to
the reimbursement of promotional expenses as if such reimbursement obligation
were in effect for the entire period with respect to periods ending prior to
March 31, 1999 (but only if such reimbursement obligation is then in effect).
"Consolidated Non-Cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization and other
non-cash expenses of such Person and its Restricted Subsidiaries (excluding any
such charges constituting an extraordinary or nonrecurring item) reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Continuing Director" means, as of the date of determination,
any Person who (i) was a member of the Board of Directors of Holdings or the
Company on the Issue Date, (ii) was nominated for election or elected to the
Board of Directors of Holdings or the Company, as the case may be, with the
affirmative vote of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election or (iii) is
a Representative of a Permitted Holder.
"Corporate Trust Office of the Trustee" means the principal
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of original execution
of this Indenture is located at 114 West 47th Street, New York, New York 10036,
Attention: Corporate Trust Department.
"Credit Agreement" means the credit agreement dated as of
March 3, 1998, among Holdings, the Company, The Chase Manhattan Bank, as
administrative agent and collateral agent, The Bank of New York as syndication
agent and National Westminster Bank PLC as documentation agent, Chase
Securities Inc., as exclusive arranger and advisor, and any other financial
institutions from time to time party thereto, together with the related
documents thereto (including, without limitation, any guarantee agreements and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented or otherwise modified from
time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including by way of adding Restricted
Subsidiaries of Holdings as additional borrowers or guarantors thereunder) all
or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders (or other institutions).
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
<PAGE> 11
-6-
"Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an
Event of Default.
"Depository" means, with respect to the Securities issued in
the form of one or more Global Securities, The Depository Trust Company or
another Person designated as Depository by Holdings, which must be a clearing
agency registered under the Exchange Act.
"Designated Senior Indebtedness" means (i) all obligations
under the Senior Credit Facilities and (ii) any other Senior Indebtedness of
Holdings which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $20,000,000 and is specifically
designated by Holdings in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this
Indenture.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, or transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Capital Stock" means any Capital Stock that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the sole option of the holder thereof (except,
in each case, upon the occurrence of a Change of Control), in whole or in part,
on or prior to the Final Maturity Date of the Securities; provided that only
the portion of Capital Stock which so matures or is mandatorily redeemable or
is so redeemable at the sole option of the holder thereof prior to March 1,
2008 shall be deemed Disqualified Capital Stock.
"Equity Contributions" means the $555.0 million common equity
to be provided by affiliates of Hicks Muse, management and other co-investors
to the equity of the corporate parents of Holdings, which will, in turn,
through Holdings, contribute such amount to the common equity of the Company.
"Equity Offering" means a private sale or public offering of
Capital Stock (other than Disqualified Capital Stock) of Holdings or a Holding
Company (to the extent, in the case of a Holding Company, that the net cash
proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of Holdings).
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 10% Senior Discount Notes due
2008, Series B, to be issued in exchange for the Initial Securities pursuant to
the Registration Rights Agreement.
"Final Maturity Date" means March 1, 2008.
"Financial Advisory Agreement" means the Financial Advisory
Agreement by and among Holdings, the Company, certain of their affiliates and
Hicks Muse Partners, as in effect on the Issue Date.
<PAGE> 12
-7-
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of this Indenture,
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
the Commission or in such other statements by such other entity as approved by
a significant segment of the accounting profession. All ratios and computations
based on GAAP contained in this Indenture shall be computed in conformity with
GAAP.
"GECC Note" means the debt financing for the Joint Venture
provided by General Electric Capital Corporation in the form of an $815.5
million 25-year non-amortizing senior secured note initially bearing an
interest rate of 8% per annum, the obligations in respect of which will be
assumed by the Joint Venture.
"Global Securities" means one or more 144A Global Securities,
Regulation S Global Securities or IAI Global Securities.
"Grand Rapids Acquisition" means the acquisition from AT&T
Corporation of the assets of television station WOOD-TV and the LMA rights
related to television station WOTV-TV.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof), of all or any part of any Indebtedness.
"Guarantor" means a Guarantor under the Senior Subordinated
Notes Indenture.
"Hicks Muse" means Hicks, Muse, Tate & Furst Incorporated, a
Delaware corporation.
"Hicks Muse Partners" means Hicks, Muse & Co. Partners, L.P.,
an affiliate of Hicks Muse.
"Holders" means the registered holders of the Securities.
"Holdings" means the Person named as "Holdings" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Holdings" shall
mean such successor.
"Holdings Request" or "Holdings Order" means a written request
or order signed in the name of Holdings by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President or its Treasurer, and by
its Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount at maturity of
Securities transferred after the Issue Date to Institutional Accredited
Investors.
"Incremental Term Facility" means the $225 million of
incremental term loans under the Senior Credit Agreement that is available to
the Company to finance acquisitions or pay interest on or make any mandatory
redemptions or principal payments in respect of the Senior Discount Notes.
"incur" has the meaning set forth in Section 4.04.
<PAGE> 13
-8-
"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person (i) for borrowed money, (ii)
evidenced by bonds, debentures, notes or other similar instruments, (iii)
constituting Capitalized Lease Obligations, (iv) incurred or assumed as the
deferred purchase price of property, or pursuant to conditional sale
obligations and title retention agreements (but excluding trade accounts
payable arising in the ordinary course of business), (v) for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) for Indebtedness of others guaranteed by such Person, (vii)
for Interest Swap Agreements, Commodity Agreements and Currency Agreements and
(viii) for Indebtedness of any other Person of the type referred to in clauses
(i) through (vii) which is secured by any Lien on any property or asset of such
first referred to Person, the amount of such Indebtedness being deemed to be
the lesser of the value of such property or asset or the amount of the
Indebtedness so secured. The amount of Indebtedness of any Person at any date
shall be (i) the outstanding principal amount of all unconditional obligations
described above, as such amount would be reflected on a balance sheet prepared
in accordance with GAAP, and the maximum liability at such date of such Person
for any contingent obligations described above, (ii) the accreted value
thereof, in the case of any Indebtedness issued with original issue discount
and (iii) the principal amount thereof, together with any interest thereon that
is more than 30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Initial Purchasers" means Chase Securities Inc., Bear,
Stearns & Co. Inc., Morgan Stanley & Co. Incorporated, NatWest Capital Markets
Limited and BNY Capital Markets, Inc.
"Initial Securities" means the 10% Senior Discount Notes due
2008, Series A, of Holdings.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of
any cash interest and any Liquidated Damages (as defined in the Registration
Rights Agreement) on the Securities.
"Interest Payment Date" means March 1 and September 1 of each
year, commencing on September 1, 2003.
"Interest Record Date" for the interest payable on any
Interest Payment Date (except a date for payment of defaulted interest) means
the February 15 or August 15 (whether or not a Business Day), as the case may
be, immediately preceding such Interest Payment Date.
"Interest Swap Agreements" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement.
"Investment" in any Person means any direct or indirect
advance, loan or other extension of credit (in each case, including by way of
Guarantee or similar arrangement, but excluding (i) any debt or extension of
credit represented by a bank deposit other than a time deposit and (ii)
advances to customers in the ordinary course of business) or capital
contribution to (by means of any transfer of cash or other property to others
or any payment for property or services for the account or use of others), or
any purchase or acquisition of Capital Stock, Indebtedness or other similar
instruments issued by such Person. For purposes of Section 4.09, (A)
"Investment" shall include the portion (proportionate to Holdings' equity
interest in a Restricted Subsidiary to be designated as an Unrestricted
Subsidiary) of the fair market value of the net assets of such Restricted
Subsidiary
<PAGE> 14
-9-
of Holdings at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Unrestricted Subsidiary as a Restricted Subsidiary, Holdings shall be deemed to
continue to have a permanent "Investment" (if positive) equal to (1) Holdings'
"Investment" in such Unrestricted Subsidiary at the time of such redesignation
less (2) the portion (proportionate to Holdings' equity interest in such
Subsidiary) of the fair market value of the net assets of such Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is so redesignated
from an Unrestricted Subsidiary to a Restricted Subsidiary; and (B) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the board of directors of Holdings.
"Issue Date" means the date of original issuance of the
Initial Securities.
"Joint Venture" means the television station joint venture to
be formed in connection with and prior to the Merger pursuant to an agreement
dated January 15, 1998, as amended, by and between Holdings, the National
Broadcast Company Inc. ("NBC"), LIN Television and certain affiliates of
Holdings, NBC and LIN Television party thereto, pursuant to which both LIN
Television and NBC will contribute television stations to the Joint Venture in
exchange for equity interests therein.
"Leverage Ratio" means, as to any Person, the ratio of (i) the
aggregate outstanding amount of Indebtedness of such Person and its Restricted
Subsidiaries as of the date of calculation on a consolidated basis in
accordance with GAAP plus the aggregate liquidation preference of all
Disqualified Capital Stock of such Person and of all outstanding Preferred
Stock of Restricted Subsidiaries of such Person (other than any such
Disqualified Capital Stock or Preferred Stock held by such Person or any of its
Restricted Subsidiaries) to (ii) the Consolidated Cash Flow of such Person for
the four full fiscal quarters (the "Four Quarter Period") ending on or prior to
the date of determination.
For purposes of this definition, the aggregate outstanding
principal amount of Indebtedness of the Person and its Restricted Subsidiaries
for which such calculation is made shall be determined on a pro forma basis as
if the Indebtedness giving rise to the need to perform such calculation had
been incurred and the proceeds therefrom had been applied, and all other
transactions in respect of which such Indebtedness is being incurred has
occurred, on the last day of the Four Quarter Period. In addition to the
foregoing, for purposes of this definition, "Consolidated Cash Flow" shall be
calculated on a pro forma basis after giving effect to (i) the Transactions,
(ii) the incurrence of the Indebtedness of such Person and its Restricted
Subsidiaries (and the application of the proceeds therefrom) giving rise to the
need to make such calculation and any incurrence (and the application of the
proceeds therefrom) or repayment of other Indebtedness, other than the
incurrence or repayment of Indebtedness pursuant to working capital facilities,
at any time subsequent to the beginning of the Four Quarter Period and on or
prior to the date of determination, as if such incurrence (and the application
of the proceeds thereof), or the repayment, as the case may be, occurred on the
first day of the Four Quarter Period, (iii) any Asset Sales (including those
excluded from the definitions thereof by clauses (b), (c) or (d) of the
definition thereof) or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Restricted Subsidiaries (including any Person that
becomes a Restricted Subsidiary as a result of such Asset Acquisition)
incurring, assuming or otherwise becoming liable for Indebtedness) or Asset
Swaps at any time on or subsequent to the first day of the Four Quarter Period
and on or prior to the date of determination, as if such Asset Sale, Asset
Acquisition (including the incurrence, assumption or liability for any such
Indebtedness and also including any Consolidated Cash Flow associated with such
Asset Acquisition) or Asset Swap occurred on the first day of the Four Quarter
Period and (iv) cost savings resulting from employee terminations, facilities
consolidations and closings, standardization of employee benefits and
compensation practices, consolidation of property, casualty and
<PAGE> 15
-10-
other insurance coverage and policies, standardization of sales representation
commissions and other contract rates, and reductions in taxes other than income
taxes (collectively, "Cost Savings Measures"), which cost savings such Person
reasonably believes in good faith could have been achieved during the Four
Quarter Period as a result of such Asset Acquisition or Asset Swap (regardless
of whether such cost savings could then be reflected in pro forma financial
statements under GAAP, Regulation S-X promulgated by the Commission or any
other regulation or policy of the Commission), less the amount of any
additional expenses that such Person reasonably estimates would result from
anticipated replacement of any items constituting Cost Savings Measures in
connection with such Asset Acquisitions or Asset Swap; provided, however, that
both (A) such cost savings and Cost Savings Measures were identified and such
cost savings were quantified in an officer's certificate delivered to the
Trustee at the time of the consummation of the Asset Acquisition or Asset Swap
and (B) with respect to each Asset Acquisition or Asset Swap completed prior to
the 90th day preceding such date of determination, actions were commenced or
initiated by Holdings within 90 days of such Asset Acquisition or Asset Swap to
effect the Cost Savings Measures identified in such officer's certificate
(regardless, however, of whether the corresponding cost savings have been
achieved). Furthermore, in calculating "Consolidated Interest Expense" for
purposes of the calculation of "Consolidated Cash Flow," (i) interest on
Indebtedness determined on a fluctuating basis as of the date of determination
(including Indebtedness actually incurred on the date of the transaction giving
rise to the need to calculate the Leverage Ratio) and which will continue to be
so determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness as in effect on the
date of determination and (ii) notwithstanding (i) above, interest determined
on a fluctuating basis, to the extent such interest is covered by Interest Swap
Agreements, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Lien" means, with respect to any asset, any lien, mortgage,
deed of trust, pledge, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease
in the nature thereof and any agreement to give any security interest).
"LIN Television" means LIN Television Corporation, a Delaware
corporation, or any successor in interest thereto.
"LMA" means a station operated by the Company pursuant to a
local marketing agreement and with respect to which the Company has a purchase
option exercisable under certain circumstances.
"Merger" means the merger of the Company with and into LIN
Television pursuant to an Agreement and Plan of Merger dated August 12, 1997,
as amended, among the Company, Holdings and LIN Television.
"Monitoring and Oversight Agreement" means the Monitoring and
Oversight Agreement by and among Holdings, the Company, certain of their
affiliates and Hicks Muse Partners, as in effect on the Issue Date.
"NBC" means the National Broadcasting Company, Inc.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents (including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents) received by Holdings or any of its Restricted Subsidiaries from
such Asset Sale net of (i) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, relocation costs, legal,
accounting and investment banking fees and sales commissions, recording fees,
relocation costs, title insurance premiums, appraisers, fees and costs
reasonably incurred in preparation of any asset or property for sale), (ii)
taxes paid or reasonably estimated to be payable (calculated based on the
combined state,
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federal and foreign statutory tax rates applicable to Holdings or the
Restricted Subsidiary engaged in such Asset Sale), (iii) all distributions and
other payments required to be made to any Person owning a beneficial interest
in the assets subject to sale or minority interest holders in Subsidiaries or
joint ventures as a result of such Asset Sale, (iv) any reserves established in
accordance with GAAP for adjustment in respect of the sales price of the asset
or assets subject to such Asset Sale or for any liabilities associated with
such Asset Sale, and (v) repayment of Indebtedness secured by assets subject to
such Asset Sale; provided, however, that if the instrument or agreement
governing such Asset Sale requires the transferor to maintain a portion of the
purchase price in escrow (whether as a reserve for adjustment of the purchase
price or otherwise) or to indemnify the transferee for specified liabilities in
a maximum specified amount, the portion of the cash or Cash Equivalents that is
actually placed in escrow or segregated and set aside by the transferor for
such indemnification obligation shall not be deemed to be Net Cash Proceeds
until the escrow terminates or the transferor ceases to segregate and set aside
such funds, in whole or in part, and then only to the extent of the proceeds
released from escrow to the transferor or that are no longer segregated and set
aside by the transferor.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating
to, any Indebtedness.
"Offerings" means the initial offerings of the Securities and
the Senior Subordinated Notes.
"Offering Memorandum" means the final offering memorandum
dated February 18, 1998 setting forth information concerning the Company,
Holdings, the Securities and the Senior Subordinated Notes.
"Officer" means the Chairman, any Vice Chairman, the
President, any Vice President, the Chief Financial Officer, the Treasurer or
the Secretary of Holdings or any other officer designated by the Board of
Directors serving in a similar capacity.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
Holdings complying with Sections 10.04 and 10.05.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount at maturity of
Initial Securities sold in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to Holdings or the Trustee.
"Participants" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holders" has the meaning provided in the definition
of "Change of Control."
"Permitted Indebtedness" means, without duplication, (i)
Indebtedness outstanding on the Issue Date (including the Senior Subordinated
Notes); (ii) Indebtedness of Holdings, the Company and any of its Restricted
Subsidiaries that is a Guarantor (a) outstanding under the Senior Credit
Facilities (including letter of credit obligations); provided that the
aggregate principal amount at any time outstanding does not exceed
$570,000,000; provided that, of such amount (x) $125,000,000 may be used under
the Delayed Tranche A Facility (as defined in the Credit Agreement) only to
finance the Grand Rapids Acquisition (and refinancings
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thereof) and (y) $225,000,000 may be used under the Incremental Term Facility
only to finance acquisitions of Productive Assets or to make interest payments
on or mandatory redemptions or principal payments in respect of the Securities
(and refinancings thereof); or (b) incurred under the Senior Credit Facilities
pursuant to and in compliance with (x) clause (v) of this definition or (y) the
proviso in Section 4.04; (iii) Indebtedness evidenced by or arising under the
Securities and this Indenture; (iv) Interest Swap Agreements, Commodity
Agreements and Currency Agreements; provided, however, that such agreements are
entered into for bona fide hedging purposes and not for speculative purposes;
(v) additional Indebtedness of Holdings or any of its Restricted Subsidiaries
that is a Guarantor not to exceed $20,000,000 in principal amount outstanding
at any time (which amount may, but need not, be incurred under the Senior
Credit Facilities); (vi) Refinancing Indebtedness; (vii) Indebtedness owed by
Holdings to any Subsidiary of Holdings or by any Restricted Subsidiary of
Holdings to Holdings or any Subsidiary of Holdings; (viii) guarantees by
Restricted Subsidiaries of any Indebtedness permitted to be incurred pursuant
to this Indenture; (ix) Indebtedness in respect of performance bonds, bankers'
acceptances and surety or appeal bonds provided by Holdings or any of its
Restricted Subsidiaries to their customers in the ordinary course of their
business; (x) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
guarantees or letters of credit, surety bonds or performance bonds securing any
obligations of Holdings or any of its Restricted Subsidiaries pursuant to such
agreements, in each case incurred in connection with the disposition of any
business assets or Restricted Subsidiaries of Holdings (other than guarantees
of Indebtedness or other obligations incurred by any Person acquiring all or
any portion of such business assets or Restricted Subsidiaries of Holdings for
the purpose of financing such acquisition) in a principal amount not to exceed
the gross proceeds actually received by Holdings or any of its Restricted
Subsidiaries in connection with such disposition; provided, however, that the
principal amount of any Indebtedness incurred pursuant to this clause (x), when
taken together with all Indebtedness incurred pursuant to this clause (x) and
then outstanding, shall not exceed $20,000,000; and (xi) Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations, in each case incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement of
property or assets used in a related business or incurred to refinance any such
purchase price or cost of construction or improvement, in each case incurred no
later than 365 days after the date of such acquisition or the date of
completion of such construction or improvement; provided, however, that the
principal amount of any Indebtedness incurred pursuant to this clause (xi)
shall not exceed $7,500,000 at any time outstanding.
"Permitted Investments" means (i) Investments by Holdings or
any Restricted Subsidiary of Holdings to acquire the stock or assets of any
Person (or Acquired Indebtedness or Acquired Preferred Stock acquired in
connection with a transaction in which such Person becomes a Restricted
Subsidiary of Holdings) engaged in the broadcast business or businesses
reasonably related thereto; provided, however, that if any such Investment or
series of related Investments involves an Investment by Holdings in excess of
$10,000,000, at the time of such Investment and immediately after giving effect
thereto (1) Holdings has incurred no additional Indebtedness and (2) Holdings
is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.04, (ii) Investments
received by Holdings or its Restricted Subsidiaries as consideration for a sale
of assets made in compliance with the other terms of this Indenture, (iii)
Investments by Holdings or any Restricted Subsidiary of Holdings in any
Restricted Subsidiary of Holdings (whether existing on the Issue Date or
created thereafter) or any Person that after such Investments, and as a result
thereof, becomes a Restricted Subsidiary of Holdings and Investments in
Holdings or any Restricted Subsidiary by any Restricted Subsidiary of Holdings,
(iv) Investments in cash and Cash Equivalents, (v) Investments in securities of
trade creditors, wholesalers or customers received pursuant to any plan of
reorganization or similar arrangement, (vi) loans or advances to employees of
Holdings or any Restricted Subsidiary thereof for purposes of purchasing
Holdings' or a Holding Company's Capital Stock and other loans and advances to
employees made in the ordinary course of business consistent with past
practices of Holdings or such Restricted
<PAGE> 18
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Subsidiary, (vii) Investments in the Sports Joint Venture made at the time of
the initial formation of the Sports Joint Venture and (viii) additional
Investments in an aggregate amount not to exceed $5,000,000 at any time
outstanding.
"Person" means an individual, partnership, corporation,
limited liability company, unincorporated organization, trust or joint venture,
or a governmental agency or political subdivision thereof.
"Physical Securities" means one or more certificated
Securities in registered form.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.
"Private Exchange Securities" has the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set
forth on the Initial Securities in the form set forth on Exhibit A hereto.
"Productive Assets" means assets of a kind used or usable by
Holdings and its Restricted Subsidiaries in broadcast business or businesses
reasonably related, ancillary or complementary thereto (including any
sports-related business acquired pursuant to the Sports Joint Venture), and
specifically includes assets acquired through Asset Acquisitions (it being
understood that "assets" may include Capital Stock of a Person that owns such
Productive Assets, provided that either (x) such assets consist of ownership
interests in the Sports Joint Venture or (y) after giving effect to such
transaction, such Person would be a Restricted Subsidiary of Holdings).
"Public Equity Offering" means an underwritten public offering
of Capital Stock (other than Disqualified Capital Stock) of Holdings or a
Holding Company (to the extent, in the case of a Holding Company, that the net
cash proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of Holdings), pursuant to an effective registration statement
filed with the Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"redemption price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed hereto as Exhibit A.
"Refinancing Indebtedness" means any refinancing of
Indebtedness incurred in accordance with Section 4.04 (other than pursuant to
clause (iii) or (iv) of the definition of Permitted Indebtedness) that does not
(i) result in an increase in the aggregate principal amount of Indebtedness
(such principal amount to include, for purposes of this definition, any
premiums, penalties or accrued interest paid with the proceeds of
<PAGE> 19
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the Refinancing Indebtedness) of such Person or (ii) create Indebtedness with
(A) a Weighted Average Life to Maturity that is less than the Weighted Average
Life to Maturity of the Indebtedness being refinanced or (B) a final maturity
earlier than the final maturity of the Indebtedness being refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of the Issue Date by and among Holdings
and the Initial Purchasers.
"Registration" means a registered exchange offer for the
Securities by Holdings or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of the Registration
Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent global
security in registered form representing the aggregate principal amount at
maturity of Securities sold in reliance on Regulation S under the Securities
Act.
"Representative" means the indenture Trustee or other Trustee,
agent or representative in respect of any Senior Indebtedness; provided,
however, that if, and for so long as, any issue of Senior Indebtedness lacks
such a representative, then the holders of a majority in outstanding principal
amount of such issue of Senior Indebtedness shall at all times constitute the
Representative for such issue of Senior Indebtedness.
"Restricted Payment" means (i) the declaration or payment of
any dividend or the making of any other distribution (other than dividends or
distributions payable in Qualified Capital Stock or in options, rights or
warrants to acquire Qualified Capital Stock) on shares of Holdings' Capital
Stock, (ii) the purchase, redemption, retirement or other acquisition for value
of any Capital Stock of Holdings, or any warrants, rights or options to acquire
shares of Capital Stock of Holdings, other than through the exchange of such
Capital Stock or any warrants, rights or options to acquire shares of any class
of such Capital Stock for Qualified Capital Stock or warrants, rights or
options to acquire Qualified Capital Stock or (iii) the making of any
Investment (other than a Permitted Investment).
"Restricted Security" means a Security that is a "restricted
security" within the meaning set forth in Rule 144(a)(3) under the Securities
Act; provided, however, that the Trustee shall be entitled to request and
conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Restricted Subsidiary" means a Subsidiary of Holdings other
than an Unrestricted Subsidiary and includes all of the Subsidiaries of
Holdings existing as of the Issue Date. The Board of Directors of Holdings may
designate any Unrestricted Subsidiary or any person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to
such action (and treating any Acquired Indebtedness as having been incurred at
the time of such action), Holdings could have incurred at least $1.00 of
additional indebtedness (other than Permitted Indebtedness) pursuant to Section
4.04.
"Rule 144A" means Rule 144A under the Securities Act.
"Secured Indebtedness" means any Indebtedness of Holdings or a
Restricted Subsidiary secured by a Lien.
<PAGE> 20
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"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities" means, collectively, the Initial Securities, the
Private Exchange Securities and the Unrestricted Securities treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Senior Credit Facilities" means the credit facilities under
the Credit Agreement.
"Senior Indebtedness" means, whether outstanding on the Issue
Date or thereafter issued, (x) the Securities and (y) all other Indebtedness of
Holdings, including interest (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to Holdings
or any Restricted Subsidiary whether or not a claim for post-filing interest is
allowed in such proceeding) and premium, if any, thereon, and other monetary
amounts (including fees, expenses, reimbursement obligations under letters of
credit and indemnities) owing in respect thereof unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is provided that the obligations in respect of such Indebtedness ranks pari
passu with the Securities; provided, however, that Senior Indebtedness shall
not include (1) any obligation of Holdings to any Restricted Subsidiary, (2)
any liability for federal, state, foreign, local or other taxes owed or owing
by Holdings, (3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (4) any Indebtedness, guarantee, or
obligation of Holdings that is expressly subordinate or junior in right of
payment to any other Indebtedness, guarantee or obligation of Holdings,
including any Senior Subordinated Indebtedness and any Subordinated Obligations
or (5) obligations in respect of any Capital Stock.
"Senior Subordinated Notes" means the 8 3/8% Senior
Subordinated Notes due 2008 of the Company issued under the Senior Subordinated
Notes Indenture.
"Senior Subordinated Notes Indenture" means the indenture, as
amended or supplemented from time to time, dated March 3, 1998 between the
Company, the Guarantors named therein, and the United States Trust Company of
New York, as trustee.
"Significant Restricted Subsidiary" means, at any date of
determination, any Restricted Subsidiary that would be a "significant
subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933, as amended, as such rule is in effect on the
Issue Date.
"Sports Joint Venture" means any Hicks Muse affiliated entity
to which the Company contributes station KXTX-TV and related assets in exchange
for a minority ownership interest therein, cash or a combination thereof.
"Stated Maturity" means with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subsidiary," with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a majority
of the votes entitled to be cast in the election of directors under ordinary
<PAGE> 21
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circumstances shall at the time be owned, directly or indirectly through one or
more intermediaries, by such Person or (ii) any other Person of which at least
a majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, through one or more intermediaries, owned by such
Person. Notwithstanding anything in this Indenture to the contrary, all
references to Holdings and its consolidated Restricted Subsidiaries or to
financial information prepared on a consolidated basis in accordance with GAAP
shall be deemed to include Holdings and its Restricted Subsidiaries as to which
financial statements are prepared on a combined basis in accordance with GAAP
and to financial information prepared on such a combined basis.
Notwithstanding anything in this Indenture to the contrary, an Unrestricted
Subsidiary shall not be deemed to be a Restricted Subsidiary for purposes of
this Indenture.
"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb), as amended, as in effect on the date of this Indenture
(except as provided in Section 9.03) until such time as this Indenture is
qualified under the TIA, and thereafter as in effect on the date on which this
Indenture is qualified under the TIA.
"Transactions" means the consummation of the Offerings, the
initial borrowings under the Senior Credit Facilities, the Merger, the Joint
Venture, the issuance of the GECC Note and the Equity Contribution.
"Treasury Rate" has the meaning provided in paragraph 5 on the
reverse of each Security.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust matter, any other
officer to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Trustee" means the party named as such in the first paragraph
of this Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.
"Unrestricted Securities" means one or more Securities that do
not and are not required to bear the Private Placement Legend in the form set
forth in Exhibit A hereto, including, without limitation, the Exchange
Securities and any Securities registered under the Securities Act pursuant to
and in accordance with the Registration Rights Agreement.
"Unrestricted Subsidiary" means a Subsidiary of Holdings
created after the Issue Date and so designated by a resolution adopted by the
Board of Directors of Holdings; provided, however, that (a) neither Holdings
nor any of its other Restricted Subsidiaries (1) provides any credit support
for any Indebtedness or other Obligations of such Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) or (2) is
directly or indirectly liable for any Indebtedness or other Obligations of such
Subsidiary and (b) at the time of designation of such Subsidiary, such
Subsidiary has no property or assets (other than de minimis assets resulting
from the initial capitalization of such Subsidiary). The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving effect to such designation (1)(x)
Holdings has incurred no additional Indebtedness and (y) the Company could
incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section
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4.04 and (2) no Default or Event of Default shall have occurred or be
continuing. Any designation pursuant to this definition by the Board of
Directors of Holdings shall be evidenced to the Trustee by the filing with the
Trustee of a certified copy of the resolution of Holdings' Board of Directors
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"Unsubordinated Indebtedness" means the Securities and any
other Indebtedness of Holdings that specifically provides that such
Indebtedness is to rank pari passu with the Securities in right of payment and
is not subordinated by its terms in right of payment to any Senior Indebtedness
of Holdings.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which shall elapse
between such date and the making of such payment.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" means Holdings or any other obligor on the
Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
in effect from time to time, and any other reference in this Indenture to
"generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture.
The Exchange Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities
may have notations, legends or endorsements required by law, stock exchange
rule or usage. Holdings and the Trustee shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security
shall be dated the date of its issuance and shall show the date of its
authentication.
Securities offered and sold in reliance on Rule 144A and
Securities offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more Global Securities, substantially in the
form set forth in Exhibit A hereto, deposited with the Trustee, as custodian
for the Depository, duly executed by Holdings and authenticated by the Trustee
as hereinafter provided and shall bear the legend set forth in Exhibit C
hereto. The aggregate principal amount at maturity of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository, as hereinafter
provided.
SECTION 2.02. Execution and Authentication.
Two Officers or an Officer and an Assistant Secretary shall
sign, or one Officer shall sign and one Officer and an Officer and an Assistant
Secretary (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Securities for Holdings by
manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer
at the time of such execution but no longer holds that office at the time the
Trustee authenticates the Security the Security shall be valid nevertheless.
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A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Securities for
original issue in an aggregate principal amount at maturity not to exceed
$325,000,000, (ii) Private Exchange Securities from time to time only in
exchange for a like principal amount at maturity of Initial Securities and
(iii) Unrestricted Securities from time to time only in exchange for (A) a like
principal amount at maturity of Initial Securities or (B) a like principal
amount at maturity of Private Exchange Securities, in each case upon a written
order of Holdings in the form of an Officers' Certificate. Each such written
order shall specify the amount of Securities to be authenticated and the date
on which the Securities are to be authenticated, whether the Securities are to
be Initial Securities, Private Exchange Securities or Unrestricted Securities
and whether the Securities are to be issued as Physical Securities or Global
Securities and such other information as the Trustee may reasonably request.
The aggregate principal amount at maturity of Securities outstanding at any
time may not exceed $325,000,000, except as provided in Sections 2.07 and 2.08.
Notwithstanding the foregoing, all Securities issued under
this Indenture shall vote and consent together on all matters (as to which any
of such Securities may vote or consent) as one class and no series of
Securities will have the right to vote or consent as a separate class on any
matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to Holdings to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with
Holdings and Affiliates of Holdings.
The Securities shall be issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
Holdings shall maintain an office or agency, which may be in
the Borough of Manhattan, The City of New York, where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Securities may be presented or surrendered for payment (the
"Paying Agent") and (c) notices and demands in respect of the Securities and
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. Holdings, upon notice to the
Trustee, may appoint one or more co-Registrars and one or more additional
Paying Agents. The term "Paying Agent" includes any additional Paying Agent.
Except as provided herein, Holdings may act as Paying Agent, Registrar or
co-Registrar.
Holdings shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture
that relate to such Agent. Holdings shall notify the Trustee of the name and
address of any such Agent. If Holdings fails to maintain a Registrar or Paying
Agent, or fails to give the foregoing notice, the Trustee shall act as such and
shall be entitled to appropriate compensation in accordance with Section 7.07.
Holdings initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has
been appointed.
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SECTION 2.04. Paying Agent To Hold Assets in Trust.
Holdings shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities, and shall notify the
Trustee of any Default by Holdings in making any such payment. Holdings at any
time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by Holdings to the Paying
Agent (if other than Holdings), the Paying Agent shall have no further
liability for such assets. If Holdings or any of their Affiliates acts as
Paying Agent, it shall, on or before each due date of the principal of or
interest on the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, Holdings shall
furnish to the Trustee before each Interest Record Date and at such other times
as the Trustee may request in writing a list as of such date and in such form
as the Trustee may reasonably require of the names and addresses of Holders,
which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to Holdings and the Registrar or co-Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing. To permit
registrations of transfers and exchanges, Holdings shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but Holdings may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.07,
4.13 or 10.05). The Registrar or co-Registrar shall not be required to
register the transfer or exchange of any Security (i) during a period beginning
at the opening of business 15 days before the mailing of a notice of redemption
of Securities and ending at the close of business on the day of such mailing
and (ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as
provided herein, Holdings, the Trustee and any Agent of Holdings shall treat
the person in whose name the Security is registered as the owner thereof for
all purposes whether or not the Security shall be overdue, and none of
Holdings, the Trustee nor any such Agent shall be affected by notice to the
contrary. Any consent, waiver or actions of a Holder shall be binding upon any
subsequent Holders of such Security or a Security received upon transfer. Any
Holder of a beneficial
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interest in a Global Security shall, by acceptance of such beneficial interest
in a Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Depository (or its agent), and that ownership of a beneficial interest in a
Global Security shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, Holdings shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of
Securities are met. If required by Holdings or the Trustee, such Holder must
provide an indemnity bond or other indemnity, sufficient in the judgment of
Holdings and the Trustee, to protect Holdings, the Trustee and any Agent from
any loss which any of them may suffer if a Security is replaced. Holdings may
charge such Holder for their reasonable out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of
Holdings.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that
have been authenticated by the Trustee except those canceled by it, those
delivered to it for cancellation and those described in this Section 2.08 as
not outstanding. Subject to Section 2.09 and paragraph 20 of the Securities, a
Security does not cease to be outstanding because Holdings or any Affiliates of
Holdings holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than
a mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or the Final Maturity Date the Paying
Agent holds money sufficient to pay all of the principal and interest due on
the Securities payable on that date, and is not prohibited from paying such
money to the Holders pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be outstanding and interest on them ceases
to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by Holdings or any of its Affiliates shall be disregarded,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
that a Trust Officer of the Trustee actually knows are so owned shall be
disregarded.
Holdings shall notify the Trustee, in writing, when Holdings
or any of its Affiliates repurchases or otherwise acquires Securities, of the
aggregate principal amount at maturity of such Securities so repurchased or
otherwise acquired.
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SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, Holdings
may prepare and the Trustee shall authenticate temporary Securities upon
receipt of a written order of Holdings in the form of an Officers' Certificate.
The Officers' Certificate shall specify the amount of temporary Securities to
be authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that Holdings considers
appropriate for temporary Securities. Without unreasonable delay, Holdings
shall prepare and the Trustee shall authenticate upon receipt of a written
order of Holdings pursuant to Section 2.02 definitive Securities in exchange
for temporary Securities.
SECTION 2.11. Cancellation.
Holdings at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of Holdings,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07,
Holdings may not issue new Securities to replace Securities that they have paid
or delivered to the Trustee for cancellation. If Holdings shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and
until the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
Holdings shall pay interest on overdue principal from time to
time on demand at the rate of interest then borne by the Securities. Holdings
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities.
If Holdings defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus (to the extent lawful)
any interest payable on the defaulted interest to the Persons who are Holders
on a subsequent special record date, which date shall be the fifteenth day
preceding the date fixed by Holdings for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least
15 days before the subsequent special record date, Holdings shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid
prior to the expiration of the 30-day period set forth in Section 6.01(a) shall
be paid to Holders as of the Interest Record Date for the Interest Payment Date
for which interest has not been paid.
SECTION 2.13. CUSIP Number.
Holdings in issuing the Securities will use a "CUSIP" number
and the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number
<PAGE> 28
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printed in the notice or on the Securities, and that reliance may be placed
only on the other identification numbers printed on the Securities. Holdings
shall promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 11:00 a.m. New York City time on each Interest
Payment Date, Redemption Date, and the Final Maturity Date, Holdings shall
deposit with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, Redemption
Date or Final Maturity Date, as the case may be, in a timely manner which
permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, Redemption Date or Final Maturity Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered
in the name of the Depository or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in Exhibit C.
Members of, or participants in, the Depository
("Participants") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Security, and the Depository may be treated by
Holdings, the Trustee and any agent of Holdings or the Trustee as the absolute
owner of the Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent Holdings, the Trustee or any agent of
Holdings or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global Securities
may be transferred or exchanged for Physical Securities in accordance with the
rules and procedures of the Depository and the provisions of Section 2.16;
provided, however, that Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in Global
Securities if (i) the Depository notifies Holdings that it is unwilling or
unable to continue as Depository for any Global Security and a successor
Depository is not appointed by Holdings within 90 days of such notice or (ii)
an Event of Default has occurred and is continuing and the Registrar has
received a request from the Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as
an entirety to beneficial owners pursuant to paragraph (b) of this Section
2.15, the Global Securities shall be deemed to be surrendered to the Trustee
for cancellation, and Holdings shall execute, and the Trustee shall upon
written instructions from Holdings authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount at maturity of
Physical Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to
paragraph (c) of this Section 2.15 shall, except as otherwise provided by
Section 2.16, bear the Private Placement Legend.
<PAGE> 29
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(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may
hold interests through Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities;
or
(ii) to exchange such Physical Securities for an equal
principal amount of Physical Securities of other authorized
denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the
Physical Securities presented or surrendered for registration of transfer or
exchange:
(I) shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(II) in the case of Physical Securities the offer and sale of
which have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of Holdings,
by the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the
Registrar or co-Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification from such Holder to that
effect (substantially in the form of Exhibit D
hereto); or
(B) if such Physical Security is being transferred to a
QIB in accordance with Rule 144A, a certification to
that effect (substantially in the form of Exhibit D
hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the
form of Exhibit D hereto) and a transferee letter of
representation (substantially in the form of Exhibit
E hereto) and, at the option of Holdings, an Opinion
of Counsel reasonably satisfactory to Holdings to the
effect that such transfer is in compliance with the
Securities Act; or
(D) if such Physical Security is being transferred in
reliance on Rule 144 under the Securities Act,
delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and,
at the option of Holdings, an Opinion of Counsel
reasonably satisfactory to Holdings to the effect
that such transfer is in compliance with the
Securities Act; or
(E) if such Physical Security is being transferred in
reliance on Regulation S, delivery of a certification
to that effect (substantially in the form of Exhibit
D hereto) and a transferor certificate for Regulation
S transfers (substantially in the form of Exhibit F
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hereto) and, at the option of Holdings, an Opinion of
Counsel reasonably satisfactory to Holdings to the
effect that such transfer is in compliance with the
Securities Act; or
(F) if such Physical Security is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect (substantially in the form of Exhibit
D hereto) and, at the option of Holdings, an Opinion
of Counsel reasonably acceptable to Holdings to the
effect that such transfer is in compliance with the
Securities Act.
(b) Restrictions on Transfer of a Physical Security for a
Beneficial Interest in a Global Security. A Physical Security the offer and
sale of which has not been registered under the Securities Act may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Registrar or co-Registrar of a Physical Security, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Registrar
or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D
hereto, that such Physical Security is being
transferred (I) to a QIB, (II) to an Institutional
Accredited Investor or (III) in an offshore
transaction in reliance on Regulation S and, with
respect to (II) or (III), at the option of Holdings,
an Opinion of Counsel reasonably acceptable to
Holdings to the effect that such transfer is in
compliance with the Securities Act; and
(B) written instructions directing the Registrar or
co-Registrar to make, or to direct the Depository to
make, an endorsement on the applicable Global
Security to reflect an increase in the aggregate
amount of the Securities represented by the Global
Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar
or co-Registrar, the principal amount of Securities represented by the
applicable Global Security to be increased accordingly. If no 144A Global
Security, IAI Global Security or Regulation S Global Security, as the case may
be, is then outstanding, Holdings shall, unless either of the events in the
proviso to Section 2.15(b) have occurred and are continuing, issue and the
Trustee shall, upon written instructions from Holdings in accordance with
Section 2.02, authenticate such a Global Security in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written
instructions, or such other instruction as is customary for the Depository,
from the Depository or its nominee, requesting the registration of transfer of
an interest in a 144A Global Security, an IAI Global Security or a Regulation S
Global Security, as the case may be, to another type of Global Security,
together with the applicable Global Securities (or, if the applicable type of
Global Security required to represent the interest as requested to be obtained
is not then outstanding, only the Global Security representing the interest
being transferred), the Registrar or Co-Registrar shall reflect on its books
and records (and the applicable Global Security) the applicable increase and
decrease of the principal amount of Securities represented by such types of
Global Securities, giving effect to such transfer. If the applicable type of
Global Security required to represent the interest as requested to be obtained
is not outstanding at the time of such request, Holdings shall issue and the
Trustee shall, upon written instructions from Holdings in accordance with
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Section 2.02, authenticate a new Global Security of such type in principal
amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Physical Security; provided, however, that prior to the Registration,
a transferee that is a QIB or Institutional Accredited Investor may
not exchange a beneficial interest in Global Security for a Physical
Security. Upon receipt by the Registrar or co-Registrar of written
instructions, or such other form of instructions as is customary for
the Depository, from the Depository or its nominee on behalf of any
Person having a beneficial interest in a Global Security and upon
receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such
transfer or exchange of a beneficial interest in Securities the offer
and sale of which have not been registered under the Securities Act,
the following additional information and documents:
(A) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act,
delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and,
at the option of Holdings, an Opinion of Counsel
reasonably satisfactory to Holdings to the effect
that such transfer is in compliance with the
Securities Act; or
(B) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect (substantially in the form of Exhibit
D hereto) and, at the option of Holdings, an Opinion
of Counsel reasonably satisfactory to Holdings to the
effect that such transfer is in compliance with the
Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository
and the Registrar or co-Registrar, the aggregate principal amount at
maturity of the applicable Global Security to be reduced and,
following such reduction, Holdings will execute and, upon receipt of
an authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and
deliver to the transferee a Physical Security in the appropriate
principal amount.
(ii) Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.16(d) shall
be registered in such names and in such authorized denominations as
the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar or
co-Registrar in writing. The Registrar or co-Registrar shall deliver
such Physical Securities to the Persons in whose names such Physical
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
<PAGE> 32
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(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private
Placement Legend if, (i) there is delivered to the Trustee an Opinion of
Counsel reasonably satisfactory to Holdings and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act;(ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act (including pursuant to a Registration); or (iii) the
date of such transfer, exchange or replacement is two years after the later of
(x) the Issue Date and (y) the last date that Holdings or any affiliate (as
defined in Rule 144 under the Securities Act) of Holdings was the owner of such
Securities (or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in
the Private Placement Legend and agrees that it will transfer such Security
only as provided in this Indenture.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of
any interest in any Security (including any transfers between or among
Participants or beneficial owners of interest in any Global Security) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. Holdings shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If Holdings elects to redeem Securities pursuant to paragraph
5 of the Securities at the applicable redemption price set forth thereon, it
shall notify the Trustee in writing of the Redemption Date and the principal
amount of Securities to be redeemed. Holdings shall give such notice to the
Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be agreed to by the Trustee in writing), together with an Officers'
Certificate stating that such redemption will comply with the conditions
contained herein.
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SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant
to paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, in the absence of such
requirements or if the Securities are not then listed on a national securities
exchange, on a pro rata basis, by lot or in such other manner as may be
required pursuant to this Indenture or otherwise as the Trustee shall deem fair
and appropriate. Selection of the Securities to be redeemed pursuant to
paragraph 5(b) or paragraph 20 of the Securities shall be made by the Trustee
only on a pro rata basis or on as nearly a pro rata basis as is practicable
(subject to the procedures of the Depository) based on the aggregate principal
amount at maturity of Securities held by each Holder. The Trustee shall make
the selection from the Securities then outstanding, subject to redemption and
not previously called for redemption.
The Trustee may select for redemption pursuant to paragraph 5
of the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, Holdings shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 5(b) of
the Securities shall be mailed to each Holder whose Securities are to be
redeemed no later than 60 days after the date of the closing of the relevant
Equity Offering of Holdings.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) that, as long as Holdings has deposited with the Paying Agent
funds in satisfaction of the applicable redemption price pursuant to this
Indenture, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the Holders
is to receive payment of the redemption price upon surrender to the Paying
Agent;
(6) in the case of any redemption pursuant to paragraph 5 of the
Securities, if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after
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the Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will
be issued;
(7) the subparagraph of the Securities pursuant to which such
redemption is being made; and
(8) that no representation is made as to the accuracy of the CUSIP
number listed in such notice or printed on such Security.
At Holdings' request, the Trustee shall give the notice of
redemption on behalf of Holdings, in Holdings' name and at Holdings' expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price, plus accrued interest thereon, if any, to the Redemption
Date, but interest installments whose maturity is on or prior to such
Redemption Date shall be payable to the Holders of record at the close of
business on the relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the Redemption Date, Holdings
shall deposit with the Paying Agent (or if Holdings is its own Paying Agent, it
shall, on or before the Redemption Date, segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date other than Securities or portions
thereof called for redemption on that date which have been delivered by
Holdings to the Trustee for cancellation.
If any Security surrendered for redemption in the manner
provided in the Securities shall not be so paid on the Redemption Date due to
the failure of Holdings to deposit with the Paying Agent money sufficient to
pay the redemption price thereof, the principal and accrued and unpaid
interest, if any, thereon shall, until paid or duly provided for, bear interest
as provided in Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
Holdings shall pay the principal of and interest on the
Securities in the manner provided in the Securities and the Registration Rights
Agreement. An installment of principal or interest shall be considered
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paid on the date due if the Trustee or Paying Agent (other than Holdings or any
Affiliates of Holdings) holds on that date money designated for and sufficient
to pay the installment in full and is not prohibited from paying such money to
the Holders of the Securities pursuant to the terms of this Indenture.
Holdings shall pay cash interest on overdue principal at the
same rate per annum borne by the Securities. Holdings shall pay cash interest
on overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
Holdings shall give prompt written notice to the Trustee of
the location, and any change in the location, of any office or agency required
by Section 2.03. If at any time Holdings shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 10. Holdings hereby
initially designates the Trustee at its address set forth in Section 10.02 as
its office or agency in The Borough of Manhattan, The City of New York, for
such purposes.
SECTION 4.03. Limitation on Transactions with Affiliates.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease,
contribution or exchange of any property or the rendering of any service) with
or for the benefit of any of its Affiliates (other than transactions between
Holdings and a Restricted Subsidiary of Holdings or among Restricted
Subsidiaries of Holdings) (an "Affiliate Transaction"), other than Affiliate
Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction on an arm's-length
basis from a person that is not an Affiliate; provided, however, that for a
transaction or series of related transactions involving value of $5,000,000 or
more, such determination shall be made in good faith by a majority of members
of the Board of Directors of Holdings and by a majority of the disinterested
members of the Board of Directors of Holdings, if any; provided, further, that
for a transaction or series of related transactions involving value of
$15,000,000 or more, the board of directors of Holdings has received an opinion
from an independent investment banking firm of nationally recognized standing
that such Affiliate Transaction is fair, from a financial point of view, to
Holdings or such Restricted Subsidiary. The foregoing restrictions shall not
apply to (1) reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder; (2) any obligations of Holdings
under any employment agreement, noncompetition or confidentiality agreement
with any officer of Holdings as in effect on the Issue Date (provided that each
amendment of any of the foregoing agreements shall be subject to the
limitations of this covenant); (3) any Restricted Payment permitted to be made
pursuant to Section 4.09; (4) any issuance of securities, or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans approved
by the Board of Directors of Holdings; (5) loans or advances to employees in
the ordinary course of business of Holdings or any of its Restricted
Subsidiaries consistent with past practices; (6) payments made in connection
with the Transaction and the Grand Rapids Acquisition, including, without
limitation, fees to Hicks Muse, as described in the Offering Memorandum; and
(7) payments by Holdings to Hicks Muse Partners in accordance with the terms of
the Financial Advisory Agreement and the Monitoring and Oversight Agreement.
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SECTION 4.04. Limitation on Incurrence of Additional Indebtedness and
Issuance of Capital Stock.
(a) Holdings shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (other than
Permitted Indebtedness) and Holdings shall not issue any Disqualified Capital
Stock and its Restricted Subsidiaries shall not issue any Preferred Stock
(except Preferred Stock issued to Holdings or a Restricted Subsidiary of
Holdings so long as it is so held); provided, however, that Holdings and its
Restricted Subsidiaries may incur Indebtedness or issue shares of such Capital
Stock if, in either case, Holdings' Leverage Ratio at the time of incurrence of
such Indebtedness or the issuance of such Capital Stock, as the case may be,
after giving pro forma effect to such incurrence or issuance as of such date
and to the use of proceeds therefrom is less than 8.75 to 1 and, provided
further, that if such Indebtedness is Indebtedness of Holdings, such
Indebtedness is pari passu with the Securities as to right of payment and such
Indebtedness shall not have the benefit of any security except to the extent
that the Securities are equally and ratably secured therewith.
(b) Holdings shall not incur or suffer to exist, or permit any of
its Subsidiaries to incur or suffer to exist, any Obligations with respect to
an Unrestricted Subsidiary that would violate the provisions set forth in the
definition of Unrestricted Subsidiary.
SECTION 4.05. Payments for Consents.
Neither Holdings nor any of its Subsidiaries will, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid or is paid to all Holders of the Securities that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
SECTION 4.06. Limitation on Investment Company Status.
Holdings and its Subsidiaries shall not take any action, or
otherwise permit to exist any circumstance, that would require Holdings to
register as an "investment company" under the Investment Company Act of 1940,
as amended.
SECTION 4.07. Limitation on Asset Sales.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) Holdings or the applicable
Restricted Subsidiary, as the case may be, receives consideration at the time
of such Asset Sale at least equal to the fair market value of the assets sold
or otherwise disposed of (as determined in good faith by management of Holdings
or, if such Asset Sale involves consideration in excess of $10,000,000, by the
board of directors of Holdings, as evidenced by a board resolution), (ii) at
least 75% of the consideration received by Holdings or such Restricted
Subsidiary, as the case may be, from such Asset Sale is in the form of cash or
Cash Equivalents and is received at the time of such disposition and (iii) upon
the consummation of an Asset Sale, Holdings applies, or causes such Restricted
Subsidiary to apply, such Net Cash Proceeds within 180 days of receipt thereof
either (A) to repay any Indebtedness of a Restricted Subsidiary of Holdings
(and, to the extent such Indebtedness relates to principal under a revolving
credit or similar facility, to obtain a corresponding reduction in the
commitments thereunder, except that the Company may
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temporarily repay Senior Indebtedness using the Net Cash Proceeds from such
Asset Sale and thereafter use such funds to reinvest pursuant to clause (B)
below within the period set forth therein without having to obtain a
corresponding reduction in the commitments thereunder), (B) to reinvest, or to
be contractually committed to reinvest pursuant to a binding agreement, in
Productive Assets and, in the latter case, to have so reinvested within 360
days of the date of receipt of such Net Cash Proceeds or (C) to purchase
Securities tendered to Holdings for purchase at a price equal to 100% of the
principal amount thereof plus accrued interest thereon, if any, to the date of
purchase pursuant to an offer to purchase made by Holdings as set forth below
(a "Net Proceeds Offer"); provided, however, that Holdings may defer making a
Net Proceeds Offer until the aggregate Net Cash Proceeds from Asset Sales not
otherwise applied in accordance with this Section 4.07 equal or exceed
$15,000,000.
To the extent that the aggregate principal amount of Securities
tendered pursuant to any Net Proceeds Offer is less than the amount of Net Cash
Proceeds subject to such Net Proceeds Offer, Holdings may use any remaining
portion of such Net Cash Proceeds not required to fund the repurchase of
tendered Securities for any purposes otherwise permitted by this Indenture.
Upon the consummation of any Net Proceeds Offer, the amount of Net Cash
Proceeds subject to any future Net Proceeds Offer from the Asset Sales giving
rise to such Net Cash Proceeds shall be deemed to be zero.
Holdings shall comply with the requirements of Rule 14e-1 under
the Exchange Act to the extent applicable in connection with the repurchase of
Securities pursuant to a Net Proceeds Offer.
SECTION 4.08. Limitation on Asset Swaps.
Holdings shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Swap, unless: (i) at the time of entering
into such Asset Swap, and immediately after giving effect to such Asset Swap,
no Default or Event of Default shall have occurred and be continuing, (ii) in
the event such Asset Swap involves an aggregate amount in excess of
$10,000,000, the terms of such asset Swap have been approved by a majority of
the members of the Board of Directors of Holdings and (iii) in the event such
Asset Swap involves an aggregate amount in excess of $50,000,000, Holdings has
received a written opinion from an independent investment banking firm of
nationally recognized standing that such Asset Swap is fair to Holdings or such
Restricted Subsidiary, as the case may be, from a financial point of view.
SECTION 4.09. Limitation on Restricted Payments.
(a) Holdings shall not, and shall not cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, make any Restricted
Payment if at the time of such Restricted Payment and immediately after giving
effect thereto:
(i) a Default or Event of Default shall have occurred; or
(ii) Holdings would be able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.04; or
(iii) the aggregate amount of Restricted Payments made
subsequent to the Issue Date (the amount expended for such purposes,
if other than in cash, being the fair market value of such property as
determined by the Board of Directors of Holdings in good faith)
exceeds the sum of (a) (x) 100% of the aggregate Consolidated Cash
Flow of Holdings (or, in the event such Consolidated Cash Flow shall
be a deficit, minus 100% of such deficit) accrued subsequent to the
Issue Date to the most recent
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date for which financial information is available to Holdings, taken
as one accounting period, less (y) 1.4 times Consolidated Interest
Expense for the same period, plus (b) 100% of the aggregate net
proceeds, including the fair market value of property other than cash
as determined by the Board of Directors of the Company in good faith,
received subsequent to the Issue Date by Holdings from any Person
(other than a Restricted Subsidiary of Holdings) from the issuance and
sale subsequent to the Security Issue Date of Qualified Capital Stock
of Holdings (excluding (i) any net proceeds from issuances and sales
financed directly or indirectly using funds borrowed from Holdings or
any Restricted Subsidiary of Holdings, until and to the extent such
borrowing is repaid, but including the proceeds from the issuance and
sale of any securities convertible into or exchangeable for Qualified
Capital Stock to the extent such securities are so converted or
exchanged and including any additional proceeds received by Holdings
upon such conversion or exchange and (ii) any net proceeds received
from issuances and sales that are used to consummate a transaction
described in clause (2) of paragraph (b) below), plus (c) without
duplication of any amount included in clause (iii)(b) above, 100% of
the aggregate net proceeds, including the fair market value of
property other than cash (valued as provided in clause (iii)(b)
above), received by Holdings as a capital contribution subsequent to
the Issue Date, plus (d) the amount equal to the net reduction in
Investments (other than Permitted Investments) made by Holdings or any
of its Restricted Subsidiaries in any Person resulting from, and
without duplication, (i) repurchases or redemptions of such
Investments by such Person, proceeds realized upon the sale of such
Investment to an unaffiliated purchaser and repayments of loans or
advances or other transfers of assets by such Person to Holdings or
any Restricted Subsidiary of Holdings or (ii) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each
case as provided in the definition of "Investment") not to exceed, in
the case of any Restricted Subsidiary, the amount of Investments
previously made by Holdings or any Restricted Subsidiary in such
Unrestricted Subsidiary, which amount was included in the calculation
of Restricted Payments; provided, however, that no amount shall be
included under this clause (d) to the extent it is already included in
Consolidated Cash Flow, plus (e) the aggregate net cash proceeds
received by a Person in consideration for the issuance of such
Person's Capital Stock (other than Disqualified Capital Stock) that
are held by such Person at the time such Person is merged with and
into the Company in accordance with Section 5.01 subsequent to the
Issue Date; provided, however, that concurrently with or immediately
following such merger the Company uses an amount equal to such net
cash proceeds to redeem or repurchase the Company's Capital Stock,
plus (f) $15,000,000.
(b) Notwithstanding the foregoing, these provisions shall not
prohibit: (1) the payment of any dividend or the making of any distribution
within 60 days after the date of its declaration if such dividend or
distribution would have been permitted on the date of declaration; (2) the
purchase, redemption or other acquisition or retirement of any Capital Stock of
Holdings or any warrants, options or other rights to acquire shares of any
class of such Capital Stock either (x) solely in exchange for shares of
Qualified Capital Stock or other rights to acquire Qualified Capital Stock or
(y) through the application of the net proceeds of a substantially concurrent
sale for cash (other than to a Restricted Subsidiary of Holdings) of shares of
Qualified Capital Stock or warrants, options or other rights to acquire
Qualified Capital Stock or (z) in the case of Disqualified Capital Stock,
solely in exchange for, or through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a Restricted Subsidiary
of Holdings) of, Disqualified Capital Stock; (3) payments made pursuant to any
merger, consolidation or sale of assets effected in accordance with Section
5.01; provided, however, that no such payment may be made pursuant to this
clause (3) unless, after giving effect to such transaction (and the incurrence
of any Indebtedness in connection therewith and the use of the proceeds
thereof), Holdings would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.04 such that
after incurring that $1.00 of Additional Indebtedness, the Leverage Ratio would
be less than 7.75 to 1; (4) payments to enable Holdings or any holding company
as to which Holdings is,
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directly or indirectly, a Restricted Subsidiary (a "Holding Company") to pay
dividends on its Capital Stock (other than Disqualified Capital Stock) after
the first Public Equity Offering in an annual amount not to exceed 6.0% of the
gross proceeds (before deducting underwriting discounts and commissions and
other fees and expenses of the offering) received from shares of Capital Stock
(other than Disqualified Capital Stock) sold for the account of the issuer
thereof (and not for the account of any stockholder) in such initial Public
Equity Offering; (5) payments by Holdings to fund the payment by any Holding
Company of audit, accounting, legal or other similar expenses, to pay franchise
or other similar taxes and to pay other corporate overhead expenses, so long as
such dividends are paid as and when needed by its respective direct or indirect
Holding Company and so long as the aggregate amount of payments pursuant to
this clause (5) does not exceed $1,000,000 in any calendar year; (6) payments
by Holdings to repurchase, or to enable a Holding Company to repurchase,
Capital Stock or other securities from employees of the Company or a Holding
Company in an aggregate amount not to exceed $15,000,000; (7) payments by
Holdings to redeem or repurchase or to enable a Holding Company to redeem or
repurchase stock purchase or similar rights granted by Holdings with respect to
its Capital Stock in an aggregate amount not to exceed $500,000; (8) payments,
not to exceed $200,000 in the aggregate, to enable Holdings or a Holding
Company to make cash payments to holders of its Capital Stock in lieu of the
issuance of fractional shares of its Capital Stock; (9) payments by Holdings to
fund taxes of a Holding Company for a given taxable year in an amount equal to
Holdings' "separate return liability," as if the Company were the parent of a
consolidated group (for purposes of this clause (9) "separate return liability"
for a given taxable year shall mean the hypothetical United States tax
liability of Holdings defined as if Holdings had filed its own U.S. federal tax
return for such taxable year); and (10) payments by Holdings to Hicks Muse
Partners in accordance with the terms of the Financial Advisory Agreement and
the Monitoring and Oversight Agreement; provided, however, that in the case of
clauses (3), (4), (6), (7) and (8), no Event of Default shall have occurred or
be continuing at the time of such payment or as a result thereof. In
determining the aggregate amount of Restricted Payments made subsequent to the
Issue Date, amounts expended pursuant to clauses (1), (4), (6), (7) and (8)
shall be included in such calculation.
SECTION 4.10. Notice of Defaults.
(a) In the event that any Indebtedness of Holdings or any of
its Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, Holdings shall
promptly give written notice to the Trustee of such declaration, the status of
such default or event and what action Holdings is taking or proposes to take
with respect thereto.
(b) Upon becoming aware of the occurrence and continuation of
any Default or Event of Default, Holdings shall promptly deliver an Officers'
Certificate to the Trustee specifying the Default or Event of Default.
SECTION 4.11. Reports.
So long as any of the Securities are outstanding, Holdings
shall provide to the Trustee and the Holders and file with the Commission, to
the extent such submissions are accepted for filing by the Commission, copies of
the annual reports and of the information, documents and other reports that
Holdings would have been required to file with the Commission pursuant to
Section 13 or 15(d) of the Security Exchange Act, regardless of whether Holdings
is then obligated to file such reports.
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SECTION 4.12. Limitations on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.
Holdings shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause to permit to
exist or become effective, by operation of the charter of such Restricted
Subsidiary or by reason of any agreement, instrument, judgment, decree, rule,
order, statute or governmental regulation, any encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock; (b) make loans or advances or pay any
Indebtedness or other obligation owed to Holdings or any of its Restricted
Subsidiaries; or (c) transfer any of its property or assets to Holdings, except
for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) customary non-assignment provisions of
any lease governing a leasehold interest of Holdings or any Restricted
Subsidiary; (4) any instrument governing Acquired Indebtedness or Acquired
Preferred Stock, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired; (5) agreements existing on
the Issue Date (including the Senior Subordinated Notes and the Credit
Agreement) as such agreements are from time to time in effect; provided,
however, that any amendments or modifications of such agreements that affect
the encumbrances or restrictions of the types subject to this covenant shall
not result in such encumbrances or restrictions being less favorable to
Holdings in any material respect, as determined in good faith by the Board of
Directors of Holdings, than the provisions as in effect before giving effect to
the respective amendment or modification; (6) any restriction with respect to
such a Restricted Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or disposition;
(7) an agreement effecting a refinancing, replacement or substitution of
Indebtedness issued, assumed or incurred pursuant to an agreement referred to
in clause (2), (4) or (5) above or any other agreement evidencing Indebtedness
permitted under this Indenture; provided, however, that the provisions relating
to such encumbrance or restriction contained in any such refinancing,
replacement or substitution agreement or any such other agreement are no less
favorable to Holdings in any material respect as determined in good faith by
the Board of Directors of Holdings than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clause
(2), (4) or (5); (8) restrictions on the transfer of the assets subject to any
Lien imposed by the holder of such Lien; (9) a licensing agreement to the
extent such restrictions or encumbrances limit the transfer of property subject
to such licensing agreement; (10) restrictions relating to Subsidiary Preferred
Stock that require that due and payable dividends thereon to be paid in full
prior to dividends on such Subsidiary's common stock; or (11) any agreement or
charter provision evidencing Indebtedness or Capital Stock permitted under this
Indenture; provided, however, that the provisions relating to such encumbrance
or restriction contained in such agreement or charter provision are not less
favorable to Holdings in any material respect as determined in good faith by
the Board of Directors of Holdings than the provisions relating to such
encumbrance or restriction contained in this Indenture.
SECTION 4.13. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder
will have the right to require that Holdings purchase all or a portion of such
Holder's Securities in cash pursuant to the offer described below (the "Change
of Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but
in any event within 30 days following the date on which Holdings becomes aware
that a Change of Control has occurred (the "Change of Control Date"), Holdings
covenants that if the purchase of the Securities would violate or constitute a
default
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under any other Indebtedness of Holdings or its Subsidiaries, or not be
permitted (including because Subsidiaries of Holdings could not provide
adequate funds thereof), then Holdings shall and shall cause its Subsidiaries,
to the extent needed to permit such purchase of Securities, either (i) repay
all such Indebtedness and terminate all commitments outstanding thereunder or
(ii) obtain the requisite consents, if any, under any such Indebtedness to
permit the purchase of the Securities as provided below. Holdings will first
comply with the covenant in the preceding sentence before it will be required
to make the Change of Control Offer or purchase the Securities pursuant to the
provisions described below.
(c) Within 30 days following the date on which Holdings
becomes aware that a Change of Control has occurred, Holdings shall send, by
first class mail, postage prepaid, a notice to each Holder, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Change of Control Offer. Such notice shall
state:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.13 and that all Securities validly tendered
and not withdrawn will be accepted for payment;
(2) the purchase price (including the amount of accrued
interest, if any) and the purchase date (which shall be no earlier
than 30 days nor later than 45 days from the date such notice is
mailed, other than as may be required by law) (the "Change of Control
Payment Date");
(3) that any Security not tendered will continue to
accrue interest;
(4) that, unless Holdings defaults in making payment
therefor, any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(5) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to surrender
the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying
Agent and Registrar for the Securities at the address specified in the
notice prior to the close of business on the Business Day prior to the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than five Business
Days prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(7) that Holders whose Securities are purchased only in
part will be issued new Securities in a principal amount equal to the
unpurchased portion of the Securities surrendered; provided, however,
that each Security purchased and each new Security issued shall be in
a principal amount of $1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding such
Change of Control.
(d) On or before the Change of Control Payment Date, Holdings
shall (i) accept for payment Securities or portions thereof (in integral
multiples of $1,000) validly tendered pursuant to the Change of Control
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Offer, (ii) deposit with the Paying Agent in accordance with Section 2.14 cash
in U.S. dollars or United States Government Obligations sufficient to pay the
purchase price plus accrued and unpaid interest, if any, of all Securities so
tendered and (iii) deliver to the Trustee Securities so accepted together with
an Officers' Certificate stating the Securities or portions thereof being
purchased by Holdings. Upon receipt by the Paying Agent of the monies
specified in clause (ii) above and a copy of the Officers' Certificate
specified in clause (iii) above, the Paying Agent shall promptly mail to the
Holders of Securities so accepted payment in an amount equal to the purchase
price plus accrued and unpaid interest, if any, out of the funds deposited with
the Paying Agent in accordance with the preceding sentence. The Trustee shall
promptly authenticate and mail to such Holders new Securities equal in
principal amount to any unpurchased portion of the Securities surrendered.
Upon the payment of the purchase price for the Securities accepted for
purchase, the Trustee shall return the Securities purchased to Holdings for
cancellation. Any monies remaining after the purchase of Securities pursuant
to a Change of Control Offer shall be returned within three Business Days by
the Trustee to Holdings except with respect to monies owed as obligations to
the Trustee pursuant to Article Seven. For purposes of this Section 4.13, the
Trustee shall, except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven, act as the Paying Agent.
(e) Holdings will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
purchase of the Securities pursuant to a Change of Control Offer. To the
extent the provisions of any such rule conflict with the provisions of this
Indenture relating to a Change of Control Offer, Holdings shall comply with the
provisions of such rule and be deemed not to have breached its obligations
relating to such Change of Control Offer by virtue thereof.
(f) Paragraphs (a)-(e) of this Section 4.13 notwithstanding,
Holdings shall not be required to make a Change of Control Offer if, instead,
Holdings elects to effect a Change of Control Redemption in compliance with the
requirements listed on the Securities in Exhibit A and Exhibit B hereof.
(g) Paragraphs (a)-(f) notwithstanding, Holdings shall not be
required to make a Change of Control Offer or a Change of Control Redemption in
the event of (i) changes in a majority of the board of directors of Holdings or
the Company so long as a majority of such board of directors continues to
consist of Continuing Directors and (ii) certain transactions with Permitted
Holders (including Hicks Muse, its officers and directors, and their respective
Affiliates).
SECTION 4.14. Compliance Certificate.
Holdings shall deliver to the Trustee within 120 days after
the close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of Holdings has been made under the supervision
of the signing officer with a view to determining whether a Default or Event of
Default has occurred and whether or not the signers know of any Default or
Event of Default by Holdings that occurred during such fiscal year. If they do
know of such a Default or Event of Default, their status and the action
Holdings is taking or proposes to take with respect thereto. The first
certificate to be delivered by Holdings pursuant to this Section 4.14 shall be
for the fiscal year ending December 31, 1998.
SECTION 4.15. Corporate Existence.
Subject to Article Five, Holdings shall do or shall cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence
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of each Subsidiary in accordance with the respective organizational documents
of each such Subsidiary and the rights (charter and statutory) and material
franchises of Holdings and the Subsidiaries; provided, however, that Holdings
shall not be required to preserve any such right or franchise, or the corporate
existence of any Subsidiary, if the Board of Directors of Holdings shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of Holdings and its Subsidiaries, taken as a whole; provided,
further, however, that a determination of the Board of Directors of Holdings
shall not be required in the event of a merger of one or more Restricted
Subsidiaries of Holdings with or into another Restricted Subsidiary of Holdings
or another Person, if the surviving Person is a Restricted Subsidiary of
Holdings organized under the laws of the United States or a State thereof or of
the District of Columbia. This Section 4.15 shall not prohibit Holdings from
taking any other action otherwise permitted by, and made in accordance with,
the provisions of this Indenture.
SECTION 4.16. Maintenance of Properties and Insurance.
(a) Holdings shall, and shall cause each of its Restricted
Subsidiaries to, maintain its material properties in normal condition (subject
to ordinary wear and tear) and make all reasonably necessary repairs, renewals
or replacements thereto as in the judgment of Holdings may be reasonably
necessary to the conduct of the business of Holdings and its Restricted
Subsidiaries; provided, however, that nothing in this Section 4.16 shall
prevent Holdings or any of its Restricted Subsidiaries from discontinuing the
operation and maintenance of any of its properties, if such properties are, in
the reasonable and good faith judgment of the Board of Directors of Holdings or
the Restricted Subsidiary, as the case may be, no longer reasonably necessary
in the conduct of their respective businesses.
(b) Holdings shall provide or cause to be provided, for itself
and each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of Holdings, are reasonably adequate and appropriate for the
conduct of the business of Holdings and such Restricted Subsidiaries.
SECTION 4.17. Payment of Taxes and Other Claims.
Holdings shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any of
its Restricted Subsidiaries or properties of it or any of its Restricted
Subsidiaries and (ii) all material lawful claims for labor, materials, supplies
and services that, if unpaid, might by law become a Lien upon the property of
it or any of its Restricted Subsidiaries; provided, however, that there shall
not be required to be paid or discharged any such tax, assessment or charge,
the amount, applicability or validity of which is being contested in good faith
by appropriate proceedings and for which adequate provision has been made or
where the failure to effect such payment or discharge is not adverse in any
material respect to the Holders.
SECTION 4.18. Waiver of Stay, Extension or Usury Laws.
Holdings covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive Holdings from paying all
or any portion of the principal of, premium or interest on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the obligations or the performance of this Indenture; and
(to the extent that it may lawfully do so) Holdings hereby expressly waives all
benefit or advantage of any such law,
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and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidation and Sale of Assets.
(a) Holdings shall not, in a single transaction or a series of
related transactions, consolidate with or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, another Person or adopt a plan of liquidation unless (i) either (1)
Holdings is the surviving Person or (2) the Person (if other than Holdings)
formed by such consolidation or into which Holdings is merged or the person
that acquires by conveyance, transfer or lease the properties and assets of
Holdings substantially as an entirety or in the case of a plan of liquidation,
the Person to which assets of Holdings have been transferred, shall be a
corporation, partnership, limited liability company or trust organized and
existing under the laws of the United States or any State thereof or the
District of Columbia; (ii) such surviving person shall assume all of the
obligations of Holdings under the Securities and this Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately after giving effect to such transaction and the use of the proceeds
therefrom (on a pro forma basis, including giving effect to any Indebtedness
incurred or anticipated to be incurred in connection with such transaction),
(1) no Default or Event of Default shall have occurred and be continuing and
(2) Holdings (in the case of clause (1) of the foregoing clause (i)) or such
Person (in the case of clause (2) of the foregoing clause (i)) shall have a
Leverage Ratio that would be less than 8.75 to 1; and (iv) Holdings has
delivered to the Trustee prior to the consummation of the proposed transaction
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with this Indenture and that all
conditions precedent in this Indenture relating to such transaction have been
satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of related
transactions) of all or substantially all of the properties and assets of one
or more Restricted Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties or assets of Holdings, shall be deemed to
be the transfer of all or substantially all of the properties and assets of
Holdings.
(c) Notwithstanding the foregoing clauses (ii) and (iii) in
paragraph (a) above, (1) any Restricted Subsidiary of Holdings may consolidate
with, merge into or transfer all or part of its properties and assets to
Holdings and (2) Holdings may merge with an Affiliate thereof organized solely
for the purpose of reorganizing Holdings in another jurisdiction in the U.S. to
realize tax or other benefits.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described
in and complying with the conditions listed in Section 5.01 in which Holdings
is not the surviving person and the surviving person is to assume all the
Obligations of Holdings under the Securities, this Indenture and the
Registration Rights Agreement pursuant to a supplemental indenture, such
surviving person shall succeed to, and be substituted for, and
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may exercise every right and power of Holdings, and Holdings shall be
discharged from its Obligations under this Indenture, the Securities and the
Registration Rights Agreement.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for
purposes of this Indenture:
(a) the failure to pay interest on any Security when the same
becomes due and payable and the Default continues for a period of 30
days;
(b) the failure to pay principal of or premium, if any, on
any Security when such principal or premium, if any, becomes due and
payable, at maturity, upon redemption or otherwise;
(c) a default in the observance or performance of any other
covenant or agreement contained in the Securities or this Indenture,
which default continues for a period of 30 days after Holdings
receives written notice thereof specifying the default from the
Trustee or Holders of at least 25% in aggregate principal amount of
outstanding Securities;
(d) the failure to pay at the final stated maturity (giving
effect to any extensions thereof) the principal amount of any
Indebtedness of Holdings or any Restricted Subsidiary of Holdings, or
the acceleration of the final stated maturity of any such
Indebtedness, if the aggregate principal amount of such Indebtedness,
together with the aggregate principal amount of any other such
Indebtedness in default for failure to pay principal at the final
stated maturity (giving effect to any extensions thereof) or which has
been accelerated, aggregates $10,000,000 or more at any time in each
case after a 10-day period during which such default shall not have
been cured or such acceleration rescinded;
(e) one or more judgments in an aggregate amount in excess of
$15,000,000 (which are not covered by insurance as to which the
insurer has not disclaimed coverage) being rendered against Holdings
or any of its Significant Restricted Subsidiaries and such judgment or
judgments remain undischarged or unstayed for a period of 60 days
after such judgment or judgments become final and nonappealable;
(f) Holdings ceasing for any reason to own directly all of
the outstanding capital stock (including shares issuable upon
conversion or exchange of other instruments or obligations) of the
Company;
(g) Holdings or any of its Significant Restricted
Subsidiaries (or one or more Restricted Subsidiaries that, taken
together would constitute a Significant Restricted Subsidiary)
pursuant to or within the meaning of any Bankruptcy Law: (i) admits
in writing its inability to pay its debts generally as they become
due; (ii) commences a voluntary case or proceeding; (iii) consents to
the entry of an order for relief against it in an involuntary case or
proceeding; (iv) consents or acquiesces in the institution of a
bankruptcy or insolvency proceeding against it; (v) consents to the
appointment of a
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Custodian of it or for all or substantially all of its property; or
(vi) makes a general assignment for the benefit of its creditors, or
any of them takes any action to authorize or effect any of the
foregoing; or
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against
Holdings or any Significant Restricted Subsidiary (or one or more
Restricted Subsidiaries that, taken together would constitute a
Significant Restricted Subsidiary) of Holdings in an involuntary case
or proceeding; (ii) appoints a Custodian of Holdings or any
Significant Restricted Subsidiary (or one or more Restricted
Subsidiaries that, taken together would constitute a Significant
Restricted Subsidiary) of Holdings for all or substantially all of its
property; or (iii) orders the liquidation of Holdings or any
Significant Restricted Subsidiary (or one or more Restricted
Subsidiaries that, taken together would constitute a Significant
Restricted Subsidiary) of Holdings; and in each case the order or
decree remains unstayed and in effect for 60 days; provided, however,
that if the entry of such order or decree is appealed and dismissed on
appeal, then the Event of Default hereunder by reason of the entry of
such order or decree shall be deemed to have been cured.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other
than an Event of Default specified in clause (g) or (h) of Section 6.01) occurs
and is continuing, the Trustee may, or the Trustee upon the request of Holders
of 25% in principal amount of the outstanding Securities shall, or the Holders
of at least 25% in aggregate principal amount of the outstanding Securities may
declare the principal of all the Securities, together with all accrued and
unpaid interest and premium, if any, to be due and payable by notice in writing
to Holdings and the Trustee specifying the respective Event of Default and that
it is a "notice of acceleration" (the "Acceleration Notice"), and the same
shall become immediately due.
If an Event of Default specified in clause (g) or (h) of
Section 6.01 occurs and is continuing, all unpaid principal of and accrued
interest on all outstanding Securities shall ipso facto become immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.
At any time after such declaration with respect to the
Securities, the Holders of a majority in principal amount of Securities then
outstanding (by notice to the Trustee) may rescind and cancel such declaration
and its consequences if (i) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction, (ii) all existing Defaults and
Events of Default have been cured or waived except nonpayment of principal of
or interest on the Securities that has become due solely by such declaration of
acceleration, (iii) to the extent the payment of such interest is lawful,
interest (at the same rate specified in the Securities) on overdue installments
of interest and overdue payments of principal, which has become due otherwise
than by such declaration of acceleration has been paid, (iv) Holdings has paid
the Trustee its reasonable compensation and reimbursed the Trustee for its
reasonable expenses, disbursements and advances and (v) in the event of the
cure or waiver of a Default or Event of Default of the type described in clause
(g) or (h) of Section 6.01, the Trustee has received an Officers' Certificate
and Opinion of Counsel that such Default or Event of Default has been cured or
waived. The Holders of a majority in principal amount of the Securities may
waive any existing Default or Event of Default under this Indenture and its
consequences, except a default in the payment of the principal of or interest
on any Securities. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
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SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder in exercising any
right or remedy maturing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are cumulative
to the extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 9.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive any existing Default or Event of Default and
its consequences, except a Default in the payment of principal of or interest
on any Security as specified in clauses (a), (b), (c) and (d) of Section 6.01
or a Default in respect of any term or provision of this Indenture that may not
be amended or modified without the consent of each Holder affected as provided
in Section 9.02. Holdings shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents. In case of any such waiver,
Holdings, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Securities, respectively. This
paragraph of this Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from
this Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of another Holder,
it being understood that the Trustee shall have no duty (subject to Section
7.01) to ascertain whether or not such actions or forebearances are unduly
prejudicial to such Holders, or that may involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. In the
event the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against any loss or expense caused by taking such action
or following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
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SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to the
Trustee to pursue a remedy;
(iii) such Holder or Holders offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(v) during such 60-day period the Holders of a majority
in principal amount of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of or interest on a
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest
specified in Section 6.01(a), (b), (c) or (d) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against Holdings or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
on principal and to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum borne by the Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to Holdings (or any other
obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to authorize the
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Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
creditors' committee.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to Holdings.
The Trustee, upon prior written notice to Holdings, may fix a
record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 shall not apply to a suit by the
Trustee, a suit by a Holder or group of Holders of more than 10% in aggregate
principal amount of the outstanding Securities, or to any suit instituted by
any Holder for the enforcement or the payment of the principal or interest on
any Securities on or after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default:
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(i) The Trustee shall not be liable except for the
performance of such duties as are specifically set forth herein; and
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Indenture; provided,
however, that in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Sections 6.02, 6.04 and 6.05.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of such
funds is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with Holdings. Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which
shall conform to the provisions of Section 10.05. The Trustee shall
not be liable for any action it takes or omits to take in good faith
in reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or
negligence of any agent or attorney (other than an agent who is an
employee of the Trustee) appointed with due care and appointed with
the consent of Holdings.
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(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) Before the Trustee acts or refrains from acting, it may
consult with counsel and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Any request or direction of Holdings mentioned herein
shall be sufficiently evidenced by a Holdings Request or Holdings
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of Holdings, personally or by agent or
attorney.
(i) The Trustee shall not be deemed to have notice of any
Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless the Trustee shall have received written
notice thereof at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
(j) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties
hereunder.
(k) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the
Trustee shall not be answerable for other than its gross negligence or
willful misconduct.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with Holdings or
their Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for Holdings' use of the proceeds from
the Securities, and it shall not be responsible for any statement of Holdings
in this Indenture or any document issued
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in connection with the sale of Securities or any statement in the Securities
other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing
and the Trustee has actual knowledge of such Defaults or Events of Default, the
Trustee shall mail to each Holder notice of the Default or Event of Default
within 30 days after the occurrence thereof. Except in the case of a Default
or an Event of Default in payment of principal of or interest on any Security
or a Default or Event of Default in complying with Section 5.01, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interest of the
Holders. This Section 8.05 shall be in lieu of the proviso to Section 315(b)
of the TIA and such proviso to Section 315(b) of the TIA is hereby expressly
excluded from this Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each
February 1 beginning with March 1, 1997, the Trustee shall mail to each Holder
a report dated as of such February 1 that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b), (c) and (d).
A copy of each such report at the time of its mailing to
Holders shall be filed with the Commission and each stock exchange, if any, on
which the Securities are listed.
Holdings shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
Holdings shall pay to the Trustee and the Agents from time to
time, and the Trustee and the Agents shall be entitled to, such compensation as
Holdings and the Trustee and the Agents shall from time to time agree in
writing for their respective services. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. Holdings
shall reimburse the Trustee and the Agents upon request for all reasonable
disbursements, expenses and advances, including all costs and expenses of
collection and reasonable fees, disbursements and expenses of its agents and
outside counsel incurred or made by any of them in addition to the compensation
for their respective services except any such disbursements, expenses and
advances as may be attributable to the Trustee's negligence or willful
misconduct. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
outside counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 8.01 hereof.
Holdings shall indemnify the Trustee and the Agents for, and
hold them harmless against any and all loss, damage, claims, liability or
expense, including taxes (other than franchise taxes imposed on the indemnified
party and taxes based upon, measured by or determined by the income of the
indemnified party), arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending themselves against or investigating any claim or
liability in connection with the exercise or performance of any of their powers
or duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its negligence or willful misconduct of the
indemnified party. The indemnified party shall notify Holdings promptly of any
claim asserted against the indemnified party for which it may seek indemnity.
However, the failure by the indemnified party to so notify Holdings shall not
relieve
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Holdings of its obligations hereunder unless Holdings has been prejudiced
thereby. Holdings shall defend the claim and the indemnified party shall
cooperate in the defense at Holdings' expense; provided that Holdings shall not
be liable in any action or for which it has assumed the defense for the
expenses of separate counsel to the indemnified party unless (1) the employment
of separate counsel has been authorized by Holdings, (2) the indemnified party
has reasonably concluded (based upon advice of counsel to the indemnified
party) that there may be legal defenses available to the indemnified party that
are different from or in addition to those available to Holdings or (3) a
conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and Holdings; provided
further, however, that in any such event Holdings' reimbursement obligation
with respect to separate counsel of the indemnified party will be limited to
the reasonable fees and expenses of such counsel.
Holdings need not pay for any settlement made without their
written consent, which consent shall not be unreasonably withheld. Holdings
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee or any Agent as a result of its own negligence or
willful misconduct.
To secure Holdings' payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying Holdings in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and Holdings in
writing and may appoint a successor Trustee with Holdings' consent. Holdings
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), Holdings shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by Holdings.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to Holdings. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment
<PAGE> 54
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of all sums then owing to the Trustee pursuant to Section 7.07, all property
held by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties
of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Holder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee,
Holdings or the Holders of at least 10% in principal amount of the outstanding
Securities may petition, at the expense of Holdings, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, Holdings' obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee; provided, however, that such corporation shall be otherwise
qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. If the Trustee
has or shall acquire any "conflicting interest" within the meaning of TIA
Section 310(b), the Trustee and Holdings shall comply with the provisions of
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of Holdings are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 7.10, the
Trustee shall resign immediately in the manner and with the effect hereinbefore
specified in this Article Seven. The provisions of TIA Section 310 shall apply
to Holdings and any other obligor of the Securities.
SECTION 7.11. Preferential Collection of Claims Against Holdings.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
<PAGE> 55
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ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Holdings' Obligations.
Holdings may terminate its obligations under the Securities
and this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 8.01, if:
(i) either (a) all the Securities theretofore
authenticated and delivered (except lost, stolen or destroyed
Securities which have been replaced or paid and Securities for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by Holdings and thereafter repaid to Holdings or
discharged from such trust) have been delivered to the Trustee for
cancellation or (b) all Securities not theretofore delivered to the
Trustee for cancellation have become due and payable or have been
called for redemption and Holdings has irrevocably deposited or caused
to be deposited with the Trustee funds in an amount sufficient to pay
and discharge the entire Indebtedness on the Securities not
theretofore delivered to the Trustee for cancellation, for principal
of, premium, if any, and interest on the Securities to the date of
deposit together with irrevocable instructions from Holdings directing
the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;
(ii) Holdings has paid all other sums payable under this
Indenture by Holdings; and
(iii) Holdings has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the first paragraph of this Section 8.01,
Holdings' obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08,
8.05 and 8.06 shall survive until the Securities are no longer outstanding
pursuant to Section 2.08. After the Securities are no longer outstanding,
Holdings' obligations in Sections 7.07, 7.08, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon
request shall acknowledge in writing the discharge of Holdings' obligations
under the Securities and this Indenture except for those surviving obligations
specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance
(a) Holdings may terminate its obligations in respect of the
Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing,
Holdings may, at its option, at any time elect to have either paragraph (b) or
(c) below be applied to all outstanding Securities, subject in either case to
compliance with the conditions set forth in Section 8.03.
(b) Upon Holdings' exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), Holdings shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be deemed to have
paid and discharged the entire indebtedness represented by the outstanding
Securities, except for (i) the rights of Holders to receive payments in respect
of the principal of, premium, if any, and interest on the Securities when such
payments are due, (ii) Holdings' obligations with respect to the Securities
under Sections 2.03
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through 2.07, inclusive, and 4.02, (iii) the rights, powers, trust, duties and
immunities of the Trustee under this Indenture and Holdings' obligations in
connection therewith and (iv) Article Eight of this Indenture (hereinafter,
"Legal Defeasance"). Subject to compliance with this Article Eight, Holdings
may exercise its option under this paragraph (b) notwithstanding the prior
exercise of its option under paragraph (c) hereof.
(c) Upon Holdings' exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), Holdings shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be released from its
obligations under Sections 4.03 through 4.13, inclusive, 4.16 and Article Five
with respect to the outstanding Securities (hereinafter, "Covenant Defeasance")
and thereafter any omission to comply with such obligations shall not
constitute a Default or an Event of Default with respect to the Securities.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
In order to exercise either Legal Defeasance pursuant to
Section 8.02(b) or Covenant Defeasance pursuant to Section 8.02(c):
(a) Holdings must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars or United
States Government Obligations, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the Securities on the
stated date for payment thereof or on the applicable redemption date,
as the case may be;
(b) in the case of an election under Section 8.02(b),
Holdings shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
(A) Holdings has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the Securities
will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had
not occurred;
(c) in the case of an election under Section 8.02(c),
Holdings shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
the Holders of the Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Sections 6.01(g) and 6.01(h) are concerned, at
any time in the period ending on the 91st day after the date of such
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of or constitute a Default under this
Indenture or any other material agreement or instrument to which
Holdings or any of its Restricted Subsidiaries is a party or by which
Holdings or any of its Restricted Subsidiaries is bound;
<PAGE> 57
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(f) Holdings shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by Holdings with the
intent of preferring the Holders over any other creditors of Holdings
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of Holdings or others;
(g) Holdings shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with; and
(h) Holdings shall have delivered to the Trustee an Opinion
of Counsel to the effect that assuming no intervening bankruptcy or
insolvency of Holdings between the date of deposit and the 91st day
following the deposit and that no Holder is an insider of Holdings,
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required
by clause (b) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (x) have become due and payable, (y)
will become due and payable on the Final Maturity Date within one year or (z)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of Holdings.
SECTION 8.04. Application of Trust Money; Trustee Acknowledgment and
Indemnity.
The Trustee shall hold in trust money or United States
Government Obligations deposited with it pursuant to Section 8.03, and shall
apply the deposited money and the money from United States Government
Obligations in accordance with this Indenture solely to the payment of
principal of, premium, if any, and interest on the Securities.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of Holdings' obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
Holdings shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to Section 8.03 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Securities.
SECTION 8.05. Repayment to Company.
Subject to Sections 7.07 and 8.04, the Trustee shall promptly
pay to Holdings upon written request any excess money held by it at any time.
The Trustee shall pay to Holdings upon written request any money held by it for
the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee before being required to make any payment
may at the expense of Holdings cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
shall be repaid to Holdings. After payment to Holdings, Holders entitled to
money must look solely to
<PAGE> 58
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Holdings for payment as general creditors unless an applicable abandoned
property law designates another person and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
SECTION 8.06. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
Holdings' obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02 until
such time as the Trustee is permitted to apply all such money or United States
Government Obligations in accordance with Section 8.02; provided, however, that
if Holdings has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, Holdings shall be subrogated
to the rights of the Holders of such Securities to receive such payment from
the money or United States Government Obligations held by the Trustee.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
Holdings, when authorized by a resolution of the Board of
Directors, and the Trustee may amend or supplement this Indenture or the
Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect
the rights of any Holder;
(b) to effect the assumption by a successor Person of all
obligations of Holdings under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(c) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(d) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional
benefit or rights to the Holders;
(f) to make any other change that does not adversely affect
the rights of any Holder under this Indenture; or
(g) to add to the covenants of Holdings for the benefit of
the Holders, or to surrender any right or power herein conferred upon
Holdings;
provided, however, that Holdings has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.01.
<PAGE> 59
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SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, Holdings, when authorized by a Board
Resolution, and the Trustee may modify, amend or supplement, or waive
compliance by Holdings with any provision of, this Indenture or the Securities
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities. However, without the consent of each
Holder affected, no such modification, amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may:
(a) [reserved];
(b) reduce the principal amount of or change the Stated
Maturity of any Security or alter the provisions with respect to the
repurchase or redemption of the Securities (other than provisions
relating to Section 4.07 or 4.13);
(c) reduce the rate of or change the time for payment of
interest on any Security;
(d) make any Security payable in money other than that stated
in the Securities;
(e) make any change in the provisions of this Indenture
relating to the rights of Holders of Securities to receive payments of
principal of or premium, if any, or interest on the Securities;
(f) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07
or this Section 9.02 (other than to add sections of this Indenture or
the Securities which may not be modified, amended, supplemented or
waived without the consent of each Holder affected);
(g) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or
for waiver of any Default in respect thereof;
(h) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities (except
a rescission of acceleration of the Securities by the Holders thereof
as provided in Section 6.02 and a waiver of the payment default that
resulted from such acceleration);
(i) waive a mandatory repurchase or redemption payment with
respect to any Security required by Section 4.07 or 4.13; or
(j) modify the ranking or priority of any Security in any
manner adverse to the Holders of the Securities.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
9.02 becomes effective, Holdings shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
Holdings to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
<PAGE> 60
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SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.04. Record Date for Consents and Effect of Consents.
Holdings may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after
such record date. No such consent shall be valid or effective for more than 90
days after such record date. The Trustee is entitled to rely upon any
electronic instruction from beneficial owners to the Holders of any Global
Security.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(a) through (j) of Section 9.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder. Alternatively, if
Holdings or the Trustee so determine, Holdings in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment, supplement
or waiver.
SECTION 9.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Nine is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver constitutes the legal, valid and binding obligation of Holdings,
enforceable in accordance with its terms (subject to customary exceptions).
The Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
<PAGE> 61
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ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that
are required to be a part of this Indenture, and shall, to the extent
applicable, be governed by such provisions. If any provision of this Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Indenture as so modified. If any provision of this
Indenture excludes any TIA provision that may be so excluded, such TIA
provision shall be excluded from this Indenture.
The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 10.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to Holdings:
LIN Holdings Corp.
1 Richmond Square, Suite 230E
Providence, Rhode Island 02906
Attention: Peter E. Maloney
Facsimile: (401) 454-0089
Telephone: (401) 457-9405
<PAGE> 62
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Copy to:
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Facsimile: (214) 740-7313
Telephone: (214) 740-7300
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Facsimile: (212) 852-1625
Telephone: (212) 852-1000
Holdings or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage
prepaid, to a Holder including any notice delivered in connection with TIA
Section 310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b),
shall be mailed to him at his address as set forth on the Security register and
shall be sufficiently given to him if so mailed within the time prescribed. To
the extent required by the TIA, any notice or communication shall also be mailed
to any Person described in TIA Section 313(c).
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received,
if a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 10.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities. Holdings, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by Holdings to the Trustee to
take or refrain from taking any action under this Indenture, Holdings shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory to
the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
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(2) an Opinion of Counsel in form and substance satisfactory to
the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 10.05. Statements Required in Certificate.
Each certificate with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such
certificate are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 10.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Paying Agent or Registrar may make reasonable rules
for its functions.
SECTION 10.07. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE,
THE SECURITIES AND THE SUBSIDIARY GUARANTEES WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 10.08. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of
Holdings shall have any liability for any obligations of Holdings under the
Securities or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
SECTION 10.09. Successors.
All agreements of Holdings in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
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SECTION 10.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 10.11. Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
SECTION 10.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of Holdings or a Subsidiary of Holdings. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.13. Legal Holidays.
If a payment date is not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day.
[Remainder of page intentionally left blank]
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S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
LIN HOLDINGS CORP.
By:
------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
------------------------------------
Name:
Title:
<PAGE> 66
EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO HOLDINGS, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO
OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS' AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND, IN THE
CASE OF THE FOREGOING CLAUSE (D), A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE ISSUERS AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-1
<PAGE> 67
LIN HOLDINGS CORP.
10% Senior Discount Note due 2008
CUSIP No.:[ ]
No. [ ] $[ ]
LIN HOLDINGS CORP., a Delaware corporation ("Holdings," which
term includes any successor corporation), for value received, promise to pay to
[ ] or registered assigns the principal sum of [ ]
Dollars, on March 1, 2008.
Interest Payment Dates: March 1 and September 1, commencing
on September 1, 2003
Interest Record Dates: February 15 and August 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, Holdings has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
LIN HOLDINGS CORP.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Dated: March 3, 1998
A-2
<PAGE> 68
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10% Senior Discount Notes due 2008,
described in the within-mentioned Indenture.
Dated: March 3, 1998
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
------------------------------------
Authorized Signatory
A-3
<PAGE> 69
(REVERSE OF SECURITY)
LIN HOLDINGS CORP.
10% Senior Discount Note due 2008
1. Interest.
LIN HOLDINGS CORP. promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from March 3, 1998. Holdings will pay
interest semi-annually in arrears on each Interest Payment Date, commencing on
September 1, 2003. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
Holdings shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
Holdings shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are canceled on registration of transfer or
registration of exchange after such Interest Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. Holdings
shall pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, Holdings may pay principal and interest by wire transfer of
Federal funds (provided that the Paying Agent shall have received wire
instructions on or prior to the relevant Interest Record Date), or interest by
check payable in such U.S. Legal Tender. Holdings may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the
"Trustee") will act as Paying Agent and Registrar. Holdings may change any
Paying Agent or Registrar without notice to the Holders. Holdings may, subject
to certain exceptions, act as Registrar.
4. Indenture.
Holdings issued the Securities under an Indenture, dated as of
March 3, 1998 (the "Indenture"), by and among Holdings and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Security is one of a duly authorized issue of Securities
of Holdings designated as its 10% Senior Discount Notes due 2008, Series A (the
"Initial Securities"), limited in aggregate principal amount at maturity to
$325,000,000, which may be issued under the Indenture. The Securities include
the Initial Securities, the Private Exchange Securities (as defined in the
Indenture) and the Unrestricted Securities (as defined in the Indenture). All
Securities issued under the Indenture are treated as a single class of
securities under the Indenture. The terms of the Securities include those
stated in the Indenture and
A-4
<PAGE> 70
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture (except as otherwise indicated in the Indenture) until such time
as the Indenture is qualified under the TIA, and thereafter as in effect on the
date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of them.
The Securities are general unsecured obligations of Holdings. The Securities
are subordinated in right of payment to all existing and future Senior
Indebtedness of Holdings to the extent and in the manner provided in the
Indenture. Each Holder of a Security, by accepting a Security, agrees to such
subordination, authorizes the Trustee to give effect to such subordination and
appoints the Trustee as attorney-in-fact for such purpose.
5. Optional Redemption.
(a) The Securities will be redeemable at the option of
Holdings, in whole or in part, at any time on or after March 1, 2003, at the
redemption prices (expressed as a percentage of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant Interest Record Date
to receive interest due on the relevant Interest Payment Date) if redeemed
during the 12-month period commencing on March 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2003 105.000%
2004 103.333%
2005 101.667%
2006 and thereafter 100.000%
</TABLE>
(b) Prior to March 1, 2001, Holdings may, at its option, use
the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Securities at a redemption price equal to 110.000% of
the Accreted Value thereof at the redemption date; provided, however, that after
any such redemption, at least 65% of the aggregate principal amount at maturity
of the Securities originally issued would remain outstanding immediately after
giving effect to such redemption. Any such redemption will be required to occur
on or prior to the date that is one year after the receipt by Holdings of the
proceeds of an Equity Offering. Holdings shall effect such redemption on a pro
rata basis.
(c) Prior to March 1, 2003, upon the occurrence of a Change of
Control, Holdings will have the option to redeem the Securities in whole but
not in part (a "Change of Control Redemption") at a redemption price equal to
100% of the Accreted Value thereof, plus the Applicable Premium. In order to
effect a Change of Control Redemption, Holdings must send a notice to each
Holder, which notice shall govern the terms of the Change of Control
Redemption. Such notice must comply with the provisions of Section 3.03 of the
Indenture; provided, however, that such notice must be mailed to Holders within
30 days following the date the Change of Control occurred (the "Change of
Control Redemption Date") and state that Holdings is effecting a Change of
Control Redemption in lieu of a Change of Control Offer.
"Applicable Premium" means, with respect to a Security at any
Change of Control Redemption Date, the greater of (i) 1.0% of the Accreted
Value of such Security and (ii) the excess of (A) the present value at such
time of the redemption price of such Security at March 1, 2003 (such redemption
price being described in paragraph (a) above) computed using a discount rate
equal to the Treasury Rate plus 87.5 basis points over (B) the Accreted Value
of such Security.
A-5
<PAGE> 71
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury Securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) that has become publicly available at least two business days prior
to the Change of Control Redemption Date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Change of Control Redemption Date to March
1, 2003; provided, however, that if the period from the Change of Control
Redemption Date to March 1, 2003 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury Securities for which such yields are given except that if the period
from the Change of Control Redemption Date to March 1, 2003 is less than one
year, the weekly average yield on actually traded United States Treasury
Securities adjusted to a constant maturity of one year shall be used.
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at its registered address. The Trustee may
select for redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest will cease to accrue on Securities or portions
thereof called for redemption so long as Holdings has deposited with the Paying
Agent for the Securities funds in satisfaction of the redemption price pursuant
to the Indenture and the Paying Agent is not prohibited from paying such funds
to the Holders pursuant to the terms of the Indenture.
7. Change of Control Offer.
Following the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), Holdings shall, within 30
days after the Change of Control Date, be required to offer to purchase all
Securities then outstanding at a purchase price in cash equal to (a) 101% of
the Accreted Value thereof if purchased on or before March 1, 2003 and (b) 101%
of the aggregate principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of such purchase (subject to the right of Holders
of record on the relevant Interest Record Date to receive interest due on the
relevant Interest Payment Date) if purchased after March 1, 2003.
8. Limitation on Disposition of Assets.
Holdings is, subject to certain conditions and certain
exceptions, obligated to offer to purchase the Securities at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of such purchase (subject to the right of Holders
of record on the Interest Relevant Record Date to receive interest due on the
relevant Interest Payment Date) with the proceeds of certain asset
dispositions.
A-6
<PAGE> 72
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the
owner of it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to Holdings at their written request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
Holdings may be discharged from its obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the
Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture and the Securities to, among other things, cure any ambiguity,
defect or inconsistency, provide for uncertificated Securities in addition to
or in place of certificated Securities or comply with any requirements of the
SEC in connection with the qualification of the Indenture under the TIA, or
make any other change that does not materially adversely affect the rights of
any Holder.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other
things, limit the ability of Holdings and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to sell assets, to permit
restrictions on dividends and other payments by Subsidiaries to Holdings, to
consolidate, merge or sell all or substantially all of its assets and to engage
in transactions with affiliates. The limitations are subject to a number of
important qualifications and exceptions. Holdings must report annually to the
Trustee on compliance with such limitations.
A-7
<PAGE> 73
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture, or
the Securities unless it has received indemnity satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of
a majority in aggregate principal amount of the Securities then outstanding to
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of certain continuing Defaults or Events of
Default if it determines that withholding notice is in their interest.
16. Trustee Dealings with Holdings.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with Holdings, its respective Subsidiaries or their respective Affiliates
as if it were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of
Holdings shall have any liability for any obligations of Holdings under the
Securities or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
20. Mandatory Principal Redemption.
Except as described in paragraph 5, Holdings may not redeem
the Securities prior to March 1, 2003. On March 1, 2003, Holdings will be
required to redeem Securities with an aggregate principal amount at maturity
equal to (i) $125.0 million multiplied by (ii) the quotient obtained by
dividing (x) the aggregate principal amount at maturity of Securities then
outstanding (other than Securities then held by Holdings or its Subsidiaries or
the entities with respect to which Holdings is a direct or indirect Subsidiary)
by (y) $325.0 million, at a redemption price equal to 100% of the principal
amount at maturity of the Securities so redeemed.
A-8
<PAGE> 74
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, Holdings has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Registration Rights.
Pursuant to the Registration Rights Agreement, Holdings will
be obligated to consummate an exchange offer pursuant to which the Holder of
this Security shall have the right to exchange this Security for a 10% Senior
Discount Note due 2008 of Holdings which has been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects to the Initial Securities. The Holders shall be entitled to
receive certain liquidated damages payments in the event such exchange offer is
not consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
23. Governing Law.
The laws of the State of New York shall govern the Indenture
and this Security without regard to principles of conflicts of laws to the
extent that the application of the laws of another jurisdiction would be
required thereby.
A-9
<PAGE> 75
ASSIGNMENT FORM
I or we assign and transfer this Security to
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
- -------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of Holdings. The agent may
substitute another to act for him.
Dated: Signed:
--------------------- -------------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
<PAGE> 76
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
Holdings pursuant to Section 4.07 or Section 4.13 of the Indenture, check the
appropriate box:
Section 4.07 [ ] Section 4.13 [ ]
If you want to elect to have only part of this Security
purchased by Holdings pursuant to Section 4.07 or Section 4.13 of the
Indenture, state the amount: $_____________
Dated: Signed:
--------------------- -------------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
<PAGE> 77
EXHIBIT B
[FORM OF SERIES B SECURITY]
LIN HOLDINGS CORP.
10% Senior Discount Note due 2008, Series B
CUSIP No.:[ ]
No. [ ]
$[ ]
LIN HOLDINGS CORP., a Delaware corporation ("Holdings," which
term includes any successor corporation), for value received, promise to pay to
[ ] or registered assigns the principal sum of [ ] Dollars, on
March 1, 2008.
Interest Payment Dates: March 1 and September 1, commencing
on September 1, 2003.
Interest Record Dates: February 15 and August 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, Holdings has caused this Security to be
signed manually or by facsimile by its duly authorized officer.
LIN HOLDINGS CORP.
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
Dated:
B-1
<PAGE> 78
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10% Senior Discount Notes due 2008, Series
B, described in the within-mentioned Indenture.
Dated:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
-----------------------------------------
Authorized Signatory
B-2
<PAGE> 79
(REVERSE OF SECURITY)
LIN HOLDINGS CORP.
10% Senior Discount Note due 2008, Series B
1. Interest.
LIN HOLDINGS CORP. promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on
the Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from March 3, 1998. Thereafter,
Holdings will pay interest semi-annually in arrears on each Interest Payment
Date, commencing on September 1, 2003. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
Holdings shall pay interest on overdue principal from time to
time on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
Holdings shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are canceled on registration of transfer or
registration of exchange after such Interest Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. Holdings
shall pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, Holdings may pay principal and interest by wire transfer of
Federal funds (provided that the Paying Agent shall have received wire
instructions on or prior to the relevant Interest Record Date), or interest by
check payable in such U.S. Legal Tender. Holdings may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York (the
"Trustee") will act as Paying Agent and Registrar. Holdings may change any
Paying Agent or Registrar without notice to the Holders. Holdings may, subject
to certain exceptions, act as Registrar.
4. Indenture.
Holdings issued the Securities under an Indenture, dated as of
March 3, 1998 (the "Indenture"), by and among Holdings and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Security is one of a duly authorized issue of Securities
of Holdings designated as its 10% Senior Discount Notes due 2008, Series B
limited in aggregate principal amount at maturity to $325,000,000, which may be
issued under the Indenture. The Securities include the Initial Securities (as
defined in the Indenture), the Private Exchange Securities (as defined in the
Indenture) and the Unrestricted Securities (as defined in the Indenture). All
Securities issued under the Indenture are treated as a single
B-3
<PAGE> 80
class of securities under the Indenture. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture (except as otherwise
indicated in the Indenture) until such time as the Indenture is qualified under
the TIA, and thereafter as in effect on the date on which the Indenture is
qualified under the TIA. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Securities are general
unsecured obligations of Holdings. The Securities are subordinated in right of
payment to all existing and future Senior Indebtedness of Holdings to the
extent and in the manner provided in the Indenture. Each Holder, by accepting
a Security, agrees to such subordination, authorizes the Trustee to give effect
to such subordination and appoints the Trustee as attorney-in-fact for such
purpose.
5. Optional Redemption.
(a) The Securities will be redeemable at the option of
Holdings, in whole or in part, at any time on or after March 1, 2003, at the
redemption prices (expressed as a percentage of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant Interest Record Date
to receive interest due on the relevant Interest Payment Date) if redeemed
during the 12-month period commencing on March 1 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2003 105.000%
2004 103.333%
2005 101.667%
2006 and thereafter 100.000%
</TABLE>
(b) Prior to March 1, 2001, Holdings may, at its option, use
the net cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Securities at a redemption price equal to 110.000% of
the Accreted value thereof, at the redemption, at least 65% of the aggregate
principal amount at maturity of the Securities originally issued would remain
outstanding immediately after giving effect to such redemption. Any such
redemption will be required to occur on or prior to the date that is one year
after the receipt by Holdings of the proceeds of an Equity Offering. Holdings
shall effect such redemption on a pro rata basis.
(c) Prior to March 1, 2003, upon the occurrence of a Change of
Control, Holdings will have the option to redeem the Securities in whole but
not in part (a "Change of Control Redemption") at a redemption price equal to
100% of the Accreted Value thereof, plus the Applicable Premium. In order to
effect a Change of Control Redemption, Holdings must send a notice to each
Holder, which notice shall govern the terms of the Change of Control
Redemption. Such notice must comply with the provisions of Section 3.03 of the
Indenture; provided, however, that such notice must be mailed to Holders within
30 days following the date the Change of Control occurred (the "Change of
Control Redemption Date") and state that Holdings is effecting a Change of
Control Redemption in lieu of a Change of Control Offer.
"Applicable Premium" means, with respect to a Security at any
Change of Control Redemption Date, the greater of (i) 1.0% of the Accreted
Value of such Security and (ii) the excess of (A) the present value at such
time of the redemption price of such Security at March 1, 2003 (such redemption
price being described in paragraph (a) above) computed using a discount rate
equal to the Treasury Rate plus 87.5 basis points over (B) the Accreted Value
of such Security.
B-4
<PAGE> 81
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury Securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) that has become publicly available at least two business days prior
to the Change of Control Redemption Date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Change of Control Redemption Date to March
1, 2003; provided, however, that if the period from the Change of Control
Redemption Date to March 1, 2003 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury Securities for which such yields are given except that if the period
from the Change of Control Redemption Date to March 1, 2003 is less than one
year, the weekly average yield on actually traded United States Treasury
Securities adjusted to a constant maturity of one year shall be used.
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at its registered address. The Trustee may
select for redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest will cease to accrue on Securities or portions
thereof called for redemption so long as Holdings has deposited with the Paying
Agent for the Securities funds in satisfaction of the redemption price pursuant
to the Indenture and the Paying Agent is not prohibited from paying such funds
to the Holders pursuant to the terms of the Indenture.
7. Change of Control Offer.
Following the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), Holdings shall, within 30
days after the Change of Control Date, offer to purchase all Securities then
outstanding at a purchase price in cash equal to (a) 101% of the Accreted Value
thereof if purchased on or before March 1, 2003 and (b) 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the date of such purchase (subject to the right of Holders of record on the
relevant Interest Record Date to receive interest due on the relevant Interest
Payment Date) if purchased after March 1, 2003.
8. Limitation on Disposition of Assets.
Holdings is, subject to certain conditions and certain
exceptions, obligated to offer to purchase the Securities at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of such purchase (subject to the right of Holders
of record on the Interest Relevant Record Date to receive interest due on the
relevant Interest Payment Date) with the proceeds of certain asset
dispositions.
B-5
<PAGE> 82
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the
owner of it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to Holdings at their written request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
Holdings may be discharged from its obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the
Securities may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture and the Securities to, among other things, cure any ambiguity,
defect or inconsistency, provide for uncertificated Securities in addition to
or in place of certificated Securities or comply with any requirements of the
SEC in connection with the qualification of the Indenture under the TIA, or
make any other change that does not materially adversely affect the rights of
any Holder.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other
things, limit the ability of Holdings and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to sell assets, to permit
restrictions on dividends and other payments by Subsidiaries to Holdings, to
consolidate, merge or sell all or substantially all of its assets and to engage
in transactions with affiliates. The limitations are subject to a number of
important qualifications and exceptions. Holdings must report annually to the
Trustee on compliance with such limitations.
B-6
<PAGE> 83
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of certain continuing Defaults or Events of Default if it
determines that withholding notice is in their interest.
16. Trustee Dealings with Holdings.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with Holdings, its respective Subsidiaries or their respective Affiliates
as if it were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of
Holdings shall have any liability for any obligations of Holdings under the
Securities or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
20. Mandatory Principal Redemption.
Except as described in paragraph 5, Holdings may not redeem
the Securities prior to March 1, 2003. On March 1, 2003, Holdings will be
required to redeem Securities with an aggregate principal amount at maturity
equal to (i) $125.0 million multiplied by (ii) the quotient obtained by
dividing (x) the aggregate principal amount at maturity of Securities then
outstanding (other than Securities then held by Holdings or its Subsidiaries or
the entities with respect to which Holdings is a direct or indirect Subsidiary)
by (y) $325.0 million, at a redemption price equal to 100% of the principal
amount at maturity of the Securities so redeemed.
B-7
<PAGE> 84
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, Holdings has caused CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Governing Law.
The laws of the State of New York shall govern the Indenture
and this Security without regard to principles of conflicts of laws to the
extent that the application of the laws of another jurisdiction would be
required thereby.
B-8
<PAGE> 85
ASSIGNMENT FORM
I or we assign and transfer this Security to
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
- -------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of Holdings. The agent may
substitute another to act for him.
Dated: Signed:
--------------------- -------------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
<PAGE> 86
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
Holdings pursuant to Section 4.07 or Section 4.13 of the Indenture, check the
appropriate box:
Section 4.07 [ ] Section 4.13 [ ]
If you want to elect to have only part of this Security
purchased by Holdings pursuant to Section 4.07 or Section 4.13 of the
Indenture, state the amount: $_____________
Dated: Signed:
--------------------- -------------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor program
reasonably acceptable to the Trustee)
<PAGE> 87
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required
in the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
C-1
<PAGE> 88
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 10% Senior Discount Notes due 2008
(the "Securities") of LIN HOLDINGS CORP.
This Certificate relates to $_______ principal amount of
Securities held in the form of* ___ a beneficial interest in a Global Security
or* _______ Physical Securities by ______ (the "Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its
beneficial interest in such Global Security (or the portion thereof indicated
above); or
[ ] has requested that the Registrar by written order exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such
Indenture, and that the transfer of the Securities does not require
registration under the Securities Act of 1933, as amended (the "Act"),
because*:
[ ] Such Security is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.16 of the Indenture).
[ ] Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Act), in reliance on
Rule 144A.
[ ] Such Security is being transferred to an institutional
"accredited investor" (within the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Act) which delivers a certificate to the Trustee in
the form of Exhibit E to the Indenture.
[ ] Such Security is being transferred in reliance on Rule 144
under the Act.
[ ] Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act
other than Rule 144A or Rule 144 under the Act to a person other than an
institutional "accredited investor." [An Opinion of Counsel to the effect that
such transfer does not require registration under the Securities Act
accompanies this certification.]
-------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
----------------------------------------
[Authorized Signatory]
Date:
----------------------
*Check applicable box.
D-1
<PAGE> 89
EXHIBIT E
Form of Transferee Letter of Representation
LIN HOLDINGS CORP.
One Richmond Square, Suite 230E
Providence, Rhode Island 02906
Ladies and Gentlemen:
This certificate is delivered to request a transfer of
$________ principal amount of the 10% Senior Discount Notes due 2008 (the
"Notes") of LIN HOLDINGS CORP. ("Holdings"). Upon transfer, the Notes would be
registered in the name of the new beneficial owner as follows:
Name:
----------------------------------------------
Address:
-------------------------------------------
Taxpayer ID Number:
--------------------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933
(the "Securities Act")) purchasing for our own account or for the account of
such an institutional "accredited investor" at least $250,000 principal amount
of the Notes, and we are acquiring the Notes not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities
Act. We have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risk of our investment in the
Notes and we invest in or purchase securities similar to the Notes in the
normal course of our business. We and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is two years after the
later of the date of original issue and the last date on which Holdings or any
affiliate of Holdings was the owner of such Notes (or any predecessor thereto)
(the "Resale Restriction Termination Date") only (a) to Holdings, (b) pursuant
to a registration statement which has been declared effective under the
Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own
account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor," in each case in a
minimum principal amount of Notes of $250,000, (e) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act or (f) pursuant to any other available exemption from
the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within
E-1
<PAGE> 90
our or their control and in compliance with any applicable state securities
laws. The foregoing restrictions on resale will not apply subsequent to the
Resale Restriction Termination Date. If any resale or other transfer of the
Notes is proposed to be made pursuant to clause (d) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to Holdings and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Notes for
investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that Holdings and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f)
above to require the delivery of an opinion of counsel, certificates and/or
other information satisfactory to Holdings and the Trustee.
Dated: TRANSFEREE:
------------------ -------------------------------------
By:
---------------------------------------------
E-2
<PAGE> 91
EXHIBIT F
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Re: LIN HOLDINGS CORP. ("Holdings")
10% Senior Discount Notes due 2008, Series A and
10% Senior Discount Notes due 2008, Series B (collectively, the
"Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $____________
aggregate principal amount of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a person
in the United States;
(2) either (a) at the time the buy offer was originated,
the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was
outside the United States, or (b) the transaction was executed in, on
or through the facilities of a designated off-shore securities market
and neither we nor any person acting on our behalf knows that the
transaction has been prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
F-1
<PAGE> 92
You and Holdings are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
----------------------------------
[Authorized Signatory]
F-2
<PAGE> 1
EXHIBIT 4.7
LIN ACQUISITION COMPANY
$300,000,000
8 3/8% Senior Subordinated Notes due 2008
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
February 18, 1998
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
NATWEST CAPITAL MARKETS LIMITED
BNY CAPITAL MARKETS, INC.
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
LIN Acquisition Company, a Delaware corporation (the
"Company"), proposes to issue and sell to Chase Securities Inc., Bear, Stearns &
Co. Inc., Morgan Stanley & Co. Incorporated, NatWest Capital Markets Limited and
BNY Capital Markets, Inc. (the "Initial Purchasers"), upon the terms and subject
to the conditions set forth in a purchase agreement dated February 18, 1998 (the
"Purchase Agreement") between the Company, the Guarantors identified on the
signature pages hereto (together with the Company, the "Issuers"), LIN Holdings
Corp., a Delaware corporation, and the Initial Purchasers, $300,000,000
aggregate principal amount of its 8 3/8% Senior Subordinated Notes due 2008 (the
"Notes"). The Notes will be guaranteed on an unsecured senior subordinated basis
(the "Guarantees," and together with the Notes, the "Securities") by the
Guarantors. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the obligations of the
Initial Purchasers thereunder, the Issuers agree with the Initial Purchasers,
for the benefit of the holders (including the Initial Purchasers) of the
Securities, the Exchange Securities (as defined herein) and the Private Exchange
Securities (as defined herein) (collectively, the "Holders"), as follows:
1. Registered Exchange Offer. The Issuers shall (i) use their
reasonable best efforts to prepare and, not later than 90 days following the
date of original issuance of the Securities (the "Issue Date"), file with the
Commission a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act with respect to a
proposed offer to the Holders of the Securities (the "Registered Exchange
Offer") to issue and deliver to such Holders, in exchange for the Securities, a
like aggregate principal amount of debt securities of the Company that are
identical in all material respects to the Notes and are
<PAGE> 2
-2-
unconditionally guaranteed by the Guarantors (the "Exchange Securities"), except
that the Exchange Securities will not contain terms with respect to transfer
restrictions, (ii) use their reasonable best efforts to cause the Exchange Offer
Registration Statement to become effective under the Securities Act no later
than 180 days after the Issue Date and the Registered Exchange Offer to be
consummated no later than 225 days after the Issue Date and (iii) keep the
Exchange Offer Registration Statement effective for not less than 30 days (or
longer, if required by applicable law) after the date on which notice of the
Registered Exchange Offer is mailed to the Holders (such period being called the
"Exchange Offer Registration Period"). The Exchange Securities will be issued
under the Senior Subordinated Securities Indenture (the "Indenture") or an
indenture (the "Exchange Securities Indenture") between the Company, the
Guarantors party thereto and the Senior Subordinated Notes Trustee (the
"Trustee") or such other bank or trust company that is reasonably satisfactory
to the Initial Purchasers, as trustee (the "Exchange Securities Trustee"), such
indenture to be identical in all material respects to the Indenture, except with
respect to the transfer restrictions relating to the Securities (as described
above).
Upon the effectiveness of the Exchange Offer Registration
Statement, the Issuers shall as soon as practicable commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for Exchange Securities
(assuming that such Holder (a) is not an affiliate (as defined in Rule 405 under
the Securities Act) of the Issuers or an Exchanging Dealer (as defined herein)
not complying with the requirements of the next sentence, (b) is not an Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business, and (d)
has no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. Each Issuer, each Initial Purchaser and
each Exchanging Dealer acknowledges that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, (i) each Holder that
is a broker-dealer electing to exchange Securities acquired for its own account
as a result of market-making activities or other trading activities for Exchange
Securities (an "Exchanging Dealer") is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the
cover of such prospectus, in Annex B hereto in the "Exchange Offer Procedures"
and "Purpose of the Exchange Offer" sections of such prospectus, and in Annex C
hereto in the "Plan of Distribution" section of such prospectus in connection
with a sale of any such Exchange Securities received by such Exchanging Dealer
pursuant to the Registered Exchange Offer and (ii) if any Initial Purchaser
elects to sell Private Exchange Securities (as defined below) acquired in
exchange for Securities constituting any portion of an unsold allotment, it is
required to deliver a prospectus containing the information required by Items
507 and 508 of Regulation S-K under the Securities Act and the Exchange Act
("Regulation S-K"), as applicable, in connection with such sale.
<PAGE> 3
-3-
Upon consummation of the Registered Exchange Offer in
accordance with this Section 1, the provisions of this Agreement shall continue
to apply, mutatis mutandis, solely with respect to Transfer Restricted
Securities (as defined) that are Private Exchange Securities, Exchange
Securities as to which clause (v) of the first paragraph of Section 2 is
applicable and Exchange Securities held by Exchanging Dealers, and the Issuers
shall have no further obligations to register Transfer Restricted Securities
(other than Private Exchange Securities and other than in respect of any
Exchange Securities as to which clause (v) of the first paragraph of Section 2
hereof applies) pursuant to Section 2 hereof.
If, prior to the consummation of the Registered Exchange
Offer, any Holder holds any Securities acquired by it that have, or that are
reasonably likely to be determined to have, the status of an unsold allotment in
an initial distribution, or any Holder is not entitled to participate in the
Registered Exchange Offer, the Issuers shall, upon the request of any such
Holder, simultaneously with the delivery of the Exchange Securities in the
Registered Exchange Offer, issue and deliver to any such Holder, in exchange for
the Securities held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of the Company and the Guarantors that are
identical in all material respects to the Exchange Securities (the "Private
Exchange Securities"), except with respect to the transfer restrictions relating
to such Private Exchange Securities. The Private Exchange Securities will be
issued under the same indenture as the Exchange Securities, and the Company
shall use its reasonable best efforts to cause the Private Exchange Securities
to bear the same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, the Issuers
shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date on
which notice of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York;
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York City time, on the last
business day on which the Registered Exchange Offer shall remain open;
and
(e) otherwise comply in all respects with all laws that are
applicable to the Registered Exchange Offer.
<PAGE> 4
-4-
As soon as practicable after the close of the Registered
Exchange Offer and any Private Exchange, as the case may be, the Issuers shall:
(a) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer and the
Private Exchange Offer;
(b) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as
the case may be, promptly to authenticate and deliver to each Holder,
Exchange Securities or Private Exchange Securities, as the case may be,
equal in principal amount to the Securities of such Holder so accepted
for exchange.
The Issuers shall use their reasonable best efforts to keep
the Exchange Offer Registration Statement effective and to amend and supplement
the prospectus contained therein in order to permit such prospectus to be used
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that the Issuers shall make
such prospectus and any amendment or supplement thereto available to any
broker-dealer for use in connection with any resale of any Exchange Securities
for a period of 90 days after the consummation of the Registered Exchange Offer.
The Indenture or the Exchange Securities Indenture, as the
case may be, shall provide that the Securities, the Exchange Securities and the
Private Exchange Securities shall vote and consent together on all matters as
one class and that none of the Securities, the Exchange Securities or the
Private Exchange Securities will have the right to vote or consent as a separate
class on any matter.
Interest on each Exchange Security and Private Exchange
Security issued pursuant to the Registered Exchange Offer and in the Private
Exchange will accrue from the last interest payment date on which interest was
paid on the Securities surrendered in exchange therefor or, if no interest has
been paid on the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer
shall be required to represent to the Issuers that at the time of the
consummation of the Registered Exchange Offer (i) any Exchange Securities
received by such Holder will be acquired in the ordinary course of business,
(ii) such Holder will have no arrangements or understanding with any person to
participate in the distribution of the Securities or the Exchange Securities
within the meaning of the Securities Act and (iii) such Holder is not an
affiliate (as defined in Rule 405 under the Securities Act) of any of the
Issuers or, if it is such an affiliate, such Holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
<PAGE> 5
-5-
Notwithstanding any other provisions hereof, each of the
Issuers will ensure that (i) any Exchange Offer Registration Statement and any
amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the Securities Act and the rules
and regulations of the Commission thereunder, (ii) any Exchange Offer
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (iii) any prospectus forming part of any Exchange
Offer Registration Statement, and any supplement to such prospectus, does not,
as of the consummation of the Registered Exchange Offer, include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff the Issuers are not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) any Securities validly tendered pursuant to the Registered
Exchange Offer are not exchanged for Exchange Securities within 225 days after
the Issue Date, or (iii) any Initial Purchaser so requests in writing within 60
days after the Registered Exchange Offer with respect to Private Exchange
Securities, or (iv) any applicable law or interpretations do not permit any
Holder to participate in the Registered Exchange Offer, or (v) any Holder that
participates in the Registered Exchange Offer does not receive freely
transferable Exchange Securities in exchange for tendered Securities, or (vi)
the Issuers so elect, then the following provisions shall apply:
(a) The Issuers shall use their reasonable best efforts to
file as promptly as practicable (but in no event more than 90 days after so
required or requested, in each case pursuant to this Section 2) with the
Commission, and thereafter shall use their reasonable best efforts to cause to
be declared effective, a shelf registration statement on an appropriate form
under the Securities Act relating to the offer and sale of the Transfer
Restricted Securities by the Holders thereof from time to time in accordance
with the methods of distribution set forth in such registration statement
(hereafter, a "Shelf Registration Statement" and, together with any Exchange
Offer Registration Statement, a "Registration Statement"); provided, however,
that no Holder of Securities or Exchange Securities (other than the Initial
Purchasers) shall be entitled to have Securities or Exchange Securities held by
it covered by such Shelf Registration Statement, unless such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder.
(b) The Issuers shall use their reasonable best efforts to
keep the Shelf Registration Statement continuously effective in order to permit
the prospectus forming part thereof to be used by Holders of Transfer Restricted
Securities for a period ending on the earlier of two years from the Issue Date
or the date on which all the Transfer Restricted Securities covered by the Shelf
Registration Statement have been sold pursuant thereto (in any such case,
<PAGE> 6
-6-
such period being called the "Shelf Registration Period"). The Issuers shall be
deemed not to have used their reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if they voluntarily
take any action that would result in Holders of Transfer Restricted Securities
covered thereby not being able to offer and sell such Transfer Restricted
Securities during that period, unless such action is required by applicable law;
provided, however, that the foregoing shall not apply to actions taken by the
Issuers in good faith and for valid business reasons (not including avoidance of
their obligations hereunder), including, without limitation, the acquisition or
divestiture of assets, so long as the Issuers within 120 days thereafter comply
with the requirements of Section 4(j) hereof. Any such period during which the
Issuers fail to keep the Shelf Registration Statement effective and usable for
offers and sales of Securities and Exchange Securities is referred to as a
"Suspension Period." A Suspension Period shall commence on and include the date
that the Issuers give notice that the Shelf Registration Statement is no longer
effective or the prospectus included therein is no longer usable for offers and
sales of Securities and Exchange Securities and shall end on the date when each
Holder of Securities and Exchange Securities covered by such registration
statement either receives the copies of the supplemented or amended prospectus
contemplated by Section 4(j) hereof or is advised in writing by the Issuers that
use of the prospectus may be resumed. If one or more Suspension Periods occur,
the two-year period referenced above shall be extended by the aggregate of the
number of days included in each Suspension Period.
(c) Notwithstanding any other provisions hereof, the Issuers
will ensure that (i) any Shelf Registration Statement and any amendment thereto
and any prospectus forming part thereof and any supplement thereto complies in
all material respects with the Securities Act and the rules and regulations of
the Commission thereunder, (ii) any Shelf Registration Statement and any
amendment thereto (in either case, other than with respect to information
included therein in reliance upon or in conformity with written information
furnished to the Issuers by or on behalf of any Holder specifically for use
therein (the "Holders' Information")) does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Shelf Registration Statement, and any supplement to such
prospectus (in either case, other than with respect to Holders' Information),
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that the
Holders of Transfer Restricted Securities will suffer damages if the Issuers
fail to fulfill their obligations under Section 1 or Section 2, as applicable,
and that it would not be feasible to ascertain the extent of such damages.
Accordingly, if (i) the applicable Registration Statement is not filed with the
Commission on or prior to 90 days after the Issue Date, (ii) the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
is not declared effective within 180 days after the Issue Date (or in the case
of a Shelf Registration Statement
<PAGE> 7
-7-
required to be filed in response to a change in law or the applicable
interpretations of the Commission's staff, if later, within 45 days after
publication of the change in law or interpretation), (iii) the Registered
Exchange Offer is not consummated on or prior to 225 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
180 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of the Commission's staff, if later, within 45 days after
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Issuers are obligated to maintain the
effectiveness thereof) without being succeeded within 90 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Issuers will,
jointly and severally, be obligated to pay liquidated damages to each Holder of
Transfer Restricted Securities, during the period of one or more such
Registration Defaults, in an amount equal to $ 0.10 per week per $1,000
principal amount of Transfer Restricted Securities held by such Holder until (a)
the applicable Registration Statement is filed, (b) the Exchange Offer
Registration Statement is declared effective and the Registered Exchange Offer
is consummated, (c) the Shelf Registration Statement is declared effective or
(d) the Shelf Registration Statement again becomes effective, as the case may
be. Following the cure of all Registration Defaults, the accrual of liquidated
damages will cease. As used herein, the term "Transfer Restricted Securities"
means (i) each Security until the date on which such Security has been exchanged
for a freely transferable Exchange Security in the Registered Exchange Offer,
(ii) each Security or Private Exchange Security until the date on which it has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iii) each Security or
Private Exchange Security until the date on which it is distributed to the
public pursuant to Rule 144 under the Securities Act or is saleable pursuant to
Rule 144(k) under the Securities Act. Notwithstanding anything to the contrary
in this Section 3(a), the Issuers shall not be required to pay liquidated
damages to a Holder of Transfer Restricted Securities if such Holder failed to
comply with its obligations to make the representations set forth in the second
to last paragraph of Section 1 or failed to provide the information required to
be provided by it, if any, pursuant to Section 4(n).
(b) The Issuers shall notify the Trustee and the Paying Agent
under the Indenture immediately upon the happening of each and every
Registration Default. The Issuers shall, jointly and severally, pay the
liquidated damages due on the Transfer Restricted Securities by depositing with
the Paying Agent (which may not be any of the Issuers for these purposes), in
trust, for the benefit of the Holders thereof, prior to 10:00 a.m., New York
City time, on the next interest payment date specified by the Indenture and the
Securities, sums sufficient to pay the liquidated damages then due. The
liquidated damages due shall be payable on each interest payment date specified
by the Indenture and the Securities to the Holder of record entitled to receive
the interest payment to be made on such date. Each obligation to pay liquidated
damages shall be deemed to accrue from and including the date of the applicable
Registration Default.
<PAGE> 8
-8-
(c) The parties hereto agree that the liquidated damages
provided for in this Section 3 constitute a reasonable estimate of and are
intended to constitute the sole damages that will be suffered by Holders of
Transfer Restricted Securities by reason of the failure of (i) the Shelf
Registration Statement or the Exchange Offer Registration Statement to be filed,
(ii) the Shelf Registration Statement to remain effective or (iii) the Exchange
Offer Registration Statement to be declared effective and the Registered
Exchange Offer to be consummated, in each case to the extent required by this
Agreement.
4. Registration Procedures. In connection with any
Registration Statement, the following provisions shall apply:
(a) The Issuers shall (i) furnish to each Initial Purchaser,
prior to the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall use its reasonable best efforts to reflect
in each such document, when so filed with the Commission, such comments as any
Initial Purchaser may reasonably propose; (ii) if applicable, include the
information set forth in Annex A hereto on the cover, in Annex B hereto in the
"Exchange Offer Procedures" and "Purpose of the Exchange Offer" sections and in
Annex C hereto in the "Plan of Distribution" section of the prospectus forming a
part of the Exchange Offer Registration Statement, and include the information
set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to
the Registered Exchange Offer; and (iii) if requested by any Initial Purchaser,
include the information required by Items 507 or 508 of Regulation S-K, as
applicable, in the prospectus forming a part of the Exchange Offer Registration
Statement.
(b) The Issuers shall advise each Initial Purchaser, each
Exchanging Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment
thereto has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments
or supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Issuers of any
notification with respect to the suspension of the qualification of the
Securities, the Exchange Securities or the Private
<PAGE> 9
-9-
Exchange Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the
making of any changes in any Registration Statement or the prospectus
included therein in order that the statements therein are not
misleading and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(c) The Issuers will make every reasonable effort to obtain
the withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(d) The Issuers will furnish to each Holder of Transfer
Restricted Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) The Issuers will, during the Shelf Registration Period,
promptly deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included in
such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Issuers consent to the use of such
prospectus or any amendment or supplement thereto by each of the selling Holders
of Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(f) The Issuers will furnish to each Initial Purchaser and
each Exchanging Dealer, and to any other Holder who so requests, without charge,
at least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).
(g) The Issuers will, during the Exchange Offer Registration
Period or the Shelf Registration Period, as applicable, promptly deliver to each
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the Exchange
Offer Registration Statement or the Shelf Registration Statement and any
amendment or supplement thereto as such Initial Purchaser, Exchanging Dealer or
other persons may reasonably request; and the Issuers consent to the use of such
prospectus or any
<PAGE> 10
-10-
amendment or supplement thereto by any such Initial Purchaser, Exchanging Dealer
or other persons, as applicable, as aforesaid.
(h) Prior to the effective date of any Registration Statement,
the Issuers will use their reasonable best efforts to register or qualify, or
cooperate with the Holders of Securities, Exchange Securities or Private
Exchange Securities included therein and their respective counsel in connection
with the registration or qualification of, such Securities, Exchange Securities
or Private Exchange Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Holder reasonably requests in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Securities, Exchange Securities or
Private Exchange Securities covered by such Registration Statement; provided
that the Issuers will not be required to qualify generally to do business in any
jurisdiction where they are not then so qualified or to take any action which
would subject them to general service of process or to taxation in any such
jurisdiction where they are not then so subject.
(i) The Issuers will cooperate with the Holders of Securities,
Exchange Securities or Private Exchange Securities to facilitate the timely
preparation and delivery of certificates representing Securities, Exchange
Securities or Private Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as the Holders thereof may request in writing prior
to sales of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Registration Statement.
(j) If (i) any event contemplated by Section 4(b)(ii) through
(v) occurs during the period for which the Issuers are required to maintain an
effective Registration Statement, or (ii) any Suspension Period remains in
effect more than 120 days after the occurrence thereof, the Issuers will
promptly prepare and file with the Commission a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Securities, Exchange Securities or Private Exchange Securities from a Holder,
the prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(k) Not later than the effective date of the applicable
Registration Statement, the Issuers will provide a CUSIP number for the
Securities, the Exchange Securities and the Private Exchange Securities, as the
case may be, and provide the applicable trustee with printed certificates for
the Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
<PAGE> 11
-11-
(l) Each of the Issuers will comply with all applicable rules
and regulations of the Commission and will make generally available to its
security holders as soon as practicable after the effective date of the
applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act; provided that in no event
shall such earnings statement be delivered later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of such Issuer's first fiscal quarter commencing after the effective
date of the applicable Registration Statement, which statement shall cover such
12-month period.
(m) The Issuers will cause the Indenture or the Exchange
Securities Indenture, as the case may be, to be qualified under the Trust
Indenture Act as required by applicable law in a timely manner.
(n) The Issuers may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Issuers such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Issuers may from time
to time reasonably require for inclusion in such Shelf Registration Statement,
and the Issuers may exclude from such registration the Transfer Restricted
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
(o) In the case of a Shelf Registration Statement, each Holder
of Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Issuers (i) of a Suspension Period under Section 2(b) hereof or
(ii) pursuant to Section 4(b)(ii) through (v) hereof, such Holder will
discontinue disposition of such Transfer Restricted Securities until such
Holder's receipt of (x) notice that the Suspension Period has ended or (y)
copies of the supplemental or amended prospectus contemplated by Section 4(j)
hereof, as the case may be, or until advised in writing (the "Advice") by the
Issuers that the use of the applicable prospectus may be resumed. If the Issuers
shall give any notice under Section 4(b)(ii) through (v) during the period that
the Issuers are required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 4(j)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the Issuers
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities,
Exchange Securities and Private Exchange Securities being sold or
<PAGE> 12
-12-
the managing underwriters (if any) shall reasonably request in order to
facilitate any disposition of Securities, Exchange Securities or Private
Exchange Securities pursuant to such Shelf Registration Statement.
(q) In the case of a Shelf Registration Statement, the Issuers
shall (i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold and any underwriter participating in any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement, all relevant financial and other
records, pertinent corporate documents and properties of the Issuers and their
respective subsidiaries and (ii) use their reasonable best efforts to have their
officers, directors, employees, accountants and counsel supply all relevant
information reasonably requested by such representative, Special Counsel or any
such underwriter (an "Inspector") in connection with such Shelf Registration
Statement.
(r) In the case of a Shelf Registration Statement, the Issuers
shall, if requested by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use their reasonable best efforts to cause
(i) their counsel to deliver an opinion relating to the Shelf Registration
Statement and the Securities, Exchange Securities or Private Exchange
Securities, as applicable, in customary form, (ii) their officers to execute and
deliver all customary documents and certificates requested by Holders of a
majority in aggregate principal amount of the Securities, Exchange Securities
and Private Exchange Securities being sold, their Special Counsel or the
managing underwriters (if any) and (iii) their independent public accountants to
provide a comfort letter or letters in customary form, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72.
5. Registration Expenses. The Issuers will, jointly and
severally, bear all expenses incurred in connection with the performance of
their obligations under Sections 1, 2, 3 and 4 and the Issuers will, jointly and
severally, reimburse the Initial Purchasers and the Holders for the reasonable
fees and disbursements of one firm of attorneys (in addition to any local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Securities, the Exchange Securities and the Private Exchange Securities to
be sold pursuant to each Registration Statement (the "Special Counsel") acting
for the Initial Purchasers or Holders in connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration
Statement or in connection with any prospectus delivery pursuant to an Exchange
Offer Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, the Issuers shall, jointly and severally, indemnify and hold
harmless each Holder (including, without limitation, any such Initial Purchaser
or Exchanging Dealer), its affiliates, each person who controls such Holder or
<PAGE> 13
-13-
such affiliates within the meaning of the Securities Act or Exchange Act and
their respective officers, directors, employees, representatives and agents
(collectively referred to for purposes of this Section 6 and Section 7 as a
"Holder") from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of
Securities, Exchange Securities or Private Exchange Securities), to which that
Holder may become subject, whether commenced or threatened, under the Securities
Act, the Exchange Act, any other federal or state statutory law or regulation,
at common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any such Registration Statement
or any prospectus forming part thereof or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall, jointly and severally, reimburse each Holder promptly
upon demand for any legal or other expenses reasonably incurred by that Holder
in connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Issuers shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with any
Holders' Information; and provided further, however, that with respect to any
such untrue statement in or omission from any related preliminary prospectus (as
amended or supplemented) or, if amended or supplemented, any related final
prospectus (excluding the correcting amendment or supplement), the indemnity
agreement contained in this Section 6(a) shall not inure to the benefit of any
such Holder from whom the person asserting any such loss, claim, damage,
liability or action received Securities, Exchange Securities or Private Exchange
Securities to the extent that such loss, claim, damage, liability or action of
or with respect to such Holder results from the fact that both (A) a copy of the
final prospectus (together with any correcting amendments or supplements) was
not sent or given to such person at or prior to the written confirmation of the
sale of such Securities, Exchange Securities or Private Exchange Securities to
such person and (B) the untrue statement in or omission from any related
preliminary prospectus (as amended or supplemented) or, if amended or
supplemented, any related final prospectus (excluding the correcting amendment
or supplement) was corrected in the final prospectus or, if applicable, an
amendment or supplement thereto and the final prospectus (as amended or
supplemented) does not contain any other untrue statement or omission or alleged
untrue statement or omission of a material fact unless, in either case, such
failure to deliver the final prospectus was a result of non-compliance by the
Issuers with Sections 4(d), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each
Holder, severally and not jointly, shall indemnify and hold harmless the
Issuers, their respective affiliates, each person who controls any such Issuer
or any such affiliates within the meaning of the Securities
<PAGE> 14
-14-
Act or Exchange Act and their respective officers, directors, employees,
representatives and agents (collectively referred to for purposes of this
Section 6(b) and Section 7 as the "Issuers"), from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Issuers may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Holders' Information furnished to
the Issuers by such Holder, and shall reimburse the Issuers for any legal or
other expenses reasonably incurred by the Issuers in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no such Holder
shall be liable for any indemnity claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Securities, Exchange
Securities or Private Exchange Securities pursuant to such Shelf Registration
Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced by such failure; and provided further,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under this Section 6. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than the
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based
<PAGE> 15
-15-
upon advice of counsel to the indemnified party) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based upon advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel reasonably satisfactory to the indemnified party to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
7. Contribution. If the indemnification provided for in
Section 6 is unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuers from the offering and sale
of the Securities, on the one hand, and a Holder with respect to the sale by
such Holder of Securities, Exchange Securities or Private Exchange Securities,
on the other, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Issuers on the one hand and such Holder on the other with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers, on the one hand,
and a Holder, on the other, with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities
<PAGE> 16
-16-
(before deducting expenses) received by or on behalf of the Issuers as set forth
in the table on the cover of the Offering Memorandum, on the one hand, bear to
the total proceeds received by such Holder with respect to its sale of
Securities, Exchange Securities or Private Exchange Securities, on the other.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to the Issuers or
information supplied by the Issuers, on the one hand, or to any Holders'
Information supplied by such Holder, on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 7 were
to be determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above in
this Section 7 shall be deemed to include, for purposes of this Section 7, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 7, an
indemnifying party that is a Holder of Securities, Exchange Securities or
Private Exchange Securities shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities, Exchange
Securities or Private Exchange Securities sold by such indemnifying party to any
purchaser exceeds the amount of any damages which such indemnifying party has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. Rules 144 and 144A. Each if the Issuers shall use its
commercially reasonable best efforts to file the reports required to be filed by
it under the Securities Act and the Exchange Act in a timely manner and, if at
any time such Issuer is not required to file such reports, it will, upon the
written request of any Holder of Transfer Restricted Securities, make publicly
available other information for so long as necessary to permit sales of such
Holder's securities pursuant to Rules 144 and 144A. Each of the Issuers
covenants that it will take such further action as any Holder of Transfer
Restricted Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including, without limitation, the
requirements of Rule 144A(d)(4)). Upon the written request of any Holder of
Transfer Restricted Securities, each of the Issuers shall deliver to such Holder
a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require any of the Issuers to register any of its securities pursuant to the
Exchange Act.
<PAGE> 17
-17-
9. Underwritten Registrations. If any of the Transfer
Restricted Securities covered by any Shelf Registration Statement are to be sold
in an underwritten offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities included in such offering, subject to the consent of the Issuers
(which shall not be unreasonably withheld or delayed), and such Holders shall be
responsible for all underwriting commissions and discounts in connection
therewith.
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions
of this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
Issuers have obtained the written consent of Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities, taken as a single class. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose Securities, Exchange
Securities or Private Exchange Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities being sold by such Holders pursuant to such Registration
Statement.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing next-day delivery:
(i) if to a Holder, at the most current address given
by such Holder to the Issuers in accordance with the provisions of this
Section 10(b), which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the
Indenture, with a copy in like manner to Chase Securities Inc., Bear,
Stearns & Co. Inc., Morgan Stanley & Co. Incorporated, NatWest Capital
Markets Limited and BNY Capital Markets, Inc.
(ii) if to an Initial Purchaser, initially at its
address set forth in the Purchase Agreement; and
<PAGE> 18
-18-
(iii) if to the Issuers, initially at the address of
the Company set forth in the Purchase Agreement and to Hicks, Muse,
Tate & Furst Incorporated at the address set forth in the Purchase
Agreement.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; one business
day after being delivered to a next-day air courier; five business days after
being deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors and Assigns. This Agreement shall be binding
upon the Issuers and their successors and assigns.
(d) Counterparts. This Agreement may be executed in any number
of counterparts (which may be delivered in original form or by telecopier) and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of law provisions thereof to the extent the application of the laws of
another jurisdiction would be required thereby.
(h) Remedies. In the event of a breach by the Issuers or by
any Holder of any of their obligations under this Agreement, each Holder or the
Issuers, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages (other than the recovery of
damages for a breach by the Issuers of their obligations under Sections 1 or 2
hereof for which liquidated damages have been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this
Agreement. The Issuers and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
<PAGE> 19
-19-
(i) No Inconsistent Agreements. The Issuers represent, warrant
and agree that (i) they have not entered into, and shall not, on or after the
date of this Agreement, enter into, any agreement that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) they have not previously entered into any agreement
which remains in effect granting any registration rights with respect to any of
their debt securities to any person and (iii) without limiting the generality of
the foregoing, without the written consent of the Holders of a majority in
aggregate principal amount of the then outstanding Transfer Restricted
Securities, they shall not grant to any person the right to request any of the
Issuers to register any debt securities of such Issuer under the Securities Act
unless the rights so granted are not in conflict or inconsistent with the
provisions of this Agreement.
(j) No Piggyback on Registrations. Neither the Issuers nor any
of their respective security holders (other than the Holders of Transfer
Restricted Securities in such capacity) shall have the right to include any
securities of the Issuers in any Shelf Registration or Registered Exchange Offer
other than Transfer Restricted Securities.
(k) Severability. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
[Remainder of page intentionally left blank]
<PAGE> 20
S-1
Please confirm that the foregoing correctly sets forth the
agreement between the Issuers and the Initial Purchasers.
Very truly yours,
LIN ACQUISITION COMPANY
By:
--------------------------------
Name:
Title:
<PAGE> 21
S-2
AIRWAVES, INC.
BUFFALO BROADCASTING CO. INC.
BUFFALO MANAGEMENT ENTERPRISES
CO. INC.
KXAN, INC.
KXTX HOLDINGS, INC.
LINBENCO, INC.
LIN SPORTS, INC.
LIN TELEVISION OF TEXAS, INC.
LWWI BROADCASTING INC.
NORTH TEXAS BROADCASTING
CORPORATION
WAND TELEVISION, INC.
WOOD TELEVISION, INC.
WTNH BROADCASTING, INC.
as Guarantors
By:
--------------------------------
Name:
Title:
INDIANA BROADCASTING, LLC
WAVY BROADCASTING, LLC
WOOD LICENSE CO., LLC
WIVB BROADCASTING, LLC
By: LIN Television Corporation,
its Managing Member
By:
---------------------------------
Name:
Title:
<PAGE> 22
S-3
LIN TELEVISION OF TEXAS, L.P.
By: LIN Television of Texas, Inc.,
its General Partner
By:
----------------------------------
Name:
Title:
<PAGE> 23
S-4
Accepted by:
CHASE SECURITIES INC.
By:
-------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
-------------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:
-------------------------------
Name:
Title:
NATWEST CAPITAL MARKETS LIMITED
By:
-------------------------------
Name:
Title:
BNY CAPITAL MARKETS, INC.
By:
-------------------------------
Name:
Title:
<PAGE> 24
ANNEX A
Each broker-dealer that receives Exchange Securities for its
own account pursuant to the Registered Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Issuers have agreed that, for a period of 90 days after the
Expiration Date (as defined herein), they will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
<PAGE> 25
ANNEX B
Each broker-dealer that receives Exchange Securities for its
own account in exchange for Securities, where such Securities were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
<PAGE> 26
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its
own account pursuant to the Registered Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of Exchange
Securities received in exchange for Securities where such Securities were
acquired as a result of market-making activities or other trading activities.
The Issuers have agreed that, for a period of 90 days after the Expiration Date,
they will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until ,
1998, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.
The Issuers will not receive any proceeds from any sale of
Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Registered Exchange Offer
may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Securities or a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Exchange Securities. Any
broker-dealer that resells Exchange Securities that were received by it for its
own account pursuant to the Registered Exchange Offer and any broker or dealer
that participates in a distribution of such Exchange Securities may be deemed to
be an "underwriter" within the meaning of the Securities Act and any profit on
any such resale of Exchange Securities and any commission or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that, by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 90 days after the Expiration Date the Issuers
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Issuers have agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
<PAGE> 27
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
----------------------------
Address:
-------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE> 1
EXHIBIT 4.8
LIN HOLDINGS CORP.
$325,000,000
10% Senior Discount Notes due 2008
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
February 18, 1998
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO. INCORPORATED
NATWEST CAPITAL MARKETS LIMITED
BNY CAPITAL MARKETS, INC.
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
LIN Holdings Corp., a Delaware corporation ("Holdings"),
proposes to issue and sell to Chase Securities Inc., Bear, Stearns & Co. Inc.,
Morgan Stanley & Co. Incorporated, NatWest Capital Markets Limited and BNY
Capital Markets, Inc. (the "Initial Purchasers"), upon the terms and subject to
the conditions set forth in a purchase agreement dated February 18, 1998 (the
"Purchase Agreement") between Holdings, a Delaware corporation, LIN Acquisition
Corporation, a Delaware corporation, the Guarantors named therein and the
Initial Purchasers, $325,000,000 aggregate principal amount at maturity of its
10% Senior Discount Notes due 2008 (the "Securities"). Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the obligations of the
Initial Purchasers thereunder, Holdings agrees with the Initial Purchasers, for
the benefit of the holders (including the Initial Purchasers) of the Securities,
the Exchange Securities (as defined herein) and the Private Exchange Securities
(as defined herein) (collectively, the "Holders"), as follows:
1. Registered Exchange Offer. Holdings shall (i) use its
reasonable best efforts to prepare and, not later than 90 days following the
date of original issuance of the Securities (the "Issue Date"), file with the
Commission a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act with respect to a
proposed offer to the Holders of the Securities (the "Registered Exchange
Offer") to issue and deliver to such Holders, in exchange for the Securities, a
like aggregate principal amount of debt securities of Holdings that are
identical in all material respects to the Securities (the "Exchange
Securities"), except that the Exchange Securities will not contain terms with
respect to transfer restrictions, (ii) use its reasonable best efforts to cause
the Exchange Offer Registration
<PAGE> 2
-2-
Statement to become effective under the Securities Act no later than 180 days
after the Issue Date and the Registered Exchange Offer to be consummated no
later than 225 days after the Issue Date and (iii) keep the Exchange Offer
Registration Statement effective for not less than 30 days (or longer, if
required by applicable law) after the date on which notice of the Registered
Exchange Offer is mailed to the Holders (such period being called the "Exchange
Offer Registration Period"). The Exchange Securities will be issued under the
Senior Discount Notes Indenture (the "Indenture") or an indenture (the "Exchange
Securities Indenture") between Holdings, the Guarantors party thereto and the
Senior Discount Notes Trustee (the "Trustee") or such other bank or trust
company that is reasonably satisfactory to the Initial Purchasers, as trustee
(the "Exchange Securities Trustee"), such indenture to be identical in all
material respects to the Indenture, except with respect to the transfer
restrictions relating to the Securities (as described above).
Upon the effectiveness of the Exchange Offer Registration
Statement, Holdings shall as soon as practicable commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for Exchange Securities
(assuming that such Holder (a) is not an affiliate (as defined in Rule 405 under
the Securities Act) of Holdings or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not an Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business, and (d)
has no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. Holdings, each Initial Purchaser and
each Exchanging Dealer acknowledges that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, (i) each Holder that
is a broker-dealer electing to exchange Securities acquired for its own account
as a result of market-making activities or other trading activities for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the
cover of such prospectus, in Annex B hereto in the "Exchange Offer Procedures"
and "Purpose of the Exchange Offer" sections of such prospectus, and in Annex C
hereto in the "Plan of Distribution" section of such prospectus in connection
with a sale of any such Exchange Securities received by such Exchanging Dealer
pursuant to the Registered Exchange Offer and (ii) if any Initial Purchaser
elects to sell Private Exchange Securities (as defined below) acquired in
exchange for Securities constituting any portion of an unsold allotment, it is
required to deliver a prospectus containing the information required by Items
507 and 508 of Regulation S-K under the Securities Act and the Exchange Act
("Regulation S-K"), as applicable, in connection with such sale.
Upon consummation of the Registered Exchange Offer in
accordance with this Section 1, the provisions of this Agreement shall continue
to apply, mutatis mutandis, solely
<PAGE> 3
-3-
with respect to Transfer Restricted Securities (as defined) that are Private
Exchange Securities, Exchange Securities as to which clause (v) of the first
paragraph of Section 2 is applicable and Exchange Securities held by Exchanging
Dealers, and Holdings shall have no further obligations to register Transfer
Restricted Securities (other than Private Exchange Securities and other than in
respect of any Exchange Securities as to which clause (v) of the first paragraph
of Section 2 hereof applies) pursuant to Section 2 hereof.
If, prior to the consummation of the Registered Exchange
Offer, any Holder holds any Securities acquired by it that have, or that are
reasonably likely to be determined to have, the status of an unsold allotment in
an initial distribution, or any Holder is not entitled to participate in the
Registered Exchange Offer, Holdings shall, upon the request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of Holdings that are identical in all
material respects to the Exchange Securities (the "Private Exchange
Securities"), except with respect to the transfer restrictions relating to such
Private Exchange Securities. The Private Exchange Securities will be issued
under the same indenture as the Exchange Securities, and Holdings shall use its
reasonable best efforts to cause the Private Exchange Securities to bear the
same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, Holdings
shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date on
which notice of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York;
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York City time, on the last
business day on which the Registered Exchange Offer shall remain open;
and
(e) otherwise comply in all respects with all laws that are
applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered
Exchange Offer and any Private Exchange, as the case may be, Holdings shall:
<PAGE> 4
-4-
(a) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer and the
Private Exchange;
(b) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as
the case may be, promptly to authenticate and deliver to each Holder,
Exchange Securities or Private Exchange Securities, as the case may be,
equal in principal amount to the Securities of such Holder so accepted
for exchange.
Holdings shall use its reasonable best efforts to keep the
Exchange Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that Holdings shall make
such prospectus and any amendment or supplement thereto available to any
broker-dealer for use in connection with any resale of any Exchange Securities
for a period of 90 days after the consummation of the Registered Exchange Offer.
The Indenture or the Exchange Securities Indenture, as the
case may be, shall provide that the Securities, the Exchange Securities and the
Private Exchange Securities shall vote and consent together on all matters as
one class and that none of the Securities, the Exchange Securities or the
Private Exchange Securities will have the right to vote or consent as a separate
class on any matter.
Interest on each Exchange Security and Private Exchange
Security issued pursuant to the Registered Exchange Offer and in the Private
Exchange will accrue from the last interest payment date on which interest was
paid on the Securities surrendered in exchange therefor or, if no interest has
been paid on the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer
shall be required to represent to Holdings that at the time of the consummation
of the Registered Exchange Offer (i) any Exchange Securities received by such
Holder will be acquired in the ordinary course of business, (ii) such Holder
will have no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate (as defined in Rule
405 under the Securities Act) of Holdings or, if it is such an affiliate, such
Holder will comply with the registration and prospectus delivery requirements of
the Securities Act to the extent applicable.
Notwithstanding any other provisions hereof, Holdings will
ensure that (i) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the Securities
<PAGE> 5
-5-
Act and the rules and regulations of the Commission thereunder, (ii) any
Exchange Offer Registration Statement and any amendment thereto does not, when
it becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (iii) any prospectus forming part of any
Exchange Offer Registration Statement, and any supplement to such prospectus,
does not, as of the consummation of the Registered Exchange Offer, include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff Holdings is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) any Securities validly tendered pursuant to the Registered
Exchange Offer are not exchanged for Exchange Securities within 225 days after
the Issue Date, or (iii) any Initial Purchaser so requests in writing within 60
days after the Registered Exchange Offer with respect to Private Exchange
Securities, or (iv) any applicable law or interpretations do not permit any
Holder to participate in the Registered Exchange Offer, or (v) any Holder that
participates in the Registered Exchange Offer does not receive freely
transferable Exchange Securities in exchange for tendered Securities, or (vi)
Holdings so elects, then the following provisions shall apply:
(a) Holdings shall use its reasonable best efforts to file as
promptly as practicable (but in no event more than 90 days after so required or
requested, in each case pursuant to this Section 2) with the Commission, and
thereafter shall use its reasonable best efforts to cause to be declared
effective, a shelf registration statement on an appropriate form under the
Securities Act relating to the offer and sale of the Transfer Restricted
Securities by the Holders thereof from time to time in accordance with the
methods of distribution set forth in such registration statement (hereafter, a
"Shelf Registration Statement" and, together with any Exchange Offer
Registration Statement, a "Registration Statement"); provided, however, that no
Holder of Securities or Exchange Securities (other than the Initial Purchasers)
shall be entitled to have a Securities or Exchange Securities held by it covered
by such Shelf Registration Statement unless such Holder agrees in writing to be
bound by all of the provisions of this Agreement applicable to such Holder.
(b) Holdings shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be used by Holders of Transfer Restricted
Securities for a period ending on the earlier of (i) two years from the Issue
Date or the date on which all the Transfer Restricted Securities covered by the
Shelf Registration Statement have been sold pursuant thereto (in any such case,
such period being called the "Shelf Registration Period"). Holdings shall be
deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in Holders of Transfer Restricted Securities
covered thereby not being able to offer and sell such Transfer Restricted
<PAGE> 6
-6-
Securities during that period, unless such action is required by applicable law;
provided, however, that the foregoing shall not apply to actions taken by
Holdings in good faith and for valid business reasons (not including avoidance
of its obligations hereunder), including, without limitation, the acquisition or
divestiture of assets, so long as Holdings within 120 days thereafter complies
with the requirements of Section 4(j) hereof. Any such period during which
Holdings fails to keep the Shelf Registration Statement effective and usable for
offers and sales of Securities and Exchange Securities is referred to as a
"Suspension Period." A Suspension Period shall commence on and include the date
that Holdings gives notice that the Shelf Registration Statement is no longer
effective or the prospectus included therein is no longer usable for offers and
sales of Securities and Exchange Securities and shall end on the date when each
Holder of Securities and Exchange Securities covered by such registration
statement either receives the copies of the supplemented or amended prospectus
contemplated by Section 4(j) hereof or is advised in writing by the company that
use of the prospectus may be resumed. If one or more Suspension Periods occur,
the two-year period referenced above shall be extended by the aggregate of the
number of days included in each such Suspension Period.
(c) Notwithstanding any other provisions hereof, Holdings will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included therein
in reliance upon or in conformity with written information furnished to Holdings
by or on behalf of any Holder specifically for use therein (the "Holders'
Information")) does not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any prospectus forming part of any
Shelf Registration Statement, and any supplement to such prospectus (in either
case, other than with respect to Holders' Information), does not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that the
Holders of Transfer Restricted Securities will suffer damages if Holdings fails
to fulfill its obligations under Section 1 or Section 2, as applicable, and that
it would not be feasible to ascertain the extent of such damages. Accordingly,
if (i) the applicable Registration Statement is not filed with the Commission on
or prior to 90 days after the Issue Date, (ii) the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, is not
declared effective within 180 days after the Issue Date (or in the case of a
Shelf Registration Statement required to be filed in response to a change in law
or the applicable interpretations of the Commission's staff, if later, within 45
days after publication of the change in law or interpretation), (iii) the
Registered Exchange Offer is not consummated on or prior to 225 days after the
Issue Date, or (iv) the Shelf Registration Statement is filed and declared
effective within 180 days
<PAGE> 7
-7-
after the Issue Date (or in the case of a Shelf Registration Statement required
to be filed in response to a change in law or the applicable interpretations of
the Commission's staff, if later, within 45 days after publication of the change
in law or interpretation) but shall thereafter cease to be effective (at any
time that Holdings is obligated to maintain the effectiveness thereof) without
being succeeded within 90 days by an additional Registration Statement filed and
declared effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), Holdings will be obligated to pay liquidated damages to
each Holder of Transfer Restricted Securities, during the period of one or more
such Registration Defaults, in an amount equal to $ 0.10 per week per $1,000
principal amount of Transfer Restricted Securities held by such Holder until (a)
the applicable Registration Statement is filed, (b) the Exchange Offer
Registration Statement is declared effective and the Registered Exchange Offer
is consummated, (c) the Shelf Registration Statement is declared effective or
(d) the Shelf Registration Statement again becomes effective, as the case may
be. Following the cure of all Registration Defaults, the accrual of liquidated
damages will cease. As used herein, the term "Transfer Restricted Securities"
means (i) each Security until the date on which such Security has been exchanged
for a freely transferable Exchange Security in the Registered Exchange Offer,
(ii) each Security or Private Exchange Security until the date on which it has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iii) each Security or
Private Exchange Security until the date on which it is distributed to the
public pursuant to Rule 144 under the Securities Act or is saleable pursuant to
Rule 144(k) under the Securities Act. Notwithstanding anything to the contrary
in this Section 3(a), Holdings shall not be required to pay liquidated damages
to a Holder of Transfer Restricted Securities if such Holder failed to comply
with its obligations to make the representations set forth in the second to last
paragraph of Section 1 or failed to provide the information required to be
provided by it, if any, pursuant to Section 4(n).
(b) Holdings shall notify the Trustee and the Paying Agent
under the Indenture immediately upon the happening of each and every
Registration Default. Holdings shall pay the liquidated damages due on the
Transfer Restricted Securities by depositing with the Paying Agent (which may
not be Holdings for these purposes), in trust, for the benefit of the Holders
thereof, prior to 10:00 a.m., New York City time, on the next interest payment
date specified by the Indenture and the Securities, sums sufficient to pay the
liquidated damages then due. The liquidated damages due shall be payable on each
semi-annual accretion date or interest payment date, as the case may be,
specified by the Indenture and the Securities to the Holders of record entitled
to receive the interest payment to be made on such date. Each obligation to pay
liquidated damages shall be deemed to accrue from and including the date of the
applicable Registration Default.
(c) The parties hereto agree that the liquidated damages
provided for in this Section 3 constitute a reasonable estimate of and are
intended to constitute the sole damages that will be suffered by Holders of
Transfer Restricted Securities by reason of the failure of (i) the Shelf
Registration Statement or the Exchange Offer Registration Statement to be filed,
(ii)
<PAGE> 8
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the Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any
Registration Statement, the following provisions shall apply:
(a) Holdings shall (i) furnish to each Initial Purchaser,
prior to the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall use its reasonable best efforts to reflect
in each such document, when so filed with the Commission, such comments as any
Initial Purchaser may reasonably propose; (ii) if applicable, include the
information set forth in Annex A hereto on the cover, in Annex B hereto in the
"Exchange Offer Procedures" and "Purpose of the Exchange Offer" sections and in
Annex C hereto in the "Plan of Distribution" section of the prospectus forming a
part of the Exchange Offer Registration Statement, and include the information
set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to
the Registered Exchange Offer; and (iii) if requested by any Initial Purchaser,
include the information required by Items 507 or 508 of Regulation S-K, as
applicable, in the prospectus forming a part of the Exchange Offer Registration
Statement.
(b) Holdings shall advise each Initial Purchaser, each
Exchanging Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment
thereto has been filed with the Commission and when such Registration
Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments
or supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by Holdings of any notification
with respect to the suspension of the qualification of the Securities,
the Exchange Securities or the Private Exchange Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
<PAGE> 9
-9-
(v) of the happening of any event that requires the
making of any changes in any Registration Statement or the prospectus
included therein in order that the statements therein are not
misleading and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(c) Holdings will make every reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(d) Holdings will furnish to each Holder of Transfer
Restricted Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) Holdings will, during the Shelf Registration Period,
promptly deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included in
such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and Holdings consents to the use of such
prospectus or any amendment or supplement thereto by each of the selling Holders
of Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(f) Holdings will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).
(g) Holdings will, during the Exchange Offer Registration
Period or the Shelf Registration Period, as applicable, promptly deliver to each
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the Exchange
Offer Registration Statement or the Shelf Registration Statement and any
amendment or supplement thereto as such Initial Purchaser, Exchanging Dealer or
other persons may reasonably request; and Holdings consents to the use of such
prospectus or any amendment or supplement thereto by any such Initial Purchaser,
Exchanging Dealer or other persons, as applicable, as aforesaid.
<PAGE> 10
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(h) Prior to the effective date of any Registration Statement,
Holdings will use its reasonable best efforts to register or qualify, or
cooperate with the Holders of Securities, Exchange Securities or Private
Exchange Securities included therein and their respective counsel in connection
with the registration or qualification of, such Securities, Exchange Securities
or Private Exchange Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Holder reasonably requests in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Securities, Exchange Securities or
Private Exchange Securities covered by such Registration Statement; provided
that Holdings will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process or to taxation in any such jurisdiction
where it is not then so subject.
(i) Holdings will cooperate with the Holders of Securities,
Exchange Securities or Private Exchange Securities to facilitate the timely
preparation and delivery of certificates representing Securities, Exchange
Securities or Private Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as the Holders thereof may request in writing prior
to sales of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Registration Statement.
(j) If (i) any event contemplated by Section 4(b)(ii) through
(v) occurs during the period for which Holdings is required to maintain an
effective Registration Statement, or (ii) any Suspension Period remains in
effect more than 120 days after the occurrence thereof, Holdings will promptly
prepare and file with the Commission a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Securities, Exchange Securities or Private Exchange Securities from a Holder,
the prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(k) Not later than the effective date of the applicable
Registration Statement, Holdings will provide a CUSIP number for the Securities,
the Exchange Securities and the Private Exchange Securities, as the case may be,
and provide the applicable trustee with printed certificates for the Securities,
the Exchange Securities or the Private Exchange Securities, as the case may be,
in a form eligible for deposit with The Depository Trust Company.
(l) Holdings will comply with all applicable rules and
regulations of the Commission and will make generally available to its security
holders as soon as practicable after the effective date of the applicable
Registration Statement an earning statement satisfying the provisions of Section
11(a) of the Securities Act; provided that in no event shall such earning
statement be delivered later than 45 days after the end of a 12-month period (or
90
<PAGE> 11
-11-
days, if such period is a fiscal year) beginning with the first month of
Holdings' first fiscal quarter commencing after the effective date of the
applicable Registration Statement, which statement shall cover such 12-month
period.
(m) Holdings will cause the Indenture or the Exchange
Securities Indenture, as the case may be, to be qualified under the Trust
Indenture Act as required by applicable law in a timely manner.
(n) Holdings may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to Holdings such information concerning the Holder and the distribution
of such Transfer Restricted Securities as Holdings may from time to time
reasonably require for inclusion in such Shelf Registration Statement, and
Holdings may exclude from such registration the Transfer Restricted Securities
of any Holder that fails to furnish such information within a reasonable time
after receiving such request.
(o) In the case of a Shelf Registration Statement, each Holder
of Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from Holdings (i) of a Suspension Period under Section 2(b) hereof or
(ii) pursuant to Section 4(b)(ii) through (v) hereof, such Holder will
discontinue disposition of such Transfer Restricted Securities until such
Holder's receipt of (x) notice that the Suspension Period has ended or (y)
copies of the supplemental or amended prospectus contemplated by Section 4(j)
hereof, as the case may be, or until advised in writing (the "Advice") by
Holdings that the use of the applicable prospectus may be resumed. If Holdings
shall give any notice under Section 4(b)(ii) through (v) during the period that
Holdings is required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 4(j)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, Holdings
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities,
Exchange Securities and Private Exchange Securities being sold or the managing
underwriters (if any) shall reasonably request in order to facilitate any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement.
<PAGE> 12
-12-
(q) In the case of a Shelf Registration Statement, Holdings
shall (i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold and any underwriter participating in any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement, all relevant financial and other
records, pertinent corporate documents and properties of Holdings and its
subsidiaries and (ii) use its reasonable best efforts to have its officers,
directors, employees, accountants and counsel supply all relevant information
reasonably requested by such representative, Special Counsel or any such
underwriter (an "Inspector") in connection with such Shelf Registration
Statement.
(r) In the case of a Shelf Registration Statement, Holdings
shall, if requested by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use its reasonable best efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf Registration Statement
and the Securities, Exchange Securities or Private Exchange Securities, as
applicable, in customary form, (ii) its officers to execute and deliver all
customary documents and certificates requested by Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold, their Special Counsel or the managing
underwriters (if any) and (iii) its independent public accountants to provide a
comfort letter or letters in customary form, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement of Auditing
Standards No. 72.
5. Registration Expenses. Holdings will bear all expenses
incurred in connection with the performance of its obligations under Sections 1,
2, 3 and 4 and Holdings will reimburse the Initial Purchasers and the Holders
for the reasonable fees and disbursements of one firm of attorneys (in addition
to any local counsel) chosen by the Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities to be sold pursuant to each Registration Statement (the "Special
Counsel") acting for the Initial Purchasers or Holders in connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration
Statement or in connection with any prospectus delivery pursuant to an Exchange
Offer Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, Holdings shall indemnify and hold harmless each Holder (including,
without limitation, any such Initial Purchaser or Exchanging Dealer), its
affiliates, each person who controls such Holder or such affiliates within the
meaning of the Securities Act or Exchange Act and their respective officers,
directors, employees, representatives and agents (collectively referred to for
purposes of this Section 6 and Section 7 as a "Holder") from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, without limitation, any loss, claim, damage, liability or
action relating to purchases and sales of Securities, Exchange Securities or
Private Exchange
<PAGE> 13
-13-
Securities), to which that Holder may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
any such Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse each Holder promptly
upon demand for any legal or other expenses reasonably incurred by that Holder
in connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that Holdings shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with any Holders'
Information; and provided further, however, that with respect to any such untrue
statement in or omission from any related preliminary prospectus (as amended or
supplemented) or, if amended or supplemented, any related final prospectus
(excluding the correcting amendment or supplement), the indemnity agreement
contained in this Section 6(a) shall not inure to the benefit of any such Holder
from whom the person asserting any such loss, claim, damage, liability or action
received Securities, Exchange Securities or Private Exchange Securities to the
extent that such loss, claim, damage, liability or action of or with respect to
such Holder results from the fact that both (A) a copy of the final prospectus
(together with any correcting amendments or supplements) was not sent or given
to such person at or prior to the written confirmation of the sale of such
Securities, Exchange Securities or Private Exchange Securities to such person
and (B) the untrue statement in or omission from any related preliminary
prospectus (as amended or supplemented or, if amended or supplemented, any
selected final prospectus (excluding the correcting amendment or supplement),
was corrected in the final prospectus or, if applicable, an amendment or
supplement thereto and the final prospectus (as amended or supplemented) does
not contain any other untrue statement or omission or alleged untrue statement
or omission of a material fact unless, in either case, such failure to deliver
the final prospectus was a result of non-compliance by the Issuers with Sections
4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each
Holder, severally and not jointly, shall indemnify and hold harmless Holdings,
its affiliates, each person who controls any such Holder or any such affiliates
within the meaning of the Securities Act or Exchange Act and their respective
officers, directors, employees, representatives and agents (collectively
referred to for purposes of this Section 6(b) and Section 7 as "Holdings"), from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which Holdings may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at
<PAGE> 14
-14-
common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any such Registration Statement
or any prospectus forming part thereof or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any Holders' Information furnished to Holdings by
such Holder, and shall reimburse Holdings for any legal or other expenses
reasonably incurred by Holdings in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that no such Holder shall be liable for any
indemnity claims hereunder in excess of the amount of net proceeds received by
such Holder from the sale of Securities, Exchange Securities or Private Exchange
Securities pursuant to such Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced by such failure; and provided further,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under this Section 6. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than the
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon advice of counsel
to the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based upon advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the
<PAGE> 15
-15-
indemnified party) or (4) the indemnifying party has not in fact employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
7. Contribution. If the indemnification provided for in
Section 6 is unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by Holdings from the offering and sale of
the Securities, on the one hand, and a Holder with respect to the sale by such
Holder of Securities, Exchange Securities or Private Exchange Securities, on the
other, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
Holdings on the one hand and such Holder on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by Holdings, on the one hand, and
a Holder, on the other, with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by or on behalf of
Holdings as set forth in the table on the cover of the Offering Memorandum, on
the one hand, bear to the total proceeds received by such Holder with respect to
its sale of Securities, Exchange Securities or Private Exchange Securities, on
the other. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged
<PAGE> 16
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omission to state a material fact relates to Holdings or information supplied by
Holdings, on the one hand, or to any Holders' Information supplied by such
Holder, on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 7 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 7
shall be deemed to include, for purposes of this Section 7, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 7, an indemnifying party that is
a Holder of Securities, Exchange Securities or Private Exchange Securities shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities, Exchange Securities or Private Exchange
Securities sold by such indemnifying party to any purchaser exceeds the amount
of any damages which such indemnifying party has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. Rules 144 and 144A. Holdings shall use its commercially
reasonable best efforts to file the reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner and, if at any time
Holdings is not required to file such reports, it will, upon the written request
of any Holder of Transfer Restricted Securities, make publicly available other
information for so long as necessary to permit sales of such Holder's securities
pursuant to Rules 144 and 144A. Holdings covenants that it will take such
further action as any Holder of Transfer Restricted Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Transfer Restricted Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rules 144 and 144A
(including, without limitation, the requirements of Rule 144A(d)(4)). Upon the
written request of any Holder of Transfer Restricted Securities, Holdings shall
deliver to such Holder a written statement as to whether it has complied with
such requirements. Notwithstanding the foregoing, nothing in this Section 8
shall be deemed to require Holdings to register any of its securities pursuant
to the Exchange Act.
9. Underwritten Registrations. If any of the Transfer
Restricted Securities covered by any Shelf Registration Statement are to be sold
in an underwritten offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities included in such offering, subject to the consent of Holdings
<PAGE> 17
-17-
(which shall not be unreasonably withheld or delayed), and such Holders shall be
responsible for all underwriting commissions and discounts in connection
therewith.
No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Transfer
Restricted Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions
of this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless
Holdings has obtained the written consent of Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities, taken as a single class. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose Securities, Exchange
Securities or Private Exchange Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities being sold by such Holders pursuant to such Registration
Statement.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing next-day delivery:
(i) if to a Holder, at the most current address given
by such Holder to Holdings in accordance with the provisions of this
Section 10(b), which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the
Indenture, with a copy in like manner to Chase Securities Inc., Bear,
Stearns & Co. Inc., Morgan Stanley & Co. Incorporated, NatWest Capital
Markets Limited and BNY Capital Markets, Inc.
(ii) if to an Initial Purchaser, initially at its
address set forth in the Purchase Agreement; and
(iii) if to Holdings, initially at the address of
Holdings set forth in the Purchase Agreement and to Hicks, Muse, Tate &
Furst Incorporated at the address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; one business
day after being delivered to a
<PAGE> 18
-18-
next-day air courier; five business days after being deposited in the mail; and
when receipt is acknowledged by the recipient's telecopier machine, if sent by
telecopier.
(c) Successors And Assigns. This Agreement shall be binding
upon Holdings and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number
of counterparts (which may be delivered in original form or by telecopier) and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of law provisions thereof to the extent the application of the laws of
another jurisdiction would be required thereby.
(h) Remedies. In the event of a breach by Holdings or by any
Holder of any of their obligations under this Agreement, each Holder or
Holdings, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages (other than the recovery of
damages for a breach by Holdings of its obligations under Sections 1 or 2 hereof
for which liquidated damages have been paid pursuant to Section 3 hereof), will
be entitled to specific performance of its rights under this Agreement. Holdings
and each Holder agree that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(i) No Inconsistent Agreements. Holdings represents, warrants
and agrees that (i) it has not entered into, and shall not, on or after the date
of this Agreement, enter into any agreement that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any agreement which
remains in effect granting any registration rights with respect to any of its
debt securities to any person and (iii) without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding
<PAGE> 19
-19-
Transfer Restricted Securities, it shall not grant to any person the right to
request Holdings to register any debt securities of Holdings under the
Securities Act unless the rights so granted are not in conflict or inconsistent
with the provisions of this Agreement.
(j) No Piggyback on Registrations. Neither Holdings nor any of
its security holders (other than the Holders of Transfer Restricted Securities
in such capacity) shall have the right to include any securities of Holdings in
any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities.
(k) Severability. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
[Remainder of page intentionally left blank]
<PAGE> 20
S-1
Please confirm that the foregoing correctly sets forth the
agreement between Holdings and the Initial Purchasers.
Very truly yours,
LIN HOLDINGS CORP.
By:
-------------------------------------
Name:
Title:
<PAGE> 21
S-2
Accepted by:
CHASE SECURITIES INC.
By:
----------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By:
----------------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:
----------------------------------
Name:
Title:
NATWEST CAPITAL MARKETS LIMITED
By:
----------------------------------
Name:
Title:
BNY CAPITAL MARKETS, INC.
By:
----------------------------------
Name:
Title:
<PAGE> 22
ANNEX A
Each broker-dealer that receives Exchange Securities for its
own account pursuant to the Registered Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. Holdings has agreed that, for a period of 90 days after the
Expiration Date (as defined herein), it will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
<PAGE> 23
ANNEX B
Each broker-dealer that receives Exchange Securities for its
own account in exchange for Securities, where such Securities were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
<PAGE> 24
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its
own account pursuant to the Registered Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of Exchange
Securities received in exchange for Securities where such Securities were
acquired as a result of market-making activities or other trading activities.
Holdings has agreed that, for a period of 90 days after the Expiration Date, it
will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
, 1998, all dealers effecting transactions in the Exchange Securities may
be required to deliver a prospectus.
Holdings will not receive any proceeds from any sale of
Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Registered Exchange Offer
may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Securities or a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Exchange Securities. Any
broker-dealer that resells Exchange Securities that were received by it for its
own account pursuant to the Registered Exchange Offer and any broker or dealer
that participates in a distribution of such Exchange Securities may be deemed to
be an "underwriter" within the meaning of the Securities Act and any profit on
any such resale of Exchange Securities and any commission or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that, by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 90 days after the Expiration Date Holdings
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. Holdings has agreed to pay all expenses incident
to the Registered Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
<PAGE> 25
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
----------------------------
Address:
-------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE> 1
Conformed Copy
EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF
MARCH 3, 1998
AMONG
LIN HOLDINGS CORP.,
LIN TELEVISION CORPORATION,
AS BORROWER,
THE LENDERS PARTY HERETO,
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT,
AS ISSUING LENDER
AND AS SWINGLINE LENDER,
THE BANK OF NEW YORK,
AS SYNDICATION AGENT
AND
NATIONAL WESTMINSTER BANK PLC,
AS DOCUMENTATION AGENT
CHASE SECURITIES INC.,
AS ARRANGER
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1 Term Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2 Procedure for Term Loan Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.3 Repayment of Term Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.4 Revolving Credit Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.5 Procedure for Revolving Credit Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.6 Commitment Fees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.7 Termination or Reduction of Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.8 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.9 Mandatory Prepayments and Commitment Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.10 Conversion and Continuation Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.11 Minimum Amounts and Maximum Number of Eurodollar Tranches. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.12 Interest Rates and Payment Dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.13 Computation of Interest and Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.14 Inability to Determine Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.15 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.16 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.17 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.18 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.19 Change of Lending Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.20 Replacement of Lenders under Certain Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.21. Notice of Certain Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.1 L/C Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.2 Procedure for Issuance of Letter of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.3 Commissions, Fees and Other Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.4 L/C Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.5 Reimbursement Obligation of the Borrower. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.6 Obligations Absolute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.7 Letter of Credit Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3.8 Applications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
<PAGE> 3
<TABLE>
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4.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.3 Corporate Existence; Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.4 Corporate Power; Authorization; Enforceable Obligations.54
4.5 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.6 No Material Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.7 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.8 Ownership of Property; Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.11 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.12 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.13 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.14 Investment Company Act; Other Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.15 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.16 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.18 Accuracy of Information, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.19 Security Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.20 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.21 Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.22 Station Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1 Conditions to Initial Extension of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.2 Conditions to Each Extension of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.1 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.2 Certificates; Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.3 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.4 Conduct of Business and Maintenance of Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.5 Maintenance of Property; Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.6 Inspection of Property; Books and Records; Discussions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.8 Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.9 Interest Rate Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.10 Additional Collateral, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
6.11 WOOD-TV Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.12 After - Acquired Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.13 Changes in Locations, Name, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
7.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
7.2 Limitation on Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.4 Limitation on Fundamental Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.5 Limitation on Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
7.6 Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.7 Limitation on Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.8 Limitation on Investments, Loans and Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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<TABLE>
<S> <C>
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc. . . . . . . . . . . . . . . . . . . 79
7.10 Limitation on Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
7.11 Limitation on Sales and Leasebacks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.12 Limitation on Changes in Fiscal Periods.81
7.13 Limitation on Negative Pledge Clauses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.14 Limitation on Lines of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.15 Limitation on Amendments to Constituent and Transaction Documents. . . . . . . . . . . . . . . . . . . . . . . 81
7.16 Limitations on Changes in Holding Company Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.17 Limitation on Changes in Station Affiliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.18 Limitation on Minority Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
7.19 Approval of Joint Venture Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 9. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.4 Reliance by Administrative Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.6 Non-Reliance on the Administrative Agent and Other Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.8 Agent in Its Individual Capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.9 Successor Administrative Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
10.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
10.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
10.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.4 Survival of Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.5 Payment of Expenses and Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.6 Successors and Assigns; Participations and Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
10.7 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
10.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.10 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.12 Submission To Jurisdiction; Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
10.13 Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.14 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
10.16 FCC Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
10.17 Filing of Mortgages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
</TABLE>
<PAGE> 5
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Properties
1.1C Consolidated EBITDA Prior to Closing Date
1.1D Network Affiliation Agreements
4.4 Consents, Authorizations, Filings and Notices
4.6 Litigation
4.12 Labor Matters
4.15 Subsidiaries
4.17 Environmental Matters
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
4.22 Station Licenses
7.2(e) Existing Indebtedness
7.3(f) Existing Liens
7.8(g) Existing Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D-1 Form of Mortgage--Borrower
D-2 Form of Mortgage--Subsidiary Guarantor
E Form of Assignment and Acceptance
F Form of Legal Opinion of Weil, Gotshal & Manges LLP
G Form of Incremental Term Loan Activation Notice
H Form of Swingline Loan Participation Certificate
I-1 Form of Revolving Credit Note
I-2 Form of Term Loan Note
I-3 Form of Swingline Note
J Form of Borrowing Notice
<PAGE> 6
CREDIT AGREEMENT, dated as of March 3, 1998, among
LIN HOLDINGS CORP., a newly formed Delaware corporation
("Holdings") organized by Hicks, Muse, Tate & Furst
Incorporated ("Hicks Muse"), LIN ACQUISITION COMPANY, a newly
formed, wholly owned subsidiary of Holdings organized by Hicks
Muse, (the "Borrower"), the several banks and other financial
institutions or entities from time to time parties to this
Agreement (the "Lenders"), THE CHASE MANHATTAN BANK, as
administrative agent (in such capacity, the "Administrative
Agent"), as issuing lender (in such capacity, the "Issuing
Lender"), and as swingline lender (in such capacity, the
"Swingline Lender"), National Westminster Bank Plc, as
documentation agent (in such capacity, the "Documentation
Agent"), and The Bank of New York, as syndication agent (in
such capacity, the "Syndication Agent").
Pursuant to the Agreement and Plan of Merger dated as of
August 12, 1997 (as amended by the Amendment thereto dated October 21, 1997,
the "Merger Agreement"), among the Borrower, Holdings and LIN Television
Corporation, a Delaware corporation ("LIN"), the Borrower will merge (the
"Merger") with and into LIN, with LIN being the surviving entity. Immediately
following the effective time of the Merger, LIN shall succeed to all the rights
and obligations of the Borrower by operation of law and without any further
action by any Person, and the term "Borrower" shall be deemed to mean LIN.
In connection with the Merger, (a) the Borrower (LIN following
the Merger) will issue the Senior Subordinated Notes (such term and each other
capitalized term used but not defined in the preamble of this Agreement having
the meaning assigned to such term in subsection 1.1) in a public offering or
Rule 144A offering or private placement, (b) Holdings will issue the Holdings
Discount Notes in a public offering or Rule 144A offering or private placement,
(c) Holdings will contribute to the Borrower at least $555,000,000 (less the
amount of rollover investment by members of management and employees of LIN and
its Subsidiaries), along with the net proceeds of the issuance of the Holdings
Discount Notes, in cash as common equity from the proceeds of capital
contributions made to Holdings by (i) Ranger Equity Holdings A Corp., a newly
formed Delaware corporation organized by Hicks Muse ("Equity Holdings A"), in
an aggregate amount of at least $188,000,000, in exchange for approximately 37%
of the common stock of Holdings, and (ii) Ranger Equity Holdings B Corp., an
additional newly formed Delaware corporation organized by Hicks Muse ("Equity
Holdings B"), in an aggregate amount of at least $350,000,000, in exchange for
the remaining common stock of Holdings, in each case from the proceeds of a
capital contribution made, directly or indirectly, by funds managed by Hicks
Muse and certain other investors (collectively, the "Investors"), in exchange
for the issuance to the Investors, directly or indirectly, of all the common
stock of Equity Holdings A and Equity Holdings B, (d) LIN will refinance all of
its Existing Indebtedness other than Existing Indebtedness that is permitted
under subsection 7.2(e) ("Refinanced Indebtedness") and (e) subsequent to
receipt of approvals for such mergers and the related asset transfers, each of
Buffalo Broadcasting Co., Inc. and Buffalo Management Enterprises Co. Inc. will
be merged with and into LWWI Broadcasting Inc. ("LWWI"), and LWWI will be
merged with and into LIN.
In addition, in connection with the Merger and pursuant to the
Joint Venture Agreements, (a) on the Funding Date (i) LIN Texas will obtain an
$815,500,000 25-year non-
<PAGE> 7
2
amortizing term loan (the "Joint Venture Loan") from GECC, (ii) LIN Texas will
grant to GECC a first priority security interest (the "Original Lien") in the
KXAS Assets, and (iii) NBC will contribute to the LLC an undivided 99% interest
in the KNSD Assets that will be immediately contributed to the LP, (b) also on
the Funding Date, (i) LIN Texas will contribute to the LLC the KXAS Assets,
subject to the Original Lien, (ii) the Joint Venture Loan will be assigned to
and assumed by the LLC and, upon the execution of the Joint Venture Loan
Guarantee, LIN Texas will be released from all liability with respect to the
Joint Venture Loan, (iii) the LP will grant to GECC a first priority security
interest (the "Additional Lien") in its 99% undivided interest in the KNSD
Assets, (iv) the Borrower will execute a guarantee with respect to the LLC's
obligations under the Joint Venture Loan (the "Original Guarantee") and (v) LIN
Texas will loan the cash proceeds of the Joint Venture Loan to LIN or one of
its subsidiaries (any such loan, the "LIN Texas Loan"), (c) immediately
following the effective time of the Merger (i) the LLC will contribute to the
LP the KXAS Assets (subject to the Original Lien), (ii) NBC will contribute to
the LP an undivided 1% interest in the KNSD Assets, (iii) Equity Holdings B
will execute the Joint Venture Loan Guarantee and (iv) the Borrower will be
released from the Original Guarantee and shall have no obligations under the
Joint Venture Loan, (d) Holdings will obtain from NBC an option to acquire the
assets of television station WVTM-TV, serving Birmingham, Alabama (the "WVTM
Assets"), for a purchase price of $199,000,000, subject to certain adjustments,
as provided in the WVTM Purchase Agreement, (e) the NBC network affiliation
agreements for stations KXAS-TV, KNSD-TV and WVTM-TV will each be modified to
provide for a term of 25 years from the Funding Date, (f) the NBC network
affiliation agreements for the other stations owned by LIN and its Subsidiaries
and Affiliates will be modified to provide for (i) a term for each expiring in
the year 2010 and (ii) compensation thereunder at levels which, taken as a
whole, are substantially no less favorable to LIN and its Subsidiaries and
Affiliates as arrangements as may be agreed upon between NBC and a majority of
NBC affiliates in the 25 largest television markets (the network affiliation
agreements of LIN and its Subsidiaries described in this clause (f) and in
clause (e) above, together with any other related network affiliation
compensation arrangements, being collectively referred to as the "NBC Network
Affiliation Agreements") and (g) the LP will enter into the LP Services
Agreement.
The Borrower has requested (a) the Tranche A Term Loan Lenders
to extend credit in the form of (i) Initial Tranche A Term Loans on the Closing
Date in an aggregate principal amount not in excess of $50,000,000 and (ii)
Delayed Tranche A Term Loans at any one time during the Delayed Tranche A
Commitment Period, in an aggregate principal amount not in excess of
$125,000,000, (b) the Tranche B Term Loan Lenders to extend credit in the form
of Tranche B Term Loans on the Closing Date, in an aggregate principal amount
not in excess of $120,000,000, (c) the Revolving Credit Lenders to extend
credit in the form of Revolving Credit Loans from time to time during the
Revolving Credit Commitment Period, in an aggregate principal amount at any
time outstanding not in excess of the difference between (i) $50,000,000 and
(ii) the sum of the L/C Obligations at such time and the Swingline Exposure at
such time, (d) the Issuing Lender to issue Letters of Credit from time to time
during the Revolving Credit Commitment Period in an aggregate stated amount at
any time outstanding not in excess of $25,000,000 and (e) the Swingline Lender
to extend credit in the form of Swingline Loans from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any time
outstanding not in excess of $25,000,000.
<PAGE> 8
3
The proceeds of the Initial Tranche A Term Loans and the
Tranche B Term Loans will be used on the Closing Date, in part, to (i) finance
the Merger Transactions, (ii) repay in full the Refinanced Indebtedness and
(iii) pay related fees, expenses and other transaction costs (provided that
fees and expenses payable in connection with the Joint Venture Loan shall be
reimbursed by NBC). The proceeds of the Delayed Tranche A Term Loans will be
used solely to finance the acquisition by the Borrower of the assets of WOOD-TV
Station (the "WOOD-TV Acquisition"), pursuant to the terms of the WOOD-TV
Purchase Agreement. The proceeds of the Incremental Term Loans shall be used
solely to finance Permitted Acquisitions and transaction fees and expenses in
connection therewith and to fund required redemptions of the portion of
Holdings Discount Notes issued in respect of accrued interest on Holdings
Discount Notes. The proceeds of Revolving Credit Loans (other than an amount
not to exceed $20,000,000 to finance a portion of the Merger Transactions) will
be used for general corporate purposes, including Permitted Acquisitions. The
Letters of Credit and Swingline Loans will be used for general corporate
purposes.
The Lenders and the Swingline Lender are willing to extend
such credit to the Borrower and the Issuing Lender is willing to issue Letters
of Credit for the account of the Borrower, in each case on the terms and
subject to the conditions set forth herein.
<PAGE> 9
4
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABC": the American Broadcasting Companies, Inc.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to
time by Chase as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by Chase in connection with extensions of credit
to debtors); "Base CD Rate" shall mean the sum of (a) the product of
(i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus
the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it; and "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, the
Base CD Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which
is based upon the ABR.
"Additional Lien": as defined in the preamble of this
Agreement.
<PAGE> 10
5
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": Chase, together with its affiliates,
as the arranger of the Commitments and as the administrative agent for
the Lenders under this Agreement and the other Loan Documents,
together with any of its successors.
"Affected Eurodollar Loans": as defined in subsection 2.9(f).
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 51% or more of the
securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct
or cause the direction of the management and policies of such Person,
whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": (a) for all Loans, other than
Incremental Term Loans, the Applicable Margin as determined pursuant
to the Pricing Grid and (b) with respect to Incremental Term Loans,
the rate per annum for Incremental Term Loans agreed to, or the rate
per annum determined pursuant to a pricing grid agreed to, by the
Borrower and the applicable Incremental Lenders in the applicable
Incremental Term Loan Activation Notice.
"Application": an application, in such form (reasonably
acceptable to the Borrower) as the Issuing Lender may specify from
time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Approved Fund": with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans
and is advised or managed by the same investment advisor as such
Lender or by an affiliate of such investment advisor.
"Asset Sale": any sale, transfer or other disposition
(including any sale and leaseback of assets and any sale of accounts
receivable in connection with a receivable financing transaction) by
Holdings or any of its Subsidiaries of any property of Holdings or any
such Subsidiary (including property subject to any Lien under any
Security Document), other than as permitted pursuant to subsection
7.5(a), (b) (provided that, except with respect to the loss or
condemnation of all or substantially all of the assets of Holdings and
its Subsidiaries, the proceeds from such casualty or condemnation
(including insurance) are used to replace or rebuild the lost or
condemned assets within the time period specified in subsection
2.9(b)) and (c) through (g).
"Asset Swap Transaction": a substantially concurrent purchase
and sale, or exchange, of a Broadcasting Asset of the Borrower or all
the Capital Stock of, or other
<PAGE> 11
6
equity interests in, a Subsidiary owning a Broadcasting Asset,
for a Broadcast Station or Broadcast Enterprise of another Person or
group of affiliated Persons, or all the Capital Stock of, or other
equity interests in, a Person or group of affiliated Persons owning a
Broadcast Station or Broadcast Enterprise (or such lesser amount as
shall be determined by the Board of Directors of the Borrower or such
Subsidiary as fair consideration), including, without limitation, the
KXTX Transaction, provided that (a) the Borrower shall receive, in
exchange for such Broadcasting Asset, or Capital Stock of, or other
equity interests in, such Subsidiary owning a Broadcasting Asset, a
Broadcast Station or Broadcast Enterprise, or Capital Stock of, or
other equity interests in, a Person or group of affiliated Persons
owning a Broadcast Station or Broadcast Enterprise, (b) on a pro forma
basis for the most recently completed four-fiscal-quarter period for
which financial statements are available on the date of such Asset
Swap Transaction, no Default or Event of Default will have occurred
and be continuing (including, without limitation, pursuant to
subsection 7.1), provided that for purposes of calculating
Consolidated EBITDA pursuant to this clause (b), the Consolidated
EBITDA of such Broadcast Station or Broadcast Enterprise being
acquired for such four-fiscal-quarter period shall equal the
Consolidated EBITDA of such Broadcast Station or Broadcast Enterprise,
as applicable, for the 12-month period preceding such Asset Swap
Transaction, (c) (i) the Consolidated EBITDA of the Broadcasting Asset
being sold or exchanged plus the Consolidated EBITDA of all
Broadcasting Assets that were sold pursuant to subsection 7.5(h) or
exchanged pursuant to subsection 7.5(i) in such fiscal quarter and in
the immediately preceding four-fiscal- quarter period shall not exceed
25% of the Consolidated EBITDA of the Borrower for such immediately
preceding four-fiscal-quarter period, (ii) the Consolidated EBITDA of
the Broadcasting Asset being sold or exchanged plus the Consolidated
EBITDA of all Broadcasting Assets that were sold pursuant to
subsection 7.5(h) or exchanged pursuant to subsection 7.5(i) in such
fiscal quarter and in the immediately preceding eight-fiscal-quarter
period shall not exceed 40% of the Consolidated EBITDA of the Borrower
for such eight-fiscal-quarter period and (iii) the Consolidated EBITDA
of the Broadcasting Asset being sold or exchanged plus the
Consolidated EBITDA of all Broadcasting Assets that were sold pursuant
to subsection 7.5(h) or exchanged pursuant to subsection 7.5(i) in
such fiscal quarter and in the preceding twenty-fiscal-quarter period
shall not exceed 60% of the Consolidated EBITDA of the Borrower for
such twenty-fiscal-quarter period, (d) any Net Cash Proceeds of such
Asset Swap Transaction shall be deemed Net Cash Proceeds of an Asset
Sale, and shall be applied pursuant to subsection 2.9(d) or reinvested
pursuant to subsection 2.9(b), (e) the Borrower provides the
Administrative Agent with a certificate showing compliance with all of
the covenants contained in subsection 7.1, (f) the Borrower takes such
actions as may be required or reasonably requested to ensure that the
Administrative Agent, for the ratable benefit of the Lenders, has a
perfected first priority security interest in any assets required to
be secured pursuant to subsection 6.10 or any other Loan Document,
subject to Liens permitted by subsection 7.3, and (g) the Borrower
provides the Administrative Agent with appropriate supporting
documentation if reasonably requested by the Administrative Agent,
including, without limitation, any exchange agreement in connection
with such transaction, opinions of counsel, including FCC counsel, in
connection therewith and copies of an FCC consent on Form 732 (or any
comparable form issued by the FCC) relating to the transfer of control
or assignment of the Station Licenses of the acquired Broadcast
Station to the
<PAGE> 12
7
Borrower or its Subsidiary and, unless the Administrative Agent shall
otherwise agree, such consent shall have become a Final Order.
"Assignee": as defined in subsection 10.6(c).
"Assignor": as defined in subsection 10.6(c).
"Available Revolving Credit Commitment": as to any Lender at
any time, an amount equal to (a) such Lender's Revolving Credit
Commitment minus (b) such Lender's Revolving Extensions of Credit.
"Benefitted Lender": as defined in subsection 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the introductory paragraph of this
Agreement.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the Lenders or Swingline
Lender to make Loans or Swingline Loans hereunder.
"Broadcast Enterprise": assets used and useful for the
operation of broadcasting or entertainment businesses, or any
businesses reasonably related thereto.
"Broadcast Station": all or substantially all the assets used
and useful for operating a full service commercial television
broadcast station pursuant to a Station License, including without
limitation the rights to use such Station License.
"Broadcasting Assets": collectively, any Stations and any
Non-Station Assets of the Borrower and its Subsidiaries.
"Broadcasting Asset Temporary Repayment": as defined in
subsection 2.8(b).
"Business": as defined in subsection 4.17(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close, provided that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on
which commercial banks are not open for dealing in Dollar deposits in
the London interbank market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures (whether paid in cash or
accrued as a liability) by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and
<PAGE> 13
8
improvements during such period). For purposes of this definition,
the following items will be excluded from the definition of "Capital
Expenditures": (a) Capital Expenditures to the extent funded by
insurance proceeds, condemnation awards or payments pursuant to a deed
in lieu thereof, (b) Capital Expenditures to the extent made through
barter transactions and (c) assets acquired pursuant to (i) Permitted
Acquisitions, (ii) Asset Swap Transactions and (iii) a reinvestment of
proceeds received under subsection 7.5(c).
"Capital Lease Obligations": as to any Person, the
obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a
balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with
GAAP.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants, rights
or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit
of the United States, in each case maturing on or within one year from
the date of acquisition; (b) certificates of deposit, time deposits,
Eurodollar time deposits, bankers' acceptances and repurchase
agreements, or overnight bank deposits having maturities of one year
or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States of
America or any state thereof having combined capital and surplus (or
whose obligations are guaranteed by an affiliated commercial bank
which has capital and surplus) of not less than $500,000,000; (c)
commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Services or P-2 by Moody's Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally; (d) money market
accounts or funds with or issued by Qualified Issuers; (e) repurchase
obligations with a term of not more than 90 days for underlying
securities of the types described in clause (a) above entered into
with any bank meeting the qualifications specified in clause (b) above
and (f) demand deposit accounts maintained in the ordinary course of
business with any Lender or with any bank that is not a Lender not in
excess of $100,000 in the aggregate on deposit with such Lender or any
such bank.
"CBS": the CBS Television Network, a division of CBS, Inc.
"C/D Assessment Rate": for any day as applied to the Base CD
Rate, the net annual assessment rate (rounded upward to the nearest
1/100th of 1%) determined by Chase to be payable on such day to the
Federal Deposit Insurance Corporation or any successor (the "FDIC")
for the FDIC's insuring time deposits made in Dollars at offices of
Chase in the United States.
<PAGE> 14
9
"C/D Reserve Percentage": for any day as applied to the Base
CD Rate, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum
reserve requirement for a member of the Federal Reserve System in New
York City with deposits exceeding one billion Dollars in respect of new
non-personal time deposits in Dollars having a three month maturity and
in an amount of $100,000 or more.
"Change of Control": the earlier to occur of (a) Hicks Muse,
its principals and their Affiliates and management of Holdings and the
Borrower ("HMTF") shall cease to have the power, directly or
indirectly, to vote or direct the voting of securities having a
majority of the ordinary voting power for the election of directors of
Holdings, provided that the occurrence of the foregoing event shall
not be deemed a Change of Control if (i) at any time prior to the
consummation of an Initial Public Offering, and for any reason
whatever, (A) HMTF otherwise has the right to designate (and does so
designate) a majority of the board of directors of Holdings or (B)
HMTF and their employees, directors and officers (the "HMTF Group")
own of record and beneficially an amount of common stock of Holdings
equal to at least 50% of the amount of common stock of Holdings owned
by the HMTF Group of record and beneficially as of the Closing Date
and such ownership by the HMTF Group represents the largest single
block of voting securities of Holdings held by any Person or related
group for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended, or (ii) at any time after the consummation of an
Initial Public Offering, and for any reason whatever, (A) no "Person"
or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), excluding the HMTF
Group, shall become the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more
than the greater of (x) 20% of the shares outstanding or (y) the
percentage of the then outstanding voting stock of Holdings owned
beneficially by the HMTF Group and (B) the board of directors of
Holdings shall consist of a majority of Continuing Directors and (b) a
Change of Control as defined in any document pertaining to any Senior
Subordinated Indebtedness or the Holdings Discount Notes.
"Chase": The Chase Manhattan Bank.
"Closing Date": March 3, 1998.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment": as to any Lender, the sum of the Term
Commitments, the Revolving Credit Commitment and the Swingline Loan
Commitment of such Lender and with respect to the Issuing Lender and
L/C Participants, as applicable, their L/C Obligations.
"Commitment Fee Rate": 1/2 of 1% per annum, provided that
from and after the First Adjustment Date, the Commitment Fee Rate will
be determined pursuant to the Pricing Grid.
<PAGE> 15
10
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Consolidated Cash Interest Expense": for any period,
Consolidated Interest Expense (including, without limitation, that
attributable to Capital Lease Obligations but excluding capitalized
financing fees), net of cash interest income of the Borrower and its
Subsidiaries, for such period (a) minus, in each case to the extent
included in determining such Consolidated Interest Expense for such
period, the sum of the following: (i) non-cash expenses for interest
payable in kind and (ii) amortization of debt discount and fees and
(b) plus the sum of cash payments made by the Borrower or any of its
Subsidiaries during such period in respect of the items referred to in
clause (a)(i) of this definition to the extent previously subtracted
pursuant to clause (a) of this definition (including, without
limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Protection Agreements to the extent
such net costs are allocable to such period in accordance with GAAP).
Prior to the completion of 12 full calendar months after the Closing
Date, Consolidated Cash Interest Expense will be annualized by
multiplying Consolidated Cash Interest Expense for the number of then
completed months after the Closing Date by a fraction, the numerator
of which is 12 and the denominator of which is the number of months in
such shorter period.
"Consolidated Current Assets": at a particular date, all
amounts (other than cash, Cash Equivalents and the current portion of
programming rights) which would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at
such date.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be set forth opposite
the caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at
such date, but excluding (a) the current portion of any Funded Debt
and Film Obligations of the Borrower and its Subsidiaries and (b)
without duplication of clause (a) above, all Indebtedness consisting
of Revolving Credit Loans to the extent otherwise included therein.
"Consolidated Debt Service": for any period, the sum of
Consolidated Cash Interest Expense plus any scheduled amortization
payments on any Indebtedness made or payable during such period, but
excluding mandatory prepayments on any such Indebtedness.
"Consolidated EBITDA": for any period:
(a) Net Income for such period; plus
<PAGE> 16
11
(b) without duplication, the sum of the following items (to
the extent deducted in the computation of such Net Income for such
period):
(i) depreciation expense;
(ii) amortization expense (including amortization in
respect of Film Obligations and other amortized film expense)
and amortization of intangibles (including, but not limited
to, goodwill and organizational costs (including costs
associated with the Transactions));
(iii) Consolidated Interest Expense;
(iv) income and franchise tax expense;
(v) any extraordinary and unusual losses (net of
income taxes);
(vi) the annualized promotional reimbursement from
NBC not to exceed $2,000,000;
(vii) to the extent identified and reasonably
satisfactory to the Administrative Agent, any cost savings
realized in connection with any acquired Broadcasting Assets;
(viii) to the extent set forth in a written contract,
any recurring improvements to Consolidated EBITDA as a result
of any acquired Broadcasting Assets; and
(ix) other non-cash charges (excluding barter
expenses and trade expenses);
less (c) without duplication, the sum of the following items:
(i) all cash payments originally scheduled to be made
during such period in respect of Film Obligations;
(ii) any extraordinary and unusual gains (net of
income taxes);
(iii) non-cash gains included in Net Income; and
(iv) cash dividends or other distributions made by
the Borrower to Holdings for its reasonable corporate overhead
expenses,
provided that for the purpose of calculating Consolidated EBITDA, not
more than (A) 30% of Consolidated EBITDA for any period of four
consecutive fiscal quarters may be attributable to local marketing
agreements and (B) not more than 10% of Consolidated EBITDA for any
period of four consecutive fiscal quarters may be attributable to
non-broadcasting businesses and, provided further, that (x) for
purposes of calculating Consolidated EBITDA for any Test Period prior
to December 31, 1998, the Borrower may
<PAGE> 17
12
include during such period an aggregate amount of up to $2,200,000 of
Distributable Cash (as defined in the LLC Agreement) and (y) for
purposes of calculating Consolidated EBITDA for the Test Period ending
December 31, 1998, the Borrower may include during such period the
actual amount of Distributable Cash (without consideration of the
reserve requirement of Section 8.06 of the LLC Agreement and without
duplication of amounts otherwise included in Net Income) for the
period from the Closing Date through December 31, 1998, plus the
amount of Distributable Cash, determined on a pro forma basis assuming
the Transactions had occurred on January 1, 1998, for the period from
January 1, 1998 through the Closing Date. For purposes of subsection
2.9 and subsection 7.1(a), Consolidated EBITDA for any period will be
adjusted to (A) exclude the Consolidated EBITDA attributable to any
asset or business that was disposed of (either directly or as part of
an exchange) by the Borrower or any of its Subsidiaries prior to the
date of determination (as if such asset or business had not been owned
by the Borrower or any of its Subsidiaries prior to the date of
determination) and (B) include the Consolidated EBITDA attributable to
any asset or business that was acquired (either directly or as part of
an exchange) by the Borrower or any of its Subsidiaries (including, to
the extent identified and reasonably satisfactory to the
Administrative Agent, pro forma cost savings in connection therewith)
prior to the date of determination (as if such asset or business had
been owned by the Borrower or any of its Subsidiaries prior to the
date of determination). Notwithstanding the foregoing, (a) the
Consolidated EBITDA of each Designated LMA Station shall be excluded
for purposes of determining Consolidated EBITDA for each fiscal
quarter ending on or before the earlier of June 30, 1999 and the
beginning of the first fiscal quarter after the Closing Date for which
such Designated LMA Station has positive Consolidated EBITDA and (b)
the Consolidated EBITDA of any Designated Future LMA Station shall be
excluded for purposes of determining Consolidated EBITDA for each
fiscal quarter ending on or before the earlier of the date that is
three years after the acquisition of such Designated Future LMA
Station and the beginning of the first fiscal quarter after such
acquisition for which such Designated Future LMA Station has positive
Consolidated EBITDA.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum
(without duplication) of (a) Consolidated Debt Service for such
period, (b) Capital Expenditures made by the Borrower or any of its
Subsidiaries during such period, (c) any income taxes paid by the
Borrower or any of its Subsidiaries, and any amounts paid by the
Borrower to Holdings for purposes of paying income taxes, in each
case, during such period, (d) cash dividends paid by the Borrower
during such period less the amount of any Indebtedness for money
borrowed incurred by the Borrower to fund such dividends to the extent
the proceeds of such dividends are used by Holdings during such period
to pay required redemptions of Holdings Discount Notes after the fifth
anniversary of the Closing Date and (e) any operating losses from
Designated Future LMA Stations to the extent such losses are excluded
from Consolidated EBITDA. Prior to the completion of 12 full calendar
months after the Closing Date, (a) the components of Consolidated
Fixed Charges relating to interest and income taxes will be annualized
by multiplying such components of Consolidated Fixed Charges for
<PAGE> 18
13
the number of then completed months after the Closing Date by a
fraction, the numerator of which is 12 and the denominator of which is
the number of months in such shorter period, and (b) for purposes of
this definition, Capital Expenditures (i) for the fiscal quarter ended
June 30, 1998 will equal the Capital Expenditures for such fiscal
quarter plus an amount equal to the Capital Expenditures in the three
fiscal quarters preceding the Closing Date, (ii) for the fiscal
quarter ended September 30, 1998 will equal the Capital Expenditures
for the two fiscal quarters ended September 30, 1998 plus an amount
equal to the Capital Expenditures in the two fiscal quarters preceding
the Closing Date and (iii) for the fiscal quarter ended December 31,
1998 will equal Capital Expenditures for the three fiscal quarters
ended December 31, 1998 plus an amount equal to the Capital
Expenditures in the fiscal quarter preceding the Closing Date.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Cash Interest Expense for such period.
"Consolidated Interest Expense": for any period, the amount
of interest expense, both expensed and capitalized, of the Borrower
and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, for such period on the aggregate principal amount of their
Indebtedness, excluding non-cash deferred financing costs (other than
for purposes of the definition of the term "Consolidated EBITDA").
Prior to the completion of 12 full calendar months after the Closing
Date, Consolidated Interest Expense will be annualized by multiplying
Consolidated Interest Expense for the number of then completed months
after the Closing Date by a fraction, the numerator of which is 12 and
the denominator of which is the number of months in such shorter
period.
"Consolidated Leverage Ratio": as at the last day of any
period, the ratio of (a) Consolidated Total Debt on such day to (b)
Consolidated EBITDA for such period.
"Consolidated Senior Debt": Consolidated Total Debt less (a)
any Senior Subordinated Indebtedness issued in accordance with the
terms of this Agreement and (b) any subordinated Indebtedness assumed
in connection with a Permitted Acquisition or an Asset Swap
Transaction pursuant to subsection 7.2(j)(iii).
"Consolidated Senior Leverage Ratio": as at the last day of
any period, the ratio of (a) Consolidated Senior Debt to (b)
Consolidated EBITDA for such period.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness for borrowed money of the
Borrower and its Subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP, net of cash on the
consolidated balance sheet of the Borrower to the extent the initial
equity contribution (together with any equity contribution made within
45 days after the Closing Date) to the Borrower exceeds $555,000,000
less the amount of rollover investment by members of management and
employees of the Borrower and its Subsidiaries (but only for so long
as the cash relating to such equity contribution shall remain on the
balance sheet), plus an amount of cash on the balance sheet not to
exceed $10,000,000.
<PAGE> 19
14
"Consolidated Working Capital": the excess of Consolidated
Current Assets over Consolidated Current Liabilities.
"Continuing Directors": the directors of Holdings on the
Closing Date, after giving effect to the Merger and the other
transactions contemplated hereby, and each other director, if, in each
case, such other director's nomination for election to the board of
directors of Holdings is recommended by a majority of the then
Continuing Directors or such other director receives the vote of HMTF
in his or her election by the stockholders of Holdings.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking (including, without limitation, any undertaking made
to the FCC) to which such Person is a party or by which it or any of
its property is bound.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, unless cured or waived, has been satisfied.
"Delayed Tranche A Commitment Period": the period from and
including the Closing Date to the Delayed Tranche A Termination Date.
"Delayed Tranche A Term Loan Commitment": as to any Tranche A
Term Loan Lender, the obligation of such Tranche A Term Loan Lender to
make Delayed Tranche A Term Loans to the Borrower hereunder in an
aggregate principal amount not to exceed the amount set forth under
the heading "Delayed Tranche A Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A, as the same may be changed from time
to time pursuant to the terms hereof. The original aggregate amount
of the Delayed Tranche A Term Loan Commitments is $125,000,000.
"Delayed Tranche A Term Loans": as defined in subsection
2.1(a)(i).
"Delayed Tranche A Termination Date": the earlier of (a) the
date that is fifteen (15) months after the Closing Date or, if such
date is not a Business Day, the Business Day next succeeding such date
and (b) the date upon which the Delayed Tranche A Term Loan
Commitments shall be earlier terminated pursuant hereto.
"Delivery Date": as defined in the definition of the term
"Pricing Grid".
"Designated Future LMA Station": any Station operated by the
Borrower or any of its Subsidiaries pursuant to local marketing
arrangements (or should the FCC rules permit, under direct ownership)
established after the Closing Date, provided that at the time of such
arrangement such Station has not had positive cash flow for at least
four consecutive fiscal quarters.
"Designated LMA Stations": any Existing LMA Station which has
not had positive cash flow for at least four consecutive fiscal
quarters.
<PAGE> 20
15
"Documentation Agent": as defined in the introductory
paragraph of this Agreement.
"Dollars" and "$": lawful currency of the United States of
America.
"ECF Percentage": 75%, provided that the ECF Percentage shall
be deemed to be 50% if, on the applicable Excess Cash Flow Application
Date, the Consolidated Leverage Ratio as of the end of the last fiscal
quarter preceding such Excess Cash Flow Application Date was less than
6.00 to 1.00, provided further that the ECF Percentage shall be deemed
to be 0% if, on the applicable Excess Cash Flow Application Date, the
Consolidated Leverage Ratio as of the end of the last fiscal quarter
preceding such Excess Cash Flow Application Date was less than 5.00 to
1.00.
"Environmental Laws": any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, legally binding requirements of
any Governmental Authority or other Requirements of Law (including
common law) regulating, relating to or imposing liability or standards
of conduct concerning protection of the environment, as now or may at
any time hereafter be in effect.
"Equity Holdings A": as defined in the preamble of this
Agreement.
"Equity Holdings B": as defined in the preamble of this
Agreement.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied
to a Eurodollar 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 or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D
of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chase is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted 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
Eurodollar Loans to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
<PAGE> 21
16
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
--------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans under the same Facility the then current Interest Periods with
respect to all of which begin on the same date and end on the same
later date (whether or not such Loans shall originally have been made
on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower,
Consolidated EBITDA (plus or minus the cash portion of any
extraordinary gains or losses incurred during such fiscal year without
duplication of mandatory prepayments resulting from any transaction
giving rise thereto) for such period (before any adjustments thereto
(a) to exclude the Consolidated EBITDA attributable to any asset or
business that was disposed of (either directly or as part of an
exchange) by the Borrower or any of its Subsidiaries during the period
of calculation or (b) to include the Consolidated EBITDA attributable
to any asset or business that was acquired (either directly or as part
of an exchange) by the Borrower or any of its Subsidiaries (excluding,
to the extent identified and reasonably satisfactory to the
Administrative Agent, pro forma cost savings in connection therewith
to the extent included in Consolidated EBITDA) during the period of
calculation), minus the sum of the following (without duplication):
(i) Consolidated Debt Service for such period;
(ii) Capital Expenditures made during such period by the
Borrower and its Subsidiaries;
(iii) distributions permitted to be made by the Borrower
pursuant to subsection 7.6(a)(iii) and other taxes of the Borrower for
such period;
(iv) the amount of any increases during such period in
Consolidated Working Capital;
(v) voluntary prepayments made during such period of the Term
Loans;
(vi) voluntary repayments made during such period of the
Revolving Credit Loans, provided that substantially simultaneously
therewith the aggregate Revolving Credit Commitments are permanently
reduced by an amount equal to the amount of such repayment;
<PAGE> 22
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(vii) any cash used during such period for any Restricted
Payment (other than any dividend, repurchase of Capital Stock or other
distribution made by the Borrower to Holdings), Permitted Acquisition,
Asset Swap Transaction or Investment permitted pursuant to subsections
7.8(f), (j) or (i); and
(viii) amounts referred to in clause (ii) of subparagraph (b)
of the proviso contained in the definition of the term "Net Income";
plus the sum of the following (without duplication):
(i) the amount of all proceeds received during such period of
Capital Lease Obligations, purchase money Indebtedness and any other
Indebtedness to the extent used to finance any Capital Expenditures,
to make any Restricted Payment (other than any dividend, repurchase of
Capital Stock or other distribution made by the Borrower to Holdings)
or to make a Permitted Acquisition; and
(ii) the amount of any decreases during such period in
Consolidated Working Capital.
"Excess Cash Flow Application Date": as defined in subsection
2.9(c).
"Existing Indebtedness": all Indebtedness of the Borrower
existing on the Closing Date and prior to the consummation of the
Merger.
"Existing LMA Station": any Station operated as of the
Closing Date pursuant to local marketing arrangements, including
WBNE-TV, serving New Haven, Connecticut, WVBT-TV, serving Norfolk,
Virginia, KNVA-TV, serving Austin, Texas, and KXTX-TX, serving Dallas,
Texas.
"Facility": each of (a) the Tranche A Term Loan Commitments
and the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Tranche B Term Loan Commitments and the Tranche B
Term Loans made thereunder (the "Tranche B Term Loan Facility"), (c)
the Incremental Term Loan Amounts and the Incremental Term Loans
related thereto (the "Incremental Term Loan Facility"), (d) the
Swingline Loan Commitments and the Swingline Loans made thereunder and
(e) the Total Revolving Credit Commitments and the Revolving
Extensions of Credit made thereunder (the "Revolving Credit
Facility").
"FCC": the Federal Communications Commission or any
Governmental Authority substituted therefor.
"Federal Funds Effective Rate": as defined in the definition
of the term "ABR".
"Film Cash Payments": for any period, the sum (determined on
a consolidated basis in accordance with GAAP) of all scheduled
payments made and to be made by Holdings or any of its Subsidiaries
during such period on Film Obligations which were existing as of, or
have been incurred at any time after, the Closing Date.
<PAGE> 23
18
"Film Obligations": all obligations in respect of the
purchase, use, license or acquisition of programs, programming
materials, films and similar assets used in connection with the
business and operation of Holdings and its Subsidiaries.
"Final Order": with respect to the assignment or transfer of
control of the Station Licenses for any Station, an order of the FCC
approving such assignment or transfer that is final (i.e., no longer
subject to further judicial or administrative review), as to which no
requests for judicial or administrative review are pending, and that
has not been reversed, stayed, enjoined, set aside, annulled or
suspended.
"Fox": the Fox Broadcasting Company.
"Funded Debt": as to any Person, all Indebtedness of such
Person that matures more than one year from the date of its creation
or matures within one year from such date but is renewable or
extendable, at the option of such Person, to a date more than one year
from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period
of more than one year from such date, including, without limitation,
all current maturities and current sinking fund payments in respect of
such Indebtedness whether or not required to be paid within one year
from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.
"Funding Date": the day immediately prior to the day on which
the Merger is consummated.
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time set forth in
the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards
Board and the rules and regulations of the Securities and Exchange
Commission, or in such other statements by such other entity as may be
in general use by significant segments of the accounting profession,
which are applicable to the circumstances of Holdings and the Borrower
as of the date of determination, except that for purposes of
subsection 7.1, GAAP shall be determined on the basis of such
principles in effect on the date hereof and consistent with those used
in the preparation of the audited financial statements referred to in
subsection 4.1(a). In the event that any "Accounting Change" (as
defined below) shall occur and such change results in a change in the
method of calculation of financial covenants, standards or terms in
this Agreement, then the Borrower and the Administrative Agent agree
to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating the Borrower's
financial condition shall be the same after such Accounting Changes as
if such Accounting Changes had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower,
the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Accounting Changes had not
occurred. The term "Accounting Changes" refers to changes in
accounting principles
<PAGE> 24
19
required by the promulgation of any rule, regulation, pronouncement or
opinion by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission (or successors thereto or agencies
with similar functions).
"GECC": General Electric Capital Corporation, a New York
corporation.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by Holdings, the
Borrower and each Subsidiary Guarantor, substantially in the form of
Exhibit A, as the same may be amended, supplemented or otherwise
modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counter indemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for
the purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term "Guarantee Obligation" shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation
in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by such Person in good
faith.
"Guarantors": Holdings and the Subsidiary Guarantors.
"Hicks Muse": as defined in the introductory paragraph of
this Agreement.
<PAGE> 25
20
"HMTF": as defined in the definition of the term "Change of
Control".
"Holdings": as defined in the introductory paragraph of this
Agreement.
"Holdings Discount Indebtedness": the Holdings Discount Notes
and any unsecured Indebtedness of Holdings the proceeds of which shall
be used to refinance in full all of the Holdings Discount Notes, or
other Holdings Discount Indebtedness outstanding, provided such
refinancing Indebtedness has (a) no maturity, amortization, mandatory
redemption or purchase option (other than with asset sale proceeds,
subject to the provisions of this Agreement, or following a change of
control) or sinking fund payment prior to the tenth anniversary of the
Closing Date, (b) no financial maintenance covenants, (c) such other
terms and conditions (including, without limitation, interest rate,
events of default, covenants and interest Discount period) as shall be
reasonably satisfactory to the Administrative Agent and (d) any
permanent refinancing shall not be less favorable to the Borrower and
the Lenders as the Holdings Discount Notes taken as a whole.
"Holdings Discount Notes": Holdings's 10% Discount Notes due
2008 issued on the Closing Date in accordance with subsection 5.1(x)
(and shall include any substantially identical deferred interest
senior unsecured notes of Holdings in the same aggregate principal
amount issued after the Closing Date in exchange therefor pursuant to
a registered exchange offer or shelf registration statement in
accordance with the Holdings Discount Notes Indenture.)
"Holdings Discount Notes Indenture": the indenture to be
entered into by Holdings in connection with the issuance of the
Holdings Discount Notes or any other Holdings Discount Indebtedness,
together with all instruments and other agreements entered into by
Holdings in connection therewith, all in form and substance reasonably
satisfactory to the Administrative Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with subsection 7.9.
"Incremental Lenders": (a) on any Incremental Term Loan
Activation Date, the Lenders signatory to the Incremental Term Loan
Activation Notice and (b) thereafter, each Lender which has made, or
acquired pursuant to an assignment made in accordance with subsection
10.6(c), an Incremental Term Loan.
"Incremental Maturity Date": as to the Incremental Term Loans
to be made pursuant to any Incremental Term Loan Activation Notice,
the maturity date specified in such Incremental Term Loan Activation
Notice, which date shall be a date at least six months after the
Tranche B Maturity Date.
"Incremental Term Loan Activation Date": each date, which
shall be a Business Day on or before the Incremental Term Loan
Termination Date, on which any Lender shall execute and deliver to the
Administrative Agent an Incremental Term Loan Activation Notice
pursuant to subsection 2.1(b).
<PAGE> 26
21
"Incremental Term Loan Activation Notice": a notice
substantially in the form of Exhibit G.
"Incremental Term Loan Amount": as to each Incremental
Lender, on and after the effectiveness of any Incremental Term Loan
Activation Notice, the obligation of such Incremental Lender to make
Incremental Term Loans hereunder in a principal amount equal to the
amount set forth under the heading "Incremental Term Loan Amount"
opposite such Incremental Lender's name on such Incremental Term Loan
Activation Notice.
"Incremental Term Loan Closing Date": each date, which shall
be a Business Day on or before the Incremental Term Loan Termination
Date, designated as such in an Incremental Term Loan Activation
Notice.
"Incremental Term Loan Facility": as defined in the
definition of the term "Facility".
"Incremental Term Loan Percentage": as to any Incremental
Lender, the percentage which such Lender's Incremental Term Loans then
outstanding constitutes of the aggregate principal amount of the
Incremental Term Loans then outstanding.
"Incremental Term Loans": as defined in subsection 2.1(b).
"Incremental Term Loan Termination Date": March 3, 2003.
"Incremental Term Note": a Term Note evidencing Incremental
Term Loans.
"Incur": as defined in subsection 7.2; and the term
"Incurrence" shall have a correlative meaning.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
property or services (other than current trade payables and accrued
expenses incurred in the ordinary course of such Person's business),
(c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created
or arising under any conditional sale or other title retention
agreement with respect to property acquired 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), (e) all Capital Lease Obligations of such Person,
(f) all obligations of such Person, contingent or otherwise, as an
account party under a bankers' acceptance, letter of credit or similar
facilities, (g) the obligations of such Person under any Interest Rate
Protection Agreement, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through
(g) above and (i) all obligations of the kind referred to in clauses
(a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such
obligation
<PAGE> 27
22
and on which obligations such Person has recourse only to such
property; provided, however, that the amount of such Indebtedness of
any Person described in this clause (i) shall, for the purposes of
this Agreement, be deemed to be equal to the lesser of (i) the
aggregate unpaid amount of such Indebtedness and (ii) the fair market
value of the property or asset encumbered, as determined by such
Person in good faith.
"Initial Public Offering": an underwritten public offering by
Holdings of Capital Stock of Holdings or any Subsidiary or parent
thereof pursuant to a registration statement filed with the Securities
and Exchange Commission in accordance with the Securities Act of 1933,
as amended.
"Initial Tranche A Term Loan Commitment": as to any Tranche A
Term Loan Lender, the obligation of such Tranche A Term Loan Lender to
make an Initial Tranche A Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading
"Initial Tranche A Term Loan Commitment" opposite such Lender's name
on Schedule 1.1A. The original aggregate amount of the Initial
Tranche A Term Loan Commitments is $50,000,000.
"Initial Tranche A Term Loans": as defined in subsection
2.1(a)(i).
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 4.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan
is outstanding, (b) as to any Eurodollar Loan having an Interest
Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day
of such Interest Period and (d) as to any Loan, the date of repayment
thereof at final stated maturity, provided that the first Interest
Payment Date shall be June 30, 1998.
<PAGE> 28
23
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two,
three, six or (if available to all Lenders under the relevant Facility
as determined in good faith by such Lenders) nine or twelve months
thereafter, as selected by the Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto;
and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three, six or (if available to all Lenders under the
relevant Facility as determined in good faith by such Lenders) nine or
twelve months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect
thereto, provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend beyond
the Revolving Credit Termination Date, in the case of Revolving Credit
Loans, or the date final payment is due, in the case of Term Loans,
shall end on the Revolving Credit Termination Date or such due date,
as applicable;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate futures contract, interest rate
option, interest rate cap or other interest rate hedge arrangement, to
or under which Holdings or any of its Subsidiaries is a party or a
beneficiary on the date hereof or becomes a party or a beneficiary
after the date hereof.
"Investment" as defined in subsection 7.8.
"Investors": as defined in the preamble of this Agreement.
"Issuing Lender": Chase or any of its affiliates, in its
capacity as issuer of any Letter of Credit.
"Joint Venture Agreements": (a) the LP Agreement, (b) the LLC
Agreement and (c) the NBC Transaction Agreements.
<PAGE> 29
24
"Joint Venture Loan": as defined in the preamble of this
Agreement.
"Joint Venture Loan Guarantee": the guarantee, in the form
heretofore approved by the Administrative Agent, executed by Equity
Holdings B with respect to the Joint Venture Loan.
"KNSD Assets": as defined in the Transaction Agreement.
"KNSD-TV Station": television station KNSD-TV, serving San
Diego, California.
"KXAN-TV Station": television station KXAN-TV, serving
Austin, Texas.
"KXAS Assets": as defined in the Transaction Agreement.
"KXTX Transaction": any transaction whereby the Borrower
contributes KXTX-TV Station to any Affiliate of Hicks Muse or its
principals in exchange for cash, a minority ownership interest therein
or a combination thereof, provided that (i) the cash component of any
such consideration shall not exceed 20% of the total consideration
received in connection with such transaction and (ii) the Borrower
shall deliver to the Administrative Agent a fairness opinion with
respect to such consideration delivered by an independent investment
banking firm of nationally recognized standing.
"KXTX-TV Station": television station KXTX-TV, serving
Dallas, Texas.
"L/C Commitment": $25,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant
to subsection 3.5.
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than
the Issuing Lender that issued such Letter of Credit.
"Lenders": as defined in the introductory paragraph of this
Agreement.
"Letters of Credit": as defined in subsection 3.1(a),
provided that to the extent the Borrower shall have deposited amounts
in a cash collateral account for the benefit of the Lenders, the
Letters of Credit relating thereto shall be deemed not to be Letters
of Credit for purposes of this Agreement.
<PAGE> 30
25
"License Subsidiary": (a) as of the Closing Date, (i) in the
case of the WISH-TV Station, the WANE-TV Station, the WAVY-TV Station
and the WIVB-TV Station, LWWI, (ii) in the case of the KXAN-TV
Station, KXAN, Inc., (iii) in the case of the WTNH-TV Station, WTNH
Broadcasting, Inc. and (iv) in the case of the WAND-TV Station, WAND
Television, Inc. and (b) after the Closing Date, in each case for
clauses (i) through (iv) below upon receipt of the necessary FCC
approvals for any transfer, (i) in the case of the WISH-TV Station and
the WANE-TV Station, Indiana Broadcasting LLC, (ii) in the case of the
WIVB-TV Station, WIVB Broadcasting LLC, (iii) in the case of the
WAVY-TV Station, WAVY Broadcasting LLC, (iv) in the case of the
WTNH-TV Station, WTNH Broadcasting Inc., (v) in the case of the
KXAN-TV Station, KXAN, Inc., (vi) in the case of the WAND-TV Station,
WAND Television, Inc. and (vii) in the case of any Station acquired
after the date hereof, the Subsidiary of the Borrower that shall hold
the respective Station Licenses under the authority of which such
Station is operated, provided that each such License Subsidiary shall
be a single purpose entity the sole purpose of which shall be to hold
the Station Licenses and to perform related functions with respect
thereto.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"LIN": as defined in the preamble of this Agreement.
"LIN Texas": LIN Television of Texas, LP, a Delaware limited
partnership.
"LIN Texas Loan": as defined in the preamble of this
Agreement.
"LLC": Station Venture Holdings, LLC, a Delaware limited
liability company.
"LLC Agreement": the Station Venture Holdings, LLC Amended
and Restated Limited Liability Company Agreement dated as of January
15, 1998, between Outlet and LIN Texas.
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents and
the Notes, if any.
"Loan Parties": Holdings, the Borrower and each Subsidiary of
the Borrower which is a party to a Loan Document.
"LP": Station Venture Operations, LP, a Delaware limited
partnership.
"LP Agreement": the Station Venture Operations, LP Amended
and Restated Limited Partnership Agreement dated as of January 15,
1998, between Outlet, the LLC and Holdings.
<PAGE> 31
26
"LP Services Agreement": the TV Master Service Agreement
dated as of January 15, 1998, among the LLC, the LP and NBC.
"LWWI": as defined in the preamble of this Agreement.
"Majority Facility Lenders": with respect to any Facility,
Lenders which collectively are the holders of more than 50% of the
aggregate unpaid principal amount of the Tranche A Term Loans, the
Tranche B Term Loans or the Incremental Term Loans, or of the Total
Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, (a) in the case of the Revolving Credit Facility,
prior to any termination of the Revolving Credit Commitments, Lenders
which are collectively the holders of more than 50% of the aggregate
Revolving Credit Commitments or, (b) in the case of the Tranche A Term
Loan Facility, prior to the Delayed Tranche A Termination Date,
Lenders which are collectively the holders of more than 50% of the sum
of the Delayed Tranche A Term Loan Commitments and the outstanding
Tranche A Term Loans).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Majority Tranche A Term Facility Lenders": the Majority
Facility Lenders in respect of the Tranche A Term Loan Facility.
"Material Adverse Effect": a material adverse effect on (a)
at the Closing Date, the Transactions and the other transactions
contemplated by this Agreement, (b) the business, operations,
properties, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries or the Borrower and its Subsidiaries,
each taken as a whole (other than, for purposes of the conditions to
the initial funding of Loans on the Closing Date, changes in general
economic conditions or in economic conditions generally affecting the
television broadcasting industry) or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or
the rights or remedies of the Administrative Agent, the Swingline
Lender, the Issuing Lender or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Merger": as defined in the preamble of this Agreement.
"Merger Agreement": as defined in the preamble of this
Agreement.
"Merger Transactions": the transactions contemplated by the
Merger Agreement.
<PAGE> 32
27
"Mortgaged Properties": the real properties listed on
Schedule 1.1B, as to which the Administrative Agent for the benefit of
the Lenders shall, subject to subsection 10.17, be granted a Lien
pursuant to the Mortgages and which initial Schedule 1.1B shall
include only those real properties owned by the Borrower and its
Subsidiaries at the Closing Date with a fair market value in excess of
$1,500,000.
"Mortgages": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative
Agent for the benefit of the Lenders, substantially in the form of
Exhibit D-1 or D-2, as the case may be (with such changes thereto as
shall be advisable under the law of the jurisdiction in which such
mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NBC": the National Broadcasting Company, Inc., a Delaware
corporation.
"NBC Network Affiliation Agreements": as defined in the
preamble of this Agreement.
"NBC Transaction Agreements": the Transaction Agreement and
all exhibits and schedules thereto.
"NBC Transactions": the transactions contemplated by the NBC
Transaction Agreements.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and
when received) of such Asset Sale or Recovery Event, net of attorneys'
fees, notarial fees, accountants' fees, investment banking fees,
appraisal fees, survey costs, title insurance premiums, amounts to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in
connection therewith, net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available
tax credits or deductions and any tax sharing arrangements) and net of
purchase price adjustments reasonably expected to be payable in
connection therewith and (b) in connection with any issuance or sale
of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
Incurrence, net of attorneys' fees, notarial fees, investment banking
fees, accountants' fees, underwriting discounts and commissions and
other customary fees and expenses actually Incurred in connection
therewith.
<PAGE> 33
28
"Net Income": at a particular date, all amounts which would,
in conformity with GAAP, be set forth opposite the caption "Net
Income" (or any like caption) on a consolidated statement of
operations of the Borrower and its Subsidiaries at such date; provided
that such amount shall be adjusted to exclude (to the extent otherwise
included therein) (a) earnings or losses attributable to any Person
(other than the LLC) in which the Borrower or any of its Subsidiaries
has a joint interest, except to the extent of the amount of dividends
or other distributions actually paid to the Borrower or such
Subsidiary by such other Person in cash during such period and (b) any
earnings or losses attributable to the interest of the Borrower or any
of its Subsidiaries in the LLC, except for any such earnings to the
extent of (i) actual distributions of Distributable Cash (as defined
in the LLC Agreement) in respect of such interest made to the Borrower
or any of its Subsidiaries and (ii) amounts that would have
constituted Distributable Cash and would have been required to be
distributed to the Borrower and its Subsidiaries in respect of such
interest but for the reserve requirement of Section 8.06 of the LLC
Agreement.
"Network Affiliation Agreements": the NBC Network Affiliation
Agreements, each agreement set forth on Schedule 1.1D and each other
agreement entered into by the Borrower or any of its Subsidiaries
(including any such agreement assumed pursuant to an Asset Swap
Transaction or otherwise) pursuant to which a television network
agrees to serve as the primary source within a designated market area
for television programming for any Station.
"Non-Consenting Lender": as defined in subsection 2.20.
"Non-Excluded Taxes": as defined in subsection 2.17(a).
"Non-Funding Lender": as defined in subsection 2.15(c).
"Non-Station Asset": all of the assets used and useful for
the operation of the Borrower's and its Subsidiaries' broadcasting and
entertainment businesses, other than the Stations.
"Non-U.S. Lender": as defined in subsection 2.17(b).
"Notes": the collective reference to the Term Notes, the
Revolving Credit Notes and the Swingline Notes.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans, the Reimbursement
Obligations and all other obligations and liabilities of the Borrower
to the Administrative Agent, the Swingline Lender, the Issuing Lender
or to any Lender (or, in the case of Interest Rate Protection
Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any Notes, any other
<PAGE> 34
29
Loan Document, the Letters of Credit, any Interest Rate Protection
Agreement entered into with any Lender or any affiliate of any Lender
or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agent, to the Swingline Lender, to the Issuing Lender
or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise.
"Original Guarantee": as defined in the preamble of this
Agreement.
"Original Lien": as defined in the preamble of this
Agreement.
"Outlet": Outlet Broadcasting, Inc., a Rhode Island
corporation.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": the acquisition by the Borrower or
any of its Subsidiaries of one or more Broadcast Stations or Broadcast
Enterprises, or all the capital stock of, or other equity interests
in, any other Person whose primary business is the ownership and
operation of one or more Broadcast Stations or Broadcast Enterprises,
in the United States (or such lesser amount as shall be determined by
the Board of Directors of the Borrower or such Subsidiary as fair
consideration), including, without limitation, the KXTX Transaction,
provided that (a) on a pro forma basis for the most recently completed
four-fiscal-quarter period for which financial statements are
available on the date of such acquisition, no Default or Event of
Default will have occurred and be continuing (including, without
limitation, pursuant to subsection 7.1), provided that for purposes of
calculating Consolidated EBITDA pursuant to this clause (a), the
Consolidated EBITDA of such Broadcast Stations or Broadcast
Enterprises being acquired for such four-fiscal-quarter period shall
be equal to the Consolidated EBITDA of such Broadcast Stations or
Broadcast Enterprises for the 12-month period immediately preceding
such acquisition, (b) the Borrower provides the Administrative Agent
with a certificate showing compliance with all of the covenants
contained in subsection 7.1 and showing the aggregate purchase price
(including the assumption of any Indebtedness) for such Permitted
Acquisition, (c) the Borrower takes such actions as may be required or
reasonably requested to ensure that the Administrative Agent, for the
ratable benefit of the Lenders, has a perfected first priority
security interest in any assets required to be secured pursuant to
subsection 6.10 or any other Loan Document, subject to Liens permitted
by subsection 7.3, and (d) the Borrower provides the Administrative
Agent with appropriate supporting documentation if reasonably
requested by the Administrative Agent, including, without limitation,
any acquisition documents in connection with such acquisition,
opinions of counsel, including FCC counsel, in connection therewith
and copies of an FCC consent on Form 732 (or any comparable form
issued by the FCC) relating to the transfer of control or assignment
of the Station Licenses
<PAGE> 35
30
of any acquired Broadcast Station to the Borrower or its Subsidiary
and, unless the Administrative Agent shall otherwise agree, such
consent shall have become a Final Order.
"Permitted Issuance": (a) the issuance by Holdings of shares
of Capital Stock as dividends on issued and outstanding Capital Stock
of the same class of Holdings or pursuant to any dividend reinvestment
plan, (b) the issuance by Holdings of options or other equity
securities of Holdings to outside directors, members of management or
employees of Holdings or any Subsidiary of Holdings, (c) the issuance
of securities as interest or dividends on pay-in-kind debt or
preferred equity securities in accordance with their terms permitted
hereunder and under the other Loan Documents, (d) the issuance to
Holdings or any Subsidiary (or any director, with respect to
directors' qualifying shares) by any of its Subsidiaries of any of
their respective Capital Stock, in each case with respect to this
clause (d) to the extent such Capital Stock issued to Holdings or any
Subsidiary is pledged to the Administrative Agent pursuant to the
applicable Loan Document (provided that (i) only 65% of the voting
Capital Stock of any foreign Subsidiary of the Borrower is required to
be so pledged and (ii) no voting Capital Stock of any foreign
Subsidiary of any other foreign Subsidiary is required to be so
pledged), (e) the issuance by Holdings of shares of its common stock
in connection with a Permitted Acquisition, (f) cash payments made in
lieu of issuing fractional shares of Holdings Capital Stock in an
aggregate amount not to exceed $100,000, and (g) the issuance by
Holdings of shares of Capital Stock of Holdings to infuse additional
capital into Holdings in an aggregate amount not to exceed
$25,000,000, plus any amounts relating to the infusion of capital into
Holdings made (i) within 45 days after the Closing Date and (ii)
solely for the purpose of making an Investment in the Joint Venture as
contemplated by subsection 7.8(o).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledged Debt Securities": as defined in the Guarantee and
Collateral Agreement.
"Pledged Stock": as defined in the Guarantee and Collateral
Agreement.
"Pricing Grid": the pricing grid as follows:
Tranche A Term Loans, Revolving
Credit Loans and Swingline Loans
<PAGE> 36
31
<TABLE>
<CAPTION>
Applicable Applicable Revolving/
Consolidated Leverage Ratio Margin for Margin for Tranche A Term
- --------------------------- Eurodollar Loans ABR Loans Loan Facility
---------------- ---------- Commitment
Fee
-----------------
<S> <C> <C> <C> <C>
Level 1: Greater than or equal to 2.00% 1.00% 0.500%
6.50 to 1.00
Level 2: Greater than or equal to 1.75% 0.75% 0.375%
6.00 to 1.00 and less
than 6.50 to 1.00
Level 3: Greater than or equal to 1.50% 0.50% 0.375%
5.50 to 1.00 and less
than 6.00 to 1.00
Level 4: Greater than or equal to 1.25% 0.25% 0.375%
5.00 to 1.00 and less
than 5.50 to 1.00
Level 5: Greater than or equal to 1.00% 0.00% 0.375%
4.50 to 1.00 and less
than 5.00 to 1.00
Level 6: Less than 4.50 to 1.00 0.75% 0.00% 0.250%
Tranche B Term Loans
--------------------
Applicable Applicable
Consolidated Leverage Ratio Margin for Margin for
- --------------------------- Eurodollar Loans ABR Loans
---------------- -----------
<S> <C> <C> <C>
Level 1: Greater than or equal to 2.25% 1.25%
6.50 to 1.00
Level 2: Greater than or equal to 2.00% 1.00%
6.00 to 1.00 and less
than 6.50 to 1.00
Level 3: Greater than or equal to 2.00% 1.00%
5.50 to 1.00 and less
than 6.00 to 1.00
Level 4: Greater than or equal to 1.75% .75%
5.00 to 1.00 and less
than 5.50 to 1.00
</TABLE>
<PAGE> 37
32
<TABLE>
<CAPTION>
Applicable Applicable
Consolidated Leverage Ratio Margin for Margin for
- --------------------------- Eurodollar Loans ABR Loans
---------------- -----------
<S> <C> <C> <C>
Level 5: Greater than or equal to 1.75% .75%
4.50 to 1.00 and less
than 5.00 to 1.00
Level 6: Less than 4.50 to 1.00 1.75% .75%
</TABLE>
Changes in the Applicable Margin and the Commitment Fee Rate resulting from
changes in the Consolidated Leverage Ratio shall become effective on the day
(the "Adjustment Date") of receipt by the Administrative Agent of the financial
statements delivered pursuant to subsection 6.1 and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time
periods specified above, then, until such financial statements are delivered,
at the option of the Administrative Agent or the Required Lenders, the
Consolidated Leverage Ratio as at the end of the fiscal period that would have
been covered thereby shall for the purposes of this definition be determined by
reference to "Level 1". Each determination of the Consolidated Leverage Ratio
pursuant to this paragraph shall be made with respect to the period of four
consecutive fiscal quarters of the Borrower ending at the end of the period
covered by the relevant financial statements, provided that prior to delivery
(the date of such delivery, the "Delivery Date") of the financial statements
for the first fiscal quarter following the Closing Date, the Consolidated
Leverage Ratio shall be determined by reference to the pro forma financial
statements delivered to the Administrative Agent by the Borrower on or prior to
the Closing Date (such statements to be reasonably satisfactory to the
Administrative Agent) giving pro forma effect to the Transactions for the most
recently completed four-fiscal-quarter period of the Borrower for which
financial statements are available, and if no such statements are so delivered,
the Consolidated Leverage Ratio prior to the Delivery Date shall be deemed to
be that corresponding to "Level 1".
"Prime Rate": as defined in the definition of the term "ABR".
"Projections": as defined in subsection 6.2(c).
"Properties": as defined in subsection 4.17(a).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Qualified Issuer": any commercial bank (a) which has, or
whose obligations are guaranteed by an affiliated commercial bank
which has, capital and surplus in excess of $500,000,000 and (b) the
outstanding long-term debt securities of which are rated at least A-2
by Standard & Poor's Ratings Services or at least P-2 by Moody's
Investors Service,
<PAGE> 38
33
Inc., or carry an equivalent rating by a nationally recognized rating
agency if both of the two named rating agencies cease publishing
ratings of investments.
"Recovery Event": any settlement of or payment in respect of
any property insurance or casualty insurance claim or any condemnation
proceeding or deed in lieu thereof relating to any Property of
Holdings or any of its Subsidiaries, excluding any such settlement or
payment which, together with any related settlement or payment, yields
gross proceeds to Holdings or any of its Subsidiaries of less than
$5,000,000.
"Refinanced Indebtedness": as defined in the preamble of this
Agreement.
"Refunded Swingline Loans": as defined in subsection
2.4(c)(ii).
"Register": as defined in subsection 10.6(d).
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5 for amounts
drawn under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by
Holdings or any of its Subsidiaries in connection therewith which are
not applied to prepay the Term Loans or reduce the Revolving Credit
Commitments pursuant to subsection 2.9(d) as a result of the delivery
of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of
the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire
assets useful in its business, provided that to the extent the Net
Cash Proceeds of an Asset Sale relate to the sale of a Broadcasting
Asset sold in accordance with subsection 7.5(h) or exchanged in
accordance with subsection 7.5(i) or relate to a Recovery Event with
respect to a Broadcasting Asset, the Borrower may deliver a
Reinvestment Notice with respect to such Net Cash Proceeds only to the
extent such Net Cash Proceeds shall be used to make a Permitted
Acquisition pursuant to subsection 7.5(h) or to pay cash consideration
in connection with an Asset Swap Transaction pursuant to subsection
7.5(i).
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount expended prior to the relevant Reinvestment Prepayment
Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring 365 days
after such Reinvestment Event and (b) the date on which the Borrower
shall have determined not to, or shall have otherwise ceased to,
acquire
<PAGE> 39
34
assets useful in the Borrower's business with all or any portion of
the relevant Reinvestment Deferred Amount, provided that if the
Reinvestment Notice with respect to such Reinvestment Event relates to
the acquisition of a new Station by the Borrower or any of its
Subsidiaries (whether as a result of a Permitted Acquisition, an Asset
Swap Transaction or otherwise) and the Borrower or such Subsidiary has
filed within 365 days of the Reinvestment Event an application with
the FCC for the approval of the transfer of control or assignment of
the Station License of such acquired Station, the period specified in
paragraph (a) shall be extended to a period equal to five Business
Days after the time required for the FCC to issue a Final Order
relating to the transfer of control of such Station License.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Replacement Guarantor Pledge Agreement": as defined in the
credit agreement governing the Joint Venture Loan.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under the regulations issued pursuant to
Section 4043(b) of ERISA.
"Required Lenders": Lenders, other than Non-Funding Lenders,
which collectively are the holders of more than 50% of the sum of (i)
the Loans, (ii) the unused Tranche A Term Loan Commitments and (iii)
the aggregate unused Revolving Credit Commitments (excluding
commitments to issue Letters of Credit or make Swingline Loans) or, if
the Revolving Credit Commitments have been terminated, the Total
Revolving Extensions of Credit (other than Swingline Loans).
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation
(including, without limitation, Environmental Laws or rules,
regulations or orders, whether addressed to Holdings, the Borrower or
any of its Subsidiaries, of the FCC) or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to
or binding upon such Person or any of its property or to which such
Person or any of its property is subject.
"Responsible Officer": the chief executive officer, the
president, any vice president or senior vice president, the treasurer
or any assistant treasurer, the secretary or assistant secretary and
the chief financial officer (or officer having comparable duties) of
the Borrower (including, in any event, any person who is an officer of
the Borrower and is named on the closing certificate delivered by the
Borrower on the Closing Date pursuant to subsection 5.1(d) whether or
not such person holds any of the foregoing positions).
"Restricted Payment" as defined in subsection 7.6.
<PAGE> 40
35
"Revolving Credit Commitment": as to any Revolving Credit
Lender, the obligation of such Revolving Credit Lender, if any, to
make Revolving Credit Loans, and to participate in Swingline Loans and
Letters of Credit, in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Revolving Credit
Commitment" opposite such Lender's name on Schedule 1.1A, as the same
may be changed from time to time pursuant to the terms hereof. The
original aggregate amount of the Revolving Credit Commitments is
$50,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": as defined in the definition of
the term "Facility".
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which has made, or acquired pursuant to an
assignment made in accordance with subsection 10.6(c), Revolving
Credit Loans or has participations in outstanding Letters of Credit or
Swingline Loans.
"Revolving Credit Loans": as defined in subsection 2.4(a).
"Revolving Credit Note": as defined in subsection 10.6(f).
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving
Credit Commitment then constitutes of the aggregate Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Credit Loans then
outstanding constitutes of the aggregate principal amount of the
Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": the earlier of (a) the
Scheduled Revolving Credit Termination Date or, if such date is not a
Business Day, the Business Day next preceding such date and (b) the
date upon which the Revolving Credit Commitments shall be earlier
terminated pursuant hereto.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender
then outstanding, (b) such Lender's Revolving Credit Percentage of the
L/C Obligations then outstanding and (c) such Lender's Swingline
Exposure at such time.
"Scheduled Revolving Credit Termination Date": March 31,
2005.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other
security documents hereafter delivered to the Administrative Agent
granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
<PAGE> 41
36
"Senior Subordinated Indebtedness": the Senior Subordinated
Notes and any unsecured senior subordinated Indebtedness of the
Borrower the proceeds of which shall be used to refinance in full all
of the Senior Subordinated Notes, or other Senior Subordinated
Indebtedness outstanding, provided such refinancing Indebtedness has
(a) no maturity, amortization, mandatory redemption or purchase option
(other than with asset sale proceeds, subject to the provisions of
this Agreement, or following a change of control) or sinking fund
payment prior to the tenth anniversary of the Closing Date, (b) no
financial maintenance covenants, (c) such other terms and conditions
(including without limitation, interest rate, events of default,
subordination and covenants) as shall be reasonably satisfactory to
the Administrative Agent and (d) any permanent refinancing shall not
be less favorable to the Borrower and the Lenders as the Senior
Subordinated Notes taken as a whole.
"Senior Subordinated Note Indenture": the indenture to be
entered into by the Borrower and certain of its Subsidiaries in
connection with the issuance of the Senior Subordinated Notes or any
other Senior Subordinated Indebtedness, together with all instruments
and other agreements entered into by the Borrower and such
Subsidiaries in connection therewith, all in form and substance
reasonably satisfactory to the Administrative Agent, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with subsection 7.9.
"Senior Subordinated Notes": the Borrower's 8 3/8% Senior
Subordinated Notes due 2008 issued on the Closing Date in accordance
with subsection 5.1(w) (and shall include any substantially identical
senior subordinated notes of the Borrower in the same aggregate
principal amount issued after the Closing Date in exchange therefor
pursuant to a registered exchange offer or shelf registration
statement in accordance with the Senior Subordinated Note Indenture).
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the fair value of the property of
such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital.
"Station Licenses": (a) with respect to the Borrower or any
of its Subsidiaries, all authorizations, licenses or permits issued by
the FCC and granted or assigned to the Borrower or any of its
Subsidiaries, or under which the Borrower or any of its Subsidiaries
has the right to operate any Station, together with any extensions or
renewals thereof and (b) with respect to any other Person, all
authorizations, licenses or permits issued by the
<PAGE> 42
37
FCC and granted or assigned to such Person, or under which such Person
has the right to operate any Broadcast Station, together with any
extensions or renewals thereof.
"Stations": collectively, (a) the WISH-TV Station, (b) the
WANE-TV Station, (c) the WIVB-TV Station, (d) the WAVY-TV Station, (e)
the WTNH-TV Station, (f) the KXAN-TV Station, (g) the WAND-TV Station
and (h) any additional Broadcast Station acquired after the date
hereof.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower
after giving effect to the Transactions.
"Subsidiary Guarantor": each Subsidiary of the Borrower party
to the Guarantee and Collateral Agreement.
"Swingline Exposure": at any time, the aggregate principal
amount of all outstanding Swingline Loans at such time. The Swingline
Exposure of any Revolving Credit Lender at any time shall mean its
Revolving Credit Percentage of the aggregate Swingline Exposure at
such time.
"Swingline Lender": as defined in the introductory paragraph
of this Agreement.
"Swingline Loan Participation Certificate": a certificate in
substantially the form of Exhibit H.
"Swingline Loan Commitment": the obligation of the Swingline
Lender to make Swingline Loans to the Borrower hereunder. The
original amount of the Swingline Loan Commitment is $25,000,000.
"Swingline Loans": as defined in subsection 2.4(c)(i).
"Swingline Note": as defined in subsection 10.6(f).
"Syndication Agent": as defined in the introductory paragraph
of this Agreement.
"Term Commitments": the Tranche A Term Loan Commitments and
the Tranche B Term Loan Commitments.
"Term Loans": the Tranche A Term Loans, the Tranche B Term
Loans and the Incremental Term Loans made by the Lenders to the
Borrower pursuant to subsection 2.1.
<PAGE> 43
38
"Term Notes": as defined in subsection 10.6(f).
"Test Period": any period of four consecutive fiscal quarters
of the Borrower most recently ended.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the
Revolving Credit Lenders at such time.
"Tranche A Term Loan Commitment": as to any Tranche A Term
Loan Lender, such Tranche A Term Loan Lender's Initial Tranche A Term
Loan Commitment and Delayed Tranche A Term Loan Commitment.
"Tranche A Term Loan Facility": as defined in the definition
of the term "Facility".
"Tranche A Term Loan Lender": each Lender which has a Tranche
A Term Loan Commitment or which has made, or acquired pursuant to an
assignment made in accordance with subsection 10.6(c), a Tranche A
Term Loan.
"Tranche A Term Loan Percentage": as to any Tranche A Term
Loan Lender (a) at any time prior to the Closing Date, the percentage
which such Lender's Tranche A Term Loan Commitment then constitutes of
the aggregate Tranche A Term Loan Commitments, (b) at any time during
the Delayed Tranche A Commitment Period, the percentage which the sum
of such Lender's Delayed Tranche A Term Loan Commitment and the
principal amount of such Lender's Tranche A Term Loans then
outstanding constitutes of the sum of the aggregate Delayed Tranche A
Term Loan Commitments and the aggregate principal amount of the
Tranche A Term Loans then outstanding and (c) at any time after the
end of the Delayed Tranche A Commitment Period, the percentage which
the principal amount of such Lender's Tranche A Term Loans then
outstanding constitutes of the aggregate principal amount of the
Tranche A Term Loans then outstanding.
"Tranche A Term Loans": the Initial Tranche A Term Loans and
the Delayed Tranche A Term Loans.
"Tranche A Term Note": any Term Note evidencing Tranche A
Term Loans.
"Tranche B Maturity Date": as defined in subsection 2.3(b).
"Tranche B Term Loan Commitment": as to any Tranche B Term
Loan Lender, the obligation of such Tranche B Term Loan Lender to make
a Tranche B Term Loan to the Borrower hereunder in a principal amount
not to exceed the amount set forth under the heading "Tranche B Term
Loan Commitment" opposite such Lender's name on Schedule 1.1A. The
original aggregate amount of the Tranche B Term Loan Commitments is
$120,000,000.
"Tranche B Term Loan Facility": as defined in the definition
of the term "Facility".
<PAGE> 44
39
"Tranche B Term Loan Lender": each Lender which has a Tranche
B Term Loan Commitment or which has made, or acquired pursuant to an
assignment made in accordance with subsection 10.6(c), a Tranche B
Term Loan.
"Tranche B Term Loan Percentage": as to any Tranche B Term
Loan Lender at any time, the percentage which such Lender's Tranche B
Term Loan Commitment then constitutes of the aggregate Tranche B Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the principal amount of such Lender's Tranche B Term
Loans then outstanding constitutes of the aggregate principal amount
of the Tranche B Term Loans then outstanding).
"Tranche B Term Loans": as defined in subsection 2.1(a)(ii).
"Tranche B Term Note": any Term Note evidencing Tranche B
Term Loans.
"Transaction Agreement": the Transaction Agreement dated as
of January 15, 1998, between NBC, Outlet, LIN Texas, the Borrower, the
LLC, the LP and Holdings.
"Transaction Documents": the Merger Agreement, the Joint
Venture Agreements and the other documents relating to the
Transactions.
"Transactions": the Merger Transactions and the NBC
Transactions.
"Transferee": as defined in subsection 10.6(g).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be revised from time to time.
"WAND-TV Station": television station WAND (TV), serving
Decatur, Illinois.
"WANE-TV Station": television station WANE-TV, serving Fort
Wayne, Indiana.
"WAVY-TV Station": television station WAVY-TV, serving
Norfolk, Virginia.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or
through other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
"WISH-TV Station": television station WISH-TV, serving
Indianapolis, Indiana.
<PAGE> 45
40
"WIVB-TV Station": television station WIVB-TV, serving
Buffalo, New York.
"WOOD-TV Acquisition": as defined in the preamble of this
Agreement.
"WOOD-TV Purchase Agreement": the Asset Purchase Agreement
dated August 12, 1997, among Holdings, LIN Broadcasting Corporation,
LIN Michigan Broadcasting Corporation, LCH Communications, Inc. and
the Borrower.
"WOOD-TV Station": television station WOOD-TV, serving Grand
Rapids, Michigan.
"WTNH-TV Station": means television station WTNH-TV, serving
New Haven, Connecticut.
"WVTM Assets": as defined in the preamble of this Agreement.
"WVTM Purchase Agreement": the Asset Purchase Option
Agreement among Holdings, Birmingham Broadcasting (WVTM TV), Inc. and
NBC dated January 15, 1998.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments. (a) Subject to the terms and
conditions hereof,
(i) each Tranche A Term Loan Lender severally agrees (A) to
make a term loan (an "Initial Tranche A Term Loan") to the Borrower on the
Closing Date in a principal amount not to exceed the amount of the Initial
Tranche A Term Loan Commitment of such Lender and (B) to make a term loan (a
"Delayed Tranche A Term Loan") to the Borrower at any one time during the
Delayed Tranche A Commitment Period in a principal amount not to exceed the
Delayed Tranche A Term Loan Commitment of such Lender.
<PAGE> 46
41
(ii) each Tranche B Term Loan Lender severally agrees to make
a term loan (a "Tranche B Term Loan") to the Borrower on the Closing Date in a
principal amount not to exceed the Tranche B Term Loan Commitment of such
Lender.
(b) The Borrower and all or certain of the Lenders may, up to
five times during the period from and including the Closing Date to but
excluding the Incremental Term Loan Termination Date, agree that such Lenders
shall become Incremental Lenders or increase the principal amount of their
Incremental Term Loans by executing and delivering to the Administrative Agent
an Incremental Term Loan Activation Notice specifying (i) the respective
Incremental Term Loan Amount of such Incremental Lenders, (ii) the applicable
Incremental Term Loan Closing Date, (iii) the applicable Incremental Maturity
Date, (iv) the amortization schedule for the applicable Incremental Term Loans,
which shall comply with subsection 2.3(c) and (v) the Applicable Margin for the
Incremental Term Loans to be made pursuant to such Incremental Term Loan
Activation Notice, and which shall be otherwise duly completed. Each
Incremental Lender that is a signatory to an Incremental Term Loan Activation
Notice severally agrees, on the terms and conditions of this Agreement, to make
a term loan (an "Incremental Term Loan") to the Borrower on the Incremental
Term Loan Closing Date specified in such Incremental Term Loan Activation
Notice in a principal amount not to exceed the amount of the Incremental Term
Loan Amount of such Incremental Lender specified in such Incremental Term Loan
Activation Notice. Subject to the terms and conditions of this Agreement, the
Borrower may convert Incremental Term Loans of one Type into Incremental Term
Loans of another Type (as provided in subsection 2.10) or continue Incremental
Term Loans of one Type as Incremental Term Loans of the same Type (as provided
in subsection 2.10). Incremental Term Loans that are prepaid may not be
reborrowed. Nothing in this subsection 2.1(b) shall be construed to obligate
any Lender to execute an Incremental Term Loan Activation Notice.
Notwithstanding the foregoing, (a) without the consent of the Required Lenders
the Borrower shall not solicit any Incremental Term Loan Activation Notice
after March 3, 2001 and (b) the aggregate amount of Incremental Term Loans
shall not exceed $225,000,000.
(c) The Term Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with subsections 2.2 and 2.10.
2.2 Procedure for Term Loan Borrowing. (a) The Borrower
shall give the Administrative Agent irrevocable written (or telephonic promptly
confirmed in writing) notice (which notice must be received by the
Administrative Agent prior to 12:00 noon, New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Tranche A Term Loan
Lenders and the Tranche B Term Loan Lenders make the Initial Tranche A Term
Loans and the Tranche B Term Loans, respectively, on the Closing Date and
specifying the amount to be borrowed. Each such notice shall be given by the
Borrower in the form of Exhibit J. The Initial Tranche A Term Loans and the
Tranche B Term Loans made on the Closing Date shall initially be ABR Loans.
Upon receipt of such notice the Administrative Agent shall promptly notify each
Tranche A Term Loan Lender and Tranche B Term Loan Lender thereof. Not later
than 12:00 Noon, New York City time, on the Closing Date each Tranche A Term
Loan Lender and Tranche B Term Loan Lender shall make available to the
Administrative Agent at its office specified in subsection 10.2 an amount in
immediately available funds equal to the Initial Tranche A Term Loans or
Tranche B Term Loans to
<PAGE> 47
42
be made by such Lender. The Administrative Agent shall credit the account of
the Borrower on the books of such office of the Administrative Agent with the
aggregate of the amounts made available to the Administrative Agent by the
Tranche A Term Loan Lenders and Tranche B Term Loan Lenders in like funds as
received by the Administrative Agent.
(b) The Borrower shall give the Administrative Agent
irrevocable written (or telephonic promptly confirmed in writing) notice of
each borrowing of Delayed Tranche A Term Loans or Incremental Term Loans (which
notice must be received by the Administrative Agent prior to 12:00 Noon, New
York City time, (i) three Business Days prior to the requested Borrowing Date,
in the case of Eurodollar Loans, or (ii) one Business Day prior to the
requested Borrowing Date, in the case of ABR Loans), specifying (A) the amount
and Type of Delayed Tranche A Term Loans or Incremental Term Loans to be
borrowed, (B) the requested Borrowing Date and (C) in the case of Eurodollar
Loans, the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Period therefor. Each such notice shall be
given by the Borrower in the form of Exhibit J. There shall be only one
borrowing under the Delayed Tranche A Term Loan Commitment and no more than
five borrowings under the Incremental Term Loan Facility. The borrowing under
the Delayed Tranche A Term Loan Commitment and each borrowing under the
Incremental Term Loan Facility shall be in an amount equal to (x) in the case
of ABR Loans, $1,000,000 or a whole multiple of $100,000 in excess thereof and
(y) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $100,000
in excess thereof. Upon receipt of any such notice with respect to a Delayed
Tranche A Term Loan or Incremental Term Loan from the Borrower, the
Administrative Agent shall promptly notify each Tranche A Term Loan Lender or
Incremental Lender, as the case may be, thereof. Each Tranche A Term Loan
Lender will make the amount of its pro rata share of each borrowing available
to, and each Incremental Lender will make its respective Incremental Term Loan
Amount available to, the Administrative Agent for the account of the Borrower
at the office of the Administrative Agent specified in subsection 10.2 prior to
12:00 Noon, New York City time, on the Borrowing Date requested by the Borrower
in funds immediately available to the Administrative Agent. Such borrowing
will then be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
applicable Lenders and in like funds as received by the Administrative Agent.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loans
of each Tranche A Term Loan Lender shall mature in 26 consecutive quarterly
installments, commencing on December 31, 1998, each of which installments in
any calendar year specified below shall be in an amount equal to the product of
(i) one quarter of the percentage set forth opposite such calendar year (except
with respect to 1998 and 2005, during which there will be one installment made
on December 31, 1998, and March 31, 2005, respectively, and with respect to
2005 in the lesser of the amount of Tranche A Term Loans then outstanding and
the percentage set forth below opposite the year 2005), (ii) the amount of the
outstanding Tranche A Term Loans as of the Closing Date plus $125,000,000 and
(iii) such Lender's Tranche A Term Loan Percentage:
<PAGE> 48
43
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1998 1.190%
1999 8.333
2000 11.310
2001 13.690
2002 17.857
2003 19.048
2004 22.619
2005 5.953
</TABLE>
Notwithstanding the foregoing, if (a) the WOOD-TV Acquisition
shall not occur prior to the Delayed Tranche A Termination Date or (b) the
WOOD-TV Acquisition shall occur and the difference between $125,000,000 and the
actual aggregate principal amount of the Delayed Tranche A Term Loans is
greater than zero, then the quarterly installments of principal of the Tranche
A Term Loans after the earlier of the Delayed Tranche A Termination Date and
the date, if any, on which the WOOD-TV Acquisition shall occur (such earlier
date, the "Installment Adjustment Date") will be determined in accordance with
the first sentence of this subsection 2.3(a) but substituting for the amount
determined pursuant to clause (ii) thereof the amount (the "Actual Tranche A
Term Loan Amount") equal to the sum of (i) the amount of the outstanding
Tranche A Term Loans on the Closing Date and (ii) the amount of Delayed Tranche
A Term Loans, if any, provided that the amounts of such quarterly installments
payable after the Installment Adjustment Date shall be reduced in order of
maturity in an aggregate amount equal to the difference between (A) the
aggregate amount of the scheduled installments of Tranche A Term Loans paid
prior to the Installment Adjustment Date and (B) the aggregate amount of
scheduled installments of Tranche A Term Loans that would have been required to
have been paid prior to the Installment Adjustment Date if such installments
had been determined in accordance with the first sentence of this subsection
2.3 but substituting for the amount determined pursuant to clause (ii) thereof
the Actual Tranche A Term Loan Amount.
(b) The Tranche B Term Loans of each Tranche B Term Loan
Lender shall mature in 34 consecutive quarterly installments, commencing on
December 31, 1998, each of which installments in any calendar year specified
below shall be in an amount equal to the product of (i) one quarter of the
percentage set forth opposite such calendar year (except with respect to 1998
and 2007, during which there will be one installment made on December 31, 1998
and March 31, 2007 (the "Tranche B Maturity Date"), respectively, and with
respect to 2007 in the lesser of the amount of Tranche B Term Loans then
outstanding and the percentage set forth below opposite the year 2007), (ii)
the amount of the outstanding Tranche B Term Loans as of the Closing Date and
(iii) such Lender's Tranche B Term Loan Percentage:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1998 0.200%
1999 0.400
2000 0.400
2001 0.400
2002 0.400
2003 0.400
2004 0.400
2005 24.100
2006 57.000
2007 16.300
</TABLE>
<PAGE> 49
44
(c) The Incremental Term Loans, if any, of each Incremental
Lender shall mature in consecutive quarterly installments as specified in the
Incremental Term Loan Activation Notice pursuant to which such Incremental Term
Loans were made, provided that prior to the date that is six months following
the Tranche B Maturity Date the amounts of such installments for any four
consecutive fiscal quarters shall not exceed 1% of the aggregate principal
amount of such Incremental Term Loans on the date such Loans were first made.
2.4 Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Swingline
Exposure at such time and Revolving Credit Percentage of the L/C Obligations
then outstanding, does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying and reborrowing the
Revolving Credit Loans in whole or in part, all in accordance with the terms
and conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to
the Administrative Agent in accordance with subsections 2.5 and 2.10, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Scheduled Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date and all outstanding Swingline
Loans on the earlier of the Revolving Credit Termination Date and the first
date after such Swingline Loan is made that is the 15th or last day of a
calendar month and is at least two Business Days after such Swingline Loan is
made.
(c)(i) Subject to the terms and conditions hereof, the
Swingline Lender agrees to make swingline loans ("Swingline Loans") to the
Borrower from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed
$25,000,000, provided that at no time may the Total Revolving Extensions of
Credit exceed the aggregate Revolving Credit Commitments. During the Revolving
Credit Commitment Period, the Borrower may use the Swingline Loan Commitment by
borrowing, prepaying, in whole or in part, and reborrowing the Swingline Loans,
all in accordance with the terms and conditions hereof. All Swingline Loans
shall be ABR Loans. The Borrower shall give the Swingline Lender irrevocable
written (or telephonic promptly confirmed in writing) notice (which notice must
be received by the Swingline Lender prior to 12:00 noon New York City time) on
the requested Borrowing Date specifying the amount of the requested Swingline
Loan which shall be in an aggregate minimum amount of $100,000, or a whole
multiple of $25,000 in excess thereof. Each such notice shall be given by the
Borrower in the form of Exhibit J. The proceeds of the Swingline Loan will be
made available by the Swingline Lender to the Borrower at the office of the
Swingline Lender by 2:00 p.m. New York City time on the Borrowing Date by
crediting the account of the
<PAGE> 50
45
Borrower at such office with such proceeds. The Borrower may, at any time and
from time to time, prepay the Swingline Loans, in whole or in part, without
premium or penalty, by notifying the Swingline Lender prior to 12:00 noon New
York City time on any Business Day of the date and amount of prepayment. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein. Partial prepayments shall be in an
aggregate principal amount of $100,000, or a whole multiple of $25,000 in
excess thereof.
(ii) The Swingline Lender, at any time in its sole and
absolute discretion, may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), and without regard to the
minimum amounts in subsection 2.5, request each Revolving Credit Lender
including the Swingline Lender to make a Revolving Credit Loan in an amount
equal to such Lender's Revolving Credit Percentage of the amount of the
Swingline Loans outstanding on the date such notice is given (the "Refunded
Swingline Loans"). Unless any of the events described in paragraph (f) of
Section 8 shall have occurred with respect to the Borrower (in which event the
procedures of subparagraph (iii) of this subsection 2.4(c) shall apply), each
Revolving Credit Lender shall make the proceeds of its Revolving Credit Loan
available to the Administrative Agent for the account of the Swingline Lender
at the office of the Administrative Agent specified in subsection 10.2 prior to
1:00 p.m. New York City time in immediately available funds on the Business
Day next succeeding the date such notice is given. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Refunded
Swingline Loans. Effective on the day such Revolving Credit Loans are made,
the portion of such Loans so paid shall no longer be outstanding as Swingline
Loans, shall no longer be due under any Swingline Note and shall be Revolving
Credit Loans made by the Revolving Credit Lenders in accordance with their
respective Revolving Credit Percentages. The Borrower authorizes the Swingline
Lender to charge its accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline Loans to the extent amounts received from the Revolving
Credit Lenders are not sufficient to repay in full such Refunded Swingline
Loans.
(iii) If prior to the making of a Revolving Credit Loan
pursuant to subparagraph (ii) of this subsection 2.4(c) one of the events
described in paragraph (f) of Section 8 shall have occurred and be continuing
with respect to the Borrower, each Revolving Credit Lender will, on the date
such Revolving Credit Loan was to have been made pursuant to the notice in
subsection 2.4(c)(ii), purchase an undivided participating interest in the
Refunded Swingline Loan in an amount equal to (i) its Revolving Credit
Percentage times (ii) the Refunded Swingline Loans. Each Revolving Credit
Lender will immediately transfer to the Swingline Lender, in immediately
available funds, the amount of its participation, and upon receipt thereof the
Swingline Lender will deliver to such Revolving Credit Lender a Swingline Loan
Participation Certificate dated the date of receipt of such funds and in such
amount.
(iv) Whenever, at any time after any Revolving Credit Lender
has purchased a participating interest in a Swingline Loan, the Swingline
Lender receives any payment on account thereof, the Swingline Lender will
distribute to such Revolving Credit Lender its participating interest in such
amount (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Revolving Credit Lender's participating
interest was outstanding and funded); provided, however, that in the event that
such payment received by the Swingline
<PAGE> 51
46
Lender is required to be returned, such Revolving Credit Lender will return to
the Swingline Lender any portion thereof previously distributed by the
Swingline Lender to it.
(v) Each Revolving Credit Lender's obligation to make the
Loans referred to in subsection 2.4(c)(ii) and to purchase participating
interests pursuant to subsection 2.4(c)(iii) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (A) any set-off, counterclaim, recoupment, defense or other right
which such Revolving Credit Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever;
(B) the occurrence or continuance of a Default or an Event of Default; (C) any
adverse change in the condition (financial or otherwise) of the Borrower; (D)
any breach of this Agreement or any other Loan Document by Holdings, the
Borrower or any of its Subsidiaries or any other Lender; or (E) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
2.5 Procedure for Revolving Credit Borrowing. Subject to
subsection 2.8(b), the Borrower may borrow under the Revolving Credit
Commitments during the Revolving Credit Commitment Period on any Business Day,
provided that the Borrower shall give the Administrative Agent irrevocable
written (or telephonic promptly confirmed in writing) notice (which notice must
be received by the Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the
case of Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, in the case of ABR Loans), specifying (i) the amount and Type
of Revolving Credit Loans to be borrowed, (ii) the requested Borrowing Date and
(iii) in the case of Eurodollar Loans, the respective amounts of each such Type
of Loan and the respective lengths of the initial Interest Period therefor.
Each such notice shall be given by the Borrower in the form of Exhibit J. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal to
(A) in the case of ABR Loans, $1,000,000 or a whole multiple of $100,000 in
excess thereof (or, if the then aggregate Available Revolving Credit
Commitments are less than $1,000,000, such lesser amount) and (B) in the case
of Eurodollar Loans, $5,000,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Revolving Credit Lender thereof. Each
Revolving Credit Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the office of the Administrative Agent specified in subsection 10.2 prior to
12:00 Noon, New York City time, on the Borrowing Date requested by the Borrower
in funds immediately available to the Administrative Agent. Such borrowing
will then be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Credit Lenders and in like funds as received by the Administrative
Agent.
2.6 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment
of such Lender during the period for which payment is made, payable quarterly
in arrears on the last day of each March, June, September and December and on
the Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof. For
<PAGE> 52
47
purposes of calculating commitment fees under this subsection 2.6(a) only, no
portion of the Revolving Credit Commitments shall be deemed utilized as a
result of outstanding Swingline Loans.
(b) The Borrower agrees to pay to the Administrative Agent
for the account of each Tranche A Term Loan Lender a commitment fee for the
period from and including the Closing Date to the Delayed Tranche A Termination
Date, computed at the Commitment Fee Rate on the average daily amount of the
Delayed Tranche A Term Loan Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Delayed Tranche A Termination
Date, commencing on the first of such dates to occur after the date hereof.
(c) The Borrower agrees to pay to the Administrative Agent
the fees in the amounts and on the dates set forth in the Amended and Restated
Fee Letter dated January 12, 1998, in writing among Holdings, the Borrower, the
Administrative Agent and Chase Securities Inc.
2.7 Termination or Reduction of Commitments.
(a) The Initial Tranche A Term Loan Commitments and the
Tranche B Term Loan Commitments shall be automatically and permanently
terminated at 5:00 p.m., New York City time, on the Closing Date. The Delayed
Tranche A Term Loan Commitments shall be automatically and permanently
terminated at 5:00 p.m., New York City time, on the Delayed Tranche A
Termination Date. The Revolving Credit Commitments shall be automatically and
permanently terminated at 5:00 p.m., New York City time, on the Revolving
Credit Termination Date.
(b) The Borrower shall have the right, upon not less than
three Business Days' notice to the Administrative Agent, to terminate the
Revolving Credit Commitments or the Delayed Tranche A Term Loan Commitments or,
from time to time, to reduce the amount of the Revolving Credit Commitments or
the Delayed Tranche A Term Loan Commitments, provided that no such termination
or reduction with respect to Revolving Credit Commitments shall be permitted
if, after giving effect thereto and to any prepayments of the Swingline Loans
and the Revolving Credit Loans made on the effective date thereof, the Total
Revolving Extensions of Credit would exceed the Revolving Credit Commitments
then in effect. Any reduction pursuant to this subsection 2.7(b) shall be in
an amount equal to $1,000,000, or a whole multiple of $100,000 in excess
thereof, and shall reduce permanently the Revolving Credit Commitments or the
Delayed Tranche A Term Loan Commitments, as applicable, then in effect. Upon
receipt of any notice pursuant to this subsection 2.7(b), the Administrative
Agent shall promptly notify each Tranche A Term Loan Lender or each Revolving
Credit Lender and the Swingline Lender, as applicable, of the contents
thereof).
2.8 Optional Prepayments. (a) The Borrower may at any time
and from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable written (or telephonic promptly confirmed in writing)
notice delivered to the Administrative Agent at least three Business Days prior
thereto in the case of Eurodollar Loans and at least one Business Day prior
thereto in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each, provided that if a Eurodollar Loan is prepaid
<PAGE> 53
48
on any day other than the last day of the Interest Period applicable thereto,
the Borrower shall also pay any amounts owing pursuant to subsection 2.18.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein. Amounts prepaid on account of the Term Loans may not be reborrowed.
Partial prepayments (other than as contemplated in subsection 2.8(b)) of
Eurodollar Loans shall be in an aggregate principal amount of $5,000,000 or a
whole multiple of $100,000 in excess thereof. Partial prepayments (other than
of a Swingline Loan or as contemplated by subsection 2.8(b)) of ABR Loans shall
be in an aggregate principal amount of $1,000,000 or a whole multiple of
$100,000 thereof. At the election of the Borrower, the first $20,000,000 in
aggregate amount of optional prepayments on account of the Term Loans shall be
applied to the then remaining installments thereof as the Borrower elects and
thereafter optional prepayments of the Term Loans shall be allocated among the
Term Loans under the Tranche A Term Loan Facility, the Tranche B Term Loan
Facility and the Incremental Term Loan Facility ratably based on the
outstanding principal amount of the Term Loans under each such Facility and
applied to the then remaining installments of the Term Loans under each such
Facility ratably based on the number of then remaining installments under such
Facility (i.e. each then remaining installment of the applicable Term Loans
shall be reduced by an amount equal to the aggregate amount to be applied to
such Term Loan divided by the number of the then remaining installments for
such Term Loans), provided that if the amount to be applied to any installment
required by this Agreement would exceed the then remaining amount of such
installment, then an amount equal to such excess shall be applied to the
remaining installments in the order of maturity after giving effect to all
prior reductions thereto (including the amount of prepayments theretofore
allocated pursuant to the preceding portion of this sentence).
(b) In the event that the Borrower specifies in the
Reinvestment Notice with respect to the sale of any Broadcasting Asset that the
Borrower will apply the Net Cash Proceeds of such sale to the temporary
repayment of Revolving Credit Loans pursuant to this subsection 2.8(b), the
Borrower shall apply such Net Cash Proceeds to the repayment of Revolving
Credit Loans as provided in subsection 2.8(a), without giving effect to any
minimum repayment amounts set forth therein. Any such repayment is referred to
herein as a "Broadcasting Asset Temporary Repayment". The Borrower may from
time to time reborrow all or a portion of the amount prepaid pursuant to any
Broadcasting Asset Temporary Repayment if (i) such borrowing complies with all
the procedures for borrowing set forth in subsection 2.5 and (ii) promptly upon
the receipt of the proceeds of such borrowing, the Borrower (A) applies such
proceeds to make a Permitted Acquisition, (B) deposits such proceeds in a cash
collateral account with the Administrative Agent as contemplated by subsection
2.9(b) or (C) applies such proceeds to the prepayment of Term Loans and the
permanent reduction of Revolving Credit Commitments in the manner specified in
such subsection 2.9(d). So long as any portion of any Broadcasting Asset
Temporary Repayment has not been reborrowed, the Borrower shall not be entitled
to borrow, and no Lender shall be entitled to make, Revolving Credit Loans or
Swingline Loans if after giving effect thereto the aggregate amount of
outstanding Revolving Extensions of Credit at such time would exceed an amount
equal to (i) the aggregate amount of the Revolving Credit Commitments at such
time minus (ii) the aggregate amount of all Broadcasting Asset Temporary
Repayments that have not been reborrowed at such time.
<PAGE> 54
49
2.9 Mandatory Prepayments and Commitment Reductions. (a) If
any Capital Stock (other than a Permitted Issuance) or Indebtedness shall be
issued or Incurred by Holdings, the Borrower or any of its Subsidiaries
(excluding any Incurrence of Indebtedness in accordance with subsection 7.2),
an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on
the date of such issuance or Incurrence toward the prepayment of the Term Loans
and to the extent of any excess to the reduction of the Revolving Credit
Commitments as set forth in subsection 2.9(d), provided that if, at the time of
such issuance or Incurrence, the Consolidated Leverage Ratio as of the last day
of the most recent Test Period is (i) less than 5.00 to 1.00 and greater than
or equal to 4.00 to 1.00, an amount equal to 50% of the Net Cash Proceeds
thereof shall be applied on the date of such issuance or Incurrence first,
toward the prepayment of the Term Loans, and second, to the reduction of the
Revolving Credit Commitments as set forth in subsection 2.9(d) and (ii) less
than 4.00 to 1.00, no such prepayment or reduction shall be required in respect
of such issuance or Incurrence.
(b) If on any date Holdings, the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery
Event then, unless a Reinvestment Notice shall be delivered in respect thereof,
such Net Cash Proceeds shall be applied, within five Business Days after such
date, toward the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in subsection 2.9(d), provided that
if a Reinvestment Notice shall be delivered in respect thereof (i) on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in subsection 2.9(d) and (ii) if such Net Cash
Proceeds relate to an Asset Sale pursuant to subsection 7.5(h) or an Asset Swap
Transaction pursuant to subsection 7.5(i) and a Reinvestment Notice has been
delivered in connection therewith, pending such Reinvestment Prepayment Date,
such Net Cash Proceeds shall be (A) applied to the repayment of Revolving
Credit Loans pursuant to subsection 2.8(b) to be reborrowed by the Borrower,
subject to compliance by the Borrower at the time of such reborrowing with the
terms and conditions of this Agreement, to make a Permitted Acquisition or as
cash consideration in connection with an Asset Swap Transaction or (B)
deposited in a cash collateral account with the Administrative Agent (the
proceeds of which will be invested by the Administrative Agent in Cash
Equivalents at the request of the Borrower) to be released by the
Administrative Agent at the request of the Borrower, subject to compliance by
the Borrower at the time of such release with the terms and conditions of this
Agreement, to make a Permitted Acquisition or as cash consideration in
connection with an Asset Swap Transaction, provided further, that,
notwithstanding subsection 2.9(d), if, at the time of receipt of such Net Cash
Proceeds, the Consolidated Leverage Ratio as of the last day of the most recent
Test Period is (i) less than 5.00 to 1.00 and greater than or equal to 4.00 to
1.00, an amount equal to 50% of the Net Cash Proceeds thereof shall be applied
as set forth in subsection 2.9(d) and (ii) less than 4.00 to 1.00, no such
prepayment or reduction shall be required in respect of such Net Cash Proceeds,
(provided that amounts not required to be applied toward the prepayment of the
Term Loans and, if applicable, the reduction of the Revolving Credit
Commitments pursuant to clauses (i) and (ii) above shall be reinvested in the
business of the Borrower or any of its Subsidiaries in a manner permitted by
Section 4.08 of the Senior Subordinated Note Indenture (or any comparable
section after the date hereof) on or prior to the 179th day after receipt of
such Net Cash Proceeds, and any amounts not so reinvested on or prior to such
time shall be applied first, toward the prepayment of the Term Loans
<PAGE> 55
50
and, second, to the reduction of the Revolving Credit Commitments prior to the
180th day after receipt thereof).
(c) If, for any fiscal year of the Borrower commencing with
the fiscal year ending December 31, 1998, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply the
ECF Percentage of such Excess Cash Flow toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in
subsection 2.9(d). Each such prepayment shall be made on a date (an "Excess
Cash Flow Application Date") no later than five days after the earlier of (i)
the date on which the financial statements of the Borrower referred to in
subsection 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are delivered.
(d) Subject to the other provisions of this subsection 2.9,
(i) 100% of the Net Cash Proceeds of the issuance of any Capital Stock (other
than a Permitted Issuance) or the issuance or Incurrence of any Indebtedness
as provided in subsection 2.9(a), (ii) 100% of the Net Cash Proceeds of any
Asset Sale or Recovery Event, unless a Reinvestment Notice shall be delivered
in respect of any Asset Sale or Recovery Event (in which case the terms of
subsection 2.9(b) shall apply) as provided in subsection 2.9(b) and (iii) the
Excess Cash Flow to be applied pursuant to subsection 2.9(c) shall be applied
first, to the prepayment of the Term Loans, and second, to the permanent
reduction of the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of first, the
Swingline Loans, and second, the Revolving Credit Loans, to the extent, if any,
that the Total Revolving Extensions of Credit exceed the amount of the
aggregate Revolving Credit Commitments as so reduced, provided that if the
aggregate principal amount of the Swingline Loans and Revolving Credit Loans
then outstanding is less than the amount of such excess (because L/C
Obligations constitute a portion thereof), the Borrower shall, to the extent of
the balance of such excess, deposit an amount in cash in a cash collateral
account established with the Administrative Agent for the benefit of the
Lenders on terms and conditions reasonably satisfactory to the Administrative
Agent. The application of any prepayment pursuant to this subsection 2.9 shall
be made first to ABR Loans and second to Eurodollar Loans. Subject to
subsection 2.9(e), amounts prepaid on account of the Term Loans (i) shall be
allocated among the Term Loans under the Tranche A Term Loan Facility, the
Tranche B Term Loan Facility and the Incremental Term Loan Facility ratably
based on the outstanding principal amount of the Term Loans under each such
Facility and applied to the then remaining installments of the Term Loans under
each such Facility ratably based on the number of such installments under such
Facility and (ii) may not be reborrowed.
(e) Any Lender holding Tranche B Term Loans or Incremental
Term Loans may, to the extent Tranche A Term Loans are outstanding, elect on
not less than one Business Day's prior written notice to the Administrative
Agent with respect to any mandatory prepayment made pursuant to this subsection
2.9, not to have such prepayment applied to such Lender's Tranche B Term Loans
or Incremental Term Loans, as applicable, until all Tranche A Term Loans shall
have been paid in full, in which case the amount not so applied shall be
applied to prepay Tranche A Term Loans and shall reduce the then remaining
installments of the Tranche A Term Loans ratably based on the number of such
installments.
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(f) Notwithstanding the foregoing provisions of this
subsection 2.9, if at any time the mandatory prepayment of any Loans pursuant
to this Agreement would result, after giving effect to the procedures set forth
in this Agreement, in the Borrower incurring costs under subsection 2.16, 2.17
or 2.18 as a result of Eurodollar Loans ("Affected Eurodollar Loans") being
prepaid other than on the last day of an Interest Period applicable thereto,
which costs are required to be paid pursuant to subsection 2.18, then, the
Borrower may, in its sole discretion, initially deposit a portion (up to 100%)
of the amounts that otherwise would have been paid in respect of the Affected
Eurodollar Loans with the Administrative Agent (which deposit must be equal in
amount to the amount of the Affected Eurodollar Loans not immediately prepaid)
to be held as security for the obligations of the Borrower to make such
mandatory prepayment pursuant to a cash collateral agreement to be entered into
in form and substance reasonably satisfactory to the Administrative Agent, with
such cash collateral to be directly applied upon the first occurrence (or
occurrences) thereafter of the last day of an Interest Period applicable to the
relevant Loan that is a Eurodollar Loan (or such earlier date or dates as shall
be requested by the Borrower), to repay an aggregate principal amount of such
Loan equal to the Affected Eurodollar Loans not initially repaid pursuant to
this sentence.
2.10 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least one Business Day's prior irrevocable written
(or telephonic promptly confirmed in writing) notice of such election (but no
later than 12:00 Noon, New York City time on the Business Day immediately prior
to such election), provided that unless the Borrower elects to deposit with the
Administrative Agent the amount of any breakage costs and other Eurodollar
Loans related costs to be incurred by the Borrower under this Agreement with
respect to any prepayment or conversion of such Eurodollar Loans prior to the
end of an Interest Period, any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable
written (or telephonic promptly confirmed in writing) notice of such election
by 12:00 Noon, New York City time (which notice shall specify the length of the
initial Interest Period therefor), provided that no ABR Loan may be converted
into a Eurodollar Loan (i) when any Event of Default has occurred and is
continuing and the Administrative Agent or the Required Lenders have determined
that such a conversion is not appropriate or (ii) after the date that is one
month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
subsection 1.1, of the length of the next Interest Period to be applicable to
such Loans, provided that no Eurodollar Loan may be continued as such (i) when
any Event of Default has occurred and is continuing and the Administrative
Agent has or the Required Lenders have determined that such a continuation is
not appropriate or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of any Facility, and provided further
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Eurodollar Loans shall be automatically converted to ABR
Loans on the last day of such then expiring Interest Period. Upon
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receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
2.11 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving
effect thereto, (a) the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $100,000 in excess thereof, (b) no more than six Eurodollar
Tranches under a particular Facility shall be outstanding at any one time and
(c) no more than ten Eurodollar Tranches in the aggregate shall be outstanding
at any one time.
2.12 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) Upon the occurrence and during the continuance of an
Event of Default under subsection 8(a), (i) all outstanding Loans and any
overdue amounts hereunder shall bear interest at a rate per annum which is (A)
in the case of the Loans, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this subsection 2.12 plus 2% or (B) in
the case of Reimbursement Obligations, overdue interest, commitment fee or
other amount payable at a rate per annum equal to the rate applicable to ABR
Loans under the relevant Facility plus 2% (or, in the case of any such other
amounts that do not relate to a particular Facility, the rate applicable to ABR
Loans under the Revolving Credit Facility plus 2%), in each case, with respect
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (after judgment as well as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection 2.12 shall be payable from time to time on demand.
2.13 Computation of Interest and Fees. (a) Interest, fees
and other amounts payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to ABR
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on
a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
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(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the
Borrower, deliver to the Borrower a statement showing the quotations used by
the Administrative Agent in determining any interest rate pursuant to
subsections 2.12.
2.14 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination, absent manifest error, shall be conclusive and binding
upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as ABR Loans, (y) any Loans that were
to have been converted on the first day of such Interest Period to Eurodollar
Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans
shall be converted to ABR Loans on the last day of the Interest Period
applicable thereto. Until such notice has been withdrawn by the Administrative
Agent (which the Administrative Agent agrees to do when the circumstances that
prompted delivery of such notice no longer exist), no further Eurodollar Loans
under the relevant Facility shall be made or continued as such, nor shall the
Borrower have the right to convert Loans under the relevant Facility to
Eurodollar Loans.
2.15 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made, with regard to the applicable Facility, pro rata
according to the respective Tranche A Term Loan Percentages, Tranche B Term
Loan Percentages, Incremental Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders.
(b) Whenever (i) any payment received by the Administrative
Agent under this Agreement or any Note or (ii) any other amounts received by
the Administrative Agent for or on behalf of the Borrower (including, without
limitation, proceeds of collateral or payments under any guarantee) is
insufficient to pay in full all amounts then due and payable to the
Administrative Agent and the Lenders under this Agreement and any Note, such
payment shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the following order: first, to the
payment of fees and expenses due and payable to the Administrative Agent under
and in connection with this Agreement; second, to the payment of all expenses
due and payable under subsection 10.5, ratably among the Administrative Agent
and the Lenders in accordance with the aggregate amount of such payments owed
to the Administrative Agent and each such Lender; third, to the payment of fees
due and payable under subsections 2.6 and 3.3, ratably among the Revolving
Credit Lenders in accordance with the Revolving Credit Commitment of each
Revolving Credit Lender, the Tranche A Term Loan Lenders in accordance with the
Delayed Tranche A Term Loan Commitments of each Tranche A Term Loan Lender, if
applicable, and, in the case of the Issuing Lender, the amount retained by the
Issuing Lender for its own account pursuant to subsection 3.3(a); fourth, to
the payment of interest then due and payable under the Loans, ratably in
accordance with the aggregate amount of interest owed to each such Lender; and
fifth, to the payment of the principal amount of the Loans and the L/C
Obligations then due and payable and, in the case of proceeds of collateral or
payments under any guarantee, to the payment of any other obligations to any
Lender not covered in first through fourth above ratably secured by such
collateral or ratably guaranteed under any such guarantee, ratably among the
Lenders in accordance with
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the aggregate principal amount and, in the case of proceeds of collateral or
payments under any guarantee, the obligations secured or guaranteed thereby
owed to each such Lender.
(c) If any Revolving Credit Lender or Tranche A Term Loan
Lender (each, a "Non-Funding Lender") has (x) failed to make a Revolving Credit
Loan or Delayed Tranche A Term Loan, as applicable, required to be made by it
hereunder, and the Administrative Agent has determined that such Revolving
Credit Lender or Tranche A Term Loan Lender, as applicable, is not likely to
make such Revolving Credit Loan or Delayed Tranche A Term Loan, as applicable,
or (y) given notice to the Borrower or the Administrative Agent that it will
not make, or that it has disaffirmed or repudiated any obligation to make, any
Revolving Credit Loans or Delayed Tranche A Term Loans, as applicable, in each
case by reason of the provisions of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, as amended, or otherwise, any payment made on
account of the principal of the Revolving Credit Loans or Tranche A Term Loans,
as applicable, outstanding shall be made as follows:
(i) with respect to Revolving Credit Loans, in the case of any
such payment made on any date when and to the extent that, in the
determination of the Administrative Agent, the Borrower would be able,
under the terms and conditions hereof, to reborrow the amount of such
payment under the Revolving Credit Commitments and to satisfy any
applicable conditions precedent set forth in subsection 5.2 to such
reborrowing, such payment shall be made on account of the outstanding
Revolving Credit Loans held by the Revolving Credit Lenders other than
the Non-Funding Lender pro rata according to the respective
outstanding principal amounts of the Revolving Credit Loans of such
Revolving Credit Lenders;
(ii) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans or Tranche A Term Loans, as
applicable, held by the Revolving Credit Lenders or Tranche A Term
Loan Lenders, as applicable, pro rata according to the respective
outstanding principal amounts of such Revolving Credit Loans or
Tranche A Term Loans, as applicable; and
(iii) any payment made on account of interest on the Revolving
Credit Loans or Tranche A Term Loans, as applicable, shall be made pro
rata according to the respective amounts of accrued and unpaid
interest due and payable on the Revolving Credit Loans or Tranche A
Term Loans, as applicable, with respect to which such payment is being
made.
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The Borrower agrees to give the Administrative Agent such assistance in making
any determination pursuant to this paragraph as the Administrative Agent may
reasonably request. Any such determination by the Administrative Agent shall
be conclusive and binding on the Lenders.
(d) Subject to subsection 2.15(c) and subsection 2.9(e), each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Tranche A Term Loans, the Tranche B Term Loans and the
Incremental Term Loans shall be made pro rata according to the respective
outstanding principal amounts of the applicable Term Loans then held by the
applicable Term Loan Lenders.
(e) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Loans (other than the Term
Loans) shall be made first to the Swingline Loans and then pro rata according
to the respective outstanding principal amounts of the Revolving Credit Loans
then held by the Revolving Credit Lenders.
(f) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in subsection 10.2, in Dollars and in immediately
available funds. Payments received by the Administrative Agent after such time
shall be deemed to have been received on the next Business Day. The
Administrative Agent shall distribute such payments to the Lenders promptly
upon receipt in like funds as received. If any payment hereunder becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day (except, in the case of Eurodollar Loans,
as otherwise provided in clause (i) of the definition of "Interest Period").
In the case of any extension of any payment of principal pursuant to the
preceding sentence, interest thereon shall be payable at the then applicable
rate during such extension.
(g) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a Borrowing Date that such Lender will not
make the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such Lender
is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the greater of the daily average Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this subsection 2.15(g) shall be conclusive
in the absence of manifest error. If such Lender's share of such borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to ABR Loans under the relevant Facility, on
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demand, from the Borrower. The failure of any Lender to make any Loan to be
made by it shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on such Borrowing Date.
2.16 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by subsection 2.17 and the establishment of a tax based
on the net income of such Lender and changes in the rate of tax on the
net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable, provided that before making
any such demand, each Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, in its reasonable discretion, in
any legal, economic or regulatory manner) to designate a different Eurodollar
lending office if the making of such designation would allow the Lender or its
Eurodollar lending office to continue to perform its obligations to make
Eurodollar Loans or to continue to fund or maintain Eurodollar Loans and avoid
the need for, or materially reduce the amount of, such increased cost. If any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection 2.16, it shall promptly notify the Borrower, through the
Administrative Agent, of the event by reason of which it has become so
entitled. If the Borrower notifies the Administrative Agent within five
Business Days after any Lender notifies the Borrower of any increased cost
pursuant to the foregoing provisions of this subsection 2.16(a), the Borrower
may convert all Eurodollar Loans of such Lender then outstanding into ABR Loans
in accordance with subsection 2.10 and shall, additionally, reimburse such
Lender for any cost in accordance with subsection 2.18.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or
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compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority made subsequent to the date
hereof shall have the effect of reducing the rate of return on such Lender's or
such corporation's capital as a consequence of its obligations hereunder or
under or in respect of any Letter of Credit to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, after submission by such Lender, to the
Borrower, through the Administrative Agent, of a written request therefor, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this subsection 2.16, showing in reasonable detail the calculation
thereof and certifying that it is generally charging such costs to other
similarly situated borrowers under similar credit facilities, submitted by any
Lender through the Administrative Agent shall be conclusive in the absence of
manifest error, provided that the determination of such amounts shall be made
in good faith in a manner generally consistent with such Lender's standard
practices. The obligations of the Borrower pursuant to this subsection 2.16
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder for a period of nine months thereafter.
2.17 Taxes. (a) Except as provided below in this
subsection, all payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non- excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the
amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the Borrower shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of the
United States of America or a state thereof to the extent such Lender's
compliance with the requirements of subsection 2.17(b) at the time such Lender
becomes a party to this Agreement fails to establish a complete exemption from
such withholding or to the extent such failure to establish a complete
exemption from such withholding thereafter is attributable to the actions of
such Lender. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Administrative
Agent for its own account or for the account of such
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Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this subsection 2.17 shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder for a period of nine months thereafter.
(b) Each Lender (or Transferee) that is not a United States
person within the meaning of Section 7701(a)(30) of the Code (a "Non-U.S.
Lender") shall deliver to the Borrower and the Administrative Agent (or, in the
case of a Participant, to the Lender from which the related participation shall
have been purchased) two copies of either U.S. Internal Revenue Service Form
1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from
U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, an annual certificate representing, under penalty of perjury, that
such Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the
Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms on
or before the expiration or obsolescence and promptly upon the invalidity of
any form previously delivered by such Non-U.S. Lender and after the occurrence
of any event requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested by the Borrower
or the Administrative Agent for filing and completing such forms. Each
Non-U.S. Lender (and, if applicable, any other Lender or Transferee) agrees, to
the extent legally entitled to do so, upon reasonable request by the Borrower,
to provide to the Borrower (for the benefit of the Borrower and the
Administrative Agent) such other forms as may be reasonably required in order
to establish the legal entitlement of such Lender to an exemption from
withholding with respect to payments of interest under this Agreement or the
other Loan Documents, provided that in determining the reasonableness of such a
request, such Lender shall be entitled to consider the cost of complying with
such request (to the extent unreimbursed by the Borrower) that would be imposed
on such Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any
time it determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this subsection 2.17(b), a Non-U.S. Lender shall not be
required to deliver any form pursuant to this subsection 2.17(b) that such
Non-U.S. Lender is not legally able to deliver. If the Administrative Agent or
any Lender (or Transferee) receives a refund in respect of Non-Excluded Taxes
paid by the Borrower, it shall promptly pay such refund, together with any
other amounts paid by the Borrower in connection with such refunded
Non-Excluded Taxes, to the Borrower, net of all out-of-pocket expenses of such
Lender incurred in
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obtaining such refund, provided that the Borrower agrees to promptly return
such refund to the Administrative Agent or the applicable Lender if it receives
notices from the Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such refund.
2.18 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss (excluding loss of profit) or
expense which such Lender actually incurs as a consequence of (a) withdrawal of
notice given by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
failure by the Borrower to make any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day
of an Interest Period with respect thereto. Such indemnification may include
an amount equal to the excess, if any, of (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this subsection 2.18, showing
in reasonable detail the calculation thereof, submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder for a period of nine months thereafter.
2.19 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of subsection 2.16 or
2.17(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event, provided that such
designation is made on terms that in the reasonable judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided further that nothing in this subsection
2.19 shall affect or postpone any of the obligations of any Borrower or the
rights of any Lender pursuant to subsection 2.16 or 2.17(a).
2.20 Replacement of Lenders under Certain Circumstances. If
at any time (a) the Borrower becomes obligated to pay additional amounts
described in subsection 2.16 or 2.17 as a result of any condition described in
such subsections or any Lender ceases to make Eurodollar Loans pursuant to
subsection 2.16, (b) any Lender becomes insolvent and its assets become subject
to a receiver, liquidator, trustee, custodian or other Person having similar
powers, (c) any Lender becomes a "Non-Consenting Lender" (as defined below in
this subsection 2.20) or (d) any Lender becomes a "Non-Funding Lender", then
the Borrower may, on ten Business Days' prior written notice to the
Administrative Agent and such Lender, replace such Lender by causing such
Lender to (and such Lender shall be obligated to) assign pursuant to subsection
10.6(c) all of its rights and obligations under this Agreement to a Lender or
other entity selected by the Borrower and
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reasonably acceptable to the Administrative Agent (and in the case of Revolving
Credit Commitments or Revolving Loans, reasonably acceptable to the Issuing
Lender and the Swingline Lender) for a purchase price equal to the outstanding
principal amount of such Lender's Loans and all accrued interest and fees and
other amounts payable hereunder (including amounts payable under subsection
2.18 as though such Loans were being paid instead of being purchased), provided
that (i) neither the Administrative Agent nor any Lender shall have any
obligation to the Borrower to find a replacement Lender or other such entity,
(ii) in the event of a replacement of a Non-Consenting Lender or a Lender to
which the Borrower becomes obligated to pay additional amounts pursuant to
clause (a) of this subsection 2.20, in order for the Borrower to be entitled to
replace such a Lender, such replacement must take place no later than 180 days
after (A) the date the Non-Consenting Lender shall have notified the Borrower
and the Administrative Agent of its failure to agree to any requested consent,
waiver or amendment or (B) the Lender shall have demanded payment of additional
amounts under one of the subsections described in clause (a) of this subsection
2.20, as the case may be, and (iii) in no event shall the Lender hereby
replaced be required to pay or surrender to such replacement Lender or other
entity any of the fees received by such Lender hereby replaced pursuant to this
Agreement. In the case of a replacement of a Lender to which the Borrower
becomes obligated to pay additional amounts pursuant to clause (a) of this
subsection 2.20, the Borrower shall pay such additional amounts to such Lender
prior to such Lender being replaced and the payment of such additional amounts
shall be a condition to the replacement of such Lender. In the event that (x)
the Borrower or the Administrative Agent has requested the Lenders to consent
to a departure or waiver of any provisions of the Loan Documents or to agree to
any amendment thereto, (y) the consent, waiver or amendment in question
requires the agreement of all Lenders in accordance with the terms of
subsection 10.1 or all the Lenders with respect to a certain class of the Loans
and (z) Required Lenders or more than 50% of the class of such Lenders have
agreed to such consent, waiver or amendment, then any Lender who does not agree
to such consent, waiver or amendment shall be deemed a "Non-Consenting Lender".
The Borrower's right to replace a Non-Funding Lender pursuant to this
subsection 2.20 is, and shall be, in addition to, and not in lieu of, all other
rights and remedies available to the Borrower against such Non-Funding Lender
under this Agreement, at law, in equity, or by statute.
2.21. Notice of Certain Costs. Notwithstanding anything in
this Agreement to the contrary, to the extent any notice required by subsection
2.15 through and including subsection 2.18 is given by any Lender more than 90
days after such Lender has knowledge (or should have had knowledge) of the
occurrence of the event giving rise to the additional cost, reduction in
amounts, loss, tax or other additional amounts described in such subsections,
such Lender shall not be entitled to compensation under such subsections for
any such amounts incurred or accruing prior to the giving of such notice to the
Borrower.
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SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in subsection 3.4(a), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower on any
Business Day during the Revolving Credit Commitment Period in such form as may
be approved from time to time by the Issuing Lender, provided that the Issuing
Lender shall not have any obligation to issue any Letter of Credit if, after
giving effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Credit
Commitments would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Scheduled Revolving Credit Termination Date,
provided that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices specified herein
an Application therefor, completed to the satisfaction of the Issuing Lender,
and such other certificates, documents and other papers and information as the
Issuing Lender may reasonably request. Upon receipt of any Application, the
Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its
receipt of the Application therefor and all such other certificates, documents
and other papers and information relating thereto) by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be agreed
to by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative Agent
notice of the issuance of each Letter of Credit (including the amount thereof).
The Administrative Agent will furnish to the Revolving Credit Lenders (a)
prompt notice of the issuance of each standby Letter of Credit and (b) a
monthly report setting forth for the relevant month the total aggregate daily
amount available to be drawn under commercial Letters of Credit that were
outstanding during such month.
3.3 Commissions, Fees and Other Charges. (a) The Borrower
will pay to the Administrative Agent, for the account of each Revolving Credit
Lender, a commission on the average daily face amount of each Letter of Credit
at a per annum rate equal to the Applicable Margin then in effect with respect
to Eurodollar Loans under the Revolving Credit Facility minus
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the fronting fee referred to below, shared ratably among the Revolving Credit
Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the
issuance date. In addition, the Borrower shall pay to the Issuing Lender for
its own account a fronting fee of 1/4 of 1% per annum of the average daily face
amount of each Letter of Credit issued by the Issuing Lender, payable quarterly
in arrears on each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing Lender
in issuing, negotiating, effecting payment under, amending or otherwise
administering any Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in the Issuing Lender's obligations
and rights under each Letter of Credit issued by the Issuing Lender and the
amount of each draft paid by the Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with the Issuing Lender
that, if a draft is paid under any Letter of Credit issued by the Issuing
Lender for which the Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Lender upon demand an amount equal to such L/C Participant's
Revolving Credit Percentage of the amount of such draft or any part thereof,
which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to subsection 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit is paid to the Issuing Lender within three Business Days after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand an amount equal to the product of (i) such amount, times (ii) the
greater of the daily average Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
subsection 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Revolving Credit Facility. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this subsection shall be conclusive in the absence
of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with subsection 3.4(a), the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied
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thereto by the Issuing Lender), or any payment of interest on account thereof,
the Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuing Lender in connection with such payment. Each such
payment shall be made to the Issuing Lender in Dollars and in immediately
available funds. Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this subsection from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate set forth in subsection 2.12(c).
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender
(except to the extent resulting from the gross negligence or willful misconduct
of the Issuing Lender), any beneficiary of a Letter of Credit or any other
Person. The Borrower also agrees with the Issuing Lender that, subject to the
last sentence of this subsection 3.6, the Issuing Lender shall not be
responsible for, and the Borrower's Reimbursement Obligations under subsection
3.5 shall not be affected by, among other things, the validity or genuineness
of documents or of any endorsements thereon, even though such documents shall
in fact prove to be invalid, fraudulent or forged, or any dispute between or
among the Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower against any beneficiary of such Letter of Credit or
any such transferee. The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors, omissions or delays in transmission found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Issuing Lender.
The Borrower agrees that any action taken or omitted by the Issuing Lender
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards or care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit issued by it shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.
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3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Lenders, the Swingline
Lender and the Issuing Lender to enter into this Agreement and to make the
Loans and issue or participate in the Letters of Credit, Holdings and the
Borrower hereby represent and warrant to the Administrative Agent, the
Swingline Lender, the Issuing Lender and each Lender that:
4.1 Financial Condition. (a) The audited consolidated
financial statements of LIN as of and for the fiscal year ending December 31,
1997, reported on by Ernst & Young LLP, present fairly the consolidated
financial condition of LIN and the results of operations and cash flows as of
such date and for such period. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the period involved (except as approved by the
relevant firm of accountants and disclosed therein). The most recent balance
sheet referred to above reflects, as required by GAAP, any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, and any
long-term leases and unusual forward or long-term commitments, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, in each case as of
the date of such balance sheet.
(b) The two unaudited pro forma consolidated balance sheets
of Holdings and its consolidated Subsidiaries as at December 31, 1997
(including the notes thereto), copies of which have heretofore been furnished
to each Lender, have each been prepared giving effect (as if such events had
occurred on such date) to (i) the consummation of the Transactions, (ii) the
Loans to be made hereunder and the use of proceeds thereof and (iii) the
payment of fees and expenses in connection with the foregoing, provided, that
one such balance sheet gives effect to such events assuming consummation of the
WOOD-TV Acquisition and one such balance sheet gives effect to such events
assuming the WOOD-TV Acquisition has not been consummated. Each of the
aforementioned unaudited pro forma consolidated balance sheets presents fairly
on a pro forma basis the financial position of Holdings and its consolidated
Subsidiaries, as at December 31, 1997 and is based upon good faith estimates
and assumptions believed by management of Holdings and the Borrower to be
reasonable at the time made, assuming that the events specified in the
preceding sentence had actually occurred at such date.
4.2 No Change. Since the date of the most recent audited
financial statements delivered pursuant to subsection 4.1(a)(i), there has been
no (a) development or event which has had or could reasonably be expected to
have a Material Adverse Effect or (b) sale, transfer or other disposition by
the Borrower or any of its Subsidiaries of any material part of its business or
property, other than as contemplated in the NBC Transactions.
4.3 Corporate Existence; Compliance with Law. Each of
Holdings and its Subsidiaries (a) is duly organized or formed, as the case may
be, validly existing and in good
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standing under the laws of the jurisdiction of its organization or formation,
(b) has the requisite power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except to the extent that the failure to
so qualify could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the requisite power and authority, and the legal right, to
make, deliver and perform the Loan Documents and the Transaction Documents to
which it is a party and, in the case of the Borrower, to borrow and obtain
other extensions of credit hereunder. Each Loan Party has taken all necessary
corporate or other action to authorize the execution, delivery and performance
of the Loan Documents and the Transaction Documents to which it is a party and,
in the case of the Borrower, to authorize the borrowings and other extensions
of credit on the terms and conditions of this Agreement. Other than consents
from the FCC as required pursuant to the Merger Agreement, no consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
Transactions and the borrowings and other extensions of credit hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement, any of the other Loan Documents or the Transaction Documents, except
(i) consents, authorizations, filings and notices described in Schedule 4.4,
which consents, authorizations, filings and notices have been obtained or made
and are in full force and effect, (ii) consents under immaterial Contractual
Obligations and (iii) the filings referred to in subsections 4.19 and 10.17.
Each Loan Document and each Transaction Document has been duly executed and
delivered on behalf of each Loan Party thereto. This Agreement and each
Transaction Document constitutes, and each Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan party thereto,
enforceable against each such Loan Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement, the Transaction Documents and the Loan Documents, the issuance
of Letters of Credit, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or any material Contractual
Obligation of any of the Loan Parties and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such material Contractual
Obligation (other than the Liens created by the Security Documents).
4.6 No Material Litigation. Except as set forth in Schedule
4.6, no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of Holdings or the
Borrower, threatened by or against any of the Loan Parties or against any of
their respective properties or revenues (a) with respect to any of the Loan
Documents
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or any of the transactions contemplated hereby or thereby, (b) as of the
Closing Date, with respect to the Transaction Documents or any of the
transactions contemplated thereby or (c) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
4.7 No Default. None of the Loan Parties is in default under
or with respect to any of its Contractual Obligations (including the
Transaction Documents) in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.
4.8 Ownership of Property; Liens. Each of the Loan Parties
has title in fee simple to, or a valid leasehold interest in, all its material
real property, and good title to, or a valid leasehold interest in, all its
other material property, and none of such property is subject to any Lien
except as permitted by subsection 7.3.
4.9 Intellectual Property. Each of the Borrower and each of
its Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
service marks, copyrights, technology, know-how and processes ("Intellectual
Property") necessary for the conduct of its business as currently conducted,
except for those the failure to own or license which could not reasonably be
expected to have a Material Adverse Effect . Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect and to the
knowledge of Holdings and the Borrower (a) no claim has been asserted and is
pending by any Person challenging or questioning the use of any Intellectual
Property or the validity of any Intellectual Property (nor does Holdings or the
Borrower know of any valid basis for any such claim) and (b) the use of
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of, and no Intellectual Property of the Borrower or any of its
Subsidiaries is being infringed upon by, any Person.
4.10 Taxes. Each of the Loan Parties has filed or caused to
be filed all Federal and all other material tax returns which are required to
be filed and has paid all taxes shown to be due and payable on said returns or
on any material assessments made against it or any of its property and all
other material taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than (a) any taxes, fees or other
charges the amount or validity of which are currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the applicable Loan
Party, and (b) taxes, assessments, fees or other charges imposed by any
Governmental Authority, other than income taxes imposed by the United States of
America, with respect to which the failure to make payments could not, by
reason of the amount thereof or of remedies available to such Governmental
Authorities, reasonably be expected to have a Material Adverse Effect); and no
tax Lien has been filed, and, to the knowledge of Holdings and the Borrower, no
material claim is being asserted, with respect to any such material tax, fee or
other charge, other than those being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of the Loan Parties.
4.11 Federal Regulations. No Letters of Credit and no part
of the proceeds of any Loans will be used for "buying" or "carrying" any
"margin stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U of the Board as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
Regulations of the
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Board. If requested by any Lender or the Administrative Agent, the Borrower
will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form
U-1 referred to in said Regulation G or Regulation U, as the case may be.
4.12 Labor Matters. Except as set forth on Schedule 4.12,
there are no strikes or other labor disputes against the Borrower or any of its
Subsidiaries pending or, to the knowledge of Holdings and the Borrower,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payments made to
employees of the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. To the knowledge of Holdings and
the Borrower, all payments due from the Borrower or any of its Subsidiaries on
account of employee health and welfare insurance that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect if
not paid have been paid or accrued as a liability on the books of the Borrower
or the relevant Subsidiary.
4.13 ERISA. Except where the liability, individually or in
the aggregate, which could reasonably be expected to result has not had or
could not reasonably be expected to have a Material Adverse Effect: (a)
neither a Reportable Event nor an "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during
the five-year period prior to the date on which this representation is made or
deemed made with respect to any Single Employer Plan; (b) each Plan (other than
a Multiemployer Plan) has complied in all material respects with the applicable
provisions of ERISA and the Code; (c) no termination of a Single Employer Plan
has occurred, and no Lien in favor of the PBGC or a Single Employer Plan has
arisen and remains outstanding, during such five-year period; (d) the present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
in an amount that could reasonably be expected to have a Material Adverse
Effect; (e) none of the Loan Parties nor any Commonly Controlled Entity has had
a complete or partial withdrawal from any Multiemployer Plan, and, to the
knowledge of the Loan Parties, none of the Loan Parties nor any Commonly
Controlled Entity would become subject to any liability under ERISA if the Loan
Parties or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made; (f) no such
Multiemployer Plan is in Reorganization or Insolvent; (g) the present value
(determined using actuarial and other assumptions which are reasonable in
respect of the benefits provided and the employees participating) of the
liability of the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(l) of ERISA)
does not, in the aggregate, exceed the assets under all such Plans allocable to
such benefits.
4.14 Investment Company Act; Other Regulations. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under
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any Requirement of Law (other than Regulation X of the Board) which limits its
ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute after the completion of the Transactions all the Subsidiaries of the
Borrower at the date hereof. Holdings has no Subsidiaries other than the
Borrower.
4.16 Use of Proceeds. The proceeds of the Loans and the
issuances of Letters of Credit shall be used solely for the purposes specified
in the preamble of this Agreement.
4.17 Environmental Matters. Except as set forth on Schedule
4.17:
(a) The facilities and properties owned, leased or operated
by the Borrower or any of its Subsidiaries (the "Properties") do not contain,
and have not previously contained, any Materials of Environmental Concern in
amounts or concentrations or under such conditions which (i) constitute or
constituted a violation of, or could reasonably be expected to give rise to
liability under, any Environmental Law in effect at the time of the making of
this representation, or (ii) could materially and adversely interfere with the
continued operation of the Properties, or (iii) materially impair the fair
saleable value thereof except in each case insofar as such violation,
liability, interference, or reduction in fair market value, or any aggregation
thereof, is not reasonably likely to result in a Material Adverse Effect.
(b) The business operated by the Borrower or any of its
Subsidiaries (the "Business"), the Properties and all operations at the
Properties are, and to the knowledge of Holdings and the Borrower have been, in
compliance in all respects with all applicable Environmental Laws except for
noncompliance which is not reasonably likely to result in a Material Adverse
Effect.
(c) Neither Holdings, the Borrower nor any of its
Subsidiaries has received any written notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the Business, nor does Holdings or the Borrower have knowledge or
reason to believe that any such notice will be received or is being threatened
except insofar as such notice or threatened notice, or any aggregation thereof,
does not involve a matter or matters that is or are reasonably likely to result
in a Material Adverse Effect.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could reasonably be expected to result in the Borrower
or any of its Subsidiaries incurring liability under, any Environmental Law in
effect at the time of the making of this representation, nor have any Materials
of Environmental Concern been generated, treated, stored or disposed of at, on
or under any of the Properties in violation of, or in a manner that could
reasonably be expected to result in the Borrower or any of its Subsidiaries
incurring liability under, any applicable Environmental Law in effect at the
time of the making of this representation except insofar as any such violation
or liability referred to in this paragraph, or any aggregation thereof, is not
reasonably likely to result in a Material Adverse Effect.
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(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of Holdings or the Borrower, threatened,
under any Environmental Law to which Holdings, the Borrower or any of its
Subsidiaries is or will be named as a party with respect to the Properties or
the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business except insofar as such proceeding, action,
decree, order or other requirement, or any aggregation thereof, is not
reasonably likely to result in a Material Adverse Effect.
(f) There has been no release or, to the best knowledge of
Holdings or the Borrower, threat of release of Materials of Environmental
Concern at or from the Properties, or arising from or related to the operations
of Holdings or any of its Subsidiaries in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in
a manner that could reasonably give rise to liability under Environmental Laws
in effect at the time of making this representation except insofar as any such
violation or liability referred to in this paragraph, or any aggregation
thereof, is not reasonably likely to result in a Material Adverse Effect.
4.18 Accuracy of Information, etc. No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished to the Administrative Agent or the
Lenders, or any of them, by or on behalf of any Loan Party for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents (but excluding all projections and pro forma financial
information and other estimates covered by the next sentence), contained as of
the date such statement, information, document or certificate was so furnished,
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. The projections and pro forma financial information and other
estimates and opinions contained in the materials referenced above are based
upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the
Administrative Agent and the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. As of the
date hereof, the representations and warranties (a) of Holdings and LIN
Acquisition Company in the Merger Agreement are true and correct in all
material respects, (b) of Holdings and LIN Acquisition Company in the NBC
Transaction Agreements are true and correct in all material respects and (c) of
all other parties to the Merger Agreement and the NBC Transaction Agreements,
to the knowledge of Holdings and the Borrower, are true and correct in all
material respects. As of the Closing Date, there is no fact known to any Loan
Party (other than general economic conditions, which conditions are commonly
known and affect businesses generally) that could reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed herein, in
the other Loan Documents or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents.
4.19 Security Documents. (a) Except as described in
subsection 10.16, the Guarantee and Collateral Agreement is effective to create
in favor of the Administrative Agent, for
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the benefit of the Lenders, a legal, valid and enforceable security interest in
the collateral described therein and proceeds thereof. In the case of the
Pledged Stock and the Pledged Debt Securities, when stock certificates
representing such Pledged Stock or certificates representing such Pledged Debt
Securities are delivered to the Administrative Agent, or when financing
statements in appropriate form are filed in the offices specified on Schedule
4.19(a), and in the case of the other collateral described in the Guarantee and
Collateral Agreement, when financing statements in appropriate form are filed
in the offices specified on Schedule 4.19(a), the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in such collateral and the
proceeds thereof, as security for the Obligations (as defined in the Guarantee
and Collateral Agreement), in each case prior and superior in right to any
other Person subject, except in the case of such Pledged Stock and the Pledged
Debt Securities, to Liens permitted by subsection 7.3.
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b) in accordance with subsection 10.17, each Mortgage shall constitute a
fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, as security for the Obligations (as defined in the relevant Mortgage),
in each case prior and superior in right to any other Person, subject to Liens
permitted by subsection 7.3 (other than, with respect to Mortgaged Properties
as of the Closing Date, subsections 7.3(g) and (q)).
4.20 Solvency. Each Loan Party is, and after giving effect
to the Transactions and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be, Solvent.
4.21 Senior Indebtedness. The Obligations will constitute
"Senior Indebtedness" of the Borrower under and as defined in the Senior
Subordinated Note Indenture. The obligations of each Subsidiary Guarantor and
Holdings under the Guarantee and Collateral Agreement will constitute
"Guarantor Senior Indebtedness" of such Subsidiary Guarantor or Holdings under
and as defined in the Senior Subordinated Note Indenture.
4.22 Station Licenses. Schedule 4.22 accurately and
completely lists as of the date hereof (after giving effect to the
Transactions), for each Station, all Station Licenses granted or assigned to
the Borrower or any of its Subsidiaries, or under which the Borrower and its
Subsidiaries have the right to operate such Station. As of the Closing Date,
the Station Licenses listed on Schedule 4.22 with respect to any Station
include all material authorizations, licenses and permits issued by the FCC
that are required or necessary for the operation of such Station, and the
conduct of the business of the Borrower and its Subsidiaries with respect to
such Station, as now conducted or proposed to be conducted. The Station
Licenses listed on Schedule 4.22 will be, as of the Closing Date, issued in the
name of, or validly assigned to the respective License Subsidiary for the
Station being operated under authority of such Station Licenses and validly
issued and in full force and effect, and the Borrower and its Subsidiaries will
have fulfilled and performed in all material respects their obligations with
respect thereto and have full power and authority to operate thereunder, and,
except as described in Schedule 4.22 hereto, all consents to the transfer of
control
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of the principal broadcasting licenses and any other material Station Licenses
in connection with the transactions contemplated hereby and in the Transaction
Documents shall have been granted by the FCC, provided that such consents will
not be required to have become Final Orders.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making of
such extension of credit on the Closing Date, of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a Responsible
Officer of the Borrower and Holdings, (ii) the Guarantee and
Collateral Agreement, executed and delivered by a Responsible Officer
of Holdings, the Borrower and each Subsidiary Guarantor, (iii) each of
the Mortgages, executed and delivered by a Responsible Officer of each
party thereto, and (iv) a notice of borrowing pursuant to subsection
2.2 and subsection 2.5 of this Agreement.
(b) Lien Searches. The Administrative Agent shall have
received the results of a recent lien, tax and judgment search in each
of the jurisdictions and offices where assets of the Loan Parties are
located or recorded, and such search shall reveal no Liens on any of
the assets of Holdings or its Subsidiaries except for Liens permitted
by subsection 7.3 and Liens that will be removed prior to the Closing
Date.
(c) Environmental Audit. The Lenders shall have received a
Phase I Environmental Site Assessment prepared by Law Engineering,
dated August 1997, and shall be reasonably satisfied with the findings
contained therein with respect to the real properties of LIN and its
Subsidiaries.
(d) Closing Certificate. The Administrative Agent shall have
received, with a copy for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments.
(e) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Weil, Gotshal & Manges LLP,
counsel to the Loan Parties, substantially in the form of
Exhibit F; and
(ii) the legal opinion of special FCC counsel to the
Loan Parties.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement and the Transaction
Documents as the Administrative Agent may reasonably require.
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(f) Pledged Stock, Stock Powers. The Administrative Agent
shall have received the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such
certificate executed in blank by a Responsible Officer of the pledgor
thereof and the Pledged Debt Securities pledged pursuant to the
Guarantee and Collateral Agreement endorsed in blank by a Responsible
Officer of the pledgor thereof.
(g) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement and any filings with the FCC or the United States Patent and
Trademark Office) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien
on the collateral described therein, prior and superior in right to
any other Person (other than with respect to Liens expressly permitted
by subsection 7.3), shall be in proper form for filing, registration
or recordation.
(h) Mortgages, etc. (i) The Administrative Agent shall have
received a Mortgage with respect to each Mortgaged Property, executed
and delivered by a Responsible Officer of each party thereto.
(ii) The Administrative Agent shall have received maps or
plats of an as-built survey of the sites of the Mortgaged Properties
certified to the Administrative Agent in a manner reasonably
satisfactory to them, dated a recent date by an independent
professional licensed land surveyor reasonably satisfactory to the
Administrative Agent, which maps or plats and the surveys on which
they are based shall be made in accordance with the Minimum Standard
Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: (A) the locations on such sites
of all the buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets abutting
the sites and width thereof; (C) all access and other easements
appurtenant to the sites; (D) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor,
(E) any encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site is
described as being on a filed map, a legend relating the survey to
said map.
(iii) The Administrative Agent shall have received in respect
of each Mortgaged Property a title report in form and substance
reasonably satisfactory to the Administrative Agent.
(iv) The Administrative Agent shall have received a copy of
all recorded documents referred to, or listed as exceptions to title,
in the title report referred to in subsection 5.1(h)(iii).
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(i) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of subsection 6.5
of this Agreement.
(j) Fees and Expenses of Lenders. The Administrative Agent
and the Lenders (and their Affiliates) shall have received all fees
and expenses required to be paid by the Borrower on or before the
Closing Date, or provision for payment with proceeds of the initial
extensions of credit hereunder shall have been made by the Borrower.
(k) The Transactions.
The Transactions shall have been consummated or shall be
consummated substantially simultaneously with the initial borrowing of
Loans under this Agreement in accordance with all applicable
Requirements of Law and the terms of the Transaction Documents
(without giving effect to any amendments or waivers to the Transaction
Documents that could reasonably be expected adversely to impact the
Facilities and are not reasonably satisfactory to the Lenders), and
the Lenders shall be reasonably satisfied that the fees and expenses
to be paid in connection with the Transactions shall not exceed
$95,000,000, unless additional common equity is contributed to the
Borrower in the amount of such excess.
(l) Equity Contributions. The Investors shall have
contributed, directly or indirectly, at least $555,000,000 (in each
case less the amount of rollover investment by members of management
and employees of LIN and its Subsidiaries) to Holdings and at least
$188,000,000 and $350,000,000 in cash to Equity Holdings A and Equity
Holdings B, respectively, in exchange for the issuance to the
Investors, directly or indirectly, of all the outstanding common stock
of Equity Holdings A and Equity Holdings B, respectively; Equity
Holdings A and Equity Holdings B shall have contributed at least
$188,000,000 and $350,000,000 in cash to Holdings, respectively, in
exchange for the issuance to Equity Holdings A and Equity Holdings B
of approximately 37% and 63%, respectively, of the common stock of
Holdings; and Holdings shall have contributed the entire amount (net
of applicable transactions expenses) so received from Equity Holdings
A and Equity Holdings B to LIN in cash as common equity.
(m) Joint Venture Loan. LIN Texas shall have distributed or
loaned to LIN or one of its Subsidiaries at least $815,500,000 in cash
from the proceeds of the Joint Venture Loan.
(n) Outstanding Indebtedness. After giving effect to the
Transactions and the other transactions contemplated by this
Agreement, Equity Holdings A, Equity Holdings B, the LLC, Holdings and
Holdings's Subsidiaries shall have no outstanding Indebtedness or
preferred equity, other than Indebtedness under (i) this Agreement,
(ii) the Senior Subordinated Notes, (iii) the Holdings Discount Notes,
(iv) the Joint Venture Loan and the Joint Venture Loan Guarantee and
(v) other Indebtedness permitted under subsection 7.2, and all
Refinanced Indebtedness shall have been permanently terminated and all
obligations thereunder shall have been discharged.
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(o) Delivery of Financial Information. The Lenders shall
have received consolidated balance sheets and related statements of
income, stockholder's equity and cash flows for LIN for the 1997 and
the 1998 fiscal quarters prior to the Closing Date, and for all full
fiscal months since the end of the most recent fiscal quarter, and such
financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated
financial condition of LIN and its Subsidiaries, taken as a whole
(other than changes in general economic conditions or in economic
conditions generally affecting the television broadcasting industry),
as reflected in the financial statements previously furnished to the
Lenders.
(p) Certificate of Financial Officer. The Lenders shall have
received a certificate of a financial officer of LIN with respect to
the Consolidated EBITDA of each of LIN and WOOD-TV Station, in each
case calculated in a manner reasonably satisfactory to the
Administrative Agent.
(q) Pro Forma Financial Information. The Lenders shall have
received a pro forma consolidated balance sheet of (i) Holdings and
its Subsidiaries (without giving effect to the WOOD-TV Acquisition)
and (ii) Holdings and its Subsidiaries (after giving effect to the
WOOD-TV Acquisition), in each case on a consolidated basis as of the
Closing Date, after giving effect to the Transactions, which balance
sheets shall not be materially inconsistent with the forecasts
previously provided to the Lenders.
(r) Judicial Actions. (i) There shall be in effect no
temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the
Transactions, nor shall any proceeding by any Governmental Authority
seeking any of the foregoing be pending.
(ii) There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed
applicable to the Transactions, that makes the consummation of the
Transactions illegal.
(s) Solvency Opinion. The Lenders shall have received a
solvency opinion in form and substance reasonably satisfactory to the
Lenders from Valuation Research Corporation, which shall opine as to
the solvency of Holdings, LIN and its Subsidiaries, taken as a whole,
after giving effect to the Transactions and the other transactions
contemplated hereby.
(t) Consummation of the Transactions. The consummation of
the Transactions and the other transactions contemplated hereby shall
not (i) violate any material Requirement of Law or (ii) conflict with,
or result in a default or event of default under, any material
Contractual Obligation of Holdings or any of its Subsidiaries, the LLC
or the LP.
(u) Governmental Approvals. All requisite Governmental
Authorities and third parties shall have approved or consented to the
Transactions and the other transactions contemplated hereby to the
extent required (including the grant of all required consents of
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the FCC (which shall not be required to have become Final Orders) and
other applicable material consents including with respect to the
Network Affiliation Agreements and local marketing agreements of LIN
and its Subsidiaries, but excluding approvals or consents that
reasonably could not be expected to have a Material Adverse Effect),
all applicable appeal periods shall have expired (except with respect
to the FCC consents) and there shall be no action, actual or
threatened, of any Governmental Authority that could reasonably be
expected to restrain, prevent or impose materially burdensome
conditions on the Transactions or the other transactions contemplated
hereby.
(v) Certificate as to Network Affiliation Agreements. The
Administrative Agent shall have received a certificate of the chief
executive, chief operating or chief financial officer (or any officer
having comparable duties) of LIN to the effect that such officer has
no reason to believe either (i) that the Network Affiliation
Agreements and local marketing agreements of LIN and its Subsidiaries
will not remain in full force and effect for the remaining stated term
thereof (other than, with respect to the local marketing agreements,
as a result of any action by any Governmental Authority affecting the
television industry as a whole) or (ii) that any such Network
Affiliation Agreement of LIN and its Subsidiaries will not be renewed
upon expiration thereof (it being understood that such statement shall
not relate to the terms of such renewal).
(w) Proceeds of Senior Subordinated Notes. The Borrower
shall have received at least $300,000,000 in gross cash proceeds from
the issuance of the Senior Subordinated Notes, and the subordination
and other terms of the Senior Subordinated Notes shall be reasonably
satisfactory in all respects to the Lenders.
(x) Proceeds of Holdings Discount Notes. Holdings shall have
received at least $200,000,000 in gross cash proceeds from the
issuance of the Holdings Discount Notes, and such proceeds (net of
applicable transaction expenses) shall have been contributed to the
Borrower.
(y) Leverage Ratios. The Consolidated Leverage Ratio and the
Consolidated Senior Leverage Ratio, after giving effect to any
requested borrowing and any other Indebtedness Incurred on the Closing
Date, shall not exceed 7.0x and 5.0x, respectively.
5.2 Conditions to Each Extension of Credit. The agreement of
each Lender and the Swingline Lender to make any extension of credit requested
to be made by it on any date (including, without limitation, its initial
extension of credit) is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date
except for any representation and warranty which is expressly made as
of an earlier date, which representation and warranty shall have been
true and correct in all material respects as of such earlier date.
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(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) Delayed Tranche A Term Loans. In the case of any Delayed
Tranche A Term Loans, the consummation of the WOOD-TV Acquisition
simultaneously with such borrowing in accordance with all applicable
Requirements of Law and the terms of the WOOD-TV Purchase Agreement
(without giving effect to any amendments or waivers that could
reasonably be expected to adversely impact the Facilities and are not
reasonably satisfactory to the Administrative Agent).
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
subsection 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower hereby agree that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender, the Swingline Lender, the
Issuing Lender or the Administrative Agent hereunder, each of Holdings and the
Borrower shall and (except in the case of delivery of financial information
reports and notices) shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative
Agent which shall in turn be promptly distributed by the Administrative Agent
to the Lenders or, in the case of clause (c) hereof, upon the request of any
Lender):
(a) as soon as available but in any event within 90 days after
the end of each fiscal year of Holdings and the Borrower, as
applicable, (i) a copy of the audited consolidated balance sheet of
each of Holdings and its consolidated Subsidiaries and the Borrower
and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of operations and of cash
flows for such year, and (ii) the annual operating statements of each
Station, in each case setting forth in comparative form the figures
for the previous year, and, in the case of clause (i), reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by independent
certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of Holdings and the Borrower, as applicable (i) the
unaudited consolidated balance sheet of each of Holdings and its
consolidated Subsidiaries and the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter,
and (ii) the quarterly operating statements of each Station, in each
case setting forth in comparative form the figures for the
corresponding period in the previous year, certified by
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a Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 15
days after receipt thereof, the information set forth in clauses (a),
(b), (c) and (d) of Annex D to the Joint Venture Loan.
All such financial statements shall fairly present in all material respects the
financial position of Holdings and its Subsidiaries or the Borrower and its
Subsidiaries, as applicable, as of such date and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except as approved by
such accountants or officer, as the case may be, and disclosed therein). Prior
to the WOOD-TV Acquisition, the Borrower shall be required to deliver with
respect to WOOD-TV Station the financial statements required by this subsection
6.1.
6.2 Certificates; Other Information. Furnish to the
Administrative Agent (which shall in turn be promptly distributed by the
Administrative Agent to the Lenders) or, in the case of clause (f), to the
relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a)(i), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default relating to the
covenants contained in subsections 7.1 and 7.7, except as specified in
such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to subsection 6.1(a) and 6.1(b),(i) a certificate of a
Responsible Officer stating that, to such Responsible Officer's
knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or
satisfied by it, in all material respects, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate, (ii) (A) a Compliance
Certificate containing all information necessary for determining
compliance by Holdings and its Subsidiaries with the provisions of
this Agreement referred to therein as of the last day of the relevant
fiscal quarter or fiscal year and (B) to the extent not previously
disclosed to the Administrative Agent, a listing of any state within
the United States where any Loan Party keeps inventory or equipment
and of any Intellectual Property arising under the laws of the United
States (or any jurisdiction therein) acquired by any Loan Party since
the date of the most recent list delivered pursuant to this clause (B)
(or, in the case of the first such list so delivered, since the
Closing Date) and (iii) any final accountants' management letters
delivered by the independent certified public accountants reporting on
such financial statements to Holdings or any of its Subsidiaries;
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of Holdings, a detailed
consolidated budget for (i) Holdings and its consolidated
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Subsidiaries and (ii) each Station, in each case for such fiscal year
(including a projected consolidated balance sheet of Holdings and its
Subsidiaries, as applicable, as of the end of such fiscal year, and
the related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as
available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by
a certificate of a Responsible Officer stating that such Projections
are based upon good faith estimates and assumptions believed by
management of Holdings to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial
information may differ from the projected results set forth therein by
a material amount;
(d) within five days after the same are sent, copies of all
financial statements and reports which Holdings or the Borrower sends
to the holders of any class of its debt securities or public equity
securities and within five days after the same are filed, copies of
all financial statements and reports which Holdings or the Borrower
may make to, or file with, the Securities and Exchange Commission or
any successor or analogous Governmental Authority;
(e) promptly following their submission with the FCC or any
other Federal, state or local Governmental Authority, copies of any
and all periodic or special reports filed by Holdings or any of its
Subsidiaries, if such reports are publicly available and indicate any
material adverse change in the business, operations or financial
condition of Holdings or any of its Subsidiaries or if copies thereof
are requested by any Lender or the Administrative Agent (but only to
the extent such reports are publicly available), and copies of any and
all material notices and other material communications from the FCC or
from any other Federal, state or local Governmental Authority with
respect to Holdings or any of its Subsidiaries or any Station; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of Holdings or its Subsidiaries, as the case may be,
provided that notwithstanding the foregoing, Holdings and each of its
Subsidiaries shall have the right to pay any such obligation and in good faith
contest, by proper legal actions or proceedings, the validity or amount of such
claims.
6.4 Conduct of Business and Maintenance of Existence, etc.
(a) Except as contemplated by subsection 7.4, (i) continue to engage in
business of the same general type as now conducted by it, (ii) preserve, renew
and keep in full force and effect its existence and (iii) take all reasonable
action to preserve and maintain all rights, privileges, licenses and franchises
necessary or
<PAGE> 84
79
desirable in the normal conduct of its business, except (other than with
respect to the Station Licenses), in the case of this clause (iii), to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect and except if (A) in the reasonable business judgment
of Holdings, the Borrower or such Subsidiary, as the case may be, it is in its
best economic interest not to preserve and maintain such privileges, rights or
franchises (other than the Station Licenses), and (B) such failure to preserve
and maintain such privileges, rights or franchises (other than the Station
Licenses) would not materially adversely affect the rights of the Lenders
hereunder or the value of the collateral security for the Loans; (b) comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (c) comply in all material
respects with the terms of all Station Licenses.
6.5 Maintenance of Property; Insurance. (a) Keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, and maintain with financially sound
and reputable insurance companies insurance on all its property in at least
such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business or as otherwise reasonably requested by the Administrative Agent; and
furnish to the Administrative Agent, upon written request, information in
reasonable detail as to the insurance carried except to the extent that the
failure to do any of the foregoing with respect to any such property could not
reasonably be expected to materially adversely affect the value or usefulness
of such property.
(b) All such insurance shall (i) provide that no cancelation,
material reduction in amount or material change in coverage thereof shall be
effective until at least thirty (30) days after receipt by the Administrative
Agent of written notice thereof, (ii) name the Administrative Agent as insured
party or loss payee and (iii) if reasonably requested by the Administrative
Agent, include a breach of warranty clause.
6.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and accounts in accordance with sound
business practices and (b) upon reasonable prior notice and at any reasonable
time, permit representatives of the Administrative Agent or any Lender to visit
and inspect any of its properties and examine and, if reasonably requested,
make copies of its contracts, books and records and to discuss the business,
operations, properties and financial and other condition of Holdings and its
Subsidiaries with officers and employees of Holdings and its Subsidiaries and
with its independent certified public accountants, provided that the
Administrative Agent or such Lender shall notify Holdings and the Borrower
prior to any contact with such accountants and give Holdings and the Borrower
the opportunity to participate in such discussions.
6.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
<PAGE> 85
80
(b) any (i) default or event of default under any Contractual
Obligation of Holdings or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between
Holdings or any of its Subsidiaries and any Governmental Authority and
which has a reasonable likelihood of being adversely determined, which
in either case, if not cured or if adversely determined, as the case
may be, could reasonably be expected to have a Material Adverse
Effect;
(c) any litigation or proceeding affecting Holdings or any of
its Subsidiaries in which the amount involved is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought;
(d) the following events, as soon as possible and in any event
within 30 days after Holdings or the Borrower knows or has reason to
know thereof and if, individually or in the aggregate, the liability
that could reasonably be expected to result would be material to
Holdings and its Subsidiaries taken as a whole: (i) the occurrence of
any Reportable Event with respect to any Plan (other than a
Multiemployer Plan), a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan;
(e) any development or event which has had or could reasonably
be expected to have a Material Adverse Effect; and
(f) the receipt by Holdings or any of its Subsidiaries of any
complaint, order, citation, notice or other written communication from
any Person with respect to the existence or alleged existence of a
violation of any Environmental Laws or Materials of Environmental
Concern or any other environmental matter including the occurrence of
any spill, discharge or release in a quantity that is reportable under
any Environmental Laws on any Mortgaged Properties or any other
property owned, leased or utilized by Holdings or any of its
Subsidiaries but only to the extent that such complaint, order,
citation, notice or written communication individually could
reasonably be expected to result in liability or an obligation under
any Environmental Law that could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this subsection 6.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings or the relevant Subsidiary proposes to
take with respect thereto.
6.8 Environmental Laws. (a) Except as could not reasonably
be expected to have a Material Adverse Effect, comply with, and use reasonable
efforts to ensure compliance by all tenants and subtenants, if any, with all
applicable Environmental Laws, and obtain and comply with and maintain, and use
reasonable efforts to ensure that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws.
<PAGE> 86
81
(b) Conduct and complete (or cause to be conducted and
completed) in all material respects all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and in a timely fashion comply in all material respects with
all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws, except to the extent that the failure to do so could not be
reasonably expected to have a Material Adverse Effect.
6.9 Interest Rate Protection. On or before the date that is
the earlier to occur of (a) September 30, 1998 and (b) 60 days after the
closing of the WOOD-TV Acquisition, enter into Interest Rate Protection
Agreements to the extent necessary to provide that at least 50% of the
aggregate principal amount of Indebtedness of the Borrower and its Subsidiaries
outstanding after the Closing Date is subject to either a fixed interest rate
or interest rate protection for a period of not less than two years (provided,
that in the event that the term thereof shall be less than two years, such
Interest Rate Protection Agreements shall be extended or replaced no later than
the expiration of such term, with the term of such extended or replacement
Interest Rate Protection Agreements ending no earlier than the second
anniversary of the date on which the original Interest Rate Protection
Agreements were entered into), which Interest Rate Protection Agreements shall
in each case have terms and conditions reasonably satisfactory to the
Administrative Agent. None of Holdings or any of its Subsidiaries shall
default (beyond any applicable grace period) in the performance of any of its
material obligations thereunder.
6.10 Additional Collateral, etc. (a) If at any time
following the Closing Date the aggregate monetary value (as determined by
aggregating the monetary value of each item or items of property so acquired on
the date of the acquisition thereof) of all property (to the extent not already
secured) of any nature whatsoever acquired by the Borrower or any Subsidiary
after the Closing Date is in excess of $1,000,000 (other than (i) any Property
described in paragraph (b) or (c) below and (ii) any Property subject to a Lien
expressly permitted by subsection 7.3(g)) as to which the Administrative Agent,
for the benefit of the Lenders, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such Property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in such Property, including without limitation, the
filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Administrative Agent.
(b) With respect to any fee interest in any real estate
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than any such real estate subject to a Lien expressly permitted by
subsection 7.3(g), (j) or (q) (but in the case of clause (q), only to the
extent of such Lien)), promptly (i) execute and deliver a first priority
Mortgage (subject only to Liens permitted by subsection 7.3) in favor of the
Administrative Agent, for the benefit of the Lenders, covering such real
estate, (ii) if reasonably requested by the Administrative Agent, provide the
Lenders with a title report as well as a current ALTA survey thereof, together
with a surveyor's
<PAGE> 87
82
certificate, in each case in form and substance reasonably satisfactory to the
Administrative Agent. Notwithstanding the foregoing, the Borrower and its
Subsidiaries shall only be required to execute and deliver Mortgages and/or
provide title reports and current ALTA surveys covering fee properties acquired
after the Closing Date by the Borrower or its Subsidiaries with a fair market
value at the time of such acquisition in excess of $1,500,000.
(c) With respect to any new Subsidiary created or acquired
after the Closing Date by the Borrower or any of its Subsidiaries, promptly (i)
execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent deems necessary
or advisable in order to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in the Capital Stock
and debt securities of such new Subsidiary which are owned by the Borrower or
any of its Subsidiaries and required to be pledged pursuant to the Guarantee
and Collateral Agreement, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock and debt securities, together with
(A) in the case of such Capital Stock, undated stock powers endorsed in blank,
and (B) in the case of such debt securities, endorsed in blank, in each case
executed and delivered by a Responsible Officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement and (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including, without limitation, the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be reasonably requested
by the Administrative Agent and (iv) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinion shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, provided that notwithstanding the foregoing, only 65% of the voting
Capital Stock of any direct foreign Subsidiary of Holdings, the Borrower or any
domestic Subsidiary need be pledged under this clause (c), no voting Capital
Stock of any foreign Subsidiary of any other foreign Subsidiary need be pledged
under this clause (c) and no direct or indirect foreign Subsidiary shall become
a Guarantor hereunder or shall be required to pledge any of its assets.
(d) Promptly, but in any event not later than 30 Business
Days after the Administrative Agent or the Required Lenders, as applicable,
shall have made a request contemplated by subsection 10.17, provide to the
Administrative Agent in respect of each Mortgaged Property (i) a mortgagee's
title insurance policy (or policies) or marked up unconditional binder for such
insurance, provided that each such policy shall (A) be in an amount reasonably
satisfactory to the Administrative Agent with respect to each Mortgaged
Property covered thereby (but not in excess of the fair market value thereof);
(B) insure that the Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances, except as
disclosed therein or otherwise permitted by subsection 7.3 (other than
subsections 7.3(g) and (q)); (C) name the Administrative Agent for the benefit
of the Lenders as the insured thereunder; (D) be in the form of ALTA Loan
Policy - 1992 (or equivalent policies) to the extent available in the
applicable jurisdictions; (E) contain such endorsements and affirmative
coverage as the Administrative Agent may reasonably request to the extent
available in the applicable jurisdictions and available without material cost
to the Borrower or its Subsidiaries; and
<PAGE> 88
83
(F) be issued by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or reinsurers, at the
option of the Administrative Agent) and (ii) evidence satisfactory to it that
all premiums in respect of each such policy, all charges for mortgage recording
tax, and all related expenses, if any, have been paid or duly provided for.
(e) Upon the request of the Administrative Agent, to the
extent permitted by applicable Requirements of Law at the time of such request,
grant or cause its Subsidiaries to grant, to the Administrative Agent, a direct
security interest in the Station Licenses within 30 days after receipt of such
request, provided that to the extent FCC consent shall be required in
connection with granting such security interest, such consent shall be
requested within 30 days after receipt of such request and upon receipt of such
FCC consent, such security interest shall be granted within 10 Business Days
thereof.
(f) Upon the occurrence and during the continuance of (i) any
Event of Default with respect to paragraph (a) of Section 8, (ii) any payment
default with respect to any Senior Subordinated Indebtedness or the Holdings
Discount Notes or (iii) any Event of Default with respect to subsection 7.1,
promptly, but in any event not more than 30 Business Days (subject to necessary
approvals by the FCC), following the request of the Administrative Agent, cause
the assets relating to each Station held by the Borrower to be transferred to
its respective License Subsidiary or, at the election of the Administrative
Agent, another Subsidiary that has no other assets or liabilities.
6.11 WOOD-TV Acquisition. (a) As soon as practicable after
the Closing Date, take all actions to obtain FCC approval for the WOOD-TV
Acquisition and (b) as soon as practicable after obtaining such FCC approval,
consummate such acquisition.
6.12 After-Acquired Stations. Unless the Borrower and the
Administrative Agent shall otherwise agree, cause the Station License relating
to each after-acquired Station to be held in a separate License Subsidiary,
provided that to the extent the Borrower shall not have received FCC approval
with respect to the foregoing at the scheduled closing of the acquisition of
such Station, the Borrower shall comply with the foregoing requirement as soon
as practicable following such acquisition (but in any event within 60 days
after such acquisition).
6.13 Changes in Locations, Name, etc. The Borrower shall
not, except upon not less than 15 days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of all additional
executed financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
security interests provided for in the Guarantee and Collateral Agreement:
(a) permit any of the Inventory or Equipment (each as defined
in the Guarantee and Collateral Agreement) (other than (i) immaterial Inventory
and Equipment and (ii) Inventory and Equipment in transit in the ordinary
course of business) to be kept at a location other than those listed on
Schedule 5 of the Guarantee and Collateral Agreement;
(b) change the location of its chief executive office or sole
place of business from that referred to in Section 4.4 of the Guarantee and
Collateral Agreement; or
<PAGE> 89
84
(c) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Administrative Agent in
connection with the Guarantee and Collateral Agreement would become misleading.
SECTION 7. NEGATIVE COVENANTS
Each of Holdings and the Borrower hereby agrees that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding
or any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, neither Holdings nor the Borrower shall, or shall permit (except
with respect to subsection 7.1) any of its Subsidiaries to, directly or
indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as of the last day of any Test Period set forth below to exceed
the ratio set forth below opposite such period:
<TABLE>
<CAPTION>
Period Consolidated Leverage Ratio
------ ---------------------------
(prior to any KXTX Transaction)
-------------------------------
<S> <C>
Closing Date to 6/30/99 7.25x
7/01/99 to 6/30/00 7.00x
7/01/00 to 6/30/01 6.75x
7/01/01 to 6/30/02 6.50x
7/01/02 to 6/30/03 5.75x
7/01/03 and thereafter 5.00x
</TABLE>
<TABLE>
<CAPTION>
Period Consolidated Leverage Ratio
------ ---------------------------
(following any KXTX
-------------------
Transaction)
------------
<S> <C>
Closing Date to 7.40x
12/31/98
1/01/99 to 6/30/99 7.25x
7/01/99 to 6/30/00 7.00x
7/01/00 to 6/30/01 6.75x
7/01/01 to 6/30/02 6.50x
7/01/02 to 6/30/03 5.75x
7/01/03 and thereafter 5.00x
</TABLE>
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio as of the last day of any Test Period set
forth below to be less than the ratio set forth below opposite such period:
<PAGE> 90
85
<TABLE>
<CAPTION>
Period Consolidated Interest
------ ---------------------
Coverage Ratio
--------------
<S> <C>
Closing Date to 12/31/99 1.60x
1/01/00 to 12/31/00 1.75x
1/01/01 to 12/31/01 1.95x
1/01/02 to 12/31/02 2.05x
1/01/03 and thereafter 2.10x
</TABLE>
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio as at the completion of any Test
Period to be less than 1.05x.
(d) Consolidated Senior Leverage Ratio. Permit the
Consolidated Senior Leverage Ratio as of the last day of any Test Period set
forth below to exceed the ratio set forth below opposite such period:
<TABLE>
<CAPTION>
Period Consolidated Senior
------ -------------------
Leverage Ratio
--------------
(prior to any KXTX
Transaction)
<S> <C>
Closing Date to 6/30/99 5.25x
7/01/99 to 6/30/00 5.00x
7/01/00 to 6/30/01 5.00x
7/01/01 to 6/30/02 4.75x
7/01/02 to 6/30/03 4.50x
7/01/03 and thereafter 4.00x
</TABLE>
<TABLE>
<CAPTION>
Period Consolidated Senior
------ -------------------
Leverage Ratio
---------------
(following any KXTX
Transaction)
<S> <C>
Closing Date to 12/31/98 5.35x
1/01/99 to 6/30/99 5.25x
7/01/99 to 6/30/00 5.00x
7/01/00 to 6/30/01 5.00x
7/01/01 to 6/30/02 4.75x
7/01/02 to 6/30/03 4.50x
7/01/03 and thereafter 4.00x
</TABLE>
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist (in each case, to "Incur") any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
<PAGE> 91
86
(b) Indebtedness among the Loan Parties (other than Holdings)
arising as a result of intercompany loans;
(c) purchase money Indebtedness, provided that the aggregate
amount of Indebtedness incurred pursuant to this subsection 7.2(c)
shall not exceed $20,000,000 at any one time outstanding;
(d) Capital Lease Obligations, provided that the aggregate
principal amount of Capital Lease Obligations incurred pursuant to
this subsection 7.2(d) in any fiscal year of the Borrower, when added
to the aggregate amount of other Capital Expenditures made during such
fiscal year pursuant to subsection 7.7, shall not exceed the amount
permitted to be expended during such fiscal year pursuant to
subsection 7.7;
(e) Indebtedness (other than Senior Subordinated Indebtedness
and Holdings Discount Indebtedness) outstanding on the date hereof and
listed on Schedule 7.2(e) and any refinancings, refundings, renewals
or extensions thereof (without any increase in the principal amount
thereof other than pursuant to the instrument creating such Lien
without any modification thereof after the date hereof);
(f) (i) indemnities and guarantees (including guarantees of
Indebtedness if such Indebtedness is otherwise permitted hereunder)
made in the ordinary course of business by the Borrower or any of its
Subsidiaries, provided that such indemnities and guarantees could not
individually or in the aggregate have a Material Adverse Effect, (ii)
guarantees by Holdings or any of its Subsidiaries of (A) real property
leases and (B) personal property operating leases, in each case
entered into in the ordinary course of business by the Borrower or any
of its Subsidiaries and (iii) indemnities in favor of the Persons
issuing title insurance policies insuring the title to any property;
(g) (i) Senior Subordinated Indebtedness of the Borrower in an
aggregate principal amount not to exceed $200,000,000, (ii) Holdings
Discount Indebtedness in an aggregate principal amount not to exceed
$125,000,000 plus an amount equal to the pay-in-kind or accrued
interest payable on the Holdings Discount Notes over the first five
years the Holdings Discount Notes shall be outstanding and (iii)
Guarantee Obligations of any Subsidiary Guarantor in respect of
Indebtedness referred to in clause (i) of this subsection 7.2(g),
provided that a Subsidiary Guarantor shall not guarantee any Senior
Subordinated Indebtedness unless (A) such guarantee of the Senior
Subordinated Indebtedness is subordinated to the guarantee of such
Subsidiary Guarantor of the Obligations on terms no less favorable to
the Lenders than the subordination provisions of the Senior
Subordinated Notes and (B) such guarantee of the Senior Subordinated
Indebtedness provides for the release and termination thereof, and is
released and terminated, without action by any party, upon (I) the
sale of all or substantially all of the assets of such Subsidiary
Guarantor (including by way of an Asset Swap Transaction), (II) a sale
of all of the equity interest in such Subsidiary Guarantor or (III)
such Subsidiary Guarantor ceasing to be a Restricted Subsidiary (as
defined in the Senior Subordinated Note Indenture);
<PAGE> 92
87
(h) Indebtedness resulting from the endorsement of negotiable
instruments in the ordinary course of business;
(i) Indebtedness in respect of any Interest Rate Protection
Agreements;
(j) Indebtedness (i) of the Borrower or any of its
Subsidiaries to the seller on an unsecured basis representing the
purchase price in a Permitted Acquisition or any Asset Swap
Transaction in an aggregate amount for all Permitted Acquisitions and
Asset Swap Transactions not to exceed $30,000,000, (ii) of the
Borrower or any of its Subsidiaries that is not subordinated to the
Obligations, assumed in connection with any Permitted Acquisition or
any Asset Swap Transaction in an aggregate amount for all Permitted
Acquisitions and Asset Swap Transactions not to exceed $30,000,000 and
(iii) (A) of the Borrower and (B) of any Subsidiary of the Borrower,
in each case that is subordinated to the Obligations and is assumed in
connection with any Permitted Acquisition or any Asset Swap
Transaction, in an aggregate amount for all Permitted Acquisitions and
Asset Swap Transactions not to exceed $200,000,000 in the case of
clause (A) and $30,000,000 in the case of clause (B), provided that in
the case of this clause (iii), (A) after giving effect to the
assumption of such Indebtedness, (I) no Default or Event of Default
will have occurred and be continuing and no default or event of
default shall have occurred and be continuing under the Senior
Subordinated Note Indenture and (II) the Borrower shall be in
compliance with all covenants contained in subsection 7.1, (B) the
subordination provisions of such Indebtedness shall be reasonably
satisfactory in all respects to the Administrative Agent (it being
understood that, to the extent such subordination provisions are no
less favorable to the Lenders than the subordination provisions of the
Senior Subordinated Notes, such terms shall be deemed satisfactory)
(C) the aggregate amount of such Indebtedness, to the extent its terms
provide for any maturity, amortization or mandatory redemption (other
than with asset sale proceeds, subject to the provisions of this
Agreement, or following a change of control) or sinking fund payment
prior to the date that is six months following the Tranche B Maturity
Date, shall not exceed $100,000,000 and (D) the covenants and events
of default relating to such Indebtedness shall be no more restrictive
than those contained in this Agreement taken as a whole;
(k) Indebtedness of any Loan Party (other than Holdings) to
any other Loan Party from intercompany transfers of assets made in the
ordinary course of business or to the extent permitted under
subsections 7.5 and 7.8;
(l) Indebtedness subject to Liens permitted under subsections
7.3(a), (b), (c), (d) and (r);
(m) indemnities made in (i) the Loan Documents, the
Transaction Documents or in any of the agreements contemplated hereby
and thereby and (ii) the monitoring and oversight agreement and
financial advisory agreement described in subsection 7.6(a)(iv), and
in the corporate charter and/or bylaws or other comparable constituent
documents of Holdings and its Subsidiaries; and
<PAGE> 93
88
(n) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and
all Subsidiaries) not to exceed $25,000,000 at any one time
outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect to contested taxes are maintained on the books
of Holdings or one of its Subsidiaries, as the case may be, in
conformity with GAAP;
(b) carriers', landlord's, warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, insurance contracts, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(e) easements, rights-of-way, restrictions, covenants, minor
exceptions to title and other similar encumbrances (i) previously or
hereinafter incurred in the ordinary course of business which, in the
aggregate, are not material in amount and which, in the case of such
encumbrances on any of the Mortgaged Properties, do not in the
aggregate materially detract from the value of the Property subject
thereto or, in the case of such encumbrances on property, materially
interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries or (ii) which are set forth in the title
reports delivered to the Administrative Agent on or prior to the
Closing Date pursuant to subsection 5.1(h)(iii) or after the Closing
Date pursuant to subsection 6.10(b);
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by subsection 7.2(e)
(including refinancings, refundings, renewals and extensions of such
Indebtedness as permitted by subsection 7.2(e)), provided that no such
Lien is spread to cover any additional property (other than after
acquired title in or on such property and proceeds of the existing
collateral in accordance with the instrument creating such Lien) after
the Closing Date and that the amount of Indebtedness secured thereby
is not increased except pursuant to the instrument creating such Lien
(without any modification thereof after the date hereof);
(g) (i) Liens securing Indebtedness of the Borrower or any of
its Subsidiaries permitted pursuant to subsections 7.2(c) and 7.2(d)
(provided that (A) such Liens shall be
<PAGE> 94
89
created substantially simultaneously with the acquisition of such
fixed or capital assets, (B) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness and
(C) the amount of Indebtedness secured thereby is not increased except
pursuant to the instrument creating such Lien (without any
modification thereof after the date hereof)) and (ii) Liens existing
on any property or asset at the time of acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof at the time
such Person becomes a Subsidiary (provided that (x) such Lien is not
created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as the case may be, (y) such Lien
shall not apply to any other property or assets of the Borrower or any
of its Subsidiaries and (z) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may be) and (iii)
Liens securing Indebtedness of the Borrower or any of its Subsidiaries
assumed in connection with a Permitted Acquisition or an Asset Swap
Transaction in accordance with the terms of subsection 7.2(j)(ii);
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of its business and covering only the assets so leased;
(j) any obligations or duties affecting any of the Property of
the Borrower or its Subsidiaries to any municipality or public
authority with respect to any franchise, grant, license or permit
which do not materially impair the use of such Property for the
purposes for which it is held;
(k) Liens imposed by operation of law with respect to any
judgments or orders not constituting an Event of Default;
(l) attachment or judgment Liens (other than judgment Liens
paid or fully covered by insurance which are not outstanding for more
than 60 days) in an aggregate amount outstanding at any one time not
in excess of $10,000,000;
(m) Liens arising from precautionary Uniform Commercial Code
financing statement filings with respect to operating leases or
consignment arrangements entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(n) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including the right of set-off)
held by such banking institution incurred in the ordinary course of
business and which are within the general parameters customary in the
banking industry;
(o) licenses (other than Station Licenses), leases or
subleases permitted hereunder granted to others not interfering in any
material respect with the business of Holdings or any of its
Subsidiaries;
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(p) Liens on property of the Borrower or any of its
Subsidiaries in favor of landlords securing licenses (other than
Station Licenses), subleases and leases permitted hereunder and
granted to others and not interfering in any material respect in the
business of Holdings or any of its Subsidiaries;
(q) Liens not otherwise permitted by this subsection 7.3 so
long as the aggregate outstanding principal amount of the obligations
secured thereby does not exceed $7,500,000 at any one time; and
(r) Liens granted by LIN Texas with respect to its interest in
the LLC to GECC in connection with the Joint Venture Loan.
7.4 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:
(a) any Subsidiary of the Borrower (other than, except as set
forth below, any License Subsidiary or, at any time after any of the
conditions set forth in subsection 6.10(f)(i), (ii) or (iii) shall
have occurred, any Subsidiary holding the assets and liabilities of
any Station) may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Wholly Owned Subsidiary Guarantor
(other than, except as set forth below, any License Subsidiary or, at
any time after any of the conditions set forth in subsection 6.10(f)
(i), (ii) or (iii) shall have occurred, any Subsidiary holding the
assets and liabilities of any Station) (provided that the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving
corporation); provided, however, that (i) a License Subsidiary and any
Subsidiary holding the assets and liabilities of any Station may take
any actions otherwise prohibited by this clause (a) to the extent such
merger or consolidation occurs in contemplation of, and immediately
preceding, a sale, transfer or other disposition (including an Asset
Swap Transaction) of such License Subsidiary or other Subsidiary and
(ii) any Subsidiary may take any actions otherwise prohibited by this
clause (a) to the extent necessary to comply with the requirements of
subsection 6.10(f);
(b) any Subsidiary of the Borrower (other than, except as set
forth below, any License Subsidiary or, at any time after any of the
conditions set forth in subsection 6.10(f)(i), (ii) or (iii) shall
have occurred, any Subsidiary holding the assets and liabilities of
any Station) may sell, lease, transfer or otherwise dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or any Wholly Owned Subsidiary Guarantor; provided, however,
that (i) a License Subsidiary and any Subsidiary holding the assets
and liabilities of any Station may take any actions otherwise
prohibited by this clause (b) to the extent any sale, transfer or
other disposition occurs in contemplation of, and immediately
preceding, a sale, transfer or other disposition (including an Asset
Swap Transaction) of such License Subsidiary or other Subsidiary and
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(ii) any Subsidiary may take any actions otherwise prohibited by this
clause (b) to the extent necessary to comply with the requirements of
subsection 6.10(f); and
(c) the Borrower may be merged or consolidated with or into a
newly formed limited liability company with no assets or liabilities
that is a Subsidiary of Holdings solely for the purposes of realizing
certain tax benefits so long as Holdings shall take such actions as
would be required under subsection 6.10(c) if such limited liability
company were a Subsidiary of the Borrower.
7.5 Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables, leasehold interests and its
interest in the LLC), whether now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the ordinary
course of business or property that is no longer useful in the conduct
of the Borrower's business disposed of in the ordinary course of
business;
(b) transfers resulting from any casualty or condemnation of
property or assets;
(c) any sale or other transfer at fair market value of any
property or assets constituting fixed assets for at least 75% cash,
provided that the aggregate net cash proceeds of the sales and
transfers made pursuant to this paragraph (c) in the aggregate do not
exceed $5,000,000 in any fiscal year;
(d) intercompany sales or transfers of assets made in the
ordinary course of business;
(e) the sale or discount of overdue accounts receivable
arising in the ordinary course of business, but only in connection
with the compromise or collection thereof;
(f) licenses or sublicenses of intellectual property and
general intangibles (other than any Station Licenses) and licenses,
leases or subleases of other property (other than any Station
Licenses) in each case in the ordinary course of business and which do
not materially interfere with the business of the Borrower and its
Subsidiaries;
(g) dispositions permitted by subsection 7.4;
(h) the sale of any Broadcasting Asset for aggregate
consideration equal to the fair market value of such Broadcasting
Asset (as determined in good faith by the board of directors of the
Borrower or the applicable Subsidiary), provided that (i) after giving
effect to such sale, no Default or Event of Default exists or shall be
continuing, (ii) at least 75% of such consideration received by the
Borrower in respect thereof shall be in the form of cash and Cash
Equivalents, (iii) the Net Cash Proceeds of such sale shall be applied
in the manner prescribed by subsection 2.9(d) and (iv) (A) the
Consolidated EBITDA of the Broadcasting Asset being sold plus the
Consolidated EBITDA of all Broadcasting Assets that were sold pursuant
to this subsection 7.5(h) or exchanged pursuant to
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subsection 7.5(i) in such fiscal quarter and in the immediately
preceding four-fiscal-quarter period shall not exceed 25% of the
Consolidated EBITDA of the Borrower for such immediately preceding
four-fiscal-quarter period, (B) the Consolidated EBITDA of the
Broadcasting Asset being sold plus the Consolidated EBITDA of all
Broadcasting Assets that were sold pursuant to this subsection 7.5(h)
or exchanged pursuant to subsection 7.5(i) in such fiscal quarter and
in the preceding eight-fiscal-quarter period shall not exceed 40% of
the Consolidated EBITDA of the Borrower for such eight-fiscal quarter
period and (C) the Consolidated EBITDA of the Broadcasting Assets
being sold plus the Consolidated EBITDA of all Broadcasting Assets
that were sold pursuant to this subsection 7.5(h) or exchanged
pursuant to subsection 7.5(i) in such fiscal quarter and in the
preceding twenty-fiscal-quarter period shall not exceed 60% of the
Consolidated EBITDA of the Borrower for such twenty-fiscal-quarter
period;
(i) Asset Swap Transactions; and
(j) the KXTX Transaction
7.6 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock) on, or make any payment
on account of, or set apart assets for a sinking or other analogous fund for,
the purchase, redemption, defeasance, retirement or other acquisition of, any
shares of any class of Capital Stock of Holdings or any of its Subsidiaries or
any warrants or options to purchase any such Capital Stock, whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
Holdings or any of its Subsidiaries (such declarations, payments, setting
apart, purchases, redemptions, defeasance, retirements, acquisitions and
distributions being herein called "Restricted Payments"), except that:
(a) the Borrower may make Restricted Payments to Holdings, so
long as no Event of Default (or with respect to clause (vi) below, any
interest payment Default) has occurred and is continuing or would be
continuing after giving effect to such Restricted Payment, provided
that the Borrower shall be permitted to make the Restricted Payments
in clauses (iii) and (iv) below notwithstanding any such Event of
Default, unless, in the case of clause (iv), such Event of Default
relates to a payment Default under subsection 8(a):
(i) the proceeds of which shall be applied by
Holdings directly to pay out of pocket expenses, for
administrative, legal and accounting services provided by
third parties that are reasonable and customary and incurred
in the ordinary course of business for such professional
services, or to pay franchise fees and similar costs;
provided, however, any such administrative expenses shall not
exceed an aggregate amount of $3,000,000 per fiscal year;
(ii) payments, the proceeds of which will be used to
repurchase the Capital Stock or other securities of Holdings
from outside directors, employees or members of the management
of Holdings, or any Subsidiary of Holdings, at a price not in
excess of fair market value, in an aggregate amount not in
excess of
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$15,000,000, net of the proceeds received by Holdings as a
result of any resales of any such Capital Stock or other
securities;
(iii) payments, the proceeds of which will be used to
pay taxes of Holdings, the Borrower and its Subsidiaries as
part of a consolidated, combined or unitary tax filing group
or of the separate operations of Holdings;
(iv) payments, the proceeds of which will be used to
pay management fees to Hicks Muse & Co. Partners, L.P. in
accordance with the terms of its monitoring and oversight
agreement and the financial advisory agreement contemplated by
subsection 7.10(b)(ii);
(v) if such Restricted Payment is a purchase of
Capital Stock or a distribution to Holdings to permit Holdings
to purchase its Capital Stock, in either case, made in order
to fulfill the obligations of Holdings or any of its
Subsidiaries under an employee stock purchase plan or similar
plan covering employees of Holdings or any Subsidiary of
Holdings as from time to time in effect in an aggregate net
amount not to exceed $15,000,000; and
(vi) at any time after the fifth anniversary of the
Closing Date, the proceeds of which shall be applied by
Holdings to pay cash interest and scheduled principal
(including pursuant to a mandatory redemption) on the Holdings
Discount Indebtedness in accordance with its terms, provided
that such Restricted Payments shall not exceed in any
quarterly period, the amounts due with respect to the Holdings
Accrued Indebtedness for such quarter.
(b) any Subsidiary may make Restricted Payments to the
Borrower or any of its Subsidiaries;
(c) Permitted Issuances may be made; and
(d) Restricted Payments necessary to complete the
Transactions.
7.7 Limitation on Capital Expenditures. (a) Make or commit
to make any Capital Expenditure, except Capital Expenditures of the Borrower
and its Subsidiaries in the ordinary course of business not exceeding for any
fiscal year $30,000,000, provided that 100% of any amount not used in any
fiscal year may be carried forward into the next succeeding fiscal year (it
being understood and agreed that no amount may be carried forward beyond the
year immediately succeeding the fiscal year in which it arose).
(b) In addition to the Capital Expenditures permitted
pursuant to paragraph (a) of this subsection 7.7, to the extent such proceeds
are not otherwise utilized pursuant to subsection 7.8(n) or 7.9(e), the
Borrower and its Subsidiaries may make additional Capital Expenditures (which
shall not be counted in the limitations set forth in paragraph (a) of this
subsection 7.7) consisting of (i) the investment of Net Cash Proceeds not
required to be applied pursuant to subsection 2.9, including with respect to
the investment of the proceeds of the sale of
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assets which are permitted pursuant to subsection 7.5 and (ii) the investment
of Excess Cash Flow generated during prior fiscal years (beginning with Excess
Cash Flow generated in the fiscal year ended in December 1998 but, in each
case, including the retained portion of Excess Cash Flow for only those periods
where the respective Excess Cash Flow payment has theretofore occurred) and not
required to be applied pursuant to subsection 2.9(c).
(c) Notwithstanding the foregoing, in no event shall Capital
Expenditures be made by Holdings.
7.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or make any other
investment in, any Person ("Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) Guarantee Obligations permitted by subsection 7.2(f) and
subsection 7.2(g)(iii);
(d) the Transactions and, subject to the proviso set forth in
the definition of the term "Permitted Acquisition", the WOOD-TV
Acquisition and the acquisition of the WVTM Assets in accordance with
all material applicable Requirements of Law and the terms of the WVTM
Purchase Agreement (without giving effect to any amendments or waivers
that could reasonably be expected to adversely impact the Facilities
and are not reasonably satisfactory to the Administrative Agent);
(e) Investments (other than Permitted Acquisitions) by
Holdings and its Subsidiaries in any of the Loan Parties, including
any new Subsidiary which becomes a Loan Party;
(f) loans and advances by Holdings or its Subsidiaries to
their respective directors, officers and employees in an aggregate
principal amount not exceeding $5,000,000 at any one time outstanding;
(g) loans, advances or Investments in existence on the Closing
Date and listed on Schedule 7.8(g), and extensions, renewals,
modifications or restatements or replacements thereof, provided that
no such extension, renewal, modification or restatement shall (i)
increase the amount of the original loan, advance or Investment or
(ii) adversely affect the interests of the Lenders with respect to
such original loan, advance or Investment or the interests of the
Lenders under this Agreement or any other Loan Document in any
material respect;
(h) Investments permitted by subsections 7.2(b), (f) and (l),
subsections 7.4 and 7.6 and Capital Expenditures permitted by
subsection 7.7;
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(i) promissory notes and other similar non-cash consideration
received by the Subsidiaries of Holdings in connection with the
dispositions permitted by subsection 7.5, including equity interests
received in connection with Asset Swap Transactions permitted by
subsection 7.5(i);
(j) Investments in Interest Rate Protection Agreements in the
ordinary course of the business of the Borrower or any of its
Subsidiaries and not for purposes of speculation;
(k) Investments (including debt obligations and Capital Stock)
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 of business;
(l) in addition to the foregoing but subject to subsection
7.18, Investments by the Borrower and its Subsidiaries in an aggregate
amount not exceeding $30,000,000 (valued at cost, without regard to
any write down or write up thereof) at any one time outstanding;
(m) Investments after the Closing Date by the Borrower and its
Subsidiaries constituting Permitted Acquisitions or Asset Swap
Transactions;
(n) in addition to the foregoing, to the extent such proceeds
are not otherwise utilized pursuant to subsection 7.7(b) or 7.9(e),
the Subsidiaries of Holdings may make additional Investments (which
shall not be counted in the limitations set forth above) as follows:
(i) Investments consisting of the Investment of Net Cash Proceeds not
required to be applied pursuant to subsection 2.9, including (A) with
respect to the Investment of proceeds of the insurance and
condemnation proceeds not required to be applied pursuant to
subsection 2.9 and (B) with respect to the Investment of proceeds of
the sale of assets which are permitted pursuant to subsection 7.5; and
(ii) Investments consisting of the Investment of Excess Cash Flow
generated during prior fiscal years (beginning with Excess Cash Flow
generated in the fiscal year ended in December 1998 but, in each case,
including the retained portion of the respective Excess Cash Flow for
only those periods where the respective Excess Cash Flow payment has
theretofore occurred) and not required to be applied pursuant to
subsection 2.9(c); and
(o) Investments in Holdings that are downstreamed to the Joint
Venture within two Business Days solely for the purpose of curing any
event of default under the Joint Venture Loan.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make any optional payment or prepayment on or redemption
of or any payments in redemption, defeasance or repurchase of (A) any Senior
Subordinated Indebtedness (except pursuant to a permanent refinancing of Senior
Subordinated Indebtedness) or (B) the Holdings Discount Indebtedness (except
pursuant to a permanent refinancing of the Holdings Discount Indebtedness),
except in each case mandatory payments of interest, scheduled principal
(including
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pursuant to a mandatory redemption) after the fifth anniversary of the Closing
Date with respect to interest accruing following the Closing Date, fees and
expenses required by the terms of the agreement governing or instrument
evidencing such Indebtedness but only to the extent permitted under the
subordination provisions, if any, applicable thereto;
(b) amend, supplement, waive or otherwise modify any of the
provisions of any Senior Subordinated Indebtedness, the Senior Subordinated
Note Indenture, the Holdings Discount Indebtedness or the Holdings Discount
Notes Indenture:
(i) in the case of Senior Subordinated Indebtedness and the
Senior Subordinated Note Indenture, which amends or modifies any
subordination provisions contained therein;
(ii) which shortens the fixed maturity, or increases the rate
or shortens the time of payment of interest on, or increases the
amount or shortens the time of payment of any principal or premium
payable whether at maturity, at a date fixed for prepayment or by
acceleration or otherwise of such Indebtedness, or increases the
amount of, or accelerates the time of payment of, any fees payable in
connection therewith;
(iii) which relates to the affirmative or negative covenants,
events of default or remedies under the documents or instruments
evidencing such Indebtedness and the effect of which is to subject
Holdings or any of its Subsidiaries to any more onerous or more
restrictive provisions; or
(iv) which otherwise adversely affects the interests of the
Lenders as senior creditors or the interests of the Lenders under this
Agreement or any other Loan Document in any respect;
(c) make any payment in cash on any equity or debt security
that may be made under the terms thereof by the issuance of any security of the
same nature;
(d) designate any Indebtedness (other than the Loans) as
"Designated Senior Indebtedness" under any Senior Subordinated Indebtedness
(including, without limitation, under the Senior Subordinated Note Indenture);
or
(e) make any optional payment or prepayment on or redemption
of or any payments in redemption, defeasance or repurchase of any Indebtedness
that is subordinated to the Obligations and that is assumed in connection with
a Permitted Acquisition or an Asset Swap Transaction pursuant to subsection
7.2(j)(iii) (except pursuant to a permanent refinancing of such Indebtedness),
except (i) mandatory payments of interest, fees and expenses required by the
terms of the agreement governing or instrument evidencing such Indebtedness but
only to the extent permitted under the subordination provisions, if any,
applicable thereto, and (ii) the Borrower and its Subsidiaries may, to the
extent such proceeds are not otherwise utilized pursuant to subsections 7.7(b)
or 7.8(n), use cash consisting of the retained amount of Excess Cash Flow
generated during prior fiscal years (beginning with Excess Cash Flow generated
in the fiscal year ended December 1998 but, in each case, including the
retained portion of the respective Excess Cash flow for only those periods
where the respective Excess Cash Flow payment has theretofore occurred) to make
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voluntary prepayments on such Indebtedness in an aggregate amount, which, when
added to the aggregate amount of all prior prepayments of such Indebtedness,
shall not exceed $100,000,000.
7.10 Limitation on Transactions with Affiliates. (a) Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property or the rendering of any service, with any Affiliate
unless such transaction is (i) otherwise permitted under this Agreement, (ii)
in the ordinary course of business of Holdings or the relevant Subsidiary of
Holdings, as the case may be, and (iii) upon fair and reasonable terms no less
favorable to Holdings or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate.
(b) In addition, notwithstanding the foregoing, Holdings and
its Subsidiaries shall be entitled to make the following payments and/or to
enter into the following transactions:
(i) the payment of reasonable and customary fees and
reimbursement of expenses payable to directors of Holdings;
(ii) the payment to Hicks Muse & Co. Partners, L.P. of fees
and expenses pursuant to a monitoring and oversight agreement and a
financial advisory agreement approved by the board of directors of
Holdings; and
(iii) the employment arrangements with respect to the
procurement of services of directors, officers and employees in the
ordinary course of business and the payment of reasonable fees in
connection therewith.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal, immovable or movable, property which has been
or is to be sold or transferred by the Borrower or such Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Borrower or such Subsidiary, provided that this subsection 7.11 shall not
prohibit any sale and leaseback resulting from the incurrence of any lease in
respect of any capital asset entered into within 120 days of the acquisition of
such capital asset for the purpose of providing permanent financing of such
capital asset.
7.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of Holdings or the Borrower to end on a day other than December 31,
provided that Holdings and the Borrower may change such fiscal year upon the
approval of the Administrative Agent or change Holdings's or the Borrower's
method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into with
any Person, or suffer to exist, any agreement, other than (a) this Agreement
and the other Loan Documents, (b) the Senior Subordinated Note Indenture and
any other agreement evidencing Senior Subordinated Indebtedness, (c) the
Holdings Discount Notes Indenture and any other agreement evidencing the
Holdings Discount Indebtedness (d) any indenture evidencing Indebtedness
permitted under subsection 7.2(j)(iii) and (e) in the case of clause (i) below
only, any agreements
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governing any purchase money Liens Capital Lease Obligations, Liens permitted
under subsection 7.3(j) or any other similar agreement or transaction otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of Holdings, the Borrower or any of its Subsidiaries to (i) create,
incur, assume or suffer to exist any Lien upon any of its Property or revenues,
whether now owned or hereafter acquired, or (ii) pay dividends or make other
distributions, or pay any Indebtedness owed, to Holdings, the Borrower or any
of its Subsidiaries.
7.14 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those
businesses in which the Borrower and its Subsidiaries are engaged on the date
of this Agreement or which are reasonably related thereto (including, without
limitation, in connection with any Permitted Acquisition, Asset Swap
Transaction or otherwise).
7.15 Limitation on Amendments to Constituent and Transaction
Documents. (a) Amend, supplement or otherwise modify its certificate of
incorporation or by-laws unless such amendment, supplement or other
modification does not adversely affect the interests of any Lender in any
material respect or (b) amend, supplement or otherwise modify (pursuant to a
waiver or otherwise) the Joint Venture Loan Guarantee, the LLC Agreement, the
LP Agreement or the Network Affiliation Agreements or consent to, or permit
Equity Holdings B to consent to, any amendment, supplement or other
modification (pursuant to a waiver or otherwise) to the Joint Venture Loan or
the Replacement Guarantor Pledge Agreement unless such amendment, supplement or
other modification does not adversely affect the interests of any Lender in any
material respect.
7.16 Limitations on Changes in Holding Company Status.
Permit Holdings, Equity Holdings B or Equity Holdings A to engage in any
activities or incur any Indebtedness or Guarantee Obligations other than (a) in
the case of Holdings, (i) owning the stock of the Borrower, (ii) its activities
incident to the performance of the Loan Documents, including its guarantee
thereunder, (iii) transactions pursuant to or expressly contemplated by the
Transaction Documents or this Agreement, (iv) its unsecured subordinated
guarantee of any Senior Subordinated Indebtedness in accordance with the terms
of this Agreement and (v) any Holdings Discount Indebtedness, (b) in the case
of Equity Holdings B, (i) owning the stock of Holdings and (ii) the Joint
Venture Loan Guarantee and (c) in the case of Equity Holdings A, owning the
stock of Holdings.
7.17 Limitation on Changes in Station Affiliation. Permit
any Station (other than a Station that, on the date hereof, is affiliated with
United Paramount Network or Warner Brothers Network) to change its network
affiliation if the percentage represented by such Station of Consolidated
EBITDA for the twelve month period preceding the date of the proposed change
(giving pro forma effect to any acquisitions or dispositions that have occurred
since the beginning of such twelve month period as if such acquisitions or
dispositions had occurred at the beginning of such twelve month period),
together with the percentage represented by each such other Station that
previously changed its network affiliation after the date hereof of the
Consolidated EBITDA for the twelve month period preceding the date of such
previous change (determined on a pro forma basis as aforesaid), would exceed
40%, provided that WAVY-TV Station may become affiliated
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with Fox and such change will not be subject to the foregoing restriction and
will not be taken into account for purposes of this subsection 7.17.
7.18 Limitation on Minority Investments. Permit more than
10% of Consolidated EBITDA for any Test Period to be derived from minority
investments in partnerships and local marketing agreements where the Borrower
or any Wholly Owned Subsidiary is not the operating and control entity of the
local marketing agreement, provided that such percentage shall be increased to
15% following any KXTX Transaction.
7.19 Approval of Joint Venture Actions. Approve any
corporate transaction involving the LLC or the LP that could reasonably be
expected to materially and adversely impact the Lenders without the prior
consent of the Required Lenders.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such
interest or other amount becomes due in accordance with the terms
hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished
by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or
(c) (i) Holdings, the Borrower or any of their Subsidiaries
shall default in the observance or performance of any agreement
contained in subsection 6.4(a)(ii), subsection 6.7(a), subsection
6.10(e) or (f), subsection 6.13 or Section 7 of this Agreement; or
(d) Holdings, the Borrower or any Subsidiary shall default in
the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this subsection), and such default shall
continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent to the Borrower (which notice will be given
at the request of any Lender); or
(e) Holdings, the Borrower or any of its Subsidiaries shall
(i) default in making any payment of any principal of or interest on
any Indebtedness (other than pursuant to the Loan Documents) beyond
the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (ii) default in the
observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any
<PAGE> 105
100
other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its
stated maturity or (in the case of any such Indebtedness constituting
a Guarantee Obligation) to become payable, provided that a default,
event or condition described in clause (i) or (ii) of this paragraph
(e) shall not at any time constitute an Event of Default under this
Agreement unless, at such time, one or more defaults, events or
conditions (without duplication as to the same item of Indebtedness)
of the type described in clauses (i) and (ii) of this paragraph (e)
shall have occurred and be continuing with respect to Indebtedness the
outstanding amount of which exceeds in the aggregate $10,000,000; or
(f) (i) Holdings, the Borrower or any of its Subsidiaries
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its
assets, or Holdings, the Borrower or any of its Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against Holdings, the Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against Holdings, the Borrower or any
of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not
have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof, or (iv) Holdings, the Borrower
or any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings,
the Borrower or any of its Subsidiaries shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its
debts (other than intercompany debt) as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed
(or a trustee shall be appointed) to administer, or to terminate, any
Single
<PAGE> 106
101
Employer Plan, which Reportable Event or commencement of proceedings
or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with
a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$10,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60
days from the entry thereof; or
(i) Any Loan Document shall, at any time, cease to be in full
force and effect (unless released by the Administrative Agent at the
direction of the Required Lenders or all Lenders (to the extent
required by subsection 10.1) or as otherwise permitted under this
Agreement or the other Loan Documents) or shall be declared null and
void (and, if such invalidity is such so as to be amenable to cure
without materially disadvantaging the position of the Administrative
Agent and the Lenders thereunder, the relevant Loan Party shall have
failed to cure such invalidity within 30 days after notice from the
Administrative Agent or such shorter time period as is specified by
the Administrative Agent in such notice and is reasonable in the
circumstances), or the validity or enforceability thereof shall be
contested by any Loan Party, or any of the Liens intended to be
created by any Security Document (including, without limitation, any
Mortgage filed pursuant to subsection 10.17) shall cease to be or
shall not be a valid and perfected Lien having the priority
contemplated thereby (and, if such invalidity is such so as to be
amenable to cure without materially disadvantaging the position of the
Administrative Agent and the Lenders as secured parties thereunder,
the relevant Loan Party shall have failed to cure such invalidity
within 30 days after notice from the Administrative Agent or such
shorter time period as specified by the Administrative Agent in such
notice and is reasonable in the circumstances); or
(j) A Change of Control shall occur or Holdings shall fail to
own directly or indirectly, beneficially and of record, 100% of the
Capital Stock of the Borrower free and clear of all Liens other than
Liens in favor of the Lenders pursuant to the Loan Documents; or
(k) Holdings, the Borrower or any Subsidiary shall incur any
liability (not paid or fully covered by insurance) under any
Environmental Law in an amount which would result in a Material
Adverse Effect; or
(l) The principal broadcasting licenses of any Station, or any
other material authorizations, licenses or permits issued by the FCC,
shall be revoked or canceled or expire by its terms and not be
renewed, or shall be modified in each case in a manner which would
have a Material Adverse Effect; or
<PAGE> 107
102
(m) The Borrower or any of its Subsidiaries shall have
received a notice of termination with respect to any Network
Affiliation Agreements(or any alternative network affiliation
agreement in compliance with this clause (m)) if the percentage
represented by such Network Affiliation Agreement (for the Station in
question) of Consolidated EBITDA for the 12-month period preceding the
date of the termination (giving pro forma effect to any acquisitions
or dispositions that have occurred since the beginning of such
12-month period as if such acquisitions or dispositions had occurred
at the beginning of such 12-month period), would exceed 15%, unless,
within 30 days after receipt of such termination notice, an
alternative network affiliation agreement in form and substance
reasonably satisfactory to the Required Lenders shall have been
executed and delivered and come into effect prior to or concurrently
with the termination date of such Network Affiliation Agreement; or
any such Network Affiliation Agreement shall otherwise for any reason
be terminated or cease to be in full force and effect; or
(n) The Borrower or any of its Subsidiaries shall default in
the payment when due of any Film Obligations in an aggregate amount in
excess of $2,000,000 and such default shall continue unremedied for a
period of 150 or more days, except to the extent the same shall be
contested in good faith and by proper proceedings and against which
adequate reserves are being maintained; or
(o) Any Event of Default shall have occurred and be continuing
with respect to the Joint Venture Loan and the lender thereunder shall
have instituted proceedings against Equity Holdings B with respect to
the Joint Venture Loan Guarantee, the outcome of which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to Holdings or the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or any of the following actions may
be taken: (i) with the consent of the Majority Revolving Credit Facility
Lenders, the Administrative Agent may, or upon the request of the Majority
Revolving Credit Facility Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments shall immediately
terminate; (ii) with the consent of the Majority Tranche A Term Facility
Lenders, the Administrative Agent may, or upon the request of the Majority
Tranche A Term Facility Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Delayed Tranche A Term Loan Commitments to be
terminated forthwith, whereupon the Delayed Tranche A Term Loan Commitments
shall immediately terminate and (iii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without
<PAGE> 108
103
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of
an acceleration pursuant to this paragraph, the Borrower shall at such time
deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by
the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the other Loan Documents shall
have been paid in full, the balance, if any, in such cash collateral account
shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto). Except as otherwise expressly provided above in this
Section 8, the Borrower waives presentment, demand, protest or other notice of
any kind.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each Lender irrevocably authorizes
the Administrative Agent, in such capacity, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto
to the extent permitted by applicable law. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys-in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan
<PAGE> 109
104
Party or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party a
party thereto to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation 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, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower 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 Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders), provided that unless and until the Administrative
Agent shall have received such directions, the Administrative 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.
9.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in- fact or affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereafter taken, including any
review of the affairs of a Loan Party or any affiliate of a Loan Party, shall
be deemed to constitute any
<PAGE> 110
105
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Loan Parties and their affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or
any affiliate of a Loan Party which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their pro rata share of the aggregate Revolving Credit
Exposure, Term Loans outstanding and unused Commitments in effect on the date
on which indemnification is sought under this subsection 9.7 (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such share immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing, provided that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements which are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the Administrative Agent's gross negligence or willful
misconduct. The agreements in this subsection 9.7 shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. The Administrative
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with any Loan Party as though the Administrative
Agent were not an Agent. With respect to its Loans made or renewed by it and
with respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other
<PAGE> 111
106
Loan Documents as any Lender and may exercise the same as though it were not an
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders, which successor agent
shall be approved by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
<PAGE> 112
107
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection 10.1. The Required Lenders and each Loan Party to the relevant Loan
Documents may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party to the relevant Loan Document may,
from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i) forgive
the principal amount or extend the final scheduled date of maturity of any
Loan, extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest, fee or letter of credit
commission payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender's
Revolving Credit Commitment or Delayed Tranche A Term Loan Commitment, in each
case without the consent of each Lender directly affected thereby; (ii) amend,
modify or waive any provision of this subsection 10.1 or reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by Holdings or the Borrower of any of its rights and obligations under
this Agreement and the other Loan Documents, release all or substantially all
of the collateral or release all or substantially all of the Subsidiary
Guarantors or Holdings from their obligations under the Guarantee and
Collateral Agreement other than pursuant to a transaction permitted by this
Agreement, in each case without the written consent of all Lenders; (iii)
amend, modify or waive any condition precedent to any extension of credit under
the Revolving Credit Facility set forth in subsection 5.2 without the written
consent of the Majority Revolving Credit Facility Lenders; (iv) change the
allocation of payments among the Tranche A Term Loan Facilities, the Tranche B
Term Loan Facilities and the Incremental Term Loan Facilities, as applicable,
specified in subsection 2.15(b) or the allocation of payments between the
Facilities pursuant to subsection 2.9(d), in each case without the consent of
the Majority Facility Lenders in respect of each Facility adversely affected
thereby; (v) amend the definition of the term "Majority Facility Lenders",
"Majority Revolving Credit Facility Lenders" or "Majority Tranche A Term
Facility Lenders" or modify in any other manner the number, percentages or
class of Lenders required to make any determinations or waive any rights
hereunder or to modify any provision hereof without the consent of each Lender
directly affected thereby; (vi) amend, modify or waive any provision of Section
9 without the written consent of the Administrative Agent; (vii) amend, modify
or waive any provision of Section 3 without the written consent of the Issuing
Lender or (viii) amend, modify or waive any provision of subsection 2.4(c)
without the written consent of the Swingline Lender. In furtherance of clause
(iii) of this subsection 10.1, no amendment to or waiver of any representation
or warranty or any covenant contained in this Agreement or any other Loan
Document, or of any Default or Event of Default, shall be deemed to be
effective for purposes of determining whether the conditions precedent set
forth in subsection 5.2 to the making of any Revolving Credit Loan have been
satisfied unless the Majority Revolving Credit Facility Lenders shall have
consented to such amendment or waiver. Any waiver and any amendment,
supplement or modification in accordance with this subsection 10.1 shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future
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108
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the other Loan Documents, 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.
10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Borrower, Holdings and
the Administrative Agent, and as set forth on the signature pages hereto or in
any Assignment and Acceptance in the case of the Lenders, or to such other
address as may be hereafter notified by the respective parties hereto:
<TABLE>
<S> <C>
The Borrower: LIN Television Corporation
1 Richmond Square, Suite 230E
Providence, Rhode Island 02906
Attention: Deborah R. Jacobson
Telecopy: 401-454-0089
with copies to: Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Telecopy: 214-740-7313
with a copy to: Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: Glenn D. West, Esq.
Telecopy: 214-746-7777
Holdings: Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Telecopy: 214-740-7313
with a copy to: Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: Glenn D. West, Esq.
Telecopy: 214-746-7777
</TABLE>
<PAGE> 114
109
<TABLE>
<S> <C>
The Administrative
Agent: Chase Agency Services
1 Chase Manhattan Plaza
New York, New York 10017
Attention: Janet Belden
Telecopy: 212-552-5658
with a copy to: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Stephen Mumblow
Telecopy: 212-270-1264
</TABLE>
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and, at any time after and during the continuance of an
Event of Default, of one counsel of all the Lenders, (c) to pay, indemnify, and
hold harmless each Lender and the Administrative Agent from and against any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or
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110
consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify and hold harmless each
Lender and the Administrative Agent and their respective officers, directors,
trustees, professional advisors, employees, affiliates, agents and controlling
persons (each, an "indemnitee") from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower, any of its
Subsidiaries or any of the Properties (all the foregoing in this clause (d),
collectively, the "indemnified liabilities"), provided that the Borrower shall
have no obligation hereunder to any indemnitee with respect to indemnified
liabilities to the extent such indemnified liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such indemnitee or, in the
case of indemnified liabilities arising under this Agreement, any Notes and the
other documents, from material breach by the indemnitee of this Agreement, any
Notes or the other Loan Documents, as the case may be. The agreements in this
subsection 10.5 shall survive repayment of the Loans and all other amounts
payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may in the ordinary course of its business and
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan Documents.
In the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. No
Lender shall permit any Participant to have (and no participant shall have) the
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Loans or any fees payable hereunder, or postpone the date of
the final maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that in
<PAGE> 116
111
purchasing such participating interest, such Participant shall be deemed to
have agreed to share with the Lenders the proceeds thereof as provided in
subsection 10.7(a) as fully as if it were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of
subsections 2.16, 2.17 and 2.18 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it were a Lender,
provided that in the case of subsection 2.17, such Participant shall have
complied with the requirements of said subsection and provided further that no
Participant shall be entitled to receive any greater amount pursuant to any
such subsection than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in the ordinary course of
its business and in accordance with applicable law, at any time and from time
to time assign to any Lender, affiliate or Approved Fund thereof or, with the
consent of the Borrower and the Administrative Agent (which, in each case,
shall not be unreasonably withheld or delayed), to an additional bank,
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit E, executed by such Assignee
and such Assignor (and, in the case of an Assignee that is not then a Lender,
an affiliate thereof or an Approved Fund, by the Borrower and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register, provided, that no such assignment to
an Assignee (other than any Lender or any affiliate thereof or an Approved
Fund) shall be in an aggregate principal amount of less than $5,000,000 (other
than in the case of an assignment of all of a Lender's interests under this
Agreement), unless otherwise agreed by the Borrower and the Administrative
Agent. Any such assignment need not be ratable as among the Facilities. Upon
such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (A) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and/or Loans as set forth therein, and (B) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this subsection 10.6, the
consent of the Borrower shall not be required, and, unless requested by the
Assignee and/or the Assignor, Notes shall not be required to be executed and
delivered by the Borrower, for any assignment which occurs at any time when any
of the events described in Section 8(f) shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address
referred to in subsection 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitments of, and the principal
amount of the Loans owing to, each Lender from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, each other Loan Party, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of the
Loan recorded therein for all purposes of this Agreement. Any assignment of
any Loan or other obligation hereunder (whether or not evidenced by a Note)
shall be effective only upon appropriate entries with respect thereto being
made in the Register. The
<PAGE> 117
112
Register shall be available for inspection by the Borrower of any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in the case of an Assignee that is not
then a Lender, an affiliate thereof or an Approved Fund, by the Borrower and
the Administrative Agent) together with payment to the Administrative Agent of
a registration and processing fee of $3,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto and give notice of such acceptance and recordation to the Borrower.
On or prior to such effective date, upon request the Borrower,
at its own expense, shall execute and deliver to the Administrative Agent (in
exchange for any Revolving Credit Note, Term Note or Swingline Note of the
assigning Lender) a new Revolving Credit Note, Term Note or Swingline Note, as
the case may be, to the order of such Assignee in an amount equal to the
Revolving Credit Commitment, Delayed Tranche A Term Loan Commitment or portion
of the Tranche A Term Loans or Tranche B Term Loans or Incremental Term Loan,
as the case may be, assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Revolving Credit Commitment or
Delayed Tranche A Term Loan Commitment or portion of a Tranche A Term Loan,
Tranche B Term Loan or Incremental Term Loan hereunder, a new Revolving Credit
Note, Tranche A Term Note, Tranche B Term Note or Incremental Term Note, as the
case may be, to the order of the assigning Lender in an amount equal to the
Revolving Credit Commitment or Delayed Tranche A Term Loan Commitment or
Tranche A Term Loan, Tranche B Term Loan or Incremental Term Loan, as the case
may be, retained by it hereunder. Such new Notes shall be in the form of the
Note replaced thereby.
(f) The Borrower agrees that, upon request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender (i) a promissory note of the Borrower evidencing the Revolving
Credit Loans of such Lender, substantially in the form of Exhibit I-1 (each as
amended, supplemented, replaced or otherwise modified from time to time, a
"Revolving Credit Note"), and/or (ii) a promissory note of the Borrower
evidencing the applicable Term Loan of such Lender, substantially in the form
of Exhibit I-2 (each as amended, supplemented, replaced or otherwise modified
from time to time, a "Term Note"), and/or (iii) a promissory note of the
Borrower evidencing the Swingline Loans of the Swingline Lender, substantially
in the form of Exhibit I-3) (as amended, supplemented, replaced or otherwise
modified from time to time, the "Swingline Note").
(g) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information concerning the Loan Parties and their
respective affiliates which has been delivered to such Lender by or on behalf
of any Loan Party pursuant to this Agreement or any other Loan Document or
which has been delivered to such Lender by or on behalf any Loan Party in
connection with such Lender's credit evaluation of the Loan Parties and their
respective affiliates, under the condition that such Transferee or prospective
Transferee shall previously have agreed to be bound by the provisions of
subsection 10.15.
<PAGE> 118
113
(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection 10.6 concerning assignments
of Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law, provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
lender as a party hereunder.
10.7 Adjustments; Set-off. (a) Except to the extent that
this Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 8(f), or otherwise),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans or the
Reimbursement Obligations owing to such other Lender, or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans and/or
of the Reimbursement Obligations owing to each such other Lender, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
<PAGE> 119
114
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan
Documents represent the entire agreement of Holdings, the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Lender relative to subject matter
hereof or thereof not expressly set forth or referred to herein or in the other
Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of Holdings
and the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 10.2
or at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection 10.12 any special,
exemplary, punitive or consequential damages.
<PAGE> 120
115
10.13 Acknowledgments. Each of Holdings and the Borrower
hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and Holdings and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among Holdings and the
Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each Lender agrees to keep
information obtained by it pursuant hereto and the other Loan Documents
identified as confidential in writing at the time of delivery confidential in
accordance with such Lender's customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender's employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or affiliates who are advised of the
confidential nature of such information or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provision of
this Section 10.15), (b) to the extent such information presently is or
hereafter becomes available to such Lender on a non-confidential basis from any
source or such information that is in the public domain at the time of
disclosure, (c) to the extent disclosure is required by law (including
applicable securities laws), regulation, subpoena or judicial order or process
(provided that notice of such requirement or order shall be promptly furnished
to the Borrower unless such notice is legally prohibited) or requested or
required by bank, securities, insurance or investment company regulations or
auditors or any administrative body or commission (including the Securities
Valuation Office of the National Association of Insurance Commissioners) to
whose jurisdiction such Lender may be subject, (d) to any rating agency to the
extent required in connection with any rating to be assigned to such Lender,
(e) to Transferees or prospective Transferees who agree to be bound by the
provisions of this subsection 10.15, (f) to the extent required in connection
with any litigation between any Loan Party and any Lender with respect to the
Loans or this Agreement and the other Loan Documents or (g) with the Borrower's
prior written consent. The agreements in this subsection 10.15 shall survive
repayment of the Loans and all other amounts payable hereunder.
<PAGE> 121
116
10.16 FCC Compliance. Notwithstanding anything to the
contrary contained herein or in any other agreement, instrument or document
executed in connection herewith, no party hereto shall take any actions
hereunder that would constitute or result in a transfer or assignment of any
Station License, permit or authorization or a change of control over such
Station License, permit or authorization requiring the prior approval of the
FCC without first obtaining such prior approval of the FCC.
10.17 Filing of Mortgages. Notwithstanding anything to the
contrary contained in this Agreement, it is understood and agreed that (a) the
Mortgages will not be filed on the Closing Date and (b) at any time after the
Closing Date, at the request of the Administrative Agent or the Required
Lenders, the Mortgages delivered on the Closing Date and each Mortgage
delivered pursuant to subsection 6.10(b) shall be filed, at the Borrower's
expense, in the offices specified in Schedule 4.19(b) and each other
jurisdiction reasonably requested by the Administrative Agent or the Required
Lenders, as applicable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
LIN HOLDINGS CORP.,
By: /s/ Gayle C. Toney
--------------------------------
Name: Gayle C. Toney
Title: Assistant Secretary
LIN ACQUISITION COMPANY,
By: /s/ Gayle C. Toney
--------------------------------
Name: Gayle C. Toney
Title: Assistant Secretary
THE CHASE MANHATTAN BANK, as
Administrative Agent,
By: /s/ Deborah Davey
--------------------------------
Name: Deborah Davey
Title: Vice President
<PAGE> 122
117
NATIONAL WESTMINSTER BANK PLC, as
Documentation Agent,
By: /s/ Andrew S. Weinberg
--------------------------------
Name: Andrew S. Weinberg
Title: Senior Vice President
THE BANK OF NEW YORK, as Syndication
Agent,
By: /s/ Brendan T. Nedzi
--------------------------------
Name: Brendan T. Nedzi
Title: Senior Vice President
DRESDNER BANK AG NEW YORK AND
GRAND CAYMAN BRANCHES,
By: /s/ Brian Haughney
--------------------------------
Name: Brian Haughney
Title: Assistant Treasurer
By: /s/ Robert Grella
--------------------------------
Name: Robert Grella
Title: Vice President
FLEET NATIONAL BANK,
By: /s/ Alexander G. Ivanov
--------------------------------
Name: Alexander G. Ivanov
Title: Vice President
THE FUJI BANK, LIMITED, NEW YORK
BRANCH,
By: /s/ Teiji Teramoto
--------------------------------
Name: Teiji Teramoto
Title: Vice President & Manager
<PAGE> 123
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, NEW YORK BRANCH,
By: /s/ Shuichi Tajima
--------------------------------
Name: Shuichi Tajima
Title: Deputy General Manager
THE MITSUBISHI TRUST AND BANKING
CORPORATION,
By: /s/ Beatrice E. Kossodo
--------------------------------
Name: Beatrice E. Kossodo
Title: Senior Vice President
BANKBOSTON, N.A.,
By: /s/ Daniel Kortick
--------------------------------
Name: Daniel Kortick
Title: Vice President
NATIONSBANK OF TEXAS, NA.,
By: /s/ Trevor F. Carter
--------------------------------
Name: Trevor F. Carter
Title: Senior Vice President
<PAGE> 124
BHF BANK AKTIENGESELLSCHAFT,
GRAND CAYMAN BRANCH,
By: /s/ Thomas P. Scifo
--------------------------------
Name: Thomas P. Scifo
Title: Assistant Vice President
By: /s/ Anthony Heyman
--------------------------------
Name: Anthony Heyman
Title: Assistant Treasurer
NATEXIS BANQUE - BFCE,
By: /s/ Evan S. Kraus
--------------------------------
Name: Evan S. Kraus
Title: Associate
By: /s/ William C. Maier
--------------------------------
Name: William C. Maier
Title: VP-Group Manager
BANK OF HAWAII,
By: /s/ Elizabeth O. Maclean
--------------------------------
Name: Elizabeth O. Maclean
Title: Vice President
THE BANK OF NOVA SCOTIA,
By: /s/ Vincent J. Fitzgerald, Jr.
--------------------------------
Name: Vincent J. Fitzgerald, Jr.
Title: Authorized Signatory
<PAGE> 125
BANK OF TOKYO - MITSUBISHI TRUST
COMPANY,
By: /s/ Glenn B. Eckert
--------------------------------
Name: Glenn B. Eckert
Title: Vice President
BANQUE PARIBAS,
By: /s/ Thomas G. Brandt
--------------------------------
Name: Thomas G. Brandt
Title: Vice President
By: /s/ Darlynn Ernst
--------------------------------
Name: Darlynn Ernst
Title: Associate Vice President
CREDIT LYONNAIS, NEW YORK
BRANCH,
By: /s/ John P. Judge
--------------------------------
Name: John P. Judge
Title: Vice President
DAI-ICHI KANGYO BANK, LIMITED,
By: /s/ Nancy Stengel
--------------------------------
Name: Nancy Stengel
Title: Associate Vice President
FIRST HAWAIIAN BANK,
By: /s/ James C. Polk
--------------------------------
Name: James C. Polk
Title: Assistant Vice President
<PAGE> 126
PNC BANK NATIONAL ASSOCIATION,
By: /s/ Kristen E. Talaber
--------------------------------
Name: Kristen E. Talaber
Title: Assistant Vice President
ROYAL BANK OF CANADA,
By: /s/ Barbara Meyer
--------------------------------
Name: Barbara Meyer
Title: Senior Manager
SOCIETE GENERALE, NEW YORK
BRANCH,
By: /s/ Elaine Khalil
--------------------------------
Name: Elaine Khalil
Title: Vice President
SUMITOMO BANK, LTD.,
By: /s/ John H. Kemper
--------------------------------
Name: John H. Kemper
Title: Senior Vice President
SUMMIT BANK,
By: /s/ Kenneth B. Stoddard
--------------------------------
Name: Kenneth B. Stoddard
Title: Vice President
<PAGE> 127
SUNTRUST BANK, CENTRAL FLORIDA,
N.A.,
By: /s/ Janet P. Sammons
--------------------------------
Name: Janet P. Sammons
Title: Vice President
UNION BANK OF CALIFORNIA,
By: /s/ Christine P. Ball
--------------------------------
Name: Christine P. Ball
Title: Vice President
DEEPROCK & COMPANY,
BY: Eaton Vance Management as Investment
Advisor,
By: /s/ Scott H. Page
--------------------------------
Name: Scott H. Page
Title: Vice President
NORTHERN LIFE INSURANCE COMPANY
BY: ING CAPITAL ADVISORS, INC., AS
INVESTMENT ADVISOR,
By: /s/ Michael D. Hatley
--------------------------------
Name: Michael D. Hatley
Title: Vice President & Portfolio Manager
KZH-ING-2 CORPORATION,
By: /s/ Virginia Conway
--------------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE> 128
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
By: /s/ Jeffrey W. Maillet
--------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President & Director
CYPRESS TREE BOSTON PARTNERS,
By: /s/ Todd Dahlstrom
--------------------------------
Name: Todd Dahlstrom
Title: Partner
KHZ-CRESCENT-2 CORPORATION,
By: /s/ Virginia Conway
--------------------------------
Name: Virginia Conway
Title: Authorized Agent
KHZ-SOLEIL-2 CORPORATION,
By: /s/ Virginia Conway
--------------------------------
Name: Virginia Conway
Title: Authorized Agent
PRIME INCOME TRUST,
By: /s/ Rajesh K. Gupta
--------------------------------
Name: Rajesh K. Gupta
Title: Senior Vice President
<PAGE> 129
METROPOLITAN LIFE INSURANCE COMPANY,
By: /s/ James R. Dingler
--------------------------------
Name: James R. Dingler
Title: Director
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (A UNIT OF THE CHASE
MANHATTAN BANK),
By: /s/ Andrew D. Gordon
--------------------------------
Name: Andrew D. Gordon
Title: Managing Director
CREDIT AGRICOLE INDOSUEZ,
By: /s/ Francoise Berthelot
--------------------------------
Name: Francoise Berthelot
Title: Vice President
By: /s/ Les J. Lieberman
--------------------------------
Name: Les J. Lieberman
Title: Executive Managing Director
PILGRIM AMERICA PRIME RATE TRUST,
By: /s/ Thomas C. Hunt
--------------------------------
Name: Thomas C. Hunt
Title: Assistant Portfolio Manager
KZH HOLDING CORPORATION III,
By: /s/ Virginia Conway
--------------------------------
Name: Virginia Conway
Title: Authorized Agent
<PAGE> 130
BALANCED HIGH YIELD FUND I, LTD.
BHF - BANK AKTIENGESELLSCHAFT
ACTING THROUGH ITS NEW YORK
BRANCH AS ATTORNEY-IN-FACT,
By: /s/ Thomas J. Scifo
--------------------------------
Name: Thomas J. Scifo
Title: Assistant Vice President
By: /s/ Anthony Heyman
--------------------------------
Name: Anthony Heyman
Title: Assistant Treasurer
<PAGE> 131
126
SCHEDULE 1.1A
REVOLVING CREDIT COMMITMENTS
----------------------------
<TABLE>
<CAPTION>
Lender Revolving Credit Commitment
------ ---------------------------
<S> <C>
The Chase Manhattan Bank $
The Bank of New York
National Westminster Bank Plc
</TABLE>
TERM LOAN COMMITMENTS
---------------------
<TABLE>
<CAPTION>
Lender Term Loan Commitment
------ --------------------
<S> <C>
The Chase Manhattan Bank $
The Bank of New York
National Westminster Bank Plc
</TABLE>
<PAGE> 1
Exhibit 10.2
- --------------------------------------------------------------------------------
GUARANTEE AND COLLATERAL AGREEMENT
made by
LIN HOLDINGS CORP.,
LIN ACQUISITION COMPANY,
LIN TELEVISION CORPORATION and
certain of its Subsidiaries,
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of March 3, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
GUARANTEE AND COLLATERAL AGREEMENT, dated as of March 3,1998,
made by each of the signatories hereto listed on Schedule 7 attached hereto
(together with any other entity that may become a party hereto as provided
herein, the "Grantors"), in favor of THE CHASE MANHATTAN BANK, as
Administrative Agent (in such capacity, the "Administrative Agent") for the
banks and other Financial institutions or entities (the "Lenders") from time to
time parties to the Credit Agreement, dated as of March 3, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among LIN HOLDINGS CORP., a Delaware corporation ("Holdings"), LIN TELEVISION
CORPORATION, a Delaware corporation (the "Borrower"), the Lenders, the
Administrative Agent, The Bank of New York, as syndication agent (in such
capacity, the "Syndication Agent"), and National Westminster Bank Plc, as
documentation agent (in such capacity, the "Documentation Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Secured
Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent
for the ratable benefit of the Secured Parties, as follows:
<PAGE> 3
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the following terms which are
defined in the Uniform Commercial Code in effect in the State of New York on
the date hereof are used herein as so defined: Accounts, Chattel Paper,
Documents, Equipment, Farm Products, Instruments and Inventory.
(b) The following terms shall have the following
meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on (including, without limitation, interest accruing
after the maturity of the Loans and Reimbursement Obligations and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans, the Reimbursement Obligations and all other
obligations and liabilities of the Borrower to the Administrative Agent, the
Swingline Lender, the Issuing Lender or to any Lender (or, in the case of
Interest Rate Protection Agreements, any affiliate of any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, any Notes, any other Loan Documents, the Letters of
Credit, any Interest Rate Protection Agreement entered into with any Lender (or
any affiliate of any Lender) or any other document rn~de, delivered or given in
connection therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without limitation,
all fees, charges and disbursements of counsel to the Administrative Agent, to
the Swingline Lender, to the Issuing Lender or to any Lender that are required
to be paid by the Borrower pursuant to the Credit Agreement) or otherwise.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
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<PAGE> 4
"Commodity Account": an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract": a commodity futures contract, an option
on a commodity futures contract, a commodity option or any other contract that,
in each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
"Commodity Customer": a person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary": (a) a person who is registered as a
futures commission merchant under the federal commodities laws or (b) a person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Communications Act": the Communications Act of 1934, as
amended.
"Copyrights": (i) all copyrights, in the United States or any
other country, whether registered or unregistered, or published or unpublished
(including, without limitation, those listed in Schedule 6), all registrations
and recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and applications
in the United States Copyright Office, and (ii) the right to obtain all
renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and sell
materials derived from any Copyright.
"Entitlement Holder": a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-50 1 (b)(2) or (3) of the Uniform Commercial Code, such person is
the Entitlement Holder.
"Financial Asset": (a) a Security, (b) an obligation of a
person or a share, participation or other interest in a person or in property
or an enterprise of a person, which
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<PAGE> 5
is, or is of a type, dealt with in or traded on financial markets, or which is
recognized in any area in which it is issued or dealt in as a medium for
investment or (c) any property that is held by a Securities Intermediary for
another person in a Securities Account if the Securities Intermediary has
expressly agreed with the other person that the property is to be treated as a
Financial Asset under Article 8 of the Uniform Commercial Code. As the context
requires, the term Financial Asset shall mean either the interest itself or the
means by which a person's claim to it is evidenced, including a certificated or
uncertificated Security, a certificate representing a Security or a Security
Entitlement.
"Fixtures": all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements, limited
partnership interests, limited liability company interests, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party
or under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may from time
to time be amended, supplemented or other-wise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of such
Grantor to damages arising thereunder and (iii) all rights of such Grantor to
perform and to exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a security interest pursuant to this Agreement in its
right, title and interest in such contract, agreement, instrument or indenture
is not prohibited by such contract, agreement, instrument or indenture without
the consent of any other party thereto, would not give any other party to such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent if all necessary consents
to such grant of a security interest have been obtained from the other parties
thereto (it being understood that the foregoing shall not be deemed to obligate
such Grantor to obtain such consents), provide that the foregoing limitation
shall not affect, limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any Receivable or any money or
other amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (1) the Borrower Obligations and (ii) all obligations
and liabilities of such Guarantor which may arise under or in connection with
this Agreement, or any other Loan
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<PAGE> 6
Document to which such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Secured Parties
that are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Intellectual Property": the collective reference to the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks and the Trademark Licenses.
"Investment Property": all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of any Grantor, whether now owned or hereafter
acquired by any Grantor.
"Issuers": the collective reference to each issuer of a
Pledged Security.
"License": any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule 6 (other than those license agreements in
existence on the date hereof and listed on Schedule 6 and those license
agreements entered into after the date hereof, which by their terms prohibit
assignment or a grant of a security interest by such Grantor as licensee
thereunder, including as provided by Section 8.17 hereof).
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States or any other country and
all divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule 6, and (iii)
all rights to obtain any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use
or sell any invention covered in
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<PAGE> 7
whole or in part by a Patent, including, without limitation, any of the
foregoing referred to in Schedule 6.
"Pledged Debt Securities": (i) the debt securities listed
opposite the name of the Pledgor on Schedule 2 hereto, (ii) any debt securities
in the future issued to the Pledgor and (iii) the promissory notes and any
other instruments evidencing such debt securities.
"Pledged Securities": the collective reference to the Pledged
Debt Securities and the Pledged Stock.
" Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options or
rights of any nature whatsoever in respect of the Capital Stock of any Person
that may be issued or granted to, or held by, any Grantor while this Agreement
is in effect.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(l) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Secured Parties": (a) the Lenders, (b) the Administrative
Agent, (c) the Syndication Agent, (d) the Documentation Agent, (e) the Issuing
Lender, (f) each counterparty to an Interest Rate Protection Agreement entered
into with the Borrower if such counterparty was a Lender at the time the
Interest Rate Protection Agreement was entered into, (g) the beneficiaries of
each indemnification obligation undertaken by any Grantor under any Loan
Document and (h) the successors and assigns of each of the foregoing.
"Securities": any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of
shares, participations, interests or obligations and (c)(i) are, or are of a
type, dealt with or trade on securities exchanges or securities markets or (ii)
are a medium for investment and by their
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<PAGE> 8
terms expressly provide that they are a security governed by Article 8 of the
Uniform Commercial Code.
"Securities Account": an account to which a Financial Asset is
or may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Securities Act": the Securities Act of 1933, as amended.
"Security Entitlements": the rights and property interests of
an Entitlement Holder with respect to a Financial Asset.
"Security Intermediary": (a) a clearing corporation or (b) a
person, including a bank or broker, that 'in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedule 6.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in Schedule 6 and (ii) the right to obtain all renewals thereof.
"Undelivered Instruments": as defined in Section 4.8.
1.2 Other Definitional Provisions. (a) The words
"hereof," "herein", "hereto" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references are
to this Agreement unless otherwise specified.
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<PAGE> 9
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
(d) For the purposes of this Agreement, each reference to
Collateral or to any relevant type or item of Property constituting Collateral
shall be deemed to exclude any Station License.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby,
jointly and severally, unconditionally irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Secured Parties and their
respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations
may at any time and from time to time exceed the amount of the liability of
such Guarantor hereunder without impairing the guarantee contained in this
Section 2 or affecting the rights and remedies of the Administrative Agent or
any Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall
remain in full force and effect until all the Borrower Obligations and the
obligations of each Guarantor under the guarantee contained in this Section
shall have been satisfied by payment in full, no Letter of Credit shall be
outstanding and the Commitments shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement the Borrower may be free
from any Borrower Obligations.
(e) No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any
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<PAGE> 10
Secured Party from the Borrower, any of the Guarantors, any other guarantor or
any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of
or in payment of the Borrower Obligations shall be deemed to modify, reduce,
release or other-wise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Borrower Obligations or any payment received or
collected from such Guarantor in respect of the Borrower Obligations), remain
liable for the Borrower Obligations up to the maximum liability of such
Guarantor hereunder until, subject to Section 2.6, the Borrower Obligations are
paid in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees
that to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek
and receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 2.3. The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the Secured
Parties, and each Guarantor shall remain liable to the Administrative Agent and
the Secured Parties for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by
any Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Administrative Agent or any Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any Security Party against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Secured Party for the payment of the Borrower Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder until all amounts owing to the Administrative
Agent and the Secured Parties by the Borrower on account of the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of such Guarantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the Administrative Agent in the
exact form received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in accordance with the Credit
Agreement.
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2.4 Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without
notice to or further assent by any Guarantor, any demand for payment of any of
the Borrower Obligations made by the Administrative Agent or any Secured Party
may be rescinded by the Administrative Agent or such Secured Party and any of
the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, 'in whole or in part be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Secured Party, and the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or appropriate Secured Parties,
as the case may be, in accordance with the Credit Agreement) may deem advisable
from time to time, and any collateral security, guarantee or right of offset at
any time held by the Administrative Agent or any Secured Party for the payment
of the Borrower Obligations may be sold, exchanged, waived, surrendered or
released in accordance with the terms of the Credit Agreement. Neither the
Administrative Agent nor any Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Borrower Obligations or for the guarantee contained in this Section 2
or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Secured Party upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Secured Parties, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement, any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Secured Party, (b) any defense, set-off or
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counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Secured Party, other than payment in full of
the Borrower Obligations (except as set forth elsewhere in this Agreement), or
(c) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance (other than a defense of payment or
performance). When making any demand hereunder or otherwise pursuing its rights
and remedies hereunder against any Guarantor, the Administrative Agent or any
Secured Party may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Secured
Party to make any such demand, to pursue such other rights or remedies or to
collect any payments from the Borrower, any other Guarantor or any other Person
or to realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of the Borrower, any other Guarantor or
any other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Secured Party
against any Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
is rescinded or must otherwise be restored or returned by the Administrative
Agent or any Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
2.7 Payments. Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim 'in Dollars at the office of the Administrative Agent located at
270 Park Avenue, New York, New York 10017.
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SECTION 3. GRANT OF SECURITY INTEREST
Subject to Section 8.17 hereof each Grantor hereby assigns and
transfers to the Administrative Agent, and hereby grants to the Administrative
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all cash and cash accounts;
(c) all Chattel Paper;
(d) all Documents;
(e) all Equipment;
(f) all Fixtures
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all Pledged Securities;
(m) all books and records pertaining to the Collateral;
(n) all Undelivered Instruments; and
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(o) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing.
"Collateral" shall not include, with respect to any Grantor,
any General Intangible, Intellectual Property or Investment Property to the
extent the grant by such Grantor of a security interest pursuant to this
Agreement in its rights under such General Intangible, Intellectual Property or
Investment Property, as the case may be, is prohibited or restricted by such
General Intangible, Intellectual Property or Investment Property, as the case
may be, and the consent of applicable Persons has not been obtained, provided
that the foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this Agreement in any
Account or any money or other amounts due or to become due under any such
General Intangible, Intellectual Property or Investment Property, as the case
may be, to the extent provided in Section 9-318 of the Code as in effect on the
date hereof
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Secured Parties to
enter into the Credit Agreement and to induce the Secured Parties to make their
respective extensions of credit to the Borrower thereunder, each Grantor hereby
represents and warrants to the Administrative Agent and each Secured Party
that:
4.1 Representations in Credit Agreement. In the case of
each Guarantor, the representations and warranties set forth in Section 4 of
the Credit Agreement as they relate to such Guarantor or to the Loan Documents
or Transaction Documents to which such Guarantor is a party, each of which is
hereby incorporated herein by reference, are true and correct, and the
Administrative Agent and each Secured Party shall be entitled to rely on each
of them as if they were fully set forth herein, provided that each reference in
each such representation and warranty to the Borrower's knowledge shall, for
the purposes of this Section 4.1, be deemed to be reference to each Guarantor's
knowledge.
4.2 Title, No Other Liens. Except for the security
interest granted to the Administrative Agent for the ratable benefit of the
Secured Parties pursuant to this Agreement and the other Liens expressly
permitted to exist on the Collateral by the Credit Agreement, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others. No financing statement or other public notice with respect to all or
any part of the Collateral is on file or of record in any public office, except
such as have been
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filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are expressly permitted by
the Credit Agreement.
4.3 Perfected First Priority Liens. The security
interests granted pursuant to this Agreement (a) that are capable of perfection
pursuant to the Code upon completion of the filings and other actions specified
on Schedule 3 (which, in the case of all filings and other documents referred
to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for
the ratable benefit of the Secured Parties, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for Liens expressly permitted
by the Credit Agreement.
4.4 Chief Executive Office. On the date hereof, such
Grantor's jurisdiction of organization and the location of such Grantor's chief
executive office is specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
4.6 Farm Products. None of the Collateral constitutes,
or is the Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged Stock
pledged by such Grantor hereunder and delivered to the Administrative Agent on
the Closing Date constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer.
(b) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
(c) The Pledged Debt Securities pledged by such Grantor
hereunder delivered to the Administrative Agent on the Closing Date constitute
all of the Pledged Debt Securities held by such Grantor.
(d) Each of the Pledged Debt Securities in existence on
the date hereof are set forth in Schedule 2 and each of the Pledged Debt
Securities constitutes, to the knowledge of the Grantor that is the payee
thereof, the legal, valid and binding obligation of the obligor
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with respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(e) Such Grantor is the record and beneficial owner of,
and has good and marketable title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
4.8 Receivables. No amount payable to the Grantors under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent (collectively,
"Undelivered Instruments") in excess of $1,000,000.
4.9 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned or licensed by such Grantor in its own name on the
date hereof.
(b) To such Grantor's knowledge, all material
Intellectual Property is on the date hereof valid, subsisting, unexpired,
enforceable and has not been abandoned.
(c) Except as set forth in Schedule 6, none of the
material Intellectual Property is on the date hereof the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor.
(d) No holding, decision or judgment has been rendered by
any Governmental Authority which would limit, cancel or question the validity
of, or such Grantor's rights in, any Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending on the date hereof
seeking to limit, cancel or question the validity, or such Grantor's ownership,
of any Intellectual Property which, if adversely determined, would have a
Material Adverse Effect.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Secured Parties that, from and after the date of this Agreement
until the Obligations shall
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have been paid 'in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take
such action or to refrain from taking such action by such Guarantor or any of
its Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If the
aggregate of all amounts payable to the Grantors pursuant to Undelivered
Instruments shall exceed $5,000,000, such Undelivered Instruments, to the
extent necessary to eliminate such excess, shall be immediately delivered to
the Administrative Agent duly indorsed in a manner satisfactory to the
Administrative Agent to be held as Collateral pursuant to this Agreement.
5.3 Insurance. Each Grantor shall maintain insurance
policies insuring Inventory and Equipment pursuant to and in accordance with
Section 6.5 of the Credit Agreement.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created
by this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Upon reasonable written request of the Administrative
Agent, such Grantor will famish to the Administrative Agent and the Lenders
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Code (or other similar laws) in effect in any jurisdiction
with respect to the security interests created hereby.
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5.5 Changes in Locations, Name, etc. Such Grantor will
not, except upon not less than 15 days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of all additional
executed financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
security 'interests provided for herein:
(a) permit any of the Inventory or Equipment (other than
(1) immaterial Inventory and Equipment and (11) Inventory and Equipment in
transit in the ordinary course of business) to be kept at a location other than
those listed on Schedule 5 -1.
(b) change the location of its chief executive office or
sole place of business from that referred to in Section 4.4; or
(c) change its name, identity or corporate structure to
such an extent that any financing statement filed by the Administrative Agent
in connection with this Agreement would become misleading.
5.6 Pledged Securities. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Secured Parties, hold the
same in trust for the Administrative Agent and the Secured Parties and deliver
the same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative Agent, if required, together
with an undated stock power covering such certificate duly executed in blank by
such Grantor to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Obligations. If an Event of
Default shall have occurred and be continuing, (1) any sums paid upon or in
respect of the Pledged Securities upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations and (ii) in
case any distribution of capital shall be made on or in respect of the Pledged
Securities or any property shall be distributed upon or with respect to the
Pledged Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property
so distributed shall, unless otherwise subject to a perfected security interest
in favor of the Administrative Agent, be delivered to the Administrative Agent
to be held by it hereunder as additional collateral security for the
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Obligations. If any sums of money or property so paid or distributed in
respect of the Pledged Securities shall be received by such Grantor, such
Grantor shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.7(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 63(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.
5.7 Receivables. (a) Other than in the ordinary course
of business or as otherwise permitted by the Loan Documents, such Grantor will
not (i) grant any extension of the time of payment of any Receivable, (11)
compromise or settle any Receivable for less than the full amount thereof,
(iii) release, wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable or
(v) amend, supplement or modify any Receivable in any manner that could
materially and adversely affect the value thereof.
(b) Such Grantor will take all actions necessary to give
notice pursuant to the United States Assignment of Claims Act of 1940, as
amended, or such other analogous law if a material portion of the total amount
of the Receivables is owing from Governmental Authorities.
5.8 Intellectual Property. (a) Such Grantor (either
itself or through licensees) will (1) continue to use each material Trademark
on each and every trademark class of goods applicable to its current 1~ne as
reflected in its then-current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under each material Trademark, (iii) use such Trademark with all
appropriate notices of registration and (iv) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby
any material Trademark may become invalidated or impaired in any way.
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(b) Such Grantor (either itself or through licensees)
will not do any act, or omit to do any act, whereby any material Patent may
become forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees)
will not (and will not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any material portion of the
Copyrights may become invalidated. Such Grantor will not (either itself or
through licensees) do any act whereby any material portion of the Copyrights
may fall into the public domain.
(d) Such Grantor (either itself or through licensees)
will not do any act that knowingly uses a material Intellectual Property to
infringe the Intellectual Property rights of a third party.
(e) Such Grantor will notify the Administrative Agent and
the Secured Parties immediately if it knows, or has reason to know, that any
application or registration relating to any material Patent, Copyright or
Trademark may become abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the U.S. Copyright Office or any court or
tribunal in any country) regarding such Grantor's ownership of, or the validity
of, any material Intellectual Property or such Grantor's right to register the
same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through
any agent employee, licensee or designee, shall file an application for any
Patent or Trademark with the United States Patent and Trademark Office or any
Copyright in the U.S. Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, such Grantor shall report
such filing to the Administrative Agent within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon written
request of the Administrative Agent, such Grantor shall execute and deliver,
and have recorded, any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the
Administrative Agent's security interest in any such Copyright, Patent or
Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the U.S. Copyright Office or any similar
office or agency in any other country or any
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political subdivision thereof, to maintain each registration of the material
Intellectual Property, including, without limitation, filing of applications
for renewal, affidavits of use and affidavits of incontestability.
(h) In the event that any material Intellectual Property
is infringed, misappropriated or diluted by a third party, such Grantor shall
(i) take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent and the Secured Parties after it learns thereof.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Related to Receivables. (a) The
Administrative Agent hereby authorizes each Grantor to collect such Grantor's
Receivables, and the Administrative Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, any payments
of Receivables, when collected by any Grantor, (1) shall be forthwith (and, in
any event, within two Business Days) deposited by such Grantor in the exact
form received, duly indorsed by such Grantor to the Administrative Agent if
required, in a Collateral Account maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Administrative Agent and the Secured Parties, segregated from
other funds of such Grantor. Each such deposit of Proceeds of Receivables shall
be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(b) At the Administrative Agent's request, each Grantor
shall deliver to the Administrative Agent, all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the then existing Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
6.2 Communications with Obligors, Grantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of others may at
any time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's reasonable satisfaction the existence, amount and terms
of any Receivables.
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(b) Upon the request of the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables that the Receivables have
been assigned to the Administrative Agent for the ratable benefit of the
Secured Parties and that payments 'in respect thereof shall be made directly to
the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Secured Party of any payment relating thereto, nor
shall the Administrative Agent or any Secured Party be obligated in any manner
to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it
or as to the sufficiency of any performance by any party thereunder, to present
or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
6.3 Pledged Securities. (a) Unless an Event of Default
shall have occurred and be continuing and the Administrative Agent shall have
given notice to the relevant Grantor of the Administrative Agent's intent to
exercise its corresponding rights pursuant to Section 6.3)(b), each Grantor
shall be permitted to receive all cash dividends paid in respect of the Pledged
Stock and all payments made in respect of the Pledged Debt Securities, 'in each
case paid in the normal course of business of the relevant Issuer, to the
extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities; provided, however,
that no vote shall be cast or corporate right exercised or other action taken
which, in the Administrative Agent's reasonable judgment would impair the
Collateral or which would be inconsistent with or result in any violation of
any provision of the Credit Agreement, this Agreement or any other Loan
Document.
(b) If an Event of Default shall occur and be continuing
and the Administrative Agent shall give written notice of its 'intent to
exercise such rights to the relevant Grantor or Grantors, (i) the
Administrative Agent shall have the night to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Pledged Securities
and make application thereof to the Obligations in such order as the
Administrative Agent may determine, and (ii) any or all of the Pledged
Securities shall be registered in the name of
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the Administrative Agent or Its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof ('including, without limitation, the right to exchange at its
discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor hereunder to (i)
comply with any instruction received by it from the Administrative Agent in
writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without
any other or further instructions from such Grantor, and each Grantor agrees
that each Issuer shall be fully protected in so complying, and (ii) unless
otherwise expressly permitted hereby, pay any dividends or other payments with
respect to the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent.
In addition to the rights of the Administrative Agent and the Secured Parties
specified in Section 6.1 with respect to payments of Receivables, if an Event
of Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Administrative
Agent, if required). All Proceeds received by the Administrative Agent
hereunder shall be held by the Administrative Agent in a Collateral Account
maintained under its sole dominion and control. All Proceeds while held by the
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Administrative Agent and the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.
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6.5 Application of Proceeds. At any time after the
occurrence and during the continuance of an Event of Default, at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations
in such order as the Administrative Agent may elect, and any part of such funds
which the Administrative Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Administrative Agent to the Borrower or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default
shall occur and be continuing, the Administrative Agent, on behalf of the
Secured Parties, may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code or any other applicable law. Without limiting
the generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demand, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Administrative Agent or any Secured Party or elsewhere upon such terms and
conditions as It may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral
or the rights of the Administrative Agent and the Secured Parties
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hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Administrative Agent may elect, and only after such application
and after the payment by the Administrative Agent of any other amount required
by any provision of law, including, without limitation, Section 9-504(l)(c) of
the Code, need the Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claim, damages and demands it may acquire against the Administrative Agent or
any Secured Party arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.
6.7 Registration Rights. (a) If the Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged
Securities pursuant to Section 6.6, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Pledged Securities, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the relevant Grantor will cause the Issuer thereof to (i) execute and
deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Securities, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use its
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Securities, or that portion thereof to be
sold, and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Securities, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such
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circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Securities for the
period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Securities pursuant to this Section
6.7 valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Secured Parties, that the Administrative Agent and
the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
6.7 shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees
not to assert any rights or privileges which it may acquire under Section 9-112
of the Code. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Secured Party to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as
Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action to the
extent permitted by is law and to execute any and all documents and
'instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or asset by such Grantor, to do any or all of
the following:
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(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or with respect to any other
Collateral whenever payable;
(ii) in the case of any Copyright, Patent or Trademark,
execute, deliver and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Secured Parties' security interest in such
Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance called
for by the terms of this Agreement and pay all or any part of the premiums
therefor and the costs thereof,
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative Agent
shall direct; (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral; (3) sign and
indorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (5) defend any suit,
action or proceeding brought against such Grantor with respect to any
Collateral; (6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as
the Administrative Agent may deem appropriate; (7) assign any Copyright, Patent
or Trademark (along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative Agent
shall in its sole discretion determine, and (8) generally, sell, transfer,
pledge and make any
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agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent's option and such
Grantor's expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent's and the Secured Parties' security
interests therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless
an Event of Default shall have occurred and be continuing.
(b) If any Grantor falls to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable under the Credit Agreement on past due Loans
that are or would be ABR Loans (whether or not any ABR Loans are then
outstanding), from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-2207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the Administrative Agent, any Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon an~ of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or
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to take any other action whatsoever with regard to the Collateral or any part
thereof The powers conferred on the Administrative Agent and the Secured
Parties hereunder are solely to protect the Administrative Agent's and the
Secured Parties' interests in the Collateral and shall not impose any duty upon
the Administrative Agent or any Secured Party to exercise any such powers. The
Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to
Section 9-402 of the Code and any other applicable law, each Grantor authorizes
the Administrative Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. Subject to the terms of the
Credit Agreement, the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified by a written instrument executed by
each affected Grantor and the Administrative Agent, provided that, subject to
the terms of the Credit Agreement, any provision of this Agreement imposing
obligations on any Grantor may be waived by the
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Administrative Agent and the Secured Parties in a written instrument executed
by the Administrative Agent.
8.2 Notices. All notices, requests and demands to or
upon the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 10.2 of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any Secured Party shall by any act (except
by a written instrument pursuant to Section 8.1), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent
or any Secured Party of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative Agent
or such Secured Party would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.
8.4 Enforcement Expenses. Indemnification. (a) Each
Guarantor agrees to pay or reimburse each Secured Party and the Administrative
Agent for all its costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise enforcing or
preserving any rights under this Agreement and the other Loan Documents to
which such Guarantor is a party, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
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whatsoever with respect to the execution, delivery, enforcement, performance
and administration of this Agreement to the same extent the Borrower would be
required to do so pursuant to Section 9.7 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Administrative Agent and the Secured Parties and their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent.
8.6 Set-off. In addition to any rights and remedies of
the Administrative Agent and the Secured Parties provided by law, the
Administrative Agent and each Secured Party shall have the right, without prior
notice to any Grantor, any such notice being expressly waived by each Grantor
to the extent permitted by applicable law, upon any amount becoming due and
payable by any Grantor hereunder (whether at the stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Secured Party or any
branch or agency thereof to or for the credit or the account of such Grantor.
The Administrative Agent and each Secured Party agrees promptly to notify the
relevant Grantor and (if applicable) the Administrative Agent after any such
set off and application made by the Administrative Agent or such Secured Party,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
8.7 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
('including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
8.8 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
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any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
8.9 Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Grantors, the Administrative
Agent and the Secured Parties with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
of the Administrative Agent or any Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the
other Loan Documents.
8.10 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.11 Submission To Jurisdiction: Waivers. Each Grantor
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof,
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
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(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover In any legal action or proceeding
referred to in this Section 8.11 any special, exemplary, punitive or
consequential damages.
8.12 Acknowledgments. Each Grantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Secured
Party has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent and Secured Parties, on one hand,
and the Grantors, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured Parties.
8.13 WAIVERS OF JURY TRIAL. EACH GRANTOR, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.14 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
8.15 Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.10
of the Credit Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex I hereto.
8.16 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor
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hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor
following any such termination, the Administrative Agent shall deliver to such
Grantor any Collateral held by the Administrative Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the
Credit Agreement, then the Administrative Agent, at the request and sole
expense of such Grantor, shall execute and deliver to such Grantor all releases
or other documents reasonably necessary or desirable for the release of the
Liens created hereby on such Collateral. At the request and sole expense of
the Borrower, a Guarantor shall be released from its obligations hereunder in
the event that all the Capital Stock of such Guarantor shall be sold,
transferred or otherwise disposed of 'in a transaction permitted by the Credit
Agreement.
8.17 FCC Compliance. (a) Notwithstanding anything to the
contrary contained herein or in any other agreement, instrument, or document
executed in connection herewith, no party hereto shall take any actions
hereunder that would constitute or result in a transfer or assignment of any
Station License, permit or authorization or a change of control over such
Station License, permit or authorization requiring the prior approval of the
FCC without first obtaining such prior approval of the FCC. In addition, the
parties acknowledge that the voting rights of the Pledged Stock shall remain
with the relevant Grantor thereof even upon the occurrence and during the
continuance of an Event of Default until the FCC shall have given its prior
consent to the exercise of stockholder rights by a purchaser at a public or
private sale of such Pledged Stock or the exercise of such rights by the
Administrative Agent or by a receiver, trustee, conservator or other agent duly
appointed pursuant to applicable law.
(b) If an Event of Default shall have occurred, each
Grantor shall take any action which the Administrative Agent may request in the
exercise of its rights and remedies under this Agreement in order to transfer
or assign the Collateral to the Administrative Agent or to such one or more
third parties as the Administrative Agent may designate, or to a combination of
the foregoing. To enforce the provisions of this Section 8.17, the
Administrative Agent is empowered to seek from the FCC and any other
Governmental Authority, to the extent required, consent to or approval of any
involuntary transfer of control of any entity whose Collateral is subject to
this Agreement for the purpose of seeking a bona fide purchaser to whom control
ultimately will be transferred. Each Grantor agrees to cooperate with any such
purchaser and with the Administrative Agent in the preparation,
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execution and filing of any forms and providing any information that may be
necessary or helpful in obtaining the FCC's consent to the assignment to such
purchaser of the Collateral. Each Grantor hereby agrees to consent to any such
voluntary or involuntary transfer after and during the continuation of an Event
of Default and, without limiting any rights of the Administrative Agent under
this Agreement, to authorize the Administrative Agent to nominate a trustee or
receiver to assume control of the Collateral, subject only to required
judicial, FCC or other consents required by Governmental Authorities, in order
to effectuate the transactions contemplated by this Section 8.17. Such trustee
or receiver shall have all the rights and powers as provided to it by law or
court order, or to the Administrative Agent under this Agreement. Each Grantor
shall cooperate fully in obtaining the consent of the FCC and the approval or
consent of each other Governmental Authority required to effectuate the
foregoing.
(c) Without limiting the obligations of any Grantor
hereunder in any respect, each Grantor further agrees that if such Grantor,
upon or after the occurrence of an Event of Default, should fail or refuse for
any reason whatsoever, without limitation, including any refusal to execute any
application necessary or appropriate to obtain any governmental consent
necessary or appropriate for the exercise of any right of the Administrative
Agent hereunder, such Grantor agrees that such application may be executed on
such Grantor's behalf by the clerk of any court of competent jurisdiction
without notice to such Grantor pursuant to court order.
(d) In connection with this Section 8.17, the
Administrative Agent shall be entitled to rely in good faith upon an opinion of
outside FCC counsel of the Administrative Agent's choice with respect to any
such assignment or transfer, whether or not the advice rendered is ultimately
determined to have been accurate.
8.18 Conflicts. In the event of a conflict between the
terms and conditions of this Agreement and the terms and conditions of the
Credit Agreement, the terms and conditions of the Credit Agreement shall
control.
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IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
LIN TELEVISION CORPORATION
---------------------------------------
By:
Title:
LIN HOLDINGS CORP.
---------------------------------------
By:
Title:
LIN ACQUISITION COMPANY
---------------------------------------
By:
Title:
EACH OF THE OTHER SIGNATORIES
LISTED ON SCHEDULE 7 ATTACHED
HERETO
---------------------------------------
By:
Title:
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Schedule I
NOTICE ADDRESS OF EACH GRANTOR
LIN Holdings Corp.
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
LIN Television Corporation
Airwaves, Inc.
Buffalo Broadcasting Co. Inc.
Buffalo Management Enterprises Co. Inc.
Indiana Broadcasting, LLC
KXAN, Inc.
KXTX Holdings, Inc.
Linbenco, Inc.
LIN Sports, Inc.
UN Television of Texas, Inc.
LIN Television of Texas, LP
LWWI Broadcasting Inc.
North Texas Broadcasting Corporation
WAND Television, Inc.
WAVY Broadcasting, LLC
WIVB Broadcasting, LLC
WTNH Broadcasting, Inc.
LIN Television Corporation
Four Richmond Square
Suite 200
Providence, Rhode Island 02906
Schedule I - Guarantee and Col-lateral Agreement
Page 1
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<TABLE>
<S> <C>
SECTION 1. DEFINED TERMS
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2. GUARANTEE
2.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Right of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 No Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Amendments, etc. with respect to the Borrower Obligations . . . . . . . . . . . . . . . . . . . . 7
2.5 Guarantee Absolute and Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.7 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3. GRANT OF SECURITY INTEREST
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Representations in Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Title. No Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Perfected First Priority Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 Chief Executive Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.5 Inventory and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.6 Farm Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.7 Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.8 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5. COVENANTS
5.1 Covenants in Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Delivery of Instruments and Chattel Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Maintenance of Perfected Security Interest, Further Documentation . . . . . . . . . . . . . . . 11
5.5 Changes in Locations, Name, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.6 Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.7 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.8 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
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<TABLE>
<S> <C>
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Related to Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Communications with Obligors, Grantors Remain Liable . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Pledged Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Proceeds to be Turned Over To Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . 15
6.5 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.6 Code and Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.7 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.8 Waiver: Deficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
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<TABLE>
<S> <C>
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact. etc . . . . . . . . . . . . . . . . . . 17
7.2 Duty of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.3 Execution of Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.4 Authority of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.3 No Waiver by Course of Conduct, Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . 20
8.4 Enforcement Expenses, Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.6 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.9 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.11 Submission To Jurisdiction, Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.12 Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.13 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.14 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.15 Additional Grantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.16 Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.17 FCC Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.18 Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
39
<PAGE> 1
EXHIBIT 10.3
MONITORING AND OVERSIGHT AGREEMENT
THIS MONITORING AND OVERSIGHT AGREEMENT (this "Agreement") is made and
entered into effective as of March 3, 1998, among LIN Television Corporation, a
Delaware corporation (together with its successors, the "Company"), LIN
Holdings Corp., a Delaware corporation (together with its successors,
"Holdings"), Ranger Equity Holdings Corporation, a Delaware corporation
(together with its successors, "REH"), Ranger Equity Holdings A Corp., a
Delaware corporation (together with its successors, "REHA"), Ranger Equity
Holdings B Corp., a Delaware corporation (together with its successors, "REHB,"
and together with the Company, Holdings, REH and REHA, the "Clients") and
Hicks, Muse & Co. Partners, L.P., a Texas limited partnership (together with
its successors, "HMCo").
1. Retention. The Clients hereby acknowledge that they have
retained HMCo to, and HMCo acknowledges that, subject to reasonable advance
notice in order to accommodate scheduling, HMCo will, provide financial
oversight and monitoring services to the Clients as requested by the board of
directors of REH during the term of this Agreement.
2. Term. The term of this Agreement shall continue until the
earlier to occur of (i) the tenth anniversary of the date hereof or (ii) the
date on which Hicks, Muse, Tate & Furst Incorporated ("HMTF") or its successors
and their respective affiliates (including, without limitation, any equity fund
sponsored by HMTF or its successors) shall cease to own beneficially, directly
or indirectly, any securities of any of the Clients or their respective
successors.
3. Compensation.
(a) As compensation for HMCo's services to the Clients
under this Agreement, the Clients hereby irrevocably agree, jointly and
severally, to pay to HMCo an annual fee (the "Monitoring Fee") of $1,000,000
(the "Base Fee"), subject to adjustment pursuant to paragraphs (b) and (c)
below and prorated on a daily basis for any partial calendar year during the
term of this Agreement. The Monitoring Fee shall be payable in equal quarterly
installments on each January 1, April 1, July 1 and October 1 during the term
of this Agreement (each a "Payment Date"), beginning with the first Payment
Date following the date hereof. All payments shall be made by wire transfer of
immediately available funds to the account described on Exhibit A hereto (or
such other account as HMCo may hereafter designate in writing).
(b) On January 1 of each calendar year during the term of
this Agreement, the Monitoring Fee shall be adjusted to an amount equal to (i)
the budgeted consolidated annual EBITDA of Holdings and its subsidiaries for
the then current fiscal year, multiplied by (ii) 1.0% (the "Percentage");
provided, however, that in no event shall the annual Monitoring Fee be less
than the Base Fee.
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS
IN PARAGRAPH 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGE OR EXPENSES
THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR
PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY
OTHER INDEMNIFIED PERSON IDENTIFIED THEREIN.
<PAGE> 2
(c) On each occasion that Holdings or any of its
subsidiaries shall acquire another entity or business during the term of this
Agreement, the annual Monitoring Fee for the calendar year in which such
acquisition occurs shall be adjusted prospectively (i.e., for periods
subsequent to such acquisition until the next adjustment pursuant to clause (b)
above), as of the closing of such acquisition, to an annual amount equal to (i)
the pro forma combined budgeted consolidated annual EBITDA of Holdings and its
subsidiaries for the entire then-current fiscal year of Holdings (including the
EBITDA of the acquired entity or business for such entire fiscal year, on a pro
forma basis), multiplied by (ii) the Percentage; provided, however, that in no
event shall the annual Monitoring Fee be less than the Base Fee.
(d) All past due payments in respect of the Monitoring
Fee shall bear interest at the lesser of the highest rate of interest which may
be charged under applicable law or the prime commercial lending rate per annum
of The Chase Manhattan Bank or its successors (which rate is a reference rate
and is not necessarily its lowest or best rate of interest actually charged to
any customer) (the "Prime Rate") as in effect from time to time, plus five
percent (5.0%), from the due date of such payment to and including the date on
which payment is made to HMCo in full, including such interest accrued thereon.
4. Reimbursement of Expenses. In addition to the compensation to
be paid pursuant to Section 3 hereof, the Clients agree, jointly and severally,
to pay or reimburse HMCo for all "Reimbursable Expenses," which shall consist
of (i) all reasonable disbursements and out-of-pocket expenses (including,
without limitation, costs of travel, postage, deliveries, communications, etc.)
incurred by HMCo or its affiliates for the account of any Client or in
connection with the performance by HMCo of the services contemplated by Section
1 hereof and (ii) the Clients' Pro Rata Share of Allocable Expenditures (as
defined in Exhibit B hereto). Promptly (but not more than 10 days) after
request by or notice from HMCo, the applicable Client shall pay HMCo, by wire
transfer of immediately available funds to the account described on Exhibit A
hereto (or such other account as HMCo may hereafter designate in writing), the
Reimbursable Expenses for which HMCo has provided such Client invoices or
reasonably detailed descriptions. All past due payments in respect of the
Reimbursable Expenses shall bear interest at the lesser of the highest rate of
interest which may be charged under applicable law or the Prime Rate plus 5.0%
from the Payment Date to and including the date on which such Reimbursable
Expenses plus accrued interest thereon are fully paid to HMCo.
5. Indemnification. The Clients jointly and severally shall
indemnify and hold harmless each of HMCo, its affiliates, and their respective
directors, officers, controlling persons (within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20(a) of the Securities
Exchange Act of 1934, as amended), if any, agents and employees (HMCo, its
affiliates, and such other specified persons being collectively referred to as
"Indemnified Persons," and individually as an "Indemnified Person") from and
against any and all claims, liabilities, losses, damages and expenses incurred
by any Indemnified Person (including those arising out of an Indemnified
Person's negligence and reasonable fees and disbursements of the respective
Indemnified Person's counsel) which (A) are related to or arise out of (i)
actions taken or omitted to be taken (including, without limitation, any untrue
statements made or any statements omitted to be made) by any of the Clients or
(ii) actions taken or omitted to be taken by an Indemnified Person with any
Client's consent or in
2
<PAGE> 3
conformity with any Client's instructions or any Client's actions or omissions
or (B) are otherwise related to or arise out of HMCo's engagement, and will
reimburse each Indemnified Person for all costs and expenses, including,
without limitation, fees and disbursements of any Indemnified Person's counsel,
as they are incurred, in connection with investigating, preparing for,
defending or appealing any action, formal or informal claim, investigation,
inquiry or other proceeding, whether or not in connection with pending or
threatened litigation, caused by or arising out of or in connection with HMCo's
acting pursuant to HMCo's engagement, whether or not any Indemnified Person is
named as a party thereto and whether or not any liability results therefrom.
None of the Clients will, however, be responsible for any claims, liabilities,
losses, damages or expenses pursuant to clause (B) of the preceding sentence
that have resulted primarily from HMCo's bad faith, gross negligence or willful
misconduct. The Clients also agree that neither HMCo nor any other Indemnified
Person shall have any liability to any Client for or in connection with such
engagement except for any such liability for claims, liabilities, losses,
damages or expenses incurred by any Client that have resulted primarily from
HMCo's bad faith, gross negligence or willful misconduct. The Clients further
agree that neither of them will, without the prior written consent of HMCo,
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any Indemnified Person
is an actual or potential party to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of HMCo and each other Indemnified Person hereunder from all liability arising
out of such claim, action, suit or proceeding. EACH CLIENT HEREBY ACKNOWLEDGES
THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ANY CLAIMS, LIABILITIES,
LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE
RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY
NEGLIGENCE OF HMCO OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Each Client hereby consents to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this Agreement is brought against HMCo or any other Indemnified
Person.
It is understood that, in connection with HMCo engagement, HMCo may
also be engaged to act for a Client or Clients in one or more additional
capacities, and that the terms of this engagement or any such additional
engagement(s) may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or
oral) and any modification of said engagement or such additional engagement(s)
and shall remain in full force and effect following the completion or
termination of said engagement or such additional engagements.
Each of the Clients further understands and agrees that if HMCo is
asked to furnish any Client a financial opinion letter or act for any Client in
any other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually
3
<PAGE> 4
agreed upon.
6. Confidential Information. In connection with the performance
of the services hereunder, HMCo agrees not to divulge any confidential
information, secret processes or trade secrets disclosed by any Client or any
of its subsidiaries to it solely in its capacity as a financial advisor, unless
such Client consents to the divulging thereof or such information, secret
processes or trade secrets are publicly available or otherwise available to
HMCo without restriction or breach of any confidentiality agreement or unless
required by any governmental authority or in response to any valid legal
process.
7. Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Texas, excluding any
choice-of-law provisions thereof.
8. Assignment. This Agreement and all provisions contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; provided, however, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned (other than with respect to the rights and obligations of HMCo,
which may be assigned to any one or more of its principals or affiliates) by
any of the parties without the prior written consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart.
10. Other Understandings. All discussions, understanding and
agreements heretofore made between any of the parties hereto with respect to
the subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto. All calculations of
the Monitoring Fee and Reimbursable Expenses shall be made by HMCo and, in the
absence of mathematical error, shall be final and conclusive.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date and year first above written.
HICKS, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS INC.,
its General Partner
By:
------------------------------
Name:
Title:
LIN TELEVISION CORPORATION
By:
-----------------------------------
Name:
Title:
LIN HOLDINGS CORP.
By:
-----------------------------------
Name:
Title:
S-1
<PAGE> 6
RANGER EQUITY HOLDINGS CORPORATION
By:
--------------------------------
Name:
Title:
RANGER EQUITY HOLDINGS A CORP.
By:
---------------------------------
Name:
Title:
RANGER EQUITY HOLDINGS B CORP.
By:
--------------------------------
Name:
Title:
S-2
<PAGE> 7
EXHIBIT A
Wire Transfer Instructions
Texas Commerce Bank
ABA #: 113000609
Account E: 08805113824
Credit: Hicks, Muse & Co. Partners
Reference: Payment of Monitoring Fees or Expenses by LIN
Television
A-1
<PAGE> 8
EXHIBIT B
PRO RATA SHARE OF ALLOCABLE EXPENDITURES AND RELATED DEFINITIONS
Pro Rata Share of Allocable Expenditures shall equal the product
obtained by multiplying (i) the sum of all Allocable Expenditures that have not
previously been paid or reimbursed to HMCo by the Clients and other
Participating Acquired Companies, by (ii) a fraction, the numerator of which
shall equal the total amount of Invested Capital (as from time to time
outstanding) that any Fund has invested in the Clients' respective securities
or instruments and the denominator of which shall equal the total amount of
Invested Capital (as from time to time outstanding) that any Fund has invested
in the securities or instruments of any and all Participating Acquired
Companies.
The capitalized terms used in the foregoing definitions have the
meanings set forth below:
Allocable Expenditures shall mean all variable, fixed, and other
costs, expenses, expenditures, charges or obligations (including, without
limitation, letters of credit, deposits, etc.) that are related to assets
utilized, services provided, or programs administered by HMCo or its affiliates
in connection with the performance by HMCo of financial oversight and
monitoring services on behalf of the Clients and other Participating Acquired
Companies, including without limitation corporate airplanes, charitable
contributions, retainers for lobbyists and other professionals, and premiums
and finance charges for director and officer insurance maintained for
representatives of HMCo or its affiliates.
Fund shall mean any one or more of the equity funds now or hereafter
sponsored by Hicks, Muse, Tate & Furst Incorporated or its successors,
including any LP Investment Entity (as defined in the limited partnership
agreement for any such equity fund) formed under or with respect to any such
equity fund.
Invested Capital shall mean the total amount of partner capital that a
Fund from time to time invests in the purchase of securities or instruments of
a Participating Acquired Company, less the total cash distributions that
constitute a return of such partner capital with proceeds from the disposition
of all or any part of such securities or instruments. For each period for
which the Pro Rata Share of Allocable Expenditures is being made, the
applicable Invested Capital shall equal the amount outstanding as of the end of
the respective period.
Participating Acquired Company shall mean any partnership, corporation,
trust, limited liability company, or other entity that is, for the period for
which the Pro Rata Share of Allocable Expenditures is being determined, a party
to a monitoring agreement or similar contract with HMCo or its affiliates and
is, as of the end of such period, designated by HMCo to bear a portion of such
allocable expenditures. HMCo may, in its sole and absolute discretion,
determine not to designate an entity as a Participating Acquired Company with
respect to such period. HMCo may make such determination of non-designation
for no reason or for any reason, including without limitation the respective
entity's bankruptcy or other temporary or permanent inability to pay fees or
expenses to HMCo or its affiliates.
B-1
<PAGE> 1
EXHIBIT 10.4
FINANCIAL ADVISORY AGREEMENT
THIS FINANCIAL ADVISORY AGREEMENT (this "Agreement") is made and
entered into effective as of March 3, 1998 among LIN Television Corporation, a
Delaware corporation (together with its successors, the "Company"), LIN
Holdings Corp., a Delaware corporation (together with its successors,
"Holdings"), Ranger Equity Holdings Corporation, a Delaware corporation
(together with its successors, "REH"), Ranger Equity Holdings A Corp., a
Delaware corporation (together with its successors, "REHA"), Ranger Equity
Holdings B Corp., a Delaware corporation (together with its successors, "REHB,"
and together with the Company, Holdings, REH and REHA, the "Clients") and
Hicks, Muse & Co. Partners, L.P., a Texas limited partnership (together with
its successors, "HMCo").
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
October 17, 1996 (as amended, the "Merger Agreement"), among Holdings, the
Company and LIN Acquisition Company, a Delaware corporation ("Merger Sub"),
Merger Sub is being merged (the "Merger") with and into the Company, with the
Company being the surviving corporation and thereby becoming a wholly
owned-subsidiary of Holdings;
WHEREAS, the Clients have requested that HMCo. render, and HMCo. has
rendered, financial advisory services to them in connection with the
negotiation of the Merger and the debt and equity financing transactions and
certain other transactions related thereto (collectively with the Merger, the
"Transaction"); and
WHEREAS, the Clients have requested that HMCo. render financial
advisory, investment banking, and other similar services to them with respect
to future proposals for a tender offer, acquisition, sale, merger, exchange
offer, recapitalization, restructuring, or other similar transaction directly
or indirectly involving any of the Clients or any of their respective
subsidiaries and any other person or entity (collectively, "Subsequent
Transactions");
NOW, THEREFORE, in consideration of the services rendered and to be
rendered by HMCo to the Clients, and to evidence the obligations of the Clients
to HMCo and the mutual covenants herein contained, the Clients hereby jointly
and severally agree with HMCo as follows:
1. Retention.
(a) The Clients hereby acknowledge that they have
retained HMCo, and HMCo acknowledges that it has acted, as financial advisor to
the Clients in connection with the Transaction.
(b) Each of the Clients acknowledges that it has retained
HMCo as its exclusive financial advisor in connection with any Subsequent
Transactions that may be consummated during the term of this Agreement, and
that none of the Clients will retain any other person or entity to provide such
services in connection with any such Subsequent Transaction without the prior
written consent of HMCo. HMCo agrees that it shall provide such financial
advisory, investment banking
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS
IN PARAGRAPH 5 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES
THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR
PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HMCO OR ANY
OTHER INDEMNIFIED PERSON IDENTIFIED THEREIN.
<PAGE> 2
and other similar services in connection with any
such Subsequent Transaction as may be requested from time to time by the board
of directors of the applicable Client.
2. Term. The term of this Agreement shall continue until the
earlier to occur of (i) the tenth anniversary of the date hereof or (ii) the
date on which Hicks, Muse, Tate & Furst Incorporated ("HMTF") or its successors
and their respective affiliates (including, without limitation, any equity fund
sponsored by HMTF or its successors) shall cease to own beneficially, directly
or indirectly, any securities of any of the Clients or their respective
successors.
3. Compensation.
(a) As compensation for HMCo's services as financial
advisor to the Clients in connection with the Transaction, the Clients hereby
irrevocably agree, jointly and severally, to pay to HMCo a cash fee equal to
1.5% of the combined enterprise value (which shall include all equity, assumed
debt, if not otherwise refinanced, and all additional debt incurred or
refinanced in connection with the Transaction) of Holdings to be paid at the
closing of the Merger, which will occur substantially simultaneously with the
execution of this Agreement. The parties hereto agree that the compensation
due pursuant to this Section 3(a) shall be allocated among the segments of the
financing for the Transaction in proportion to the dollar amount of each such
segment.
(b) In connection with any Subsequent Transaction
consummated during the term of this Agreement, the applicable Client shall, and
the other Clients shall cause such Client to, pay to HMCo, at the closing of
any such Subsequent Transaction, a cash fee equal to 1.5% of the Transaction
Value of such Subsequent Transaction. As used herein, the term "Transaction
Value" means the total value of the Subsequent Transaction, including, without
limitation, the aggregate amount of the funds required to complete the
Subsequent Transaction (excluding any fees payable to this Section 3(b)),
including, without limitation, the amount of any indebtedness, preferred stock
or similar items assumed (or remaining outstanding).
4. Reimbursement of Expenses. In addition to the compensation to
be paid pursuant to Section 3 hereof, the Clients agree, jointly and severally,
to reimburse HMCo, promptly following demand therefor, together with invoices
or reasonably detailed descriptions thereof, for all reasonable disbursements
and out-of-pocket expenses (including, without limitation, fees and
disbursements of counsel) incurred by HMCo (i) as financial advisor to the
Clients in connection with the Transaction or (ii) in connection with the
performance by it of the services contemplated by Section 1(b) hereof.
5. Indemnification. The Clients jointly and severally shall
indemnify and hold harmless each of HMCo, its affiliates and their respective
directors, officers, controlling persons (within the meaning of Section 15 of
the Securities Act of 1933, as amended, or Section 20(a) of the Securities
Exchange Act of 1934, as amended), if any, agents and employees (HMCo, its
affiliates and such other specified persons being collectively referred to as
"Indemnified Persons" and individually as an "Indemnified Person") from and
against any and all claims, liabilities, losses, damages and expenses incurred
by an Indemnified Person (including, without limitation, those arising out of
an Indemnified Person's negligence and reasonable fees and disbursements of the
respective Indemnified Person's counsel) which (A) are related to or arise out
of (i) actions taken or omitted to be taken (including, without limitation, any
untrue statements made or any statements
2
<PAGE> 3
omitted to be made) by any of the Clients or (ii) actions taken or omitted to
be taken by an Indemnified Person with any Client's consent or in conformity
with any Client's instructions or any Client's actions or omissions or (B) are
otherwise related to or arise out of HMCo's engagement, and will reimburse each
Indemnified Person for all costs and expenses, including, without limitation,
fees and disbursements of any Indemnified Person's counsel, as they are
incurred, in connection with investigating, preparing for, defending or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or in connection with HMCo's acting pursuant to
HMCo's engagement, whether or not any Indemnified Person is named as a party
thereto and whether or not any liability results therefrom. None of the
Clients will, however, be responsible for any claims, liabilities, losses,
damages or expenses pursuant to clause (B) of the preceding sentence that have
resulted primarily from HMCo's bad faith, gross negligence or willful
misconduct. The Clients also agree that neither HMCo nor any other Indemnified
Person shall have any liability to any Client for or in connection with such
engagement except for any such liability for claims, liabilities, losses,
damages or expenses incurred by any Client that have resulted primarily from
HMCo's bad faith, gross negligence or willful misconduct. The Clients further
agree that none of them will, without the prior written consent of HMCo, settle
or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any Indemnified Person
is an actual or potential party to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of HMCo and each other Indemnified Person hereunder from all liability arising
out of such claim, action, suit or proceeding. EACH CLIENT HEREBY ACKNOWLEDGES
THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL CLAIMS, LIABILITIES,
LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE
RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY
NEGLIGENCE OF HMCO OR ANY OTHER INDEMNIFIED PERSON.
The foregoing right to indemnity shall be in addition to any rights
that HMCo and/or any other Indemnified Person may have at common law or
otherwise and shall remain in full force and effect following the completion or
any termination of the engagement. Each Client hereby consents to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this Agreement is brought against HMCo or any other Indemnified
Person.
It is understood that, in connection with HMCo's engagement, HMCo may
also be engaged to act for a Client or Clients in one or more additional
capacities, and that the terms of this engagement or any such additional
engagements may be embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or
oral) and any modification of said engagement or such additional engagement(s)
and shall remain in full force and effect following the completion or
termination of said engagement or such additional engagements.
Each of the Clients further understands and agrees that if HMCo is
asked to furnish any Client a financial opinion letter or act for any Client in
any other formal capacity, such further action may be subject to a separate
agreement containing provisions and terms to be mutually agreed upon.
3
<PAGE> 4
6. Confidential Information. In connection with the performance
of the services hereunder, HMCo agrees not to divulge any confidential
information, secret processes or trade secrets disclosed by any Client or any
of its subsidiaries to it solely in its capacity as a financial advisor, unless
such Client consents to the divulging thereof or such information, secret
processes or trade secrets are publicly available or otherwise available to
HMCo without restriction or breach of any confidentiality agreement or unless
required by any governmental authority or in response to any valid legal
process.
7. Governing Law. This Agreement shall be construed,
interpreted, and enforced in accordance with the laws of the State of Texas,
excluding any choice-of-law provisions thereof.
8. Assignment. This Agreement and all provisions contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns; provided, however, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned (other than with respect to the rights and obligations of HMCo,
which may be assigned to any one or more of its principals or affiliates) by
any of the parties without the prior written consent of the other parties.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and the signature of any
party to any counterpart shall be deemed a signature to, and may be appended
to, any other counterpart.
10. Other Understandings. All discussions, understandings and
agreements heretofore made between any of the parties hereto with respect to
the subject matter hereof are merged in this Agreement, which alone fully and
completely expresses the Agreement of the parties hereto.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
HICKS, MUSE & CO. PARTNERS, L.P.
By: HM PARTNERS INC.,
its General Partner
By:
----------------------------
Name:
Title:
LIN TELEVISION CORPORATION
By:
---------------------------------
Name:
Title:
LIN HOLDINGS CORP.
By:
---------------------------------
Name:
Title:
S-1
<PAGE> 6
RANGER EQUITY HOLDINGS CORPORATION
By:
---------------------------------
Name:
Title:
RANGER EQUITY HOLDINGS A CORP.
By:
---------------------------------
Name:
Title:
RANGER EQUITY HOLDINGS B CORP.
By:
---------------------------------
Name:
Title:
S-2
<PAGE> 1
EXHIBIT 10.5
AMENDED AND RESTATED
TRANSACTION AGREEMENT
dated as of
JANUARY 22, 1998
between
NATIONAL BROADCASTING COMPANY, INC.,
OUTLET BROADCASTING, INC.,
LIN TELEVISION OF TEXAS, L.P.,
LIN TELEVISION CORPORATION,
STATION VENTURE HOLDINGS, LLC,
STATION VENTURE OPERATIONS, LP
and
RANGER HOLDINGS CORP.
<PAGE> 2
TABLE OF CONTENTS
----------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions......................................................................1
ARTICLE 2
CONTEMPLATED TRANSACTIONS
SECTION 2.01. Contemplated Transactions.......................................................12
ARTICLE 3
TRANSFERS OF ASSETS AND LIABILITIES
SECTION 3.01. Asset Contribution..............................................................14
SECTION 3.02. Excluded Assets.................................................................16
SECTION 3.03. Assumed Liabilities.............................................................16
SECTION 3.04. Excluded Liabilities............................................................18
SECTION 3.05. Assignment of Contracts and Rights..............................................19
SECTION 3.06. Closing.........................................................................20
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF RANGER
SECTION 4.01. Corporate Existence and Power...................................................21
SECTION 4.02. Corporate Authorization.........................................................21
SECTION 4.03. Governmental Authorization......................................................21
SECTION 4.04. Noncontravention................................................................21
SECTION 4.05. Litigation......................................................................22
SECTION 4.06. Sufficiency of and Title to the KXAS Assets.....................................22
SECTION 4.07. Finders' Fees...................................................................22
SECTION 4.08. Amendments to, and Notices under, the Merger
Agreements.................................................................22
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NBC
SECTION 5.01. Corporate Existence and Power...................................................23
SECTION 5.02. Corporate Authorization.........................................................23
SECTION 5.03. Governmental Authorization......................................................24
SECTION 5.04. Noncontravention................................................................24
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 5.05. Litigation......................................................................24
SECTION 5.06. Sufficiency of and Title to the KNSD Assets.....................................24
SECTION 5.07. Finders' Fees...................................................................25
SECTION 5.08. Required and Other Consents.....................................................25
SECTION 5.09. Absence of Certain Changes......................................................25
SECTION 5.10. No Undisclosed Material Liabilities.............................................26
SECTION 5.11. Material Contracts..............................................................26
SECTION 5.12. Compliance with Laws and Court Orders...........................................27
SECTION 5.13. Tangible Property...............................................................28
SECTION 5.14. Intellectual Property...........................................................28
SECTION 5.15. Licenses and Permits............................................................28
SECTION 5.16. Environmental Matters...........................................................29
SECTION 5.17. KNSD Financial Statements.......................................................31
SECTION 5.18. Employee Arrangements and Benefit Plans.........................................31
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF LIN-TEXAS
SECTION 6.01. Partnership Existence and Power.................................................31
SECTION 6.02. Partnership Authorization.......................................................32
SECTION 6.03. Governmental Authorization......................................................32
SECTION 6.04. Noncontravention................................................................32
SECTION 6.05. Litigation......................................................................32
SECTION 6.06. Finders' Fees...................................................................32
ARTICLE 7
COVENANT OF RANGER
SECTION 7.01. Merger Agreement Amendments and Waivers.........................................33
ARTICLE 8
COVENANT OF NBC
SECTION 8.01. Conduct of the KNSD Business....................................................33
ARTICLE 9
OTHER COVENANTS
SECTION 9.01. Access to Information...........................................................34
SECTION 9.02. Notices of Certain Events.......................................................35
SECTION 9.03. Reasonable Best Efforts; Further Assurances.....................................36
SECTION 9.04. Certain Filings.................................................................36
SECTION 9.05. Public Announcements............................................................37
SECTION 9.06. WARN Act........................................................................37
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 9.07. Certain Capital Expenditures in Respect of the KXAS
Business...................................................................37
ARTICLE 10
TAX MATTERS
SECTION 10.01. Tax Representations............................................................37
SECTION 10.02. Excluded or Assumed Liabilities................................................38
SECTION 10.03. Tax Allocations................................................................38
SECTION 10.04. Tax Cooperation and Consistent Reporting.......................................38
SECTION 10.05. Preparation of Tax Returns.....................................................39
ARTICLE 11
EMPLOYEE BENEFITS
SECTION 11.01. Employees......................................................................39
SECTION 11.02. Continuation of Benefits.......................................................40
SECTION 11.03. Severance Arrangements and Employment Agreements...............................40
SECTION 11.04. Bonus Arrangements.............................................................40
SECTION 11.05. Welfare Plans..................................................................40
SECTION 11.06. Employee Liabilities...........................................................41
SECTION 11.07. Defined Contribution Plan......................................................43
SECTION 11.08. Defined Benefit Plans..........................................................43
SECTION 11.09. Multiemployer Pension Plans....................................................44
SECTION 11.10. Past Service Credit. .........................................................45
ARTICLE 12
CONDITIONS TO CLOSINGS
SECTION 12.01. Conditions to Closing the Funding Date Transactions............................45
SECTION 12.02. Conditions to Closing the Closing Date Transactions............................50
ARTICLE 13
SURVIVAL; INDEMNIFICATION
SECTION 13.01. Survival.......................................................................50
SECTION 13.02. Indemnification................................................................50
SECTION 13.03. Procedures.....................................................................51
ARTICLE 14
TERMINATION AND RESCISSION
SECTION 14.01. Grounds for Termination........................................................51
SECTION 14.02. Effect of Termination..........................................................52
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 14.03. Rescission Rights..............................................................52
ARTICLE 15
MISCELLANEOUS
SECTION 15.01. Notices........................................................................55
SECTION 15.02. Amendments and Waivers.........................................................57
SECTION 15.03. Fees and Expenses..............................................................57
SECTION 15.04. Successors and Assigns.........................................................57
SECTION 15.05. Governing Law..................................................................58
SECTION 15.06. Jurisdiction...................................................................58
SECTION 15.07. WAIVER OF JURY TRIAL...........................................................58
SECTION 15.08. Specific Performance...........................................................58
SECTION 15.09. Counterparts; Third Party Beneficiaries........................................58
SECTION 15.10. Entire Agreement...............................................................59
SECTION 15.11. Bulk Sales Laws................................................................59
SECTION 15.12. Captions.......................................................................59
SECTION 15.13. Covenant of LIN-TV as to Its Subsidiaries......................................59
SECTION 15.14. Covenant of NBC as to Its Subsidiaries.........................................59
SECTION 15.15. Additional Interim Operating Restriction.......................................59
</TABLE>
<PAGE> 6
EXHIBITS
Exhibit A -- Assignment and Assumption Agreement
Exhibit B -- HM Affiliation Agreement Amendments
Exhibit C -- LLC Agreement
Exhibit D -- LP Agreement
Exhibit E -- Management Services Agreement
Exhibit F -- Tower Agreements
Exhibit G -- Transition Services Agreement
Exhibit H -- KXAS-TV Affiliation Agreement and Related Side Letter
Exhibit I -- KNSD(TV) Affiliation Agreement and Related Side Letter
Exhibit J -- WVTM TV Affiliation Agreement and Related Side Letter
Exhibit K -- Venture Credit Agreement
Exhibit L -- Venture Letter Agreement
Exhibit M -- WVTM Option Agreement
SCHEDULES
Schedule 3.01 -- Certain KXAS Assets
Schedule 3.02 -- Certain Excluded Assets in respect of the KXAS Business
Schedule 4.05 -- Ranger Litigation
Schedule 5.08 -- KNSD Required Consents
Schedule 5.15(b) -- KNSD FCC Authorizations
Schedule 5.16 -- KNSD Environmental Matters
Schedule 5.17 -- KNSD Financial Statements
Schedule 5.18 -- KNSD Employment Arrangements and Plans
Schedule 6.05 -- LIN Litigation
<PAGE> 7
AMENDED AND RESTATED
TRANSACTION AGREEMENT
AMENDED AND RESTATED TRANSACTION AGREEMENT dated as of January 22, 1998
between NATIONAL BROADCASTING COMPANY, INC., a Delaware corporation (with its
successors, "NBC"), OUTLET BROADCASTING, INC., a Rhode Island corporation (with
its successors, "OUTLET"), RANGER HOLDINGS CORP., a Delaware corporation (with
its successors, "RANGER"), LIN TELEVISION OF TEXAS, L.P., a Delaware limited
partnership (with its successors, "LIN-TEXAS"), LIN TELEVISION CORPORATION, a
Delaware corporation (with its successors, "LIN-TV"), STATION VENTURE HOLDINGS,
LLC, a Delaware limited liability company (with its successors, the "LLC") and
STATION VENTURE OPERATIONS, LP, a Delaware limited partnership (with its
successors, the "LP").
W I T N E S S E T H :
WHEREAS, the parties hereto have entered into a Transaction Agreement
(the "ORIGINAL AGREEMENT") dated as of January 15, 1998; and
WHEREAS, the parties hereto have agreed to amend and restate the
Original Agreement on and as of the date hereof to provide that the Business
Transfers relating to the KNSD Business shall all take place on the Funding
Date, as set forth more fully below;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person; provided that, for purposes of the definition of Affiliate as
used in this
<PAGE> 8
Agreement, the LP, the LLC and the Lender shall not be treated as an Affiliate
of any party hereto.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means any Assignment and
Assumption Agreement entered into in respect of either any Business Transfer or
the transfer of assets contemplated under Section 2.01(a)(i), substantially in
the form of Exhibit A hereto.
"BUSINESS" means the KXAS Business and/or the KNSD Business, as the
context may require.
"BUSINESS TRANSFER" means (i) the transfer of the KXAS Business by
LIN-Texas to the LLC on the Funding Date pursuant to Section 2.01(a)(v) and
Article 3 hereof, (ii) the transfer of an undivided 99% interest in the KNSD
Business by Outlet to the LLC on the Funding Date pursuant to Section
2.01(a)(iv) and Article 3 hereof, (iii) the transfer of (A) an undivided 1%
interest in the KNSD Business by Outlet to the LP and (B) an undivided 99%
interest in the KNSD Business by the LLC to the LP, in each case on the Funding
Date pursuant to Section 2.01(a)(vii) and Article 3 hereof and (iv) the transfer
of the KXAS Business by the LLC to the LP on the Closing Date pursuant to
Section 2.01(b)(i) and Article 3 hereof.
"BUSINESS TRANSFEREE" means (i) the LLC in respect of the transfer to
it of the KXAS Business by LIN-Texas on the Funding Date pursuant to Section
2.01(a)(v) and Article 3 hereof, (ii) the LLC in respect of the transfer to it
of an undivided 99% interest in the KNSD Business by Outlet on the Funding Date
pursuant to Section 2.01(a)(iv) and Article 3 hereof, (iii) the LP in respect of
the transfer to it of (A) an undivided 1% interest in the KNSD Business by
Outlet on the Funding Date and (B) undivided 99% interest in the KNSD Business
by the LLC on the Funding Date, in each case pursuant to Section 2.01(a)(vii)
and Article 3 hereof and (iv) the LP in respect of the transfer to it of the
KXAS Business on the Closing Date pursuant to Section 2.01(b)(i) and Article 3
hereof.
"BUSINESS TRANSFEROR" means (i) LIN-Texas in respect of the transfer by
it of the KXAS Business to the LLC on the Funding Date pursuant to Section
2.01(a)(v) and Article 3 hereof, (ii) Outlet in respect of the transfer by it of
(A) an undivided 99% interest in the KNSD Business to the LLC on the Funding
Date pursuant to Section 2.01(a)(iv) and Article 3 hereof and (B) an undivided
1% interest in the KNSD Business to the LP on the Funding Date, in each case
pursuant to Section 2.01(a)(vii) and Article 3 hereof and (iii) the LLC in
respect of the transfer by it of (A) the undivided 99% interest in the KNSD
Business to the LP on the Funding Date pursuant to Section 2.01(a)(vii) and
Article 3 hereof and
2
<PAGE> 9
(B) the KXAS Business to the LP on the Closing Date pursuant to Section
2.01(b)(i) and Article 3 hereof.
"CLOSING DATE" means the date of the Effective Time.
"CLOSING DATE TRANSACTIONS" means those Contemplated Transactions that
are to close on the Closing Date.
"CLOSING DATE TRANSACTION DOCUMENTS" means this Agreement and those
Transaction Documents that are to be dated as of the Closing Date.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"CONFIDENTIALITY AGREEMENTS" means (i) the Confidentiality Agreement
dated as of June 13, 1997 between LIN-TV and Hicks, Muse, Tate & Furst
Incorporated, (ii) the Confidentiality Agreement dated as of October 21, 1997
between NBC and LIN-TV, and (iii) the Confidentiality Agreement dated as of
October 24, 1997 between NBC and Ranger, in each case as the same may be amended
from time to time.
"CONTEMPLATED TRANSACTIONS" means the transactions contemplated by
the Transaction Documents.
"EFFECTIVE TIME" shall have the meaning set forth in the Merger
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"EXCLUDED NAME" means (i) in respect of the KXAS Business, any name or
logo that includes "LIN Television Corporation" or any derivatives thereof or
(ii) in respect of the KNSD Business, any name or logo that includes "National
Broadcasting Company, Inc." or "NBC" or any derivatives thereof.
"FCC" means the Federal Communications Commission.
"FCC APPLICATIONS" means each of (i) the FCC Form 315 that is on file
with respect to the Merger and the resulting transfer of control of LIN-TV to
Ranger, (ii) the FCC Form 316 that is on file with respect to the assignment of
the KXAS-TV license from North Texas Broadcasting Corp. to the LLC in which
3
<PAGE> 10
North Texas Broadcasting Corp. would have a controlling interest, (iii) the FCC
Form 314 that is on file with respect to the assignment of the KXAS-TV license
from the LLC to the LP and (iv) the FCC Form 316 that is on file with respect to
the assignment of the KNSD(TV) license from Outlet to the LP.
"FCC AUTHORIZATIONS" means any licenses, permits and other
authorizations issued by the FCC with respect to the KXAS Business or the KNSD
Business, as the case may be.
"FUNDING DATE" means, if Ranger has delivered the Venture Notice (as
defined in the Merger Agreement), the Business Day immediately preceding the
Closing Date.
"FUNDING DATE TRANSACTIONS" means those Contemplated Transactions that
are to close on the Funding Date.
"FUNDING DATE TRANSACTION DOCUMENTS" means this Agreement and those
Transaction Documents that are to be dated as of the Funding Date.
"GOVERNMENTAL ENTITY" means any government or any state, department or
other political subdivision thereof, or any governmental body, agency, authority
(including, without limitation, any central bank or taxing authority) or
instrumentality (including, without limitation, any court or tribunal)
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTOR" means Ranger Equity Holdings B Corp., a Delaware
corporation, with its successors.
"GUARANTOR PLEDGE AGREEMENT" means the Guarantor Pledge Agreement dated
as of the Closing Date, substantially in the form of that set forth in the
exhibits to the Venture Credit Agreement.
"GUARANTY" means the Replacement Guaranty dated as of the Closing Date
by and between the Guarantor and the Lender, substantially in the form of that
set forth in the exhibits to the Venture Credit Agreement.
"HM AFFILIATION AGREEMENT AMENDMENTS" means the amendments dated as of
the Closing Date to the network affiliation agreements by and between NBC and
either LIN-TV or Sunrise Television Corp., as the case may be, in respect of
each HM NBC-Affiliated Station, substantially in the form of Exhibit B hereto.
4
<PAGE> 11
"HM NBC-AFFILIATED STATIONS" means (i) KSBW(TV), serving Salinas, CA,
WEYI-TV, serving Saginaw, Michigan, WJAC-TV, serving Johnstown, Pennsylvania,
KACB-TV, serving San Angelo, Texas, KRCB-TV, serving Abilene, Texas, KXAN-TV,
serving Austin, Texas, WAVY-TV, serving Norfolk, Virginia and WOOD-TV, serving
Grand Rapids, Michigan, in each case if such television station is owned by
Ranger or any of its Affiliates as of the Effective Time, and (ii) any other
NBC-affiliated television station owned by Ranger or any of its Affiliates as of
the Effective Time.
"INTELLECTUAL PROPERTY RIGHT" means any trademark, service mark, trade
name, mask work, invention, patent, trade secret, copyright, know-how (including
any registrations or applications for registration of any of the foregoing) or
any other similar type of proprietary intellectual property right.
"KNSD ASSETS" means the Contributed Assets in respect of the KNSD
Business.
"KNSD BUSINESS" means all of the business and operations currently and
hereafter conducted by the television station KNSD(TV), serving San Diego,
California, including the assets and operations thereof and certain liabilities
thereof, to be contributed or assumed pursuant to this Agreement.
"KNSD LIEN" means the first priority security interest to be granted to
the Lender on the Funding Date, pursuant to the Venture Security Agreement, in
the LLC's undivided 99% interest in the KNSD Assets to be contributed to the LLC
by Outlet on the Funding Date and thereafter by the LLC to the LP on the Funding
Date.
"KXAS ASSETS" means the Contributed Assets in respect of the KXAS
Business.
"KXAS BUSINESS" means all of the business and operations currently and
hereafter conducted by the television station KXAS-TV, serving Dallas, Texas,
including the assets and operations thereof and certain liabilities thereof, to
be contributed or assumed pursuant to this Agreement.
"KXAS LIEN" means the first priority security interest to be granted to
the Lender on the Funding Date, pursuant to the Venture Security Agreement, in
the KXAS Assets to be contributed to the LLC by LIN-Texas on the Funding Date
and thereafter by the LLC to the LP on the Closing Date.
"KXAS TOWER" means the real, personal and mixed property set forth in
Exhibits A-1, A-2 and A-3 to the Tower Agreement pursuant to which the LP is
5
<PAGE> 12
the Grantor and LIN-Texas is the Grantee thereunder, together with all fixtures
and improvements thereon, but excluding the Grantee's easement and any equipment
or other property located on such tower and such real property by virtue of such
easement.
"KXTX TOWER" means the real, personal and mixed property set forth in
Exhibits A-1, A-2 and A-3 to the Tower Agreement pursuant to which LIN-Texas is
the Grantor and the LP is the Grantee thereunder, together with all fixtures and
improvements thereon, but excluding the Grantee's easement and any equipment or
other property located on such tower and such real property by virtue of such
easement.
"LENDER" means General Electric Capital Corporation or any of its
Affiliates.
"LETTER AGREEMENT" means the Letter Agreement Regarding Proposed
Television Station Joint Venture and Asset Sale from NBC to Ranger dated as of
October 21, 1997.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any property or
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.
"LLC AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement dated as of the Funding Date by and between LIN-Texas and
Outlet, substantially in the form of Exhibit C hereto.
"LMA STATION" means any broadcast television station, other than
KXTX-TV, for which the KXAS Business or the KNSD Business provides programming
and advertising services pursuant to an LMA Agreement.
"LP AGREEMENT" means the Amended and Restated Limited Partnership
Agreement dated as of the Funding Date by and between the LLC, as limited
partner, Outlet, as general partner, Ranger and NBC, substantially in the form
of Exhibit D hereto.
"LP SECURITY AGREEMENT" means the LP Security Agreement dated as of the
Funding Date, substantially in the form of that set forth in the exhibits to the
Venture Credit Agreement.
6
<PAGE> 13
"MANAGEMENT SERVICES AGREEMENT" means the TV Master Services Agreement
dated as of the Closing Date by and between NBC, the LLC and the LP,
substantially in the form of Exhibit E hereto.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
condition (financial or otherwise), business, assets or results of operations of
the KNSD Business or the KXAS Business (in each case, other than the Excluded
Assets).
"MERGER" shall have the meaning ascribed to it in the Merger Agreement.
"MERGER AGREEMENT" means the Agreement and Plan of Merger among Ranger,
Ranger Acquisition Company and LIN-TV dated as of August 12, 1997 and amended as
of October 21, 1997, as the same may be further amended from time to time.
"1934 ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"NOVATION AGREEMENT" means the Novation Agreement dated as of the
Funding Date by and between the Lender, LIN-Texas and the LLC, substantially in
the form of that set forth in the exhibits to the Venture Credit Agreement.
"ORIGINAL GUARANTY" means the Original Guaranty dated as of the Funding
Date by and between the Lender and LIN-TV substantially in the form of that set
forth in the exhibits to the Venture Credit Agreement.
"PERMITTED LIENS" means (i) any Liens for Taxes, assessments and
similar charges that are not yet due or are being contested in good faith, (ii)
any mechanic's, materialman's, carrier's, repairer's and other similar Liens
arising or incurred in the ordinary course of business or that are not yet due
and payable or are being contested in good faith, (iii) any other Liens which
would not, individually or in the aggregate, materially affect the applicable
Business and (iv) any Liens granted pursuant to the Venture Security Agreement
(including, without limitation, the KXAS Lien and the KNSD Lien), the Venture
Pledge Agreement, the Guarantor Pledge Agreement and the LP Security Agreement.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"POST-CLOSING TAX PERIOD" means any Tax period (or portion thereof)
ending after the Funding Date or the Closing Date, as the case may be.
7
<PAGE> 14
"PRE-CLOSING TAX PERIOD" means any Tax period (or portion thereof)
ending on or before the Funding Date or the Closing Date, as the case may be.
"REQUIRED CONSENT" means each consent or action required as a result of
the execution, delivery and performance of the Transaction Documents under any
agreement, contract, license, permit or other instrument binding upon any
Business Transferor or any of their Affiliates, except such consents or actions
as would not, individually or in the aggregate, have a Material Adverse Effect
if not received or taken by the Funding Date.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
are at the time owned by such Person.
"TAX" means taxes of any kind including but not limited to federal,
state, local or foreign net income tax, alternative or add-on minimum tax,
profits or excess profits tax, franchise tax, gross income, adjusted gross
income or gross receipts tax, employment related tax (including employee
withholding or employer payroll tax, FICA or FUTA), real or personal property
tax or ad valorem tax, sales or use tax, excise tax, license tax, stamp tax or
duty, any withholding or backup withholding tax, value added tax, severance tax,
prohibited transaction tax, premiums tax, occupation tax, or any similar fee,
assessment or charge, together with any interest or any penalty, addition to tax
or additional amount imposed by any governmental authority (domestic or foreign)
responsible for the imposition of any such tax.
"TAX RETURN" means any return, report or statement required to be filed
with any governmental authority with respect to Taxes.
"TOWER AGREEMENTS" means (i) the Tower Facility Easement Agreement in
respect of the KXAS Tower and (ii) the Tower Facility Easement Agreement in
respect of the KXTX Tower, in each case dated as of the Closing Date by and
between the LP and LIN-Texas substantially in the form of Exhibit F hereto.
"TRANSACTION DOCUMENTS" means this Agreement, the Assignment and
Assumption Agreements, the Guaranty, the Guarantor Pledge Agreement, the HM
Affiliation Agreement Amendments, the LLC Agreement, the LP Agreement, the LP
Security Agreement, the Management Services Agreement, the Merger Agreement, the
Novation Agreement, the Original Guaranty, the Tower Agreements, the Transition
Services Agreement, the Venture Affiliation Agreements, the Venture Credit
Agreement, the Venture Security Agreement, the
8
<PAGE> 15
Venture Pledge Agreement, the Venture Note, the Venture Letter Agreement, the
WVTM Option Agreement, and any exhibits, schedules or attachments to each of the
foregoing.
"TRANSITION SERVICES AGREEMENT" means the Transition Services and
Access Agreement dated as of the Closing Date by and between the LP and LIN-
Texas, substantially in the form of Exhibit F hereto.
"VENTURE AFFILIATION AGREEMENTS" means the network affiliation
agreements and related side letters by and between (i) the LP and NBC with
respect to KXAS-TV and KNSD(TV) and (ii) Birmingham Broadcasting (WVTM TV), Inc.
and NBC with respect to WVTM-TV, in each case dated as of the Funding Date,
substantially in the form of Exhibits H, I and J hereto.
"VENTURE CREDIT AGREEMENT" means the Credit Agreement dated as of the
Funding Date by and between LIN-Texas and the Lender, substantially in the form
of Exhibit K hereto.
"VENTURE LETTER AGREEMENT" means the Letter Agreement dated as of the
Closing Date by and between NBC and Ranger with respect to the $2 million annual
payment for promotional expenses for KXAN-TV, serving Austin, Texas, WAVY-TV,
serving Norfolk, Virginia, WOOD-TV, serving Grand Rapids, Michigan and, if and
at any time after the parties consummate the transactions contemplated by the
WVTM Option Agreement, WVTM TV, serving Birmingham, Alabama, substantially in
the form of Exhibit L hereto.
"VENTURE LOAN" means the loan of $815.5 million in cash from the Lender
to LIN-Texas on the Funding Date pursuant to the Venture Note.
"VENTURE NOTE" means the Note evidencing the Venture Loan substantially
in the form of that set forth in the exhibits to the Venture Credit Agreement.
"VENTURE PLEDGE AGREEMENT" means the Venture Pledge Agreement dated as
of the Closing Date, substantially in the form of that set forth in the exhibits
to the Venture Credit Agreement.
"VENTURE SECURITY AGREEMENT" means the Venture Security Agreement dated
as of the Funding Date, substantially in the form of that set forth in the
exhibits to the Venture Credit Agreement.
"WVTM BUSINESS" means all of the business and operations currently and
hereafter conducted by the television station WVTM TV, serving Birmingham,
9
<PAGE> 16
Alabama, including the assets and operations thereof and certain liabilities
thereof, to be sold or assumed pursuant to the WVTM Option Agreement.
"WVTM OPTION AGREEMENT" means the Asset Purchase Option Agreement dated
as of the Closing Date by and between Birmingham Broadcasting (WVTM TV), Inc.,
Ranger and NBC, substantially in the form of Exhibit M hereto.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
<TABLE>
<CAPTION>
TERM SECTION
- ---- -------
<S> <C>
Actions 4.16(a)
Assumed Liabilities 3.03
CERCLA 4.16(b)
Closing Date Closing 3.06(b)
Contracts 3.01(d)
Contributed Assets 3.01
Damages 13.02(a)
Employment-Related Liabilities 11.06
Environmental Laws 4.16(b)
Environmental Liabilities 4.16(b)
Excluded Assets 3.02
Excluded Liabilities 3.04
Financial Statements 5.17
Funding Date Closing 3.06(a)
Hazardous Materials 4.16(b)
Indemnified Party 13.03
Indemnifying Party 13.03
Insured Benefits 11.06
Interim Statements 5.17
KNSD Balance Sheet 5.10
KNSD Employment Arrangements 5.18
KNSD Intellectual Property Rights 5.14(a)
KNSD Licenses 5.15(a)
KNSD Plans 5.18
KNSD Required Consents 5.08
KXAS DB Plan 11.08
KXAS DC Plan 11.07
KXAS Transferred Employee 11.01
LIN Employer 11.01
</TABLE>
10
<PAGE> 17
<TABLE>
<CAPTION>
TERM SECTION
- ---- -------
<S> <C>
LIN Indemnified Person 14.03(c)
LIN Indemnitors 13.02
LIN-Texas Preamble
LIN-TV Preamble
LLC Preamble
LMA Agreement 5.11(b)
LP Preamble
Material Contracts 5.11(b)
Multiemployer Plan 11.09
NBC Preamble
NBC DC Plan 11.07
Necessary Lease 5.11(b)
Network Agreement 5.11(b)
Original Agreement Preamble
Outlet Preamble
Petty Cash 3.01
Potential Contributor 14.03
Ranger Preamble
RCRA 4.16(b)
Rescission Damages 14.03(c)
Retained Employees 11.01
Sports Agreement 5.11(b)
Third Party Claim 14.03(c)
Transferee DB Plan 11.08(a)
Transferor DB Plan 11.08(a)
Transfer Date 11.01
WARN Act 9.06
Year-End Statements 5.17
</TABLE>
ARTICLE 2
CONTEMPLATED TRANSACTIONS
SECTION 2.01. Contemplated Transactions. (a) Funding Date
Transactions. Upon the terms and subject to the conditions set forth in the
Funding Date Transaction Documents, the parties agree that the following
transactions will occur in the following sequence on the Funding Date:
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(i) North Texas Broadcasting Corp. will, and will cause its
Subsidiary to, pursuant to an Assignment and Assumption Agreement,
contribute, convey, transfer, assign and deliver to LIN-Texas, free
and clear of all Liens, other than Permitted Liens, all of its right,
title and interest in, to and under the assets, properties and
business, of every kind and description, wherever located, real,
personal or mixed, tangible or intangible (including, without
limitation, all of the FCC Authorizations with respect to the KXAS
Business), owned, held or used primarily in the conduct of the KXAS
Business by North Texas Broadcasting Corp. in a manner that is
consistent with the terms and conditions of Section 3.01;
(ii) the Lender will make the Venture Loan to LIN-Texas,
pursuant to the Venture Credit Agreement;
(iii) LIN-Texas will grant the KXAS Lien to the Lender as
collateral for the Venture Loan, pursuant to the Venture Security
Agreement;
(iv) Outlet will contribute an undivided 99% interest in the
KNSD Business to the LLC, pursuant to Article 3 hereof, in exchange
for an initial 49.9% voting interest (to be increased to a 50% voting
interest upon the consummation of the final Closing Date Transaction)
and a 79.62% equity interest in the LLC;
(v) LIN-Texas will contribute the KXAS Business (subject to the
KXAS Lien) to the LLC, pursuant to Article 3 hereof, in exchange for
an initial 50.1% voting interest (to be decreased to a 50% voting
interest upon the consummation of the final Closing Date Transaction)
and a 20.38% equity interest in the LLC;
(vi) the LLC will grant the KNSD Lien to the Lender as
collateral for the Venture Loan, pursuant to the Venture Security
Agreement;
(vii) (A) the LLC will contribute, pursuant to Article 3 hereof,
the undivided 99% interest in the KNSD Business (subject to the KNSD
Lien), to the LP, (B) Outlet will contribute, pursuant to Article 3
hereof, its remaining undivided 1% interest in the KNSD Business to
the LP, and (C) the LP will enter into the LP Security Agreement,
pursuant to which the LP will agree (1) to continue the KXAS Lien and
the KNSD Lien and (2) to grant a security interest to the Lender in
the undivided 1% interest in the
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KNSD Business contributed to the LP by Outlet pursuant to the
immediately preceding clause (B);
(viii) (A) the Lender will release LIN-Texas from any and all
obligations under the Venture Credit Agreement, (B) the Lender and
LIN- Texas will enter into the Novation Agreement with the LLC and (C)
the Lender will enter into the Original Guaranty with LIN-TV;
(ix) NBC will enter into (A) the Venture Affiliation Agreements
with respect to KXAS-TV, serving Dallas, Texas, KNSD(TV), serving San
Diego, California, and WVTM-TV, serving Birmingham, Alabama, (B) the
HM Affiliation Agreement Amendments with respect to the HM
NBC-Affiliated Stations and (C) the Venture Letter Agreement, in each
case with the respective other parties thereto; and
(x) LIN-Texas will transfer the cash proceeds of the Venture
Loan to LIN-TV and/or its Affiliates immediately preceding the
Effective Time.
(b) Closing Date Transactions. Upon the terms and subject to the
conditions set forth in the Closing Date Transaction Documents, the parties
agree that the following transactions will occur in the following sequence
immediately following the Effective Time:
(i) the LLC will contribute, pursuant to Article 3 hereof, the
KXAS Business (subject to the KXAS Lien);
(ii) the LLC will pledge to the Lender its 99.75% limited
partnership interest in the LP as additional collateral for the
Venture Loan, pursuant to the Venture Pledge Agreement;
(iii) the Guarantor will (A) enter into the Guaranty and (B)
cause to be pledged to the Lender the 50% voting interest and 20.38%
equity interest in the LLC held by LIN-Texas as collateral for the
Guaranty, pursuant to the Guarantor Pledge Agreement;
(iv) LIN-TV will be released from the Original Guaranty;
(v) NBC, the LLC and the LP will enter into the Management
Services Agreement;
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(vi) Birmingham Broadcasting (WVTM TV), Inc., Ranger and NBC
will enter into the WVTM Option Agreement, granting Ranger the option,
exercisable during the period from the date of the WVTM Option
Agreement until December 31, 1999, to purchase the WVTM Business; and
(vii) the LP and the other parties thereto will enter into (A)
the Transition Services Agreement and (B) the Tower Agreements.
ARTICLE 3
TRANSFERS OF ASSETS AND LIABILITIES
SECTION 3.01. Asset Contribution. Except as otherwise provided below,
upon the terms and subject to the conditions of this Agreement, each Business
Transferor agrees to contribute, convey, transfer, assign and deliver, or cause
to be contributed, conveyed, transferred, assigned and delivered, to the
relevant Business Transferee on the date specified in Section 2.01, free and
clear of all Liens, other than Permitted Liens, all (or in the case of any
Business Transfer involving less than 100% of the relevant Business, such
specified ownership percentage) of such Business Transferor's right, title and
interest in, to and under the assets, properties and business, of every kind and
description, wherever located, real, personal or mixed, tangible or intangible,
owned, held or used primarily in the conduct of the KXAS Business or the KNSD
Business, as the case may be, by such Business Transferor as the same shall
exist on the Funding Date (or the Closing Date in the case of any Business
Transfer to occur on such date) including all assets of the KXAS Business or the
KNSD Business, as the case may be, hereafter acquired by such Business
Transferor (the "CONTRIBUTED ASSETS"), and including, without limitation, all
(or such specified ownership percentage) of the right, title and interest of
such Business Transferor in, to and under all (or such specified ownership
percentage) of the following relating primarily to the KXAS Business or the KNSD
Business, as the case may be, subject to Section 3.02;
(a) real property and leases of, and other interests in, real property
used or held for use in the conduct of the KXAS Business (including, without
limitation, the KXAS Tower) or the KNSD Business, as the case may be, in each
case together with all buildings, fixtures, and improvements erected thereon;
(b) personal property and interests therein, including machinery,
equipment, furniture, office equipment, communications equipment (including,
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without limitation, the KXAS Tower and the Master Control System (as defined in
the Transition Services Agreement)), vehicles, spare and replacement parts, and
other tangible property;
(c) work-in-process, supplies, programs, programming materials and
other inventories;
(d) rights under all contracts, agreements, leases, licenses,
commitments, sales and purchase orders and other instruments in respect of the
KXAS Business or the KNSD Business, as the case may be, including, without
limitation, all retransmission consent agreements, rep firm contracts
(including, without limitation, the Blair representation agreement), advertiser
contracts, broadcast time sales agreements, programming contracts (including
cash and barter arrangements) and trade out agreements in respect thereof,
whether signed or unsigned (collectively, the "CONTRACTS");
(e) accounts, notes and other receivables;
(f) deposits, reserves and prepaid expenses, including but not limited
to ad valorem taxes, leases and rentals;
(g) all of the petty cash located at the operating facilities of the
KXAS Business or the KNSD Business, as the case may be ("PETTY CASH");
(h) the relevant Business Transferor's rights, claims, credits, causes
of action or rights of set-off against third parties relating to the KXAS
Business or the KNSD Business, as the case may be, including, without
limitation, unliquidated rights under producers' and vendors' warranties;
(i) patents, copyrights, trademarks, trade names, mask works,
servicemarks, service names, technology, know-how, processes, trade secrets,
inventions, proprietary data, formulae, research and development data, computer
software programs and other intangible property (excluding any rights in or to
the Excluded Names) and any applications for the same, in each case owned or
licensed by the relevant Business Transferor or any Affiliate of such Business
Transferor and used or held or held for use primarily in the KXAS Business or
the KNSD Business, as the case may be;
(j) transferable licenses, permits or other governmental authorization
affecting, or relating in any way to, the KXAS Business or the KNSD Business, as
the case may be, including without limitation, the FCC Authorizations applicable
15
<PAGE> 22
to such Business, and all applications therefor, together with any renewals,
extensions or modifications thereof and additions thereto;
(k) books, records, files and papers, whether in hard copy or
computer format, used in the KXAS Business or the KNSD Business, as the case may
be, including, without limitation, engineering information, sales and
promotional literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers, lists of present and former customers,
personnel and employment records, and any information relating to any Tax
imposed on the KXAS Assets or the KNSD Assets, as the case may be; and
(l) the assets set forth on Schedule 3.01, whether or not primarily
relating to the KXAS Business.
SECTION 3.02. Excluded Assets. Each Business Transferee expressly
understands and agrees that the following assets and properties of the relevant
Business Transferor (the "EXCLUDED ASSETS") shall be excluded from the KXAS
Assets or the KNSD Assets, as the case may be:
(a) all of such Business Transferor's cash and cash equivalents on
hand and in banks, except for the Petty Cash;
(b) the KXTX Tower;
(c) the assets set forth on Schedule 3.02;
(d) the Excluded Names; and
(e) any KXAS Assets or KNSD Assets, as the case may be, sold or
otherwise disposed of in the ordinary course of business and not in violation of
any provisions of this Agreement or the Merger Agreement during the period from
the date hereof until the Funding Date (or the Closing Date in the case of any
Business Transfer to occur on such date).
SECTION 3.03. Assumed Liabilities. Except as provided in Section 3.04
and Article 11, upon the terms and subject to the conditions of this Agreement,
each Business Transferee agrees, effective at the date specified in Section
2.01, to assume, pay, perform and discharge all (or in the case of any Business
Transfer involving less than 100% of the relevant Business, such specified
percentage) of the liabilities and obligations of whatever nature (whether
absolute, accrued, fixed, contingent or otherwise and whether known or unknown)
arising primarily out of or primarily in connection with (i) the KXAS Assets or
KNSD Assets, as the case may be, (ii) the operation of the KXAS Business or the
KNSD Business, as the case may be, by the relevant Business Transferor and its
Affiliates at any time prior to the Funding Date (or the Closing Date in the
case of any Business Transfer to occur on such date), (iii) the ownership, use
or sale of the KXAS Assets or KNSD Assets, as the case
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<PAGE> 23
may be, (iv) the production and sale of any product or service of the KXAS
Business or the KNSD Business, as the case may be (collectively, but excluding
the Excluded Liabilities, the "ASSUMED LIABILITIES"). The Assumed Liabilities
shall include, without limiting the generality of the foregoing, and whether or
not incurred in the ordinary course of business (but subject to Section 3.04 and
Article 11 hereof), the following to the extent primarily related to the KXAS
Business or the KNSD Business, as the case may be:
(a) all (or such specified percentage of the) liabilities and
obligations of the relevant Business Transferor arising under the relevant
Contracts, including, without limitation, all liabilities or obligations
attributable to any failure by such Business Transferor to comply with the terms
thereof;
(b) as to products or services of the KXAS Business or the KNSD
Business, as the case may be, which were produced, sold or held as inventory
(whether as work-in-process, supplies, programs, programming materials or other
inventories) by the relevant Business Transferor prior to the Funding Date (or
the Closing Date in the case of any Business Transfer to occur on such date) all
(or such specified percentage) of the liabilities and obligations with respect
to any liability to third parties resulting from, caused by or arising out of,
directly or indirectly, use, broadcast or transmission of any such products or
services (or any part or element thereof);
(c) all (or such specified percentage of the) accounts, notes or other
payables in respect of the KXAS Business or the KNSD Business, as the case may
be, as of the Funding Date (or the Closing Date in the case of any Business
Transfer to occur on such date);
(d) all (or such specified percentage of any) agent's commissions
relating to all accounts, notes and other receivables in respect of the KXAS
Business or the KNSD Business, as the case may be, whether or not such
receivables are collected;
(e) all (or such specified percentage of the) obligations and
liabilities of each Business Transferor with respect to any pending or
threatened actions, proceedings or governmental investigations against or
involving the KXAS Business or the KNSD Business, as the case may be;
(f) to the extent set forth in Article 10 of this Agreement, any
obligation or liability for any Tax arising from or with respect to the KXAS
Assets or the
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<PAGE> 24
KNSD Assets or the operations of the KXAS Business or the KNSD Business for the
relevant Pre-Closing Tax Periods;
(g) all (or such specified percentage) of Environmental Liabilities
arising in connection with or primarily relating to the KXAS Business or the
KNSD Business, as the case may be (as currently or previously conducted), the
KXAS Assets or the KNSD Assets, as the case may be, or any activities or
operations occurring or conducted at the real property owned, leased, operated
or subleased by the KXAS Business or the KNSD Business, as the case may be
(including, without limitation, off-site disposal); and
(h) all (or such specified percentage of the) other obligations and
liabilities with respect to the conduct of the KXAS Business or the KNSD
Business, as the case may be, or the ownership of the KXAS Assets or the KNSD
Assets, as the case may be, by the relevant Business Transferor or any of its
Affiliates or predecessors at any time prior to the Funding Date (or the Closing
Date in the case of any Business Transfer to occur on such date).
SECTION 3.04. Excluded Liabilities. Notwithstanding any other provision
of this Agreement or doctrine of law, each Business Transferor shall retain, and
no Business Transferee shall assume, or be liable with respect to, any and all
liabilities and obligations of any Business Transferor described below (the
"EXCLUDED LIABILITIES"):
(a) except as contemplated in Sections 10.03(c), 14.03(c), 15.03 and
15.11, any liability or obligation of any Business Transferor, or any of its
Affiliates, or any of their respective directors, officers, members, managers,
stockholders or agents, arising out of, or relating to, the Transaction
Documents or the Contemplated Transactions including, without limitation, any
Tax incurred as a result thereof and all fees and expenses of their respective
attorneys, accountants or financial advisors;
(b) any liability or obligation of whatever nature, whether accrued,
contingent, absolute, determined, determinable or otherwise (i) relating to or
based on events or conditions occurring or existing in connection with, or
arising out of, the Excluded Assets (including without limitation any case,
litigation, proceeding or investigation arising out of or related to the
collapse of the transmission tower in October 1996 owned by KXTX-TV and used by
the KXAS Business) or (ii) of any Business Transferor or any of its Affiliates
or its or their predecessors at any time in the past or any prior owner of all
or part of its business or assets, whether now existing, hereafter arising or
arising after the Funding Date (or the Closing Date in the case of any Business
Transfer to occur on such date) that relates to, is
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<PAGE> 25
based on, exists in connection with, or arises out of assets, properties,
operations or businesses of such Business Transferor, other than the KXAS Assets
and the KXAS Business or the KNSD Assets and the KNSD Business, as the case may
be;
(c) to the extent set forth in Article 10 of this Agreement, any
obligation or liability for any Tax arising from or with respect to the KXAS
Assets or the KNSD Assets or the operations of the KXAS Business or the KNSD
Business for the periods prior to the transfer;
(d) Employment-Related Liabilities in respect of the KXAS Business and
the KNSD Business; and
(e) any Debt (as defined in the LP Agreement) in respect of the KXAS
Business or the KNSD Business, as the case may be, including without limitation
any Debt owed by such Business Transferor to one or more of its Affiliates.
SECTION 3.05. Assignment of Contracts and Rights. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Contributed Asset or any claim or right or any
benefit arising thereunder or resulting therefrom if such assignment, without
the consent of a third party thereto, would constitute a breach or other
contravention of such Contributed Asset or in any way adversely affect the
rights of the relevant Business Transferor or Business Transferee thereunder.
Each Business Transferor and Business Transferee will use their reasonable best
efforts (but without any payment of money, transfer of assets or provision of
other services by such parties) to obtain the consent of the other parties to
any such Contributed Asset or any claim or right or any benefit arising
thereunder for the assignment thereof to the relevant Business Transferee as
such Business Transferee may request. If such consent is not obtained, or if an
attempted assignment thereof would be ineffective or would adversely affect the
rights of the relevant Business Transferor thereunder so that the relevant
Business Transferee would not in fact receive all such rights, such parties will
cooperate in a mutually agreeable arrangement under which the relevant Business
Transferee would obtain the benefits and assume the obligations thereunder in
accordance with this Agreement, including subcontracting, sublicensing, or
subleasing to such Business Transferee, or under which the relevant Business
Transferor would enforce for the benefit of such Business Transferee, with such
Business Transferee assuming such Business Transferor's obligations, any and all
rights of such Business Transferor against a third party thereto. Each Business
Transferor will promptly pay to the relevant Business Transferee when received
all monies received by such Business Transferor under any Contributed Asset or
any claim or right or any benefit arising thereunder, except to the extent the
same represents an Excluded Asset. In such event, such
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parties shall, to the extent the benefits therefrom and obligations thereunder
have not been provided by alternate arrangements satisfactory to them, negotiate
in good faith an adjustment in the consideration granted by the relevant
Business Transferee for the relevant Contributed Assets.
SECTION 3.06. Closing. (a) The closing (the "FUNDING DATE CLOSING") of
the Funding Date Transactions shall take place after 11:00 PM (EST) on the
Funding Date at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York, as soon as possible, but in no event later than the Business Day
prior to the Effective Time after satisfaction of the conditions set forth in
Section 12.01. At the Funding Date Closing, each Business Transferor that is
party to a Business Transfer to occur on the Funding Date shall enter into an
Assignment and Assumption Agreement with the relevant Business Transferee and
each Business Transferor shall deliver to the relevant Business Transferee such
warranty deeds, bills of sale, endorsements, consents, assignments and other
good and sufficient instruments of conveyance and assignment as the parties and
their respective counsel shall deem reasonably necessary or appropriate to vest
in all (or in the case of any Business Transfer involving less than 100% of the
relevant Business, such specified percentage of the) right, title and interest
in, to and under the relevant Contributed Assets.
(b) The closing (the "CLOSING DATE CLOSING") of the Closing Date
Transactions shall take place as soon as practicable after 12:01 AM (EST) on the
Closing Date at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York, but in any event on the Closing Date after satisfaction of the
conditions set forth in Section 12.02. At the Closing Date Closing, each
Business Transferor that is party to a Business Transfer to occur on the Closing
Date shall enter into an Assignment and Assumption Agreement with the relevant
Business Transferee and each Business Transferor shall deliver to the relevant
Business Transferee such warranty deeds, bills of sale, endorsements, consents,
assignments and other good and sufficient instruments of conveyance and
assignment as the parties and their respective counsel shall deem reasonably
necessary or appropriate to vest in all (or in the case of any Business Transfer
involving less than 100% of the relevant Business, such specified percentage of
the) right, title and interest in, to and under the relevant Contributed Assets.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF RANGER
Ranger represents and warrants to each of the other parties hereto as
of the date hereof that:
SECTION 4.01. Corporate Existence and Power. Ranger is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted. Ranger has delivered to each of the other parties
hereto true and complete copies of its certificate of incorporation and bylaws
as currently in effect.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by Ranger of the Transaction Documents to which it is a party and
the consummation of the Contemplated Transactions (to the extent it is a
participant therein) are within Ranger's corporate powers and have been duly
authorized by all necessary corporate action on the part of Ranger. This
Agreement constitutes, and the other Transaction Documents to which Ranger is a
party, when executed by Ranger, will constitute (assuming the due authorization
and execution of the other parties thereto) valid and binding agreements of
Ranger.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by Ranger of the Transaction Documents to which it is a party and
the consummation of the Contemplated Transactions (to the extent it is a
participant therein) require no material action by or in respect of, or filing
with, any Governmental Entity other than compliance with the Communications Act.
SECTION 4.04. Noncontravention. The execution, delivery and performance
by Ranger of the Transaction Documents to which it is a party and the
consummation of the Contemplated Transactions (to the extent it is a participant
therein) do not and will not (i) violate the certificate of incorporation or
bylaws of Ranger or (ii) assuming compliance with the matters referred to in
Section 4.03, violate any applicable law, rule, regulation, judgment,
injunction, order or decree.
SECTION 4.05. Litigation. Except as set forth in Schedule 4.05, there
is no action, suit, investigation or proceeding (or any basis therefor) pending
against, or to the knowledge of Ranger, threatened against or affecting Ranger
or any of its Affiliates, before any arbitrator or any Governmental Entity
which, (i) as of the date of this Agreement, questions the validity of any
Transaction Document or any action to be taken by Ranger or any of its
Affiliates in connection with the consummation of the Contemplated Transactions
or (ii) as of the date of this Agreement, would prevent or result in a material
delay of the consummation of the Contemplated Transactions. As of the date
hereof, neither Ranger nor any of its
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Affiliates nor any of their respective properties is or are subject to any
order, writ, judgment, injunction, decree, determination or award which would
prevent or result in a material delay of the consummation of the Contemplated
Transactions.
SECTION 4.06. Sufficiency of and Title to the KXAS Assets. (a) The KXAS
Assets, together with the easements to be provided to the KXAS Business under
the Tower Agreement relating to the KXTX Tower and the services to be provided
to the KXAS Business under the Transition Services Agreement and the Management
Services Agreement, constitute all of the property and assets used or held for
use primarily in the KXAS Business and are adequate to conduct the KXAS Business
as currently conducted.
(b) Upon consummation of the Closing Date Transactions, the LP will
have acquired good and marketable title in and to, or a valid leasehold interest
in, each of the KXAS Assets, free and clear of all Liens, except for Permitted
Liens.
SECTION 4.07. Finders' Fees. Except for Greenhill & Co., LLC and Chase
Securities Inc., whose fees will be paid by Ranger or one of its Affiliates,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of Ranger or one of its
Affiliates who might be entitled to any fee or commission in connection with the
Contemplated Transactions.
SECTION 4.08. Amendments to, and Notices under, the Merger Agreements.
(a) Ranger has not agreed to (i) amend any of Sections 3.1, 4.1, 4.2, 4.6, 5.3,
5.4, 5.5, 6.1, 6.2, 7.1, 7.5 or 7.6 of the Merger Agreement on or prior to the
date hereof or (ii) waive any inaccuracies in the representations and warranties
(or permit LIN-TV to revise any of the Disclosure Schedules with respect
thereto), or compliance with any of the agreements or conditions contained in
the Merger Agreement, on or prior to the date hereof.
(b) Prior to the date hereof, Ranger has (i) notified an executive
officer of NBC in writing of any notices received or given by Ranger under the
Merger Agreement pursuant to Section 8.2 of the Merger Agreement, whether due to
any party's obligations under Section 4.4 thereof or otherwise, and (ii)
provided NBC with true and complete copies of the Disclosure Schedules to the
Merger Agreement, as they existed on the date thereof and which have not been
amended or revised since such date.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NBC
NBC represents and warrants to each of the other parties hereto as of
the date hereof that:
SECTION 5.01. Corporate Existence and Power. NBC is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware
and has all corporate powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted. Outlet is a corporation duly incorporated, validly
existing and in good standing under the laws of Rhode Island and has all
corporate powers and all material governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by NBC and its Affiliates of the Transaction Documents to which they
are parties and the consummation of the Contemplated Transactions (to the extent
they are participants therein) are within the corporate powers of NBC and such
Affiliates and have been duly authorized by all necessary corporate action on
the part of NBC and such Affiliates. This Agreement has been duly executed and
delivered by NBC and constitutes, and the other Transaction Documents to which
NBC and its Affiliates are parties, when executed by NBC and/or such Affiliates,
will constitute (assuming the due authorization and execution of the other
parties thereto) a valid and binding agreement of NBC and such Affiliates
enforceable in accordance with their terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by NBC and its Affiliates of the Transaction Documents to which they
are parties and the consummation of the Contemplated Transactions (to the extent
they are participants therein) require no material action by or in respect of,
or material filing with, any Governmental Entity other than (i) compliance with
any applicable requirements of the 1934 Act and (ii) compliance with the
Communications Act.
SECTION 5.04. Noncontravention. The execution, delivery and performance
by NBC and its Affiliates of the Transaction Documents to which they are parties
and the consummation of the Contemplated Transactions (to the extent they are
participants therein) do not and will not (i) violate the certificate of
incorporation or bylaws of NBC or such Affiliates, (ii) assuming compliance with
the matters referred to in Section 5.03, violate any applicable material law,
rule,
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regulation, judgment, injunction, order or decree or (iii) violate or constitute
a default under any Material Contract.
SECTION 5.05. Litigation. Except as set forth in Schedule 4.05 and/or
6.05, there is no action, suit, investigation or proceeding (or any basis
therefor) pending against, or to the knowledge of NBC threatened against or
affecting NBC or any of its Affiliates before any arbitrator or any Governmental
Entity which (i) individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect, (ii) as of the date of this Agreement,
questions the validity of any Transaction Document or any action to be taken by
NBC or any of its Affiliates in connection with the consummation of the
Contemplated Transactions or (iii) as of the date of this Agreement, would
prevent or result in a material delay of the consummation of the Contemplated
Transactions. As of the date hereof, neither NBC nor any of its Affiliates nor
any of their respective properties is or are subject to any order, writ,
judgment, injunction, decree, determination or award which would prevent or
result in a material delay of the consummation of the Contemplated Transaction.
SECTION 5.06. Sufficiency of and Title to the KNSD Assets. (a) The KNSD
Assets, together with the services to be provided to the KNSD Business under the
Management Services Agreement, constitute all of the property and assets used or
held for use primarily in the KNSD Business and are adequate to conduct the KNSD
Business as currently conducted.
(b) Upon consummation of the Closing Date Transactions, the LP will
have acquired good and marketable title in and to, or a valid leasehold interest
in, each of the KNSD Assets, free and clear of all Liens, except for Permitted
Liens.
SECTION 5.07. Finders' Fees. Except for Lehman Brothers Holdings Inc.
and Evercore Partners Inc., whose fees will be paid by NBC or one of its
Affiliates, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of NBC who might be
entitled to any fee or commission from any other party hereto or any of their
respective Affiliates upon consummation of the Contemplated Transactions.
SECTION 5.08. Required and Other Consents. Schedule 5.08 sets forth
each agreement, contract or other instrument binding upon NBC or any of its
Affiliates or any KNSD License requiring a consent or other action by any Person
as a result of the execution, delivery and performance of the Transaction
Documents, except such consents or actions as would not, individually or in the
aggregate, have a Material Adverse Effect if not received or taken by the
Funding Date (the "KNSD REQUIRED CONSENTS").
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SECTION 5.09. Absence of Certain Changes. Since September 30, 1997 and
except as contemplated by the Transaction Documents, the KNSD Business has been
conducted in the ordinary course consistent with past practices and there has
not been:
(a) any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect;
(b) any termination or cancellation of, or any modification to, any
agreement, arrangement or understanding which has had or would reasonably be
expected to have a Material Adverse Effect;
(c) any material change by NBC in its accounting methods, principles
or practices in respect of the KNSD Business;
(d) any revaluation by NBC of any of the material assets of the KNSD
Business, except as required by generally accepted accounting principles;
(e) any entry by NBC or any of its Subsidiaries into any commitment or
transaction material to the KNSD Business;
(f) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan or agreement or arrangement, or any
other increase in the compensation payable or to become payable to any officers
or key employees of the KNSD Business other than in the ordinary course of
business consistent with past practice or as was required under employment,
severance or termination agreements in effect as of September 30, 1997;
(g) any bonus paid to the employees of the KNSD Business other than in
the ordinary course of business and consistent with past practice;
(h) any sale or transfer of any material amount of the assets of the
KNSD Business other than in the ordinary course of business and consistent with
past practice; or
(i) any loan, advance or capital contribution to or investment in any
Person in an aggregate amount in excess of $100,000 by the KNSD Business.
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SECTION 5.10. No Undisclosed Material Liabilities. There are no
liabilities of the KNSD Business of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, in each case that would be required to
be reflected or reserved against in the unaudited balance sheet (including the
notes thereto) of the KNSD Business dated September 30, 1997 (the "KNSD BALANCE
SHEET") prepared in accordance with generally accepted accounting principles as
applied in such balance sheet, other than:
(a) liabilities provided for in the KNSD Balance Sheet; and
(b) liabilities which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
SECTION 5.11. Material Contracts. (a) Except pursuant to any of the
Transaction Documents, from and after September 30, 1997, none of NBC, its
Affiliates or the KNSD Business has entered into any contract, agreement or
other document or instrument that is, individually or in the aggregate material
to the KNSD Business or any material amendment, modification or waiver under any
contract, agreement or other document or instrument that existed prior to such
date and is individually or in the aggregate material to the KNSD Business.
(b) Except as contemplated by any of the Transaction Documents, none
of NBC, its Affiliates or the KNSD Business is a party to, nor has any of them
entered into or as of the date hereof made, any material amendment or
modification to or granted any material waiver under the following
(collectively, "MATERIAL CONTRACTS"): (i) any network affiliation agreement for
the KNSD Business (a "NETWORK AGREEMENT"), (ii) any material sports broadcasting
agreement for the KNSD Business (a "SPORTS AGREEMENT"), (iii) any main
transmitter site or main studio lease for the KNSD Business (a "NECESSARY
LEASE"), (iv) any agreement pursuant to which the KNSD Business agrees to
provide programming to an LMA Station, or pursuant to which the KNSD Business
has either a contingent obligation or the right to purchase the assets of an LMA
Station or any shares of capital stock of any corporation holding any assets
relating to an LMA Station (an "LMA AGREEMENT") or (v) any partnership or joint
venture agreement obligating the KNSD Business to contribute cash in excess of
$200,000 per year.
(c) Each of the Material Contracts is valid and enforceable against
NBC, its Affiliates or the KNSD Business, as the case may be, in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency or
similar laws
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affecting creditors' rights generally and general principles of equity, and
there is no default thereunder by any of such parties or, to the knowledge of
NBC, by any other party thereto, and no event has occurred that with the lapse
of time or by the giving of notice or both would constitute a default hereunder
by NBC, such Affiliates or the KNSD Business or, to the knowledge of NBC, any
other party thereto, in any such case in which such default or event would
reasonably be expected to have a Material Adverse Effect. In addition, none of
NBC, its Affiliates or the KNSD Business is in material breach of any Network
Agreement, Sports Agreement or LMA Agreement (including any breach which would
give rise to a right to terminate any such agreement). None of NBC, its
Affiliates or the KNSD Business has received any written notice (or to the
knowledge of NBC, any other notice) of default or termination under any Material
Contract, and to the knowledge of NBC, there exists no basis for any assertion
of a right of default or termination under such agreements. None of NBC, its
Affiliates or the KNSD Business has received any written notice (or, to the
knowledge of NBC, any other notice) of the exercise of a put option or other
right pursuant to which NBC, such Affiliates or the KNSD Business would be
obligated to purchase capital stock or assets relating to any LMA Station.
(d) None of NBC, its Affiliates or the KNSD Business is in breach of
any material agreement, except for breaches that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 5.12. Compliance with Laws and Court Orders. Neither NBC nor
any of its Affiliates is in violation of, and to the knowledge of NBC none of
them is under investigation with respect to or has been threatened to be charged
with or been given notice of any violation of, any law, rule, regulation,
judgment, injunction, order or decree applicable to the KNSD Assets or the
conduct of the KNSD Business, except that no representation or warranty is made
in this Section 5.12 with respect to Environmental Laws, the Communications Act
and FCC rules, regulations and policies, and except for violations that have not
had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
SECTION 5.13. Tangible Property. All of the KNSD Assets are in good
operating condition, reasonable wear and tear excepted, and usable in the
ordinary course of business, except where the failure to be in such condition or
so usable would not individually or in the aggregate reasonably be expected to
have a Material Adverse Effect.
SECTION 5.14. Intellectual Property. Except to the extent that the
inaccuracy of any of the following (or the circumstances giving rise to such
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inaccuracy), individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect:
(a) NBC or one of its Affiliates owns, or is licensed to use (in each
case, clear of any Liens, other than Permitted Liens), all the Intellectual
Property Rights used, or held for use, in, or necessary for the conduct of, the
KNSD Business (the "KNSD INTELLECTUAL PROPERTY RIGHTS"); (b) the use of any KNSD
Intellectual Property by NBC or one of its Affiliates does not infringe on or
otherwise violate the rights of any Person and is in accordance with any
applicable license pursuant to which NBC or one of its Affiliates acquired the
right to use such KNSD Intellectual Property; and (c) to the knowledge of NBC,
no Person is challenging, infringing on or otherwise violating any right of NBC
or one of its Affiliates with respect to any KNSD Intellectual Property owned by
and/or licensed to NBC or one of its Affiliates; and (d) neither NBC nor one of
its Affiliates has received any written notice of any pending claim with respect
to any KNSD Intellectual Property used in connection with the KNSD Business and,
to NBC's knowledge, no KNSD Intellectual Property owned and/or licensed for use
in connection with the KNSD Business is being used or enforced in a manner that
would result in the abandonment, cancellation or unenforceability of such KNSD
Intellectual Property.
SECTION 5.15. Licenses and Permits. (a) NBC or one of its Affiliates
has all permits, licenses, waivers and authorizations (other than FCC
Authorizations, but including licenses, authorizations and certificates of
public convenience and necessity from applicable state and local authorities),
which are necessary to the KNSD Business (collectively, "KNSD LICENSES"), other
than any Licenses the failure of which to have would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. NBC or one
of its Affiliates is in compliance with the terms of all KNSD Licenses (other
than FCC Authorizations), except for such failures so to comply which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. NBC or one of its Affiliates has duly performed its obligations
under and each is in compliance with the terms of such KNSD Licenses, except for
such non-performance or non-compliance as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. There is no
pending or, to the knowledge of NBC, threatened application, petition, objection
or other pleading with any Governmental Entity other than the FCC which
challenges or questions the validity of, or any rights of the holder under, any
KNSD License (other than an FCC Authorization), except for such applications,
petitions, objections or other pleadings, that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or that are
applicable to the broadcast industry generally. No representation or warranty is
made in this Section 5.15 with respect to KNSD Licenses required by
Environmental Laws.
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(b) Schedule 5.15(b) sets forth all material FCC Authorizations held by
or in respect of the KNSD Business. Except as set forth in Schedule 5.15(b) and
except as does not have a Material Adverse Effect: (i) NBC is financially
qualified and, to the knowledge of NBC, otherwise qualified to hold such FCC
Authorizations or to control such FCC Authorizations, as the case may be, (ii)
NBC or one of its Affiliates holds such FCC Authorizations, (iii) NBC is not
aware of any facts or circumstances relating to the FCC qualifications that
would prevent the FCC's granting the FCC Applications, (iv) the KNSD Business is
in material compliance with all FCC Authorizations held by it and with the
Communications Act and (v) there is not pending or, to the knowledge of NBC,
threatened any application, petition, objection or other pleading with the FCC
or other Governmental Entity which challenges the validity of, or any rights of
the holder under, any FCC Authorization held by the KNSD Business except for
rule making or similar proceedings of general applicability to Persons engaged
in substantially the same business conducted by the KNSD Business.
SECTION 5.16. Environmental Matters. (a) Except as disclosed in
Schedule 5.16 and except as would not reasonably be expected to have a Material
Adverse Effect, (i) the operations of the KNSD Business and the use of the KNSD
Assets have been and are in compliance with all Environmental Laws and with all
KNSD Licenses required by Environmental Laws, (ii) there are no pending or, to
the knowledge of NBC, threatened, actions, suits, claims, investigations or
other proceedings (collectively, "ACTIONS") under or pursuant to Environmental
Laws against NBC or any of its Affiliates in respect of the KNSD Business, (iii)
neither the KNSD Business nor the KNSD Assets is subject to any Environmental
Liabilities, and, to the knowledge of NBC, no facts, circumstances or conditions
relating to, arising from, associated with or attributable to any real property
currently or, to the knowledge of NBC, formerly owned, operated or leased by the
KNSD Business or operations thereon that could reasonably be expected to result
in Environmental Liabilities, (iv) all real property owned, and, to the
knowledge of NBC, all real property operated or leased, by the KNSD Business is
free of contamination from Hazardous Materials and (v) there is not now, nor, to
the knowledge of NBC, has there been in the past, on, in or under any real
property owned, leased or operated by the KNSD Business or any of their
predecessors (A) any underground storage tanks, above-ground storage tanks,
dikes or impoundments containing Hazardous Materials, (B) any
asbestos-containing materials, (C) any polychlorinated biphenyls or (D) any
radioactive substances.
(b) As used in this Agreement, "ENVIRONMENTAL LAWS" means any and all
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decisions, injunctions, decrees, requirements of any
Governmental Entity, any and all common law requirements, rules and bases of
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liability regulating, relating to or imposing liability or standards of conduct
concerning pollution, Hazardous Materials or protection of human health or the
environment, as currently in effect and includes, but is not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C. Section 9601 et. seq., the Hazardous Materials Transportation Act 49
U.S.C. Section 1801 et. seq., the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 6901 et. seq., the Clean Water Act, 33 U.S.C.
Section 1251 et. seq., the Clean Air Act., U.S.C. Section et. seq., the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et. seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136 et. seq., and
the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et. seq., as such laws
have been amended or supplemented, and the regulations promulgated pursuant
thereto, and all analogous state or local statutes. As used in this Agreement,
"ENVIRONMENTAL LIABILITIES" with respect to any Person means any and all
liabilities of or relating to such Person or any of its Subsidiaries (including
any entity which is, in whole or in part a predecessor of such Person or any of
such Subsidiaries), whether vested or unvested, contingent or fixed, actual or
potential, known or unknown, which (i) arise under or relate to matters covered
by Environmental Laws and (ii) relate to actions occurring or conditions
existing on or prior to the Closing Date. As used in this Agreement, "HAZARDOUS
MATERIALS" means any hazardous or toxic substances, materials or wastes,
defined, listed, classified or regulated as such in or under any Environmental
Laws which includes, but is not limited to, petroleum, petroleum products,
friable asbestos, urea formaldehyde and polychlorinated biphenyls.
SECTION 5.17. KNSD Financial Statements. Schedule 5.17 contains (a) the
unaudited balance sheet, statement of cash flow and related income statement of
the KNSD Business as of and for the fiscal year ended December 31, 1996 (the
"YEAR-END STATEMENTS") and (b) the unaudited interim balance sheet, statement of
cash flow and related income statement of the Business as of and for the
nine-month period ended September 30, 1997 (the "INTERIM STATEMENTS" and
collectively with the Year-End Statements, the "FINANCIAL STATEMENTS"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles, applied consistently with past periods, and present
fairly in all material respects the financial position and results of operations
of the KNSD Business as of and for the periods indicated therein subject, in the
case of the Interim Statements, to normal year-end adjustments.
SECTION 5.18. Employee Arrangements and Benefit Plans. Schedule 5.18
sets forth a complete and correct list of (a) all employee benefit plans within
the meaning of Section 3(3) of ERISA and all bonus or other incentive
compensation, deferred compensation, salary continuation, severance, disability,
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stock award, stock option, stock purchase, tuition assistance, or vacation pay
plans or programs (collectively the "KNSD PLANS") and (b) all written
employment, severance, termination, change-in-control, or indemnification
agreements (collectively, the "KNSD EMPLOYMENT ARRANGEMENTS"), in each case
under which the KNSD Business has any obligation or liability (contingent or
otherwise), except for any KNSD Employment Arrangement which provides for annual
compensation (excluding benefits) of $150,000 or less or has an unexpired term
of and can be terminated (before, on or after a change in control) in less than
one year from the date hereof without additional cost or penalty.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF LIN-TEXAS
LIN-Texas represents and warrants to each of the other parties hereto
as of the date hereof that:
SECTION 6.01. Partnership Existence and Power. LIN-Texas is a
partnership duly organized, validly existing and in good standing under the laws
of its jurisdiction of formation and has all partnership powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.
SECTION 6.02. Partnership Authorization. The execution, delivery and
performance by LIN-Texas and LIN-TV of the Transaction Documents to which they
are a party and the consummation of the Contemplated Transactions (to the extent
they are participants therein) are within LIN-Texas's and each such Affiliate's
powers and have been duly authorized by all necessary action. This Agreement
constitutes, and the other Transaction Documents to which LIN-Texas and its
Affiliates are parties, when executed by LIN-Texas and such Affiliates, will
constitute (assuming the due authorization and execution of the other parties
thereto) valid and binding agreements of LIN-Texas and such Affiliates.
SECTION 6.03. Governmental Authorization. The execution, delivery and
performance by LIN-Texas and LIN-TV of the Transaction Documents to which they
are parties and the consummation of the Contemplated Transactions (to the extent
they are participants therein) require no action by or in respect of, or filing
with, any Governmental Entity, other than (i) compliance with any applicable
requirements of the 1934 Act; and (ii) compliance with the Communications Act.
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SECTION 6.04. Noncontravention. The execution, delivery and performance
by LIN-Texas and LIN-TV of the Transaction Documents to which they are parties
and the consummation of the Contemplated Transactions (to the extent they are
participants therein) do not and will not (i) violate the partnership agreement
under which it operates or the organizational documents of LIN-TV, as the case
may be, or (ii) assuming compliance with the matters referred to in Section
6.03, violate any applicable law, rule, regulation, judgment, injunction, order
or decree.
SECTION 6.05. Litigation. Except as set forth in Schedule 6.05, there
is no action, suit, investigation or proceeding (or any basis therefor) pending
against, or to the knowledge of LIN-Texas, threatened against or affecting
LIN-Texas or LIN-TV, before any arbitrator or any Governmental Entity which (i)
as of the date of this Agreement, questions the validity of any Transaction
Document or any action to be taken by LIN-Texas or LIN-TV in connection with the
consummation of the Contemplated Transactions or (ii) as of the date of this
Agreement, would prevent or result in a material delay of the consummation of
the Contemplated Transactions. As of the date hereof, neither Lin-Texas nor
LIN-TV nor any of their respective properties is or are subject to any order,
writ, judgment, injunction, decree, determination or award which would prevent
or result in a material delay of the consummation of the Contemplated
Transactions.
SECTION 6.06. Finders' Fees. Except for Morgan Stanley & Co., Inc.
and Wasserstein Perella & Co., whose fees will be paid by LIN-Texas or LIN-TV,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of LIN-Texas or LIN-TV who
might be entitled to any fee or commission in connection with the Contemplated
Transactions.
ARTICLE 7
COVENANT OF RANGER
Ranger agrees that:
SECTION 7.01. Merger Agreement Amendments and Waivers. Ranger will not
(a) agree to (i) the amendment of any of (A) Sections 3.1, 4.1, 4.2, 4.6, 5.3,
5.4, 5.5, 6.1, 6.2, 7.1, 7.5 or 7.6 of the Merger Agreement or (B) the
Disclosure Schedules to the Merger Agreement or (ii) waive any inaccuracies in
the representations and warranties, or compliance with any of the agreements or
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conditions contained in the Merger Agreement or (b) terminate, or agree to
terminate, the Merger Agreement, unless in each case Ranger shall have first
obtained NBC's prior written consent.
ARTICLE 8
COVENANT OF NBC
NBC agrees that:
SECTION 8.01. Conduct of the KNSD Business. From the date hereof until
the Funding Date, NBC and its Affiliates shall conduct the KNSD Business in the
ordinary course consistent with past practice and shall use its reasonable
efforts to preserve intact the business organizations and relationships with
third parties and to keep available the services of the present employees of the
KNSD Business. Without limiting the generality of the foregoing, from the date
hereof until the Funding Date, NBC and its Affiliates will not:
(a) with respect to the KNSD Business acquire a material amount of
assets (whether by merger, stock purchase or otherwise) from any other Person;
(b) sell, lease or otherwise dispose of, or mortgage, or otherwise
encumber or subject to a Lien, other than Permitted Liens, any material KNSD
Assets except (i) pursuant to existing contracts or commitments and (ii) in the
ordinary course consistent with past practice;
(c) with respect to the KNSD Business, incur or assume any material
indebtedness for borrowed money or guarantee any such indebtedness of another
Person, or make any material loans, advances or capital contributions to, or
material investments in, any other Person;
(d) agree or commit to do any of the foregoing; or
(e) take or agree or commit to take any action that would make any
representation or warranty of NBC hereunder inaccurate in any respect at, or as
of any time prior to, the Funding Date.
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ARTICLE 9
OTHER COVENANTS
Each of the parties hereto agrees that:
SECTION 9.01. Access to Information. (a) From the date hereof until the
Funding Date, LIN-TV and LIN-Texas will (i) give NBC and the Lender, and their
respective counsel, financial advisors, auditors and other authorized
representatives full access to the offices, properties, books and records of
such parties relating to the KXAS Business, (ii) furnish to NBC and the Lender,
and their respective counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information relating
to the KXAS Business as such Persons may reasonably request and (iii) instruct
their respective employees, counsel and financial advisors to cooperate with NBC
and the Lender in their respective investigations of the KXAS Business. Any
investigation pursuant to this Section shall be conducted in such manner as not
to interfere unreasonably with the conduct of the business of LIN-TV and LIN-
Texas. Notwithstanding the foregoing, neither NBC nor the Lender shall have
access to personnel records of LIN-TV and LIN-Texas relating to individual
performance or evaluation records, medical histories or other information which
in any of such party's good faith opinion is sensitive or the disclosure of
which could subject such party to risk of liability. No investigation by NBC or
the Lender or other information received by NBC or the Lender shall operate as a
waiver or otherwise affect any representation, warranty or agreement given or
made by any other party under any of the Transaction Documents.
(b) From the date hereof until the Funding Date, NBC and its
Affiliates will (i) give Ranger and its financing sources, and their respective
counsel, financial advisors, auditors and other authorized representatives full
access to the offices, properties, books and records of NBC and its Affiliates
relating to the KNSD Business, (ii) furnish to Ranger and its financing sources,
and their respective counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information relating
to the KNSD Business as such Persons may reasonably request and (iii) instruct
their respective employees, counsel and financial advisors to cooperate with
Ranger and its financing sources in their respective investigations of the KNSD
Business. Any investigation pursuant to this Section shall be conducted in such
manner as not to interfere unreasonably with the conduct of the business of NBC
and its Affiliates or the KNSD Business. Notwithstanding the foregoing, neither
Ranger nor its financing sources shall have access to personnel records of NBC
or any Affiliates relating to individual performance or evaluation records,
medical histories or other information which in such party's good faith opinion
is sensitive or the disclosure of which could subject such party to risk of
liability. No investigation by Ranger
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or its financing sources or other information received by Ranger or its
financing sources shall operate as a waiver or otherwise affect any
representation, warranty or agreement given or made by any other party under any
of the Transaction Documents.
SECTION 9.02. Notices of Certain Events. Each party hereto shall
promptly, but in any event within 1 Business Day, notify the other parties
hereto of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
Contemplated Transactions;
(b) any notice or other communication from any Governmental Entity in
connection with or affecting the Contemplated Transactions;
(c) any Actions commenced or, to its knowledge threatened against,
relating to or involving or otherwise affecting any Business that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 4.05, 5.05 or 6.05, as the case may be, or that relate to
the consummation of the Contemplated Transactions; and
(d) (i) the occurrence, or failure to occur, of any event of which it
becomes aware that has caused or that could be reasonably expected to cause any
representation or warranty of any party contained in any Transaction Document to
be untrue or inaccurate at any time from the date hereof to the Closing Date,
(ii) the failure of any party to any of the Transaction Documents or any
officer, director, employee or agent thereof, to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it under the Transaction Documents and (iii) the receipt or giving
of any notice under the Merger Agreement; provided that no such notification(s)
shall affect the representations or warranties or other rights of such parties
or the conditions to their respective obligations under the Transaction
Documents.
SECTION 9.03. Reasonable Best Efforts; Further Assurances. (a) Subject
to the terms and conditions of this Agreement, each of the parties hereto will
use its reasonable best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary or desirable under applicable
laws and regulations to consummate the Contemplated Transactions. Each of the
parties hereto agrees to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be necessary
or desirable in order to consummate or implement expeditiously the
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Contemplated Transactions and to vest in the relevant Business Transferee good
and marketable title to the relevant Contributed Assets.
(b) Each Business Transferor hereby constitutes and appoints,
effective as of the Funding Date (or the Closing Date in the case of any
Business Transfer to occur on such date), the relevant Business Transferee(s)
and their respective successors and assigns as the true and lawful attorney of
such Business Transferor with full power of substitution in the name of the
relevant Business Transferee(s), or in the name of such Business Transferor but
for the benefit of the relevant Business Transferee(s), (i) to collect for the
account of the relevant Business Transferee(s) any items of the relevant
Contributed Assets and (ii) to institute and prosecute all proceedings which the
relevant Business Transferee(s) may in its sole discretion deem proper in order
to assert or enforce any right, title or interest in, to or under the relevant
Contributed Assets, and to defend or compromise any and all actions, suits or
proceedings in respect of the relevant Contributed Assets. Each Business
Transferee shall be entitled to retain for its own account any amounts collected
pursuant to the foregoing powers, including any amounts payable as interest in
respect thereof.
SECTION 9.04. Certain Filings. Each of the parties hereto shall
cooperate with one another (i) in determining whether any action by or in
respect of, or filing with, any Governmental Entity, is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
Contemplated Transactions and (ii) in taking such actions or making any such
filings, furnishing information required in connection therewith and seeking to
obtain any such actions, consents, approvals or waivers in a timely manner.
SECTION 9.05. Public Announcements. The parties agree to consult with
each other before issuing any press release or making any public statement with
respect to the Transaction Documents or the Contemplated Transactions and,
except as may be required by applicable law or any listing agreement with any
national securities exchange, will not issue any such press release or make any
such public statement prior to such consultation.
SECTION 9.06. WARN Act. The parties agree to cooperate in good faith to
determine whether any notification may be required under the Worker Adjustment
and Retraining Notification Act (the "WARN ACT") as a result of the Contemplated
Transactions and, if such notices are required, to provide such notice in a
manner that is reasonably satisfactory to each of the parties hereto.
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SECTION 9.07. Certain Capital Expenditures in Respect of the KXAS
Business. In respect of the KXAS Business, LIN-TV hereby agrees (a) prior to the
Funding Date, (i) to purchase new DVC Pro news gathering and editing equipment
at a cost to LIN-TV of at least $750,000, (ii) to pay for the purchase and
installation of a new digital antenna and transmission line at a cost to LIN-TV
of at least $564,375, and (iii) to pay to NBC $1,532,188 less the documented
amounts actually expended by LIN-TV under (i) and (ii) above as of the Closing
Date, provided that in no event shall NBC be obligated to pay any amounts to
LIN-TV by virtue of this Section 9.03(a) and (b) that each of such assets shall
be deemed to be KXAS Assets. In respect of the KXAS Business, NBC hereby agrees
that it will reimburse LIN-TV for the sum of (x) any documented amounts paid
prior to the Closing Date towards the purchase of a new digital transmitter
which will be delivered to the LP on behalf of the KXAS Business by LIN-TV and
which will, upon delivery and the payment by the LP of any remaining balance in
respect thereof, be deemed a KXAS Asset plus (y) $150,000.
ARTICLE 10
TAX MATTERS
SECTION 10.01. Tax Representations. NBC represents and warrants, with
respect to the KNSD Business and the KNSD Assets, that (a) Outlet has timely
filed with the appropriate taxing authorities all material Tax Returns required
to be filed by Outlet and any such material Tax Returns required to be filed on
or prior to the Closing Date (except those under valid extension) will be timely
filed and all such Tax Returns are and will be true and correct in all material
respects, (b) all Taxes shown to be due on the Tax Returns described in (a)
above have been timely paid or adequately reserved for in accordance with
generally accepted accounting principles (except to the extent that such Taxes
are being contested in good faith) and (c) there are no material liens for Taxes
(other than for Taxes not yet due and payable) on any KNSD Assets.
SECTION 10.02. Excluded or Assumed Liabilities. Except as otherwise
provided in this Article 10, Taxes with respect to Pre-Closing Tax Periods shall
constitute Excluded Liabilities.
SECTION 10.03. Tax Allocations.
(a) For purposes of this Agreement, income, deductions, and other
items will be allocated between the final Pre-Closing Tax Period and the initial
Post-Closing
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Tax Period based on an actual closing of the books of KXAS Business and the KNSD
Business at the close of business on the date of the relevant Business Transfer.
Any items attributable to transactions not in the ordinary course of business at
or prior to the transfer of the KXAS Assets or the KNSD Assets, as the case may
be, will be allocated to the final Pre-Closing Tax Period, and any items
attributable to transactions not in the ordinary course of business after such
transfer will be allocated to the initial Post-Closing Tax Period.
(b) Any liability for real property tax, personal property tax or any
similar ad valorem obligation levied with respect to any KXAS Asset or KNSD
Asset for a Post-Closing Tax Period that includes the Funding Date or the
Closing Date, as the case may be, will be apportioned ratably based on the
number of days of such taxable period included in the Pre-Closing Tax Period and
the number of days of such taxable period in the Post-Closing Tax Period.
(c) Any recording or filing fees with respect to the transfers of the
KXAS Assets or the KNSD Assets, and any transfer, documentary, sales, use or
other Taxes assessed upon or with respect to such transfers, will be the
responsibility of and paid by NBC and/or its Affiliates.
SECTION 10.04. Tax Cooperation and Consistent Reporting. The parties
agree to furnish or cause to be furnished to each other, upon request, as
promptly as practicable, such information and assistance relating to the KXAS
Assets and KXAS Business and KNSD Assets and KNSD Business as is reasonably
necessary for the preparation and filing of Tax Returns, the making of any
election related to Taxes, the preparation for any audit by any taxing
authority, or the prosecution or defense of any claim, suit or proceeding
relating to any Tax Return. The parties will cooperate with each other in the
conduct of any audit or other proceeding related to Taxes and all other Tax
Matters relating to the KXAS Business or the KNSD Business.
SECTION 10.05. Preparation of Tax Returns. Each of the parties shall be
responsible for causing the preparation and filing of Tax Returns relating to
its Business during the relevant party's period of ownership.
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ARTICLE 11
EMPLOYEE BENEFITS
SECTION 11.01. Employees. The parties hereto agree that they will
cooperate and use all commercially reasonable efforts to cause employees of the
KXAS Business to physically report to work on the Closing Date or as soon
thereafter as is practicable. NBC shall offer employment as of the Closing Date
to each individual who is an employee of the KXAS Business immediately prior to
the Closing Date and physically reports to work on the Closing Date or, if
absent from work on the Closing Date solely by reason of vacation or regularly
scheduled non-working days, on the day immediately following such vacation or
days off. Each such employee shall be offered employment with NBC in a position
similar to his or her position immediately prior to the Closing Date. NBC shall
also offer employment to each individual who is an employee of the KXAS Business
immediately prior to the Closing Date but is absent from work on the Closing
Date for any reason other than vacation or regularly scheduled days off. Each
such employee shall be offered employment with NBC in a position similar to such
employee's last position with the KXAS Business as of the date such employee
physically returns to work duty. Each employee of the KXAS Business who is
actively at work with the KXAS Business as of the Closing Date or returns to
active work duty with the KXAS Business from an authorized leave of absence
after the Closing Date shall hereinafter be referred to as a "KXAS TRANSFERRED
EMPLOYEE", and the first date on which each such KXAS Transferred Employee is
actively at work with the KXAS Business on or after the Closing Date shall
hereinafter be referred to as the "TRANSFER DATE" with respect to such KXAS
Transferred Employee. Notwithstanding anything to the contrary contained herein,
unless otherwise provided under the terms of a written employment or collective
bargaining agreement, each KXAS Transferred Employee shall be employed by NBC on
an at will basis and nothing shall prohibit NBC from terminating such employment
at any time after the Closing. Each individual who is an employee of the KXAS
Business immediately prior to the Closing Date but is not employed by NBC on the
Closing Date ("RETAINED EMPLOYEES") shall be continued as an employee of
LIN-Texas or its affiliate ("LIN EMPLOYER") until such employee's termination of
employment with LIN- Texas and its Affiliates in accordance with the policies
and practice of such LIN Employer as of the date hereof. LIN Employer shall
provide Retained Employees during their employment with LIN Employer all
benefits and protections ordinarily provided by LIN Employer to similarly
situated employees pursuant to its plans, policies and practices substantially
as in effect as of the date hereof.
SECTION 11.02. Continuation of Benefits. During the period from the
Closing Date until January 1, 2000, NBC shall maintain or cause to be maintained
wages, compensation levels, employee pension and welfare plans for the benefit
of the KXAS Transferred Employees, which in the aggregate are equal or greater
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than those wages, compensation levels and other benefits provided to such KXAS
Transferred Employees on the date of execution of the Merger Agreement.
SECTION 11.03. Severance Arrangements and Employment Agreements. (a)
With respect to any KXAS Transferred Employee who is covered by a severance
compensation agreement, employment agreement or other severance policy or plan
separate from the standard severance policy for the employees of LIN-TV or any
of its Subsidiaries, NBC shall maintain or cause to be maintained such severance
compensation agreement, employment agreement or other separate policy or plan as
in effect as of the date of execution of the Merger Agreement (except as may be
otherwise agreed by such KXAS Transferred Employee), and as to all other KXAS
Transferred Employees, NBC shall maintain or cause to be maintained severance
benefits at least as favorable as those provided under the standard severance
policy of LIN-TV and its Subsidiaries applicable to employees of the KXAS
Business as in effect as of the date of execution of the Merger Agreement until
January 1, 2000.
(b) NBC shall honor or cause to be honored all severance agreements
and employment agreements with any KXAS Transferred Employees.
SECTION 11.04. Bonus Arrangements. NBC shall maintain or cause to be
maintained the bonus practices of LIN-TV and its Subsidiaries as applicable to
KXAS Transferred Employees, as in effect on the date of execution of the Merger
Agreement, through the end of the 1998 fiscal year, with bonuses to be paid to
the KXAS Transferred Employees participating thereunder at levels consistent
with past practice.
SECTION 11.05. Welfare Plans. NBC shall (i) waive or cause to be
waived all limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the KXAS Transferred Employees under any welfare plan that such employees may
be eligible to participate in after the Closing Date and (ii) provide or cause
to be provided to each KXAS Transferred Employee credit for any co-payments and
deductibles paid prior to the Closing Date in satisfying any applicable
deductible or out-of-pocket requirements under any welfare plans that such
employees are eligible to participate in after the Closing Date.
SECTION 11.06. Employee Liabilities. (a) From and after the Closing
Date, the liabilities with respect to employees and former employees of the KXAS
Business, including liabilities associated with any domestic partner, dependent
or beneficiary of any such employee or former employee (collectively,
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"EMPLOYMENT-RELATED LIABILITIES") shall be divided between Ranger and NBC as
provided in this Section 11.06.
(b) Ranger shall maintain or cause an Affiliate to maintain in effect
at least until the Closing Date insurance policies relating to workers'
compensation, life insurance, long-term disability and accidental death and
dismemberment benefits with respect to current or former employees of the KXAS
Business ("INSURED BENEFITS") providing at least the same coverage in all
material respects as is currently in effect as of the date hereof (subject to
individual employee elections (if applicable) in accordance with the terms of
such benefits as in effect on the date hereof). Ranger shall maintain or cause
an Affiliate to maintain on and after the Closing Date with respect to Retained
Employees insurance policies providing (i) Insured Benefits which, at Ranger's
election, are the same in all material respects as in effect as of the date
hereof or the same as in effect for similarly situated employees of Ranger and
its Affiliates and (ii) a stop loss limit of $175,000 for each individual with
respect to his or her medical claims during any policy year as in effect in all
material respects on the date hereof; provided, however, that if no such
stop-loss insurance policy is in effect as of the date hereof Ranger shall
procure such a policy, at its sole expense, with terms of coverage satisfactory
to NBC. Ranger or its appropriate Affiliate (e.g., LIN-Texas) may reasonably
enter into or obtain insurance coverage with respect to employee benefits other
than Insured Benefits applicable to all similarly situated employees of Ranger
or such Affiliate. Ranger or its Affiliate, if applicable, shall retain on and
after the Closing Date as its sole property all insurance policies,
administrative service contracts and trust agreements relating to Insured
Benefits and all reserves and retention amounts held in connection herewith.
(c) Ranger shall be solely liable for (i) all claims with respect to
Insured Benefits and other employee benefits covered under an applicable
insurance policy incurred prior to the Closing Date to the extent covered or
required to be covered by an insurance policy maintained by Ranger or its
Affiliate (and all costs and expenses relating to such claims), (ii) claims
incurred prior to the Closing Date for dental, medical, prescription drug or
other health benefits covered under the plans, policies and practices applicable
prior to the Closing Date to current or former employees of the KXAS Business,
(iii) claims incurred on and after the Closing Date for dental, medical,
prescription drug or other health benefits with respect to (A) each former
employee of the KXAS Business who terminates employment with the KXAS Business
on or prior to the Closing Date and (B) each Retained Employee (whether or not
such Retained Employee becomes a KXAS Transferred Employee after the Closing
Date), in each case to the extent, and only to the extent, that (x) such claims
are covered under the plans, policies and practices of LIN-TV or its Affiliate
applicable to such individuals and (y) the aggregate amount
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of all such claims incurred at any time on and after the Closing Date exceed
$175,000 for any such individual, (iv) all claims with respect to Insured
Benefits and other employee benefits covered under an applicable insurance
policy incurred with respect to an employee of the KXAS Business on or after the
Closing Date through the date of such employee's termination of employment with
Ranger and its Affiliates (or, if applicable, the last day of the calendar month
on or immediately after such termination date) to the extent covered or required
to be covered by an insurance policy maintained by Ranger or its Affiliate (and
all costs and expenses relating to such claims) and (v) all damage, loss,
liability and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees) arising from or in connection with
the foregoing clauses (i) through (iv) of this sentence.
(d) Except as provided in the preceding paragraph, NBC shall indemnify
and hold harmless Ranger from and against all damage, loss, liability and
expense (including, without limitation, reasonable expenses of investigation and
reasonable attorneys' fees) arising from or in connection with Employment-
Related Liabilities, including, but not limited to, (i) compensation and
benefits payable to, and insurance premiums for coverage of, Retained Employees
on and after the Closing Date through their date of termination of employment
with Ranger and its Affiliates, (ii) all claims arising from or in connection
with the collective bargaining agreement covering employees of the KXAS Business
(including all costs incurred in connection with negotiations, if any, with the
union on the effect of the manner in which NBC assumes such agreement or extends
employment to persons covered by such agreement) and (iii) claims arising in
connection with the termination of employment of Retained Employees in
accordance with the provisions of this Article 11.
(e) For purposes of this Section, a claim in respect of dental,
medical, prescription drug or other health benefits shall be deemed to be
incurred as of the date that the dental, medical, prescription drug or other
health care or drugs (including any related devices or medications) are provided
or procured, and a claim in respect of workers' compensation or long-term
disability benefits shall be deemed to be incurred as of the date of the
accident, injury or other events giving rise to the condition forming the basis
of such claim or disability.
SECTION 11.07. Defined Contribution Plan. (a) Prior to the Closing
Date, Ranger shall take or cause to be taken all actions necessary to provide
that each employee of the KXAS Business is fully (100%) vested in all amounts
credited to the KXAS Transferred Employee's account under each KXAS DC Plan.
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(b) As soon as practicable following the Closing Date, NBC shall adopt
or designate one or more defined contribution plans (as defined in Section 3(34)
of ERISA) intended to meet the requirements of Section 401(a) of the Code (each
an "NBC DC PLAN"), the terms of which shall be determined in the sole discretion
of NBC or an NBC Affiliate designated by NBC, subject to its obligation under
Section 11.02. To the extent permitted by ERISA and the Code, Ranger shall take
or cause to be taken all actions necessary to permit the distribution and
rollover, or the direct transfer (under Code Section 401(a)(31)), of the account
balance of each KXAS Transferred Employee under each KXAS DC Plan to an NBC DC
Plan designated by NBC; provided, however, that each NBC DC Plan shall be
required to accept such rollovers or transfers only to the extent that they are
made in cash, and shall not be required to accept rollovers or transfers of
participant loan notes, securities or other in-kind assets.
(c) The parties hereto shall cooperate and take all actions reasonably
necessary or appropriate to: (i) effectuate the rollovers and transfers
described herein; (ii) at the request of NBC, assure that for a period of up to
one year following the Closing Date any participant loans taken by any KXAS
Transferred Employee under any pension plans (as defined in Section 3(2) of
ERISA) are not called due or deemed distributions by reason of the transactions
contemplated herein or by reason of any termination or deemed termination of
employment of any such KXAS Transferred Employee as a result of the transactions
contemplated herein; and (iii) share information necessary to each party to
effectuate the foregoing.
SECTION 11.08. Defined Benefit Plans. (a) Prior to the Closing Date,
Ranger shall take or cause to be taken all action necessary to provide that each
employee of the KXAS Business who participates in any defined benefit plan (as
defined in Section 3(35) of ERISA) maintained by LIN-Texas or any Affiliate of
LIN-Texas prior to the Closing Date (other than a multiemployer plan as defined
in Section 4001(a)(3) of ERISA) (each a "KXAS DB PLAN") is fully (100%) vested
in all benefits accrued by such employee under each such KXAS DB Plan as of the
Closing Date.
SECTION 11.09. Multiemployer Pension Plans. (a) To avoid the imposition
of any withdrawal liability on any of the parties hereto, NBC shall (i)
contribute or cause to be contributed to each multiemployer plan (as defined in
section 4001(a)(3) of ERISA) covering any current or former employee of the KXAS
Business (a "MULTIEMPLOYER PLAN") for substantially the same number of
contribution base units for which LIN-TV and its Affiliates have an obligation
to contribute in respect of such employees prior to the Closing Date; (ii)
provide to each Multiemployer Plan for a period of five plan years commencing
with the first
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plan year beginning after the Closing Date, a bond issued by a corporate surety
corporation, or, in a manner sufficient to avoid the imposition of withdrawal
liability, a sum to be held in escrow, or an irrevocable letter of credit, in
each case issued by a bank or similar financial institution, equal to the
greater of the average annual contribution required to be made by LIN-TV and its
Affiliates under each Multiemployer Plan for the three plan years preceding the
plan year in which the Closing Date occurs or the annual contribution that
LIN-TV and its Affiliates were required to make under each Multiemployer Plan
for the last plan year prior to the plan year in which the Closing Date occurs,
in each case in respect of current and former employees of the KXAS Business, or
shall obtain a waiver of the requirements to provide any of the foregoing or
shall comply with alternatives acceptable to any Multiemployer Plan, in order to
ensure compliance with Section 4204 of ERISA. If at any time during the first
five plan years beginning after the Closing Date, NBC withdraws from, or fails
to make or cause to be made a required contribution to, one of the Multiemployer
Plans, the bond, escrow, or letter of credit obtained with respect to such
Multiemployer Plan, if any, shall be paid to such Multiemployer Plan.
(b) Notwithstanding any other provision hereof, the obligations of
NBC under this Section 11.09 are limited to the extent necessary to comply with
Section 4204 of ERISA. If NBC effects a complete or partial withdrawal from a
Multiemployer Plan during the first five plan years following the Closing Date
and NBC fails to make any withdrawal liability payment to the Multiemployer Plan
when due, then Ranger shall be secondarily liable to the Multiemployer Plan for
any unpaid withdrawal liability to the extent that Ranger would have incurred
such liability following the Closing Date had the LP not agreed to the
provisions of this Section. Ranger's obligations set forth in this paragraph
shall continue with respect to events that occurred prior to the last day of the
five plan year period referred to in this Section 11.09 (regardless of when
notice of such liability is received by any party). Each party hereto shall
promptly notify all other parties of any demand for payment of withdrawal
liability received with respect to any Multiemployer Plan within five years from
the Closing Date. The parties hereto agree to take all such further action as
may be necessary to satisfy the sale of assets exception requirements set forth
in Section 4204 of ERISA.
SECTION 11.10. Past Service Credit. NBC agrees that, with respect to
all of the employee benefit programs and arrangements covering or otherwise
benefitting any of the KXAS Transferred Employees on or after the Closing Date,
service with LIN-TV or any of its Subsidiaries shall be included solely for
purposes of determining any period of eligibility to participate or to vest in
benefits under such programs and arrangements (but not for benefit accrual or
any other purpose under such programs or arrangements).
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ARTICLE 12
CONDITIONS TO CLOSINGS
SECTION 12.01. Conditions to Closing the Funding Date Transactions.
(a) Conditions to Funding Date Obligations of Each Party. The
obligations of each party to consummate the Funding Date Closing are subject to
the satisfaction of the following conditions:
(i) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of any of the Contemplated Transactions.
(ii) All actions by or in respect of or filings with any
Governmental Entity that are required to permit the consummation of
all of the Contemplated Transactions shall have been taken, made or
obtained, including final approval by the FCC of the FCC Applications;
provided that, if the FCC has granted approval of, but such approval
is not yet final with respect to (i) the FCC Form 314 or the FCC Form
316 with respect to the Business Transfers of the KXAS Business or
(ii) the FCC Form 316 with respect to the Business Transfer of the
KNSD Business, then NBC, with respect to the KXAS Business, and
Ranger, with respect to the KNSD Business, shall have the unilateral
right to waive this Section 12.01(a)(ii) as a condition to the Funding
Date Closing with respect to the receipt of any such final approval.
For purposes of this Agreement, FCC approval of the FCC Applications
shall be deemed to be final if the FCC has taken action approving the
transfer or assignment of the FCC Authorizations for the operation of
the KXAS Business and the KNSD Business, pursuant to the Business
Transfers, which has not been reversed, stayed, enjoined, set aside,
annulled or suspended, with respect to which no timely request for
stay, petition for reconsideration or appeal or sua sponte action of
the FCC with comparable effect is pending and as to which the time for
filing any such request, petition or appeal or for the taking of any
such sua sponte action by the FCC has expired.
(iii) Each of the parties hereto shall have received copies of
the Funding Date Transaction Documents duly executed by each of the
parties thereto.
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(iv) (A) The LLC shall have obtained at its sole cost an ALTA
extended coverage form of owner's or leasehold owner's title insurance
policies, or binders to issue the same, dated the Funding Date and in
amounts satisfactory to the LLC committing to insure, at ordinary
premium rates without any requirement for additional premiums, good
and marketable title to the real property that is owned or leased by
or to each Business Transferor and that is part of the Contributed
Assets free and clear of any Liens, except for Permitted Liens and (B)
any easements necessary for the use by the LLC of such real property
shall have been obtained by the LLC.
(v) Ranger shall have delivered the Venture Notice.
(b) Conditions to Funding Date Obligations of NBC. The obligation of
NBC to consummate the Funding Date Closing is subject to the satisfaction of the
following further conditions:
(i) (A) Each of the other parties to the Transaction Documents
shall have performed in all material respects all of its obligations
under the Transaction Documents required to be performed by it on or
prior to the Funding Date, (B) the representations and warranties of
such parties contained in each of the Transaction Documents and in any
certificate or other writing delivered by such parties pursuant
thereto, disregarding all qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect (as and if
defined in each Transaction Document) or any similar standard or
qualification, shall be true at and as of the Funding Date, as if made
at and as of such date with only such exceptions as would not in the
aggregate reasonably be expected to have a Material Adverse Effect on
the KXAS Business and (C) NBC shall have received a certificate signed
by an executive officer of each such party to the foregoing effect.
(ii) There shall not be threatened, instituted or pending any
action or proceeding brought by or on behalf of any Governmental
Entity (A) seeking to restrain, prohibit or otherwise interfere with
the ownership or operation by any Business Transferee or any of its
Affiliates of all or any material portion of the relevant Contributed
Assets or to compel such Business Transferee or any of its Affiliates
to dispose of all or any material portion of the relevant Contributed
Assets or of its other assets or (B) seeking to require divestiture by
such Business Transferee or any of its Affiliates of any of the
relevant Contributed Assets or of any of its other assets.
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(iii) There shall not be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the transfer of the
Contributed Assets, by any Governmental Entity, that, in the
reasonable judgment of NBC could, directly or indirectly, result in
any of the consequences referred to in clauses 12.01(b)(ii)(A) or
12.01(b)(ii)(B) above.
(iv) NBC shall have received an opinion of Weil, Gotshal & Manges
LLP, counsel to Ranger, dated the Funding Date to the effect specified
in Sections 4.01, 4.02, 4.03, 4.04 and, to such counsel's knowledge,
4.05. In rendering such opinion, such counsel may rely upon
certificates of public officers, as to matters governed by the laws of
jurisdictions other than New York, Delaware or the federal laws of the
United States of America, upon opinions of counsel reasonably
satisfactory to NBC, and, as to matters of fact, upon certificates of
officers of Ranger, copies of which opinions and certificates shall be
contemporaneously delivered to NBC.
(v) The parties to the Funding Date Transaction Documents shall
have received (A) all Required Consents with respect to the KXAS
Business and (B) all consents, authorizations or approvals from the
governmental agencies referred to in Section 4.03, 5.03 or 6.03, in
each case in form and substance reasonably satisfactory to NBC, and no
such consent, authorization or approval shall have been revoked.
(vi) NBC shall have received all documents it may reasonably
request relating to the existence of each of the other parties hereto
and the authority of such parties for the Transaction Documents, all
in form and substance reasonably satisfactory to NBC.
(c) Conditions to Funding Date Obligations of Ranger. The obligation
of Ranger to consummate the Funding Date Closing is subject to the satisfaction
of the following further conditions:
(i) (A) Each of the parties to the Transaction Documents shall
have performed in all material respects all of its obligations under
the Funding Date Transaction Documents required to be performed by
such parties at or prior to the Funding Date, (B) the representations
and warranties of such parties contained in each of the Transaction
Documents and in any certificate or other writing delivered by such
parties pursuant
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thereto, disregarding all qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect (as and if
defined in each Transaction Document) or any similar standard or
qualification, shall be true at and as of the Funding Date, as if made
at and as of such date with only such exceptions as would not in the
aggregate reasonably be expected to have a Material Adverse Effect on
the KNSD Business and (C) Ranger shall have received a certificate
signed by an executive officer of each such party to the foregoing
effect.
(ii) There shall not be threatened, instituted or pending any
action or proceeding brought by or on behalf of any Governmental
Entity (A) seeking to restrain, prohibit or otherwise interfere with
the ownership or operation by any Business Transferee or any of its
Affiliates of all or any material portion of the relevant Contributed
Assets or to compel such Business Transferee or any of its Affiliates
to dispose of all or any material portion of the relevant Contributed
Assets or of its other assets or (B) seeking to require divestiture by
such Business Transferee or any of its Affiliates of any of the
relevant Contributed Assets or of any of its other assets.
(iii) There shall not be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the transfer of the
Contributed Assets, by any Governmental Entity, that, in the
reasonable judgment of Ranger could, directly or indirectly, result in
any of the consequences referred to in clauses 12.01(c)(ii)(A) or
12.01(c)(ii)(B) above.
(iv) Ranger shall have received an opinion of Davis Polk &
Wardwell, counsel to NBC, dated the Funding Date to the effect
specified in Sections 5.01, 5.02, 5.03, 5.04 and, to such counsel's
knowledge, 5.05. In rendering such opinion, such counsel may rely upon
certificates of public officers, as to matters governed by the laws of
jurisdictions other than New York, Delaware or the federal laws of the
United States of America, upon opinions of counsel reasonably
satisfactory to Ranger, and, as to matters of fact, upon certificates
of officers of NBC, copies of which opinions and certificates shall be
contemporaneously delivered to Ranger.
(v) The parties to the Funding Date Transaction Documents shall
have received all KNSD Required Consents and all consents,
authorizations or approvals from governmental agencies referred to in
Section 5.03 or 6.03, in each case in form and substance reasonably
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satisfactory to Ranger, and no such consent, authorization or approval
shall have been revoked.
(vi) Ranger shall have received all documents it may reasonably
request relating to the existence of each of the other parties hereto
and the authority of such parties for the Funding Date Transaction
Documents, all in form and substance reasonably satisfactory to
Ranger.
(d) Conditions to Funding Date Obligations of LIN-Texas. The
obligation of LIN-Texas to consummate the Funding Date Closing is subject to the
satisfaction of the following further conditions:
(i) (A) Each of the other parties to the Transaction Documents
shall have performed in all material respects all of its obligations
under the Transaction Documents required to be performed by it on or
prior to the Funding Date, (B) the representations and warranties of
such parties contained in each of the Transaction Documents and in any
certificate or other writing delivered by such parties pursuant
thereto, disregarding all qualifications and exceptions contained
therein relating to materiality or Material Adverse Effect (as and if
defined in each Transaction Document) or any similar standard or
qualification, shall be true at and as of the Funding Date, as if made
at and as of such date with only such exceptions as would not in the
aggregate reasonably be expected to materially adversely affect the
ability of Ranger to consummate the Merger and (C) LIN-Texas shall
have received a certificate signed by an executive officer of each
such party to the foregoing effect.
(ii) LIN-Texas shall have received all documents it may
reasonably request relating to the existence of each of the other
parties hereto and the authority of such parties for the Transaction
Documents, all in form and substance reasonably satisfactory to
LIN-Texas.
(iii) All of the conditions specified in Section 6.3 of the
Merger Agreement to the obligation of LIN-TV to effect the Merger
shall have been satisfied (or duly waived by LIN-TV), and all of the
transactions contemplated to occur at the closing of the Merger shall
have occurred except the receipt by the Paying Agent of the Merger
Consideration.
SECTION 12.02. Conditions to Closing the Closing Date Transactions.
The obligations of each party to consummate the Closing Date Closing
are subject to the satisfaction of the following conditions:
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<PAGE> 56
(a) (i) Each of the Funding Date Transactions shall have been
consummated, (ii) each of the Funding Date Transaction Documents shall have been
duly executed by each of the parties thereto and (iii) the Effective Time shall
have occurred.
(b) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Closing Date
Transactions.
(c) Each of the parties hereto shall have received copies of the
Closing Date Transaction Documents duly executed by each of the parties thereto.
ARTICLE 13
SURVIVAL; INDEMNIFICATION
SECTION 13.01. Survival. Except for Section 4.06 and Section 5.06 which
shall survive the Closing Date, the representations and warranties of the
parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall terminate and
not survive the Closing Date.
SECTION 13.02. Indemnification. (a) Ranger, LIN-TV and LIN-Texas (the
"LIN INDEMNITORS") hereby, jointly and severally, indemnify NBC and its
Affiliates and each of their respective directors, officers, employees and
agents against and agree to hold each of them harmless from any and all damage,
loss, liability and expense (including, without limitation, reasonable expenses
of investigation and reasonable attorneys' fees and expenses in connection with
any action, suit or proceeding) ("DAMAGES") incurred or suffered by such parties
arising out of (i) any misrepresentation or breach of warranty made by Ranger in
Section 4.06 or any covenant or agreement to be performed by the LIN Indemnitors
or any of their Affiliates pursuant to this Agreement and (ii) any Excluded
Liability with respect to the KXAS Business.
(b) NBC hereby indemnifies Ranger and its Affiliates and each of their
respective directors, officers, employees and agents against and agrees to hold
each of them harmless from any and all Damages incurred or suffered by such
parties arising out of (i) any misrepresentation or breach of warranty made by
NBC in Section 5.06 or any covenant or agreement to be performed by NBC or any
of its Affiliates pursuant to this Agreement, other than those of NBC contained
in
50
<PAGE> 57
Article 10 of this Agreement and (ii) any Excluded Liability with respect to
the KNSD Business.
SECTION 13.03. Procedures. The party seeking indemnification under
Section 13.02 (the "INDEMNIFIED PARTY") agrees to give prompt notice to the
party against whom indemnity is sought (the "INDEMNIFYING PARTY") of the
assertion of any claim, or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought under such Section. The Indemnifying
Party may at the request of the Indemnified Party participate in and control the
defense of any such suit, action or proceeding at its own expense. The
Indemnifying Party shall not be liable under Section 13.02 for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder.
ARTICLE 14
TERMINATION AND RESCISSION
SECTION 14.01. Grounds for Termination. This Agreement may be
terminated at any time prior to the Funding Date:
(a) by mutual written agreement of the parties hereto;
(b) by any of the parties hereto if the Funding Date Closing shall not
have been consummated on or before May 1, 1998;
(c) by any of the parties hereto if the Merger Agreement shall have
been terminated by any of the parties thereto, pursuant to Section 7.01 thereof;
and
(d) by any of the parties hereto if there shall be any law or
regulation that makes consummation of the Contemplated Transactions illegal or
otherwise prohibited or if consummation of the Contemplated Transactions would
violate any nonappealable final order, decree or judgment of any Governmental
Entity having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses
14.01(b), 14.01(c) or 14.01(d) shall give prompt notice of such termination to
the other party.
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<PAGE> 58
SECTION 14.02. Effect of Termination. If this Agreement is terminated
as permitted by Section 14.01, such termination shall be without liability of
any party (or any stockholder, director, officer, employee, agent, consultant,
partner or representative of such party) to the other parties to this Agreement;
provided that if such termination shall result from the (i) willful failure of
either party to fulfill a condition to the performance of the obligations of the
other party, (ii) failure to perform a covenant of any of the Transaction
Documents or (iii) breach by either party hereto of any representation or
warranty or agreement contained in any of the Transaction Documents, such party
shall be fully liable for any and all Damages incurred or suffered by the other
party as a result of such failure or breach. The provisions of Sections 15.03,
15.05, 15.06 and 15.07 shall be treated by the parties as a separate continuing
agreement that shall survive any termination of this Agreement pursuant to
Section 14.01 or any rescission of this Agreement pursuant to Section 14.03.
SECTION 14.03. Rescission Rights. (a) Unless the Closing Date
Transactions are consummated within thirty-two hours of the consummation of the
last Funding Date Transaction to have been consummated, then, without further
act or notice by any party or parties hereto, the Funding Date Transactions
shall be rescinded and thereupon the following shall occur:
(i) the LLC and the LP will be unwound, pursuant to the terms of
the LLC Agreement and the LP Agreement, and LIN-Texas will receive the
KXAS Business and Outlet will receive the KNSD Business, in each case
in liquidation of the LLC members' and the LP partners' respective
interests in the LLC and the LP;
(ii) the Venture Loan will accelerate, pursuant to the terms of
the Venture Credit Agreement, and LIN-Texas will (A) repay the Venture
Loan to the Lender without interest and (B) pay to the Lender any
funds that were actually earned by LIN-Texas on the proceeds of the
Venture Loan (without regard to the coupon on the Venture Note), in
each case promptly upon receipt of the KXAS Business by LIN-Texas from
the LLC pursuant to Section 14.03(a)(i);
(iii) Upon repayment of the Venture Loan pursuant to Section
14.03(a)(ii), LIN-TV will be released from the Original Guaranty
pursuant to the terms thereof and the KXAS Lien and the KNSD Lien will
be released and extinguished; and
52
<PAGE> 59
(iv) Each of the Funding Date Transaction Documents shall be
terminated and shall have no force and effect against any of the
respective parties thereto.
(b) Each of the parties hereto agrees that, subject to clause (c)
hereof, the intent of this Section 14.03 is to restore each party to the Funding
Date Transactions to the position that each such party would have occupied had
the Funding Date Transactions never occurred and the Funding Date Transaction
Documents never been executed and effective. The parties hereto agree to reflect
all income, gain or loss arising from, or with respect to, any Contributed Asset
or the Venture Loan on any Tax Return of such party and for all other purposes
in a manner that is consistent with this intent, including, without limitation,
(i) ignoring the provisions of Section 10.03 and treating all income, gain or
loss arising on the Funding Date and thereafter from any Contributed Asset as
income, gain or loss of the relevant Business Transferor for all Tax purposes,
(ii) treating any funds that were actually earned with respect to the proceeds
of the Venture Loan (without regard to the coupon on the Venture Note) as income
of the Lender for all Tax purposes, and (iii) treating all of the Funding Date
Transactions as though they had never occurred and the Funding Date Transaction
Documents had never been executed and effective.
(c) (i) In the event of rescission pursuant to this Section 14.03, NBC
hereby indemnifies LIN-TV and its Affiliates and each of their respective
directors, officers, employees and agents (each, a "LIN INDEMNIFIED PERSON")
against and agrees to hold each of them harmless from any and all damage, loss,
liability and expense (including, without limitation, the reasonable fees and
expenses of LIN-TV's accountants, attorneys, brokers and financial and other
advisors) incurred or suffered by any such LIN Indemnified Persons or with
respect to any of their respective properties or assets arising out of the
Funding Date Transactions and any exercise of a party's rights under this
Section 14.03 (collectively, the "RESCISSION DAMAGES"), and that would not have
otherwise been incurred or suffered in connection with LIN-TV's efforts to
consummate the transactions contemplated by the Merger Agreement.
(ii) Any LIN Indemnified Person seeking indemnification under
this Section 14.03(c) shall give prompt notice to NBC of the assertion
of any claim, or the commencement of any audit, suit, action or
proceeding in respect of which indemnity may be sought under this
Section and will provide NBC such information with respect thereto
that NBC may reasonably request. The failure to so notify NBC shall
not relieve NBC of its obligations hereunder, except to the extent
such failure shall have adversely prejudiced NBC. With respect to
claims for Taxes, LIN-TV shall
53
<PAGE> 60
initially be responsible for providing documents requested by any
Taxing authority in any audit of its Tax Returns for the Pre-Closing
Tax Period that includes the Funding Date and, after giving notice of
such request for documents to NBC, shall, if consented to by NBC,
handle any such audit until there is reason to believe that an audit
adjustment in respect of Rescission Damages may be proposed. NBC shall
control the defense of any Claim asserted by any third party ("THIRD
PARTY CLAIM"), including without limitation the control and
appointment of lead counsel for such defense, in each case at its
expense. NBC shall obtain the prior written consent of the relevant
LIN Indemnified Person(s) (which shall not be unreasonably withheld)
before entering into any settlement of such Third Party Claim, if the
settlement does not release the relevant LIN Indemnified Person(s)
from all liabilities and obligations with respect to such Third Party
Claim or the settlement imposes injunctive or other equitable relief
against the relevant LIN Indemnified Person(s) and such LIN
Indemnified Person(s) shall be entitled to participate in the defense
of such Third Party Claim and to employ separate counsel of its choice
for such purpose. The fees and expenses of such separate counsel shall
be paid by such LIN Indemnified Person(s).
(iii) Each party shall cooperate, and cause their respective
Affiliates to cooperate, in the defense or prosecution of any Third
Party Claim and shall furnish or cause to be furnished such records,
information and testimony, and attend such conferences, discovery
proceedings, hearings, trials or appeals, as may be reasonably
requested in connection therewith.
(iv) The amount of any Rescission Damages payable under this
Section 14.03(c) by NBC shall be net of (A) any amounts recovered or
recoverable by the relevant LIN Indemnified Person(s) under applicable
insurance policies, (B) the present value of any Tax cost incurred by
the relevant LIN Indemnified Person arising from the receipt of
indemnity payments and (C) the present value of any Tax benefit
realized by the relevant LIN Indemnified Person(s) arising from the
Funding Date Transactions, the rescission thereof or the incurrence or
payment of any such Rescission Damages. In computing the amount of any
such Tax cost or Tax benefit, such LIN Indemnified Person(s) shall be
deemed to fully utilize, at the highest marginal tax rate then in
effect, all Tax items arising from the receipt of any indemnity
payment hereunder, the Funding Date Transactions, the rescission
thereof or the incurrence or payment of any indemnified Rescission
Damages.
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<PAGE> 61
(v) NBC shall not be liable under Section 14.03(c) for any (A)
punitive Rescission Damages or (B) Rescission Damages for lost
profits.
(vi) If any LIN Indemnified Person(s) receives any payment from
NBC in respect of any Rescission Damages pursuant to Section 14.03(c)
and such LIN Indemnified Person(s) could have recovered all or a part
of such Rescission Damages from a third party (a "POTENTIAL
CONTRIBUTOR") based on the underlying Claim asserted against NBC, such
LIN Indemnified Person(s) shall assign such of its rights to proceed
against the Potential Contributor as are necessary to permit NBC to
recover from the Potential Contributor the amount of such payment.
(vii) This Section 14.03(c) shall provide the exclusive remedy
for any Rescission Damages.
ARTICLE 15
MISCELLANEOUS
SECTION 15.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given,
if to NBC, Outlet, the LLC and/or the LP, to:
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Attention: Warren Jenson
Fax: (212) 664-0427
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<PAGE> 62
with a copy to:
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Attention: Stephen F. Stander
Fax: (212) 664-6572
if to Ranger, the LLC, the LP and/or to LIN-TV or LIN-Texas after the
Closing Date, to:
Ranger Holdings Corp.
200 Crescent Court, Suite 1600
Dallas, TX 75201
Attention: Lawrence D. Stuart
Fax: (214) 740-7313
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Stephen E. Jacobs
Fax: (212) 310-8007
if to LIN-TV and/or LIN-Texas, prior to the Closing Date, to:
LIN Television of Texas, L.P.
c/o LIN Television Corporation
#1 Richmond Square, Suite 230E
Providence, RI 02906
Attention: Peter E. Maloney
Facsimile: (404) 454-0089
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: David B. Chapnick
Facsimile: (212) 455-2502
56
<PAGE> 63
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.
SECTION 15.02. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 15.03. Fees and Expenses. (a) Except as otherwise provided
herein, all costs and expenses incurred in connection with this Agreement shall
be
57
<PAGE> 64
paid by the party incurring such cost or expense. Notwithstanding anything to
the contrary herein, NBC shall pay all costs and expenses relating to the
transfer of assets to the LP and the LLC (but excluding (i) any Tax incurred as
a result thereof, other than any transfer Tax and (ii) the insurance required by
Section 12.01(a)(iv) hereof).
(b) If LIN-TV pays the Termination Fee (as defined in the Merger
Agreement) pursuant to Section 7.3(b)(i) of the Merger Agreement, then Ranger
shall pay to NBC an amount in cash equal to 23% of (i) the amount of the
Termination Fee actually paid plus the amount of the expenses actually
reimbursed pursuant to such Section minus (ii) $32 million. If LIN-TV reimburses
Ranger for its expenses pursuant to Section 7.3(b)(iii) of the Merger Agreement,
then Ranger shall pay to NBC an amount in cash equal to 23% of (i) the amount of
the expenses actually reimbursed by LIN-TV minus (ii) $4 million.
SECTION 15.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
SECTION 15.05. Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of New York, without
regard to the conflicts of law rules of such state.
SECTION 15.06. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 15.01 shall be deemed
effective service of process on such party.
58
<PAGE> 65
SECTION 15.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 15.08. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of the
Transaction Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of the Transaction
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
SECTION 15.09. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 15.10. Entire Agreement. Except for the Confidentiality
Agreements, the Transaction Documents constitute the entire agreement between
the parties with respect to the subject matter of this Agreement and supersede
all prior agreements and understandings, both oral and written, between the
parties with respect to the subject matter of this Agreement, including without
limitation the Letter Agreement.
SECTION 15.11. Bulk Sales Laws. Each Business Transferee each hereby
waives compliance by each Business Transferor with the provisions of the "bulk
sales", "bulk transfer" or similar laws of any state. NBC agrees to indemnify
and hold the relevant Business Transferee harmless against any and all claims,
losses, damages, liabilities, costs and expenses incurred by each Business
Transferee or any of its Affiliates as a result of any failure to comply with
any such "bulk sales", "bulk transfer" or similar laws.
SECTION 15.12. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
59
<PAGE> 66
SECTION 15.13. Covenant of LIN-TV as to Its Subsidiaries. LIN-TV agrees
to cause LIN-Texas and each other Subsidiary that is a party to any Transaction
Document or a participant in any Contemplated Transaction to perform in all
material respects all of its and their respective obligations thereunder and
with respect thereto.
SECTION 15.14. Covenant of NBC as to Its Subsidiaries. NBC agrees to
cause each Subsidiary that is a party to any Transaction Document or a
participant in any Contemplated Transaction to perform in all material respects
all of its obligations thereunder and with respect thereto.
SECTION 15.15. Additional Interim Operating Restriction. (a) During the
period between consummation of the Funding Date Transactions and the Effective
Time, LIN-Texas agrees to cause the LLC to operate the KXAS Business in the
ordinary course of business and not to acquire, sell, lease or otherwise dispose
of a material amount of assets or agree or commit to do any of the foregoing,
except as expressly contemplated by the Transaction Documents.
(b) During the period after the Effective Time but prior to the
consummation of the Closing Date Transactions, Ranger agrees to cause the LLC to
operate the KXAS Business in the ordinary course of business and not to acquire,
sell, lease or otherwise dispose of a material amount of assets or agree or
commit to do any of the foregoing, except as expressly contemplated by the
Transaction Documents.
60
<PAGE> 67
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
NATIONAL BROADCASTING
COMPANY, INC.
By:
---------------------------------
Name:
Title:
OUTLET BROADCASTING, INC.
By:
---------------------------------
Name:
Title:
RANGER HOLDINGS CORP.
By:
---------------------------------
Name:
Title:
LIN TELEVISION OF TEXAS, L.P.
By:
---------------------------------
Name:
Title:
STATION VENTURE HOLDINGS,
LLC
By:
---------------------------------
Name:
Title:
STATION VENTURE OPERATIONS, LP
By:
---------------------------------
Name:
Title:
LIN TELEVISION CORPORATION
By:
---------------------------------
Name:
Title:
<PAGE> 68
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of ________ __, 1998,
between [NAME OF BUSINESS TRANSFEROR], a ________ [corporation/limited
partnership] ("TRANSFEROR"), and [NAME OF BUSINESS TRANSFEREE], a [limited
liability company/limited partnership] ("TRANSFEREE").
W I T N E S S E T H :
WHEREAS, Transferor, Transferee and certain other parties have
concurrently herewith consummated the contribution by the Transferor of the
[all/____%] of the [KXAS/KNSD] Assets(1) pursuant to the terms and conditions
of the Transaction Agreement dated as of January __, 1998 between Transferor,
Transferee and certain other parties, (the "TRANSACTION AGREEMENT"; terms
defined in the Transaction Agreement and not otherwise defined herein being used
herein as therein defined);
WHEREAS, pursuant to the Transaction Agreement, Transferee has agreed
to assume certain liabilities and obligations of Transferor with respect to the
[KXAS/KNSD] Assets and the [KXAS/KNSD] Business;
NOW, THEREFORE, in consideration of the sale of the relevant
Contributed Assets and in accordance with the terms of the Transaction
Agreement, Transferor and Transferee agree as follows:
1. (a) Transferor does hereby contribute, transfer, assign and
deliver to Transferee [all /__%] of the right, title and interest of Transferor
in, to and under the [KNSD/KXAS] Assets; provided that no sale, transfer,
assignment or delivery shall be made of any or any material portion of any of
the relevant Contracts if an attempted contribution, assignment, transfer or
delivery, without the consent of a third party, would constitute a breach or
other contravention thereof or in any way adversely affect the rights of
Transferor or Transferee thereunder.
- --------------
(1) To be revised appropriately throughout for the purposes of the
Assignment and Assumption Agreement contemplated by Section 2.01(a)(i) of the
Transaction Agreement.
<PAGE> 69
(b) Transferee does hereby accept [all /__%] of the right, title and
interest of Transferor in, to and under [all/___%] of the [KXAS/KNSD] Assets
(except as aforesaid) and Transferee assumes and agrees to pay, perform and
discharge promptly and fully when due [all/___%] of the relevant Assumed
Liabilities and to perform [all /__%] of the obligations of Transferor to be
performed under the relevant Contracts.
2. This Agreement shall be governed by and construed in accordance
with the law of the State of New York, without regard to the conflicts of law
rules of such state.
3. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[TRANSFEROR]
By:
---------------------------------
Name:
Title:
[TRANSFEREE]
By:
---------------------------------
Name:
Title:
2
<PAGE> 1
EXHIBIT 10.6
================================================================================
ASSET PURCHASE OPTION AGREEMENT
AMONG
LIN HOLDINGS CORP.
AND
BIRMINGHAM BROADCASTING (WVTM TV), INC.
AND JOINED IN BY
NATIONAL BROADCASTING COMPANY, INC.,
FOR THE SOLE PURPOSE OF ARTICLE 12 HEREOF
DATED MARCH 3, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
----------------------
<TABLE>
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PAGE
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<S> <C> <C>
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions......................................................................2
ARTICLE 2
PURCHASE OPTION
SECTION 2.01. Purchase Option..................................................................8
ARTICLE 3
SALE AND PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES
SECTION 3.01. Asset Sale and Purchase of Assets................................................9
SECTION 3.02. Excluded Assets.................................................................11
SECTION 3.03. Nonassignable Rights............................................................12
SECTION 3.04. Purchase Price..................................................................13
SECTION 3.05. Payment of Purchase Price; Allocation...........................................13
SECTION 3.06. Proration Amount................................................................14
SECTION 3.07. Assumption of Liabilities.......................................................16
ARTICLE 4
REPRESENTATIONS AND WARRANTIES BY SELLER
SECTION 4.01. Organization and Standing; Corporate Power and Authority........................16
SECTION 4.02. Subsidiaries and Investments....................................................16
SECTION 4.03. Authorization; Binding Effect...................................................17
SECTION 4.04. Consents and Approvals; No Violations...........................................17
SECTION 4.05. Assets..........................................................................17
SECTION 4.06. Financial Statements............................................................18
SECTION 4.07. No Undisclosed Liabilities; Ordinary Course.....................................18
SECTION 4.08. Compliance with Laws............................................................19
SECTION 4.09. Permits and Licenses............................................................19
SECTION 4.10. Taxes...........................................................................20
SECTION 4.11. Contracts.......................................................................20
SECTION 4.12. Personal Property Leases........................................................21
SECTION 4.13. Employees.......................................................................21
SECTION 4.14. Employee Relations..............................................................21
SECTION 4.15. Employee Benefit Plans..........................................................22
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 4.16. Intellectual Property...........................................................22
SECTION 4.17. Environmental Matters...........................................................22
SECTION 4.18. Entire Business.................................................................23
SECTION 4.19. Brokers.........................................................................23
SECTION 4.20. Litigation......................................................................23
SECTION 4.21. Transactions with Affiliates....................................................24
SECTION 4.22. Full Disclosure.................................................................24
ARTICLE 5
REPRESENTATIONS AND WARRANTIES BY BUYER
SECTION 5.01. Organization and Standing; Corporate Power and Authority........................24
SECTION 5.02. Authorization; Binding Effect...................................................24
SECTION 5.03. Consents and Approvals; No Violations...........................................25
SECTION 5.04. Brokers.........................................................................25
ARTICLE 6
COVENANTS AND AGREEMENTS OF SELLER
SECTION 6.01. Conduct of Business.............................................................26
SECTION 6.02. Affirmative Covenants...........................................................27
SECTION 6.03. Notices.........................................................................28
SECTION 6.04. Confidentiality.................................................................28
ARTICLE 7
COVENANTS AND AGREEMENTS OF BUYER
SECTION 7.01. Confidentiality.................................................................29
SECTION 7.02. Bulk Sales Laws.................................................................30
ARTICLE 8
ADDITIONAL COVENANTS AND AGREEMENTS OF BUYER AND SELLER
SECTION 8.01. Reasonable Best Efforts.........................................................30
SECTION 8.02. Control of Seller's Operations..................................................31
SECTION 8.03. Notification of Certain Matters.................................................32
SECTION 8.04. Conveyance Taxes................................................................32
SECTION 8.05. Risk of Loss....................................................................32
SECTION 8.06. Public Announcements............................................................32
SECTION 8.07. Records.........................................................................33
SECTION 8.08. Warn Act........................................................................33
SECTION 8.09. Employees and Employee Benefits.................................................33
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE 9
CONDITIONS
SECTION 9.01. Conditions to Obligations of Each Party.........................................36
SECTION 9.02. Conditions to Obligations of Buyer..............................................37
SECTION 9.03. Conditions to Obligations of Seller.............................................37
ARTICLE 10
THE CLOSING
SECTION 10.01. Closing........................................................................38
SECTION 10.02. Delivery by Seller.............................................................38
SECTION 10.03. Delivery by Buyer..............................................................39
ARTICLE 11
TERMINATION, AMENDMENT AND WAIVER
SECTION 11.01. Termination....................................................................40
SECTION 11.02. Effect of Termination..........................................................41
SECTION 11.03. Amendment......................................................................41
SECTION 11.04. Waiver.........................................................................41
ARTICLE 12
COVENANTS AND REPRESENTATIONS AND WARRANTIES OF NBC
SECTION 12.01. Covenant of NBC as to the Seller...............................................41
SECTION 12.02. Guaranty by NBC of Seller's Indemnification Payment Obligations................41
SECTION 12.03. Representation and Warranty of NBC.............................................42
ARTICLE 13
SURVIVAL; INDEMNIFICATION
SECTION 13.01. Survival of Representations....................................................42
SECTION 13.02. Indemnification by Seller......................................................42
SECTION 13.03. Indemnification by Buyer.......................................................43
SECTION 13.04. Procedures.....................................................................43
SECTION 13.05. Limits on and Conditions to Indemnification....................................44
ARTICLE 14
GENERAL PROVISIONS
SECTION 14.01. Notices........................................................................46
SECTION 14.02. Parties in Interest............................................................47
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 14.03. Enforcement of Agreement.......................................................47
SECTION 14.04. Governing Law..................................................................47
SECTION 14.05. Expenses and Transfer Taxes....................................................48
SECTION 14.06. Benefit and Assignment.........................................................48
SECTION 14.07. Entire Agreement...............................................................48
SECTION 14.08. Severability...................................................................48
SECTION 14.09. Headings.......................................................................49
SECTION 14.10. Signature in Counterparts......................................................49
SECTION 14.11. Disclosure Schedules...........................................................49
SECTION 14.12. Jurisdiction and Venue.........................................................49
</TABLE>
iv
<PAGE> 6
SCHEDULES
Schedule 1.01 -- Certain Permitted Encumbrances
Schedule 3.01(a) -- Station FCC Licenses
Schedule 3.01(b)(i) -- Real Property
Schedule 3.01(b)(ii) -- Leasehold Interests
Schedule 3.01(c) -- Certain Tangible Personal Property
Schedule 3.01(e) -- Certain Program Contracts
Schedule 3.01(f) -- Certain Trade-Out Agreements
Schedule 3.01(g) -- Employment Agreements
Schedule 3.01(h) -- Certain Operating Contracts
Schedule 3.01(i) -- Certain Prepaid Expenses
Schedule 3.02(j) -- Seller Trademarks and Tradenames
Schedule 3.02(l) -- Certain Other Property
Schedule 4.04 -- Certain Contract Violations
Schedule 4.05(c) -- Certain Affiliate Arrangements
Schedule 4.06 -- Financial Statements
Schedule 4.07(a) -- Certain Contingent Liabilities
Schedule 4.07(b) -- Material Changes
Schedule 4.09(b)(iii) -- Relevant FCC Facts or Circumstances
Schedule 4.12 -- Tangible Personal Property Leases
Schedule 4.13 -- Employees
Schedule 4.14 -- Employee Relations Matters
Schedule 4.15 -- Employee Benefit Plans
Schedule 4.17 -- Environmental Matters
Schedule 4.20 -- Litigation
Schedule 5.03 -- Certain Contract Violations
Schedule 6.01 -- Ordinary Course of Business Exceptions
v
<PAGE> 7
ASSET PURCHASE OPTION AGREEMENT
THIS ASSET PURCHASE OPTION AGREEMENT (this "AGREEMENT") is entered into
as of this 3d day of March, 1998 by and among LIN Holdings Corp. a Delaware
corporation ("BUYER"), and Birmingham Broadcasting (WVTM TV), Inc., an Alabama
corporation ("SELLER"). This Agreement is joined in by National Broadcasting
Company, Inc., a Delaware corporation and the indirect parent corporation of
Seller ("NBC"), for the sole purpose of Article 12 hereof.
WHEREAS, Buyer and NBC are, simultaneously herewith, entering into
definitive agreements with respect to a television station joint venture (the
"VENTURE");
WHEREAS, Seller is the owner and licensee of television broadcast
station WVTM TV, serving Birmingham, Alabama, together with certain auxiliary
facilities (the "STATION"), the operations of the Station being referred to
herein as the "BUSINESS";
WHEREAS, on the day prior to the date hereof, NBC and Seller have
entered into a television station network affiliation agreement pursuant to
which NBC will provide the Station with network programming for a term of 25
years (the "NBC AFFILIATION AGREEMENT");
WHEREAS, to further induce Buyer to enter into and to consummate the
Venture, NBC desires to cause Seller to grant to Buyer an option to purchase all
of the assets and rights, except those assets and rights which are expressly
excluded herein, employed by Seller in connection with the Business, including
without limitation its rights under the NBC Affiliation Agreement, in accordance
with and subject to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. As used in this Agreement, the following
capitalized terms have the meanings specified below:
<PAGE> 8
"ACCOUNTING FIRM" shall have the meaning specified in Section 3.06(b).
"ACCOUNTS RECEIVABLE" means all accounts receivable with respect to the
Station as of the end of the broadcast day immediately preceding the Closing
Date.
"AFFILIATE" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person.
"ASSETS" shall have the meaning specified in Section 3.01.
"ASSIGNMENT OF CONTRACTS AND LEASES" means that certain Assignment of
Contracts and Leases, to be dated as of the Closing Date and executed by Seller,
in form and substance reasonably satisfactory to Buyer.
"ASSIGNMENT OF FCC LICENSES" means that certain Assignment of FCC
Licenses, to be dated as of the Closing Date and executed by Seller, in form and
substance reasonably satisfactory to Buyer.
"ASSUMED CONTRACTS" means the Program Contracts, the Trade-Out
Agreements, the Employment Agreements, the Operating Contracts and the Leases.
"ASSUMED LIABILITIES" shall have the meaning specified in Section
3.07(a).
"ASSUMPTION AGREEMENT" means that certain Assumption Agreement, to be
dated the Closing Date and executed by Buyer and Seller, in form and substance
reasonably satisfactory to Buyer.
"BASE PURCHASE PRICE" means an amount equal to one hundred ninety nine
million dollars ($199,000,000).
"BENEFIT ARRANGEMENT" means a benefit program or practice for bonuses,
incentive compensation, vacation pay, severance pay, insurance, restricted
stock, stock options, employee discounts, company cars, tuition reimbursement or
any other perquisite or benefit (including, without limitation, any fringe
benefit under Section 132 of the Code) to employees, officers or independent
contractors that is not a Plan.
"BILL OF SALE" means that certain Bill of Sale and Assignment of
Assets, dated as of the Closing Date and executed by Seller, in form and
substance reasonably satisfactory to Buyer.
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<PAGE> 9
"BUYER DOCUMENTS" shall mean, collectively, this Agreement and the
Assumption Agreement.
"CLOSING" means the closing of the purchase, assignment and sale of the
Assets and assumption of the Liabilities contemplated hereunder.
"CLOSING DATE" means the date on which the Closing takes place, as
established by Section 10.01.
"CODE" means the Internal Revenue Code of 1986, as amended, and all
Laws promulgated pursuant thereto or in connection therewith.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended,
and all Laws promulgated pursuant thereto or in connection therewith.
"CONTROL" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of stock, as trustee or
executor, by contract or otherwise.
"EMPLOYMENT AGREEMENTS" shall have the meaning specified in
Section 3.01(g).
"ENCUMBRANCES" means any mortgages, pledges, liens, security interests,
restrictions, defects in title, easements or encumbrances.
"ENVIRONMENTAL LAW" means any U.S. local, county, state and/or federal
law (including common law), regulation or other legally binding requirement that
governs the existence of or provides a remedy for release of Hazardous Sub
stances, the protection of Persons, natural resources or the environment, the
management of Hazardous Substances, or other activities involving Hazardous
Substances including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. Sections 9601 et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et
seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Sections
6901 et seq., the Clean Water Act, 33 U.S.C. Sections 1251 et seq., the Clean
Air Act, 33 U.S.C. Sections 2601 et seq., the Toxic Substances Control Act, 15
U.S.C. Sections 2601 et seq., the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. Sections 136 et seq., the Oil Pollution Act of 1990,
33 U.S.C. Sections 2701 et seq. and the Occupational Safety and Health Act, 29
U.S.C. Sections 651 et seq., as such laws have been amended or supplemented,
and/or any other similar federal, state, local and/or county laws or
regulations, in each case as in effect on or prior to the Closing Date or, with
3
<PAGE> 10
respect to representations and warranties made on the date hereof, on or prior
to the date hereof.
"ENVIRONMENTAL PERMITS" has the meaning set forth in Section 4.17.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.
"EXCLUDED ASSETS" shall have the meaning specified in Section 3.02.
"EXERCISE DATE" shall have the meaning specified in Article 2.
"FCC" means the Federal Communications Commission.
"FCC APPLICATION" shall mean such filings with the FCC as are necessary
under the Communications Act to obtain an FCC Order.
"FCC LICENSE" means any permit, license, waiver or authorization that a
Person is required by the FCC to hold in connection with the operation of its
business.
"FCC ORDER" means an order or orders of the FCC, or of the Staff of the
FCC acting under delegated authority, consenting to the assignment to Buyer of
the Station FCC Licenses.
"FINAL ORDER" means an FCC Order which has not been reversed, stayed,
enjoined, set aside, annulled or suspended, as to which the time for filing a
request for administrative or judicial review, or for instituting administrative
review sua sponte, shall have expired without any such filing have been made or
notice of such review having been issued; or, in the event of such filing or
review sua sponte, as to which such filing or review shall have been disposed of
favorably to the grant and the time for seeking further relief with respect
thereto shall have expired without any request for such further relief having
been filed.
"GOVERNMENTAL AUTHORITY" means any agency, board, bureau, court,
commission, department, instrumentality or administration of the United States
government, any state government or any local or other governmental body in a
state, territory or possession of the United States or the District of Columbia.
"HAZARDOUS SUBSTANCE" means any substance, material or waste that is
regulated under any Environmental Law or is deemed by any Environmental Law or
Governmental Authority to be "hazardous," "toxic," a "contaminant," "waste," a
"pollutant" or words with similar meaning and shall include, without limitation,
4
<PAGE> 11
petroleum and petroleum products, asbestos, asbestos-containing products and
PCBs.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and all Laws promulgated pursuant thereto or in connection
therewith.
"HSR FILING" shall have the meaning specified in Section 8.01(b).
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" shall have the respective
meanings specified in Section 13.04(a).
"INTELLECTUAL PROPERTY" shall have the meaning specified in Section
3.01(d).
"KNOWLEDGE" means to the actual knowledge of any director or officer of
such Person or of any subsidiary of such Person.
"LAWS" means any federal, state or local law, statute, code, ordinance,
regulation, order, writ, injunction, judgment or decree applicable to the
specified Person and to the businesses and assets thereof.
"LEASES" shall have the meaning specified in Section 3.01(b)(ii).
"LIABILITIES" shall mean as to any Person, all debts, adverse claims,
liabilities and obligations, direct, indirect, absolute or contingent, of such
Person, whether accrued, vested or otherwise, whether in contract, tort, strict
liability or otherwise and whether or not actually reflected, or required by
generally accepted accounting principles to be reflected, in such Person's
balance sheets or other books and records.
"LOSSES" means any and all demands, claims, complaints, actions or
causes of action, suits, proceedings, investigations, arbitrations, assessments,
losses, damages, liabilities, obligations (including those arising out of any
action, such as any settlement or compromise thereof or judgment or award
therein) and any costs and expenses, including, without limitation, attorney's
and other advisor's fees and disbursements.
"MATERIAL ADVERSE EFFECT" means any change or effect, or a series of
changes or effects, that individually or in the aggregate is materially adverse
to the value of the Assets taken as a whole, or materially adverse to the
business, results of operations or financial condition of the Station, except
for any adverse affect resulting from (i) general economic, regulatory,
political or other factors which are
5
<PAGE> 12
outside the control of Seller and (ii) changes or conditions affecting other
similarly situated participants in the television broadcast industry generally.
"MERGER AGREEMENT" shall mean that certain Agreement and Plan of Merger
among Ranger Holdings Corp., a predecessor to Buyer, Ranger Acquisition Company
and LIN Television Corporation, dated as of August 12, 1997, as amended as of
October 21, 1997, as the same may be further amended from time to time.
"OPERATING CONTRACTS" shall have the meaning specified in Section
3.01(h).
"ORDINARY COURSE OF BUSINESS" means, with respect to Seller, actions
taken in the ordinary course of business consistent with past practices of
Seller in relation to the Business.
"OPTION PERIOD" shall have the meaning specified in Article 2.
"PENSION PLAN" means an "employee pension benefit plan" as such term is
defined in Section 3(2) of ERISA.
"PERMITTED ENCUMBRANCES" means (a) Encumbrances arising in connection
with equipment financing or leasing, (b) Encumbrances on Real Property that do
not interfere with the use of the Real Property in the operations or business of
the Station, (c) Encumbrances for Taxes not yet due and payable or which are
being contested in good faith and for which adequate reserves are maintained on
Seller's books in accordance with generally accepted accounting principles, or
(d) Encumbrances that, individually or in the aggregate, do not and would not
materially detract from the value of any of the Assets or interfere with the use
thereof, (e) Encumbrances disclosed on Schedule 1.01 or (f) mechanic's,
materialman's, carrier's, repairer's and other similar Encumbrances arising or
incurred in the Ordinary Course of Business or that are not yet due and payable
or are being contested in good faith.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization, other form
of business or legal entity or Governmental Authority.
"PLAN" means any plan, program or arrangement, whether or not written,
that is or was an "employee benefit plan" as such term is defined in Section
3(3) of ERISA and (a) which is maintained by Seller or to which Seller
contributed or is obligated to contribute or to fund or provide benefits; and
(b) which provides or promises benefits to any Person who performs or who has
performed services
6
<PAGE> 13
for the Business and because of those services is or has been (i) a participant
therein or (ii) entitled to benefits thereunder.
"PURCHASE OPTION" shall have the meaning specified in Article 2.
"PROGRAM CONTRACTS" shall have the meaning specified in Section
3.01(e).
"PRORATION AMOUNT" shall mean the amount calculated in accordance
with Section 3.06.
"PURCHASE PRICE" shall mean the Base Purchase Price, plus or minus, as
the case may be, the Proration Amount.
"REAL PROPERTY" shall have the meaning specified in Section 3.01(b).
"RELEASE" means any releasing, spilling, leaking, discharging,
disposing of, pumping, pouring, emitting, emptying, injecting, leaching, dumping
or allowing to escape.
"REMEDIAL ACTION" means actions required by or necessary to ensure
compliance with Environmental Law to: (i) clean up, remove, treat or in any
other way address Hazardous Substances; and (ii) prevent the Release, or
minimize the further Release, of Hazardous Substances.
"SCHEDULES" shall mean the disclosure schedules delivered by Seller to
Buyer in connection herewith.
"SELLER DOCUMENTS" shall mean, collectively, this Agreement, the
Assignment of Contracts and Leases, the Bill of Sale, the Assignment of FCC
Licenses, and the Assumption Agreement.
"STATION FCC LICENSES" shall have the meaning specified in Section
3.01(a).
"TAXES" shall mean all taxes, levies or other like assessments, charges
or fees, including, without limitation, income, gross receipts, excise, value
added, real or personal property, withholding, asset, sales, use, license,
payroll, transaction, capital, business, corporation, employment, net worth and
franchise taxes, or other governmental taxes imposed by or payable to the United
States of America or any State, local or foreign governmental entity, whether
computed on a separate, consolidated, unitary, combined or any other basis; and
in each instance such term shall include any interest, penalties or additions to
tax attributable to any such tax.
7
<PAGE> 14
"TRADE-OUT AGREEMENTS" shall have the meaning specified in Section
3.01(f).
"TRANSFERRED EMPLOYEES" shall have the meaning specified in Section
8.09.
"TRANSACTION DOCUMENTS" shall have the meaning set forth in the Amended
and Restated Transaction Agreement dated as of January 22, 1998 by and between
NBC, Outlet Broadcasting, Inc., LIN Television of Texas, L.P., LIN Television
Corporation, Station Venture Holdings, LLC, Station Venture Operations, LP, and
Ranger Holdings Corp., a predecessor to Buyer.
"TRANSFER TAXES" shall have the meaning specified in Section 14.07.
ARTICLE 2
PURCHASE OPTION
SECTION 2.01. Purchase Option. Seller hereby grants to Buyer or its
permitted assignee the option (the "PURCHASE OPTION") to purchase all of the
Assets, subject to the Assumed Liabilities, pursuant to the terms and conditions
of this Agreement. The Purchase Option shall be exercisable at Buyer's sole
election at any time during the period (the "OPTION PERIOD") beginning on the
date hereof and ending at midnight, E.S.T., on December 31, 1999. To exercise
the Purchase Option, Buyer must provide written notice of exercise to Seller in
the manner provided in Section 14.01 prior to expiration of the Option Period.
The date on which Seller receives such notice is referred to herein as the
"EXERCISE DATE."
ARTICLE 3
SALE AND PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES
SECTION 3.01. Asset Sale and Purchase of Assets. Subject to the terms
and conditions hereof, including, without limitation, exercise of the Purchase
Option, and in reliance upon the representations, warranties and agreements
contained herein, at the Closing, Seller shall sell, assign, transfer, convey
and deliver to Buyer, and Buyer shall purchase, acquire, pay for and accept from
Seller, all of
8
<PAGE> 15
Seller's direct or indirect right, title and interest in, to and under the
Station, and all real, personal and mixed assets, rights, benefits and
privileges, both tangible and intangible, owned, leased, used, or held for use
by Seller primarily in connection with the Business (collectively, but excluding
the Excluded Assets, the "ASSETS"), including without limitation those certain
assets set forth below, free and clear of all Encumbrances, subject only to
Permitted Encumbrances:
(a) FCC Licenses. All FCC Licenses issued to Seller in connection with
the operation of the Station, including all rights in and to the call letters
"WVTM TV" (the "STATION FCC LICENSES"), including without limitation those
listed in Schedule 3.01(a), and all applications therefor, together with any
renewals, extensions or modifications thereof and additions thereto.
(b) Real Property Interests. (i) The real property described on
Schedule 3.01(b)(i), together with all buildings, fixtures and improvements
erected thereon, and all easements and rights-of-way and other appurtenances
thereto, together with any additions thereto (collectively, the "REAL PROPERTY")
and (ii) all leasehold rights, including any prepaid rent, security deposits and
options to renew or purchase in connection therewith, in the real property
subject to lease agreements (the "LEASES") described on Schedule 3.01(b)(ii),
together with, to the extent owned or leased by Seller, all buildings, fixtures
and improvements erected thereon, together with any additions thereto
(collectively, the "LEASED PREMISES").
(c) Tangible Personal Property. The furniture, fixtures, furnishings,
machinery, computers, equipment, vehicles, inventory, supplies, antenna
installations, towers, transmitters, generators, office materials and other
tangible property of every kind and description maintained, owned, leased or
otherwise used by Seller primarily in connection with the Business, including
without limitation those items described or listed in Schedule 3.01(c), together
with all replacements thereof and additions thereto.
(d) Intellectual Property. The service marks, copyrights, franchises,
software, licenses (other than the FCC Licenses), trademarks, trade names,
programs and programming material of whatever form or nature, jingles, commer
cials, other promotional material, slogans, logotypes and other similar
intangible assets maintained, owned, used, held for use or otherwise held by
Seller primarily in connection with the Business (including any and all
applications, registrations, extensions and renewals relating thereto), and all
of the goodwill and rights, benefits and privileges associated therewith,
together with any additions thereto (collectively, the "INTELLECTUAL PROPERTY").
(e) Program Contracts. The program licenses and contracts, whether
signed or unsigned, including both cash and barter arrangements, under which
9
<PAGE> 16
Seller is authorized to broadcast programs on the Station, including without
limitation those listed on Schedule 3.01(e), together with any other such
contracts and agreements that are entered into between the date of this
Agreement and the Closing Date in accordance with the terms of this Agreement
(collectively, the "PROGRAM CONTRACTS").
(f) Trade-out Agreements. All contracts and agreements, whether signed
or unsigned, (excluding Program Contracts) pursuant to which Seller has sold,
traded or bartered commercial air time on the Station in consideration for any
property or services in lieu of or in addition to cash, including, without
limita tion, contracts under which commercial air time availability within a
particular program is exchanged for the provision of such program, including
without limitation those listed on Schedule 3.01(f), and any other such
contracts and agreements that are entered into between the date of this
Agreement and the Closing Date in accordance with the terms of this Agreement
(collectively, the "TRADE-OUT AGREEMENTS").
(g) Employment Agreements. The employment agreements and talent
contracts that are listed on Schedule 3.01(g), and any rights, privileges and
benefits thereunder (collectively, the "EMPLOYMENT AGREEMENTS").
(h) Operating Contracts. The broadcast time sales agreements, the NBC
Affiliation Agreement and all other contracts and agreements, written or oral,
whether signed or unsigned, which are primarily related to, or used in the
conduct of, the Business, including without limitation those listed on Schedule
3.01(h), together with any other such contracts and agreements entered into
between the date of this Agreement and the Closing Date in accordance with the
terms of this Agreement (collectively, the "OPERATING CONTRACTS").
(i) Prepaid Items. All deposits made by the Station and prepaid
expenses of the Station, including, without limitation, those set forth and
described in Schedule 3.01(i).
(j) Files and Records. All engineering, business and other books,
papers, logs, files and records pertaining primarily to the Business, including
without limitation all ratings reports, advertising customer lists, all sales
advertising materials, filings with the FCC, copies of all of the Assumed
Contracts, records relating to employees, financial, accounting and operation
matters, and any information relating to Taxes imposed on the Assets or
attributable to the Business.
10
<PAGE> 17
(k) Permits and Licenses. All permits, approvals, orders,
authorizations, consents, licenses, certificates, franchises, exemptions of, or
filings or registra tions with, any court or Governmental Authority (other than
the FCC) in any jurisdiction, which have been issued or granted to or are owned
or used by Seller primarily in connection with the Business and all pending
applications therefor.
(l) Accounts Receivable. All Accounts Receivable primarily arising out
of the Business.
(m) Rights and Claims. All of the rights, claims, credits, causes of
action or rights of set-off of Seller against third parties, but only to the
extent relating to or affecting the Assets, the Business or the Assumed
Liabilities.
(n) Warranties. All vendors', suppliers', manufacturers' and
contractors' warranties, representations and guaranties and all similar rights
against third parties relating to any Asset.
SECTION 3.02. Excluded Assets. Notwithstanding anything to the contrary
in this Agreement, there shall be excluded from the Assets and retained by
Seller, to the extent in existence at 11:59 P.M. (Eastern Standard Time) on the
date immediately preceding the Closing Date, the following assets (collectively,
the "EXCLUDED ASSETS"):
(a) Insurance. All contracts of insurance and all insurance plans and
the assets thereof owned or procured by Seller or Seller's Affiliates.
(b) Employee Plans and Assets. All employment, consulting or severance
agreements and all Plans, Benefit Arrangements, and the assets thereof (subject
to proration for accrued bonuses, vacation and sick pay pursuant to Section
3.06) other than the Employment Agreements and any Plans or Benefit Arrangements
which cover exclusively employees of the Business.
(c) Personal Property Disposed Of. All tangible personal property
disposed of or consumed in the Ordinary Course of Business as permitted by this
Agreement.
(d) Certain Contracts. All contracts that have terminated or expired
prior to the Closing Date in the Ordinary Course of Business and as permitted
hereunder and contracts entered into by Seller between the date hereof and the
Closing Date which are entered into in violation of the terms of this Agreement.
11
<PAGE> 18
(e) Tax Refunds. Any and all claims of Seller with respect to any Tax
refunds for any period, or any portion of any period, ending on or prior to the
Closing Date.
(f) Certain Books and Records. All of Seller's corporate minute books,
stock transfer books, corporate records and corporate seals, and all records and
documents relating to the Excluded Assets or prepared in connection with the
Transaction Documents, in each case whether in hard copy or in computer format.
(g) Rights Under this Agreement. All of Seller's rights under or
pursuant to this Agreement or arising pursuant to the transactions contemplated
hereby.
(h) Securities. All capital stock or other securities of Seller.
(i) Cash and Bank Accounts. All cash and cash equivalents and all bank
and lock box accounts pertaining to the Business.
(j) Marks and Names. The marks and names set forth on Schedule 3.02(j)
(the "SELLER TRADEMARKS AND TRADENAMES").
(k) Sales Representation Agreements. All national sales representation
agreements and arrangements relating to the Business to which NBC or an
Affiliate of NBC is a party.
(l) Other Property. The properties and assets described on Schedule
3.02(l).
SECTION 3.03. Nonassignable Rights. (a) To the extent the Assets
include licenses, permits, agreements or other rights that cannot be assigned or
the assignment of which requires consents which have not been obtained as of the
Closing Date, Seller will use commercially reasonable efforts to obtain such
consents with respect to any assignable rights (it being understood that Seller
need not pay money, transfer assets or provide services to obtain such consents)
and shall provide Buyer with the practical benefit of such Assets, by operating
agreements, leases, or otherwise, on terms and conditions mutually acceptable to
Seller and Buyer. If and when such consent(s) have been obtained, Seller will
promptly assign and convey such Asset(s) to Buyer for no additional
consideration.
(b) Nothing in this Agreement shall be construed as an attempt or
agreement to assign any contract, agreement, license, lease or other commitment
that is nonassignable without the consent of the other party or parties thereto
12
<PAGE> 19
unless such consent shall have been given, subject, however, to the covenant of
Seller in Section 3.03(a) hereof.
SECTION 3.04. Purchase Price. For and in consideration of the
conveyances and assignments described herein, and in addition to the assumption
of Liabilities as set forth in Section 3.07, Buyer agrees to pay to Seller, and
Seller agrees to accept from Buyer, the Base Purchase Price plus or minus (as
the case may be) the Proration Amount. The Purchase Price shall be payable as
described in Section 3.05.
SECTION 3.05. Payment of Purchase Price; Allocation. (a) At the
Closing, subject to the satisfaction or waiver of all the conditions to the
Buyer's obligations hereunder, Buyer shall deliver the Base Purchase Price plus
or minus (as the case may be) the Estimated Proration Amount by wire transfer of
immediately available federal funds to an account which will be identified by
Seller not less than two (2) days prior to the Closing Date.
(b) The Purchase Price (including the amount of the Assumed
Liabilities) shall be allocated among the Assets based on the value of such
Assets in accordance with Section 1060 of the Code. Within 60 days after the
Closing Date, Buyer shall provide to Seller copies of Internal Revenue Service
Form 8594 and any required exhibits thereto with Buyer's proposed allocation of
the Purchase Price among the Assets. Within 60 days after the receipt of such
Form 8594, Seller shall propose to Buyer any changes to such Form 8594 or shall
indicate its concurrence therewith, which concurrence shall not be unreasonably
withheld. The failure by Seller to propose any such change or to indicate its
concurrence within such 60 days shall be deemed to be an indication of its
concurrence with such Form 8594. Buyer and Seller shall attempt in good faith to
agree on such Form 8594 and shall file, and shall cause their Affiliates to
file, all Tax returns and statements, forms and schedules in connection
therewith in a manner consistent with such allocation of the Purchase Price and
shall take no position contrary thereto unless required to do so by applicable
tax laws.
SECTION 3.06. Proration Amount. (a) The expenses attributable to the
operation of the Business prior to the Closing Date shall be for the account of
Seller and thereafter such expenses as are assumed hereunder or incurred
thereafter shall be for the account of Buyer. Accordingly, at least three (3)
business days prior to the Closing Date, Seller shall make a good faith estimate
(the "ESTIMATED PRORATION AMOUNT") of the net amount (the "PRORATION AMOUNT") to
be added to or subtracted from the Purchase Price to prorate such income and
expenses pursuant to the following principles and procedures:
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(i) Expenses relating to the Business, including, but not limited
to, utility charges, rent, music license fees, wages and salaries of
employees (including accrued bonuses, personal holidays, holiday pay,
commissions, vacation and sick pay), ad valorem taxes, payroll taxes,
FCC annual regulatory fees, and state and local taxes (not including
income taxes), shall be prorated as of 11:59 p.m. on the day before
the Closing Date such that Seller is responsible for expenses up to
that time (and Buyer shall be entitled to a debit to the Proration
Amount with respect to such expenses which are not paid by Seller) and
Buyer is responsible for expenses after that time.
(ii) Seller shall be responsible for the payment in respect of
all supplies or inventory received by Seller prior to the Closing Date
(and Buyer shall be entitled to a debit to the Proration Amount with
respect to such payments which are not made by Seller), and Buyer
shall be responsible for the payment in respect of all supplies or
inventory received thereafter under any Assumed Contract.
(iii) Buyer shall be entitled to a debit to the Proration Amount
in the amount by which, as of 11:59 p.m. of the day before the Closing
Date, the net aggregate amount due under Trade-Out Agreements exceeds
the net aggregate amount of benefits to be received by Buyer on or
after the Closing Date under such Trade-Out Agreements.
(b) Within ninety (90) days after the Closing Date, Seller will cause
to be prepared and delivered to Buyer in writing and in reasonable detail a
determination of the Proration Amount as of the Closing Date (the "FINAL
PRORATION AMOUNT") by KPMG Peat Marwick, LLP or its successor firm. Buyer shall
have the right to review the computations and workpapers used in connection with
the determination of the Final Proration Amount. If Buyer disagrees with the
calculation of Final Proration Amount, Buyer may, within 45 days after notice of
the determination of the Final Proration Amount, deliver a notice to Seller
disagreeing with such calculation and setting forth Buyer's calculation of such
amount. Any such notice of disagreement shall specify those items or amounts as
to which Buyer disagrees, and Buyer shall be deemed to have agreed with all
other items and amounts in connection with the calculation of Final Proration
Amount if Buyer fails to notify Seller in writing of Buyer's disagreement within
such forty-five (45) day period. After the receipt of any notice of
disagreement, Buyer and Seller shall negotiate in good faith to resolve any
disagreements regarding the Final Proration Amount. If any such disagree ment
cannot be resolved by Seller and Buyer within forty-five (45) days after Seller
has received notice from Buyer of the existence of such disagreement, Buyer and
Seller shall retain an independent, mutually acceptable accounting firm of
nationally recognized standing (the
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"ACCOUNTING FIRM") to review Seller's determination of the Final Proration
Amount and to resolve as soon as possible all points of disagreement raised by
Buyer. In making such calculation, the Accounting Firm shall consider only those
items or amounts in Seller's calculation of Final Proration Amount as to which
Buyer has disagreed. The Accounting Firm shall deliver to Buyer and Seller, as
promptly as practicable, a report setting forth such calculation. Such report
and all determinations made by the Accounting Firm with respect to the Final
Proration Amount shall be final, conclusive and binding on Buyer and Seller. The
cost of such review and report shall be borne (i) by Seller if the difference
between the Final Proration Amount and Seller's calculation of the Final
Proration Amount is greater than the difference between the Final Proration
Amount and Buyer's calculation of the Final Proration Amount, (ii) by Buyer if
the first such difference is less than the second such difference and (iii)
otherwise equally by Buyer and Seller.
(c) If the Final Proration Amount is greater than the Estimated
Proration Amount, then Buyer shall pay Seller in cash, within two (2) business
days following the final determination of the Final Proration Amount, an amount
equal to the Final Proration Amount minus the Estimated Proration Amount, plus
interest at the rate of eight percent (8%) per annum from the Closing Date to
the payment date. If the Final Proration Amount is less than the Estimated
Proration Amount, then Seller shall pay Buyer in cash within two (2) business
days following the final determination of the Final Proration Amount an amount
equal to the Estimated Proration Amount minus the Final Proration Amount, plus
interest thereon at the rate of eight percent (8%) per annum from the Closing to
the payment date. Any amounts paid pursuant to this Section 3.06(c) shall be by
wire transfer of immediately available funds for credit to the recipient at a
bank account identified by such recipient in writing.
(d) Buyer and Seller agree that prior to the date of the final
determination of the Final Proration Amount pursuant to this Section 3.06 (by
the Accounting Firm or otherwise), neither party will destroy any records
pertaining to, or necessary for, the final determination of the Final Proration
Amount.
SECTION 3.07. Assumption of Liabilities. (a) At the Closing, Buyer
shall assume and agree to perform all of the following Liabilities of the
Business arising on or after the Closing Date (collectively, the "ASSUMED
LIABILITIES"):
(i) Liabilities arising under the Assumed Contracts, except any
Liability which is attributable to any action or failure to act by
Seller in accordance with the terms of the Assumed Contracts;
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(ii) current Liabilities, only to the extent to which there has
been a related debit included in the Final Proration Amount; and
(iii) Liabilities arising out of the ongoing operation of the
Business by Buyer after the Closing Date.
(b) Except for the Liabilities expressly assumed by Buyer pursuant to
Section 3.07(a) hereof, Buyer assumes no Liabilities of any kind or description.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES BY SELLER
On the date hereof, Seller represents and warrants to Buyer as follows:
SECTION 4.01. Organization and Standing; Corporate Power and Authority.
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Alabama and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary and material to the Business. Seller has the full
corporate power and authority to own, lease and otherwise to hold the Assets, to
carry on the Business as now conducted, and to enter into and perform the terms
of this Agreement, the other Seller Documents and the transactions contemplated
hereby and thereby.
SECTION 4.02. Subsidiaries and Investments. Seller does not, directly
or indirectly, (a) own, of record or beneficially, any outstanding voting
securities or other equity interests in any corporation, partnership, joint
venture or other entity which is involved in or relates to the Business or (b)
otherwise control any such corporation, partnership, joint venture or other
entity which is involved in or relates to the Business.
SECTION 4.03. Authorization; Binding Effect. The execution, delivery
and performance of the Seller Documents and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary action of the board of directors of Seller and by any other necessary
corporate or shareholder actions (none of which actions has been modified or
rescinded and all of which actions are in full force and effect). This Agreement
has been duly executed and delivered by Seller and constitutes, and upon
execution and delivery, each other Seller Document will constitute, valid and
binding agreements and obligations of Seller enforceable against Seller in
accordance with
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their respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights generally and by the
application of general principles of equity.
SECTION 4.04. Consents and Approvals; No Violations. (a) The execution
and delivery by Seller of this Agreement does not, and the consummation by the
Seller of the transactions contemplated hereby and compliance by the Seller with
the provisions hereof will not conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or the
loss of a benefit under, or result in the creation of any Encumbrance, other
than any Permitted Encumbrance, upon any of the Assets under, (i) any provision
of the certificate of incorporation or by-laws of Seller, (ii) except as set
forth in Schedule 4.04, any loan or credit agreement, note, bond, mortgage,
indenture, lease or other material contract or agreement or any material permit,
concession, franchise or license applicable to Seller, the Business or the
Assets or (iii) assuming all the consents, filings and registrations referred to
in Section 4.04(b) are made and obtained, any Law, the violation of which would
reasonably be expected to result in a material liability to the Business.
(b) No filing or registration with, or authorization, consent or
approval of, any Governmental Authority is required by or with respect to Seller
in connection with the execution and delivery of this Agreement by Seller or is
necessary for the transactions contemplated by this Agreement, except (i) such
filings as are required under the HSR Act, (ii) the FCC Order and (iii) such
filings as may be required in connection with statutory provisions and
regulations relating to real property transfer gains taxes and real property
transfer taxes.
SECTION 4.05. Assets.
(a) Except for leased or licensed Assets (as to which Seller has a
valid leasehold or license interest), Seller is the owner of, and has good and
marketable title to, all material Assets free and clear of any Encumbrances,
except for and subject only to Permitted Encumbrances. At the Closing, Buyer
shall acquire good and marketable title to, and all of Seller's right, title and
interest in and to all material Assets, free and clear of all Encumbrances,
except for Permitted Encumbrances.
(b) There are no material structural defects in any of the buildings
or other improvements situated on the Leased Premises or the Real Property. The
building systems, structures, improvements, fixed assets and equipment owned,
leased or used by Seller in connection with the Business are in all material
respects
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in good condition and working order, normal wear and tear excepted, and adequate
in all material respects in quality and quantity for the current operation of
the Business.
(c) None of Seller's Affiliates have any right, title or interest in
any real, personal or mixed assets, rights, benefits or privileges, tangible or
intangible, wheresoever located, owned, leased, used, or held for use in
connection with the business and operations of the Station, except for any
interest any such Affiliate may have (i) in any Excluded Assets and (ii) as a
result of any contract or arrangement set forth in Schedule 4.05(c) between
Seller and NBC or an Affiliate of NBC with respect to the Station.
(d) No right of redemption or similar right exists with respect to any
Real Property. There are no parties that have any right of use or occupancy
derived from or granted by Seller to all or any portion of the Real Property or
Leased Premises. Seller has made available to Buyer true, correct and complete
copies of all Leases, including all amendments, modifications and renewals
thereof.
SECTION 4.06. Financial Statements. Schedule 4.06 contains (a) the
unaudited balance sheet, statement of cash flow and related income statement of
the Business as of and for the fiscal year ended December 31, 1996 (the "YEAR-
END STATEMENTS") and (b) the unaudited interim balance sheet, statement of cash
flow and related income statement of the Business as of and for the nine-month
period ended September 30, 1997 (the "INTERIM STATEMENTS," and collectively with
the Year-End Statements, the "FINANCIAL STATEMENTS"). The Financial Statements
have been prepared in accordance with generally accepted accounting principles,
applied consistently with past periods, and present fairly in all material
respects the financial position and results of operations of the Business as of
and for the periods indicated therein subject, in the case of the Interim
Statements, to normal year-end adjustments.
SECTION 4.07. No Undisclosed Liabilities; Ordinary Course. (a) The
Business is not subject to any liability or obligation, whether direct,
indirect, absolute, contingent, accrued, vested or otherwise, which is not shown
or which is in excess of amounts shown or reserved for in the Financial
Statements or reflected in the Schedules to this Agreement, other than (i)
Liabilities disclosed on Schedule 4.07(a), (ii) Liabilities incurred after
September 30, 1997 in the Ordinary Course of Business and (iii) liabilities and
obligations, direct, indirect, absolute or contingent, not required to be
reflected or reserved against in a balance sheet prepared in accordance with
generally accepted accounting principles which, individually or in aggregate,
would not reasonably be expected to have a Material Adverse Effect.
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(b) Since the date of the Year-End Statements and except as set forth
in Schedule 4.07(b), the Business has been operated in the Ordinary Course of
Business and there has been no material (i) change in the Business, the Assets
or the manner of conducting the Business, (ii) transaction relating to the
Assets or the Business outside of the Ordinary Course of Business, except for
those contemplated by this Agreement, (iii) Encumbrances created or assumed with
respect to any material amount of the Assets, except Permitted Encumbrances,
(iv) increase in compensation payable or to become payable to any employee other
than in the Ordinary Course of Business or (v) Liabilities incurred outside the
Ordinary Course of Business.
SECTION 4.08. Compliance with Laws. Except in the case of violations
which would not reasonably be expected to result in a material liability to the
Business, Seller is not in violation of any Law, or any other applicable
requirement of any Governmental Authority with respect to the operation of the
Business or any of the Assets, no written notice has been received by Seller
that any such violation is being or may be alleged and, to the Knowledge of
Seller, there is no basis for any such violation to be alleged.
SECTION 4.09. Permits and Licenses. (a) Seller has all permits,
licenses, waivers and authorizations (other than FCC Licenses, but including
licenses, authorizations and certificates of public convenience and necessity
from applicable state and local authorities) which are necessary for Seller to
conduct the Business in the manner in which it is presently being conducted
(collectively, "LICENSES"), except for those Licenses the absence of which would
not be material to the Business. Seller is in compliance with the terms of and
has duly performed its obligations under such Licenses in all material respects.
There is no pending or, to the Knowledge of Seller, threatened application,
petition, objection or other pleading with any Governmental Authority (other
than the FCC) which challenges or questions the validity of, or any rights of
the holder under, any material License (other than an FCC License).
(b) (i) Seller is financially and otherwise qualified to hold the
Station FCC Licenses; (ii) Seller holds all FCC Licenses required by the
Communications Act; (iii) except as set forth in Schedule 4.09(b)(iii), Seller
is not aware of any facts or circumstances relating to Seller that would prevent
the FCC's granting the requisite consent to the FCC Form 314 Assignment of
License Application to be filed with respect to the transactions contemplated by
this Agreement; (iv) Seller is in material compliance with all FCC Licenses held
by it; and (v) there is not pending or, to the Knowledge of Seller, threatened
any application, petition, objection or other pleading with the FCC or other
Governmental Authority which challenges the validity of, or any rights of the
holder under, any Station FCC License.
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(c) All notices, reports, forms and other statements required to be
filed by Seller with the FCC relating to the Station and have been filed and are
complete and correct in all material respects as filed.
SECTION 4.10. Taxes. Seller has timely filed, or has had filed on its
behalf, with or has obtained, or has had obtained on its behalf, a filing
extension from the appropriate federal, state, local and foreign governments or
governmental agencies with respect to, all material Tax returns required to be
filed by Seller or on behalf of Seller on or prior to the date hereof for all
Taxes. All such Tax returns are true, correct and complete in all material
respects and all Taxes shown to be payable on such Tax returns have been paid in
full. All written assessments of Taxes due and payable by, on behalf of or with
respect to Seller, which if unpaid might result in a lien upon any of the Assets
after giving effect to the transactions contemplated hereby, have been paid by
or on behalf of Seller, or are being contested in good faith by appropriate
proceedings. All amounts required to be withheld by Seller from employees for
income taxes, social security and other payroll taxes have been collected and
withheld, and have either been paid to the respective governmental agencies, set
aside in accounts for such purpose, or accrued, reserved against and entered
upon Seller's books and records. None of the Assets is required to be treated as
being owned by a Person other than Seller pursuant to Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986.
SECTION 4.11. Contracts. Seller has delivered to Buyer true and
complete copies of all material written Assumed Contracts, including any and all
amendments and other modifications thereto. The Assumed Contracts do not omit
any lease, contract, agreement or understanding that is material to the
operation of the Business. Each of the Assumed Contracts is a valid, binding and
enforceable agreement and is in full force and effect. No event or condition has
occurred or exists or, to the knowledge of Seller, is alleged by any of the
other parties thereto to have occurred or existed, which constitutes, or with
lapse of time or giving of notice or both might constitute a default or breach
by Seller or, to the knowledge of Seller, any other party under any of the
Assumed Contracts which would result in a material liability to, or the loss of
a material benefit of, the Business. Seller enjoys peaceful and undisturbed
possession in all material respects under all leases or licenses with respect to
those Assets which are leased or licensed or under which any material portion of
the Business is operating. Seller is not a party to, and the Business and the
Assets are not bound by, any contract, agreement, instrument, lease, license,
arrangement or understanding which has had, or would reasonably be expected to
have, a Material Adverse Effect.
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SECTION 4.12. Personal Property Leases. Schedule 4.12 contains a list
of each written lease or other agreement or right, under which Seller is lessee
of, or holds or operates, any machinery, equipment, vehicle or other tangible
personal property owned by a third party and used in or relating to the Business
and which is not terminable by Seller without penalty on 30 days' notice or less
and which provides for annual rentals in excess of $50,000.
SECTION 4.13. Employees. Schedule 4.13 contains a list of all the
titles of individuals employed by Seller in connection with the Business as of
the date hereof and the then current rate of compensation for such employees.
SECTION 4.14. Employee Relations. (a) Except as set forth on Schedule
4.14, Seller has complied in respect of the Business in all material respects
with all applicable laws, rules and regulations which relate to wages, hours,
discrimination in employment and collective bargaining and to the operation of
the Business and, to the knowledge of Seller, is not liable for any material
arrears of wages, Taxes, penalties or other material Liabilities for failure to
comply with any of the foregoing.
(b) Except as set forth on Schedule 4.14, there is no (i) unfair labor
practices charge or complaint against Seller pending before the National Labor
Relations Board, any state labor relations board or any court or tribunal and,
to the Knowledge of Seller, none is threatened, (ii) strike, slowdown or work
stoppage with respect to the employees of the Business, of which Seller is aware
pending against Seller and, to the Knowledge of Seller, none is threatened,
(iii) material written employee grievance of which Seller has notice pending
against Seller and, to the Knowledge of Seller, none is threatened, (iv)
material arbitration proceeding arising out of or under any collective
bargaining agreement pending against Seller and, to the Knowledge of Seller,
none is threatened, or (v) pending demand for recognition as the collective
bargaining representative with respect to any employee of the Business by any
labor organization or group of employees.
(c) Seller has delivered to Buyer a correct and complete copy of all
written employment, compensation or severance agreements with respect to
employees of the Business.
SECTION 4.15. Employee Benefit Plans. Schedule 4.15 lists all material,
written Plans and Benefit Arrangements. Copies of such Plans and Benefit
Arrangements and any written summary plan descriptions related to such Plans
have been delivered to Buyer.
SECTION 4.16. Intellectual Property. (a) No Person has made, or to the
Knowledge of Seller, threatened to make, any claims that the operations of the
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Business are in violation of or infringe upon any material patents, trade
secrets, trademarks or trade names, trademark or trade name registrations,
service marks or service mark registrations, copyrights or copyright
registrations or any other proprietary or trade rights of any third party.
(b) There are no actions or proceedings pending or, to the Knowledge
of Seller, threatened, which challenge the right of Seller to make, use or sell
products or services embodying, and, to the Knowledge of Seller, no Person is
infringing or otherwise violating in any material respect, the Intellectual
Property.
SECTION 4.17. Environmental Matters. Except as set forth on Schedule
4.17 or as would not reasonably be expected to result in a material Liability to
the Business:
(a) Seller and the Business have been and are in compliance with all
Environmental Laws;
(b) All environmental permits, certificates, licenses, approvals,
registrations and authorizations required for operating the Business
("ENVIRONMENTAL PERMITS") are listed on Schedule 4.17 and any that are not
transferable are so designated. Seller has not received any written notice that
(i) such Environmental Permits are not in full force and effect or (ii) Seller
is not in compliance in all material respects with the terms of such
Environmental Permits;
(c) there are no judicial or administrative actions, proceedings or
investigations pending or, to the Knowledge of Seller, threatened against Seller
or the Business or its operations or any real property owned, operated or leased
by or for the Business alleging the violation of or seeking to impose Liability
pursuant to any Environmental Law;
(d) there is not now, nor, to the Knowledge of Seller, has there been
in the past, on, in or under any real property owned, leased or operated by or
for the Business (X) any underground storage tanks, above-ground storage tanks,
dikes or impoundments containing Hazardous Substances, or (Y) any
asbestos-containing materials; or (Z) any polychlorinated biphenyls being used,
or having been used, in a manner that violates any Environmental Law;
(e) Seller has provided Buyer with copies of all environmentally
related written audits, assessments, studies, reports, analyses, and results of
investigations of any real property currently or formerly owned, operated or
leased by or for the Business that are in possession, custody or control of
Seller or the Business;
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(f) The on-site operations of the Business have not, and do not now,
involve the generation, transportation, treatment, recycle or disposal of
Hazardous Substances, except for amounts that would qualify Seller's facilities
or operations as a small quantity generator or a conditionally exempt small
quantity generator; and
(g) The transactions contemplated by this Agreement do not trigger any
property transfer requirements of any Environmental Law.
SECTION 4.18. Entire Business. The Assets constitute all of the assets,
properties and rights, together with the services of the employees of the
Business, necessary to conduct the Business in all material respects as
currently conducted, and there are no material Assets of the Business that
Seller will retain following the Closing, other than the Excluded Assets.
SECTION 4.19. Brokers. Except for Lehman Brothers Holdings Inc. and
Evercore Partners Inc., whose fees will be paid by NBC or one of its Affiliates,
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of Seller.
SECTION 4.20. Litigation. Except as set forth on Schedule 4.20, there
is no litigation, proceeding or investigation pending, or to Seller's Knowledge
threatened, against Seller relating to the Business or the Assets, or which as
of the date hereof (i) questions the validity of this Agreement or any action to
be taken by Seller in connection with the consummation of the transactions
contemplated hereby or (ii) would otherwise prevent or result in a material
delay of the consummation of the transactions contemplated hereby. Neither the
Station nor the Assets are subject to any order, writ, injunction or decree of
any court or Governmental Authority, other than orders of the FCC.
SECTION 4.21. Transactions with Affiliates. Except for the NBC
Affiliation Agreement and the transactions set forth in Schedule 4.5(c), neither
Seller, nor any Affiliate of Seller is a party, directly or indirectly, to any
contract, lease, arrangement or transaction which is material to the business or
operations of the Station, whether for the purchase, lease or sale of property,
for the rendition of services or otherwise.
SECTION 4.22. Full Disclosure. To the Knowledge of Seller, the
representations and warranties of Seller contained in this Agreement, taken
together and giving effect to the Schedules to this Agreement, do not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements included in such representations and
warranties not
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misleading, except for such breaches that have not had, or would not,
individually or in the aggregate, reasonably be expected to have, a Material
Adverse Effect.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES BY BUYER
On the date hereof, Buyer represents and warrants to Seller as follows:
SECTION 5.01. Organization and Standing; Corporate Power and Authority.
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and by the Closing Date will be duly
qualified to do business as a foreign corporation where such qualification is
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse effect on
Buyer's ability to perform its obligations under this Agreement. Buyer has the
full corporate power and authority to enter into and perform the terms of this
Agreement and the other Buyer Documents and to carry out the transactions
contemplated hereby and thereby.
SECTION 5.02. Authorization; Binding Effect. The execution, delivery
and performance of this Agreement and of the other Buyer Documents, and the
consummation of the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary actions of Buyer (none of which actions
has been modified or rescinded and all of which actions are in full force and
effect), including approval of its board of directors. This Agreement has been
duly executed and delivered by Buyer and constitutes, and upon execution and
delivery each such other Buyer Document will constitute, a valid and binding
agreement and obligation of Buyer, enforceable against Buyer in accordance with
its respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights generally and by the
application of general principles of equity.
SECTION 5.03. Consents and Approvals; No Violations. (a) The execution
and delivery by Buyer of this Agreement does not, and the consummation by Buyer
of the transactions contemplated hereby and compliance by Buyer with the
provisions hereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or the loss of a
benefit under, or result in the creation of any lien upon any of the properties
or assets of Buyer
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under, (i) any provision of the certificate of incorporation or by-laws of
Buyer, (ii) except as set forth on Schedule 5.03, any loan or credit agreement,
note, bond, mortgage, indenture, lease or other material contract or agreement,
or any material permit, concession, franchise or license applicable to Buyer or
(iii) assuming all the consents, filings and registrations referred to in the
next sentence are made and obtained, any Law, the violation of which would
reasonably be expected to result in a material adverse effect on Buyer's ability
to perform its obligations under the Buyer Documents.
(b) No filing or registration with, or authorization, consent or
approval of, any Governmental Authority is required by or with respect to Buyer
(or any of its Affiliates) in connection with the execution and delivery of this
Agreement by Buyer or is necessary for the consummation of the transactions
contemplated by this Agreement, except (i) filings required under the HSR Act,
(ii) such filings with, and orders of, the FCC as may be required under the
Communications Act and (iii) such filings as may be required in connection with
statutory provisions and regulations relating to real property transfer gains
and real property transfer.
SECTION 5.04. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by and on behalf of Buyer.
ARTICLE 6
COVENANTS AND AGREEMENTS OF SELLER
Seller covenants and agrees with Buyer as follows:
SECTION 6.01. Conduct of Business. From the date hereof until the
Closing Date, Seller will conduct the Business in the Ordinary Course of
Business, including, without limitation, by maintaining normal collection
practices, and shall use commercially reasonable efforts to preserve intact the
business organizations and relationships of the Business with third parties and
to keep available the services of the present employees of the Business. Without
limiting the generality of the foregoing, from the date hereof until the Closing
Date, except as disclosed on Schedule 6.01 or as otherwise expressly permitted
hereunder, Seller will not, without the prior consent of Buyer, which consent
will not be unreasonably withheld, do or agree to do any of the following:
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(a) Dispositions; Mergers. Sell, assign, lease or otherwise transfer
or dispose of any material amount of the Assets other than in the Ordinary
Course of Business; or create or suffer to exist any Encumbrance on the Assets,
except Per mitted Encumbrances; or merge or consolidate with or into any other
entity.
(b) Operating Contracts. Acquire or enter into any (i) network
affiliation agreements, (ii) local marketing arrangements, (iii) Program
Contracts having a term of more than one year or requiring payments of $150,000
or more per year, except for such Program Contracts which are terminable by
Seller without payment or penalty upon no more than 30 days' notice, (iv) joint
operating agreements, or (v) Trade-Out Agreements, except for Trade-Out
Agreements entered into in the Ordinary Course of Business.
(c) Amendments or Waivers to Assumed Contracts. Amend or waive any
rights under, or consent to the amendment or waiver of rights under, any of the
Assumed Contracts (except for Assumed Contracts having a term of less than one
year or which are terminable by Seller without payment or penalty upon no more
than 30 days' notice), the aggregate effect of which is to cause the terms of
such Assumed Contract to be materially less favorable than prior to such
amendment or waiver.
(d) Change in Accounting Policies. Except as required by generally
accepted accounting principles, make any change in the accounting policies
applied in the preparation of the Financial Statements.
(e) Cancellation of Claims. Cancel or agree to cancel without fair
consideration therefor any material debts owed to or material claims held by
Seller in respect of the Business (including the settlement of any material
claims or material litigation).
(f) Employee Matters. Enter into or become subject to (i) any labor or
union contract, or (ii) any employment or professional service contract not
terminable at will, or any bonus, pension, insurance, profit sharing, incentive,
deferred compensation, severance pay, retirement, hospitalization, employee
benefit, or other similar plan or increase the compensation payable or to become
payable to any employee, or pay or arrange to pay any bonus payment to any
employee, except, in each case set forth in clause (ii), in the Ordinary Course
of Business.
(g) Actions Affecting FCC Licenses. Seller will not cause or permit,
by any act or failure to act, the FCC Licenses set forth on Schedule 3.01(a) to
expire or to be surrendered or modified, or take any action which would cause
the FCC or any other governmental authority to institute proceedings for the
suspension,
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revocation or adverse modification of any of the FCC Licenses set forth on
Schedule 3.01(a), or fail to prosecute with due diligence any pending
applications to any governmental authority, or take any other action within its
control which would result in the Station being in material noncompliance with
the requirements of the Communications Act, or any other applicable Law, or the
rules and regulations of the FCC (or any other governmental authority having
jurisdiction).
(h) Affiliated Transactions. Enter any transaction with any Affiliate
of Seller regarding the operation of the Station, including, without limitation,
any renewal, extension, modification, waiver, amendment or other change in, any
existing contract or agreement to which an Affiliate of Seller is a party or any
other transaction regarding the operation of the Station involving an Affiliate
of Seller which will have continued effectiveness after the Closing Date.
(i) Representations and Warranties. Take any action that would make
any representation or warranty of Seller hereunder inaccurate in any respect at
the Closing Date such that the closing condition set forth in Section 9.02(b)
shall not be satisfied as of such date.
(j) Agreements and Commitments. Agree or commit to do or authorize any
of the foregoing.
SECTION 6.02. Affirmative Covenants. Pending and prior to the Closing
Date, Seller will:
(a) Access. Cause to be afforded to representatives of Buyer
reasonable access during normal business hours to offices, properties, assets,
books and records, contracts and reports of the Station as Buyer shall from time
to time reasonably request.
(b) Reports. Seller shall deliver to Buyer copies of (i) monthly
operating statements for the Station for the period beginning on the date hereof
and ending on the Closing Date and (ii) any other information currently
generated by Seller concerning the business or financial condition of the
Station as Buyer may, from time to time, reasonably request.
(c) Consents. Seller shall use all commercially reasonable efforts to
obtain the valid and binding consent of any third parties necessary for the
assignment to Buyer (and the possible collateral assignment by Buyer to its
lenders) of the Assets, including without limitation the Assumed Contracts, so
as to permit the operation of the Station in all aspects in the same manner as
it has been operated by Seller.
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(d) Cancellation of Sales Representation Agreements. Seller shall
effect the cancellation as of the Closing Date of all national sales
representation agreements and arrangements relating to the Business to which NBC
or an Affiliate of NBC is a party.
SECTION 6.03. Notices. Seller shall promptly notify Buyer of (i) any
litigation, arbitration or administrative proceeding pending or, to the best of
its Knowledge, threatened, which challenges the transactions contemplated hereby
or that, if pending on the date of this Agreement, would have been required to
have been disclosed pursuant to Section 4.20, (ii) any notice or other written
communication from any Governmental Authority in connection with the trans
actions contemplated by this Agreement; (iii) any notice of, or other
communication relating to, a default or event which, with notice or lapse of
time or both, would become a default, received by it subsequent to the date of
this Agreement and prior to the Closing, under any material Assumed Contract,
(iv) any notice or other written communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement, provided, that the delivery of
any notice pursuant to the foregoing provisions shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
SECTION 6.04. Confidentiality. (a) Seller and its Affiliates shall,
at all times, maintain strict confidentiality with respect to all documents and
information furnished to Seller by or on behalf of Buyer. Nothing shall be
deemed to be confidential information that: (a) is known to Seller at the time
of its disclosure to Seller; (b) becomes publicly known or available other than
through disclosure by Seller; (c) is received by Seller from a third party not
actually known by Seller to be bound by a confidentiality agreement with or
obligation to Buyer; or (d) is independently developed by Seller.
Notwithstanding the foregoing provisions of this Section 6.04(a), Seller may
disclose such confidential information (a) to the extent required or deemed
advisable to comply with applicable Laws; (b) to its officers, directors,
employees, representatives, financial advisors, attorneys, accountants, and
agents with respect to the transactions contemplated hereby (so long as such
parties agree to maintain the confidentiality of such information); and (c) to
any Governmental Authority in connection with the transactions contemplated
hereby. In the event this Agreement is terminated, Seller will return to Buyer
all documents and other material prepared or furnished by Buyer relating to the
transactions contemplated hereunder, whether obtained before or after the
execution of this Agreement.
(b) Seller shall, at all times, maintain strict confidentiality with
respect to all documents and information relating to the business and operations
of the Station and the Assets. For the purposes of this Section 6.04(b), nothing
shall be
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deemed to be confidential information that: (i) becomes publicly known or
available other than through disclosure by Seller (ii) is received by Seller by
a third party and the Seller does not have Knowledge of such third party being
bound by a confidentiality agreement with or obligation to Buyer or (iii) is
independently developed by Seller. Notwithstanding the foregoing provisions of
this Section 6.04(b), Seller may disclose such confidential information (x) to
the extent required or deemed advisable to comply with Law, (y) to its officers,
directors, employees, representatives, financial advisors, attorneys,
accountants, and agents with respect to the transactions contemplated hereby (so
long as such parties agree to maintain the confidentiality of such information);
and (z) to any Governmental Authority in connection with the transactions
contemplated hereby.
(c) This Section 6.04 shall become null and void and of no force or
effect upon a date two years after the date of this Agreement.
ARTICLE 7
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with Seller as follows:
SECTION 7.01. Confidentiality. (a) Buyer and its Affiliates shall, at
all times prior to the Closing, maintain strict confidentiality with respect to
all documents and information furnished to it by or on behalf of Seller. Nothing
shall be deemed to be confidential information, that: (i) is known to a party at
the time of its disclosure to the party; (ii) becomes publicly known or
available other than through disclosure by the party; (iii) is received by that
party from a third party not actually known by that party to be bound by a
confidentiality agreement with or obligation to Seller; or (iv) is independently
developed by that party. Notwithstanding the foregoing provisions of this
Section 7.01, Buyer may disclose such confidential information (x) to the extent
required or deemed advisable to comply with applicable Laws; (y) to its
officers, directors employees, representatives, financial advisors, attorneys,
accountants, agents, underwriters, lenders, investors and any other potential
sources of financing (including the agents and advisors of such potential
sources of financing) with respect to the transactions contemplated hereby (so
long as such parties agree to maintain the confidentiality of such information);
and (z) to any Governmental Authority in connection with the transactions
contemplated hereby or the financing thereof. In the event this Agreement is
terminated in whole or with respect to a party, Buyer will return to Seller all
documents and other material prepared or furnished by
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Seller relating to the transactions contemplated by this Agreement, whether
obtained before or after the execution of this Agreement.
(b) This Section 7.01 shall become null and void and of no force or
effect upon a date two years after the date of this Agreement.
SECTION 7.02. Bulk Sales Laws. Buyer hereby waives compliance by
Seller, in connection with the transactions contemplated hereby, with the
provisions of any applicable bulk sales, bulk transfer, or other similar
applicable laws.
ARTICLE 8
ADDITIONAL COVENANTS AND AGREEMENTS OF BUYER AND SELLER
SECTION 8.01. Reasonable Best Efforts. (a) Upon the terms and subject
to the conditions set forth in this Agreement, including, without limitation,
exercise of the Purchase Option, each of the parties agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things reasonably necessary, proper or advisable, in each case under
all Laws, to consummate and make effective, in the most expeditious manner
practicable following the Exercise Date, the transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions, waivers,
consents, licenses and approvals from Governmental Authorities and the making of
all necessary registrations and filings (including filings with Governmental
Authorities) and the taking of all reasonable steps as may be necessary to
obtain an approval, waiver or license from, or to avoid an action or proceeding
by, any Governmental Authority, (ii) the defending of any lawsuit or other legal
proceedings, whether judicial or administrative, challenging this Agreement, or
the consummation of the trans actions contemplated by this Agreement, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Authority vacated or reversed and (iii) the execution and
delivery of any additional instruments reasonably necessary to consummate the
transactions contemplated by this Agreement.
(b) Without limiting the foregoing, each of the parties hereto shall
use its reasonable best efforts and cooperate in preparing and filing (i)
notifications under the HSR Act as soon as practicable following the Exercise
Date, but in no event later than 15 business days after the Exercise Date and
(ii) the FCC Application and related filings in connection with the transactions
contemplated hereby as soon as practicable following the Exercise Date, but in
no event later than 15 days after the later to occur of (A) the Exercise Date
and (B) the consummation of the
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transactions contemplated by the Merger Agreement. Each of the parties hereto
shall use its reasonable best efforts to respond as promptly as practicable to
any inquiries or requests received from the Federal Trade Commission (the
"FTC"), the Antitrust Division of the United States Department of Justice (the
"ANTITRUST DIVISION"), the FCC and any other Governmental Authorities for
additional information or documentation.
(c) Each of the parties hereto shall promptly provide the others with
a copy of any inquiry or request for information (including any oral request for
information), pleading, order or other document either party receives from any
Governmental Authorities with respect to the matters referred to in this Section
8.01.
SECTION 8.02. Control of Seller's Operations. Notwithstanding any other
provision of this Agreement, prior to the Closing Date, control of Seller's
television broadcast operations, along with all of the Seller's other
operations, shall remain with the Seller. The Seller and Buyer acknowledge and
agree that neither Buyer nor any of its employees, affiliates, agents or
representatives, directly or indirectly, shall, or have any right to control,
direct or otherwise supervise, or attempt to control, direct or otherwise
supervise, such broadcast and other operations, it being understood that
supervision of all programs, equipment, operations and other activities of such
broadcast and other operations shall be the sole responsibility, and at all
times prior to the Closing remain within the complete control and discretion of
the Seller, subject to the terms of Article 6.
SECTION 8.03. Notification of Certain Matters. Buyer or Seller, as the
case may be, shall give to the other parties prompt written notice of (a) the
occurrence, or failure to occur, of any event of which it becomes aware that has
caused or that would be likely to cause any representation or warranty of Buyer
or the Seller, as the case may be, contained in this Agreement to be untrue or
inaccu rate at any time from the date hereof to the Closing Date, and (b) the
failure of Buyer or the Seller, as the case may be, or any officer, director,
employee or agent thereof, to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
hereunder. No such notification shall affect the representation or warranties of
the parties or the conditions to their respective obligations hereunder.
SECTION 8.04. Conveyance Taxes. Each of the parties hereto shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real property
transfer gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes that become payable in connection with the transactions contemplated
hereby.
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SECTION 8.05. Risk of Loss. The risk of loss or damage by fire or other
casualty or cause to the Assets until the Closing Date shall be upon Seller. In
the event of loss or damage prior to the Closing Date, that constitute a
Material Adverse Effect, which shall not be restored, replaced, or repaired as
of the Closing Date, Buyer shall, at its option either:
(a) proceed with the Closing and receive at Closing, the insurance
proceeds or an assignment of the right to receive such insurance proceeds, as
applicable, to which Seller otherwise would be entitled, whereupon Seller shall
have no further liability to Buyer for such loss or damage or the breach or
inaccuracy of any representation, warranty, covenant or agreement caused
thereby; or
(b) terminate this Agreement by written notice to Seller, whereupon no
party to this Agreement shall have any liability to any other party to this
Agreement, and this Agreement in its entirety, except for the provisions set
forth in Sections 6.04 and 7.01 (which shall survive such termination for the
periods set forth therein), shall be deemed null and void and of no further
force and effect.
SECTION 8.06. Public Announcements. Seller and Buyer shall consult with
each other before issuing (or permitting any of their respective Affiliates to
issue) any press release or otherwise making any public statements with respect
to this Agreement or the transactions contemplated herein and shall not issue
(or permit any of their respective Affiliates to issue) any such press release
or make any such public statement without the prior written consent of the other
party, which shall not be unreasonably withheld; provided, however, that a party
(or any such Affiliate) may without the prior written consent of the other
party, issue such press release or make such public statement as may be required
by Law if it has used all reasonable efforts to consult with the other party and
to obtain such party's consent but has been unable to do so in a timely manner.
SECTION 8.07. Records. (a) Seller shall retain all original records in
its possession after the Closing Date (including employment records) that relate
to the operations of the Business for a period of three years following the
Closing, (b) Buyer shall retain all original records received from Seller at
Closing that relate to the operation of the Business for a period of three years
following the Closing and (c) Buyer and Seller shall afford authorized
representatives of the other party access to the records subject to this
Section, upon reasonable notice, for matters arising under the provisions of
this Agreement.
SECTION 8.08. Warn Act. Buyer shall assume all obligations and
liabilities for the provision of notice or payment in lieu of notice or any
applicable penalties under the Worker Adjustment and Retraining Notification Act
(the "WARN ACT")
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or any similar state or local law arising as a result of the transactions
contemplated by this Agreement with respect to the Transferred Employees.
SECTION 8.09. Employees and Employee Benefits. (a) From and after the
Closing Date, Buyer shall provide employment to each employee of the Business
who is, as of the Closing Date, at work or out of work on illness or an approved
absence or leave (whether paid or unpaid), other than long-term disability. Each
such employee shall be deemed an employee of Buyer as of the Closing Date and
shall be provided the same salary or hourly wage rate and the same employment
position as in effect for such employee immediately prior to the Closing Date.
Any employee of the Business who is, as of the Closing Date, out on long-term
disability, shall be provided employment with Buyer as of the date such employee
is willing and able to return to work at the same employment position and same
salary or hourly wage rate as in effect prior to the commencement of his long
term disability or at a level of compensation and in a position that is
commensurate with the skills and abilities of such employee. Each employee of
the Business who is entitled to be provided employment by Buyer from or after
the Closing Date shall hereinafter be referred to as a "TRANSFERRED EMPLOYEE",
and the first date on which each such Transferred Employee is entitled to be
provided employ ment with Buyer in accordance with this Section shall
hereinafter be referred to as the "TRANSFER DATE" with respect to such
Transferred Employee.
(b) From and after the Closing, Buyer shall assume, honor and perform
all obligations of Seller and its Affiliates under all written employment,
compensation and severance agreements with any Transferred Employees. For a
period of at least two years following the Closing, Buyer shall maintain or
cause to be maintained Employee Benefits (as defined below) for the benefit of
the Transferred Employees, which in the aggregate are at least as favorable to
such Transferred Employees (and their domestic partners, dependents and
beneficiaries) as the Employee Benefits provided to similarly situated employees
of Buyer. Without limiting the foregoing, (i) following the Closing, Buyer shall
recognize all vacation and personal holidays accrued by each Transferred
Employee as of the Closing and shall permit each such Transferred Employee to be
compensated for such vacation and personal holidays following the Closing in
accordance with the policies and practices applicable immediately prior to
Closing, provided, however, that such Transferred Employees may only use such
vacation and personal holidays from and after the Closing in accordance with
Buyer's policies and practices and (ii) for a period of at least one year
following the Closing, Buyer shall maintain or cause to be maintained for the
benefit of each Transferred Employee severance benefits that are at least as
favorable to each such Transferred Employee as the written severance benefits
made available to such Transferred Employee by Seller
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immediately prior to the Closing (a true and correct copy of such written
severance benefits has been provided to Buyer). Buyer shall grant each
Transferred Employee full credit, without duplication, for all service by each
such Transferred Employee with Seller and any of its predecessors for purposes
of participation eligibility, benefit eligibility (such as early retirement
eligibility and post-retirement benefit eligibility) and vesting (but not for
purposes of benefit accruals) under the terms of all Employee Benefits provided
to Transferred Employees. With respect to each plan providing medical, dental or
life insurance coverage to any Transferred Employee (or any partner or dependent
of a Transferred Employee) after the Closing, Buyer shall take all action
necessary to (i) waive all preexisting condition exclusions, actively-at-work
requirements and waiting periods that would otherwise apply with respect to
participation and coverage under each such plan to the extent waived under
Seller's Plans, and (ii) provide that any eligible expenses incurred during the
portion of the calendar year on or before the Closing shall be taken into
account for purposes of satisfying any applicable deductibles, coinsurance or
maximum out-of-pocket limitations applicable under each such plan. For purposes
of this Agreement, the term "EMPLOYEE BENEFITS" shall mean all employee
benefits, policies, practices and arrangements, including without limitation,
all pension, supplemental pension, accidental death and dismemberment, life and
health insurance and benefits (including medical, dental, vision and
hospitalization), savings, bonus, deferred compensation) incentive compensation,
holiday, vacation, personal holidays, severance pay, salary continuation, sick
pay, sick leave, short and long term disability, tuition refund, service award,
company car,scholarship, relocation, patent award, fringe benefit and other
employee benefit arrangements, plans, contracts (other than individual
employment, consulting or severance contracts), policies or practices providing
employee or executive compensation or benefits to current and former employees
of the Business.
(c) Subject to the terms of Section 3.06, from and after the Closing
Date, Buyer shall assume liability for (i) all accrued but unpaid wages,
salaries, bonuses, commissions, vacation, personal holiday and holiday pay
("COMPENSATION LIABILITIES") payable to each Transferred Employee and (ii) all
other Employment-Related Liabilities (as defined below) in respect of each
Transferred Employee arising from or relating to claims incurred or events
occurring after the Transfer Date of each such Transferred Employee. Seller
shall retain (i) all Compensation Liabilities and other Employment-Related
Liabilities in respect of any former employee of the Business who has terminated
employment on or prior to the Closing Date and (ii) all Employment-Related
Liabilities in respect of each Transferred Employee arising from or relating to
claims incurred or events occurring prior to the Transfer Date of each such
Transferred Employee. For purposes of this Section, the term "EMPLOYMENT-
RELATED LIABILITIES" includes all
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liabilities and obligations arising from or in connection with any employment
relationship, whether such liabilities or obligations relate to the employee or
any domestic partner, dependent or beneficiary of the employee, including
without limitation all liabilities and obligations in respect of (i) workers
compensation claims, (ii) claims for short-term or long-term disability
benefits, (iii) claims relating to the terms and conditions of employment or
denial of employment opportunity, including claims relating to hiring,
termination, promotion, salary, wages, hours, safety, labor disputes or any
other term or condition of employment, (iv) employer premiums, contributions, or
other amounts payable in respect of any benefit plan, policy, practice or
arrangement and (v) claims for benefits under any other welfare or fringe
benefit plans or arrangements or any employee policy, practice or arrangement,
including without limitation life insurance, health, dental and medical
benefits, disability benefits, severance benefits and other employee benefits or
entitlements. For purposes of this Section a claim in respect of health, dental
or medical benefits shall be deemed to be incurred as of the date that such
health, dental or medical care (including any related devices or medications)
are provided or procured, and a claim in respect of workers compensation,
disability benefits or the terms and conditions of employment shall be deemed to
be incurred as of the date of occurrence of the events initially giving rise to
the condition forming the basis of such claim. To the extent that Seller remains
liable hereunder with respect to any Employment-Related Liabilities relating to
any Transferred Employee, Buyer agrees to cooperate with Seller in all matters
relating to such Employment-Related Liabilities and any actions taken or
expenses incurred by Buyer with respect to such Employment-Related Liabilities
shall be subject to prior approval by Seller, which approval shall not be
unreasonably withheld.
(d) Buyer and Seller agree that pursuant to the "Alternative
Procedure" provided in Section 5 of Revenue Procedure 96-60, 1996-53, I.R.B. 24,
with respect to preparing, filing and furnishing the Internal Revenue Service
Forms W-2, W-3, 941 and W-5, (i) Buyer and Seller shall report, on a
"predecessor-successor" basis as set forth therein, (ii) Seller shall be
relieved from furnishing Forms W-2 to the Transferred Employees and (iii) Buyer
shall assume the obligations of Seller to furnish such forms to the Transferred
Employees for the full calendar year in which the Closing occurs.
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ARTICLE 9
CONDITIONS
SECTION 9.01. Conditions to Obligations of Each Party. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to Closing of the
following conditions:
(a) Consummation of the Merger and Establishment of the Venture. The
transactions contemplated by the Merger Agreement and each of the Transaction
Documents shall have been consummated in each case in accordance with the terms
thereof.
(b) FCC Approval. The FCC shall have approved the FCC Application and
such approval shall have become a Final Order, except as may be waived in
writing by Buyer.
(c) HSR Waiting Period. The waiting period applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated.
(d) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect, nor shall any proceeding by any Governmental Authority be pending
seeking any of the foregoing. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated by this Agreement, which makes the
consummation of the transactions contemplated by this Agreement illegal.
SECTION 9.02. Conditions to Obligations of Buyer. The obligation of
the Buyer to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following additional conditions unless waived
by Buyer:
(a) Deliveries by Seller. Seller shall have delivered to Buyer all
items required to be delivered by Seller to Buyer pursuant to Section 10.02 of
this Agreement.
(b) Representations and Warranties of Seller. The representations and
warranties of Seller set forth in this Agreement shall be true and correct in
all respects as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except for such breaches that
have not and would not, individually or in the aggregate with any other breaches
on the part of Seller, reasonably be expected to have a Material Adverse Effect,
and
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Buyer shall have received a certificate duly signed on behalf of Seller to
such effect.
(c) Performance of Obligations of Seller. Seller shall have performed
in all material respects all obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and Buyer shall have received a
certificate duly signed on behalf of Seller to such effect.
(d) Consents. Seller shall have obtained all necessary consents to the
assignment to Buyer of the Assumed Contracts that are material to the Business.
(e) Title Insurance. Buyer shall have received, at Seller's expense,
an owner's extended coverage policy of title insurance covering the Real
Property, issued on the Closing Date by a title insurance company reasonably
acceptable to Buyer. Such title insurance policy shall be in an amount
designated by Buyer, shall be accompanied by such endorsements as Buyer shall
require and shall insure the ownership of fee title by Seller, without any of
the Schedule B standard preprinted exceptions (other than Taxes not yet due and
payable) and free and clear of any Encumbrances, except Permitted Encumbrances.
SECTION 9.03. Conditions to Obligations of Seller. The obligation of
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following additional conditions unless waived by
Seller:
(a) Deliveries by Buyer. Buyer shall have delivered to Seller all
items required to be delivered by Buyer to Seller pursuant to Section 10.03 of
this Agreement.
(b) Representations and Warranties of Buyer. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct in all
respects as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except for such breaches that
would not, individually or in the aggregate with any other breaches on the part
of Buyer, reasonably be expected to have a material adverse effect on Buyer's
ability to perform its obligations under the Buyer Documents, and Buyer shall
have received a certificate duly signed on behalf of Buyer to such effect.
(c) Performance of Obligations of Buyer. Buyer shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Seller shall have received a
certificate duly signed on behalf of Buyer to such effect.
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ARTICLE 10
THE CLOSING
SECTION 10.01. Closing. The Closing hereunder shall be held on a date
specified by Seller that is not later than ten (10) days following the date that
the FCC's approval of the FCC Application has become a Final Order (the "CLOSING
DATE"). Subject to the satisfaction (or waiver, if applicable) of all of the
conditions set forth in Article 9, the Closing shall be held at 10:00 A.M. local
time at the offices of Weil, Gotshal & Manges LLP at 767 Fifth Avenue, New York,
New York, or at such other time and place as the parties may agree.
SECTION 10.02. Delivery by Seller. At or before the Closing, Seller
shall deliver to Buyer the following:
(a) Agreements and Instruments. The following bills of sale,
assignments and other instruments of transfer, dated as of the Closing Date and
duly executed by Seller:
(i) the Bill of Sale;
(ii) the Assignment of FCC Licenses;
(iii) the Assignment of Contracts and Leases;
(iv) the Assumption Agreement;
(v) limited or special warranty deeds in a form reasonably
acceptable to Buyer for all Real Property owned by Seller in a form
commonly used in the jurisdictions where such Real Property is
located; and
(vi) such other instruments of transfer, duly executed by the
Seller, as are necessary to transfer the Assets in accordance with
Law.
(b) Consents. Copies of all consents Seller has obtained to effect the
assignment to Buyer of the Assumed Contracts.
(c) Certified Resolutions. A copy of the resolutions of directors of
Seller, certified as being correct and complete and then in full force and
effect, authorizing the execution, delivery and performance of this Agreement,
and of the
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other Seller Documents, and the consummation of the transactions contemplated
hereby and thereby.
(d) Officers' Certificate. A certificate of Seller signed by an
officer of Seller certifying the matters set forth in Section 9.02(c).
(e) Secretary's Certificate. A certificate signed by the Secretary of
Seller as to the incumbency of the officers of Seller executing this Agreement
or any of the other Seller Documents on behalf of Seller and certifying as to
other customary matters.
SECTION 10.03. Delivery by Buyer. At or before the Closing, Buyer
shall deliver to Seller the following:
(a) Purchase Price Payment. The Purchase Price in the amount and
manner set forth in Article 3.
(b) Assumption Agreement. The Assumption Agreement dated as of the
Closing Date and duly executed by Buyer.
(c) Certified Resolutions. Copies of the resolutions of the directors
of Buyer, certified as being correct and complete and then in full force and
effect, authorizing the execution, delivery and performance of this Agreement
and of the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby.
(d) Officers' Certificate. A certificate of Buyer signed by an officer
of Buyer certifying the matters set forth in Section 9.03(b).
(e) Secretary's Certificate. A certificate signed by the Secretary of
Buyer as to the incumbency of the officers of Buyer executing this Agreement or
any of the other Buyer Documents on behalf of Seller and certifying as to other
customary matters.
ARTICLE 11
TERMINATION, AMENDMENT AND WAIVER
SECTION 11.01. Termination. This Agreement may be terminated at any
time prior to Closing:
(a) by mutual written consent of Buyer and Seller;
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<PAGE> 46
(b) by Buyer, so long as the Buyer is not then in material breach of
its obligations hereunder, upon a breach of any material representation,
warranty, covenant or agreement on the part of Seller set forth in this
Agreement, or if any such representation or warranty of Seller shall have been
or become untrue, in each case such that the conditions set forth in Section
9.02(b) or Section 9.02(c), as the case may be, would not be satisfied and such
breach or untruth (i) cannot be cured by the Closing Date or (ii) has not been
cured within 30 days of the date on which Seller receives written notice thereof
from Buyer;
(c) by Seller, so long as Seller is not then in material breach of its
obligations hereunder, upon a breach of any material representation, warranty,
covenant or agreement, on the part of Buyer set forth in this Agreement, or if
any such representation or warranty of Buyer shall have been or become untrue,
in each case such that the conditions set forth in Section 9.03(b) or Section
9.03(c), as the case may be, would not be satisfied and such breach or untruth
(i) cannot be cured by the Closing Date or (ii) has not been cured within 30
days of the date on which Buyer receives written notice thereof from Seller;
(d) by any party if, any permanent injunction or other order, decree,
ruling or action by any Governmental Authority preventing the consummation of
the transactions contemplated under this Agreement shall have become final and
nonappealable; provided that such right of termination shall not be available to
any party if such party shall have failed to make reasonable efforts to prevent
or contest the imposition of such injunction or other order, decree, ruling or
action and such failure materially contributed to such imposition; and
(e) by any party if (other than due to the willful failure of the
party seeking to terminate this Agreement to perform its obligations hereunder
required to be performed at or prior to the Closing Date) the Closing shall not
have been consummated on or prior to nine months following the Exercise Date.
SECTION 11.02. Effect of Termination. In the event that this Agreement
shall be terminated pursuant to Section 11.01, all further obligations of the
parties under this Agreement (other than Sections 6.04 and 7.01) shall terminate
without further liability of either party to the other, provided, that nothing
in this Section 11.02 shall relieve any party from liability for its willful
breach of this Agreement.
SECTION 11.03. Amendment. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
SECTION 11.04. Waiver. At any time prior to the Closing, any party
hereto, to the extent lawful, may extend the time for the performance of any of
the
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obligations or other acts of the other parties hereto or waive compliance with
any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
ARTICLE 12
COVENANTS AND REPRESENTATIONS AND WARRANTIES OF NBC
SECTION 12.01. Covenant of NBC as to the Seller. NBC agrees to cause
Seller to perform in all material respects all of its obligations under the
Seller Documents.
SECTION 12.02. Guaranty by NBC of Seller's Indemnification Payment
Obligations. NBC guarantees to Buyer the full and prompt payment and performance
by Seller of all of Seller's indemnification payment obligations under Article
13 hereof. This guaranty of Seller's indemnification payment obligations (the
"GUARANTY") is an absolute, irrevocable, primary, continuing, unconditional, and
unlimited guaranty of performance and payment, and is not a guaranty of
collection. The Guaranty shall remain in full force and effect (and shall remain
in effect notwithstanding any amendment to this Agreement) until all of Seller's
indemnification payment obligations under Article 13 hereof have been paid,
observed, performed or discharged in full. NBC hereby irrevocably waives any
defenses it may now or hereafter have relating to any facts or circumstances,
now or hereafter existing, which might constitute a legal or equitable discharge
or defense of a guarantor.
SECTION 12.03. Representation and Warranty of NBC. NBC represents and
warrants as of the date hereof and as of the Closing Date that it has full
corporate power and authority to enter into the Guaranty and this Article 12 is
binding on and enforceable against NBC in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws of general applicability relating to or affecting
creditors' rights generally and by the application of general principles of
equity.
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ARTICLE 13
SURVIVAL; INDEMNIFICATION
SECTION 13.01. Survival of Representations. Unless otherwise set forth
herein, all representations and warranties, covenants and agreements of Seller
and Buyer contained in this Agreement or in any certificate furnished pursuant
hereto shall survive the Closing Date and shall remain in full force and effect
to the following extent: (a) unless otherwise specified below, representations,
warranties and covenants shall survive for a period of fifteen (15) months after
the Closing Date, (b) the covenants and agreements in this Article 13 shall
continue in full force and effect until fully discharged, (c) the representation
and warranties made in Sections 4.01, 4.03, 5.01, and 5.02 shall survive
indefinitely, (d) the representations and warranties made in Sections 4.05,
4.14, 4.15, and 4.17 shall survive for three years, (e) the representations and
warranties made in Section 4.10 shall survive until six months following the
expiration of the applicable statute of limitations, including any extensions
thereof and (f) any representation, warranty, covenant or agreement that is the
subject of a claim which is asserted in a reasonably detailed writing prior to
the expiration of the applicable survival period shall survive with respect to
such claim or dispute until the final resolution thereof.
SECTION 13.02. Indemnification by Seller. Subject to the conditions
and provisions of Section 13.04 and Section 13.05, from and after the Closing
Date, Seller agrees to indemnify, defend and hold harmless Buyer from and
against and in any respect of any and all Losses, asserted against, imposed upon
or incurred by Buyer, directly or indirectly, by reason of or resulting from:
(a) any misrepresentation or breach of the representations and warranties of
Seller contained in or made pursuant to any Seller Document; (b) any Liability
which is not an Assumed Liability, (c) any failure by Seller to comply with any
applicable bulk transfer laws; (d) any breach by Seller of any covenants of
Seller contained in or made pursuant to any Seller Document or (e) (i) the
occupancy, operation, use or control of the Real Property or the Leased Premises
on or prior to the Closing Date or (ii) the operation of the Business on or
prior to the Closing Date, in each case incurred or imposed pursuant to any
Environmental Laws, including, without limitation, any release or storage of any
Hazardous Substances on, into, at or from (A) any such Real Properties or Leased
Premises or (B) any real property or facility owned by a third party at which
Hazardous Substances attributable to the operation of the Business were sent on
or prior to the Closing Date by the Business.
SECTION 13.03. Indemnification by Buyer. Subject to the conditions and
provisions of Section 13.04 and 13.05, from and after the Closing Date, Buyer
hereby agrees to indemnify, defend and hold harmless Seller from, against and
with respect of any and all Losses, asserted against, resulting to, imposed upon
or incurred by Seller, directly or indirectly, by reason of or resulting from:
(a) any failure by Buyer to pay, perform or discharge any Assumed Liabilities;
(b) any misrepresentation or breach of the representations and warranties of
Buyer
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<PAGE> 49
contained in or made pursuant to this Agreement or any other Buyer Document; (c)
any breach by Buyer of any covenants of Buyer contained in or made pursuant to
this Agreement or any other Buyer Document; (d) (i) the occupancy, operation,
use or control of the Real Property or the Leased Premises after the Closing
Date or (ii) the operation of the Business after the Closing Date, in each case
incurred or imposed pursuant to any Environmental Laws, including without
limitation, any release or storage of any Hazardous Substance on, into, at or
from (A) any such Real Properties or Leased Premises or (B) any real property or
facility owned by a third party at which Hazardous Substance attributable to the
operation of the Business were sent after the Closing Date or (e) Liabilities
incurred or suffered with respect to the WARN Act or any similar state or local
law arising as a result of the transactions contemplated by this Agreement with
respect to the Transferred Employees.
SECTION 13.04. Procedures. (a) Promptly after the receipt by any party
seeking indemnification hereunder ("INDEMNIFIED PARTY") of notice of (a) any
claim or (b) the commencement of any action or proceeding which may entitle such
party to indemnification under this Article 13, such party shall give the party
from whom indemnification may be sought (the "INDEMNIFYING PARTY") written
notice of such claim or the commencement of such action or proceeding and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting from such claim; provided, that failure to give such notice
shall not affect the obligations of the Indemnifying Party hereunder, except to
the extent that such failure materially prejudices the Indemnifying Party's
defense or response to such action or proceeding.
(b) If the Indemnifying Party assumes the defense of any such claim or
litigation resulting therefrom with counsel reasonably acceptable to the
Indemnified Party, the obligations of the Indemnifying Party as to such claim
shall be limited to taking all steps reasonably necessary in the defense or
settlement of such claim or litigation resulting therefrom and to holding the
Indemnified Party harmless from and against any losses, damages and liabilities
caused by or arising out of any settlement approved by the Indemnifying Party or
any judgment in connection with such claim or litigation resulting therefrom. At
its expense, however, the Indemnified Party may participate in the defense of
such claim or litigation, provided that the Indemnifying Party shall direct and
control the defense of such claim or litigation. The Indemnified Party shall
cooperate and make available all books and records reasonably necessary and
useful in connection with the defense. The Indemnifying Party shall not, except
with the written consent of the Indemnified Party, enter into any settlement, if
such settlement does not release the Indemnified Party from all liabilities and
obligations with respect to such Third Party Claim or the settlement imposes
injunctive or other equitable relief against the Indemnified Party.
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<PAGE> 50
(c) If the Indemnifying Party shall not assume the defense of any such
claim or litigation resulting therefrom, the Indemnified Party may, but shall
have no obligation to, defend against such claim or litigation in such manner as
it may deem appropriate, and the Indemnified Party may compromise or settle such
claim or litigation without the Indemnifying Party's consent. The Indemnifying
Party shall promptly reimburse the Indemnified Party for the amount of all
reasonable expenses, legal or otherwise, incurred by the Indemnified Party in
connection with the defense against or settlement of such claim or litigation.
If no settlement of the claim or litigation is made, the Indemnifying Party
shall promptly reimburse the Indemnified Party for the amount of any judgment
rendered with respect to such claim or in such litigation and of all reasonable
expenses, legal or otherwise, incurred by the Indemnified Party in the defense
against such claim or litigation.
SECTION 13.05. Limits on and Conditions to Indemnification.
(a) Threshold Amount and Cap. Notwithstanding any other provision
hereof, an Indemnified Party shall not be entitled to make a claim against an
Indemnifying Party in respect of any breach of a representation or warranty
under Sections 13.02(a) or 13.03(b) (determined without regard to any
materiality qualification contained in any representation, warranty, covenant or
agreement giving rise to the indemnity claim hereunder) except and only to the
extent that the aggregate amount of such Losses exceeds $500,000.
Notwithstanding any other provision of this Agreement, the indemnity obligation
of Buyer and Seller, respectively, under this Article 13 will not exceed the
product of 1/4 times the Base Purchase Price, provided that Buyer and Seller,
respectively, shall be liable for the full amount of any claim, liability,
expense and obligation under Article 13 hereof that arises (i) as the result of
or in connection with its willful misconduct or fraudulent act or omission or
(ii) in respect of Sections 13.02(b) or 13.03(a).
(b) Calculation of Damages.
(i) The amount of Losses payable under Section 13.02 or 13.03 by
the Indemnifying Party shall be net of any (A) amounts recovered or
recoverable by the Indemnified Party under applicable insurance
policies and (B) Tax benefit actually realized by the Indemnified
Party arising from the incurrence or payment of any such Damages, and
shall be increased by any Tax cost incurred by the Indemnified Party
arising from the receipt of indemnity payments, including payments
received pursuant to this Section 13.05(b)(i).
(ii) The Indemnifying Party shall not be liable under Section
13.02 or 13.03 for any Losses relating to any matter to the extent
that the
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Final Proration Amount compensated the Indemnified Party with respect
to such matter.
(c) Indemnity Payments. The parties agree that any payments made
pursuant to this Article 13 will be treated by the parties for all Tax purposes
as an adjustment to the Purchase Price.
(d) Assignment of Claims. If the Indemnified Party receives any
payment from an Indemnifying Party in respect of any Losses pursuant to Section
13.02 or 13.03 and the Indemnified Party could have recovered all or a part of
such Losses from a third party (a "POTENTIAL CONTRIBUTOR") based on the
underlying Claim asserted against the Indemnifying Party, the Indemnified Party
shall assign such of its rights (provided that such rights are assignable) to
proceed against the Potential Contributor as are necessary to permit the
Indemnifying Party to recover from the Potential Contributor the amount of such
payment.
(e) Exclusivity. Except as specifically set forth in this Agreement,
Buyer waives any rights and claims Buyer may have against Seller, whether in law
or in equity, relating to the Business or the transactions contemplated hereby.
The rights and claims waived by Buyer include, without limitation, claims for
contribution or other rights of recovery arising out of or relating to any
Environmental Law, claims for breach of contract, breach of representation or
warranty, negligent misrepresentation and all other claims for breach of duty.
After the Closing, Sections 8.07, 13.02 and 13.03 will provide the exclusive
remedy for any misrepresentation, breach of warranty, covenant or other
agreement or other claim arising out of this Agreement or the transactions
contemplated hereby.
ARTICLE 14
GENERAL PROVISIONS
SECTION 14.01. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon actual receipt) by delivery in Person, by
cable, telecopy, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
If to Buyer:
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<PAGE> 52
LIN Holdings Corp.
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart
Fax: (214) 740-7313
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen E. Jacobs, Esq.
Fax: (212) 310-8007
If to Seller:
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Attention: Warren Jenson
Fax: (212) 664-0427
with a copy to:
National Broadcasting Company, Inc.
30 Rockefeller Plaza
New York, NY 10112
Attention: Stephen F. Stander, Esq.
Fax: (212) 664-6572
SECTION 14.02. Parties in Interest. This Agreement shall be binding
upon an inure solely to the benefit of each party hereto and nothing in this
Agreement, except for Article 13 hereof, express or implied, is intended to or
shall confer upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
SECTION 14.03. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, such remedy being in addition to any
other remedy to which any party is entitled at law or in equity.
SECTION 14.04. Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
SECTION 14.05. Expenses and Transfer Taxes. Except as otherwise set
forth herein, each party hereto shall pay its own expenses incurred in
connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein. Notwithstanding the foregoing, Seller and
Buyer shall each pay one-half of (a) any sales (including, without limitation,
bulk sales), use, documentary, stamp, gross receipts, registration, transfer,
conveyance, excise, recording, license and other similar Taxes and fees
("TRANSFER TAXES") applicable to, imposed upon or arising out of the
transactions contemplated hereby whether now in effect or hereinafter adopted
and regardless of which party such Transfer Tax is imposed upon, (b) any FCC
filing fees incurred in connection with the assignment of the FCC Licenses, and
(c) any fees and expenses incurred in connection with any HSR Filings.
SECTION 14.06. Benefit and Assignment. Except as hereinafter
specifically provided in this Section 14.06, no party hereto shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the other party hereto; and any purported
assignment contrary to the terms hereof shall be null, void and of no force and
effect. Buyer may assign all of its rights and obligations hereunder to any
direct or indirect wholly owned subsidiary of it, provided that no such
assignment shall relieve Buyer of any of its
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obligation under this Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns as permitted hereunder.
SECTION 14.07. Entire Agreement. This Agreement, including the
Schedules hereto and the other instruments and documents referred to herein or
delivered pursuant hereto, contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior oral or written
agreement, commitments or understandings with respect to such matters. No
amendment, modification or discharge of this Agreement shall be valid or binding
unless set forth in writing and duly executed by the party or parties against
whom enforcement of the amendment, modification or discharge is sought.
SECTION 14.08. Severability. If any part of any provision of this
Agreement or any other contract, agreement, document or writing given pursuant
to or in connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said contract, agreement,
document or writing.
SECTION 14.09. Headings. The headings of the sections and subsections
contained in this Agreement are inserted for convenience only and do not form a
part or affect the meaning, construction or scope thereof.
SECTION 14.10. Signature in Counterparts. This Agreement may be
executed in separate counterparts, none of which need contain the signatures of
all parties, each of which shall be deemed to be an original, and all of which
taken together constitute one and the same instrument.
SECTION 14.11. Disclosure Schedules. The parties acknowledge and agree
that (i) the Schedules to this Agreement may include certain items and
information solely for informational purposes for the convenience of Buyer and
(ii) the disclosure by Seller of any matter in the Schedules shall not be deemed
to constitute an acknowledgment by Seller that the matter is required to be
disclosed by the terms of this Agreement or that the matter is material. If any
Schedule discloses an item or information in such a way as to make its relevance
to the disclosure required by another Schedule readily apparent, the matter
shall be deemed to have been disclosed in such other Schedule, notwithstanding
the omission of an appropriate cross-reference to such other Schedule.
SECTION 14.12. Jurisdiction and Venue. The parties hereto agree that
any suit, action or proceeding seeking to enforce any provision of, or based on
any
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<PAGE> 54
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby may be brought in the United States District Court for the
Southern District of New York or any other New York State court sitting in New
York City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 14.01 shall be deemed
effective service of process on such party.
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<PAGE> 55
IN WITNESS WHEREOF, each of the parties hereto has caused this Asset
Purchase Agreement to be duly executed and delivered in its name on its behalf,
all as of the day and year first above written.
LIN HOLDINGS CORP.
By
----------------------------------------
Name:
Title:
BIRMINGHAM BROADCASTING
(WVTM TV), INC.
By
----------------------------------------
Name:
Title:
NATIONAL BROADCASTING
COMPANY, INC., for the sole purpose of
Article 12 hereof
By
----------------------------------------
Name:
Title:
49
<PAGE> 1
EXHIBIT 10.7
EXECUTION COPY
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of
this 12th day of August, 1997 by and among Ranger Holdings Corp. a Delaware
corporation ("Ranger"), LIN Television Corporation, a Delaware corporation
("LIN"), LIN Broadcasting Corporation, a Delaware corporation ("Broadcasting"),
LIN Michigan Broadcasting Corporation, a Michigan corporation ("Michigan") and
LCH Communications, Inc., a Delaware corporation ("LCH"). LCH, Broadcasting and
Michigan are hereinafter collectively referred to as "Seller" or "Sellers".
WHEREAS, contemporaneously with the execution of this Agreement,
Ranger, Ranger Acquisition Company, a Delaware corporation, and a wholly-owned
subsidiary of Ranger, and LIN are entering into an Agreement and Plan of Merger
(the "Merger Agreement");
WHEREAS, Seller is the owner and licensee of television broadcast
station WOOD-TV, together with certain auxiliary facilities (the "Station"),
together with certain local marketing agreement rights and other auxiliary
facilities (the "LMA Station") and has an option to acquire television broadcast
station WOTV; the operations of the Station as currently conducted and Seller's
provision of services to the LMA Station being referred to herein as the
"Business";
WHEREAS, Ranger is unwilling to enter into this Agreement (and effect
the transactions contemplated hereby) unless LIN has waived its right of first
refusal with respect to the purchase of the Station and the LMA Station, and has
agreed to continue to provide consulting services to the Station and the LMA
Station from the date hereof until the Closing Date, and LIN has agreed to
provide such waiver and agreement;
WHEREAS, Broadcasting has an option to purchase the LMA Station (the
"Option");
WHEREAS, Ranger desires to purchase all the Assets (as hereinafter
defined) and to receive the assignment of the Option from Seller if the Merger
is consummated, all in accordance with and subject to the terms and conditions
hereinafter set forth;
<PAGE> 2
WHEREAS, LIN desires to purchase all the Assets and to receive an
assignment of the Option from Seller, if the Merger is not consummated, all in
accordance with and subject to the terms and conditions hereinafter set forth;
WHEREAS, Seller desires to sell and transfer the Assets, and to assign
the Option, to Ranger or LIN, as the case may be, as more particularly set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE 1
DEFINITIONS AND REFERENCES
Capitalized terms used herein without definition shall have the
respective meanings assigned thereto in Annex I attached hereto and incorporated
herein for all purposes of this Agreement (such definitions to be equally
applicable to both the singular and plural forms of the terms defined). Unless
otherwise specified, all references herein to "Articles" or "Sections" are to
Articles or Sections of this Agreement. If the Merger Agreement is not
terminated prior to the Effective Time (as defined in the Merger Agreement), the
term "Buyer" shall mean, and apply to, Ranger. If the Merger Agreement is
terminated prior to the Effective Time for any reason whatsoever, the term
"Buyer" shall mean, and shall apply to, LIN. All covenants, agreements,
liabilities and obligations of Parent and LIN as set forth in this Agreement are
several and not joint.
ARTICLE 2
SALE AND PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES
SECTION 2.1 ASSET SALE AND PURCHASE OF ASSETS. Subject to the terms
and conditions hereof and in reliance upon the representations, warranties and
agreements contained herein, at the Closing, Seller shall sell, assign,
transfer, convey and deliver to Buyer, and Buyer shall purchase, acquire, pay
for and accept from Seller at the Closing, all of Seller's right, title and
interest in, to and under the Station and all of Seller's rights in respect of
the LMA Station and the Option, and all real, personal and mixed assets, rights,
benefits and privileges, both tangible and intangible, owned, leased, used, or
held for use by Seller in connection with the Business (collectively, the
"Assets"); but excluding the Excluded Assets described in Section 2.2.
2
<PAGE> 3
The Assets shall include, without limitation, all of Seller's right,
title and interest in, to and under the following:
(a) FCC Licenses. All licenses, permits and other authorizations
issued by the FCC to Seller for the operation of the Station, including the
right to use the call letters "WOOD-TV" (the "FCC Licenses"), including without
limitation those listed in Schedule 2.1 (a), and all applications therefor,
together with any renewals, extensions or modifications thereof and additions
thereto.
(b) Real Property Interests. (i) All rights of Seller, including any
prepaid rent, security deposits and options to renew or purchase in connection
therewith, in the leased real property listed on Schedule 2.1 (b), together
with, to the extent owned or leased by Seller, all buildings, fixtures and
improvements erected thereon (collectively, the "Leased Premises") and (ii) all
right, title and interest of Seller in the owned real property listed on
Schedule 2.1 (b), together with all buildings, fixtures and improvements erected
thereon, and all easements and rights-of-way and other appurtenances thereto
(collectively, the "Real Property").
(c) Tangible Personal Property. The furniture, fixtures, furnishings,
machinery, computers, equipment, inventory, supplies, antenna installations,
towers, transmitters, generators, office materials and other tangible property
of every kind and description maintained, owned, leased or otherwise used by
Seller in connection with the Business, including without limitation those items
set forth and described in Schedule 2.1 (c), as well as all replacements thereof
and additions thereto.
(d) Intellectual Property. The service marks, copyrights, franchises,
software, licenses (other than the FCC Licenses), trademarks, trade names,
jingles, commercials, other promotional material, slogans, logotypes and other
similar intangible assets maintained, owned, used, held for use or otherwise
held by Seller in connection with the Business (including any and all
applications, registrations, extensions and renewals relating thereto) (the
"Intellectual Property"), and all of the rights, benefits and privileges
associated therewith.
(e) Program Contracts. The program licenses and contracts, under which
Seller is authorized to broadcast programs on the Station, listed on Schedule
2.1 (e), including (a) all cash and non-cash (barter) program licenses and
contracts, and (b) any other such program contracts that are entered into
between the date of this Agreement and the Closing Date in accordance with the
terms of this Agreement (collectively, the "Program Contracts").
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(f) Trade-out Agreements. All contracts and agreements (excluding
Program Contracts) pursuant to which Seller has sold, traded or bartered
commercial air time on the Station in consideration for any property or services
in lieu of or in addition to cash, including, without limitation, contracts
under which commercial air time availability within a particular program is
exchanged for the provision of such program, listed on Schedule 2.1 (f)
(collectively, the "Trade-out Agreements").
(g) Employment Contracts. The employment agreements and talent
contracts and all Cash Flow Growth Participation Agreements, and any rights,
privileges and benefits thereunder, held by the Station listed on Schedule 2.1
(g) (collectively the "Employment Agreements").
(h) Operating Contracts. The broadcast time sales agreements, network
affiliation agreements and national and local advertising representation
agreements for the Station listed on Schedule 2.1 (h), together with all
contracts and agreements that will be entered into between the date of this
Agreement and the Closing Date in accordance with the terms of this Agreement.
(i) LMA Station. The Programming Agreement, a copy of which is
provided as Schedule 2.1 (i), and any other contracts and agreements relating to
the operation of the LMA Station (the WOTV Contracts").
(j) Name. All rights to the name "WOOD-TV" or any logo or variation
thereof and the goodwill associated therewith.
(k) Prepaid Items. All deposits made by the Station and prepaid
expenses of the Station, including, without limitation, those set forth and
described in Schedule 2.11(k).
(l) Vehicles. The automotive equipment and motor vehicles maintained,
owned, leased or otherwise used by Seller in connection with the business and
operations of the Station and the LMA Station, including those referred to in
Schedule 2.1 (c).
(m) Files and Records. All engineering, business and other books,
papers, logs, files and records pertaining to the Business, including without
limitation all ratings reports, advertising customer lists, all sales
advertising materials and any information relating to Taxes imposed on the
Assets, but not the articles of incorporation, by-laws, minute books, stock
transfer records, or other corporate records of Seller, or the original
personnel and employment records in relation to the employees of the Business.
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(n) Auxiliary Facilities. The translators, earth stations, and other
auxiliary facilities, and all applications therefor owned, leased or otherwise
used by Seller in connection with the Business.
(o) Permits and Licenses. All permits, approvals, orders
authorizations, consents, licenses, certificates, franchises, exemptions of, or
filings or registrations with, any court or Governmental Authority (other than
the FCC) in any jurisdiction, which have been issued or granted to or are owned
or used by Seller in connection with the Business and all pending applications
therefor.
(p) Accounts Receivable. All Accounts Receivable arising out of the
Business.
(q) Cash and Bank Accounts. Subject to the provisions of Section 2.2
(a), all cash and cash equivalents and all bank and lock box accounts pertaining
to the Business.
(r) Rights and Claims. To the extent they are transferable, all of the
rights, claims, credits, causes of action or rights of set-off of Seller against
third parties to the extent relating to or affecting the Assets, the Business or
the Assumed Liabilities.
(s) Warranties. To the extent they are transferable, all vendors',
suppliers', manufacturers' and contractors' warranties, representations and
guaranties in respect of any Asset.
To the extent any of the assets described in Sections 2.1 (r) and 2.1
(s) are not transferable, Seller shall cooperate with Buyer to obtain all
approvals, consents or waivers necessary to convey such Assets to Buyer, and at
the request of Buyer, cooperate with Buyer in any reasonable and lawful
arrangements designed to provide the benefit of such Assets to Buyer. Buyer
shall reimburse Seller for any reasonable out of pocket expenses incurred in
seeking to provide such benefits.
SECTION 2.2 EXCLUDED ASSETS.
(a) Cash. Notwithstanding anything to the contrary in this Agreement,
there shall be excluded from the Assets and retained by Seller all cash and cash
equivalents in excess of three (3) million dollars held by Seller such as bank
balances and rights in and to bank accounts, Treasury Bills and other marketable
securities as they exist at the following dates and times: If the Buyer is
Ranger, as of 11:59 P.M. (Eastern Standard Time) on January 1, 1998. If the
Buyer is LIN, as of 11:59 P.M. (Eastern Standard Time) March 1,
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1998. As used herein the term "Accretion Date" shall mean either January 1, 1998
if Buyer is Ranger or March 1, 1998 if Buyer is LIN.
(b) Other Assets. Notwithstanding anything to the contrary in this
Agreement, there shall be excluded from the Assets and retained by Seller, to
the extent in existence at 11:59 P.M. (Eastern Standard Time) on the date
immediately preceding the Closing Date, the following assets (collectively,
these assets and the assets excluded pursuant to Section 2.2 (a) are referred to
as the "Excluded Assets"):
(i) Insurance. All contracts of insurance and all insurance plans and
the assets thereof owned or procured by Seller or Seller's Affiliates.
(ii) Employee Plans and Assets. All Plans, Benefit Arrangements,
Qualified Plans and Welfare Plans and the assets thereof, other than those
agreements listed or described on Schedule 2.1 (g).
(iii) Personal Property Disposed Of. All tangible personal property
disposed of or consumed in the Ordinary Course of Business as permitted by this
Agreement.
(iv) Right to Income Tax Refunds. Any and all claims of Seller with
respect to any Income Tax refunds for any period, or any portion of any period,
ending on or prior to the applicable Accretion Date.
(v) Certain Books and Records. All of (a) Seller's corporate minute
books, stock transfer books, corporate records and corporate seals, and
originals of account books of original entry, (b) all of Seller's original
personnel and employment records in relation to the employees of the Business;
(c) all records prepared by or on behalf of Seller in connection with the sale
of the Station, and (d) all records and documents relating to any Excluded
Assets.
(vi) Rights Under this Agreement. All of Seller's rights under or
pursuant to this Agreement.
(vii) Securities. All capital stock or other securities (other than
cash equivalent marketable securities) of Seller.
SECTION 2.3 PURCHASE PRICE. For and in consideration of the
conveyances and assignments described herein, and in addition to the assumption
of Liabilities as set forth in Section 2.6, Buyer agrees to pay to Seller, and
Seller agrees to accept from Buyer, an
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amount equal to one hundred twenty five million, five hundred thousand dollars
($125,500,000), plus any additional amounts payable in accordance with Section
2.5, and a reimbursement for any cash contributed to the Business by Seller
subsequent to the Accretion Date pursuant to Section 7.1 (g)(iii), plus a
further additional amount at the Applicable Rate (as defined in Section 2.5)
from the date of contribution of such cash (collectively, the "Purchase Price").
The Purchase Price shall be payable as described in Section 2.4.
SECTION 2.4 PAYMENT OF PURCHASE PRICE; ALLOCATION. Buyer shall deliver
the Purchase Price to Seller at the Closing by wire transfer of immediately
available federal funds to an account which will be identified by Seller not
less than two (2) days prior to the Closing Date. The Purchase Price (including
the amount of the Assumed Liabilities) shall be allocated among the Assets based
on the value of such Assets in accordance with Section 1060 of the Code. Each
party shall reflect such allocation on their forms filed under Section 1060 of
the Code and shall file all Tax returns and reports in a manner consistent with
such allocation.
SECTION 2.5 ADDITIONAL AMOUNTS. If the Closing shall occur on a date
after January 1, 1998 for any reason other than a breach by the Seller of any of
its representations or warranties contained herein or a failure by the Seller to
perform any of its obligations hereunder, then, at the Closing, the amount of
cash to which the Seller shall become entitled pursuant to Section 2.3 shall be
increased by an additional amount equal to $125,500,000 multiplied by a fraction
(A) the numerator of which shall be equal to the Applicable Rate (as defined
below) multiplied by the number of days from and including: (a) if the Buyer is
Ranger, January 1, 1998; or (b) if the Buyer is LIN, March 1, 1998, to but
excluding the date on which the Closing occurs and (B) the denominator of which
shall be 365. For purposes of this Section 2.5, the term "Applicable Rate" shall
mean a rate of 8% per annum.
SECTION 2.6 ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume, agree to perform and indemnify
Seller from all Liabilities of Seller relating to the Station and the Assets
relating to or arising out of the Business or operations of the Station or the
Assets in respect of the period prior to the Closing Date (except to the extent
such Liabilities constitute Excluded Liabilities) by entering into the
Assumption Agreement. The Liabilities assumed pursuant to this Section 2.6 are
sometimes referred to herein, collectively, as the "Assumed Liabilities".
(b) Buyer shall not assume or be obligated for any, and Seller shall
solely retain, pay, perform, defend and discharge all of the following
liabilities and obligations of Seller, which shall be "Excluded Liabilities" for
purposes of this Agreement:
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(i) any Taxes which arise from the operation of the Business or the
ownership of the Assets prior to the Closing Date;
(ii) any liability or obligation of Seller in respect of indebtedness
for borrowed money, or any obligation to Seller or its Affiliates, except as
expressly provided by this Agreement or disclosed in the Schedules hereto;
(iii) any costs and expenses incurred by Seller incident to its
negotiation and preparation of this Agreement;
(iv) any liabilities or obligations, whenever arising, related to,
associated with or arising out of the Plans, Benefit Arrangements, Qualified
Plans and Welfare Plans;
(v) any Liability arising under the Assumed Contracts after the
Closing Date which is attributable to any improper action or failure to act by
Seller in accordance with the terms of such Assumed Contracts prior to the
Closing Date, except to the extent reflected as a Liability on the June 30, 1997
balance sheet included in the Financial Statements, or any Liability arising as
a result of the transfer or assignment thereof to Buyer without any consent
required by the terms thereof, unless and to the extent, in each case, such
Liability is reflected on the Financial Statements; and
(vi) any Liabilities in respect of the claims, suits, proceedings or
investigations described in Schedule 3.24; or
(vii) any Liability for which Sellers have indemnified Buyer pursuant
to Section 12.2(e).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES BY SELLER
LCH, Michigan and Broadcasting jointly represent and warrant to Ranger
and LIN as set forth below. LCH, Michigan and Broadcasting make no
representations or warranties except as set forth in this Agreement.
Section 3.1 Organization and Standing. LCH, Michigan and Broadcasting
are corporations duly organized, validly existing and in good standing under the
laws of the state set forth in the first paragraph of this Agreement and are
duly qualified to do business as foreign corporations and are in good standing
in each jurisdiction where such qualification is
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necessary, except for those Jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect. LCH
and Michigan have the full corporate power and authority to own, lease and
otherwise to hold the Assets, to carry on the Business as now conducted, and to
enter into and perform the terms of this Agreement, the other Seller Documents
and the transactions contemplated hereby and thereby. Broadcasting has the full
corporate power and authority to enter into this Agreement and to assign the
Option.
SECTION 3.2 SUBSIDIARIES AND INVESTMENTS. Sellers do not, directly or
indirectly, (a) own, of record or beneficially, any outstanding voting
securities or other equity interests in any corporation, partnership, joint
venture or other entity which is involved in or relates to the Business (except
that Broadcasting owns all of the outstanding capital stock of LCH and Michigan)
or (b) otherwise control any such corporation, partnership, joint venture or
other entity which is involved in or relates to the Business, except that
Seller's indirect parent corporation beneficially owns shares of common stock of
LIN.
SECTION 3.3 AUTHORIZATION. The execution, delivery and performance of
this Agreement and of the other Seller Documents, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary action of the board of directors of each Seller and
by any other necessary corporate or shareholder actions of each Seller or its
Affiliates (none of which actions has been modified or rescinded and all of
which actions are in full force and effect). This Agreement has been duly
executed and delivered by each Seller and constitutes, and upon execution and
delivery each other Seller Document will constitute, valid and binding
agreements and obligations of each Seller enforceable against each Seller in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights generally and
by the application of general principles of equity.
SECTION 3.4 COMPLIANCE WITH LAWS. Sellers are in compliance in all
material respects with all Laws applicable to Sellers in connection with the
Assets, to the Assets, to the Station and to the Business. To the Knowledge of
Sellers, the Business is in compliance in all material respects with all Laws
applicable to the Business, and Sellers have not received any notice alleging
that the Business is in violation of any such Laws. To the Knowledge of Sellers,
Sellers possess all material permits, licenses, franchises and other
authorizations (collectively, "Permits") necessary for the conduct of the
Business as currently conducted, all such permits are valid and in full force
and effect and the Business is in compliance with the terms and conditions of
such Permits, except to the extent that any such
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noncompliance, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.5 ASSETS. Except for leased or licensed Assets (as to which
Seller has a valid leasehold or license interest), Sellers are the owners of,
and have good and marketable title to, the Assets free and clear of any
Encumbrances, except for and subject only to (a) the Permitted Encumbrances, and
(b) those Encumbrances listed in Schedule 3.5. At the Closing, Buyer shall
acquire good and marketable title to, and all of Sellers' right, title and
interest in and to the Assets, free and clear of all Encumbrances, except for
the Permitted Encumbrances. None of Sellers' Affiliates have any right, title or
interest in any real, personal or mixed assets, rights, benefits or privileges,
tangible or intangible, wheresoever located, owned, leased, used, or held for
use in conneCtion with the business and operations of the Station or the LMA
Station, except for any interest any such Affiliate may have in any Excluded
Assets.
SECTION 3.6 FINANCIAL STATEMENTS. Schedule 3.6 contains the unaudited
balance sheets and related income statements of the Business as of and for the
periods ended December 31, 1996 and June 30, 1997 (the "Financial Statements").
The Financial Statements have been prepared in accordance with the policies and
practices of Sellers consistently applied and present fairly in all material
respects the financial position and results of operations of the Business as of
and for the periods ended December 31, 1996 and June 30, 1997. No Seller is
subject to any material Liability with respect- to the Business which is
required to be shown on a balance sheet prepared in accordance with the policies
and practices of Sellers other than Liabilities set forth in the June 30, 1997
balance sheet included in the Financial Statements and Liabilities incurred in
the Ordinary Course of Business after June 30, 1997. Without limiting the
foregoing, such June 30, 1997 balance sheet includes an accrual of not less than
$1,160,257 dollars for amounts payable under the Cash Flow Participation
Agreements.
SECTION 3.7 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a)To the Knowledge of Sellers, the execution and delivery by the
Sellers of this Agreement does not, and the consummation by the Sellers of the
transactions contemplated hereby and compliance by the Seller with the
provisions hereof will not conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or the
loss of a benefit under, or result in the creation of any Encumbrance upon any
of the properties or assets of Sellers or any of their respective subsidiaries
under, (i) any provision of the certificate of incorporation, by-laws or
comparable organization documents
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of Sellers (ii) any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement (other than, with respect to termination, agreements
terminable at will or upon 90 days' or less notice by the terminating party),
instrument, permit, concession franchise or license applicable to Sellers, (iii)
assuming all the consents, filings and registrations referred to in the next
paragraph are made and obtained, any judgment, order decree statute, law,
ordinance, rule or regulation applicable to Sellers or any of their respective
properties or assets, other than, in the case of clause (ii), any such
violation, defaults, rights, losses or liens, that, individually or in the
aggregate, would not reasonable be expected to have a Material Adverse Effect.
(b) No filing or registration with, or authorization, consent or
approval of, any domestic (federal and state) or foreign court, commission,
governmental body, regulatory agency, authority or tribunal (a "Governmental
Entity" is required by or with respect to Sellers or any of their respective
subsidiaries in connection with the execution and delivery of this Agreement by
Sellers or is necessary for the transactions -contemplated by this Agreement,
except (i) applicable filings, if any, pursuant to the provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) such filings with, and orders of, the Federal Communications
Commission (the "FCC") as may be required under the Communications Act of 1934,
as amended, and the rules and regulations promulgated thereunder (the
"Communications Act"), (iii) such filings as may be required in connection with
statutory provisions and regulations relating to real property transfer gains
taxes and real property transfer taxes, and (iv) such other consents, approvals,
orders, authorizations, registrations, declarations and filings the failure of
which to be obtained or made would not, individually or in the aggregate,
reasonable be expected to have a Material Adverse Effect or -prevent or
materially delay the ability of Buyer to consummate the transaction contemplated
by this Agreement.
SECTION 3.8 BOOKS AND RECORDS. The books and records of Sellers
relating to the Business have been maintained in accordance with good business
practices and applicable legal, regulatory and accounting requirements, reflect
only valid transactions, are complete and correct in all material respects and
accurately reflect in all material respects the basis for the financial position
and results of operations of the Business.
SECTION 3.9 ACCOUNTS RECEIVABLE. All accounts receivable of Sellers
relating to the Business have arisen from bona fide transactions by Sellers in
the Ordinary Course Of Business.
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SECTION 3.10 LICENSES.
(a) The Sellers have all permits, licenses, waivers and authorizations
(other than FCC Licenses, but including licenses, authorizations and
certificates of public convenience and necessity from applicable state and local
authorities), which are necessary for the Sellers to conduct the Business in the
manner in which it is presently being conducted (collectively, "Licenses"),
other than any Licenses the failure of which to have Would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. The
Sellers are in compliance with the terms of all Licenses (other than FCC
Licenses), except for such failures so to comply which would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Sellers have duly performed their respective obligations under such
Licenses, except for such non-performance as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. There is no
pending or, to the Knowledge of the Sellers, threatened application, petition,
objection or other pleading with any Governmental Entity other than the FCC
which challenges or questions the validity of, or any rights of the holder
under, any License (other than an FCC License), except for such applications,
petitions, objections or other pleadings, that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or that are
applicable to the broadcast industry generally.
(b) Except as set forth in Schedule 3.1 0(b) and except as does not
materially adversely affect the operation by the Seller of the Station: (i) the
Seller and those of its subsidiaries that are required to hold FCC Licenses, or
that control FCC Licenses, are financially qualified and, to the Knowledge of
the Seller, are otherwise qualified to hold such FCC Licenses or to control such
FCC Licenses, as the case may be; (ii) the Seller and those of its subsidiaries
that are required to hold FCC Licenses hold such FCC Licenses; (iii) the Seller
is not aware of any facts or circumstances relating to the Seller or any of its
subsidiaries that would prevent the FCC's granting the requisite consent to the
FCC Form 314 Assignment of License Application to be filed with respect to the
transactions contemplated by this Agreement (the "FCC Application"), (iv) the
Seller is in material compliance with all FCC Licenses held by it; and (v) there
is not pending or, to the Knowledge of the Seller, threatened any application,
petition, objection or other pleading with the FCC or other Governmental Entity
which challenges the validity of, or any rights of the holder under, any FCC
License held by Seller except for rule making or similar proceedings of general
applicability to persons engaged in substantial the same business conducted by
the Station.
SECTION 3.11 ORDINARY COURSE. Since June 30, 1997, the Business has
been operated in the Ordinary Course of Business consistent with past practice
and there has been
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no material (i) change in the Business, the Assets or the manner of conducting
the Business, (ii) transaction relating to the Assets or the Business outside of
the Ordinary Course of Business (iii) lien created or assumed with respect to
any of the Assets, except Permitted Encumbrances (iv) liabilities incurred,
individually, or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.12 REAL PROPERTY AND LEASED PREMISES. Seller has made
available to Buyer true, correct and complete of all real property leases with
respect to the Business, including all amendments, modifications and renewals
thereof. There are no parties that have any right of use or occupancy derived
from or granted by Sellers to all or any portion of the Leased Premises.
SECTION 3.13 TAXES. Seller has timely filed, or has had filed on its
behalf, with or has obtained, or has had obtained on its behalf, a filing
extension from the appropriate federal, state, local and foreign governments or
governmental agencies with respect to, all Tax returns required to be filed by
Seller or on behalf of Seller on or prior to the date hereof for all Taxes. All
Taxes shown to be payable on such Tax returns have been paid in full. All
written assessments of Taxes due and payable by, on behalf of or with respect to
Seller, which if unpaid might result in a lien upon any of the Assets after
giving effect to the transactions contemplated hereby, have been paid by or on
behalf of Seller, or are being contested in good faith by appropriate
proceedings. All amounts required to be withheld by Seller from employees for
income taxes, social security and other payroll taxes have been collected and
withheld, and have either been paid to the respective governmental agencies, set
aside in accounts for such purpose, or accrued, reserved against and entered
upon Sellers books and records. None of the Assets is required to be treated as
being owned by a person other than Seller pursuant to Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986.
For purposes of this Agreement, the term "Tax" shall mean all taxes,
levies or other like assessments, charges or fees, including, without
limitation, income, gross receipts, excise, value added, real or personal
property, withholding, asset, sales, use, license, payroll, transaction,
capital, business, corporation, employment, net worth and franchise taxes, or
other governmental taxes imposed by or payable to the United States of America
or any State, local or foreign governmental entity, whether computed on a
separate, consolidated, unitary, combined or any other basis; and in each
instance such term shall include any interest, penalties or additions to tax
attributable to any such tax.
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SECTION 3.14 PERSONAL PROPERTY LEASES. Schedule 3.14 contains a list
of each written lease or other agreement or right, under which Seller is lessee
of, or holds or operates, any machinery, equipment, vehicle or other tangible
personal property owned by a third party and used in or relating to the Business
and which is not terminable by Seller without penalty on 30 days' notice or less
and which provides for annual rentals in excess of $50,000.
SECTION 3.15 EMPLOYEES. Schedule 3.15 contains a list of all the
titles of individuals employed by Seller in connection with the Business as of
the date hereof and the then current rate of compensation for such employees.
SECTION 3.16 EMPLOYEE RELATIONS.
(a) Seller has complied in respect of the Business in all material
respects with all applicable laws, rules and regulations which relate to wages,
hours, discrimination in employment and collective bargaining and to the
operation of the Business and is not liable for any arrears of wages or any
taxes or penalties for failure to comply with any of the foregoing.
(b) There is no (i) unfair labor practices charge or complaint against
Seller pending before the National Labor Relations Board, any state labor
relations board or any court or tribunal and, to the Knowledge of Seller, none
is threatened, (ii) strike, slowdown or work stoppage with respect to the
employees of the Business, of which Seller is aware, pending against Seller and,
to the Knowledge of Seller, none is threatened, (iii) written employee grievance
of which Seller has notice pending against Seller and, to the Knowledge of
Seller, none is threatened, (iv) arbitration proceeding arising out of or under
any collective bargaining agreement pending against Seller and, to the Knowledge
of Seller, none is threatened, or (v) pending demand for recognition as the
collective bargaining representative with respect to any employee of the
Business by any labor or group of employees.
SECTION 3.17 CONTRACTS. The Assumed Contracts do not omit any lease,
contract, agreement or understanding that is material to the operation of the
Business. Each of the Assumed Contracts is a valid and binding agreement of the
applicable Seller and, to the Knowledge of Seller, is in full force and effect.
To the Knowledge of Seller, no event or condition has occurred or exists or is
alleged by any of the other parties thereto to have occurred or existed, which
constitutes, or with lapse of time or giving of notice or both might constitute
a material default or breach by the applicable Seller or any other party under
any of the Assumed Contracts. The applicable Seller enjoys peaceful and
undisturbed possession under all leases or licenses with respect to any of the
Assets or under which any
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portion of the Business is operating. No Seller is a party to and the Business
and the Assets are not bound by, any contract, agreement, instrument, lease,
license, arrangement or understanding which has had, or is expected to have, a
Material Adverse Effect.
SECTION 3.18 EMPLOYEE BENEFIT PLANS. Schedule 3.18 lists all "Employee
Benefit Plans", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other employee benefit
arrangements or payroll practices, including, without limitation, severance pay,
sick leave, vacation pay, salary continuation for disability, consulting or
other compensation agreements, retirement, deferred compensation, bonus, stock
purchase, hospitalization, medical insurance, life insurance and scholarship
programs with respect to the Business maintained by Sellers or any of their
affiliates or to which Sellers or any of their affiliates contributed or is
obligated to contribute thereunder with respect to which any Employee
participates (the "Plans"). Copies of the summary plan descriptions related to
the Plans thereto have been made available or delivered to Buyer.
SECTION 3.19 INTELLECTUAL PROPERTY
(a) No person has made, or, to the Knowledge of Seller, threatened to
make, any claims that the operations of the Business are in violation of or
infringe upon any patents, trade secrets, trademarks or trade names, trademark
or trade name registrations, service marks or service mark registrations,
copyrights or copyright registrations or any other proprietary or trade rights
of any third party.
(b) There are no actions or proceedings pending or, to the Knowledge
of Seller, threatened, which challenge the right of Seller to make, use or sell
products or services embodying, and, to the Knowledge of Seller, no person is
infringing or otherwise violating, the Intellectual Property.
SECTION 3.20 ENVIRONMENTAL MATTERS.
(a) The following definitions shall apply to the terms listed below
when used in this Agreement:
"Environmental Law" means any U.S. local, county, state and/or federal
law or regulation that governs the existence of or provides a remedy for release
of Hazardous Substances, the protection of persons, natural resources or the
environment, the management of Hazardous Substances, or other activities
involving Hazardous Substances including, without limitation, under CERCLA or
any other similar federal, state, local and/or county
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laws or regulations, in each case as in effect on or prior to the Closing Date
or, with respect to representations and warranties made on the date hereof, on
or prior to the date hereof.
"Environmental Permits" has the meaning set forth in Section 3.20.
"Hazardous Substance" means any substance that is regulated under any
Environmental Law or is deemed by any Environmental Law to be "hazardous,"
"toxic," a "contaminant," "waste," a source of contamination or a pollutant.
"Release" means any releasing, spilling, leaking, discharging,
disposing of, pumping, pouring, emitting, emptying, injecting, leaching, dumping
or allowing to escape.
"Remedial Action" means actions required by Environmental Law to: (i)
clean up, remove, treat or in any other way address Hazardous Substances; and
(ii) prevent the Release, or minimize the further Release, of Hazardous
Substances.
(b) Except as set forth on Schedule 3.20:
(i) To Seller's Knowledge, with respect to the Business, Seller is in
compliance in all material respects with all applicable laws, rules,
regulations, ordinances, decrees, orders, judgments, permits and licenses of or
from governmental bodies, including those relating to the use of the Assets and
operation of the Business.
(ii) To Seller's Knowledge, all material environmental permits,
certificates, licenses, approvals, registrations and authorizations required for
operating the Business ("Environmental Permits") are listed on Schedule 3.20 and
any that are not transferable are so designated. Seller has not received any
written notice that (i) such Environmental Permits are not in full force and
effect or (ii) Seller is not in compliance in all material respects with the
terms of such Environmental Permits.
(iii) To Seller's Knowledge, there are no underground storage tanks or
surface impoundments in, on or under any properties or facilities that are used
or have been used by the Seller for the storage of products or any other
substance, nor to Seller's Knowledge, except as set forth in Schedule 3.20 have
any underground storage tanks or surface impoundments ever been located in, on
or under any such properties or facilities. To Seller's Knowledge, there are no
friable asbestos or equipment owned by the Company containing polychlorinated
biphenyls, located in, on or under-such properties or facilities.
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(iv) To Seller's Knowledge, the transactions contemplated by this
Agreement will not require any governmental approvals under Environmental Law,
except as set forth on Schedules 3.20, including, without limitation, those that
are triggered by sales or transfers of business or real property.
(v) To Seller's Knowledge, the on-site operations of the Business have
not, and do not now, involve the generation, transportation, treatment, recycle
or disposal of Hazardous Substances except for amounts that would qualify
Seller's facilities or operations as a small quantity generator or a
conditionally exempt small quantity generator. (vi) Seller has complied with the
property transfer requirements of M.C.L.A. 324.20116.
Notwithstanding anything contained in this Section 3.20 to the
contrary, (x) no representation or warranty made by Seller in this Section 3.20
shall apply to compliance by Seller with any applicable Environmental Law, it
being expressly understood and agreed that any and all representations and
warranties of Seller with respect to the compliance by Seller with any
applicable Environmental Law are set forth below, (y) Buyer has the option to
perform an environmental audit pursuant to Section 3.20 of this Agreement and
(z) no representation or warranty made by Seller in this Section 3.20 shall
apply to compliance by any such party with respect to any applicable building,
zoning, safety or fire laws, ordinances, resolutions or codes, it being
expressly understood and agreed that any and all representations and warranties
of Seller with respect to such matters are set forth in Schedule 3.20.
SECTION 3.21 ENTIRE BUSINESS; CONDITION OF ASSETS. The Assets, the FCC
License and the Consulting Agreement constitute all of the assets, properties
and rights, together with the services of the employees and the other rights
Buyer will obtain under this Agreement, necessary to conduct the Business in all
respects as currently conducted and there are no material Assets of the Business
that Seller will retain following the Closing. To the Knowledge of Seller, there
are no (i) material structural defects in any of the buildings or other
improvements situated on the Leased Premises or the Real Property or (ii)
building systems, structures, improvements, fixed assets or equipment owned,
leased or used by Seller and required for the conduct of the Business as
currently conducted that are not in all material respects in good condition and
working order, normal wear and tear excepted, and adequate in quality and
quantity for the current normal operation of the Business.
SECTION 3.22 FCC REPORTS. All notices, reports, forms and other
statements required to be filed by Seller with the FCC relating to the Station
and, to the Knowledge of Seller, relating to the LMA Station, have been filed
and complied with in all material respects and are complete and correct in all
material respects as filed.
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SECTION 3.23 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by and on behalf of the Seller.
SECTION 3.24 LITIGATION. Except as set forth on Schedule 3.24, there
is no litigation, proceeding or investigation pending, or to Seller's Knowledge
threatened, against Seller relating to the Business or the Assets, which if
adversely determined would have a Material Adverse Effect, or, as of the date
hereof, questions the validity of this Agreement or any action to be taken by
Seller in connection with the consummation of the transactions contemplated
hereby or would otherwise prevent or result in a material delay of the
consummation of the transactions contemplated hereby. The Station, the Assets
and to the Knowledge of Sellers, the LMA Station, are not subject to any order,
writ, injunction or decree of any court or Governmental Authority other than
orders of the FCC.
SECTION 3.25 TRANSACTIONS WITH AFFILIATES; SERVICES CONTRACTS. Except
for the Consulting Agreement and the transactions as set forth in Schedule 2.1
(h), Seller is not a party, directly or indirectly, to any contract, lease,
arrangement or transaction which is material to the business or operations of
any Station, whether for the purchase, lease or sale of property, for the
rendition of services or otherwise, with any Affiliate of Seller, or any
officer, director, employee, proprietor, partner or shareholder of Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES BY RANGER AND LIN
Ranger represents and warrants to Seller as follows:
SECTION 4.1 ORGANIZATION AND STANDING. Ranger is a corporation
duly organized, validly existing and in good standing under the laws of the
state set forth in the first paragraph of this Agreement and by the Closing Date
will be duly qualified to do business as a foreign corporation where such
qualification is necessary, except for those jurisdictions where the failure to
be so qualified would not, individually or in the aggregate, have a material
adverse effect on Ranger's ability to perform its obligations under this
Agreement. Ranger has the full corporate power and corporate authority to enter
into and perform the terms of this Agreement and the other Buyer Documents and
to carry out the transactions contemplated hereby and thereby.
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SECTION 4.2 AUTHORIZATION. The execution, delivery and performance of
this Agreement and of the other Buyer Documents, and the consummation of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary actions of Ranger (none of which actions has been
modified or rescinded and all of which actions are in full force and effect),
including approval of its board of directors. This Agreement has been duly
executed and delivered by Ranger and constitutes, and upon execution and
delivery each such other Buyer Document will constitute, a valid and binding
agreement and obligation of Ranger, enforceable against Ranger in accordance
with its respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights generally and by the
application of general principles of equity.
SECTION 4.3 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) The execution and delivery by Ranger of this Agreement does not,
and the consummation by Ranger of the transactions contemplated hereby and
compliance by Ranger with the provisions hereof will not, result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or the loss of a benefit under, or result in the creation of any
lien upon any of the properties or assets of Ranger, (i) any provision of the
certificate of incorporation or by-laws of Ranger, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Ranger or
(iii) assuming all the consents, filings and registrations referred to in the
next sentence are made and obtained, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Ranger (or any of its affiliates) or
any of its properties or assets, other than, in the case of clause (ii) or
(iii), any such violations, defaults, rights, losses or liens, that,
individually or in the aggregate, would not reasonably be expected to prevent or
result in a third party materially delaying the consummation of the transactions
contemplated herein.
(b) No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to Ranger
(or any of its affiliates) in connection with the execution and delivery of this
Agreement by Ranger or is necessary for the consummation of the transactions
contemplated by this Agreement, except (i) applicable filings, if any, pursuant
to the HSR Act, (ii) such filings with, and orders of, the FCC as may be
required under the Communications Act, (iii) such filings as may be required in
connection with statutory provisions and regulations relating to real property
transfer gains and real property transfer and (iv) such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not,
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individually or in the aggregate, reasonably be expected to prevent or result in
a third party materially delaying the consummation of the merger.
SECTION 4.4 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by and on behalf of Ranger except for the Chase Manhattan Bank and Chase
Securities, Inc., whose fees and expenses will be paid by Ranger in accordance
with Ranger's agreements with such firms.
SECTION 4.5 FCC LICENSES OF RANGER AND AFFILIATES. Ranger and any of
its affiliates that are required to hold FCC Licenses, or that control FCC
Licenses, are financially qualified and, to the Knowledge of Ranger and such
affiliates, are otherwise qualified to hold such FCC Licenses or to control such
FCC Licenses, as the case may be. Ranger is not aware of any facts or
circumstances relating to Ranger or any of its affiliates that would prevent the
FCC's granting the requisite consent to the FCC Application (other than as set
forth in Schedule 4.5) Each broadcast station owned, controlled or operated by
Ranger or any pending or, to the Knowledge of Ranger and its affiliates is in
material compliance with all FCC Licenses held by it. There is not pending or,
to the Knowledge of Ranger and its affiliates, threatened any application,
petition, objection or other pleading with the FCC or other Governmental Entity
which challenges the validity of, or any rights of the holder under, any FCC
License held by Ranger or any of its affiliates, except for rule making or
similar proceedings of general applicability to persons engaged in substantially
the 'same business conducted by the broadcast stations owned, controlled or
operated by Ranger or any of its affiliates.
SECTION 4.6 FCC APPLICATION. To Ranger's Knowledge and except as set
forth in Schedule 4.6, Ranger and its affiliates are qualified under Current FCC
Policy to hold, or control the entities which hold or will hold, the FCC
Licenses currently held or controlled by Seller and to be held by Ranger or any
person under common control with Seller after the Closing. Ranger is not aware
of any facts or circumstances relating to Ranger and its Affiliates that would
under Current FCC Policy prevent or materially delay, a grant of the FCC
Application.
SECTION 4.7 OWNERSHIP AND OPERATIONS OF RANGER. Ranger was formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement and the Merger Agreement. As of the date hereof and as of the
Effective Time, except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated by this
Agreement and except for this Agreement and any other agreements or arrangements
contemplated by this Agreement, Ranger has no and will not
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have incurred, directly or indirectly, through any subsidiary or affiliate, any
obligations or liabilities or engaged in any business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any person
or own or lease any real property.
SECTION 4.8 ATTRIBUTABLE INTERESTS. Schedule 4.8 contains a list of
all media properties in the Grand Rapids Designated Market Area in which Ranger
or any of its affiliates have any "attributable interest" as defined in the FCC
rules as of the date hereof.
LIN represents and warrants to Seller as follows:
SECTION 4.9 ORGANIZATION AND STANDING. LIN is a corporation duly
organized, validly existing and in good standing under the laws of the state set
forth in the first paragraph of this Agreement and by the Closing Date will be
duly qualified to do business as a foreign corporation where such qualification
is necessary, except for those jurisdictions where the failure to be so
qualified would not, individually or in the aggregate, have a material adverse
effect on LIN's ability to perform its obligations under this Agreement. LIN has
the full corporate power and corporate authority to enter into and perform the
terms of this Agreement and the other Buyer Documents and to carry out the
transactions contemplated hereby and thereby.
SECTION 4.10 AUTHORIZATION. The execution, delivery and performance of
this Agreement and of the other Buyer Documents, and the consummation of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary actions of LIN (none of which actions has been
modified or rescinded and all of which actions are in full force and effect),
including approval of its board of directors and approval of a majority of its
independent directors. This Agreement has been duly executed and delivered by
LIN and constitutes, and upon execution and delivery each such other Buyer
Document will constitute, a valid and binding agreement and obligation of LIN,
enforceable against LIN in accordance with its respective terms, except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditors'
rights generally and by the application of general principles of equity.
SECTION 4.11 CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) The execution and delivery by LIN of this Agreement does not, and
the consummation by LIN of the transactions contemplated hereby and compliance
by LIN with the provisions hereof will not, result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or
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acceleration of any obligation or the loss of a benefit under, or result in the
creation of any lien upon any of the properties or assets of LIN, (i) any
provision of the certificate of incorporation or by-laws of LIN, (ii) any loan
or credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to LIN or (iii)
assuming all the consents, filings and registrations referred to in the next
sentence are made and obtained, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to LIN (or any of its affiliates) or
any of its properties or assets, other than, in the case of clause (ii) or
(iii), any such violations, defaults, rights, losses or liens, that,
individually or in the aggregate, would not reasonably be expected to prevent or
result in a third party materially delaying the consummation of the transactions
contemplated herein.
(b) No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to LIN (or
any of its affiliates) in connection with the execution and delivery of this
Agreement by LIN or is necessary for the consummation of the transactions
contemplated by this Agreement, except (i) applicable filings, if any, pursuant
to the HSR Act, (ii) such filings with, and orders of, the FCC as may be
required under the Communications Act, (iii) such filings as may be required in
connection with statutory provisions and regulations relating to real property
transfer gains and real property transfer and, (iv) such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not, individually or in the
aggregate, reasonably be expected to prevent or result in a third party
materially delaying the consummation of the merger.
SECTION 4.12 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement.
SECTION 4.13 FCC LICENSES OF LIN AND AFFILIATES. LIN and any of its
affiliates that are required to hold FCC Licenses, or that control FCC Licenses,
are financially qualified and, to the Knowledge of LIN and such affiliates, are
otherwise qualified to hold such FCC Licenses or to control such FCC Licenses,
as the case may be, LIN and any of its affiliates that are required to hold FCC
Licenses hold such FCC Licenses. LIN is not aware of any facts or circumstances
relating to LIN or any of its affiliates that would prevent the FCC's granting
the requisite consent to the FCC Application. Other than as set forth in
Schedule 4.13 each broadcast station owned, controlled or operated by LIN and
its affiliates is in material compliance with all FCC Licenses held by it. There
is not pending or, to the Knowledge of LIN and its affiliates, threatened any
application, petition, objection or other pleading with the FCC or other
Governmental Entity which challenges the
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validity of, or any rights of the holder under, any FCC License held by LIN or
any of its affiliates, except for rule making or similar proceedings of general
applicability to persons engaged in substantially the same business conducted by
the broadcast stations owned, controlled or operated by LIN or any of its
affiliates.
SECTION 4.14 FCC APPLICATION. LIN and its affiliates are legally,
financially and otherwise qualified to hold, or control the entities which hold
or will hold, the FCC Licenses currently held or controlled by the Company or to
be held by LIN or any person under common control after the Effective Time, and
is not aware of any facts or circumstances that might prevent or delay prompt
consent to or waivers for the FCC Application.
ARTICLE 5
COVENANTS AND AGREEMENTS OF SELLER
Seller covenants and agrees with Ranger and LIN as follows:
SECTION 5.1 NEGATIVE COVENANTS. Pending and prior to the Closing,
Seller will not, except in the Ordinary Course of Business, without the prior
consent of Ranger, which consent will not be unreasonably withheld, conditioned,
or delayed, do or agree to do any of the following:
(a) Change in the Business. Make any material change in the Business
or the operations of the Station, except as required by lawful authorities. The
conversion of the Station to digital programming and broadcast format shall not
be deemed to be a material change in the operations of the Station.
(b) Dispositions; Mergers, Cash. Sell, assign, lease or otherwise
transfer or dispose of any of the Assets other than in the Ordinary Course of
Business; or create or suffer to exist any Encumbrance on the Assets, except
Permitted Encumbrances, other than in the Ordinary Course of Business, and with
a book value of not more than $200,000; or remove cash from the Business other
than in connection with the conduct of the Business or as otherwise expressly
permitted under this Agreement; or merge or consolidate with or into any other
entity or enter into any contracts or agreements relating thereto.
(c) Network Affiliation Agreements and Local Marketing Arrangements.
Acquire or enter into any network affiliation agreements, local marketing
arrangements,
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programming contracts, joint operating agreements, time brokerage agreements or
other similar contracts, or exercise the Option.
(d) Breaches. Do or omit to do any act which will cause a material
breach of any material Assumed Contract.
(e) Capital Expenditures. Make any capital expenditure, or enter into
any contract or commitment therefor, in excess of one (1) million dollars in the
aggregate from the date of this Agreement until December 31, 1997, and two (2)
million dollars in the aggregate in 1998.
(f) Amendments or Waivers to Assumed Contracts. Subject to Section
8.2(d), amend or consent to the amendment of any of the Assumed Contracts, the
aggregate effect of which is to cause the terms of such Assumed Contract to be
materially less favorable than prior to such amendment or consent to amendment,
or waive any rights of Seller pursuant to the Assumed Contracts.
(g) Change in Accounting Policies. Except as required by generally
accepted accounting principles, make any change in the accounting policies
applied in the preparation of the Financial Statements.
(h) Cancellation of Claims. Cancel or agree to cancel without fair
consideration therefor any material debts owed to or material claims held by
Seller in respect of the Business (including the settlement of any material
claims or material litigation).
(i) Employee Matters. Enter into or become subject to any employment,
labor, union, or professional service contract not terminable at will, or any
bonus, pension, insurance, profit sharing, incentive, deferred compensation,
severance pay, retirement, hospitalization, employee benefit, or other similar
plan; or increase the compensation payable or to become payable to any employee,
or pay or arrange to pay any bonus payment to any employee, except in the
Ordinary Course of Business.
(j) Actions Affecting FCC Licenses. Take any action which may
jeopardize the validity or enforceability of or rights under the FCC Licenses.
(k) Affiliated Transactions. Enter any transaction with any Affiliate
of Seller regarding the operation of the Station, including, without limitation,
any renewal, extension, modification or other change in, any existing contract
or agreement to which an Affiliate of
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Seller is a party or any other transaction regarding the operation of the
Station involving an Affiliate of Seller which will have continued effectiveness
after the Closing Date.
(l) Agreements and Commitments. Agree or commit to do or authorize any
of the foregoing.
(m) Tax Matters. From the Accretion Date until the Closing Date,
except to the extent required by law, make or revoke any Tax election or change
(or make a request to any taxing authority to change) any material aspect of its
method of accounting for tax purposes.
SECTION 5.2 AFFIRMATIVE COVENANTS. Pending and prior to the Closing
Date, Seller will:
(a) Preserve Existence. Preserve its corporate existence and business
organization intact, maintain its existing franchises and licenses, use
commercially reasonable efforts to preserve the relationships of the Station
with suppliers, contractors, licensors, employees, customers and others having
business relations with the Business and keep all Assets substantially in their
present condition, ordinary wear and tear excepted.
(b) Normal Operations. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 7.1 (h), (i) carry on the
businesses and activities of the Station, including without limitation, the sale
of advertising time, entering into other contracts and agreements, or purchasing
and scheduling of programming, in the Ordinary Course of Business consistent
with past practices; (ii) pay or otherwise satisfy all obligations (cash and
barter) of the Station in the Ordinary Course of Business; (iii) maintain normal
collection practices; (iv) continue to make planned capital expenditures through
December 31, 1997 (estimated to be $650,000 in the aggregate from the date of
this Agreement); and (v) maintain its books of account, records, and files in
substantially the same manner as heretofore.
(c) Maintain FCC Licenses. Maintain the validity of the FCC Licenses,
and comply in all material respects with all requirements of the FCC Licenses,
the Communications Act and the rules and regulations of the FCC.
(d) Network Affiliation. Use commercially reasonable efforts to
maintain in full force and effect Seller's present network affiliation
agreements for the Station (and any and all modifications and renewals thereof).
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(e) Assumed Contracts. Pay and perform its obligations in the Ordinary
Course of Business under the Assumed Contracts and the Consulting Agreement in
accordance with the respective terms and conditions of such Assumed Contracts
and the Consulting Agreement.
(f) Consulting Agreement. Use commercially reasonably efforts to
maintain in full force and effect and shall not waive any of its rights pursuant
to, the Consulting Agreement.
(g) Taxes. Pay or discharge all Taxes when due and payable in the
Ordinary Course of Business, except any Taxes contested in good faith.
(h) Corporate Action. Take all corporate action (including, without
limitation, all shareholder action) under the Laws of any state having
jurisdiction over Seller necessary to effectuate the transactions contemplated
by this Agreement and by the other Seller Documents.
(i) Access. Cause to be afforded to representatives of Buyer
reasonable access during normal business hours to offices, properties, assets,
books and records, contracts and reports of the Station and the LMA Station, as
Buyer shall from time to time reasonably request.
(j) Insurance. Maintain in full force and effect all of its existing
casualty, liability, and other insurance through the day following the Closing
Date in amounts not less than those in effect on the date hereof.
(k) Cash Balance. Seller will have on hand, after giving effect to the
retention of cash and cash equivalents contemplated by Section 2.2(a), not less
than three (3) million dollars in cash or cash equivalents in the Business on
the Accretion Date.
(l) Real Estate Liens. Prior to Closing Seller will satisfy and
discharge any liens on the Real Property that may be discharged or satisfied by
the payment of money.
SECTION 5.3 CONFIDENTIALITY
(a) Seller and its Affiliates shall, at all times, maintain strict
confidentiality with respect to all documents and information furnished to
Seller by or on behalf of Buyer. Nothing shall be deemed to be confidential
information that: (a) is known to Seller at the time of its disclosure to
Seller; (b) becomes publicly known or available other than through disclosure by
Seller;
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(c) is received by Seller from a third party not actually known by Seller to be
bound by a confidentiality agreement with or obligation to Buyer; or (d) is
independently developed by Seller. Notwithstanding the foregoing provisions of
this Section 5.3(a), Seller may disclose such confidential information (a) to
the extent required or deemed advisable to comply with applicable Laws; (b) to
its officers, directors, employees, representatives, financial advisors,
attorneys, accountants, and agents with respect to the transactions contemplated
hereby (so long as such parties agree to maintain the confidentiality of such
information); and (c) to any Governmental Authority in connection with the
transactions contemplated hereby. In the event this Agreement is terminated,
Seller will return to Buyer all documents and other material prepared or
furnished by Buyer relating to the transactions contemplated hereunder, whether
obtained before or after the execution of this Agreement.
(b) Seller shall, at all times, maintain strict confidentiality with
respect to all documents and information relating to the business and operations
of the Station, the LMA Station and the Assets. For the purposes of this Section
5.3(b), nothing shall be deemed to be confidential information that: (i) becomes
publicly known or available other than through disclosure by Seller (ii) is
received by Seller after the Closing by a third party and the Seller does not
have Knowledge of such third party being bound by a confidentiality agreement
with or obligation to Buyer or (iii) is independently developed by Seller after
Closing. Notwithstanding the foregoing provisions of this Section 5.3(b), Seller
may disclose such confidential information (x) to the extent required or deemed
advisable to comply with applicable Laws; (y) to its officers, directors,
employees, representatives, financial advisors, attorneys, accountants, and
agents with respect to the transactions contemplated hereby (so long as such
parties agree to maintain the confidentiality of such information); and (z) to
any Governmental Authority in connection with the transactions contemplated
hereby.
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(c) This Section 5.3 shall become null and void and of no force or
effect upon a date two years after the date of this Agreement.
ARTICLE 6
COVENANTS AND AGREEMENTS OF RANGER AND LIN
Ranger and LIN, severally and not jointly, covenant and agree with
Seller as follows:
SECTION 6.1 CONFIDENTIALITY
(a) Ranger and LIN shall, at all times prior to the Closing, maintain
strict confidentiality with respect to all documents and information furnished
to them by or on behalf of Seller. Nothing shall be deemed to be confidential
information, that: (i) is known to a party at the time of its disclosure to the
party; (ii) becomes publicly known or available other than through disclosure by
the party; (iii) is received by that party from a third party not actually known
by that party to be bound by a confidentiality agreement with or obligation to
Seller; or (iv) is independently developed by that party. Notwithstanding the
foregoing provisions of this Section 6.1, Ranger and LIN may disclose such
confidential information (x) to the extent required or deemed advisable to
comply with applicable Laws; (y) to its officers, directors, employees,
representatives, financial advisors, attorneys, accountants, agents,
underwriters, lenders, investors and any other potential sources of financing
(including the agents and advisors of such potential sources of financing) with
respect to the transactions contemplated hereby (so long as such parties agree
to maintain the confidentiality of such information); and (z) to any
Governmental Authority in connection with the transactions contemplated hereby
or the financing thereof. In the event this Agreement is terminated in whole or
with respect to a party, Ranger and LIN will return to Seller all documents and
other material prepared or furnished by Seller relating to the transactions
contemplated by this Agreement, whether obtained before or after the execution
of this Agreement.
(b) This Section 6.1 shall become null and void and of no force or
effect upon a date two years after the date of this Agreement.
SECTION 6.2 CORPORATE ACTION. Prior to the Closing, Ranger and LIN
shall take all corporate action (including, without limitation, all shareholder
action) under the Laws of any State having jurisdiction over the party necessary
to effectuate the transactions contemplated by this Agreement and the other
Buyer Documents.
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SECTION 6.3 NO SOLICITATION; NO HIRE. Except as provided in this
Agreement neither Ranger, nor its Affiliates, shall (1) solicit for employment
any executive or employee of the Station or the LMA Station or (2) solicit or
employ any person listed on Schedule 6.3, in each case until the earlier of (a)
the Closing or (b) three months following the termination of this Agreement in
accordance with its terms.
SECTION 6.4 EMPLOYEE MATTERS.
(a) Buyer shall be solely responsible for the conduct of any
negotiations prior to the Closing Date with any union with respect to collective
bargaining agreements, if any, or other labor agreements applicable to its
employees to be effective after the Closing Date, whether or not at the time of
the negotiation such individuals are employees of the Station.
(b) Buyer agrees to offer to employ at the Closing each of the
employees of Station who are listed on Schedule 6.4(b) (which shall be updated
as of the day prior to Closing) and who are employed by Seller immediately prior
to the Closing ("Acquired Employees") at the same total aggregate cash
compensation levels (i.e., salary plus cash bonus, if any) in effect on the
Closing Date, which shall be maintained for at least two years following the
Closing Date for all employees who remain employed by the Buyer, including any
reasonable salary action approved as of the Closing Date but not yet
implemented. Employment with Buyer shall be effective at 12:01 A.M. on the
Closing Date, except offers of employment extended to employees receiving
short-term disability benefits or on approved leaves of absence with a
guaranteed right of reinstatement on the Closing Date which will become
effective upon their return to active status at the termination of the
short-term disability or approved leaves of absence, respectively. Such persons
shall become employees of Buyer and shall initially have positions (including
status, offices, titles and reporting requirements), authority, duties
responsibilities comparable to those held and exercised by such employee with
Station on the Closing Date; provided, however, that Buyer shall in no event be
restricted from making such employment decisions after the Closing as it deems
appropriate. Buyer agrees to give such employees full credit for the paid time
off and sick pay earned or accrued by them during, and to which they are
entitled as a result of, their employment by Station, either by allowing such
employees such paid time off and sick pay as to which such employees would have
been entitled as of the Closing Date under the policies of Station if such
employees had remained employees of Station or, upon termination of employment,
by making full payment to such employees of the paid time off that such
employees would have received had they taken such paid time off.
(c) Buyer agrees that effective as of the Closing Date and for at
least two years after Closing, it will provide to all Acquired Employees, at a
minimum, post-closing group
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health benefits substantially comparable to those currently offered by Seller
("Post-closing Benefits").
(d) To ensure that all Acquired Employees will be actually covered by
group health plans of Buyer immediately upon Closing and so that Seller shall
have no continuing obligation for providing continuation of medical coverage to
Acquired Employees, Buyer shall not offer an "opt out" provision under its group
health plan to any Acquired Employee. For purposes of determining whether any
Acquired Employee or such employee's covered dependents have satisfied any
required co-payments, annual deductibles and out-of-pocket maximums under the
terms of the Buyer's group health plan for the calendar year in which their
employment with Buyer commences, Acquired Employees and their covered dependents
shall be credited with the amount of deductibles and co-payments made by, or on
behalf of, such Acquired Employees and their covered dependents under the
Seller's group health plan for such year.
(e) Buyer shall recognize all service with Seller, including service
with predecessor employers that was recognized by Seller, for purposes of the
Buyer's benefit plans and programs, including, but not limited to, vacation
entitlement, eligibility to participate and vesting in any pension,
profit-sharing or stock bonus plan (including one with a cash-or-deferred
arrangement), health and welfare plan participation and vesting, and severance
pay.
(f) Ranger and LIN acknowledge and agree that as of the date and time
the Closing is effective, Buyer is considered for purposes of the WARN Act the
employer of the employees of Station and that Buyer (and not Station) shall
thereupon be responsible for complying with the WARN Act with respect to such
employees.
(g) Buyer shall indemnify, defend and hold Seller harmless from and
against any and all losses, claims and expenses of any kind whatsoever,
including, without limitation, attorneys' fees and costs of investigation,
resulting from or arising out of (i) the discharge or other termination of
employment by Buyer from and after the Closing Date of any employee of Station,
including, without limitation, claims for health care coverage or benefits and
all compliance obligations (including, without limitation, the obligation to
give notice or pay money) of Station or Buyer under the WARN Act, and (ii) the
Station Union Contracts from and after the Closing.
(h) Buyer agrees to assume Seller's obligations under the Cash Flow
Growth Participation Contracts as of the Closing; provided, however, that Buyer
shall have the right
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to amend or terminate the Cash Flow Growth Participation Contracts at any time
and in any manner it deems appropriate or desirable. Provided, however, that any
termination of such Plan shall not reduce or eliminate any benefit accrued by a
Plan participant up to the date of termination (whether or not vested) and
participants shall continue to vest in any benefits unvested as of the date of
termination through service with the Buyer.
(i) As of midnight on the day before the Closing Date, all Station
Employees will cease to participate as active employees in or accrue benefits
under the Benefit Plans maintained by Seller or in which Seller participates,
except for those plans the terms of which provide for termination of
participation as of the end of the month in which employment terminates.
SECTION 6.5 BULK SALES LAWS. Ranger and LIN hereby waive compliance by
Seller, in connection with the transactions contemplated hereby, with the
provisions of any applicable bulk transfer laws.
SECTION 6.6 RIGHT OF FIRST REFUSAL. LIN and Broadcasting agree that
that certain Right of First Refusal Agreement between them, a copy of which is
appended hereto as Schedule 6.6, is waived with respect to the transactions
contemplated by this Agreement and will be terminated and of no further force or
effect with no further action by any party if the Closing occurs or if this
Agreement is terminated for any reason except pursuant to Section 9.1 (c). If
this Agreement is terminated pursuant to Section 9.1 (c), LIN's waiver of the
Right of First Refusal Agreement shall terminate and such Right of First Refusal
Agreement shall continue in full force and effect with no further action by any
party.
ARTICLE 7
ADDITIONAL COVENANTS AND AGREEMENTS OF RANGER, LIN AND
SELLER
SECTION 7.1 REASONABLE BEST EFFORTS.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things reasonably
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions, waivers, consents,
licenses and approvals from Governmental Entities and the making of all
necessary registrations and
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filings (including filings with Governmental Entities) and the taking of all
reasonable steps as may be necessary to obtain an approval, waiver or license
from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iii) the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement, or the consummation of the
transactions contemplated by this Agreement, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
carry out fully the purposes of, this Agreement.
(b) Without limiting the foregoing, each of the parties hereto shall
use its reasonable best efforts and cooperate in promptly preparing and filing
as soon as practicable, following the earlier to occur of (i) the termination of
the Merger Agreement in accordance with its terms; or (ii) the consummation of
the Merger, (y) notifications under the HSR Act and (z) the FCC Application and
related filings in connection with the Merger and the other transactions
contemplated hereby, and to respond as promptly as practicable to any inquiries
or requests received from the Federal Trade Commission (the "FTC"), the
Antitrust Division of the United Stated Department of Justice ("the "Antitrust
Division"), the FCC and any other Governmental Entities for additional
information or documentation and to respond as promptly as practicable to all
inquiries and requests received from any State Attorney General or other
Governmental Entity in connection with antitrust matters or matters relating to
the FCC Application.
(c) Each of the parties hereto, to the extent applicable, further
agrees to file (and, in the case of Buyer to cause its affiliates to file)
contemporaneously with the filing of the FCC Application any requests for
temporary or permanent waivers of applicable FCC rules and regulations or rules
and regulations of other Governmental Entities and in furtherance of those
waiver requests to pledge to hold separate, to place in trust and/or to divest
any of the businesses, product lines or assets of (A) LIN or any of its
subsidiaries at any time after the Effective Time or (B) Buyer or any of its
affiliates at any time prior to, on or after the Effective Time (collectively,
"Divestitures"), in each case as may be required under Current FCC Policy to
obtain approval of the FCC Application and other governmental approvals in order
to permit consummation of the transactions contemplated by this Agreement prior
to the Termination Date and to expeditiously prosecute such waiver requests and
to diligently submit any additional information or amendments for which the FCC
or any other relevant Governmental Entity may ask with respect to such waiver
requests.
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(d) Ranger further covenants that, prior to the Closing, neither it
nor any of its affiliates shall acquire any new or increased "attributable
interest," as defined in the FCC rules, in any media property ("Further Media
Interest"), which Further Media Interest could not be held in common control
with the Station by Ranger and its Affiliates following the Closing Date
(including by virtue of the FCC's multiple ownership limits), without the prior
written consent of Seller.
(e) In connection with, but without limiting, the foregoing
Subsections 7.1 (a) through (d), Ranger, LIN and Seller shall use their
reasonable best efforts to resolve such objections, if any, as may be asserted
with respect to the transactions contemplated by this Agreement under any
antitrust, competition or trade regulatory laws, rules or regulations of any
Governmental Entity ("Antitrust Laws") or any laws, rules or regulations of the
FCC or other Governmental Entities relating to the broadcast, newspaper, mass
media or communications industries (collectively, "Communications Laws") and
will take all necessary and proper steps (including, without limitation, any
Divestitures) as may be required (i) for securing the termination of any
applicable waiting period or for the approval of the FCC Application under the
Antitrust Laws or Communications Laws, in each case in order to permit the
consummation of the Merger and other transactions contemplated hereby prior to
the Termination Date or (ii) by any domestic or foreign court or similar
tribunal, in any suit brought by a private party or governmental Entity
challenging the transactions contemplated by this Agreement as violative of any
Antitrust Law or Communications Law, in order to avoid the entry of, or to
effect the dissolution of, any injunction, temporary restraining order or other
order that has the effect of preventing the consummation of any such
transactions.
(f) Each of the parties hereto shall promptly provide the others with
a copy of any inquiry or request for information (including any oral request for
information), pleading, order or other document either party receives from any
Governmental Entities with respect to the matters referred to in this Article 7.
(g) Seller shall give prompt notice to Ranger and LIN of (i) any
notice of, or other communication relating to, a default or event which, with
notice or lapse of time or both, would become a default, received by it
subsequent to the date of this Agreement and prior to the Closing, under any
material Assumed Contract, (ii) any notice or other communication from any third
party alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement, provided that
the delivery of any notice pursuant to the foregoing provisions of this Section
7.1 (g) shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice or (iii) any capital contribution or cash
infusion made by Seller to the Business on a
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date following the Accretion Date (including the amount thereof and a
description of the purpose thereof).
(h) Control of Seller's Operations. Notwithstanding any other
provision of this Agreement, prior to the Closing Date, control of Seller's
television broadcast operations, along with all of the Seller's other
operations, shall remain with the Seller. The Seller, Ranger and LIN acknowledge
and agree that neither Ranger or LIN nor any of their employees, affiliates,
agents or representatives, directly or indirectly, shall, or have any right to
control, direct or otherwise supervise, or attempt to control, direct or
otherwise supervise, such broadcast and other operations, it being understood
that supervision of all programs, equipment, operations and other activities of
such broadcast and other operations shall be the sole responsibility, and at all
times prior to the Closing remain within the complete control and discretion, of
the Seller, subject to the terms of Article 5. The provision of services by LIN
under the Consulting Agreement shall not be deemed to be a violation of this
covenant.
(i) Notification of Certain Matters. If Seller receives an
administrative or other order or notification relating to any violation or
claimed violation of the rules and regulations of the FCC, or of any
Governmental Entity, that could affect Seller's, Ranger's or LIN's ability to
consummate the transactions contemplated -hereby, or should Ranger, LIN (or
their affiliates) or the Seller become aware of any fact (including any change
in law or regulations (or any interpretation thereof by the FCC relating to the
qualifications of Ranger (and its controlling persons) that reasonably could be
expected to cause the FCC to withhold its consent to the transfer of control of
the FCC Licenses, Ranger, LIN or the Seller, as the case may be, shall promptly
notify the other parties thereof and shall use all reasonable efforts to take
such steps as may be necessary to remove any such impediment to the transactions
contemplated by this Agreement. In addition, Ranger, LIN or Seller, as the case
may be, shall give to the other parties prompt written notice of (a) the
occurrence, or failure to occur, of any event of which it becomes aware that has
caused or that would be likely to cause any representation or warranty of
Ranger, LIN or the Seller, as the case may be, contained in this Agreement to be
untrue or inaccurate at any time from the date hereof to the Closing date, and
(b) the failure of Ranger, LIN or the Seller, as the case may be, or any
officer, director, employee or agent thereof, to comply with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it hereunder. No such notification shall affect the representation
or warranties of the parties or the conditions to their respective obligations
hereunder.
(j) Assistance. If Ranger or LIN requests, Seller will cooperate, and
will cause Coopers and Lybrand, LLP to cooperate, in all reasonable respects
with the efforts of Ranger to finance the transactions contemplated by this
Agreement, including without
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limitation, providing assistance in the preparation of one or more offering
documents relating to debt financing to be obtained by Ranger, all at the sole
expense of Ranger. The Seller (a) shall furnish to Coopers and Lybrand, LLP, as
independent accountants to the Seller, such customary management representations
letters as Coopers and Lybrand, LLP may require of the Seller in connection with
the delivery of any customary " comfort" letters requested by Ranger's financing
sources and (b) shall furnish to Ranger all financial statements (audited and
unaudited) and other information in the possession of Seller or its
representatives or agents relating to the Business as Ranger shall reasonably
determine is necessary or appropriate for the preparation of such offering
documents. Notwithstanding the foregoing, prior to the Closing, the Seller shall
not be required to file or assist Ranger in filing any registration statement
with the SEC in connection with Ranger's efforts to finance the transactions
contemplated hereby. Ranger will indemnify and hold harmless Seller and its
officers, directors and controlling persons against any and all claims, losses,
liabilities, damages, costs or expenses (including reasonable attorneys' fees
and expenses) that may arise out of or with respect to the efforts by Ranger to
finance the transactions contemplated hereby, including, without limitation, any
offering documents and other documents related thereto.
SECTION 7.2 CONVEYANCE TAXES. Each of the parties hereto shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real property
transfer gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes that become payable in connection with the transactions contemplated
hereby.
SECTION 7.3 RISK OF LOSS. The risk of loss or damage by fire or other
casualty or cause to the Assets until the Closing Date shall be upon Seller. In
the event of loss or damage prior to the Closing Date, that constitute a
Material Adverse Effect, which shall not be restored, replaced, or repaired as
of the Closing Date, Buyer shall, at its option, either:
(a) proceed with the Closing and receive at Closing, the insurance
proceeds or an assignment of the right to receive such insurance proceeds, as
applicable, to which Seller otherwise would be entitled, whereupon Seller shall
have no further liability to Buyer for such loss or damage; or
(b) terminate this Agreement by written notice to Seller, whereupon no
party to this Agreement shall have any liability to any other party to this
Agreement, and this Agreement in its entirety, except for the provisions set
forth in Sections 5.3 and 6.1 (which
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shall survive such termination), shall be deemed null and void and of no further
force and effect.
SECTION 7.4 PUBLIC ANNOUNCEMENTS. Seller Ranger and LIN shall consult
with each other before issuing (or permitting any of their respective Affiliates
to issue) any press release or otherwise making any public statements with
respect to this Agreement or the transactions contemplated herein and shall not
issue (or permit any of their respective Affiliates to issue) any such press
release or make any such public statement without the prior written consent of
the other party, which shall not be unreasonably withheld; provided, however,
that a party (or any such Affiliate) may, without the prior written consent of
the other party, issue such press release or make such public statement as may
be required by Law or any listing agreement with a national securities exchange
to which Seller, Ranger or LIN (or any Affiliate of Ranger or LIN or Seller) is
a party if it has used all reasonable efforts to consult with the other party
and to obtain such party's consent but has been unable to do so in a timely
manner.
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SECTION 7.5 NOTICE AND CURE OF BREACH. If any party hereto shall,
prior to the Closing, obtain actual knowledge of any alleged or actual breach of
any representation, warranty or covenant by any other party, it shall give
prompt notice to such other party of the existence and nature of such alleged or
actual breach and, if circumstances giving rise to such alleged or actual breach
of the representation, warranty or covenant shall have been corrected to the
reasonable satisfaction of the notifying party prior to the Closing, the
existence of such breach shall not constitute a basis for termination of this
Agreement. The failure to provide the notice specified in the first sentence of
this Section 7.5 shall not constitute a breach of this Agreement, nor (except to
the extent the breaching party's ability to cure such breach is materially
prejudiced thereby) shall it constitute a waiver of such alleged or actual
breach.
ARTICLE 8
CONDITIONS
SECTION 8.1 CONDITIONS TO OBLIGATION OF EACH PARTY. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to Closing of the
following conditions:
(a) FCC Approval. The FCC shall have approved the FCC Application and
such approval shall have become final; provided that such approval may be
subject to Buyer (or its affiliates) making Divestitures as set forth in Article
7. For purposes of this Agreement, FCC approval of the FCC Application shall be
deemed to be final if the FCC has taken action approving the transfer of the FCC
Licenses for the operation of the Station , except as may be waived in writing
by Ranger or LIN, as the case may be, has not been reversed, stayed, enjoined,
set aside, annulled or suspended, with respect to which no timely request for
stay, petition for reconsideration or appeal of sua sponte action of the FCC
with comparable effect is pending and as to which the time for filing any such
request, petition or appeal or for the taking of any such sua sponte action by
the FCC has expired.
(b) HSR Waiting Period. The waiting period applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated.
(c) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated by this Agreement shall be in
effect, nor shall any proceeding by
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any Governmental Entity seeking any of the foregoing be pending. There shall not
be any action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the of the transactions contemplated by this
Agreement, which makes the consummation of the of the transactions contemplated
by this Agreement illegal.
SECTION 8.2 CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligation of
the Buyer to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following additional conditions unless
waived by the Buyer:
(a) Deliveries. Sellers shall have delivered to Buyer all contracts,
agreements, instruments and documents required to be delivered by Sellers to
Buyer pursuant to this Agreement.
(b) Representations and Warranties of the Seller. The representations
and warranties of the Sellers set forth in this Agreement shall be true and
correct in all respects (provided that any representation or warranty of Sellers
contained herein that is subject to a materiality, Material Adverse Effect or
similar qualification shall not be so qualified for purposes of determining the
existence of any breach thereof on the part of Sellers), as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of an earlier date) as of the Closing Date as though made on and as of the
Closing Date, except for such breaches that would not, individually or in the
aggregate with any other breaches on the part of Sellers, reasonably be expected
to have a Material Adverse Effect, and Buyer shall have received a certificate
signed on behalf of an Officer of Seller to such effect.
(c) Performance of Obligations of the Seller. The Seller shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Buyer shall have
received a certificate signed on behalf of the Seller by an officer of the
Seller to such effect.
(d) Consents. Seller shall have obtained all necessary consents to the
assignment to Buyer of the network affiliation agreements relating to the
Station and the LMA Station, the WOTV Contracts and any lease with respect to a
transmitter site or studio lease. In order to obtain such consents, Seller, with
the consent of Ranger, which shall not be unreasonably withheld, may agree to
modifications to such agreements.
(e) LMA Agreement; Waiver Requests. There shall not have been a
material modification or termination of the LMA Agreement which individually or
in the aggregate would reasonably be expected to have a materially adverse
economic effect on the business,
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financial condition or results of operations of Seller taken as a whole or a
denial by the FCC of any of the waiver requests referred to in Schedule 4.6
(provided that Buyer has made and/or agreed to make any necessary Divestitures
pursuant to Section 7.1 (c), in each case other than as directed by the FCC
under Current FCC Policy. For purposes of this Agreement, the FCC shall be
deemed to have acted under Current FCC Policy except to the extent that its
action is the result of (i) legislative change enacted after the date of this
Agreement, (ii) FCC action taken after the date of this Agreement in a rule
making proceeding, or (iii) application by the FCC Staff of interim decisions,
policies or processing guidelines adopted by the FCC Staff with respect to
requests for waivers of the duopoly rule, 47 C.F.R. Section 73.3555(b), or the
one-to-a-market rule, 47 C.F.R. Section 73.3555(c), or to LMAs, not heretofore
applied to transfer applications for stations similarly situated to WOOD-TV.
SECTION 8.3 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligation
of the Sellers to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following additional conditions unless waived
by the Sellers:
(a) Representations and Warranties of the Buyer. The representations
and warranties of the Buyer set forth in this Agreement shall be true and
correct in all respects (provided that any representation or warranty of Buyer
contained herein that is subject to a materiality, material adverse effect or
similar qualification shall not be so qualified for purposes of determining the
existence of any breach thereof on the part of Buyer), as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of an earlier date) as of the Closing Date as though made on and as of the
Closing Date, except for such breaches that would not, individually or in the
aggregate with any other breaches on the part of Buyer, reasonably be expected
to have a material adverse effect and Buyer shall have received a certificate
signed on behalf of an Officer of Buyer to such effect.
(b) Performance of Obligations of Buyer. Buyer shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and the Seller shall have received a
certificate signed on behalf of Buyer by the Chief Executive Officer of Buyer to
such effect.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 TERMINATION. This Agreement may be terminated at any time
prior to Closing:
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(a) only as to and between Ranger and Seller, by mutual written
consent of Ranger and Seller;
(b) only as to and between LIN and Seller, by mutual written consent
of LIN and Seller;
(c) by Ranger or LIN, so long as the terminating party is not then in
material breach of its obligations hereunder, upon a breach of any material
representation, warranty, covenant or agreement on the part of Seller set forth
in this Agreement, or if any such representation or warranty of Seller shall
have been or become untrue, in each case such that the conditions set forth in
Section 8.2(b) or Section 8.2(c), as the case may be, would not be satisfied and
such breach or untruth (i) cannot be cured by the Closing Date or (ii) has not
been cured within 30 days of the date on which Seller receives written notice
thereof from Buyer and further provided that any right of termination under this
Subsection (c) shall be effective only as between Seller and the party
terminating this Agreement pursuant to this Subsection (c);
(d) by Seller as to Ranger or LIN, so long as Seller is not then in
material breach of its obligations hereunder, upon a breach of any material
representation, warranty, covenant or agreement, on the part of the party with
respect to which Seller would terminate this Agreement, set forth in this
Agreement, or if any such representation or warranty of that party shall have
been or become untrue, in each case such that the conditions set forth in
Section 8.3(a) or Section 8.3(b), as the case may be, would not be satisfied and
such breach or untruth (i) cannot be cured by the Closing Date or (ii) has not
been cured within 30 days of the date on which the party receives written notice
thereof from Seller, and further provided that any right of termination under
this Subsection (d) shall be effective only as between the Seller and the party
as to which the Agreement is terminated under this Subsection (d);
(e) by any party if, any permanent injunction or other order, decree,
ruling or action by any Governmental Entity preventing the consummation of the
transactions contemplated under this Agreement shall have become final and
nonappealable; provided that any termination under this Subsection 9.1 (e) shall
only be as to, and between the Seller and the party to which the injunction, or
other order, decree, ruling or action shall have become final and nonappealable;
further provided that such right of termination shall not be available to any
party if such party shall have failed to make reasonable efforts to prevent or
contest the imposition of such injunction or other order, decree, ruling or
action and such failure materially contributed to such imposition;
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(f) by any party if (other than due to the willful failure of the
party seeking to terminate this Agreement to perform its obligations hereunder
required to be performed at or prior to the Effective Time) the Merger shall not
have been consummated on or prior to the earlier of (a) nine months following
the Effective Time; or (b) December 31, 1998 (the "Termination Date"); and
(g) This Agreement will be deemed to be terminated (1) as to Ranger if
the Merger Agreement is terminated prior to the Effective Time (as defined
therein) for any reason whatsoever in accordance with its terms, and (2) as to
LIN if the Merger Agreement is not terminated prior to the Effective Time, in
each case without any further action by any party.
SECTION 9.2 EFFECT OF TERMINATION. Any termination of this Agreement
as between Seller, Ranger or LIN shall have no effect on the rights and
obligations under this Agreement as between Seller and the non-terminated party
and if such termination occurs, this Agreement shall remain in full force and
effect as to and between LIN and Seller and the non-terminated party. In the
event of the termination of this Agreement as to a party pursuant to Section
9.1, this Agreement shall forthwith become void with respect to such party and
there shall be no liability on the part of such party, or any other party hereto
with respect to such party ; provided, however, that nothing herein shall
relieve any party from liability for any breach hereof.
SECTION 9.3 FEES AND EXPENSES. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees or expenses, whether or not the
transactions occur.
SECTION 9.4 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 9.5 WAIVER. At any time prior to the Closing, any party
hereto, to the extent lawful, may (a) extend the time for the performance of any
of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies i the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the party or parties to
be bound thereby.
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ARTICLE- 10
GENERAL PROVISIONS
SECTION 10.1 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail(postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
If to the Ranger:
Ranger Holdings Corp.
200 Crescent Court
Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen E. Jacobs, Esq.
Howard Chatzinoff, Esq.
If to LIN:
LIN Television Corporation
One Richmond Square
Providence, Rhode Island 02906
Attention: Peter Maloney
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with a copy to:
Simpson, Thatcher and Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: David Chapnick
If to Sellers:
Dennis J. Carey
Vice President & General Manager -
Corporate Productivity & CFO
AT&T Corp.
Room 4426E1
295 North Maple Avenue
Basking Ridge, New Jersey 07920
with a copy to:
Vice President - Law and Secretary
AT&T Corp.
Room A2029
131 Morristown Road
Basking Ridge, New Jersey 07920
SECTION 10.2 PARTIES IN INTEREST. This Agreement shall be binding upon
an inure solely to the benefit of each party hereto and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
SECTION 10.3 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, such remedy being in addition to any
other remedy to which any party is entitled at law or in equity.
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SECTION 10.4 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 10.5 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 10.6 ADDITIONAL ACTIONS, DOCUMENTS AND INFORMATION. Buyer
agrees that it will, at any time, prior to, at or after the Closing Date, take
or cause to be taken such further actions, and execute, deliver and file or
cause to be executed, delivered and filed such further documents and instruments
and obtain such consents, as may be reasonably requested by Seller in connection
with the consummation of the purchase and sale contemplated by this Agreement.
Seller agrees that it will, at any time, prior to, at or after the Closing Date,
take or cause to be taken such further actions, and execute, deliver and file or
cause to be executed, delivered and filed such further documents and instruments
and obtain such consents, as may be reasonably requested by Buyer in connection
with the consummation of the purchase and sale contemplated by this Agreement.
SECTION 10.7 EXPENSES AND TRANSFER TAXES. Each party hereto shall pay
its own expenses incurred in connection with this Agreement and in the
preparation for and consummation of the transactions provided for herein.
Notwithstanding the foregoing, Seller and Buyer shall each pay one-half of (a)
any sales (including, without limitation, bulk sales), use, documentary, stamp,
gross receipts, registration, transfer, conveyance, excise, recording, license
and other similar Taxes and fees ("Transfer Taxes") applicable to, imposed upon
or arising out of the transactions contemplated hereby whether now in effect or
hereinafter adopted and regardless of which party such Transfer Tax is imposed
upon, (b) any FCC filing fees incurred in connection with the assignment of the
FCC Licenses, and (c) any fees and expenses incurred in connection with any HSR
Filings.
SECTION 10.8 WAIVER. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this Agreement or under
any other instrument or document given in connection with or pursuant to this
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No waiver shall be valid
against any party hereto unless made in writing and signed by the party against
whom enforcement of such waiver is sought and then only to the extent expressly
specified therein.
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SECTION 10.9 REIMBURSEMENT FOR TAXES. Buyer shall reimburse Seller for
any Taxes paid by Seller with respect to the Business for the period beginning
on the Accretion Date and ending on the Closing Date (the "Reimbursement
Period") and the Taxes Buyer is required to reimburse Seller for pursuant to
this Section 10.9 shall be referred to herein as the "Reimbursed Tax Amount").
For purposes of this Agreement, the Reimbursed Tax Amount shall equal (a) the
sum of (i) the Tax liability of the Business for the Reimbursement Period,
computed as if the Business were conducted on a stand alone basis and assuming a
maximum tax rate for federal, state and local income tax purposes of 39 percent
and (ii) any other Taxes paid by Seller with respect to the Business for the
Reimbursement Period less (b) the amount of any Taxes with respect to the
Business for the Reimbursement Period paid by Seller from operating cash of the
Business during the Reimbursement Period. To the extent the operation of the
Business during the Reimbursement Period results in a loss for Tax purposes then
the Seller shall reimburse the Buyer in an amount equal to the product of (x)
the amount of the taxable loss with respect to the Business for the
Reimbursement Period, computed as if the Business were conducted on a stand
alone basis and (y) an applicable tax rate of 39 percent (the "Reimbursed Tax
Loss Amount"). In calculating the Reimbursed Tax Amount or the Reimbursed Tax
Loss Amount, as the case may be, items of income, gain, loss, deduction and
credit shall be allocated to the Business in a manner consistent with past
practice. Seller shall provide Buyer with a statement (the "Reimbursed Tax
Statement") setting forth in reasonable detail calculations of the Reimbursed
Tax Amount or the Reimbursed Tax Loss Amount, as the case may be, and Buyer
shall have the right to review and approve the Reimbursed Tax Statement for 30
days following the receipt thereof. Seller and Buyer shall attempt in good faith
mutually to resolve any disagreements regarding such Reimbursed Tax Statement.
If such dispute is not resolved within 45 days, the parties shall jointly retain
a nationally recognized independent accounting firm to resolve the dispute. The
fees of the independent accounting firm shall be borne equally by Buyer and
Seller, and the decision of such independent accounting firm be final and
binding on all parties.
SECTION 10.10 BENEFIT AND ASSIGNMENT. Except as hereinafter
specifically provided in this Section 10.10, no party hereto shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the other party hereto; and any purported
assignment contrary to the terms hereof shall be null, void and of no force and
effect. Buyer may assign all of its rights and obligations hereunder to any
direct or indirect wholly owned subsidiary of it, provided that no such
assignment shall relieve Buyer of any of its obligation under this Agreement.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns as permitted
hereunder. No Person other than the parties hereto is or shall be entitled to
bring any action to enforce any provision of this Agreement against any
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of the parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto or their respective successors and assigns as permitted
hereunder.
SECTION 10.11 ENTIRE AGREEMENT. This Agreement, including the
Schedules and Exhibits hereto and the other instruments and documents referred
to herein or delivered pursuant hereto, and the Consulting Agreement contains
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior oral or written agreement, commitments or
understandings with respect to such matters. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth in
writing and duly executed by the party or parties against whom enforcement of
the amendment, modification or discharge is sought.
SECTION 10.12 SEVERABILITY. If any part of any provision of this
Agreement or any other contract, agreement, document or writing given pursuant
to or in connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said contract, agreement,
document or writing.
SECTION 10.13 HEADINGS. The headings of the sections and subsections
contained in this Agreement are inserted for convenience only and do not form a
part or affect the meaning, construction or scope thereof.
SECTION 10.14 SIGNATURE IN COUNTERPARTS. This Agreement may be
executed in separate counterparts, none of which need contain the signatures of
all parties, each of which shall be deemed to be an original, and all of which
taken together constitute one and the same instrument. It shall not be necessary
in making proof of this Agreement to produce or account for more than the number
of counterparts containing the respective signatures of, or on behalf of, all of
the parties hereto.
SECTION 10.15 RECORDS. (a) Seller shall retain all original records in
its possession after "Closing" (including employment records) that relate to the
operations of the Business for a period of three years following the Closing,
(b) Buyer shall retain all original records received from Seller at Closing that
relate to the operation of the Business for a period of three years following
the Closing and (c) Buyer and Seller shall afford authorized representatives of
the other party access to the records subject to this Section, upon reasonable
notice, for matters arising under the provisions of this Agreement. Nothing
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herein contained shall or shall be deemed to alter the provisions of Sections
5.3 and 6.1 of this Agreement concerning confidentiality and non-disclosure.
ARTICLE 11
THE CLOSING
SECTION 11.1 CLOSING. The Closing hereunder shall be held on a date
specified by Seller that is not later than ten (10) days following the date that
all of the FCC Orders for transfer of the Station have become Final Orders (the
"Closing Date"). Subject to the satisfaction (or waiver, if applicable) of all
of the conditions set forth in Article 8 The Closing shall be held at 10:00 A.M.
local time at the offices of AT&T Corp., 131 Morristown Road, Basking Ridge,
N.J. 07921, or at such other time and place as the parties may agree.
Notwithstanding the foregoing, a Closing with LIN as the Buyer shall not occur
before March 1, 1998.
SECTION 11.2 DELIVERY BY SELLER. At or before the Closing, Seller
shall deliver to Buyer the following:
(a) Agreements and Instruments. The following bills of sale,
assignments and other instruments of transfer, dated as of the Closing Date and
duly executed by Seller:
(i) the Bill of Sale;
(ii) the Assignment of FCC Licenses;
(iii) the Assignment of Contracts and Leases;
(iv) the Assumption Agreement;
(v) deeds in a form reasonably acceptable to Buyer for all
Real Property owned by Seller in a form commonly used
in the jurisdictions where such Real Property is
located; and
(vi) Such other instruments of transfer, duly executed by
the Seller, as are necessary to transfer the Assets in
accordance with applicable Law.
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(b) Consents. Copies of all consents Seller has been able to obtain to
effect the assignment to Buyer of Assumed Contracts.
(c) Certified Resolutions. A copy of the resolutions of directors of
Seller, certified as being correct and complete and then in full force and
effect, authorizing the execution, delivery and performance of this Agreement,
and of the other Seller Documents, and the consummation of the transactions
contemplated hereby and thereby.
(d) Officers' Certificates. A certificate of Seller signed by an
officer of Seller certifying the matters set forth in Section 8.2(c).
(e) Secretary's Certificate. A certificate signed by the Secretary of
Seller as to the incumbency of the officers of Seller executing this Agreement
or any of the other Seller Documents on behalf of Seller and other customary
matters.
SECTION 11.3 DELIVERY BY BUYER. At or before the Closing, Buyer shall
deliver to Seller the following:
(a) Purchase Price Payment. The Purchase Price in the amount and
manner set forth in Article 2.
(b) Assumption Agreement. The Assumption Agreement dated as of the
Closing Date and duly executed by Buyer.
(c) Certified Resolutions. Copies of the resolutions of the directors
of Buyer, Certified as being correct and complete and then in full force and
effect, authorizing the execution, delivery and performance of this Agreement
and of the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby.
(d) Officers' Certificate. A certificate of Buyer signed by an officer
of Buyer certifying the matters set forth in Section 8.3(b).
(e) Secretary's Certificate. A certificate signed by the Secretary of
Buyer as to the incumbency of the officers of Buyer executing this Agreement or
any of the other Buyer Documents on behalf of Seller and other customary
matters.
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ARTICLE 12
SURVIVAL; INDEMNIFICATION
SECTION 12.1 SURVIVAL OF REPRESENTATIONS. Unless otherwise set forth
herein, all representations and warranties, covenants and agreements of Seller
and Buyer contained in this Agreement or in any certificate furnished pursuant
hereto shall survive the Closing Date and shall remain in full force and effect
to the following extent: (a) unless otherwise specified below, representations,
warranties and covenants shall survive for a period of one (1) year after the
Closing Date, (b) the covenants and agreements in this Article 12 shall continue
in full force and effect until fully discharged , (c) the representation and
warranties made in Sections 3.1, 3.3, 3.5, 3.13, 4.1, 4.2, 4.9 and 4.10, and the
covenants given in Sections 5.1 (b), 5.2(b)(iv) and 5.2(k) of this Agreement
shall survive indefinitely, (d) the representations and warranties made and
covenants given in Sections 3.15, 3.16, 3.18 and 6.4 shall survive for five
years, and (e) the representations and warranties made and covenants given in
Sections 3.20 shall survive for five years, and (f) any representation,warranty,
covenant or agreement that is the subject of a claim which is asserted in a
reasonably detailed writing prior to the expiration of the applicable survival
period shall survive with respect to such claim or dispute until the final
resolution thereof.
SECTION 12.2 INDEMNIFICATION BY SELLER. Subject to the conditions and
provisions of Section 12.4 and Section 12.5, from and after the Closing Date,
Seller agrees to indemnify, defend and hold harmless Buyer from and against and
in any respect of, on a net after-tax and insurance basis, any and all Losses,
asserted against, resulting to, imposed upon or incurred by Buyer, directly or
indirectly, by reason of or resulting from: (a) any misrepresentation or breach
of the representations and warranties of Seller contained in or made pursuant to
this Agreement or any other Seller Document; (b) any liability which is not an
Assumed Liability; (c) any liability for failure by Seller to comply with any
applicable bulk transfer laws; (d) any breach by Seller of any covenants of
Seller contained in or made pursuant to this Agreement or any other Seller
Document or (e) (i) the occupancy, operation, use or control of the Real
Property or the Leased Premises prior to the Closing Date or (ii) the operation
of the Business prior to the Closing Date, in each case incurred or imposed
pursuant to any Environmental Laws, including, without limitation, any release
or storage of any Hazardous Substances on, into, at or from (A) any such owned
Real Properties or Leased Premises or (B) any real property or facility owned by
a third party at which Hazardous Substances attributable to the operation of the
Business were sent prior to the Closing Date by the Business.
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SECTION 12.3 INDEMNIFICATION BY BUYER. Subject to the conditions and
provisions of Section 12.4 and Section 12.5, from and after the Closing Date,
Buyer hereby agrees to indemnify, defend and hold harmless Seller from, against
and with respect of, on a net after-tax and insurance basis, any and all Losses,
asserted against, resulting to, imposed upon or incurred by Seller, directly or
indirectly, by reason of or resulting from: (a) any failure by Buyer to pay,
perform or discharge any Liabilities assumed by Buyer pursuant hereto; (b) the
business or operations of the Station; (c) any misrepresentation or breach of
the representations and warranties of Buyer contained in or made pursuant to
this Agreement or any other Buyer Document; (d) any breach by Buyer of any
covenants of Buyer contained in or made pursuant to this Agreement or any other
Buyer Document or (e) (i) the occupancy, operation, use or control of the Real
Property or the Leased Premises after the Closing Date or (ii) the operation of
the Business after the Closing Date, in each case incurred or imposed pursuant
to any Environmental Laws, including without limitation, any release or storage
of any Hazardous Substances on, into, at or from (A) any such Real Properties or
Leased Premises or (B) any real property or facility owned by a third party at
which Hazardous Substances attributable to the operation of the Business were
sent after the Closing Date by the Buyer.
SECTION 12.4 LIMITATION ON INDEMNIFICATION. Notwithstanding any other
provision of this Agreement to the contrary, in no event shall Losses include a
Party's incidental or consequential damages. Neither Seller nor Buyer shall be
liable to the other in respect of any indemnification pursuant to Sections
12.2(a) or (d) and 12.3(c) except to the extent that (a) the aggregate Losses of
the party to be indemnified under this Agreement exceed $250,000 (the "Basket
Amount") and then only to the extent of the excess over the Basket Amount,
except that this Section 12.4(a) shall not apply to indemnification pursuant to
Section 12.2(a) based on any misrepresentation or breach of the representations
and warranties of Seller contained in Section 3.20 or indemnification pursuant
to Section 12.2(d), and (b) the aggregate amount of such indemnification,
together with all other indemnification by the indemnifying party for Losses of
the party to be indemnified under this Agreement is less than fifteen percent
(15%) of the Purchase Price, except that this Section 12.4(b) shall not apply to
indemnification pursuant to Section 12.2(d) based on any breach by Seller of the
covenants contained in Sections 5.1 (b), 5.1 (c) (but only as (c) relates to
network affiliation agreements, local marketing arrangements or the exercise of
the Option) or 5.1 (e) or Sections 5.2(b)(iv) or 5.2(k).
SECTION 12.5 CONDITIONS OF INDEMNIFICATION. The obligations and
liabilities of Seller and of Buyer hereunder with respect to their respective
indemnities pursuant to this Section 12.5, resulting from any Losses, shall be
subject to the following terms and conditions:
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(a) The party seeking indemnification (the "Indemnified Party") must
give the other party or parties, as the case may be (the "Indemnifying Party"),
notice of any such Losses promptly after the Indemnified Party receives notice
thereof, provided that the failure to give such notice shall not affect the
rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual damage by reason of such failure.
(b) The Indemnifying Party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such Losses
at the Indemnifying Party's risk and expense.
(c) In the event that the Indemnifying Party shall elect not to
undertake such defense, or, within a reasonable time after notice from the
Indemnified Party of any such Losses, shall fail to defend, the Indemnified
Party (Upon further written notice to the Indemnifying Party) shall have the
right to undertake the defense, compromise or settlement of such Losses, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnifying Party (subject to the right of the
Indemnifying Party to assume defense of such Losses at any time prior to
settlement, compromise or final determination thereof). In such event, the
Indemnifying Party shall pay to the Indemnified Party, in addition to the other
sums required to be paid hereunder, the costs and expenses incurred by the
Indemnified Party in connection with such defense, compromise or settlement as
and when such costs and expenses are so incurred.
(d) Anything in this Section 12.5 to the contrary notwithstanding (a)
if there is a reasonable probability that Losses may materially and adversely
affect the Indemnified Party other than as a result of money damages or other
money payments, the Indemnified Party shall have the right, at its own cost and
expense, to participate in the defense, compromise or settlement of the Losses,
(b) the Indemnifying Party shall not, without the Indemnified Party's written
consent, settle or compromise any Losses or consent to entry of any judgment
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such Loss.ses in form and substance satisfactory to the
Indemnified Party, (c) in the event that the Indemnifying Party undertakes
defense of any Losses, the Indemnified Party, by counsel or other representative
of its own choosing and at its sole cost and expense, shall have the right to
consult with the Indemnifying Party and its counsel or other representatives
concerning such Losses and the Indemnifying Party and the Indemnified Party and
their respective counsel or other representatives shall cooperate with respect
to such Losses, (d) in the event that the Indemnifying Party undertakes defense
of any Losses, the Indemnifying Party shall have an obligation to keep the
Indemnified Party informed of the status of the
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defense of such Losses and furnish the Indemnified Party undertakes defense of
any Losses, the Indemnifying Party shall have an obligation to keep the
Indemnified Party informed of the status of the defense of such Losses and
furnish the Indemnified Party with all documents, instruments and information
that the Indemnified party shall reasonably request in connection therewith, (e)
in the event of a dispute arising under Section 12.2(e), or 12.3(e) Buyer and
Seller agree to submit the dispute for resolution to a consultant with expertise
in environmental sciences selected jointly by Buyer and Seller. To assist in
his/her deliberations, the consultant may review existing data and written
materials submitted by the parties, if he/she so determines, and (f) Buyer
agrees that it shall not conduct invasive environmental sampling or testing,
except as required by Environmental Law, by an order or mandate of a
Governmental Authority or as necessary to respond to an emergency situation,
unless it has provided Sellers with advance notice of such action in writing,
which notice will include an explanation of the reasonable basis for such
sampling or testing. Seller shall not indemnify Buyer until and unless it is
notified in advance of such sampling or testing activities.
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IN WITNESSES WHEREOF, each of the parties hereto has executed this
Asset Purchase Agreement, or has caused this Asset Purchase Agreement to be duly
executed and delivered in its name on its behalf, all as of the day and year
first above written.
LCH COMMUNICATIONS, INC.
BY
-----------------------------------
Name:
Title:
RANGER HOLDINGS CORP.
By
-----------------------------------
Name:
Title:
LIN BROADCASTING CORPORATION
By
-----------------------------------
Name:
Title:
LIN TELEVISION CORPORATION
By
-----------------------------------
Name:
Title:
LIN MICHIGAN BROADCASTING
CORPORATION
By
-----------------------------------
Name:
Title:
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ANNEX 1
DEFINITIONS
"Accounting Firm" shall have the meaning specified in Section 2.5.
"Accounts Receivable" means all accounts receivable with respect to
the Stations as of the end of the broadcast day immediately preceding the
Closing Date.
"Affiliate" of a person means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person.
"Assets" shall have the meaning set forth in Section 2.1.
"Assumed Liabilities" shall have the meaning specified in Section
2.6(a).
"Assignment of Contracts and Leases" means that certain Assignment of
Contracts and Leases, to be dated as of the Closing Date and executed by Seller
in form and substance reasonably satisfactory to Buyer and Seller.
"Assignment of FCC Licenses" means that certain Assignment of FCC
Licenses, to be dated as of the Closing Date and executed by Seller, in form and
substance reasonably satisfactory to Buyer and Seller.
"Assumed Contract" means all contracts, leases and agreements
applicable solely to the Business.
"Assumption Agreement" means that certain Assumption Agreement, to be
dated the Closing Date and executed by Buyer and Seller, in form and substance
reasonably satisfactory to Buyer and Seller.
"Basket Amount" shall have the meaning set forth in Section 12.4.
"Benefit Arrangement" means a benefit program or practice for bonuses,
incentive compensation, vacation pay, severance pay, insurance, restricted
stock, stock options, employee discounts, company cars tuition reimbursement or
any other perquisite or benefit (including, without limitation, any fringe
benefit under Section 132 of the Code) to employees, officers or independent
contractors that is not a Plan.
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"Bill of Sale" means that certain Bill of Sale and Assignment of
Assets, dated as of the Closing Date and executed by Seller, in form and
substance reasonably satisfactory to Buyer and Seller.
"Buyer Documents" shall mean, collectively, this Agreement and the
Assumption Agreement.
"Cash Flow Participation Growth Agreements" means the agreements
relating to Cash Flow Participation Growth Units that are listed on Schedule 2.1
(g).
"Closing" means the closing of the purchase, assignment and sale of
the Assets contemplated hereunder.
"Closing Date" means the time and date on which the Closing takes
place, as established by Section 11. 1.
"Code" means the internal Revenue Code of 1986, as amended, and all
laws promulgated pursuant thereto or in connection therewith.
"Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
"Communications Act" means the Communications Act of 1934, as amended.
"Consulting Agreement" means the Agreement entered into among LCH,
LIN, and Michigan, dated December 28, 1994, as renewed from time to time.
"Current FCC Policy" shall have the meaning set forth in the Merger
Agreement.
"Divestiture" shall have the meaning set forth in the Merger
Agreement.
"Effective Time" shall have the meaning set forth in the Merger
Agreement.
"Encumbrances" mean any mortgages, pledges, liens, security interests,
restrictions, defects in title, easements, encumbrances, and any other matters
affecting title.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.
"Excluded Assets" shall have the meaning specified in Section 2.2.
"FCC" means the Federal Communications Commission. "FCC Licenses"
shall have the meaning specified in Section 2.1 (a).
"FCC License" means any permit, license, waiver or authorization that
a person is required by the FCC to hold in connection with the operation of its
business.
"FCC Order" means an order or orders of the FCC, or of the Staff of
the FCC acting under delegated authority, consenting to the assignment to Buyer
of the FCC Licenses for the stations.
"Final Order" means an FCC Order as to which the time for filing a
request for administrative or judicial review, or for instituting administrative
review sua sponte, shall have expired without any such filing have been made or
notice of such review having been issued; or, in the event of such filing or
review sua sponte, as to which such filing or review shall have been disposed of
favorably to the grant and the time for seeking further relief with respect
thereto shall have expired without any request for such further relief having
been filed, except in each case as may be waived in writing by Buyer.
"Governmental Authority" means any agency, board, bureau, court,
commission, department, instrumentality or administration of the United States
government, any state government or any local or other governmental body in a
state, territory or possession of the United States or the District of Columbia.
"Government Entity" shall have the meaning set forth in the Merger
Agreement.
"Hart-Scott-Rodino" or HSR Act means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and all Laws promulgated pursuant thereto
or in connection therewith.
"HSR Filing" shall have the meaning specified in Section 5.2.
"Income Taxes" shall mean all federal state and local taxes based upon
income earned by Seller which is attributed to income from the Assets which
includes all taxes
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installments of estimated taxes, assessments, deficiencies, levies, imports,
duties, license fees, registration fees, withholdings, or other similar charges
of every kind, character or description imposed by any Governmental Authorities.
"Indemnified Party" and "Indemnifying Party" shall have the respective
meanings specified in Section 12.5(a).
"Intellectual Property" shall have the meaning specified in Section
2.1 (d).
"Knowledge" means to the knowledge of the executive officers of the
party to whom such term is being applied, without requiring such executive
officers to make or assuming they have made, any investigation of the facts, but
is relying on such facts as have actually come to their attention.
"Laws" means any federal, state or local law, statute, code,
ordinance, regulation, order, writ, injunction, judgment or decree applicable to
the specified Person and to the businesses and assets thereof.
"Liabilities" shall mean as to any Person, all debts, adverse claims,
liabilities and obligations, direct, indirect, absolute or contingent of such
Person, whether accrued, vested or otherwise, whether in contract, tort, strict
liability or otherwise and whether or not actually reflected, or required by
generally accepted accounting principles to be reflected, in such Person's
balance sheets or other books and records.
"Losses" means any and all demands, claims, complaints, actions or
causes of action, suits, proceedings, investigations, arbitrations, assessments,
losses, damages, liabilities, obligations (including those arising out of any
action, such as any settlement or compromise thereof or judgment or award
therein) and any costs and expenses, including, without limitation, reasonable
attorney's and other advisor's fees and disbursements.
"Material Adverse Effect" means a material adverse effect on the
business, assets or financial condition of the Stations taken as a whole, except
for any adverse affect resulting from general economic or other conditions
applicable to the television broadcast industry in general.
"Merger" shall have the meaning set forth in the Merger Agreement.
"Operating Contracts" shall mean the contracts referred to in Section
2.1 (h).
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"Ordinary Course of Business" means, with respect to Seller, actions
taken in the ordinary course of business consistent with past practices of
Seller in relation to the Business or any actions taken pursuant to the
requirements of law or contracts existing on the date hereof or permitted to be
entered into under Article 5.
"Pension Plan" means an "employee pension benefit plan" as such term
is defined in Section 3(2) of ERISA.
"Permitted Encumbrances" means (a) Encumbrances arising in connection
with equipment or maintenance financing or leasing, (b) Encumbrances on Real
Property that do not interfere with the use of the Real Property in the
operations or business of the Stations, (c) Encumbrances for Taxes not,yet due
and payable or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on Seller's
books in accordance with generally accepted accounting principles, or (d)
Encumbrances that, individually or in the aggregate, do not and would not
materially detract from the value of any of the Assets or materially interfere
with the use thereof as currently used.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization, other form
of business or legal entity or Governmental Authority.
"Plan" means any plan, program or arrangement, whether or not written,
that is or was an "employee benefit plan" as such term is defined in Section
3(3) of ERISA and (a) which was or is established or maintained by Seller, (b)
to which Seller contributed or was obligated to contribute or to fund or provide
benefits; or (c) which provides or promises benefits to any person who performs
or who has performed services for Seller and because of those services is or has
been (i) a participant therein or (ii) entitled to benefits thereunder.
"Program Contracts" shall have the meaning specified in Section 2.1
(e).
"Purchase Price" shall have the meaning specified in Section 2.3.
"Qualified Plan" means a Pension Plan that satisfies, or is intended
by Seller to satisfy, the requirements for tax qualification described in
Section 401 of the Code.
"Real Property" means all realty, towers, fixtures, easements,
rights-of-way, leasehold and other interests in real property, buildings and
improvements owned, leased, occupied or used in the business and operations of
the Station.
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<PAGE> 59
"Schedules" shall mean the disclosure schedules delivered by Seller to
Buyer in connection herewith.
"Seller Documents" shall mean, collectively, this Agreement, the
Assignment of Contracts and Leases, the Bill of Sale, the Assignment of FCC
Licenses, and the Assumption Agreement.
"Seller Tax Returns" means all federal, state, local, foreign and
other applicable Tax returns, declarations of estimated Tax reports required to
be filed by any of Seller (without regard to extensions of time permitted by law
or otherwise).
"Station Contracts" shall have the meaning specified in Section 2.1
(h).
"Taxes" shall have the meaning specified in Section 3.13(n).
"Trade-out Agreements" shall have the meaning specified in Section 2.1 (f).
"Transfer Taxes" shall have the meaning specified in Section 14.3.
"Welfare Plan" means an "employee welfare benefit plan" as such term
is defined in Section 3(l) of ERISA.
59
<PAGE> 1
EXHIBIT 10.12
CBS TELEVISION NETWORK
-------------------------
CBS Affiliate Relations
A Division of CBS Inc.
-------------------------
AFFILIATION AGREEMENT
-------------------------
CBS AFFILIATE RELATIONS, A Division of CBS Inc., 31 West 52 Street, New York,
New York 10019 ("CBS"), and BUFFALO MANAGEMENT ENTERPRISES CO., INC., 2007
Elmwood Avenue, Buffalo, New York 14207 ("Broadcaster"), licensed to operate
television station WIVA-TV at Buffalo, New York on channel number 4
("Affiliated Station"), hereby mutually covenant and agree, as of the 4th day
of December, 1992, as follow:
1. Offer, Acceptance and Delivery of Network Programs.
Broadcaster shall have a "first call" on CBS network television programs
("Network Programs") as follows:
(a) Offer of Network Programs.
CBS shall offer to Broadcaster for broadcasting by Affiliated Station
those Network Programs which are to be broadcast on a network basis by any
television broadcast station licensed to operate in Affiliated Station's
community of license.
(b) Acceptance of Network Programs.
As to any offer described in Paragraph 1(a) of this Agreement,
Broadcaster may accept such offer only by notifying CBS's computer-based
communications system, of such acceptance within 72 hours (exclusive of
Saturdays, Sundays and holidays), or such longer period as CBS may specify
therein, after such offer; provided, however, that, if the first broadcast
referred to in such offer is scheduled to occur less than 72 hours after the
making of the offer, Broadcaster shall notify CBS of the acceptance or
rejection of such offer as promptly as possible and in any event prior to the
first broadcast time specified in such offer. Such acceptance shall constitute
Broadcaster's agreement that Affiliated Station will broadcast such Network
Program or Programs in accordance with the terms of this Agreement and of
<PAGE> 2
such offer, and so long as Affiliated Station so broadcasts such Network
Program or Programs, CBS will not, subject to its rights in the program
material, authorize the broadcast thereof on a network basis by any other
television broadcast station licensed to operate in Affiliated Station's
community of license; provided, however, that CBS shall have the right to
authorize any television broadcast station, wherever licensed to operate, to
broadcast any Network Program consisting of an address by the President of the
United States of America on a subject o f public importance or consisting of
coverage of a matter of immediate national concern. If, as to any Network
Program offered hereinunder, Broadcaster does not notify CBS as provided for in
this Paragraph 1(b), Broadcaster shall have no rights with respect to such
Network Program, and CBS may offer such Network Program on the same or
different terms to an other television broadcast station or stations licensed
to operate in Affiliated Station's community of license; provided, however,
that, if any Network Program offered hereunder is accepted, by Affiliated
Station, upon any other terms or conditions to which CBS agrees in writing,
then the provisions of this Agreement shall apply to the broadcast of such
Network Program except to the extent such provisions are expressly varied by
the terms and conditions of such acceptance as to agreed to by CBS.
(c) Delivery of Network Programs.
Any obligation of CBS to furnish Network Programs for broadcasting by
Affiliated Station is subject to CBS's making of arrangements satisfactory to
it for the delivery of Network Programs to Affiliated Station.
2. Payment to Broadcasters.
(a) Definitions.
(i) "Live Time Period" means the time period or periods
specified by CBS in its initial offer of a Network Program to Broadcaster for
the broadcast of such Network Program over Affiliated Station; (ii) "Affiliated
Station's Network Rate" shall be $4,217 and is used herein solely for purposes
of computing payments by CBS to Broadcaster; (iii) "Commercial Availability"
means a period of time made available by CBS during a Network Commercial
program for one or more Network Commercial Announcements or local cooperative
commercial announcements; and (iv) "Network Commercial Announcements" means a
commercial announcement broadcast over Affiliated Station during a Commercial
Availability and paid for by or on behalf of one or more CBS advertisers, but
does not include announcements consisting of billboards, credits, public
service announcements, promotional announcements and announcements required by
Law.
2
<PAGE> 3
(b) Payment for Broadcast of programs.
For each Network Commercial Program or portion thereof, except those
specified in Paragraph 2(c) hereof, which is broadcast over Affiliated Station
during the Live Time Period therefor and the Live Time Period for which is set
forth in the table below; CBS shall pay Broadcaster the amount from
multiplying the following:
(i) Affiliated Station's Network Rate; by
(ii) the percentage set forth below opposite such time period
(which, unless otherwise specified, is expressed in Affiliated Station's
then-current local time); by
(iii) the fraction of an hour substantially occupied by such program
or portion thereof; by
(iv) The fraction of the aggregate length of all Commercial
Availabilities during such program or portion thereof occupied by Network
Commercial Announcements.
Table
<TABLE>
<CAPTION>
Monday through Friday
<S> <C>
7:00 a.m. - 10:00 a.m. 18.25%
10:00 a.m. - 11:00 a.m. 7%
11:00 a.m. - 5:00 p.m. 12%
5:00 p.m. - 6:00 p.m. 15%
6:00 p.m. - 11:00 p.m. 32%
11:00 p.m. - 12:00 p.m. 15%
Saturday
8:00 a.m. - 9:00 a.m. 7%
9:00 a.m. - 5:00 p.m. 12%
5:00 p.m. - 6:00 p.m. 15%
6:00 p.m. - 11:00 p.m. 32%
11:00 p.m. - 12:00 p.m. 15%
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
Sunday
<S> <C>
11:30 a.m. - 5:00 p.m. 12%
5:00 p.m. - 6:00 p.m. 15%
6:00 p.m. - 11:00 p.m. 32%
11:00 p.m. - 12:00 p.m. 15%
</TABLE>
For each Network Program or portion thereof, except those specified in
Paragraph 2(c) hereof, which is broadcast by Affiliated Station during a time
period other than the Live Time Period therefor and the Live Time period for
which is set for the in the table above, CBS shall pay Broadcaster as if
Affiliated Station had broadcast such program or portion thereof during such
Live Time Period; except that:
(i) if the percentage set forth above opposite the time
period during which Affiliated Station broadcast such
program or portion thereof is less than that set
forth opposite such Live Time Period, then CBS shall
pay Broadcaster on the basis of the time period
during which Affiliated Station broadcast such
program or portion thereof; and
(ii) if the time period or any portion thereof during
which Affiliated Station broadcast such program is
not set forth in the table above, than CBS shall pay
Broadcaster in accordance with Paragraph 2(c) hereof.
(c) Payment for Broadcast of Other Programs.
For the following programs, the percentages listed below (rather than
those day part percentages set forth in the table in Paragraph 2(b)
hereinabove) shall be used in computing payment to Affiliated Station:
4
<PAGE> 5
<TABLE>
<S> <C>
Monday - Friday Late Night Daypart 21.4% per telecast for live
clearance or 16.4% per
telecast for delayed
clearance
Monday - Friday CBS EVENING NEWS 5%
CBS Sports programs 0%
CBS SUNDAY MORNING and FACE THE NATION
8%
</TABLE>
Notwithstanding the payment obligations set forth in Paragraph 2(b)
above,CBS shall pay Broadcaster such amounts as specified in CBS's program
offer for Network Programs broadcast by Affiliated Station consisting of (5)
special event programs (including, but not limited to, such programs as awards
programs, mini-series, movie specials, entertainment specials,
special-time-period broadcasts of regularly-scheduled series, and news specials
such as political conventions, election coverage, presidential inaugurations
and related events), (ii) paid political programming, and (iii) programs for
which CBS specified a Live Time period, or which Affiliated Station broadcast
during a time period, any portion of which is not set forth in the table above.
(d) Deduction.
From the amounts otherwise payable to Broadcaster hereunder, there
shall be deducted, for each week of the term of this Agreement, a sum equal to
25% of Affiliated Station's Network Rate.
(e) Changes in Rate.
CBS may reduce Affiliated Station's Network Rate in connection with a
re-evaluation and reduction of the Affiliated Station Network Rate of CBS's
affiliated stations in general, by giving Affiliated Station at least thirty-
days' prior notice of such reduction in Affiliated Station's Network Rate in
which event Broadcaster may terminate this Agreement, Affective as of the
effective date of any such reduction, on not less than fifteen-days' prior
notice to CBS. In order to reflect differences in the importance of
compensation payments to stations in markets of varying size, the rise of any
general reduction of the Network Rate of CBS's affiliated stations pursuant to
this Paragraph 2(a) may vary to a reasonable degree according to each station's
market-size category (i.e., 1-50, 51-100, 101-150 or 131+).
(f) Time of Payment.
5
<PAGE> 6
CBS shall make the payments hereunder reasonable, promptly after the
end of each four-week accounting period of CBS for Network Commercial Programs
broadcast during such accounting period.
(g) Reports.
Broadcaster shall submit to CBS in the manner requested by CBS such
reports as CBS my reasonable request concerning the broadcasting of Network
Programs by Affiliated Station.
3. Term and Termination.
(a) Term.
The term of this Agreement shall be the period commencing on
July 11, 1993 and expiring on July 31, 1995; provided, however, that, unless
Broadcaster of CBS shall notify the other at least six months prior to the
expiration of the original period or any subsequent; two-year period that the
party giving such notice does not wish to have the term extended beyond such
period, the term of this Agreement shall be automatically extended upon the
expiration of the original period and each subsequent extension thereof for an
additional period of two years; and provided further that either party shall
have the right to terminate the term of this Agreement effective at any time by
giving notice of such termination to the other party at least six months prior
to the effective date of termination specified therein, Notwithstanding any
provision of any offer or acceptance under Paragraph 1 hereof, upon the
expiration or any termination of the term of this Agreement. Broadcaster shall
have no right whatsoever to broadcast over Affiliated Station any Network
Program.
(b) Termination on Transfer of License or Interest in Broadcaster.
Broadcaster shall notify CBS forthwith if any application is made to
the Federal Communications Commission relating to a transfer either of any
interest in Broadcaster or of Broadcaster's license for Affiliated Station.
CBS shall have the right to terminate this Agreement affective as of the
effective data of any such transfer (except a transfer within the provisions of
Section 73.3540(f) of the Federal Communications Commission's present Rules and
Regulations) by giving Broadcaster notice thereof within thirty days after the
date on which Broadcaster gives CBS notice of the making of such application.
If CBS does not so terminate this Agreement. Broadcaster shall, prior to the
effective date of any such transfer of Broadcaster's license for Affiliated
Station, procure and deliver to CBS, in form satisfactory to CBS, the agreement
of the proposed transferees that, upon consummation of
6
<PAGE> 7
the transfer, the transferees will unconditionally assume and perform all
obligations of Broadcaster under this Agreement. Upon delivery of said
agreement to CBS, in forms satisfactory to it, the provisions of this Agreement
applicable to Broadcaster shall, affective upon the date of such transfer, and
applicable to such transferees. If Broadcaster does not so notify CBS or does
not so procure such agreement of the proposed transfers, then CBS shall have
the right to terminate the term of this Agreement effective upon giving
Broadcaster and the transferees notice thereof within thirty days after the
later of the effective date of such transfer and the date on which CBS first
learns of such application.
(c) Termination on Change of Transmitter Location, Power,
Frequency or Hours of Operation of Affiliated Station.
Broadcaster shall notify CBS forthwith if application is made to the
Federal Communications Commission to modify the transmitter location, power or
frequency of Affiliated Station of Broadcaster plans to modify the hours of
operation of Affiliated Station. CBS shall have the right to terminate this
Agreement, affective upon the effective date of such modification, by giving
Broadcaster notice thereof within thirty (30) days after the date on which
Broadcaster gives CBS notice of the application or plat for such modification.
If Broadcaster fails to notify CBS as required herein, then CBS shall have the
right to terminate this Agreement by giving Broadcaster thirty (30) days'
notice thereof within thirty (30) days of the date on which CBS first learns of
such application.
(d) Termination in the Event of Bankruptcy.
Upon one (1) month's notice, CBS may terminate this Agreement if a
petition in bankruptcy is filed by or on behalf of Broadcaster, or Broadcaster
otherwise takes advantage of any insolvency law, or an involuntary petition in
bankruptcy is filed against Broadcaster and not dismissed within thirty (30)
days thereafter, or if a receiver or trustee of any of Broadcaster's property
is appointed at any time and such appointment is not vacated within thirty (30)
days thereafter (it being understood that Broadcaster will ave a similar right
of termination upon the occurrence of any such event with respect to CBS).
(e) Termination in the Event of Breach.
Each party, affective upon notice to the other, may, in addition to
its other rights, terminate this Agreement if any material representation,
warranty or agreement of the other party contained in this Agreement has been
breached.
7
<PAGE> 8
4. Use of Network Programs.
(a) General.
Broadcaster shall not broadcast any Network Programs ever Affiliated
Station unless such Network Program has first been offered by CBS to
Broadcaster for broadcasting over Affiliated Station and has been accepted by
Broadcaster in Accordance with this Agreement. Except with the prior written
consent of CBS, Broadcaster shall neither sell any Network Program, in whole or
in part, or any time therein, for sponsorship, nor otherwise use Network
Programs except as specifically authorized in this Agreement or announcements
during any interval, within a Network Program, which is designated by CBS to
Affiliated Station as being for the sole purpose of making a station
identification announcement. Broadcaster shall, with respect to each Network
program broadcast over Affiliated Station, broadcast such Network Program in
its entirety (including but not limited to commercial announcements,
billboards, credits, public service announcement, promotional announcements and
network identification), without interruption, alteration, compression,
deletion or addition of any kind, from the beginning of the Network Program to
the final system due at the conclusion of the Network Program. Nothing herein
shall be construed as preventing Broadcaster's deletion of (i) part of a
Network Program in order to broadcast an emergency announcement or news
bulletin; (ii) a promotional announcement for a Network Program not to be
broadcast over Affiliated Station (provided that Affiliated Station shall
broadcast an alternative promotional announcement for CBS network programming
in place of the deleted promotional announcement); (iii) such words, phrases or
scenes as Broadcaster, in the reasonable exercise of its judgment, determined
it would not be in the public interest to broadcast over Affiliated Station;
provided, however, that Broadcaster shall not substitute for any material
delated pursuant to this clause (iii) any commercial or promotional
announcement of any kind whatsoever; and provided further that Broadcaster
shall notify CBS of every such deletion within 72 hours thereof. Broadcaster
shall not, without CBS's prior written consent, authorize or permit any Network
Program, recording, or other material furnished by CBS to Broadcaster or
Affiliated Station as provided herein; provided, however, that the failure of
Broadcaster to prohibit or prevent the carrying of any such Network Program,
recording, or other material by one or more so-called community antenna
television systems owned or controlled by Broadcaster (or by one or more
so-called community antenna television systems not authorized b Broadcaster to
carry any of the sums) shall not be deemed to be an authorization or permission
within the meaning of this sentence; and provided further that nothing included
in this sentence or elsewhere in this Agreement shall be, or be deemed to be, a
license to Broadcaster of, an undertaking by CBS nor to enforce against
Broadcaster, or a waiver of, any copyright or other rights in any Network
Program which, at the commencement of the term of this Agreement or at any
other time or
8
<PAGE> 9
times thereafter, CBS may have with respect to the carrying of such Network
Program over any community antenna television systems owned or controlled by
Broadcaster.
(b) Taped Recordings of Network Programs.
When authorized to make a taped delayed broadcast of a Network
Program, Broadcaster shall this Broadcaster- owned tape to record the Network
Program when transmitted by CBS only for a single broadcast by Affiliated
Station and shall erase the Program recorded on the tape within 24 hours of
broadcasting the Network Program and observe any limitations which CBS may
place on the exploitation of the Network Program is recorded and erased.
5. Rejection, Refusal, Substitution and Cancellation of Network Programs.
(a) Rights of Broadcaster and CBS.
With respect to Network Programs offered to or already accepted
hereunder by Broadcaster, nothing in this Agreement shall be construed to
prevent or hinder:
(i) Broadcaster from rejecting or refusing any such
Network Program which Broadcaster reasonably believes
to be unsatisfactory or unsuitable or contrary to the
public interest, or from substituting a program
which, in Broadcaster's opinion, is of greater local
or national importance; or
(ii) CBS from substituting one or more other Network
Programs, in which event CBS shall offer such
substituted program or progress to Broadcaster
pursuant to the provisions of Paragraph 1 hereof; or
(iii) CBS from canceling one or more Network Programs.
(b) Notice.
In the event of any such rejection, refusal, substitution or
cancellation by either party herein, such party shall notify the other thereof
as soon as practicable by telex or by such computer-based communications system
as CBS may develop for notifications of this kind. Notice given to CBS shall
be addressed to CBS Affiliates Relations.
9
<PAGE> 10
6. Disclosure of Information.
CBS shall endeavor in good faith, before furnishing any Network Program, to
disclose to Broadcaster information of which CBS has knowledge concerning the
inclusion of any matter in such Network Program for which any money, service or
other valuable consideration is directly or indirectly paid or promised to, or
charged or accepted by, CBS or any employee of CBS or any other person with
when CBS deals in connection with the production or preparation of such network
Program. AS used in the Paragraph 6, the terms "service or other valuable
consideration" shall not include any service or property furnished without
charge or at a nominal charge for use in, or in connection with, any Network
program "unless it is so furnished in consideration for an identification in a
broadcast of any person, product, service, trademark, or brand name beyond an
identification which is reasonably related to the use of such service or
property on the broadcast," as such words are used in Section 317 of the
Communications Act of 1934 as amended. The provisions of this Paragraph 6
requiring the disclosure of information shall to apply in any case where,
because of a waiver granted by the Federal Communications Commission, an
announcement is not required to be made under said Section 317. The inclusion
in any such Network Program of an announcement required by said Section 317
shall constitute the disclosure to Broadcaster required by this Paragraph 6.
7. Indemnification.
CBS will indemnify Broadcaster from and against any and all claims, damages,
liabilities, costs and expenses arising out of the broadcasting, pursuant to
this Agreement, of Network Programs furnished b CBS to the extent that such
claims, damages, liabilities, costs and expenses are (i) based upon alleged
libel, slander, defamation, invasion of the right of privacy, or violation or
infringement of copyright or literary or dramatic rights; (ii) based upon the
broadcasting of Network Programs as furnished by CBS, without any deletions by
Broadcaster; and (iii) not based upon any material added by Broadcaster to such
Network Programs (as to which deletions and added material Broadcaster shall,
to the like extent, indemnify CBS, all network advertisers, if any, on such
Network Program, and the advertising agencies of such advertisers).
Furthermore, each party will so indemnify the other only if such other party
gives the indemnifying party prompt notice of any claim or litigation to which
its indemnity applies; it being argued that the indemnifying party shall have
the right to assume the defense of any or all claims or litigation to which the
indemnity applies and that the indemnified party will cooperate fully with the
indemnifying party in such defense and in the settlement of such claim or
litigation. Except as herein provided t the contrary, neither Broadcaster nor
CBS shall have any rights against the other party hereto for claims by third
persons or for the non-operation of facilities or the non-furnishing of
10
<PAGE> 11
Network Programs for broadcasting is such non-operation or non-furnishing is
due to failure of equipment, action or claims by any third person, labor
dispute or any cause beyond such party's reasonable control.
8. News Reports Included in Affiliated Station's Local News Broadcasts.
As provided in the agreements pertaining to CBS Newsnet and CBS
regional news cooperatives (but as a separate obligation of this Affiliation
Agreement as well). Broadcaster shall make available, on request by CBS New,
coverage produced by Affiliated Station of news stories and breaking news
events of national and/or regional interest, to CBS News and to regional news
cooperatives operated by CBS News. Affiliated Station shall be compensated at
CBS News' then- prevailing rates for material broadcast by CBS News or included
in the national Newsnet service.
9. Non-Duplication of Network Programs.
(a) For purpose of this paragraph, a television station's "Network
Exclusivity Zone" shall mean as such of the station's area of Dominant
Influence ("ADI"), as defined by the than-current ADI cap of the Arbitron
Barings Company, as is included in the zone within thirty-five (35) miles of
the station's reference points, as defined by Section 73.658(a) of the FCC
rules, and, in the case of a "small market television station" as defined in
Section 76.92 of the FCC rules, also as such as is included in the additional
twenty (20) mile "secondary protection zone" specified in said Section 76.92.
(b) Broadcaster shall be entitled to exercise, within affiliated
Station's Network Exclusivity Zone, the protection against duplication of
network programming, as provided by Sections 76.92 through 7.97 of the FCC
rules, with respect to a Network Program during the Period beginning one (1)
day before and ending seven(7) days after the delivery of such Network Program
by CBS to Broadcaster; provided, however, that such right shall apply only to
Network Programs broadcast in the live time period as offered or on no more
than a one day delay as accepted by CBS; and provided further that nothing
herein shall be deemed to preclude CBS from granting to any other broadcast
television station licensed to any other community similar network
non-duplication rights within that station's Network Exclusivity Zone, and
Broadcaster's aforesaid right of network non-duplication shall not apply with
respect to the transmission of the programs of another CBS affiliates (current
or future) by a "community unit" as that term in defined by the rules of the
FCC, located (wholly or partially) within the area in which Broadcaster's
Network Exclusivity Zone overlaps the Network Exclusivity Zone of that other
CBS affiliate.
11
<PAGE> 12
(c) Broadcaster's network non-duplication rights under this
paragraph shall be subject to cancellation by CBS on six (6) months written
notice to Broadcaster. Any such cancellation by CBS shall not affect any of
the other rights and obligations of the parties under this Agreement.
10. Assignment, Conveyance and Conditions for Use of Descramblers.
(a) For value received, CBS hereby conveys, transfers, and assigns
to Broadcaster, all of its rights, title and interest in and to the tangible
personal property consisting of two (2) Videocipher 13 Descramblers (the
"Descramblers") subject to the following conditions:
(i) Broadcaster may not assign its rights in the
Descramblers to any party without CBS's
written approval.
(ii) As the termination or expiration of this
Agreement, Broadcaster's rights in the
Descramblers shall cease and Broadcaster
shall take appropriate steps to assign the
Descramblers to CBS.
(b) Broadcaster shall use the Descramblers solely in connection
with the broadcast rights granted and specified in the Agreement.
(c) CBS makes no warranties whatsoever, either express or implied,
in respect of the equipment including, but not limited to, any warranties of
merchantability or fitness for a particular purpose.
(d) Broadcaster shall be solely responsible for any and all
installation and other related costs or charges in connection with the use and
installation of the Descramblers. Broadcaster shall at all times use and
maintain the Descramblers as instructed by CBS and the manufacturer and shall
use its best efforts to assure that the Descramblers are kept in good condition
and that no tampering with the Descramblers or other breach of security, as
defined in subparagraph (g) below, occurs. Broadcaster shall promptly notify
the CBS Satellite Management Center by telephone of any defect or failure in
the operation of the Descramblers and shall follow such procedures as are
established by CBS for the replacement or repair of the Descramblers. CBS
shall be responsible for the cost of correcting any defect or of rectifying any
failure of the Descramblers to operate during the Term of the Agreement,
provided that Broadcaster shall be responsible for any costs associated with
its failure to follow the prescribed procedures.
12
<PAGE> 13
(e) In addition to its rights under paragraph 7 of the Agreement,
CBS will not be liable for any damages resulting from the operation of the
Descramblers or from the failure of the Descramblers to function properly or,
any less, cost or damage to Broadcaster or others arising from defeats or
non-performance of the Descramblers.
(f) If Broadcaster makes any use of the Descramblers in violation
of the terms and conditions of this Agreement, said use shall be a material
breach of this Agreement.
(g) Should Broadcaster's willful acts or negligence result in any
breach in the security of the two Descramblers covered by thin Agreement, such
breach in the security of the two Descramblers covered by this Agreement, such
breach of security shall be a material breach of this Agreement. Breach of
security shall include but not be limited to any shaft of all or part of the
Descramblers, any unauthorized reproduction of all or part of the Descramblers,
any unauthorized reproduction of the code involved in descrambling the
network-feed from CBS to Broadcaster, or any related misappropriation of the
physical property or intellectual property contained in the Descramblers.
11. General.
(a) As of the beginning of the term hereof, this Agreement takes
the place of, and is substituted for, any and all television affiliation
agreements heretofore existing between Broadcaster and CBS concerning
Affiliated Station, subject only to the fulfillment of any obligations
thereunder relating to events occurring prior to the beginning of the term
hereof. This Agreement cannot be changed or terminated orally and no waiver by
either Broadcaster or CBS of any breach of any provision hereof shall be or be
deemed to be a waiver of any preceding or subsequent breach of the same or any
other provisions of this Agreement.
(b) The obligations of Broadcaster and CBS under this Agreement
are subject to all applicable federal, state and local law, rules and
regulations (including but not limited to the Communications Act of 1954 as
amended and the Rules and Regulations of the Federal Communications Commission)
and this Agreement and all matters or issues collateral thereto shall be
governed by the law of the State of New York applicable to contracts performed
entirely therein.
(c) Neither Broadcaster nor CBS shall be or be deemed to be or
hold itself out as the agent of the other under this Agreement.
(d) Unless specified otherwise, all notices given hereunder shall
be given in writing, by personal delivery, mail, telegram, telex system or
private wire at the respective
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<PAGE> 14
addresses of Broadcaster and CBS set forth above, unless either party at any
time or times designates another address for itself by notifying the other
party thereof by certified mail, in which case all notices to such party shall
thereafter be given at its most recently so designated address. Notice given
by mail shall be deemed given on the date of mailing thereof with postage
prepaid. Notice given by telegram shall be deemed given on delivery of such
telegram to a telegram office with charges therefor prepaid or to be billed to
the sender thereof. Notice given by private wire shall be deemed given on the
sending thereof.
(e) The titles of the paragraphs in this Agreement are for
convenience only and shall not in any way affect the interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
BUFFALO MANAGEMENT CBS AFFILIATE
ENTERPRISES CO., INC. RELATIONS A Division of CBS Inc.
By By
---------------------------- ------------------------------
14
<PAGE> 1
Exhibit 10.13.2
30 Rockefeller Plaza A Division of
New York, NY 10112 National Broadcasting
212 664-4444 Company, Inc.
NBC
TV NETWORK
March 2, 1998
LIN Television Corporation and
KXAN, Inc.
c/o KXAN-TV
908 West Martin Luther King Boulevard
Austin, Texas 78701
Re: KXAN-TV (Austin, Texas)
Gentlemen:
In connection with the Affiliation Agreement (the "Agreement") dated
April 12, 1995 between NBC Television Network ("NBC") and LIN Television
Corporation and KXAN, Inc. , licensee of television broadcast station KXAN-TV
(collectively, the "Station") , and the related side letter of even date
therewith, NBC and the Station agree to the following provisions and to amend
the Agreement, effective as of the date hereof, as set forth below:
1. The expiration date of the term set forth in Paragraph 1 of the
Agreement is hereby changed from November 14, 2004 (the "Original Expiration
Date") to December 31, 2010.
2. Notwithstanding anything to the contrary set forth in Paragraph 5 of
the Agreement, during the twelve-month period commencing on the Original
Expiration Date and each subsequent twelve-month period thereafter during the
term of the Agreement, the aggregate amount of compensation payable by NBC to
the Station shall be equal to the greater of (i) the aggregate amount of
compensation actually paid by NBC to the Station during the twelve-month period
immediately preceding the Original Expiration Date and (ii) an amount equal to
(a) the Compensation Factor (as defined below) for such twelve-month period
multiplied by (b) the Station's then-current NBC Percent as determined in
accordance with Exhibit A annexed hereto and made a part hereof (the "NBC
Percent") . For purposes of this Agreement, the following definitions shall also
apply:
<PAGE> 2
(a) The "Compensation Factor" for any twelve-month period referred
to above shall be an amount equal to (i) the aggregate compensation actually
paid by NBC during the immediately preceding twelve-month period to all NBC
Affiliates in the Measured Markets (as defined below) divided by (ii) the sum of
all such NBC Affiliates' respective NBC Percents.
(b) The "Measured Markets" for purposes of any calculation hereunder
shall mean the ten markets immediately above the Station and the ten markets
immediately below the Station, when ranked on the basis of their total audience
delivery of the NBC Television Network.
3. The Station hereby agrees to enter into good faith negotiations with
NBC with respect to the appointment and authorization of NBC regarding the
negotiation of agreements related to the grant of retransmission rights to the
broadcast signal of the Station with multiple system operators ("MSO's") and
other cable television systems whose subscribers are located within or without
the ADI of the Station who would be able to receive the Station's signal.
4. In the event that at any time during the term of the Agreement, NBC
seeks to replace or supplement its current form of affiliation agreement or
arrangements with the NBC Affiliates, generally, with other contractual
arrangements, including, without limitation, participation in a joint venture or
other similar arrangement between NBC and its NBC Affiliates, Station agrees to
enter into good faith negotiations with NBC with respect to such other
arrangements, so long as the minimum number of NBC Affiliates whose consent to
such arrangements is determined to be required by NBC have agreed to so
participate.
5. Each defined term used herein without definition shall have the
meaning assigned to such term in the Agreement.
2
<PAGE> 3
Except as provided herein, the Agreement is hereby affirmed and shall
remain in full force and effect.
Very truly yours,
NBC TELEVISION NETWORK
BY:
----------------------------------
Name: Jean M. Dietze
Title: VP Affiliate Relations East
The foregoing has been reviewed
by, and is acceptable to:
LIN TELEVISION CORPORATION
By:
----------------------------------
Name: Deborah R. Jacobson
Title: VP Corporate Development
and Treasurer
KXAN, INC.
By:
----------------------------------
Name: Deborah R. Jacobson
Title: VP Corporate Development
and Treasurer
3
<PAGE> 1
Exhibit 10.14.2
30 Rockefeller Plaza A Division of
New York, NY 10112 National Broadcasting
212 664-4444 Company, Inc.
NBC
TV NETWORK
March 2, 1998
LIN Television Corporation and
LCH Communications Inc.
c/o Wood-TV
Box B
Grand Rapids, Michigan 49501
Re: WOOD-TV (Grand Rapids, Michigan)
Gentlemen:
In connection with the Affiliation Agreement (the "Agreement") dated
April 12, 1995 between NBC Television Network ("NBC" ' ) and LIN Television
Corporation and LCH Communications Inc., licensee of television broadcast
station WOOD-TV (collectively, the "Station") , and the related side letter of
even date therewith, NBC and the Station agree to the following provisions and
to amend the Agreement, effective as of the date hereof, as set forth below:
1. The expiration date of the term set forth in Paragraph 1 of the
Agreement is hereby changed from November 14, 2004 (the "Original Expiration
Date") to December 31, 2010.
2. Notwithstanding anything to the contrary set forth in Paragraph 5 of
the Agreement, during the twelve-month period commencing on the Original
Expiration Date and each subsequent twelve-month period thereafter during the
term of the Agreement, the aggregate amount of compensation payable by NBC to
the Station shall be equal to the greater of (i) the aggregate amount of
compensation actually paid by NBC to the Station during the twelve-month period
immediately preceding the Original Expiration Date and (ii) an amount equal to
(a) the Compensation Factor (as defined below) for such twelve-month period
multiplied by (b) the Station's then-current NBC Percent as determined in
accordance
<PAGE> 2
with Exhibit A annexed hereto and made a part hereof (the "NBC
Percent") . For purposes of this Agreement, the following definitions shall also
apply:
(a) The "Compensation Factor" for any twelve-month period referred
to above shall be an amount equal to (i) the aggregate compensation actually
paid by NBC during the immediately preceding twelve-month period to all NBC
Affiliates in the Measured Markets (as defined below) divided by (ii) the sum of
all such NBC Affiliates, respective NBC Percents.
(b) The "Measured Markets" for purposes of any calculation hereunder
shall mean the ten markets immediately above the Station and the ten markets
immediately below the Station, when ranked on the basis of their total audience
delivery of the NBC Television Network.
3. The Station hereby agrees to enter into good faith negotiations with
NBC with respect to the appointment and authorization of NBC regarding the
negotiation of agreements related to the grant of retransmission rights to the
broadcast signal of the Station with multiple system operators ("MSO's") and
other cable television systems whose subscribers are located within or without
the ADI of the Station who would be able to receive the Station's signal.
4. In the event that at any time during the term of the Agreement, NBC
seeks to replace or supplement its current form of affiliation agreement or
arrangements with the NBC Affiliates, generally, with other contractual
arrangements, including, without limitation, participation in a joint venture or
other similar arrangement between NBC and its NBC Affiliates, Station agrees to
enter into good faith negotiations with NBC with respect to such other
arrangements, so long as the minimum number of NBC Affiliates whose consent to
such arrangements is determined to be required by NBC have agreed to so
participate.
5. Each defined term used herein without definition shall have the
meaning assigned to such term in the Agreement.
2
<PAGE> 3
Except as provided herein, the Agreement is hereby affirmed and shall
remain in full force and effect.
Very truly yours,
NBC TELEVISION NETWORK
BY:
---------------------------------------
Name: Jean M. Dietze
Title: VP Affiliate Relations East
The foregoing has been reviewed
by, and is acceptable to:
LIN TELEVISION CORPORATION
By:
------------------------------
Name: Deborah R. Jacobson
Title: VP Corporate Development
and Treasurer
LCH COMMUNICATIONS INC.
By:
------------------------------
Name: Deborah R. Jacobson
Title: VP Corporate Development
and Treasurer
3
<PAGE> 1
Exhibit 10.15.2
30 Rockefeller Plaza A Division of
New York, NY 10112 National Broadcasting
212 664-4444 Company, Inc.
NBC
TV NETWORK
March 2, 1998
LIN Television Corporation and
WAVY-TV, Inc.
c/o WAVY-TV
300 Wavy Street
Portsmouth, Virginia 23704
Re: WAVY-TV (Norfolk, Virginia)
Gentlemen:
In connection with the Affiliation Agreement (the "Agreement") dated
April 12, 1995 between NBC Television Network ("NBC") and LIN Television
Corporation and WAVY-TV, Inc., licensee of television broadcast station WAVY-TV
(collectively, the "Station"), and the related side letter of even date
therewith, NBC and the Station agree to the following provisions and to amend
the Agreement, effective as of the date hereof, as set forth below:
1. The expiration date of the term set forth in Paragraph 1 of the
Agreement is hereby changed from November 14, 2004 (the "Original Expiration
Date") to December 31, 2010.
2. Notwithstanding anything to the contrary set forth in Paragraph 5 of
the Agreement, during the twelve-month period commencing on the Original
Expiration Date and each subsequent twelve-month period thereafter during the
term of the Agreement, the aggregate amount of compensation payable by NBC to
the Station shall be equal to the greater of (i) the aggregate amount of
compensation actually paid by NBC to the Station during the twelve-month period
immediately preceding the original Expiration Date and (ii) an amount equal to
(a) the Compensation Factor (as defined below) for such twelve-month period
multiplied by (b) the Station's then-current NBC Percent as determined in
accordance
<PAGE> 2
with Exhibit A annexed hereto and made a part hereof (the "NBC Percent") . For
purposes of this Agreement, the following definitions shall also apply:
(a) The "Compensation Factor" for any twelve-month period referred
to above shall be an amount equal to (i) the aggregate compensation actually
paid by NBC during the immediately preceding twelve-month period to all NBC
Affiliates in the Measured Markets (as defined below) divided by (ii) the sum of
all such NBC Affiliates' respective NBC Percents.
(b) The "Measured Markets" for purposes of any calculation hereunder
shall mean the ten markets immediately above the Station and the ten markets
immediately below the station, when ranked on the basis of their total audience
delivery of the NBC Television Network.
3. The Station hereby agrees to enter into good faith negotiations with
NBC with respect to the appointment and authorization of NBC regarding the
negotiation of agreements related to the grant of retransmission rights to the
broadcast signal of the Station with multiple system operators ("MSO's") and
other cable television systems whose subscribers are located within or without
the ADI of the Station who would be able to receive the Station's signal.
4. In the event that at any time during the term of the Agreement, NBC
seeks to replace or supplement its current form of affiliation agreement or
arrangements with the NBC Affiliates, generally, with other contractual
arrangements, including, without limitation, participation in a joint venture or
other similar arrangement between NBC and its NBC Affiliates, Station agrees to
enter into good faith negotiations with NBC with respect to such other
arrangements, so long as the minimum number of NBC Affiliates whose consent to
such arrangements is determined to be required by NBC have agreed to so
participate.
5. Each defined term used herein without definition shall have the
meaning assigned to such term in the Agreement.
2
<PAGE> 3
Except as provided herein, the Agreement is hereby affirmed and shall
remain in full force and effect.
Very truly yours,
NBC TELEVISION NETWORK
By:
--------------------------------
Name:
Title:
The foregoing has been reviewed
by, and is acceptable to:
LIN TELEVISION CORPORATION
By:
--------------------------------
Name: Deborah R. Jacobson
Title: VP Corporate Development
and Treasurer
WAVY-TV, INC.
By:
--------------------------------
Name: Deborah R. Jacobson
Title: VP Corporate Development
and Treasurer
3
<PAGE> 1
EXHIBIT 10.22
SEVERANCE COMPENSATION AGREEMENT dated as of September 5, 1996,
between LIN Television Corporation, a Delaware corporation (the "Company"), and
Peter E. Maloney (the "Executive").
WHEREAS the Company currently employs the Executive and has determined
that the Executive's services are important to the stability and continuity of
the management of the Company;
WHEREAS the Company has determined that it is in its best interest to
reinforce and encourage the Executive's continued disinterested attention and
undistracted dedication to the Executive's duties in the potentially disturbing
circumstances of a possible change in control of the Company by providing some
degree of personal financial security; and
WHEREAS to induce the Executive to remain in the employ of the
Company, the Company has determined that it is desirable to pay the Executive
the severance compensation set forth below if the Executive's employment with
the Company terminates in one of the circumstances described below following a
change in control of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, it is agreed upon between the Company
and the Executive as follows;
1. Definitions. In addition to other words and terms defined elsewhere in
this Agreement, the following words and terms shall have the following
meanings:
(a) "Cause" shall mean:
i) the will and continued failure of Executive to
perform substantially Executive's duties with the
Company (other than any such failure resulting from
incapacity due to physical or mental illness), after
a written demand for substantial performance is
delivered to Executive by the Board or an elected
officer of the Company which specifically identifies
the manner in which the Board or the elected officer
believes that Executive has not substantially
performed Executive's duties; or
ii) (A) the conviction of, or plea of nolo contendre to,
a felony or (B) the willful engaging by Executive in
gross misconduct which is materially and demonstrably
injurious to the Company;
<PAGE> 2
in each case above, after Executive is provided an opportunity
to be heard upon 30 days written notice and a good faith
determination of Cause by at least 3/4 of the Disinterested
Directors
(b) "Change in Control" shall mean any of the following events;
i) any "person" (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the
"Act") and as used in Sections 13(d) and 14(d)
thereof, including a "group" (as defined in Section
13(d) of the Act) but excluding AT&T, the Company,
any subsidiary thereof and any trustee or fiduciary
on behalf of any Company Executive benefit plan)
becomes the "beneficial owner" (as defined in Rule
13d-3 under the Act) of securities of the Company
having at least 25% of the voting power of the
Company's then outstanding securities (unless the
event causing the 25% threshold to be crossed is an
acquisition of securities directly from the Company)
but only if at the time of such person becoming the
beneficial owner of the requisite voting power, AT&T
designees no longer hold a majority of the seats on
the Board of Directors; or
ii) the shareholders of the Company shall approve any
merger or other business combination of the Company,
any sale of all or substantially all of the Company's
assets in one or a series of related transactions or
any combination of the foregoing transactions (the
"Transactions"), other than a Transaction immediately
following which the shareholders of the Company
immediately prior to the Transaction (including
AT&T), any subsidiary thereof and any trustee or
fiduciary on behalf of any Company Executive benefit
plan own greater than 50% of the voting securities of
the surviving company (or its parent) (and, in a sale
of assets, of the purchaser of the assets)
immediately following the Transaction; provided,
however, that a Transaction which would otherwise not
result in a Change in Control because of the
resulting ownership of more than 50% of the voting
securities of the surviving company, its parent, or a
purchaser of the assets will, nonetheless, be deemed
to be a Change in Control but only in connection with
a termination for Good Reason under Section 1(d)(iv);
or
iii) within any 24 month period, the persons who were
directors immediately before the beginning of such
period (the "Disinterested
2
<PAGE> 3
Directors") shall cease (for any reason other
than death) to constitute at least a majority
of the Board or the board of directors of a
successor to the Company. For this purpose,
any director who was not a director at the
beginning of such period shall be deemed to
be a Disinterested Director if such director
was elected to the Board by, or on the
recommendation of or with the approval of, at
least two-thirds of the directors who then
qualified as Disinterested Directors (so long
as such director was not nominated by a
person who has entered into an agreement or
threatened to effect a Change of Control).
(c) "Date of Termination" shall mean the date on which a Notice of
Termination is given.
(d) "Good Reason" shall have the following definition:
i) Executive's annual salary or target bonus opportunity is
reduced below the higher of (A) the amount of annual salary or
target bonus opportunity in effect immediately prior to the
Change in Control or (B) the highest amount of annual salary
or target bonus opportunity in effect at any time thereafter;
ii) (A) any failure by the Company to continue in effect or
provide plans or arrangements pursuant to which the Executive
will be entitled to receive grants relating to the securities
of the Company (or any parent company) (including, without
limitation, stock options, stock appreciation rights,
restricted stock or other equity based awards) of the same
type as the Executive was participating in immediately prior
to the Change in Control (hereinafter referred to as
"Securities Plans") or providing substitutes for such
Securities Plans which in the aggregate provide substantially
similar economic benefits; or (B) the taking of any action by
the Company which would adversely effect the Executive's
participation in, or benefits under, any such Securities Plan
or its substitute if in the Aggregate the Executive is not
provided substantially similar economic benefits; provided,
however, that for these purposes, any determination of whether
Good Reason exists under (A) or (B) of this subsection (ii)
because the Executive is or is not provided substantially
similar economic benefits in the aggregate will be made with
due consideration given to such Executive's base salary, other
cash compensation and any other equity based incentive
programs to which the Executive is also entitled to receive,
and not solely on the basis of whether the Executive is or is
not entitled or eligible to receive equity based incentive
compensation;
3
<PAGE> 4
iii) Executive's duties and responsibilities or, in the aggregate,
the program of retirement and welfare benefits offered to
Executive are materially and adversely diminished in
comparison to the duties and responsibilities or the program
of benefits, in the aggregate, enjoyed by Executive on the
Effective Date; provided, however, that Good Reason shall not
be deemed to exist solely as a result of changes in
Executive's duties and responsibilities which are directly
caused by the Company's ceasing to be a publicly held company
or its becoming a wholly-owned subsidiary of another company;
iv) in the event of a Transaction that is deemed to be a Change in
Control solely as a result of Section 1(b)(ii) of this
Agreement, Executive is removed from the position he held with
the Company prior to such Transaction (or fails to hold the
comparable position in the parent company following such
Transaction) or his duties or responsibilities are adversely
diminished in a manner that would be Good Reason under Section
1(d)(iii) above;
v) Executive is required to be based at a location more than 50
miles from the location where Executive was based and
performed services on the Effective Date, or if Executive is
required to substantially increase his or her business travel
obligations.
Executive must give notice in writing within 90 days alter the
Executive has knowledge of the event forming the basis of Good
Reason, setting forth the particulars of such event and the
reason why he believes in good faith that Good Reason exists.
The Company shall have 30 days within which to cure such event
if it disagrees with the Executive.
2. Severance Compensation Trigger. Executive will be entitled to
severance compensation as set forth in section 3 ("Severance
Compensation") in the event Executive's employment is terminated
within two years after a Change in Control (i) by the Company without
Cause, or (ii) by Executive within 90 days after Executive has
knowledge of the occurrence of an event constituting Good Reason.
Notwithstanding the foregoing, Executive will not be entitled to
Severance Compensation in the event of a termination of employment on
account of:
(a) Death or Disability (illness or injury preventing Executive
from performing his duties, as the existed immediately prior
to the illness or injury, on a full time basis for 180
consecutive business days);
4
<PAGE> 5
(b) Retirement (voluntary late, normal or early retirement under a
pension plan sponsored by the Company, as defined in such
plan); or
(c) Qualified Sale of Business. (the sale of a business unit in
which Executive was employed before such sale and Executive
has been offered employment with the purchaser of such
business unit on substantially the same terms under which he
worked for the Company, including severance protection).
3. Severance Compensation.
(a) In the event of a Severance Compensation Trigger, the
Executive shall be entitled to the Severance Compensation
provided below:
i) In lieu of any further salary payments to the
Executive for periods subsequent to the Date of
Termination, the Company shall pay to the Executive
not later then the tenth day following the Date of
Termination a lump sum severance payment equal to the
sum of:
(x) an amount equal to two times (2x) the
Executive's annual base salary in effect on
the Date of Termination (the "Base Salary"),
(y) an amount equal to two times (2x)
(1) the bonus compensation paid to the
Executive with respect to the last
complete fiscal year, and
(2) the contribution, if any, paid by
the Company for the benefit of the
Executive to any 401(k) Plan in the
last complete fiscal year,
(z) the present value, determined as of the Date
of Termination, of the sum of:
(3) all benefits which have accrued to
the Executive but have not vested
under the LIN Television Corporation
Retirement Plan (the "Retirement
Plan") as of the Date of
Termination, and
5
<PAGE> 6
(4) all additional benefits which would
have accrued to the Executive under
the Retirement Plan if the Executive
had continued to be employed by the
Company on the same terms the
Executive was employed on the Date
of Termination from the Pate of
Termination to the date 12 months
after the Date of Termination.
For purposes of this Section, the present value of a future
payment shall be calculated by reference to the actuarial
assumptions (including assumptions with respect to interest
rates) in use immediately prior to the Change in Control for
purpose of calculating actuarial equivalents under the
Retirement Plan.
ii) The Company shall arrange to provide the Executive
for a period of 24 months following the Date of
Termination or until the Executive's earlier death,
with life, health, disability and accident insurance
benefits and the package of "executive benefits"
substantially similar to those which the Executive
was receiving immediately prior to the Notice of
Termination, or immediately prior to a Change in
Control, if greater provided however, that Executive
shall be obliged to continue to pay that proportion
of premiums paid by the Executive immediately prior
to the change in control.
iii) The Company shall accelerate the exercise date of all
stock options granted to the Executive under the 199
Stock Incentive Plan and the 1994 Stock Adjustment
Plan (the "Options") which are not exercisable on the
Date of Termination, to the end that such Options
shall be immediately exercisable.
iv) The Executive shall have the right within one year
following the later of the Change in Control or the
exercise of each Option to sell to the Company shares
of Common Stock acquired at any time upon exercise of
an Option at a price equal to the average market
price of the Common Stock for the 30 day period
ending on the date prior to the date of the Change in
Control.
b) If the Severance Compensation under this Section 3, either
alone or together with other payments to the Executive from
the Company, would constitute an "excess parachute payment"
(as defined in Section 280G of the Code), such
6
<PAGE> 7
Severance Compensation shall be reduced to the largest amount
that will result in no portion of the payments under this
Section 3 being subject to the excise tax imposed by Section
4999 of the Code or being disallowed as deductions to the
Company under Section 280G of the Code.
4. No Obligation To Mitigate Damages: No Effect on Other Contractual
Rights.
(a) The Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of
any payment provided for under this Agreement be reduced by
any compensation earned by the Executive as the result of
employment by another employer after the termination of the
Executive's employment, or otherwise.
(b) The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or
in any way diminish the Executive's existing rights, or rights
which would accrue solely as a result of the passage of time,
under any Benefit Plan, Incentive Plan or Securities Plan,
employment agreement or other contract, plan or arrangement of
the Company.
5. Successors.
(a) The Company will require any successors or assign (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all the business and/or
assets of the Company by agreement in form and substance
satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company
would be required to perform it if no such succession or
assignment had taken place. Any failure of the Company to
obtain such agreement prior to the effectiveness of any such
succession or assignment shall be a material breach of this
Agreement and shall entitle the Executive to terminate the
Executive's employment for Good Reason. As used in this
Agreement, the "Company" shall mean the Company as
hereinbefore defined and any successor or assign to its
business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 5 or which
otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
7
<PAGE> 8
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should
die while any amounts are still payable to the Executive
under, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.
(c) In the event of a liquidation of the Company, the payment
provided for hereunder shall be made before any property or
asset of the Company is distributed to-any holder of common
stock.
6. Employment. The Executive agrees to be bound by the terms and
conditions of this Agreement and to remain in the employ of the
Company during any period following any public announcement by any
person of any proposed transaction or transactions which, if effected,
would result in a Change in Control until a Change in Control has
taken place or, in the opinion of the Board of Directors of the
Company, such person has abandoned or terminated its efforts to effect
a Change in Control. Subject to the foregoing, nothing contained in
this Agreement shall impair or interfere in any way with the right of
the Executive to terminate the Executive's employment or the right of
the Company to terminate the employment of the Executive with or
without cause prior to a Change in Control. Nothing contained in this
Agreement shall be construed as a contract of employment between the
Company and the Executive or as a right of the Executive to continue
in the employ of the Company or as a limitation of the right of the
Company to discharge the Executive with or without cause prior to a
Change in Control.
7. Legal Fees. In the event that any legal action is required to enforce
the Executive's rights under this Agreement, the Executive, if the
Executive is the prevailing party, shall be entitled to recover from
the Company any expenses for attorneys' fees and disbursements
reasonably incurred by the Executive.
8. Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
9. Confidentiality: Executive shall not, without the prior written
consent of the Company, divulge, disclose or make accessible to any
other person, partnership, corporation or other entity any
Confidential Information pertaining to the business of the Company,
except (i) while employed by the Company, or (ii) when required by
8
<PAGE> 9
law to do so. For these purposes, "Confidential Information" shall
mean non-public information concerning the financial data, strategic
business plans, product development (or other proprietary product
data), customer lists, marketing plans and any other nonpublic,
proprietary and confidential information of the Company and its
subsidiaries that is not otherwise available to the public or has not
become publicly available through any breach of fiduciary duty.
10. Nonsolicitation: For a period of one year following the Executive's
termination of employment, the Executive shall not contact,
communicate with or solicit in any fashion any employee, consultant,
customer or advertiser who, at the time of such termination and at any
time during the preceding twelve-month period was employed by,
employed or otherwise had business dealings with, the Company for the
purpose of causing such employee, consultant, customer or advertiser
(i) to terminate such person's relationship with the Company or (ii)
to be employed by, to employ or otherwise to have business dealings
with any business, whether or not incorporated, in any television
markets served by the Company at the time of termination.
11. Release. As a condition to the receipt of any payments hereunder; the
Executive shall deliver to the Company, in form and substance
reasonably acceptable to the Company, a written release of the
Company, its officers, directors and shareholders from all claims of
whatever nature, other than as arising under the terms hereof or under
any benefit plans of the Company to which the Executive is otherwise
entitled.
12. Notice. For purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage
prepaid. Notice may be given to either party at the present principal
place of business of the Company or such other place as the party to
receive such notice shall notify the other.
13. Modification or Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and the
Company. No waiver by a party hereto at any time of any breach by
another party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions or conditions.
9
<PAGE> 10
14. Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by any of the parties which are not set forth
expressly in this Agreement.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LIN TELEVISION CORPORATION, EXECUTIVE,
By: By:
------------------------- -----------------------------
Title: Title:
---------------------- --------------------------
10
<PAGE> 1
EXHIBIT 12.1
LIN TELEVISION CORPORATION AND LIN HOLDINGS CORP.
COMPUTATION OF RADIO OF EARNINGS TO FIXED CHARGES
(in thousands)
<TABLE>
<CAPTION>
Holdings Company Predecessor
Period from Period from Period from Predecessor Pro Forma
March 3 March 3 January 1 Three Months Quarter Ended
through through through Ended March 31, 1998
March 31, March 31, March 2, March 31, -----------------------
1998 1998 1998 1997 Company Holdings
----------- ------------ ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income(loss) before income taxes $ (3,444) $ (1,709) $ 966 $ 11,383 $(10,550) $(16,298)
Fixed charges 5,329 3,594 3,022 6,017 10,837 16,585
Joint venture losses 462 462 244 403 2,180 2,180
-------- -------- -------- -------- -------- --------
Earnings as adjusted (A) $ 2,347 $ 2,347 $ 4,232 $ 17,803 $ 2,467 $ 2,467
======== ======== ======== ======== ======== ========
Fixed Charges:
Interest expense $ 5,270 $ 3,535 $ 2,764 $ 5,718 $ 10,646 $ 16,394
Rent expense 59 59 258 299 191 191
-------- -------- -------- -------- -------- --------
Fixed Charges as adjusted (B) $ 5,329 $ 3,594 $ 3,022 $ 6,017 $ 10,837 $ 16,585
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges
(A) divided by (B) 0.4 0.7 1.4 3.0 0.2 0.1
Deficiency of earnings to fixed charges $ (2,982) $ (1,247) $ 1,210 $ 11,786 $ (8,370) $(14,118)
<CAPTION>
Pro Forma
Year Ended
December 31, 1997
-----------------------
Company Holdings
------- ---------
Earnings:
Net income(loss) before income taxes $(35,184) $(56,900)
Fixed charges 43,959 65,675
Joint venture losses 4,989 4,989
-------- --------
Earnings as adjusted (A) $ 13,764 $ 13,764
======== ========
Fixed Charges:
Interest expense $ 43,112 $ 64,828
Rent expense 847 847
-------- --------
Fixed Charges as adjusted (B) $ 43,959 $ 65,675
======== ========
Ratio of earnings to fixed charges (A) divided by (B) 0.3 0.2
Deficiency of earnings to fixed charges $(30,195) $(51,911)
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
1997 1996 1995 1994 1993
------- -------- ------- -------- --------
Earnings:
Net income(loss) before income taxes $ 78,709 $ 72,937 $ 59,704 $ 50,911 $ 39,370
Fixed charges 22,538 27,826 27,262 14,651 14,278
Joint venture losses 1,532 995 -- -- --
-------- -------- -------- -------- --------
Earnings as adjusted (A) $102,779 $101,758 $ 86,966 $ 65,562 $ 53,648
======== ======== ======== ======== ========
Fixed Charges:
Interest expense $ 21,340 $ 26,582 $ 26,262 $ 13,451 $ 13,678
Rent expense 1,198 1,244 1,000 1,200 600
-------- -------- -------- -------- --------
Fixed Charges as adjusted (B) $ 22,538 $ 27,826 $ 26,262 $ 14,651 $ 14,278
======== ======== ======== ======== ========
Ratio of earnings to fixed charges (A) divided by (B) 4.6 3.7 3.2 4.5 3.8
Deficiency of earnings to fixed charges $ -- $ -- $ -- $ -- $ --
</TABLE>
<PAGE> 1
EXHIBIT 21.1
LIST OF SUBSIDIARIES
Airwaves, Inc.
Indiana Broadcasting, LLC
KXAN, Inc.
KXTX Holdings, Inc.
Linbenco, Inc.
LIN Sports, Inc.
LIN Television of Texas, Inc.
LIN Television of Texas, L.P.
LWWI Broadcasting Inc.
North Texas Broadcasting Corporation
WAND Television, Inc.
WAVY Broadcasting, LLC
WIVB Broadcasting, LLC
WOOD License Co., LLC
WOOD Television, Inc.
WTNH Broadcasting, Inc.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
LIN Television Corporation
We consent to the references to our firm under the captions "Summary
Historical Financial Data," "Selected Consolidated Financial and Operating
Data," "Change In Accountant," and "Experts" and to the use of our reports dated
January 19, 1998, except for Note 2, as to which the date is March 3, 1998 and
dated March 3, 1998, in the Registration Statement (Form S-1 No. 33-00000) and
related Prospectus of LIN Television Corporation dated May 29, 1998.
ERNST & YOUNG LLP
Fort Worth, Texas
May 29, 1998
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Registration Statement on Form S-1 of our
report dated May 22, 1998, on our audit of the consolidated balance sheet of
LIN Holdings Corp. as of December 31, 1997. We also consent to the reference to
our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Dallas, Texas
May 29, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
LIN TELEVISION CORPORATION CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF INCOME.
</LEGEND>
<CIK> 0000931058
<NAME> LIN TELEVISION CORP
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1997 JAN-01-1996 JAN-01-1995
<PERIOD-END> DEC-31-1997 DEC-31-1996 DEC-31-1995
<CASH> 8,046 27,952 18,025
<SECURITIES> 0 0 0
<RECEIVABLES> 59,842 54,626 52,696
<ALLOWANCES> 2,197 1,960 1,964
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 77,472 97,426 86,051
<PP&E> 179,765 175,323 148,180
<DEPRECIATION> 72,172 68,882 52,610
<TOTAL-ASSETS> 569,325 595,944 587,256
<CURRENT-LIABILITIES> 49,208 40,858 52,035
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 299 297 295
<OTHER-SE> 192,266 138,151 86,139
<TOTAL-LIABILITY-AND-EQUITY> 569,325 595,944 587,256
<SALES> 0 0 0
<TOTAL-REVENUES> 291,519 273,367 217,247
<CGS> 0 0 0
<TOTAL-COSTS> 184,064 174,207 132,219
<OTHER-EXPENSES> 8,738 995 320
<LOSS-PROVISION> 971 496 527
<INTEREST-EXPENSE> 21,340 26,582 26,262
<INCOME-PRETAX> 78,709 72,937 59,704
<INCOME-TAX> 30,602 26,476 21,674
<INCOME-CONTINUING> 48,107 46,461 38,030
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 48,107 46,461 38,030
<EPS-PRIMARY> 1.62 1.57 1.29
<EPS-DILUTED> 1.58 1.54 1.28
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED LIN TELEVISION CORPORATION AND PREDECESSOR CONSOLIDATED BALANCE
SHEETS AND STATEMENTS OF INCOME.
</LEGEND>
<CIK> 0000931058
<NAME> LIN TELEVISION CORP.
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 1-MO 2-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998 DEC-31-1997
<PERIOD-START> MAR-03-1998 JAN-01-1998 JAN-01-1997
<PERIOD-END> MAR-31-1998 MAR-02-1998 MAR-31-1997
<CASH> 17,722 16,065 28,493
<SECURITIES> 0 0 0
<RECEIVABLES> 36,836 52,148 49,182
<ALLOWANCES> 2,067 2,296 2,102
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 79,503 94,582 97,315
<PP&E> 124,842 180,600 176,191
<DEPRECIATION> 1,267 74,152 66,086
<TOTAL-ASSETS> 1,790,270 577,338 595,789
<CURRENT-LIABILITIES> 56,596 51,863 46,570
<BONDS> 299,302 0 0
0 0 0
0 0 0
<COMMON> 0 299 298
<OTHER-SE> 741,249 197,871 146,801
<TOTAL-LIABILITY-AND-EQUITY> 1,790,270 577,338 595,789
<SALES> 0 0 0
<TOTAL-REVENUES> 16,211 43,804 61,662
<CGS> 0 0 0
<TOTAL-COSTS> 13,973 31,312 44,545
<OTHER-EXPENSES> 462 8,860 403
<LOSS-PROVISION> 95 131 279
<INTEREST-EXPENSE> 3,535 2,764 5,718
<INCOME-PRETAX> (1,709) 966 11,383
<INCOME-TAX> 2,019 3,710 4,246
<INCOME-CONTINUING> (3,728) (2,744) 7,137
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (3,728) (2,744) 7,137
<EPS-PRIMARY> 0 (0.09) 0.24
<EPS-DILUTED> 0 (0.09) 0.23
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED LIN HOLDINGS CORPORATION CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF
INCOME.
</LEGEND>
<CIK> 0001062707
<NAME> LIN HOLDINGS CORP.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> MAR-31-1998 DEC-31-1997
<CASH> 17,722 0
<SECURITIES> 0 0
<RECEIVABLES> 36,836 0
<ALLOWANCES> 2,067 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 79,503 1
<PP&E> 124,842 0
<DEPRECIATION> 1,267 0
<TOTAL-ASSETS> 1,802,940 1
<CURRENT-LIABILITIES> 55,992 0
<BONDS> 500,561 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 554,894 1
<TOTAL-LIABILITY-AND-EQUITY> 1,802,940 1
<SALES> 0 0
<TOTAL-REVENUES> 16,211 0
<CGS> 0 0
<TOTAL-COSTS> 13,973 0
<OTHER-EXPENSES> 462 0
<LOSS-PROVISION> 95 0
<INTEREST-EXPENSE> 5,270 0
<INCOME-PRETAX> (3,444) 0
<INCOME-TAX> (215) 0
<INCOME-CONTINUING> (3,229) 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (3,229) 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
