<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
----- ------
COMMISSION FILE NUMBER: 0-27000
HEARST-ARGYLE TELEVISION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-2717523
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
888 SEVENTH AVENUE (212) 887-6800
NEW YORK, NY 10106 (Registrant's telephone number,
(Address of principal executive offices) including area code)
-----------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
As of May 11, 1999, the Registrant had 89,147,879 shares of common stock
outstanding. Consisting of 47,849,231 shares of Series A Common Stock,
41,298,648 shares of Series B Common Stock.
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<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Index
<TABLE>
<CAPTION>
Page No.
Part I Financial Information
Item 1. Financial Statements
<S> <C> <C>
Condensed Consolidated Balance Sheets as of December 31, 1998 and March 31, 1999 (unaudited) 1
Condensed Consolidated Statements of Operations for the Three Months Ended
March 31, 1998 and 1999 (unaudited)......................................................... 3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1998 and 1999 (unaudited)......................................................... 4
Notes to Condensed Consolidated Financial Statements........................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....... 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................. 14
Part II Other Information
Item 4. Submission of Matters to a Vote of Security Holders........................................ 15
Item 6. Exhibits and reports on Form 8-K........................................................... 15
Signatures .......................................................................................... 16
</TABLE>
<PAGE>
Part I Financial Information
Item 1. Financial Statements
-----------------------------
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, 1998 March 31, 1999
(Unaudited)
-----------------------------------------------------------------
(In thousands)
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 380,980 $ 6,532
Accounts receivable, net 91,608 122,569
Program and barter rights 35,408 38,671
Deferred income taxes 2,166 5,316
Net assets held for sale - 11,456
Other 5,087 6,695
---------- ----------
Total current assets 515,249 191,239
---------- ----------
Property, plant and equipment, net 129,613 253,498
---------- ----------
Intangible assets, net 711,409 3,368,850
---------- ----------
Other assets:
Deferred acquisition and financing costs,
net 31,302 29,797
Program and barter rights, noncurrent 3,584 9,519
Other 29,983 36,177
---------- ----------
Total other assets 64,869 75,493
---------- ----------
Total assets $1,421,140 $3,889,080
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Balance Sheets (Continued)
<TABLE>
<CAPTION>
December 31, 1998 March 31, 1999
(Unaudited)
------------------------------------------------------------------
<S> <C> <C>
(In thousands)
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,094 $ 6,927
Accrued liabilities 34,432 58,511
Program and barter rights payable 35,411 38,480
Related party payable 12,218 11,672
Other 1,692 1,018
---------- ----------
Total current liabilities 88,847 116,608
---------- ----------
Program and barter rights payable, noncurrent 3,752 10,580
Long-term debt 842,596 1,677,596
Deferred income taxes 158,449 783,031
Other liabilities 3,106 10,579
---------- ----------
Total noncurrent liabilities 1,007,903 2,481,786
---------- ----------
Stockholders' equity:
Series A preferred stock 1 1
Series B preferred stock 1 1
Series A common stock 126 497
Series B common stock 413 413
Additional paid-in capital 203,105 1,170,074
Retained earnings 171,397 173,872
Treasury stock, at cost (50,653) (54,172)
---------- ----------
Total stockholders' equity 324,390 1,290,686
---------- ----------
Total liabilities and stockholders' equity $1,421,140 $3,889,080
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1999
----------------------------------------------------------
(In thousands, except per share data)
<S> <C> <C>
Total revenues $87,252 $113,424
Station operating expenses 42,442 55,902
Amortization of program rights 10,823 12,827
Depreciation and amortization 8,841 16,269
------- --------
Station operating income 25,146 28,426
Corporate general and administrative expenses 3,435 4,017
------- --------
Operating income 21,711 24,409
Interest expense, net 10,960 19,216
------- --------
Income before income taxes and extraordinary item 10,751 5,193
Income taxes 4,916 2,364
------- --------
Income before extraordinary item 5,835 2,829
Extraordinary item, loss on early retirement of debt,
net of income tax benefit of $6,881 in 1998 (9,969) -
------- --------
Net income (loss) (4,134) 2,829
Less preferred stock dividends (356) (356)
------- --------
Income (loss) applicable to common stockholders $(4,490) $ 2,473
======= ========
Income (loss) per common share - basic:
Before extraordinary item $ 0.10 $ 0.04
Extraordinary item (0.19) -
------- --------
Net income (loss) $ (0.09) $ 0.04
======= ========
Number of common shares used in the calculation 53,833 57,419
======= ========
Income (loss) per common share - diluted:
Before extraordinary item $ 0.10 $ 0.04
Extraordinary item (0.18) -
------- --------
Net income (loss) $ (0.08) $ 0.04
======= ========
Number of common shares used in the calculation 54,043 57,528
======= ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1999
-------------------------------------------------------
<S> <C> <C>
(In thousands)
Operating Activities
Net income (loss) $ (4,134) $ 2,829
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Extraordinary item, loss on early retirement of debt 16,850 -
Depreciation 2,827 5,962
Amortization of intangible assets 6,014 10,307
Amortization of deferred financing costs 631 641
Amortization of program rights 10,823 12,827
Program payments (11,123) (12,551)
Provision for doubtful accounts - 220
Fair value adjustments of interest rate protection agreements 546 (321)
Changes in operating assets and liabilities, net 22,744 25,058
--------- -----------
Net cash provided by operating activities 45,178 44,972
--------- -----------
Investing Activities
Acquisition of Pulitzer Broadcasting Company - (710,225)
Acquisition of Kelly Broadcasting Co. and Kelleproductions, Inc. - (527,977)
Acquisition costs (186) -
Purchases of property, plant, and equipment:
Special projects/buildings (1,837) (4,234)
Digital (1,007) (2,085)
Maintenance (2,058) (4,266)
--------- -----------
Net cash used in investing activities (5,088) (1,248,787)
--------- -----------
Financing Activities
Financing costs and other (4,154) (2,262)
Issuance of Senior Notes 200,000 -
Issuance of Private Placement Debt - 110,000
Repayment of Senior Subordinated Notes (116,280) -
Dividends paid on preferred stock (356) (356)
Payment to acquire treasury stock - (3,519)
Proceeds from issuance of long-term debt - 912,000
Payment of long-term debt (85,000) (187,000)
Exercise of stock options - 504
--------- -----------
Net cash (used in) provided by financing activities (5,790) 829,367
--------- -----------
Increase (decrease) in cash and cash equivalents 34,300 (374,448)
Cash and cash equivalents at beginning of period 12,759 380,980
--------- -----------
Cash and cash equivalents at end of period $ 47,059 $ 6,532
========= ===========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Statements of Cash Flows (continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1999
------------------------------------------------------
<S> <C> <C>
(In thousands)
Supplemental Cash Flow Information:
Businesses acquired in purchase transactions:
Pulitzer Merger
Fair market value of assets acquired $2,325,740
Liabilities assumed (648,680)
Issuance of Series A Common Stock (966,835)
----------
Net cash paid for acquisition $ 710,225
==========
Kelly Transaction
Fair market value of assets acquired $ 546,300
Liabilities assumed (18,323)
----------
Net cash paid for acquisition $ 527,977
==========
Cash paid during the period for interest $4,103 $ 8,940
========= ==========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
March 31, 1999
1. Summary of Accounting Policies
General
The condensed consolidated financial statements include the accounts of Hearst-
Argyle Television, Inc. (the "Company") and its wholly-owned subsidiaries. All
significant intercompany accounts have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements do not
include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the three-month period ended March 31,
1998 and 1999 are not necessarily indicative of the results that may be expected
for a full year.
Prior Year Reclassifications
Certain reclassifications have been made to the December 31, 1998 condensed
consolidated balance sheet to conform to the March 31, 1999 presentation.
2. Acquisitions
Effective June 1, 1998, the Company exchanged its WDTN and WNAC stations (the
"Exchanged Stations") with STC for KSBW, the NBC affiliate serving the Monterey
- - Salinas, CA, television market, and WPTZ/WNNE, the NBC affiliates serving the
Plattsburgh, NY - Burlington, VT, television market (the "Acquired Stations")
and cash of approximately $20.5 million (the "STC Swap"), net of a working
capital adjustment which totaled approximately $1.4 million. The STC Swap was
accounted for under the purchase method of accounting and, accordingly, the
purchase consideration and related acquisition costs of approximately $1.6
million have been allocated to the acquired assets and liabilities based upon
their fair market values. The excess of the cash and the Company's carrying
value of the Exchanged Stations over the net fair market value of the tangible
assets acquired and liabilities assumed of the Acquired Stations was allocated
to identifiable intangible assets, including FCC licenses and network
affiliation agreements, and goodwill.
On January 5, 1999, effective January 1, 1999, for accounting purposes, the
Company acquired through a merger transaction all of the partnership interests
in Kelly Broadcasting Co., in exchange for approximately $520 million in cash,
subject to a working capital adjustment (the "Kelly Transaction"). As a result
of the Kelly Transaction, the Company acquired television broadcast station
KCRA-TV, Sacramento, California and the programming rights under an existing
Time Brokerage Agreement, with respect to KQCA-TV, Sacramento, California. In
addition, the Company acquired substantially all of the assets and certain of
the liabilities of Kelleproductions, Inc., for approximately $10 million in
cash. The Kelly Transaction was accounted for under the purchase method of
accounting and, accordingly, the purchase consideration and related acquisition
costs of approximately $0.8 million have been allocated to the acquired assets
and liabilities based upon their preliminarily determined fair market values.
The excess of the cash over the net fair market value of the tangible assets
acquired and liabilities assumed was allocated to FCC licenses and goodwill.
The final fair values may differ from those set forth in the accompanying
condensed consolidated balance sheet at March 31, 1999; however, the changes, if
any, are not expected to have a material effect on the condensed consolidated
financial statements of the Company.
6
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
March 31, 1999
2. Acquisitions (continued)
On March 18, 1999, the Company acquired the nine television and five radio
stations ("Pulitzer Broadcasting Company") of Pulitzer Publishing Company
("Pulitzer") and a 3.5% investment in the Arizona Diamondbacks in a merger
transaction (the "Pulitzer Merger"). In connection with the transaction, the
Company issued 37,096,774 shares of Series A Common Stock (quoted market value
of $26.0625 on March 18, 1999) to Pulitzer shareholders and assumed $700 million
in debt, which was repaid on the acquisition date using the Company's Credit
Facility, and paid $5 million for the investment in the Arizona Diamondbacks. In
addition, the transaction was subject to an adjustment which guaranteed the
Company $41 million in working capital. The Pulitzer Merger was accounted for
under the purchase method of accounting and, accordingly, the purchase
consideration, including acquisition costs, of approximately $1.7 billion have
been allocated to the acquired assets and liabilities based upon their
preliminarily determined fair market values. The excess of the purchase
consideration and acquisition costs over the net fair market value of the
tangible assets acquired and liabilities assumed was allocated to FCC licenses
and goodwill. The final fair values may differ from those set forth in the
accompanying condensed consolidated balance sheet at March 31, 1999; however,
the changes, if any, are not expected to have a material effect on the condensed
consolidated financial statements of the Company.
Giving effect to the STC Swap, the Kelly Transaction and the Pulitzer Merger,
unaudited pro forma results of operations reflecting combined historical results
for the Company's 23 owned television stations, five radio stations and fees for
providing management services to the Company's Managed Stations (WWWB, KCWE,
WPBF, WBAL-AM and WIYY-FM) pursuant to a management agreement (See Note 5), as
if all acquisitions occurred as of January 1, 1998, are as follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1999
---------------------------------------------
(unaudited)
(In thousands, except per share data)
<S> <C> <C>
Total revenues $157,919 $161,549
Loss before extraordinary item $ (2,117) $ (601)
Net loss $(12,086) $ (601)
Loss applicable to common stockholders $(12,442) $ (957)
Loss per common share - basic and diluted:
Loss before extraordinary item $ (0.03) $ (0.01)
Net loss $ (0.14) $ (0.01)
Pro forma number of shares used in calculations - basic and diluted 89,157 89,157
</TABLE>
The above unaudited pro forma results are presented in response to applicable
accounting rules relating to business acquisitions and are not necessarily
indicative of the actual results that would be achieved had each of the stations
been acquired at the beginning of the periods presented, nor are they indicative
of future results of operations.
3. Long-Term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
--------------------------------
(unaudited)
(In thousands)
<S> <C> <C>
Credit Facility dated August 29, 1997:
Revolving Credit Facility $ - $ 725,000
Senior Notes 500,000 500,000
Senior Subordinated Notes 2,596 2,596
Private Placement Debt 340,000 450,000
--------- ----------
Long-term debt $ 842,596 $1,677,596
========= ==========
</TABLE>
7
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
March 31, 1999
3. Long-Term Debt (continued)
Senior Subordinated Notes
During February 1998, the Company repaid $102.4 million of the Senior
Subordinated Notes ("Notes") at a premium of approximately $13.9 million. In
addition, the Company wrote-off the remaining deferred financing fees related to
the Notes. Both the premium paid and the deferred financing fees relating to
the Notes were classified as an extraordinary item in the accompanying condensed
consolidated statement of operations for the three months ended March 31, 1998.
Private Placement Debt
On January 14, 1999, the Company issued $110 million aggregate principal amount
of senior notes to institutional investors. The senior notes have a maturity of
12 years, with an average life of 10 years, and bear interest at 7.18% per
annum. These senior notes along with the $340 million private placement debt
(collectively, the "Private Placement Debt") issued in December 1998 were used
to fund the Kelly Transaction described above.
Interest Rate Risk Management
The Company has two interest-rate protection agreements effectively fixing the
Company's interest rate at approximately 7% on $35 million of its borrowings
under the Credit Facility until June 1999.
Additional information regarding these interest-rate protection agreements in
effect at March 31, 1999 follows:
<TABLE>
<CAPTION>
Average Average Estimated Fair
Notional Amount Receive Rate Pay Rate Value
--------------------------------------------------------------------------------------
Interest-rate swap agreements:
<S> <C> <C> <C> <C>
Fixed rate agreement $20,000,000 LIBOR 7.01% $(100,106)
Fixed rate agreement $15,000,000 LIBOR 6.98% $ (75,761)
</TABLE>
The Company is exposed to credit risk in the event of nonperformance by
counterparties to its interest-rate swap agreements. Credit risk is limited by
entering into such agreements with primary dealers only; therefore, the Company
does not anticipate that nonperformance by counterparties will occur.
Notwithstanding this, the Company's treasury department monitors counterparty
credit ratings at least quarterly through reviewing independent credit agency
reports. Both current and potential exposures are evaluated, as necessary, by
obtaining replacement cost information from alternative dealers. Potential loss
to the Company from credit risk on these agreements is limited to amounts
receivable, if any. The Company enters into these agreements solely to hedge
its interest rate risk.
4. Net Assets Held for Sale
Upon completion of the Pulitzer Merger, the Company owns television stations in
two areas (Baltimore and Lancaster) with overlapping service contours in
violation of the FCC's local ownership rules. The FCC's rules prohibit the
ownership of two stations in the same geographic area whose service contours
overlap. To comply with these rules, the Company is required to divest one
station in the aforementioned areas. Included in the caption Net Assets Held
for Sale on the accompanying condensed consolidated balance sheet as of March
31, 1999, are the net assets of the station located in Lancaster at its carrying
value.
8
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
March 31, 1999
5. Related Party Transactions
The Company recorded revenues of approximately $430,000 and $875,000 relating to
the Management Agreement (whereby the Company provides certain management
services, such as sales, news, programming and financial and accounting
management services, with respect to certain Hearst owned or operated television
and radio stations); and expenses of approximately $574,000 and $765,000
relating to the Services Agreement (whereby Hearst provides the Company certain
administrative services such as accounting, financial, legal, tax, insurance,
data processing and employee benefits), during the three months ended March 31,
1998 and 1999, respectively. The Company believes that the terms of all these
agreements are reasonable to both sides; however, there can be no assurance that
more favorable terms would not be available from third parties.
6. Common Stock
On March 17, 1999, the Company amended and restated its certificate of
incorporation to increase the number of authorized shares of Series A Common
Stock from 100 million to 200 million. This increases the Company's total
authorized shares of common stock to 300 million.
7. Subsequent Events
Credit Facility
On April 12, 1999, the Company retired its existing Revolving Credit Facility
and replaced it with two new revolving credit facilities (the "New Credit
Facilities") with the Chase Manhattan Bank ("Chase"). The New Credit Facilities
of $1 billion (the "$1 Billion Facility") and $250 million (the "$250 Million
Facility") mature on April 12, 2004 and April 12, 2003, respectively. The New
Credit Facilities contain certain financial and other covenants.
Outstanding principal balances under the New Credit Facilities will bear
interest at the "applicable margin" plus either, at the Company's option, LIBOR
or the alternate base rate ("ABR"). The "applicable margin" for ABR loans is
zero. The "applicable margin" for LIBOR loans will vary between 0.75 and 1.25%
depending on the ratio of the Company's total debt to operating cash flow
("leverage ratio"). The ABR is the higher of (i) Chase's prime rate; (ii) 1%
plus the secondary market rate for three month certificates of deposit; or,
(iii) 0.5% plus the rates on overnight federal funds transactions with members
of the Federal Reserve System. The Company will also be required to pay an
annual commitment fee based on the unused portion of the New Credit Facilities.
The applicable margin ranges from 0.2% to 0.3% and from .15% to .25% for the $1
Billion Facility and the $250 Million Facility, respectively.
Stock Purchase Plan
The Company implemented an employee stock purchase plan (the "Stock Purchase
Plan") during April of 1999. The Stock Purchase Plan will allow employees to
purchase shares of the Company's Series A Common Stock through after-tax payroll
deductions. The Company reserved and made available for issuance and purchase
under the Stock Purchase Plan 5,000,000 shares of Series A Common Stock. The
Stock Purchase Plan is intended to comply with the provisions of Section 423 of
the Internal Revenue code of 1986, as amended.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
- --------------
Results of Operations
Effective June 1, 1998, the Company exchanged its WDTN and WNAC stations (the
"Exchanged Stations") with STC for KSBW, the NBC affiliate serving the Monterey
- - Salinas, CA, television market, and WPTZ/WNNE, the NBC affiliates serving the
Plattsburgh, NY-Burlington, VT, television (the "STC Swap"). See Note 2 of the
notes to the condensed consolidated financial statements.
On January 5, 1999, effective January 1, 1999, for accounting purposes, the
Company acquired through a merger transaction all of the partnership interests
in Kelly Broadcasting Co. and substantially all of the assets and certain of the
liabilities of Kelleproductions, Inc. (the "Kelly Transaction"). As a result of
the Kelly Transaction, the Company acquired television broadcast station KCRA-
TV, Sacramento, California and the programming rights under an existing Time
Brokerage Agreement, with respect to KQCA-TV, Sacramento, California. See Note 2
of the notes to the condensed consolidated financial statements.
On March 18, 1999, the Company acquired the nine television and five radio
stations ("Pulitzer Broadcasting Company") of Pulitzer Publishing Company
("Pulitzer") and a 3.5% investment in the Arizona Diamondbacks in a merger
transaction (the "Pulitzer Merger"). In connection with the transaction, the
Company issued 37,096,774 shares of Series A Common Stock to Pulitzer
shareholders and assumed $700 million in debt, which was repaid on the
acquisition date using the Company's Credit Facility, and paid $5 million for
the investment in the Arizona Diamondbacks. See Note 2 of the notes to the
condensed consolidated financial statements.
The following discussion of results of operations does not include the pro forma
effects of the STC Swap, the Kelly Transaction or the Pulitzer Merger.
Results of operations for the three months ended March 31, 1999 include: (i)
WCVB, WTAE, WBAL, WISN, KMBC, WAPT, KITV, KHBS/KHOG, WLWT, KOCO, KSBW,
WPTZ/WNNE, KCRA, KQCA and management fees derived by the Company from the
Managed Stations for the entire period; and, (ii) the Pulitzer Broadcasting
Company stations from March 19 through March 31. Results of operations for the
three months ended March 31, 1998 include: (i) WCVB, WTAE, WBAL, WISN, KMBC,
WAPT, KITV, KHBS/KHOG, WLWT, KOCO, WDTN, the Company's share of the Clear
Channel Venture (WNAC/WPRI) and management fees derived by the Company from the
Managed Stations for the entire period.
Three Months Ended March 31, 1999
Compared to Three Months Ended March 31, 1998
Total revenues. Total revenues in the three months ended March 31, 1999 were
$113.4 million, as compared to $87.3 million in the three months ended March 31,
1998, an increase of $26.1 million or 29.9%. The increase was primarily
attributable to the Kelly Transaction and the Pulitzer Merger, which added $15.9
million and $8.9 million, respectively, to 1999 total revenues.
Station operating expenses. Station operating expenses in the three months
ended March 31, 1999 were $55.9 million, as compared to $42.4 million in the
three months ended March 31, 1998, an increase of $13.5 million or 31.8%. The
increase was primarily attributable to the Kelly Transaction, the Pulitzer
Merger and the net effect of the STC Swap, which added $7.6 million, $3.9
million and $0.8 million to station operating expenses during 1999.
Amortization of program rights. Amortization of program rights in the three
months ended March 31, 1999 was $12.8 million, as compared to $10.8 million in
the three months ended March 31, 1998, an increase of $2 million or 18.5%. The
increase was primarily attributable to the Kelly Transaction and Pulitzer
Merger, which added $2.4 million and $0.3 million, respectively, to amortization
of program rights during 1999. This increase was offset by a decrease in
amortization of program rights of (i) $0.3 million due to the net effect of the
STC Swap and (ii) $0.5 million due to lower cost replacement programming in
several markets.
10
<PAGE>
Depreciation and amortization. Depreciation and amortization of intangible
assets was $16.3 million in the three months ended March 31, 1999, as compared
to $8.8 million in the three months ended March 31, 1998, an increase of $7.5
million or 85.2%. The increase was primarily attributable to the Kelly
Transaction, Pulitzer Merger and the net effect of the STC Swap, which added
$4.2 million, $2.2 million and $0.6 million, respectively, to depreciation and
amortization of intangibles during 1999.
Station operating income. Station operating income in the three months ended
March 31, 1999 was $28.4 million, as compared to $25.1 million in the three
months ended March 31, 1998, an increase of $3.3 million or 13.1%. The increase
in station operating income was attributable to the items discussed above.
Corporate general and administrative expenses. Corporate general and
administrative expenses were $4 million for the three months ended March 31,
1999, as compared to $3.4 million for the three months ended March 31, 1998, an
increase of $0.6 million or 17.6%. The increase was attributable to the
increase in corporate staff because of the Pulitzer Merger and other costs
associated with the Kelly Transaction and the Pulitzer Merger.
Interest expense, net. Interest expense, net was $19.2 million in the three
months ended March 31, 1999, as compared to $11 million in the three months
ended March 31, 1998, an increase of $8.2 million or 74.5%. This increase in
interest expense was primarily attributable to a larger outstanding debt balance
during the first quarter of 1999 than in the first quarter of 1998, which was
the result of the Kelly Transaction and the Pulitzer Merger.
Income taxes. Income tax expense was $2.4 million in the three months ended
March 31, 1999, as compared to $4.9 million in the three months ended March 31,
1998, a decrease of $2.5 million, or 51%. The effective rate was 45.5% for the
three months ended March 31, 1999 as compared to 45.7 % for the three months
ended March 31, 1998. This represents federal and state income taxes as
calculated on the Company's net income before taxes and extraordinary item.
Extraordinary item. The Company recorded an extraordinary item of $10.0 million
net of the related income tax benefit, in 1998. This extraordinary item
resulted from an early repayment of the Company's $102.4 million Senior
Subordinated Notes. The extraordinary item includes the write-off of the
unamortized deferred financing costs associated with the Senior Subordinated
Notes and the payment of a premium for the early repayment.
Net income ( loss). Net income was $2.8 million in the three months ended March
31, 1999, as compared to net loss of $4.1 million in the three months ended
March 31, 1998, an increase of $6.9 million or 168.3%. This increase in net
income was attributable to the items discussed above.
Broadcast Cash Flow. Broadcast cash flow was $45 million in the three months
ended March 31, 1999, as compared to $33.7 million in the three months ended
March 31, 1998, an increase of $11.3 million or 33.5%. The increase was
primarily attributable to the Kelly Transaction and the Pulitzer Merger, which
added $6.4 million and $4.7 million, respectively, to broadcast cash flow during
the 1999 period. Broadcast cash flow margin increased to 39.6% for the three
months ended March 31, 1999 from 38.6% for the three months ended March 31,
1998. Broadcast cash flow is defined as station operating income, plus
depreciation and amortization, plus amortization of program rights, minus
program payments. The Company has included broadcast cash flow data because
management utilizes and believes that such data are commonly used as a measure
of performance among companies in the broadcast industry. Broadcast cash flow
is also frequently used by investors, analysts, valuation firms and lenders as
one of the important determinants of underlying asset value. Broadcast cash
flow should not be considered in isolation or as an alternative to operating
income (as determined in accordance with generally accepted accounting
principles) as an indicator of the entity's operating performance, or to cash
flow from operating activities (as determined in accordance with generally
accepted accounting principles) as a measure of liquidity. This measure is
believed to be, but may not be, comparable to similarly titled measures used by
other companies.
Liquidity and Capital Resources
In connection with the Kelly Transaction, the Company issued $340 million and
$110 million in senior notes ("Private Placement Debt") in December 1998 and
January 1999, respectively. The remainder of the Kelly Transaction purchase
price was funded using a combination of borrowings under the existing Credit
Facility and available cash. See Notes 2 and 3 of the notes to the condensed
consolidated financial statements.
11
<PAGE>
In connection with the Pulitzer Merger, the Company issued 37,096,774 shares of
Series A Common Stock to Pulitzer shareholders, assumed $700 million in debt and
paid $5 million for the investment in the Arizona Diamondbacks. The Company
borrowed approximately $715 million under the Credit Facility to refinance the
assumed debt and pay related transaction expenses. See Note 2 of the notes to
the condensed consolidated financial statements.
On April 12, 1999, the Company retired its existing Revolving Credit Facility
and replaced it with two new revolving credit facilities (the "New Credit
Facilities"). The New Credit Facilities of $1 billion and $250 million with the
Chase Manhattan Bank ("Chase") will mature on April 12, 2004 and April 12, 2003,
respectively. The Company may borrow amounts under the Credit Facility from time
to time for additional acquisitions, capital expenditures and working capital,
subject to the satisfaction of certain conditions on the date of borrowing.
Borrowings related to the Kelly Transaction and the Pulitzer Merger will
increase the Company's interest expense by approximately $80.3 million per year.
Such increase in interest expense will be funded from the increase in cash flow
from operations due to the Kelly Transaction and the Pulitzer Merger.
The Company implemented an employee stock purchase plan (the "Stock Purchase
Plan") during April of 1999. The Stock Purchase Plan will allow employees to
purchase shares of the Company's Series A Common Stock through after-tax payroll
deductions. The Company reserved and made available for issuance and purchase
under the Stock Purchase Plan 5,000,000 shares of Series A Common Stock. The
Stock Purchase Plan is intended to comply with the provisions of Section 423 of
the Internal Revenue code of 1986, as amended.
The Company and The Hearst Corporation ("Hearst") are currently in discussions
regarding a potential issuance to Hearst of $100 million of the Company's Series
A Common Stock. Because any equity issuance to Hearst is subject to market
conditions, the approval of a committee of the Company's independent directors
and a definitive agreement between the Company and Hearst, there can be no
assurance that this or any future equity issuance to Hearst will be completed.
If completed, however, the Company would apply the proceeds of this $100 million
equity issuance to the repayment of a portion of the outstanding balance under
its credit facilities, thereby reducing the Company's overall debt leverage
ratio. The margin over interest rate benchmarks, which determines the interest
rate paid by the Company on outstanding balances under the credit facilities, is
reduced as the Company's debt leverage ration declines through certain leverage
ratio thresholds. Completing this equity issuance and applying the proceeds to
reducing the outstanding balances under the New Credit Facilities, therefore,
could have the effect of accelerating the time when the interest rate paid by
the Company under the New Credit Facilities would be reduced.
Capital expenditures were $22.7 million in 1998 and $10.6 million during the
three-months ended March 31, 1999. The Company invested approximately $4.2
million in special projects/buildings including its new station facility at
WLWT, approximately $2.1 million in digital conversion projects at various
stations and $4.3 million in maintenance projects, during the 1999 period.
The Company anticipates that its primary sources of cash, those being, current
cash balances, operating cash flow and amounts available under the New Credit
Facilities, will be sufficient to finance the operating and working capital
requirements of its stations, the Company's debt service requirements and
anticipated capital expenditures of the Company for both the next 12 months and
the foreseeable future thereafter.
Impact of Inflation
The impact of inflation on the Company's operations has not been significant to
date. There can be no assurance, however, that a high rate of inflation in the
future would not have an adverse impact on the Company's operating results.
Forward-Looking Statements
This report contains certain forward-looking statements concerning the Company's
operations, economic performance and financial condition. These statements are
based upon a number of assumptions and estimates which are inherently subject to
uncertainties and contingencies, many of which are beyond the control of the
Company, and reflect future business decisions which are subject to change.
Some of the assumptions may not materialize and unanticipated events may occur
which can affect the Company's results.
12
<PAGE>
Year 2000 Readiness Disclosure
State Of Readiness
- ------------------
The Company has undertaken various initiatives intended to ensure that its
information assets ("IT Assets") and non-IT Assets with embedded microprocessors
will function properly with respect to dates in the Year 2000 and thereafter.
The Company has implemented a comprehensive plan (the "Plan") including the
following phases: (i) the identification of mission-critical operating systems
and applications and the inventory of all hardware and software at risk of being
date sensitive to Year 2000 related problems (collectively, "Year 2000
problems"); (ii) assessment and evaluation of these systems including
prioritization; (iii) modification, upgrading and replacement of the affected
systems; and, (iv) compliance testing of the systems. The plan's goal is either
to certify systems as Year 2000 compliant or to determine and fund the
correction of the affected systems. To achieve this goal, the Company has
established Year 2000 teams that are responsible for analyzing the Year 2000
impact on operations and for formulating appropriate strategies to overcome and
resolve the Year 2000 problems.
To date, significant progress on each of the four phases of the Plan has been
made. The status of the Plan's completion is as follows:
(i) The Company has identified all mission-critical operating systems. The
inventory phase of the Plan has been completed.
(ii) As of May 4, 1999, the Company has completed approximately 90 % of the
assessment and evaluation phase of the systems inventoried. The Company
expects to complete this phase of the Plan by the end of May 1999. This
phase includes inquiring formally into the Year 2000 readiness of the
Company's third-party vendors, suppliers and service providers to
determine the impact of the Year 2000 on the technology they have
supplied and their plans to address any potential Year 2000 problems. The
Company has received responses from approximately 90% of the companies
identified.
(iii) As of May 4, 1999, the Company has completed approximately 85% of the
phase which entails modification, upgrade and replacement of affected
systems. The Company continues to identify systems that require
remediation and replacement and will schedule the repair or replacement
of non-compliant systems as they are identified. Completion of this phase
which entails modification, upgrade and replacement to affected systems
is expected to occur by the end of the third quarter in 1999.
(iv) As of May 4, 1999, the Company has completed approximately 90% of the
compliance-testing for systems modified, upgraded or replaced. The
compliance testing phase of the Plan is expected to be completed by the
end of the third quarter in 1999.
Year 2000 Costs
- ---------------
The majority of costs associated with the Company's Year 2000 problems have been
and are expected to be for fully depreciated and obsolete systems that were
scheduled for replacement prior to the Year 2000. These replacement systems
were installed to provide users with enhanced capabilities and functionality,
not solely to bring systems into year 2000 compliance. The Company has spent
approximately $2.0 million on these replacement systems. Through March 31, 1999
the Company has spent approximately $0.6 million for systems with accelerated
replacement schedules due to Year 2000 problems and approximately $0.1 million
for remediation of equipment and systems with Year 2000 problems.
The Company expects to spend approximately $2.5 million for scheduled
replacement systems, approximately $0.9 million for systems with accelerated
replacement schedules due to Year 2000 problems and approximately $0.8 million
for remediation of equipment and systems with Year 2000 problems. This estimate
assumes that third-party suppliers have accurately assessed the compliance of
their products and that they will successfully correct the issue in non-
compliant products. Because of the complexity of correcting Year 2000 problems,
actual costs may vary from these estimates.
13
<PAGE>
Contingency Plans
- -----------------
The Company is developing Year 2000 contingency plans. These contingency plans
include specific instructions to enable stations to continue operations should
mission-critical systems become inoperable as a result of Year 2000 related
problems. The framework of the contingency plans have been circulated to all
stations and are being modified by each station to reflect internal procedures.
Various simulated exercises will be conducted to verify the contingency plan's
effectiveness. The contingency plans include performing certain processes, as
well as developing alternative procedures should third party services be
unavailable. The Company believes that due to the pervasive nature of potential
Year 2000 problems, the contingency planning process is an ongoing one that will
require further modification as the Company obtains additional information
regarding (i) the Company's internal systems and equipment during the
remediation and testing phases of its Year 2000 program and (ii) the status of
third-party Year 2000 readiness.
Acquisitions
- ------------
The Company has inquired into the Year 2000 readiness of the Pulitzer and Kelly
Broadcasting stations (See Note 2 of the notes to the condensed consolidated
financial statements). An assessment has been made of the Pulitzer Broadcasting
Company and Kelly Broadcasting systems, and systems potentially affected by Year
2000 problems have been identified. Included are systems which were fully
depreciated, obsolete and scheduled for replacement. The Company expects to
spend approximately $0.6 million for systems whose replacement schedule was
accelerated and approximately $0.2 million for remediation of equipment and
systems with Year 2000 problems. However, because of the complexity of
correcting Year 2000 problems, actual costs may vary from this estimate. The
Company is prepared to fund remediation projects for the Pulitzer Broadcasting
Company and Kelly Broadcasting stations. The evaluation of all systems and
third-party dependencies is ongoing.
Possible Consequences of Year 2000 Problems
- -------------------------------------------
The Company believes that completed and planned modifications and conversions of
its internal systems and equipment will allow it to be Year 2000 compliant.
There can be no assurance, however, that the Company's internal systems or
equipment or those of third parties on which the Company relies will be Year
2000 compliant in a timely manner or that the Company's or third parties
contingency plans will mitigate the effect of any noncompliance. The failure of
the systems or equipment of the Company or third parties (which the Company
believes is the most reasonable likely worst case scenario) could effect the
broadcast of advertisements and programming and could have a material effect on
the Company's business or consolidated financial statements.
New Accounting Pronouncements
In April 1998, the American Institute of Certified Public Accountants ("AICPA")
issued Statement of Position ("SOP") No. 98-5, Reporting on the Costs of Start-
Up Activities ("SOP 98-5"). SOP 98-5 requires that entities expense start-up
costs and organization costs as they are incurred. In March 1998, the AICPA
issued SOP No. 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use ("SOP 98-1"). SOP 98-1 was issued to remedy the
diversity in the approaches to accounting for internal-use software by providing
guidance on expensing versus capitalization of costs, accounting for the costs
incurred in the upgrading and amortization of capitalized software costs. These
statements are effective for fiscal years beginning after December 15, 1998. The
Company's accounting practices are in compliance with these Statements.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"),
which becomes effective for the Company's consolidated financial statements for
the year ending December 31, 2000. SFAS 133 requires that derivative
instruments be measured at fair value and recognized as assets or liabilities in
a company's statement of financial position. Based on the Company's current use
of derivative instruments and hedging activities, the adoption of this statement
will not have a material effect on the Company's consolidated financial
statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- ------------------------------------------------------------------
The Company has long-term debt obligations and interest-rate swap agreements at
March 31, 1999 that are sensitive to changes in interest rates. See Note 3 of
the notes to the condensed consolidated financial statements. There have been no
material changes to the Company's derivative financial instruments for the
quarter ended March 31, 1999.
14
<PAGE>
Part II Other Information
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The Company held a special stockholders meeting on March 17, 1999. Two
proposals were approved by the Company's stockholders. The following chart
indicates the number of votes cast for and against and the number withheld with
respect to the proposal to approve and adopt an Amended and Restated Agreement
and Plan of Merger dated as of May 25, 1998, among Pulitzer Publishing Company,
Pulitzer, Inc. and the Company, and all related transactions and agreements:
Proposal One
------------
For 45,780,584
Against 5,723
Withheld 2,798,081
The following chart indicates the number of votes cast for and against and the
number withheld with respect to the proposal to approve and adopt and amendment
to the Company's Amended and Restated Certificate of Incorporation to increase
the number of authorized shares of the Company's common stock from 200 million
to 300 million shares, 200 million of such shares to be designated Series A
Common Stock, and 100 million of such shares to be designated Series B Common
Stock:
Proposal Two
------------
For 48,425,145
Against 157,301
Withheld 1,942
Item 6. Exhibits and reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
---------
Exhibit No.
- -----------
10.1 Form of 364-Day Credit Agreement, dated as of April 12, 1999, between
Hearst-Argyle Television, Inc., the Lenders Party Thereto, The Chase
Manhattan Bank, Chase Securities Inc., The Bank of Montreal, The Bank of
New York and TD Securities (USA) Inc.
10.2 Form of Five-Year Credit Agreement, dated as of April 12, 1999, between
Hearst-Argyle Television, Inc., the Lenders Party Thereto, The Chase
Manhattan Bank, Chase Securities Inc., The Bank of Montreal, The Bank of
New York and TD Securities (USA) Inc.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
--------------------
On January 20, 1999 the Company filed a Current Report on Form 8-K reporting the
consummation of the acquisition of Kelly Broadcasting Co. pursuant to the
Agreement and Plan of Merger dated as of August 21, 1998, by and among Kelly
Broadcasting Co., J.S. Kelly L.L.C., G.G. Kelly L.L.C. Robert E. Kelly, Kelly
Acquisition Corp.
On February 10, 1999 the Company filed a Current Report on Form 8-K, amending
Form 8-K/A filed on January 26, 1999 and Form 8-K filed on December 16,1998,
replacing the Company's unaudited pro forma combined condensed financial
statements giving effect to the Pulitzer Merger.
On March 26, 1999, the Company filed a Current Report on Form 8-K, reporting the
consummation of the merger with Pulitzer Publishing Company pursuant to the
Amended and Restated Agreement and Plan of Merger, dated as of May 26, 1998, by
and among Pulitzer Publishing Company, Pulitzer Inc. and the Company.
15
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Hearst-Argyle Television, Inc.
------------------------------
Registrant
May 14, 1999 By: /s/ Harry T. Hawks
- --------------------- ------------------------------------------
Date Harry T. Hawks, Senior Vice President and
Chief Financial Officer,
(Principal Financial Officer)
May 14, 1999 By: /s/ Teresa Lopez
- --------------------- ------------------------------------------
Date Teresa Lopez, Vice President and Controller
(Principal Accounting Officer)
16
<PAGE>
EXHIBIT 10.1
================================================================================
FORM OF 364-DAY CREDIT AGREEMENT
dated as of
April 12, 1999
between
HEARST-ARGYLE TELEVISION, INC.
The LENDERS Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent
CHASE SECURITIES INC.,
as Lead Arranger and Book Manager
and
BANK OF MONTREAL,
THE BANK OF NEW YORK
and TD SECURITIES (USA) INC.,
as Co-Arrangers and Documentation Agents
------------
$250,000,000
------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.............................................1
SECTION 1.02. Classification of Loans and Borrowings...................24
SECTION 1.03. Terms Generally..........................................24
SECTION 1.04. Accounting Terms; GAAP...................................24
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments..........................................25
SECTION 2.02. Loans and Borrowings.....................................25
SECTION 2.03. Requests for Borrowings..................................26
SECTION 2.04. Intentionally Omitted....................................27
SECTION 2.05. Intentionally Omitted....................................27
SECTION 2.06. Intentionally Omitted....................................27
SECTION 2.07. Funding of Borrowings....................................27
SECTION 2.08. Interest Elections.......................................27
SECTION 2.09. Termination and Reduction of the Commitments.............29
SECTION 2.10. Repayment of Loans; Evidence of Debt.....................29
SECTION 2.11. Prepayment of Loans......................................30
SECTION 2.12. Fees.....................................................34
SECTION 2.13. Interest.................................................34
SECTION 2.14. Alternate Rate of Interest...............................35
SECTION 2.15. Increased Costs..........................................36
SECTION 2.16. Break Funding Payments...................................37
SECTION 2.17. Taxes....................................................37
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.................................................38
SECTION 2.19. Mitigation Obligations; Replacement of Lenders...........40
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers.....................................41
SECTION 3.02. Authorization; Enforceability............................41
SECTION 3.03. Governmental Approvals; No Conflicts.....................41
SECTION 3.04. Financial Condition; No Material Adverse Change;
Solvency.................................................42
(i)
<PAGE>
SECTION 3.05. Properties...............................................43
SECTION 3.06. Litigation and Environmental Matters.....................43
SECTION 3.07. Compliance with Laws and Agreements......................44
SECTION 3.08. Investment and Holding Company Status....................44
SECTION 3.09. Taxes....................................................44
SECTION 3.10. ERISA....................................................44
SECTION 3.11. Disclosure...............................................45
SECTION 3.12. Use of Credit............................................45
SECTION 3.13. Material Agreements and Liens With Respect to
Indebtedness.............................................45
SECTION 3.14. Capitalization...........................................46
SECTION 3.15. Subsidiaries and Investments.............................46
SECTION 3.16. Station Licenses.........................................46
SECTION 3.17. Proxy Statement..........................................47
SECTION 3.18. Year 2000 Issues.........................................47
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date...........................................48
SECTION 4.02. Each Credit Event........................................49
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements and Other Information...............50
SECTION 5.02. Notices of Material Events...............................52
SECTION 5.03. Existence; Conduct of Business...........................53
SECTION 5.04. Payment of Obligations...................................53
SECTION 5.05. Maintenance of Properties; Insurance.....................53
SECTION 5.06. Books and Records; Inspection Rights.....................53
SECTION 5.07. Compliance with Laws.....................................53
SECTION 5.08. Use of Proceeds..........................................54
SECTION 5.09. Certain Obligations Respecting Subsidiaries..............54
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness.............................................55
SECTION 6.02. Liens....................................................56
SECTION 6.03. Fundamental Changes......................................57
SECTION 6.04. Lines of Business........................................59
SECTION 6.05. Investments..............................................59
SECTION 6.06. Restricted Payments......................................60
SECTION 6.07. Transactions with Affiliates.............................61
(ii)
<PAGE>
SECTION 6.08. Restrictive Agreements...................................62
SECTION 6.09. Modifications of Certain Documents.......................62
SECTION 6.10. Certain Financial Covenants..............................62
ARTICLE VII
EVENTS OF DEFAULT.............................63
ARTICLE VIII
THE ADMINISTRATIVE AGENT..........................66
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices..................................................69
SECTION 9.02. Waivers; Amendments......................................69
SECTION 9.03. Expenses; Indemnity; Damage Waiver.......................70
SECTION 9.04. Successors and Assigns...................................71
SECTION 9.05. Survival.................................................74
SECTION 9.06. Counterparts; Integration; Effectiveness.................74
SECTION 9.07. Severability.............................................75
SECTION 9.08. Right of Setoff..........................................75
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process..................................................75
SECTION 9.10. WAIVER OF JURY TRIAL.....................................76
SECTION 9.11. Headings.................................................76
SECTION 9.12. Treatment of Certain Information; Confidentiality........76
(iii)
<PAGE>
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens with Respect to Indebtedness
SCHEDULE III - Litigation and Environmental Matters
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Station Licenses
SCHEDULE VI - Certain Equity Rights
SCHEDULE VII - Certain Affiliate Transactions
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Opinion of Counsel to the Borrower
EXHIBIT C - Form of Opinion of Special New York Counsel to Chase
(iv)
<PAGE>
364-DAY CREDIT AGREEMENT dated as of April 12, 1999, between
HEARST-ARGYLE TELEVISION, INC., the LENDERS party hereto and THE CHASE MANHATTAN
BANK, as Administrative Agent.
The Borrower has requested that the Lenders extend credit to it in
an aggregate amount up to $250,000,000 for general corporate purposes of the
Borrower and its subsidiaries. The Lenders are willing to extend such credit
upon the terms and conditions hereof and, accordingly, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquisition" means, collectively, the Kelly Acquisition, the
Pulitzer Acquisition and any Subsequent Acquisition.
"Acquisition Related Compensation Expenses" means, with respect to
any Acquisition, (i) severance payments made to terminated employees in
connection with such Acquisition, (ii) stay bonuses paid in connection with such
Acquisition and (iii) costs and fees related to hiring and relocating new
employees in connection with such Acquisition, including payments to employee
search firms.
"Additional Permitted Indebtedness" means Indebtedness of the
Borrower incurred or assumed in accordance with the provisions of Section
6.01(g).
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
364-DAY CREDIT AGREEMENT
<PAGE>
-2-
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum 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%. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" means, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the commitment fees payable hereunder, as
the case may be, the applicable rate per annum set forth below under the caption
"ABR Loans", "Eurodollar Loans" or "Commitment Fee", as the case may be, based
upon the Leverage Ratio as at the last day of the fiscal quarter most recently
ended as to which the Borrower has either delivered financial statements
pursuant to Section 5.01, or (in the case of the fourth fiscal quarter in any
fiscal year) as to which the Borrower has otherwise delivered financial
statements as at the end of and for such fiscal quarter (or, prior to the
delivery of the first of such statements after the Effective Date, upon the
Leverage Ratio set forth in the certificate of a Financial Officer delivered
pursuant to Section 4.01(g)):
================================================================================
Leverage ABR Eurodollar Commitment
Ratio: Loans Loans Fee
- --------------------------------------------------------------------------------
Greater than 5.00x 0.000% 1.250% 0.250%
- --------------------------------------------------------------------------------
Greater than 4.50x
but less than or
equal to 5.00x 0.000% 1.000% 0.200%
- --------------------------------------------------------------------------------
Greater than 4.00x
but less than or
equal to 4.50x 0.000% 0.875% 0.150%
- --------------------------------------------------------------------------------
Less than or equal
to 4.00x 0.000% 0.750% 0.150%
================================================================================
Each change in the "Applicable Margin" based upon any change in the
Leverage Ratio shall become effective for purposes of the accrual of interest
and commitment fees hereunder (including in respect of all then-outstanding
Loans and Commitments) on the date three Business Days after the delivery to the
Administrative Agent of the financial statements of the Borrower and its
Consolidated Subsidiaries for the most recently ended fiscal quarter pursuant to
Section 5.01, and shall remain effective for such purpose until three Business
Days after the next delivery of such financial statements to the Administrative
Agent hereunder, provided that, notwithstanding the foregoing, the Applicable
Margin shall be the highest rates
364-DAY CREDIT AGREEMENT
<PAGE>
-3-
provided for in the above schedule for any period during which either (i) an
Event of Default shall have occurred and be continuing or (ii) the Borrower
shall be in default of its obligation to deliver financial statements for any
fiscal quarter by the times specified in Section 5.01 (but upon the cure or
waiver of any such Event of Default or default, this proviso shall no longer be
applicable until another such Event of Default or default shall occur).
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the aggregate principal amount of the Loans held by the
Lenders or, if no Loans are outstanding, the Commitments most recently in
effect, giving effect to any assignments.
"Applicable Prepayment Percentage" means, at any time, with respect
to any Commitments or Loans hereunder or under the Five Year Credit Agreement,
the following:
(i) with respect to the Five Year Revolving Commitments, the ratio
(expressed as a percentage) of (x) the aggregate principal amount of the
Five Year Revolving Commitments at such time over (y) the sum (such sum
being herein called the "Total Borrower Exposure") of the aggregate
principal amount of the Five Year Revolving Commitments at such time plus
the aggregate principal amount of the Five Year Incremental Facility
Commitments of each Series at such time plus the aggregate principal
amount of the Commitments hereunder at such time (or, after any conversion
of the Loans hereunder into term loans as provided herein, plus the
aggregate principal amount of the Loans hereunder at such time);
(ii) with respect to the Five Year Incremental Facility Commitments
of any Series, the ratio (expressed as a percentage) of (x) the aggregate
principal amount of the Five Year Incremental Facility Commitments of such
Series at such time over (y) the Total Borrower Exposure at such time;
(iii) with respect to the Commitments hereunder, the ratio
(expressed as a percentage) of (x) the aggregate principal amount of the
Commitments hereunder at such time over (y) the Total Borrower Exposure at
such time and
(iv) with respect to the Loans hereunder after any conversion
thereof into term loans as provided herein, the ratio (expressed as a
percentage) of (x) the aggregate principal amount of the Loans hereunder
at such time over the Total Borrower Exposure at such time.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or
364-DAY CREDIT AGREEMENT
<PAGE>
-4-
regulation, it is no longer possible to determine the Assessment Rate as
aforesaid, then the Assessment Rate shall be such annual rate as shall be
determined by the Administrative Agent to be representative of the cost of such
insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of the party or
parties whose consent is required by Section 9.04), and accepted by the
Administrative Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the Commitment Termination Date.
"Available Revolving Credit" means, at any date, the aggregate
unused amount of the Five Year Revolving Commitments (after giving effect to any
pending Borrowings or prepayments as to which notice shall have been given
hereunder) to the extent that (on a pro forma basis) such Five Year Revolving
Commitments could have been utilized through Borrowings hereunder for general
working capital purposes during the period of four fiscal quarters most recently
ended for which financial statements are available hereunder.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Basket Investments" has the meaning assigned to such term in
Section 6.05(h).
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrower" means Hearst-Argyle Television, Inc., a Delaware
corporation.
"Borrowing" means (a) all ABR Loans made, converted or continued on
the same date or (b) all Eurodollar Loans that have the same Interest Period.
For purposes hereof, the date of a Borrowing comprising one or more Loans that
have been converted or continued shall be the effective date of the most recent
conversion or continuation of such Loan or Loans.
"Borrowing Request" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"Broadcast Cash Flow" means, for any period, the sum (determined on
a consolidated basis without duplication in accordance with GAAP) for the
Borrower and its Consolidated Subsidiaries, of EBITDA for such period,
calculated before Corporate Overhead for such period.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall
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also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
"Capital Expenditures" means, for any period, expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) made by the Borrower or any of its Consolidated Subsidiaries to
acquire or construct fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) during such period
computed in accordance with GAAP; provided that any such expenditures made in
connection with any Acquisition shall not constitute Capital Expenditures.
"Capital Lease Obligations" of any Person means 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 the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Casualty Event" means, with respect to any property of the Borrower
or any of its Consolidated Subsidiaries, any casualty or other insured damage
to, or any taking under power of eminent domain or by condemnation or similar
proceeding of, such property for which the Borrower or any of its Consolidated
Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or
other compensation.
"Change of Control" means that (a) an aggregate of at least 35% of
the outstanding shares of capital stock of the Borrower shall cease to be owned
beneficially by (i) Hearst and (ii) all "Permitted Transferees" under and as
defined in the Amended and Restated Certificate of Incorporation of the Borrower
as in effect on the date hereof or (b) Hearst and such "Permitted Transferees",
collectively, shall cease to be able to elect a majority of the members of the
Board of Directors of the Borrower (or such greater number of the members of
such Board of Directors as shall be necessary, under the Certificate of
Incorporation and by-laws of the Borrower, to approve all actions requiring
approval of such Board of Directors assuming full attendance by all members of
such Board of Directors at a meeting thereof).
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority with
which, if the same does not have the force of law, such Lender believes in good
faith that it would be disadvantageous not to comply, in each case made or
issued after the date of this Agreement.
"Chase" means The Chase Manhattan Bank.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
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"Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to make Loans hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The amount of each Lender's Commitment as of the date hereof is
set forth on Schedule I, and (after giving effect to any assignment of any
Commitment permitted under Section 9.04) in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The aggregate original amount of the Lenders' Commitments is $250,000,000.
"Commitment Termination Date" means the date 364 days from the
Effective Date (or, if such date is not a Business Day, the preceding Business
Day)
"Consolidated Net Income" for any period means the net income of the
Borrower and its Consolidated Subsidiaries for such period, determined on a
consolidated basis without duplication in accordance with GAAP, excluding
(a) the proceeds of any life insurance policy,
(b) any gains arising from (i) the sale or other disposition of any
assets (other than current assets) to the extent that the aggregate amount
of the gains during such period exceeds the aggregate amount of the losses
during such period from the sale, abandonment or other disposition of
assets (other than current assets), (ii) any write-up of assets or (iii)
the acquisition of outstanding securities of the Borrower or any
Consolidated Subsidiary,
(c) any amount representing any interest in the undistributed
earnings of any other Person (other than a Consolidated Subsidiary),
(d) any earnings, prior to the date of acquisition, of any Person
acquired in any manner, and any earnings of any Consolidated Subsidiary
prior to its becoming a Consolidated Subsidiary,
(e) any earnings of a successor to or transferee of the assets of
the Borrower prior to its becoming such successor or transferee,
(f) any deferred credit (or amortization of a deferred credit)
arising from the acquisition of any Person, and
(g) any extraordinary gains not covered by clause (b) above.
"Consolidated Net Worth" means, at any date, on a consolidated basis
without duplication for the Borrower and its Consolidated Subsidiaries, (a) the
sum of (i) capital stock taken at par or stated value plus (ii) capital in
excess of par or stated value relating to capital stock plus (iii) retained
earnings (or minus any retained earning deficit) minus (b) the sum of
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treasury stock, capital stock subscribed for and unissued and other
contra-equity accounts, all determined in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary of the Borrower other
than a Designated Subsidiary.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Corporate Overhead" means, for any period, all amounts paid or
incurred by the Borrower and its Consolidated Subsidiaries (determined on a
consolidated basis) during such period in respect of all items of general
corporate overhead and administrative expenses and the like including, without
duplication, (x) all amounts payable by the Borrower or any of its Consolidated
Subsidiaries to any of its Affiliates during such period in respect of items
that would constitute general corporate overhead or administrative expense of
the Borrower if paid or incurred by the Borrower and (y) all Management Fees.
"Debt Service" means, for any period, the sum, for the Borrower and
its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all regularly
scheduled payments or regularly scheduled mandatory prepayments of principal of
any Indebtedness (including the principal component of any payments in respect
of Capital Lease Obligations, but excluding any prepayments of any part of such
Indebtedness made during such period plus (b) all Interest Expense for such
period.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Designated Subsidiary" means any Subsidiary designated as a
"Designated Subsidiary" pursuant to Section 5.09(b).
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule III. The disclosure of information
in any schedule or exhibit to this Agreement shall not constitute an admission
by the Borrower that such information is material for any purpose, including
applicable securities laws.
"Disposition" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by the
Borrower or any of its Consolidated Subsidiaries to any other Person excluding
any sale, assignment, transfer or other disposition of (i) any property sold or
disposed of in the ordinary course of business and on ordinary business terms,
(ii) any Investment permitted under Section 6.05(f) and (iii) television
broadcast station WGAL-TV in Lancaster, Pennsylvania. The term "Disposition"
shall include the entering into by the Borrower or any of its Consolidated
Subsidiaries of any LMA Arrangement that in
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economic effect is functionally equivalent to the sale of a Station (without
limiting the obligation of the Borrower and its Consolidated Subsidiaries to
first obtain the consent of the Required Lenders to such LMA Arrangement
pursuant to Section 9.02, if required hereunder).
"Disposition Investment" means, with respect to any Disposition, any
promissory notes or other evidences of indebtedness or Investments received by
the Borrower or any of its Consolidated Subsidiaries in connection with such
Disposition.
"Dividend Payment" means dividends (in cash, property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Borrower or of any warrants, options or other rights to
acquire the same (or, other than in respect of employee compensation
arrangements entered into in the ordinary course of business, to make any
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market or equity value of the
Borrower or any of its Subsidiaries), but excluding dividends payable solely in
shares of common stock of the Borrower.
"dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" means, for any period, the sum, determined without
duplication, for the Borrower and its Consolidated Subsidiaries, of (a) net
revenue (defined as gross operating revenue, including network compensation and
production revenues, plus rental income minus the sum of barter and trade
revenue, agency and advertising commissions and sales representative fees) minus
(b) operating expenses (determined as provided in the next sentence) minus (c)
Film Cash Payments minus (d) Corporate Overhead. In calculating "EBITDA":
(i) "operating expenses" shall be determined exclusive of barter and
trade expenses, depreciation and amortization (including amortization in
respect of Film Obligations and barter expenses), Interest Expense, any
non-cash charges (including non-cash pension expenses and any write-offs
of programming rights), Acquisition Related Compensation Expenses, LMA
Purchase Price Payments, income taxes accrued for the relevant period, and
any Capital Expenditures, and "net revenue" and "operating expenses" shall
both be determined exclusive of (x) any payments made or received under
Hedging Agreements, (y) extraordinary and non-recurring gains or losses,
and any gains or losses from the sale of assets and (z) any non-cash stock
option expense or non-cash stock option gain in respect of options for the
capital stock of the Borrower issued to any of its or its Subsidiaries'
officers, directors or employees;
(ii) performance bonuses shall be treated as an "operating expense"
only in the period in which such bonuses are paid, whether or not such
bonuses are accrued during or in respect of such period;
(iii) for all purposes of this Agreement (other than for purposes of
EBITDA as used in the definition of Excess Cash Flow), any Film Cash
Payment to the extent
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consisting of an up-front payment made with respect to a Film Obligation
incurred during such period, shall not be deducted in determining EBITDA
for such period but shall instead (x) in the event such contract has a
term of twelve months or less, be amortized over the term of such contract
and (y) in the event such contract has a term of more than twelve months,
be amortized over the term of such contract (or, if shorter, the pay
period of such contract), and in the case of both (x) and (y), only the
portion of such Film Cash Payment so amortized during such period shall be
deducted in determining EBITDA for such period;
(iv) if during any period for which EBITDA is being determined the
Borrower or any Consolidated Subsidiary shall have acquired any new
Station or Stations, then, for all purposes of this Agreement (other than
for purposes of the definition of Excess Cash Flow, for which purpose
actual EBITDA for the relevant period shall be used), EBITDA shall be
determined on a pro forma basis for such period as if the relevant
Acquisition had been made or consummated on the first day of such period;
and
(v) in determining the components of EBITDA attributable to any
Subsidiary that is not a Wholly Owned Subsidiary, appropriate adjustments
shall be made to exclude the effect of the portion of such components
attributable to minority interests in such Subsidiaries.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Issuance" means (a) any issuance or sale by the Borrower
after the Effective Date of (i) any of its capital stock, (ii) any warrants or
options exercisable in respect of its capital stock (other than any warrants or
options issued to directors, officers or employees of the Borrower or any of its
Consolidated Subsidiaries, pursuant to employee benefit plans established in the
ordinary course of business and any capital stock of the Borrower issued upon
the exercise of such warrants or options) or (iii) any other security or
instrument representing an
364-DAY CREDIT AGREEMENT
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equity interest (or the right to obtain any equity interest) in the Borrower or
(b) the receipt by the Borrower whether directly (or indirectly through one or
more of its Consolidated Subsidiaries) after the Effective Date of any capital
contribution (whether or not evidenced by any equity security issued by the
Borrower).
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any stockholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or of a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excess Cash Flow" means, for any period, the sum, determined
without duplication, for the Borrower and its Consolidated Subsidiaries, of (a)
EBITDA for such period minus (b) Fixed Charges for such period plus (c) cash
receipts during such period in respect of
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any extraordinary or non-recurring gains to the extent not required pursuant to
Section 2.11(b)(ii) to be applied to the reduction of Commitments hereunder or
the Five Year Commitments, or to the prepayment of the Loans or the Five Year
Loans or to provide cover for Five Year LC Exposure (or minus cash payments
during such period in respect of any extraordinary or non-recurring losses)
minus (d) Acquisition Related Compensation Expenses for such period.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
or is attributable to such Foreign Lender's failure or inability to comply with
Section 2.17(e), except to the extent that such Foreign Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such withholding tax pursuant to Section 2.17(a).
"Existing Credit Agreement" means the Credit Agreement dated as of
August 29, 1997 between Argyle Television, Inc. (predecessor in interest to the
Borrower, "Argyle"), each of the subsidiaries of Argyle named therein, the
lenders named therein and Chase as administrative agent for said lenders (as
amended, modified and supplemented and in effect on the Effective Date).
"Existing Senior Debt" means, collectively, the Private Placement
Debt, Indebtedness evidenced by the Senior Notes and the Indebtedness evidenced
by the Senior Debentures.
"FCC" means the Federal Communications Commission or any
governmental authority substituted therefor.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Film Cash Payments" means, for any period, the sum (determined on a
consolidated basis and without duplication in accordance with GAAP) of all
payments by the
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Borrower and its Consolidated Subsidiaries made or scheduled to be made during
such period in respect of Film Obligations.
"Film Obligations" means 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 the
Borrower and its Consolidated Subsidiaries.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Five Year Commitment" means the commitment of each lender party to
the Five Year Credit Agreement to make loans thereunder.
"Five Year Credit Agreement" means the Five Year Credit Agreement
dated as of April 12, 1999 between the Borrower, the lenders party thereto and
Chase, as administrative agent for said lenders.
"Five Year Incremental Facility Commitment" of any Series means the
commitment of each lender party to the Five Year Credit Agreement to make
Incremental Facility Loans thereunder.
"Five Year Incremental Facility Loans" means the loans provided for
by Section 2.01(b) of the Five Year Credit Agreement.
"Five Year LC Exposure" has the meaning assigned to the term "LC
Exposure" in the Five Year Credit Agreement.
"Five Year Loans" means the loans made pursuant to the Five Year
Credit Agreement.
"Five Year Revolving Commitment" means the commitment of each lender
party to the Five Year Credit Agreement to make revolving loans and to acquire
participations in Letters of Credit and Swingline Loans under and as defined in
the Five Year Credit Agreement.
"Five Year Revolving Exposure" has the meaning assigned to the term
"Revolving Exposure" in the Five Year Credit Agreement.
"Five Year Swingline Exposure" has the meaning assigned to the term
"Swingline Exposure" in the Five Year Credit Agreement.
"Five Year Swingline Loan" means a loan made pursuant to Section
2.05 of the Five Year Credit Agreement.
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"Fixed Charges" means, for any period, the sum, for the Borrower and
its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) the aggregate amount of Debt Service for such period, plus
(b) the aggregate amount of taxes (excluding deferred taxes) paid or
payable in respect of the income or profit of the Borrower and its
Subsidiaries for such period, plus
(c) the aggregate amount of all Capital Expenditures made during
such period (such aggregate amount of Capital Expenditures to be deemed to
be equal to the lesser of (x) actual Capital Expenditures for such period
and (y) $15,000,000, provided that the amount of actual Capital
Expenditures in excess of $15,000,000 in such period, shall not be
excluded from the calculation of "Fixed Charges" unless and to the extent
that, at the time of calculation, the Borrower has Available Revolving
Credit), plus
(d) commitment fees and letter of credit fees paid during such
period pursuant to this Agreement, plus
(e) Dividend Payments and Management Fees paid in cash during such
period.
In calculating "Fixed Charges" for any period, if any portion of such period
shall occur prior to an Acquisition of any Station, Fixed Charges shall be
calculated as if such Station had been acquired by the Borrower and its
Consolidated Subsidiaries at the beginning of such period.
"Fixed Charges Ratio" means, as at any date, the ratio of (a) EBITDA
for the period of four consecutive fiscal quarters ending on or most recently
ended prior to such date to (b) Fixed Charges for such period.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Fort Smith Preferred Stock" means, collectively, shares of Series A
Preferred Stock of the Borrower (in an aggregate face amount up to but not
exceeding $12,500,000) and shares of Series B Preferred Stock of the Borrower
(in an aggregate face amount up to but not exceeding $12,500,000).
"GAAP" means, subject to the terms of Section 1.04 hereof, generally
accepted accounting principles in the United States of America.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising
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executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" means a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including causing a bank or other financial institution to issue a letter of
credit or other similar instrument for the benefit of another Person, but
excluding (i) endorsements for collection or deposit in the ordinary course of
business and (ii) typical and customary indemnification obligations, and
representations and warranties, made in connection with the purchase or sale of
property or the issuance of securities. The terms "Guarantee" and "Guaranteed"
used as a verb shall have a correlative meaning.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hearst" means The Hearst Corporation, a Delaware corporation.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement,
equity derivative or other interest or currency exchange rate or commodity price
hedging arrangement.
"Indebtedness" means, for any Person, the sum (determined on a
consolidated basis without duplication in accordance with GAAP), of the
following: (a) obligations created, issued or incurred by such Person for
borrowed money (whether by loan, the issuance and sale of debt securities or the
sale of Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other than for borrowed
money) arising, and accrued expenses incurred, in the ordinary course of
business so long as such trade accounts payable are payable within 90 days of
the date the respective goods are delivered or the respective services are
rendered; (c) Indebtedness of others secured by a Lien on the Property of such
Person, whether or not the respective indebtedness so secured has been assumed
by such Person; (d) obligations of such Person in respect of letters of credit
or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of such
Person; and (f) Indebtedness of others Guaranteed by such Person; provided that,
such term shall not in any event include (v) contingent consideration payable in
connection with an Acquisition where, as of the date of determination, the
contingency requiring payment of
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such consideration is unlikely to occur (except that in any event any such
contingent consideration required to be carried as a liability on a balance
sheet of the Borrower and its Subsidiaries, or required to be disclosed in a
footnote to such balance sheet, shall constitute Indebtedness), (w) obligations
under Hedging Agreements, (x) Film Obligations, (y) obligations in respect of
letters of credit or surety bonds issued in connection with fiduciary or
fidelity obligations of or with respect to such Person in the ordinary course of
business or (z) obligations in respect of shares of Fort Smith Preferred Stock.
The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated March, 1999, prepared in connection with the syndication to the
Lenders of the Commitments under this Agreement.
"Interest Coverage Ratio" means, as at any date of determination
thereof, the ratio of (a) EBITDA for the period of four fiscal quarters ending
on or most recently ended prior to such date to (b) Interest Expense for such
period.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.08.
"Interest Expense" means, for any period, the sum, for the Borrower
and its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including the interest component of any payments in
respect of Capital Lease Obligations but excluding any capitalized financing
fees) accrued or capitalized during such period (whether or not actually paid
during such period) plus (b) the net amount payable (or minus the net amount
receivable) under Hedging Agreements during such period (whether or not actually
paid or received during such period).
Notwithstanding the foregoing provisions of this definition,
"Interest Expense" for any period shall not include any dividends paid in
respect of the Fort Smith Preferred Stock during such period.
"Interest Payment Date" means (a) with respect to any ABR Loan, each
Quarterly Date and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Eurodollar Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day prior to the last
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day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means for any Eurodollar Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, three or six months (or, with the consent
of each Lender participating in such Loan, nine months) thereafter, as specified
in the applicable Borrowing Request or Interest Election Request; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day, (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period and (iii) no Interest Period may
end after the Maturity Date. For purposes hereof, the date of a Loan initially
shall be the date on which such Loan is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Loan.
"Investment" means, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person), but excluding any such advance, loan or extension of credit having
a term not exceeding 90 days arising in connection with the sale of programming
or advertising time by such Person in the ordinary course of business; (c) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person; or (d) the entering into of any Hedging Agreement.
"Kelly Acquisition" means the acquisition of all the partnership
interests of Kelly Broadcasting Co. pursuant to an Agreement and Plan of Merger
dated as of August 21, 1998 among Kelly Broadcasting Co., J.S. Kelly L.L.C.,
G.G. Kelly L.L.C., Robert E. Kelly, the Borrower and Kelly Acquisition Corp.
"Lenders" means the Persons listed on Schedule I and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Leverage Ratio" means, at any date, the ratio of (a) the sum, for
the Borrower and its Consolidated Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP) of the aggregate amount of
all Indebtedness as at such date to (b)
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EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior at such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Screen of
Bridge Information Services (or on any successor or substitute page of such
Screen, or any successor to or substitute for such Screen, providing rate
quotations comparable to those currently provided on such page of such Screen,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the LIBO Rate with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LMA Arrangement" means, with respect to any Person that owns any
television broadcasting station, (i) any so-called "local marketing agreements"
or any other arrangements with any other television broadcasting station (other
than with the Borrower or another Consolidated Subsidiary with respect to one of
the Stations) whereby the parties agree to function cooperatively in terms of
programming, advertising, sales, management, consulting or similar services; or
(ii) any so-called "time brokerage agreements" or any other agreements or
arrangements under which any Station shall (A) sell broadcast time to any other
television broadcasting station (other than to any other Station) which programs
such broadcast time and sells its own commercial advertising announcements
during such broadcast time or (B) purchase broadcast time on any other
television broadcasting station (other than on any other Station) for the
purpose of programming such broadcast time and selling its commercial
advertisements during such time.
"LMA Purchase Price Payments" means any payment under an LMA
Arrangement that constitutes an Acquisition to the extent such payment
constitutes all or a portion of the purchase or acquisition price (whether or
not deferred) of the assets or the air time or both of the television station
subject to such LMA Arrangement.
"Loan Documents" means, collectively, this Agreement and any
promissory notes executed and delivered by the Borrower pursuant hereto.
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"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Management Fees" means, for any period, any amounts paid or
incurred by the Borrower or any of its Consolidated Subsidiaries to any of its
Affiliates (excluding to the Borrower and its Consolidated Subsidiaries) on
account of fees, salaries, administrative expenses and other compensation
(including on account of any regular, special or accrued bonuses), provided that
"Management Fees" for any period shall not include any non-cash stock option
expense (or be reduced by any non-cash stock option gain) in respect of options
for the capital stock of the Borrower issued to any of its or its Subsidiaries'
officers, directors or employees.
"Margin Stock" means "margin stock" within the meaning of
Regulations T, U and X.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property, operations, prospects or condition (financial or
otherwise) of the Borrower and its Consolidated Subsidiaries taken as a whole
(excluding adverse changes to prospects as a result of changes affecting the
television broadcasting industry generally), (b) the ability of the Borrower to
perform any of its obligations under this Agreement or any of the other Loan
Documents or (c) the rights of or benefits available to the Lenders under this
Agreement or any of the other Loan Documents.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and its Consolidated Subsidiaries in an
aggregate principal amount exceeding $15,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of any Person
in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Person would be
required to pay if such Hedging Agreement were terminated at such time.
"Maturity Date" means, the date falling on the fourth anniversary of
the Effective Date (or, if such date is not a Business Day, on the next
succeeding Business Day).
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means:
(a) in the case of any Casualty Event, the aggregate amount of cash
proceeds of insurance, condemnation awards and other compensation received
by the Borrower and its Consolidated Subsidiaries in respect of such
Casualty Event net of (i) reasonable expenses incurred by the Borrower and
its Consolidated Subsidiaries in connection therewith and (ii)
contractually required repayments of Indebtedness to the extent secured
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by a Lien on such property and any income and transfer taxes payable by
the Borrower or any of its Consolidated Subsidiaries in respect of such
Casualty Event; and
(b) in the case of any Disposition, the aggregate amount of all cash
payments received by the Borrower and its Consolidated Subsidiaries
directly or indirectly in connection with such Disposition, whether at the
time of such Disposition or after such Disposition under deferred payment
arrangements or Investments entered into or received in connection with
such Disposition (including Disposition Investments); provided that
(i) Net Cash Proceeds shall be net of (A) the amount of any
legal, title, transfer, accounting and recording tax expenses,
commissions and other fees and expenses payable by the Borrower and
its Consolidated Subsidiaries in connection with such Disposition
and (B) any Federal, state and local income or other taxes estimated
to be payable by the Borrower and its Consolidated Subsidiaries as a
result of such Disposition, but only to the extent that such
estimated taxes are in fact paid to the relevant Federal, state or
local governmental authority within fifteen months of the date of
such Disposition; and
(ii) Net Cash Proceeds shall be net of any repayments by the
Borrower or any of its Consolidated Subsidiaries of Indebtedness to
the extent that (A) such Indebtedness is secured by a Lien on the
property that is the subject of such Disposition and (B) the
transferee of (or holder of a Lien on) such property requires that
such Indebtedness be repaid as a condition to the purchase of such
property.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.04;
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(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, tenders, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and either (i) having, at such date of
acquisition, the highest credit rating obtainable from Standard & Poor's
Ratings Group or from Moody's Investors Services, Inc. or (ii) issued by
any Lender or any Lender's holding company;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 270 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, either (i) any domestic office of any
commercial bank organized under the laws of the United States of America
or any State thereof (or organized under the laws of any other
jurisdiction if such bank has a long-term senior debt rating of A or
better) which has a combined capital and surplus and undivided profits of
not less than $500,000,000 or (ii) any Lender or any Lender's holding
company;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) of this
definition and entered into with a financial institution satisfying the
criteria described in clause (c) of this definition; and
(e) interest in any money market mutual fund offered by any Lender
or any Lender's holding company registered under the Investment Company
Act of 1940, as amended, the portfolio of which is limited primarily to
obligations described in the
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foregoing clauses (a), (b), (c) and (d) so long as such fund has total
assets of at least $1,000,000,000 and is rated AAAm-G or better or AAA or
better by Standard & Poor's Ratings Group or Moody's Investors Services,
Inc., respectively.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means 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; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Private Placement Debt" means the Indebtedness of the Borrower in
respect of its 7.18% Senior Notes due 2010, in an aggregate original principal
amount of $450,000,000, which Notes were issued by the Borrower pursuant to the
several separate Note Purchase Agreements, each dated as of December 1, 1998,
between the Borrower and the "Purchasers" referred to therein.
"Private Placement Debt Documents" means, collectively, the Senior
Notes evidencing the Private Placement Debt and the several separate Note
Purchase Agreements pursuant to which the Private Placement Debt was issued.
"Proxy Statement" means the Joint Proxy Statement of Hearst-Argyle
Television, Inc. and Pulitzer Publishing Company dated February 11, 1999.
"Pulitzer Acquisition" means the acquisition of the broadcasting
assets and related properties of Pulitzer Publishing Company pursuant to an
Amended and Restated Agreement and Plan of Merger dated as of May 25, 1998 among
Pulitzer Publishing Company, Pulitzer, Inc. and the Borrower.
"Quarterly Dates" means the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date hereof.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
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"Required Lenders" means, at any time, Lenders having Loans and
unused Commitments representing more than 50% of the sum of the total Loans and
unused Commitments at such time.
"Restricted Debt Payment" means any purchase, redemption, retirement
or acquisition for value, or the setting apart of any money for a sinking,
defeasance or other analogous fund for the purchase, redemption, retirement or
other acquisition of, or any voluntary payment or prepayment of the principal of
or interest on, or any other amount owing in respect of, the Existing Senior
Debt or any Additional Permitted Indebtedness, provided that the term
"Restricted Debt Payment" shall not include regularly scheduled payments of
principal or interest in respect of the Existing Senior Debt or Additional
Permitted Indebtedness to the extent required pursuant to the instruments
evidencing such Existing Senior Debt or Additional Permitted Indebtedness.
"Restricted Payments" means, collectively, any Dividend Payment and
any Restricted Debt Payment.
"Senior Debentures" means the Borrower's 7.50% Senior Debentures Due
2027.
"Senior Debenture Indenture" means the Indenture dated as of
November 13, 1997, as amended by the First Supplemental Indenture dated November
13, 1997, between the Borrower and Bank of Montreal Trust Company, as trustee,
pursuant to which the Senior Debentures have been issued.
"Senior Notes" means the Borrower's 7.00% Senior Notes Due 2007 and
the Borrower's 7.00% Senior Notes Due 2018.
"Senior Notes Indentures" means, collectively, the Indenture dated
as of November 13, 1997 between the Borrower and Bank of Montreal Trust Company,
as trustee, pursuant to which the Borrower's Senior Notes Due 2007 have been
issued and (b) the Second Supplemental Indenture dated as of January 13, 1998
between the Borrower and Bank of Montreal Trust Company, as trustee, pursuant to
which the Borrower's Senior Notes Due 2018 have been issued.
"Series" has the meaning set forth in Section 2.01(b) of the Five
Year Credit Agreement.
"Station Licenses" means all authorizations, licenses or permits
issued by the FCC and granted or assigned to the Borrower or any Consolidated
Subsidiary thereof, or under which the Borrower or any Consolidated Subsidiary
thereof has the right to operate any Station, together with any extensions or
renewals thereof.
"Stations" means the television broadcasting stations from time to
time owned by the Borrower or any of its Consolidated Subsidiaries.
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"Statutory Reserve Rate" means, for any day, a fraction (expressed
as a decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and in effect on such day to which the
Administrative Agent is subject (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage. The Statutory Reserve Rate as of the date hereof is zero.
"Subsequent Acquisition" shall have the meaning assigned to such
term in Section 6.03(c)(iv).
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent. Unless otherwise
specified, "Subsidiary" means a subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, 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 is not 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 is not 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 is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
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"Transactions" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans and the use of the proceeds
thereof.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Wholly Owned Subsidiary" means, with respect to any Person, any
corporation, partnership or other entity of which all of the equity securities,
Equity Rights or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans and Borrowings may be classified and referred to by
Type (e.g., a "Eurodollar Loan" or "Eurodollar Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with, or derived by reference to, GAAP, as in effect
from time to time; provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or
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in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith. References in this Agreement to the determination of items
"in accordance with GAAP" means that such items shall be derived by reference
to, and with the relevant components of such items being determined in
accordance with, GAAP even though (as is the case with terms such as "pro
forma", "Broadcast Cash Flow" and "Film Cash Payments") such terms may not have
a meaning under GAAP.
To enable the ready and consistent determination of compliance with
the covenants set forth in Article VI, the Borrower will not change the last day
of its fiscal year from December 31 of each year, or the last days of the first
three fiscal quarters in each of its fiscal years from March 31, June 30 and
September 30 of each year, respectively.
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in the aggregate outstanding principal amount of such Lender's Loans
exceeding such Lender's Commitment. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Loans. At the Borrower's option, by notice to the Administrative Agent
at least three Business Days (but not earlier than 30 days) prior to the
Commitment Termination Date, and so long as no Default shall have occurred and
be continuing, the Loans may be converted on the Commitment Termination Date
into term loans which shall be due and payable in full on the Maturity Date with
interest payable on each Interest Payment Date.
SECTION 2.02. Loans and Borrowings.
(a) Obligation of Lenders. Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Type of Loans. Subject to Sections 2.05 and 2.14, each Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement, except that if the designation of any such foreign
branch or Affiliate shall result in any costs, reductions or taxes which would
not otherwise have
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been applicable, such Lender shall not be entitled to compensation for such
costs, reductions or taxes unless it shall in good faith have determined such
designation to be necessary or advisable to avoid any material disadvantage to
it.
(c) Minimum Amounts. At the commencement of each Interest Period for
any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount of
$5,000,000 or a larger multiple of $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount equal to
$1,000,000 or a larger multiple of $1,000,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments. Borrowings of more than one Type may be outstanding at the
same time; provided that there shall not at any time be more than a total of 12
Eurodollar Borrowings outstanding.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one
Business Day before the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
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SECTION 2.04. Intentionally Omitted.
SECTION 2.05. Intentionally Omitted.
SECTION 2.06. Intentionally Omitted.
SECTION 2.07. Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request.
(b) Presumption by Administrative Agent. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.08. Interest Elections.
(a) Elections by Borrower. Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) Notice of Elections. To make an election pursuant to this
Section, the Borrower shall notify the Administrative Agent of such election by
telephone by the time that a
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Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Information in Election Notices. Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) of this paragraph shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Notice by Administrative Agent to Lenders. Promptly following
receipt of an Interest Election Request, the Administrative Agent shall advise
each relevant Lender of the details thereof and of such Lender's portion of each
resulting Borrowing.
(e) Presumptions if no Notice. If the Borrower fails to deliver a
timely Interest Election Request with respect to a Eurodollar Borrowing prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto.
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SECTION 2.09. Termination and Reduction of the Commitments.
(a) Scheduled Termination. Unless previously terminated, the
Commitments shall terminate at the close of business on the Commitment
Termination Date.
(b) Voluntary Termination or Reduction. The Borrower may at any time
terminate, or from time to time reduce, the Commitments; provided that (i) each
reduction of the Commitments pursuant to this Section shall be in an amount that
is $5,000,000 or a larger multiple of $1,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of Loans in accordance with Section 2.11, the total Loans would
exceed the total Commitments.
(c) Notice of Termination or Reduction. The Borrower shall notify
the Administrative Agent of any election to terminate or reduce the Commitments
under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Commitments delivered by the
Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.
(d) Effect of Termination or Reduction. Any termination or reduction
of the Commitments shall be permanent. Each reduction of the Commitments shall
be made ratably among the Lenders in accordance with their respective
Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to pay
to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Loan of such Lender outstanding on the close of
business on the Commitment Termination Date, or, if the Borrower elects to
convert the Loans into term loans as provided in Section 2.01, on the Maturity
Date.
(b) Manner of Repayment. Prior to any repayment of any Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be paid and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of
such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such payment; provided that each payment of
Borrowings shall be applied to pay any outstanding ABR Borrowings before any
other Borrowings. If the Borrower fails to make a timely selection of the
Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied,
first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in
the order of the remaining duration of their respective Interest Periods (the
Borrowing with the shortest remaining Interest Period to be paid first). Each
payment of a Borrowing shall be applied ratably to the Loans included in such
Borrowing.
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(c) Maintenance of Loan Accounts by Lenders. Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(d) Maintenance of Loan Accounts by Administrative Agent. The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder and Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender's share thereof.
(e) Effect of Loan Accounts. The entries made in the accounts
maintained pursuant to paragraph (c) or (d) of this Section 2.10 shall be prima
facie evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.
(f) Promissory Notes. Any Lender may request that Loans made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.11. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with paragraph (e) of this Section 2.11; provided
that any prepayments made pursuant to this paragraph (a) in respect of (x) ABR
Loans shall be in an aggregate amount of $5,000,000 or a larger multiple of
$1,000,000 and (y) Eurodollar Loans shall be in an aggregate amount of
$10,000,000 or a larger multiple of $1,000,000.
(b) Mandatory Prepayments -- Casualty Events and Sales of Assets.
The Borrower shall make prepayments of the Loans (and reduce the Commitments)
hereunder as follows:
(i) Casualty Events. Upon the date twelve months following the
receipt by the Borrower or any of its Consolidated Subsidiaries of the
proceeds of insurance, condemnation award or other compensation in respect
of any Casualty Event affecting
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any property of the Borrower or any of its Consolidated Subsidiaries (or
upon such earlier date as the Borrower or such Consolidated Subsidiary, as
the case may be, shall have determined not to repair or replace the
property affected by such Casualty Event), the Borrower shall prepay the
Loans, and the Commitments shall be subject to automatic reduction, in an
aggregate amount, if any, equal to 100% of the Net Cash Proceeds of such
Casualty Event not theretofore applied to the repair or replacement of
such property, such prepayment and reduction to be effected in each case
in the manner and to the extent specified in clause (iii) of this Section
2.11(b).
(ii) Sale of Assets. Without limiting the obligation of the Borrower
to obtain the consent of the Required Lenders to any Disposition not
otherwise permitted hereunder, the Borrower agrees, on or prior to the
occurrence of any Disposition, to deliver to the Administrative Agent a
statement certified by a Financial Officer, in form and detail reasonably
satisfactory to the Administrative Agent, of the estimated amount of the
Net Cash Proceeds of such Disposition that will (on the date of such
Disposition) be received by the Borrower or any of its Consolidated
Subsidiaries in cash and, unless the Borrower shall elect to reinvest such
Net Cash Proceeds as provided below, the Borrower will prepay the Loans
hereunder, and the Commitments hereunder shall be subject to automatic
reduction, as follows:
(x) upon the date of such Disposition, in an aggregate amount
equal to 100% of such estimated amount of the Net Cash Proceeds of
such Disposition, to the extent received by the Borrower or any of
its Consolidated Subsidiaries in cash on the date of such
Disposition; and
(y) thereafter, quarterly, on the date of the delivery by the
Borrower to the Administrative Agent pursuant to Section 5.01 of the
financial statements for any quarterly fiscal period or fiscal year,
to the extent the Borrower or any of its Consolidated Subsidiaries
shall receive Net Cash Proceeds during the quarterly fiscal period
ending on the date of such financial statements in cash under
deferred payment arrangements or Disposition Investments entered
into or received in connection with any Disposition, an amount equal
to (A) 100% of the aggregate amount of such Net Cash Proceeds minus
(B) any transaction expenses associated with Dispositions and not
previously deducted in the determination of Net Cash Proceeds plus
(or minus, as the case may be) (C) any other adjustment received or
paid by the Borrower or any of its Consolidated Subsidiaries
pursuant to the respective agreements giving rise to Dispositions
and not previously taken into account in the determination of the
Net Cash Proceeds of Dispositions, provided that if prior to the
date upon which the Borrower would otherwise be required to make a
prepayment under this subclause (y) with respect to any quarterly
fiscal period the aggregate amount of such Net Cash Proceeds (after
giving effect to the adjustments provided for in this subclause (y))
shall exceed $25,000,000, then the Borrower shall within three
Business Days make a prepayment under this subclause (y) in an
amount equal to such required prepayment.
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Prepayments of Loans and reductions of Commitments shall be effected in
each case in the manner and to the extent specified in clause (iii) of
this Section 2.11(b).
Notwithstanding the foregoing, the Borrower shall not be required to
make a prepayment, and the Commitments shall not be reduced, pursuant to
this Section 2.11(b)(ii) with respect to the Net Cash Proceeds from any
Disposition in the event that the Borrower advises the Administrative
Agent at the time a prepayment is required to be made under the foregoing
subclauses (x) or (y) that it intends to reinvest such Net Cash Proceeds
into replacement assets pursuant to one or more Capital Expenditures or
Subsequent Acquisitions permitted hereunder, so long as the Net Cash
Proceeds from any Disposition are in fact so reinvested within 350 days of
such Disposition (it being understood that, in the event more than one
Disposition shall occur, such Net Cash Proceeds shall be deemed to be
applied in the same order in which such Dispositions occurred and,
accordingly, any such Net Cash Proceeds not so reinvested within 350 days
shall be forthwith applied to the prepayment of Loans and reductions of
Commitments as provided in clause (iii) of this Section 2.11(b).
Anything herein to the contrary notwithstanding, the Borrower shall
not be required to make any prepayment pursuant to this Section
2.11(b)(ii) (and the provisions of this Section 2.11(b)(ii) shall
accordingly be inapplicable) to the extent that after giving effect to any
Disposition the Leverage Ratio is less than 4.00 to 1.
(iii) Application. Upon the occurrence of any of the events
described in the above clauses of this Section 2.11(b), the amount of the
required prepayment shall be applied simultaneously to the reduction of
the Five Year Revolving Commitments and the Five Year Incremental Facility
Commitments of each Series, and to the reduction of the Commitments
hereunder (or, after any conversion of the Loans into term loans as
provided herein, to the prepayment of the Loans), in each case ratably in
accordance with their respective Applicable Prepayment Percentages. In
addition, to the extent that, after giving effect to any such reductions:
(x) the aggregate Five Year Revolving Exposure shall exceed
the Five Year Revolving Commitments, the Borrower shall simultaneous
prepay Five Year Revolving Loans, and/or provide cover for Five Year
LC Exposure as specified in Section 2.06(k) of the Five Year Credit
Agreement, in an aggregate amount equal to such excess;
(y) the Five Year Incremental Facility Loans of any Series
shall exceed the Five Year Incremental Facility Commitments of such
Series, the Borrower shall simultaneous prepay Five Year Incremental
Facility Loans of such Series in an aggregate amount equal to such
excess; and
(z) the Loans hereunder shall exceed the Commitments, the
Borrower shall simultaneously prepay Loans in an aggregate amount
equal to such excess.
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Notwithstanding the foregoing, to the extent that the aggregate amount of
any of the required prepayments contemplated by this paragraph (b) shall
be in excess of the amount of the ABR Loans outstanding on the date of
such prepayment, only the portion of the amount of such prepayment as is
equal to the amount of such ABR Loans shall be immediately prepaid and at
the election of the Borrower, the balance of such required prepayment
shall be either (i) deposited with the Administrative Agent to be held as
collateral security for the Loans and applied to the prepayment of the
Eurodollar Loans on the last day(s) of the then next-expiring Interest
Period(s) for Eurodollar Loans in the order in which such Interest
Period(s) shall expire (or immediately if any Event of Default shall occur
and be continuing), or (ii) made immediately, together with any amounts
owing to the Lenders under Section 2.16.
(c) Mandatory Prepayments -- Outstandings Exceeding Commitments. The
Borrower shall prepay the Loans in the event that the aggregate principal amount
of the Loans shall at any time exceed the aggregate amount of the Commitments.
(d) Mandatory Prepayments -- Change of Control. In the event that
any "Change of Control" shall occur in respect of any Existing Senior Debt, or
any similar event shall occur in respect of any Additional Permitted
Indebtedness, in either case at a time when the aggregate outstanding principal
amount of the respective Indebtedness affected thereby is in excess of
$25,000,000, and as a result thereof the Borrower shall be required to offer to
repurchase, redeem or prepay any portion of the Existing Senior Debt or such
Additional Permitted Indebtedness, the Borrower shall prepay the Loans, and the
Commitments shall be automatically reduced to zero.
(e) Notices. The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, two Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial optional prepayment of any Borrowing shall be
in an amount that would be permitted in the case of a Borrowing as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.
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SECTION 2.12. Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative
Agent for account of each Lender a commitment fee, which shall accrue at the
Applicable Margin on the daily average unutilized amount of such Lender's
Commitment for the period from and including the date hereof to but not
including the earlier of the date such Commitment is terminated and the Maturity
Date. Accrued commitment fees shall be payable on each Quarterly Date and on the
earlier of the date the Commitments are terminated and the Maturity Date, as the
case may be. All commitment fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(b) Intentionally Omitted.
(c) Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent (it being understood that if the Administrative Agent shall resign or be
removed, a ratable portion of any fees theretofore paid to the Administrative
Agent for the period during which such resignation or removal shall occur shall
be promptly paid by the Administrative Agent to the Borrower to the extent the
Borrower is required to pay fees for the balance of such period to a replacement
Administrative Agent).
(d) Payment of Fees. All fees payable hereunder shall be paid on the
dates due, in immediately available funds, to the Administrative Agent for
distribution, in the case of commitment fees and participation fees, to the
Lenders entitled thereto. Except as otherwise expressly provided in paragraph
(c) above, fees paid shall not be refundable under any circumstances.
SECTION 2.13. Interest.
(a) ABR Borrowings. The Loans comprising each ABR Borrowing shall
bear interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin.
(b) Eurodollar Borrowings. The Loans comprising each Eurodollar
Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Margin.
(c) Intentionally Omitted.
(d) Intentionally Omitted.
(e) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration, by mandatory prepayment or otherwise, such overdue amount (or, in
case the amount in default is principal of a Loan, all amounts outstanding
hereunder) shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in
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the case of overdue principal of any Loan, 2% plus the rate otherwise applicable
to such Loan as provided above or (ii) in the case of any other amount, 2% plus
the rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(f) Payment of Interest. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (e) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan
prior to the Maturity Date), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Borrowing prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(g) Computation. All interest hereunder shall be computed on the
basis of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Interest
Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that a Lender and the
Borrower may agree that, in lieu of the interest rate on such affected Borrowing
being calculated by reference to the Alternate Base Rate while such
circumstances shall continue, such interest rate shall instead be at an
alternative rate of interest (and with such applicable margins and prepayment
premiums) as may from time to time be offered by such Lender to the Borrower in
its sole discretion.
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SECTION 2.15. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of this Agreement or the Loans made by
such Lender to a level below that which such Lender or such Lender's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section, and setting forth in reasonable detail the manner in which such amount
or amounts have been determined, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the six-month period
referred to above shall be extended to include the period of retroactive effect
thereof.
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SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
under Section 2.11(e) and is revoked in accordance herewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, the loss to any Lender attributable to any such event shall be
deemed to include an amount determined by such Lender to be equal to the excess,
if any, of (i) the amount of interest that such Lender would pay for a deposit
equal to the principal amount of such Loan for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the duration of the Interest Period that would have resulted from
such borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for such Interest Period, over (ii)
the amount of interest that such Lender would earn on such principal amount for
such period if such Lender were to invest such principal amount for such period
at the interest rate that would be bid by such Lender (or an affiliate of such
Lender) for dollar deposits from other banks in the eurodollar market at the
commencement of such period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes.
(a) Payments Free of Taxes. Any and all payments by or an account of
any obligation of the Borrower hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes by Borrower. In addition, the Borrower
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
(c) Indemnification by Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full
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amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by the Administrative Agent or such Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or by the Administrative Agent on its own behalf or on
behalf of a Lender shall be conclusive absent manifest error.
(d) Receipt for Payments. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Payments by the Borrower. The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest or fees,
under Section 2.15, 2.16 or 2.17, or otherwise) or under any other Loan Document
(except to the extent otherwise provided therein) prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds, without set-off
or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 270
Park Avenue, New York, New York, except as otherwise expressly provided in the
relevant Loan Document, except that payments pursuant to Sections 2.15, 2.16,
2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All payments hereunder or
under any other Loan Document (except to the extent otherwise provided therein)
shall be made in dollars.
(b) Application if Payments Insufficient. If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all amounts of principal
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interest and fees then due hereunder, then such funds as shall actually have
been received shall be applied (i) first, to pay interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, to pay
principal then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided
herein: (i) each borrowing of Loans from the Lenders under Section 2.01 shall be
made from the Lenders, each payment of commitment fee under Section 2.12 in
respect of Commitments shall be made for account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.09
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (ii) Eurodollar Loans
having the same Interest Period shall be allocated pro rata among the Lenders
according to the amounts of their Commitments (in the case of the making of
Loans) or their respective Loans (in the case of conversions and continuations
of Loans); (iii) each payment or prepayment by the Borrower of principal of
Loans shall be made for account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Loans held by them; and (iv) each
payment by the Borrower of interest on Loans shall be made for account of the
Lenders pro rata in accordance with the amounts of interest on such Loans then
due and payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Loans and accrued interest thereon then due than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders hereunder that
the Borrower will not make such payment, the Administrative Agent may assume
that the Borrower has made such payment
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on such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the Borrower has not
in fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.07(b)
or 2.18(e), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) Designation of Different Lending Office. If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.17, then such Lender shall, at Borrower's
request, use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the good
faith judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17 as the case
may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation
under Section 2.15, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, or if any Lender defaults in its obligation to fund
Loans hereunder, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.15 or payments required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver
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by such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
Consolidated Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions are
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes, and each of
the other Loan Documents to which it is a party when executed and delivered by
the Borrower and the other parties thereto will constitute, a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any material consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except such as have
been obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Consolidated Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its Consolidated Subsidiaries or assets, or give rise to a right thereunder to
require any payment to be made by any such Person and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Consolidated Subsidiaries.
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SECTION 3.04. Financial Condition; No Material Adverse Change;
Solvency.
(a) Financial Statements. The Borrower has heretofore delivered, or
made available, to the Lenders the following financial statements:
(i) the audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries as of and for the fiscal years ended December 31, 1997 (as
set forth in the Proxy Statement, or incorporated by reference therein
from the Borrower's SEC Form 10-K, for such fiscal year) and December 31,
1998, reported on by Deloitte & Touche LLP, independent public
accountants;
(ii) the unaudited condensed consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
Borrower and its Subsidiaries as of and for the three-month period ended
September 30, 1998 (as set forth in the Proxy Statement, or incorporated
by reference therein from the Borrower's SEC Form 10-K, for the applicable
period);
(iii) the unaudited (or, to the extent available, audited)
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows of the broadcasting assets acquired in
the Kelly Acquisition and the Pulitzer Acquisition, as of and for the
fiscal years ended December 31, 1996 and December 31, 1997, respectively;
(iv) the unaudited condensed consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
broadcasting assets being acquired in the Kelly Acquisition and the
Pulitzer Acquisition, as of and for the three-month period ended September
30, 1998; and
(v) the unaudited pro forma combined condensed balance sheet as at
September 30, 1998 prepared under the assumption that the Pulitzer
Acquisition and the Kelly Acquisition (including the Transactions
contemplated under this Agreement) had occurred on September 30, 1998 (as
set forth in the Proxy Statement).
Such financial statements present fairly, in all material respects, the actual
or pro forma (as the case may be) financial position and the actual or pro forma
(as the case may be) results of operations and cash flows of the respective
entities as of such dates and for such periods in accordance with GAAP, subject
to year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clauses (ii), (iii), (iv) and (v) above.
(b) No Material Adverse Change. Since December 31, 1998, there has
been no material adverse change in the business, condition (financial or
otherwise), operations, properties or prospects (excluding adverse changes to
prospects as a result of changes affecting the television broadcasting industry
generally) of the Borrower and its Subsidiaries, taken as a whole, and during
the period since December 31, 1998 and prior to the Effective Date, there has
been no material adverse change in the business, condition (financial or
otherwise), operations,
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properties or prospects (excluding adverse changes to prospects as a result of
changes affecting the television broadcasting industry generally) of the
Borrower and its Subsidiaries, taken as a whole, from that set forth in the pro
forma combined condensed balance sheet as at said date referred to above.
(c) Solvency. After giving effect to the Transactions, none of the
Borrower or any of its Subsidiaries is insolvent nor will any of them be left
with unreasonably small capital with which to engage in its business or incurred
debts beyond its ability to pay such debts as they mature.
SECTION 3.05. Properties.
(a) Real and Personal Property. Each of the Borrower and its
Consolidated Subsidiaries has good title to, or valid leasehold interests in,
all its real and personal property material to its business, subject only to
Liens permitted by Section 6.02 and except for minor defects in title or
interests that do not interfere with their ability to conduct their business as
currently conducted or to utilize such properties for their intended purposes.
(b) Trademarks and Licenses, Etc. Each of the Borrower and its
Consolidated Subsidiaries owns or is licensed to use all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business,
and the use thereof by the Borrower and its Consolidated Subsidiaries does not
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters.
(a) Litigation. There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority now pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Consolidated Subsidiaries (i) as to which there is a reasonable
likelihood of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement or the Transactions.
(b) Environmental Matters. Except for the Disclosed Matters and
except with respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, neither
the Borrower nor any of its Consolidated Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
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(c) No Change in Disclosed Matters. Since the date of this
Agreement, there has been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Consolidated Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. The Borrower and its Subsidiaries are members
of an affiliated group of corporations filing consolidated returns for Federal
income tax purposes, of which the Borrower is the "common parent" (within the
meaning of Section 1504 of the Code). Except with respect to tax sharing
arrangements among the Borrower and its Subsidiaries and the Tax Sharing
Agreement between Hearst and the Borrower dated August 29, 1997, there is no tax
sharing allocation or similar agreement to which the Borrower or any of its
Subsidiaries is subject that is currently in effect providing for the manner in
which tax payments owing by members of such affiliated group are allocated among
members of the group. The Borrower has filed (either directly or indirectly
through Hearst Broadcasting Inc. or Hearst, for periods prior to the Pulitzer
Acquisition) all Tax returns and reports required to have been filed and has
paid (either directly or indirectly through Hearst Broadcasting Inc. or Hearst,
for periods prior to the Pulitzer Acquisition) all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which such Person has set aside on its books
adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans, in either case by an amount that could reasonably be expected to result
in a Material Adverse Effect.
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SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders
(i) all agreements, instruments and corporate or other restrictions to which it
or any of its Consolidated Subsidiaries is subject, and (ii) all other matters
known to it, that, in the case of either of the foregoing clauses (i) or (ii),
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other written information (including the Information Memorandum) furnished by
or on behalf of the Borrower to the Lender in connection with the negotiation of
this Agreement and the other Loan Documents or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, when taken as a whole, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time in light of circumstances in effect on the date
prepared, it being understood that such projections do not constitute a
representation or warranty as to the future performance of the Borrower and that
actual results may vary from such projections.
SECTION 3.12. Use of Credit. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
SECTION 3.13. Material Agreements and Liens With Respect to
Indebtedness.
(a) Material Agreements. Part A of Schedule II is a complete and
correct list of each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, the Borrower or any of its
Consolidated Subsidiaries outstanding on the date hereof the aggregate principal
or face amount of which equals or exceeds (or may equal or exceed) $10,000,000,
and the aggregate principal or face amount outstanding or that may become
outstanding under each such arrangement is correctly described in Part A of
Schedule II.
(b) Liens. Part B of Schedule II is a complete and correct list of
each Lien securing Indebtedness of any Person outstanding on the date hereof the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $10,000,000 and covering any property of the Borrower or any of its
Consolidated Subsidiaries, and the aggregate Indebtedness secured (or that may
be secured) by each such Lien and the property covered by each such Lien is
correctly described in Part B of Schedule II.
SECTION 3.14. Capitalization. On the date hereof, the authorized
capital stock of the Borrower consists of an aggregate of 301,000,000 shares
consisting of (i) 300,000,000 shares of Common Stock, par value $.01 per share,
of which 200,000,000 are designated as Series A Common Stock and 100,000,000 are
designated as Series B Common Stock and
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(ii) 1,000,000 shares of preferred stock, of which 12,500 shares are designated
as Series A Preferred Stock and 12,500 shares are designated as Series B
Preferred Stock. Except as disclosed in Schedule VI, as of the date hereof,
there are no outstanding obligations of the Borrower or any of its Subsidiaries
to repurchase, redeem, or otherwise acquire any shares of capital stock of the
Borrower nor are there any outstanding obligations of the Borrower or any of its
Subsidiaries to make payments to any Person, such as "phantom stock" payments,
where the amount thereof is calculated with reference to the fair market value
or equity value of the Borrower or any of its Subsidiaries.
SECTION 3.15. Subsidiaries and Investments.
(a) Subsidiaries. As at the date hereof, and as at the most recent
date such Schedule shall be supplemented pursuant to Section 6.03(c)(iv) (in the
case of any Subsidiary formed or acquired pursuant to any Subsequent
Acquisition), set forth in Part A of Schedule IV is a complete and correct list
of all of the Subsidiaries of the Borrower (excluding any Subsidiary that shall
have been sold, or the existence of which shall have been terminated, in
accordance with a transaction permitted hereunder), together with, for each such
Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each
Person (other than the holders of shares of stock of the Borrower) holding
ownership interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of such
Subsidiary represented by such ownership interests. As at the date hereof,
except as disclosed in Part A of Schedule IV, (x) each of the Borrower and its
Subsidiaries owns, free and clear of Liens, and has the unencumbered right to
vote, all outstanding ownership interests in each Person shown to be held by it
in Part A of Schedule IV, (y) all of the issued and outstanding capital stock of
each such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect to
such Person.
(b) Investments. Set forth in Part B of Schedule IV is a complete
and correct list of all Investments (other than Investments disclosed in Part A
of Schedule IV) held by the Borrower or any of its Subsidiaries in any Person on
the date hereof and, for each such Investment, (x) the identity of the Person or
Persons holding such Investment and (y) the nature of such Investment. Except as
disclosed in Part B of Schedule IV, each of the Borrower and its Subsidiaries
owns, free and clear of all Liens, all such Investments.
(c) No Indenture Restrictions, Etc. None of the Consolidated
Subsidiaries of the Borrower is on the date hereof subject to any indenture,
agreement, instrument or other arrangement of the type described in Section
6.08.
SECTION 3.16. Station Licenses. As at the date hereof, and as at the
most recent date such Schedule shall be supplemented pursuant to Section
6.03(c)(iv) (in the case of any Station acquired pursuant to any Subsequent
Acquisition):
(a) Schedule V accurately and completely lists all Station Licenses
(other than non-material incidental microwave relay and remote transmitter
licenses) granted or assigned to the Borrower or any Consolidated
Subsidiary, or under which the Borrower
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and its Consolidated Subsidiaries have the right to operate such Station.
The Station Licenses listed on said Schedule V 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 Consolidated
Subsidiaries with respect to such Station.
(b) The Station Licenses listed in said Schedule V are validly
issued in the name of, or the FCC has consented to the assignment of or
transfer of control of such Station Licenses to, the Borrower or one or
more of its Subsidiaries.
(c) Each such Station License is in full force and effect, and the
Borrower and its Consolidated Subsidiaries have fulfilled and performed in
all material respects all of their obligations with respect thereto and
have full power and authority to operate thereunder.
(d) All operating assets, rights and other property relating to, and
material to the operations of, any Station, are owned (or are available
for use under lease, license or other arrangements entered into with third
parties) by the Borrower or one or more of its Subsidiaries.
SECTION 3.17. Proxy Statement. The Borrower has heretofore delivered
to the Administrative Agent a complete copy (including all modifications,
waivers and supplements thereto, and exhibits and schedules) of the Proxy
Statement (including, as an exhibit thereto, the Amended and Restated Agreement
and Plan of Merger referred to in the definition of "Pulitzer Acquisition").
SECTION 3.18. Year 2000 Issues. The Borrower and its Subsidiaries
have (a) initiated a review and assessment of all areas within their respective
businesses operations (including those affected by information received from
suppliers and vendors) that could reasonably be expected to be adversely
affected by the Year 2000 Problem, (b) developed a plan and timetable for
addressing the Year 2000 Problem on a timely basis, and (c) to date, implemented
that plan substantially in accordance with that timetable. The Borrower
reasonably believes that all computer applications (including those affected by
information received from its suppliers and vendors) will on a timely basis be
Year 2000 Compliant, except to the extent that a failure to be so could not
reasonably be expected to have a Material Adverse Effect. The Borrower does not
believe that the costs of ensuring that the Borrower and its Subsidiaries will
be Year 2000 Compliant will be material. As used in this Agreement, the term
"Year 2000 Compliant" means all computer applications (including those affected
by information received from suppliers and vendors) that are material to the
businesses and operations of the Borrower and its Subsidiaries will on a timely
basis be able to perform properly date-sensitive functions involving all dates
on and after January 1, 2000; and the term "Year 2000 Problem" means the risk
that computer applications used by the Borrower or any of its Subsidiaries
(including those affected by information received from suppliers and vendors)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates on and after January 1, 2000.
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ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which the
Administrative Agent shall have received each of the following documents, each
of which shall be satisfactory to the Administrative Agent (and to the extent
specified below, to each Lender) in form and substance (or such condition shall
have been waived in accordance with Section 9.02):
(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) Opinions of Counsel to the Borrower. A written opinion
(addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Rogers & Wells LLP, counsel for the Borrower,
substantially in the form of Exhibit B. The Borrower hereby requests such
counsel deliver such opinions to the Lenders.
(c) Opinion of Special New York Counsel to Chase. An opinion, dated
the Effective Date, of Milbank, Tweed, Hadley & McCloy LLP, special New
York counsel to Chase, substantially in the form of Exhibit C (and Chase
hereby instructs such counsel to deliver such opinion to the Lenders).
(d) Corporate Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to
the Borrower, this Agreement or the Transactions, all in form and
substance reasonably satisfactory to the Administrative Agent and its
counsel.
(e) Officer's Certificate. A certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer,
confirming compliance with the conditions set forth in the lettered
clauses of the first sentence of Section 4.02.
(f) Repayment of Existing Indebtedness. Evidence that the principal
of and interest on, and all other amounts owing in respect of, the
Indebtedness in respect of the Existing Credit Agreement shall have been
(or shall be simultaneously) paid in full, that any commitments to extend
credit under the agreements or instruments relating to such Indebtedness
shall have been canceled or terminated and that all Guarantees in respect
of, and all Liens securing, any such Indebtedness shall have been released
(or arrangements for such release satisfactory to the Administrative Agent
shall have been made).
(g) Leverage Ratio. A certificate of a Financial Officer setting
forth a calculation of the Leverage Ratio as at the Effective Date.
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(h) Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to Chase may reasonably
request (including any promissory note that any Lender shall have
requested prior to the Closing Date pursuant to Section 2.10(f)).
The obligation of any Lender to make its initial extension of credit
hereunder is also subject to the payment by the Borrower of such fees as the
Borrower shall have agreed to pay to any Lender, the Administrative Agent and
its affiliates in connection herewith, including the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to
Chase, in connection with the negotiation, preparation, execution and delivery
of this Agreement and the other Loan Documents and the extensions of credit
hereunder (to the extent that statements for such fees and expenses have been
delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 9.02) on or prior to 3:00 p.m., New
York City time, on April 30, 1999 (and, in the event such conditions are not so
satisfied or waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing is subject to the satisfaction of
the following conditions:
(a) the representations and warranties of the Borrower set forth in
this Agreement shall be true and correct on and as of the date of such
Borrowing unless such representation or warranty is expressly stated to
have been made as of a specific date (such as the date hereof or the
Effective Date), in which case such representation and warranty shall be
true and correct on and as of such specific date; and
(b) at the time of and immediately after giving effect to such
Borrowing no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in the preceding
sentence.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Borrower covenants and agrees with the Lenders that:
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SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, consolidated statements of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries and of the Borrower and its Consolidated Subsidiaries (and,
separately stated, of each Designated Subsidiary) for such fiscal year and
the related consolidated balance sheets of the Borrower and its
Subsidiaries and of the Borrower and its Consolidated Subsidiaries (and,
separately stated, of each Designated Subsidiary) as at the end of such
fiscal year, setting forth in each case in comparative (or, for periods
prior to any Acquisition, comparative historical) form the corresponding
consolidated (or, in the case of a Designated Subsidiary, separately
stated) figures for the preceding fiscal year, and accompanied
(i) in the case of said consolidated statements and balance
sheet of the Borrower and its Subsidiaries, by an opinion thereon of
independent certified public accountants of recognized national
standing, which opinion shall state that said consolidated financial
statements fairly present the consolidated financial condition and
results of operations of the Borrower and its Subsidiaries as at the
end of, and for, such fiscal year in accordance with GAAP,
consistently applied (except as noted pursuant to paragraph (c)
below),
(ii) in the case of said consolidated statements and balance
sheet of the Borrower and its Consolidated Subsidiaries, by a report
of independent certified public accountants of recognized national
standing stating that the consolidated balance sheet and such other
financial statements of the Borrower and its Subsidiaries (x) have
been subjected to the auditing procedures applied in the audits of
the consolidated financial statements of the Borrower and its
Subsidiaries, (y) have been prepared in conformity with GAAP, and
(z) are fairly stated, in all material respects, in relation to such
audited consolidated financial statements of the Borrower and its
Subsidiaries taken as a whole, and
(iii) in the case of said consolidated statements and balance
sheet of the Borrower and its Consolidated Subsidiaries (and
separate statements and balance sheets for a Designated Subsidiary),
by a certificate of a Financial Officer, which certificate shall
state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the
Borrower and its Consolidated Subsidiaries (and, in the case of each
Designated Subsidiary, said separately stated financial statements
fairly present the respective results of operations of such
Designated Subsidiary), in each case in accordance with (except, in
the case of the consolidated financial statements of the Borrower
and its Consolidated Subsidiaries for the exclusion therefrom of the
Designated Subsidiaries) GAAP, consistently applied (except as noted
pursuant to paragraph (c) below), as at the end of, and for, such
fiscal year;
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(b) as soon as available and in any event within 60 days after the
end of each of the first three quarterly fiscal periods of each fiscal
year of the Borrower, consolidated statements of operations, stockholders'
equity and cash flows of the Borrower and its Subsidiaries and of the
Borrower and its Consolidated Subsidiaries (and, separately stated, of
each Designated Subsidiary) for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related consolidated balance sheets of the Borrower and its Subsidiaries
and of the Borrower and its Consolidated Subsidiaries (and, separately
stated, of each Designated Subsidiary) as at the end of such period,
setting forth in each case in comparative (or for periods prior to any
Acquisition, comparative historical) form the corresponding consolidated
(or, in the case of a Designated Subsidiary, separately stated) figures
for the corresponding periods in the preceding fiscal year (except that,
in the case of balance sheets, such comparison shall be to the last day of
the prior fiscal year), accompanied by a certificate of a Financial
Officer, which certificate shall state that said consolidated financial
statements fairly present the consolidated financial condition and results
of operations of, as the case may be, the Borrower and its Subsidiaries
and the Borrower and its Consolidated Subsidiaries (or of such Designated
Subsidiary, as the case may be), in each case in accordance with (except,
in the case of the consolidated financial statements of the Borrower and
its Consolidated Subsidiaries, for the exclusion therefrom of the
Designated Subsidiaries) GAAP, consistently applied (except as noted
pursuant to paragraph (c) below), as at the end of, and for, such period
(subject to normal year-end audit adjustments);
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.01, 6.06 and 6.10
and (iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of the audited financial statements referred
to in Section 3.04 that affects (or in the future is reasonably likely to
affect) in any material respect the presentation of financial information
with respect to the Borrower and its Subsidiaries required hereunder and,
if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, a statement of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any default by the Borrower under Section 6.10 (insofar as
such Section relates to accounting matters) (which statement may be
limited by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any of its Subsidiaries with the Securities and Exchange
Commission, or any Governmental
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Authority succeeding to any or all of the functions of said Commission, or
with any national securities exchange, or distributed by the Borrower to
its stockholders generally or to holders of any class of Indebtedness
generally, as the case may be;
(f) promptly upon their becoming available, copies of any and all
periodic or special reports filed by the Borrower or any of its
Consolidated Subsidiaries with the FCC or with any other Federal, state or
local governmental authority, if such reports indicate any material
adverse change in the business, operations, affairs or condition of the
Borrower and its Consolidated Subsidiaries, taken as a whole, or if copies
thereof are requested by any Lender or the Administrative Agent, and
copies of any and all notices and other communications from the FCC or
from any other Federal, state or local governmental authority with respect
to the Borrower, any of its Consolidated Subsidiaries or any Station that
raises any matters that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Consolidated Subsidiaries, or compliance with the
terms of this Agreement and the other Loan Documents, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Borrower or any of its Affiliates that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower will, and
will cause each of its Consolidated Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses,
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permits, privileges and franchises material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. Payment of Obligations. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, pay its obligations, including
Tax liabilities, that, if not paid, could result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such Consolidated Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Borrower
will, and will cause each of its Consolidated Subsidiaries to, (a) keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations, provided
that the Borrower will in any event maintain (with respect to itself and each of
its Consolidated Subsidiaries) casualty insurance and insurance against claims
for damages with respect to defamation, libel, slander, privacy or other similar
injury to person or reputation (including misappropriation of personal
likeness), in such amounts as are then customary for Persons engaged in the same
or similar business similarly situated.
SECTION 5.06. Books and Records; Inspection Rights. The Borrower
will, and will cause each of its Consolidated Subsidiaries to, keep proper books
of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Consolidated Subsidiaries to, permit
any representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority, including, but not limited
to, Environmental Laws applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be
used for general corporate purposes of the Borrower and its Subsidiaries. No
part of the proceeds of any Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
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SECTION 5.09. Certain Obligations Respecting Subsidiaries.
(a) Wholly Owned Subsidiaries. Subject to paragraph (b) below and
the provisions of Section 6.03(b), the Borrower will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to
ensure that each of the Stations and Station Licenses owned by it on the date
hereof are owned by Wholly Owned Subsidiaries which are Consolidated
Subsidiaries.
(b) Designated Subsidiaries. Notwithstanding the provisions of
paragraph (a) above, the Borrower may at any time after the date hereof
designate any Subsidiary (other than a Subsidiary holding any Station Licenses
or the operating assets of any Stations) as a "Designated Subsidiary" for
purposes of this Agreement, by delivering to the Administrative Agent a
certificate of a senior officer of the Borrower (and the Administrative Agent
shall promptly deliver a copy thereof to each Lender following receipt)
identifying such Subsidiary, stating that such Subsidiary shall be treated as a
"Designated Subsidiary" for all purposes hereof and certifying that, after
giving effect to such designation, the Borrower will be in compliance with the
provisions of this Agreement applicable to such Designated Subsidiary (including
the provisions of Section 6.05(f) with respect to the type of business in which
a Designated Subsidiary shall be involved and the limitations upon the aggregate
amount of Investments in Designated Subsidiaries therein specified), and such
designation will not result in a Default hereunder. Any Subsidiary of a
Designated Subsidiary shall be deemed to be a "Designated Subsidiary".
(c) Incorporation by Reference. The Borrower agrees, for the benefit
of the Lenders and the Administrative Agent hereunder, to perform, comply with
and be bound by each of its covenants, agreements and obligations contained in
Section 10.7 and 10.8 of the Senior Notes Indentures as originally in effect and
without giving effect to any modifications or supplements thereto, or
termination thereof, after the date thereof. Without limiting the generality of
the foregoing, the above-mentioned provisions of the Senior Notes Indentures,
together with related definitions and ancillary provisions and schedules and
exhibits, are hereby incorporated by reference, as if set forth herein in full,
mutatis mutandis; provided that, as incorporated herein (i) each reference to
the "Company" shall be deemed to be reference to the Borrower hereunder and (ii)
each reference to the "Debt Securities" of any series shall be deemed to be a
reference to the Loans hereunder.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full, the Borrower covenants and agrees with the Lenders that:
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SECTION 6.01. Indebtedness. The Borrower will not, nor will it
permit any of its Consolidated Subsidiaries to, create, incur, assume or permit
to exist any Indebtedness, except:
(a) Indebtedness hereunder;
(b) Indebtedness existing on the date hereof and set forth in Part A
of Schedule II (but excluding, following the making of the initial Loans
hereunder, the Indebtedness to be repaid with the proceeds of such Loans,
under the Existing Credit Agreement), together with any extensions,
renewals, refinancings or replacements of any such Indebtedness so long as
the principal thereof is not increased and such Indebtedness, as so
extended, renewed, refinanced or replaced, would constitute Indebtedness
that could be incurred in compliance with Section 6.01(g);
(c) Indebtedness of any Consolidated Subsidiary to the Borrower or
any other Consolidated Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any Consolidated
Subsidiary and by any Consolidated Subsidiary of Indebtedness of any other
Consolidated Subsidiary;
(e) Indebtedness of the Borrower and its Subsidiaries in respect of
the deferred payment of insurance premiums up to an aggregate principal
amount not exceeding $10,000,000 at any one time outstanding;
(f) Indebtedness of any Person that becomes a Consolidated
Subsidiary after the Effective Date; provided that such Indebtedness
exists at the time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a Consolidated
Subsidiary;
(g) additional Indebtedness of the Borrower, incurred after the
Effective Date (or assumed in connection with any Subsequent Acquisition),
provided that
(i) the stated maturity date with respect to such Indebtedness
shall be at least six months after the Maturity Date,
(ii) no principal payments with respect to such Indebtedness
shall be stated to be due prior to the Maturity Date (other than in
respect of a Change of Control or similar event), except that if
such Indebtedness is pari passu in right of payment with the
obligations of the Borrower hereunder (i.e. not subordinated in
right of payment to such obligations), such Indebtedness may provide
for principal payments prior to the Maturity Date, so long as the
weighted average life to maturity of such Indebtedness (determined
in accordance with GAAP) is not earlier than the weighted average
life to maturity of the Loans hereunder,
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(iii) all covenants with respect to such Indebtedness shall be
no more restrictive then the covenants set forth in this Agreement
and the Borrower shall be in compliance with such covenants,
(iv) such Indebtedness is not secured by any Lien on property
of the Borrower or any Consolidated Subsidiary, and
(v) at the time of such incurrence, and after giving effect
thereto, no Default shall have occurred and be continuing and the
Borrower shall be in pro forma compliance with Section 6.10 (the
determination of such pro forma compliance to be calculated, as at
the end of and for the period of four fiscal quarters most recently
ended prior to the date of such incurrence for which financial
statements of the Borrower and its Consolidated Subsidiaries are
available, under the assumption that such incurrence shall have
occurred at the beginning of the applicable period) and the Borrower
shall have delivered to the Administrative Agent a certificate of a
Financial Officer showing such calculations in reasonable detail to
demonstrate such compliance;
provided that the Borrower may incur up to $300,000,000 of additional
Indebtedness under this Section 6.01(g) without complying with the
foregoing clauses (i) and (ii); and
(h) other Indebtedness (whether or not secured) of the Borrower or
any Consolidated Subsidiary in an aggregate principal amount not exceeding
$50,000,000 at any time outstanding, and other Indebtedness (not secured)
of the Borrower (but not of any Consolidated Subsidiary) in an aggregate
principal amount not exceeding $150,000,000 at any time outstanding, so
long as the aggregate principal amount of Indebtedness permitted under
this clause (h) shall not exceed $200,000,000 at any time outstanding.
SECTION 6.02. Liens. The Borrower will not, nor will it permit any
of its Consolidated Subsidiaries to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any of its
Consolidated Subsidiaries existing on the date hereof, and either set
forth in Part B of Schedule II or not required to be so listed pursuant to
Section 3.13(b); provided that (i) no such Lien shall extend to any other
property or asset of the Borrower or any of its Consolidated Subsidiaries
and (ii) such Lien shall secure only those obligations which it secures on
the date hereof;
(c) any Lien existing on any property or asset of any Person that
becomes a Consolidated Subsidiary after the Effective Date prior to the
time such Person becomes a
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Consolidated Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such Person becoming a Consolidated
Subsidiary, (ii) such Lien shall not apply to any other property or assets
of the Borrower or any Consolidated Subsidiary, (iii) such Lien shall
secure only those obligations which it secures on the date such Person
becomes a Consolidated Subsidiary and (iv) the aggregate amount of
Indebtedness or other obligations secured thereby shall not exceed
$50,000,000; and
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Consolidated Subsidiary; provided that (i)
such security interests secure Indebtedness permitted by clause (h) of
Section 6.01, (ii) such security interests and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or
improving such fixed or capital assets, (iv) such security interests shall
not apply to any other property or assets of the Borrower or any
Consolidated Subsidiary and (v) the aggregate amount of Indebtedness or
other obligations secured thereby shall not exceed $50,000,000.
SECTION 6.03. Fundamental Changes.
(a) Mergers and Consolidations. The Borrower will not, nor will it permit
any of its Consolidated Subsidiaries to, enter into any transaction of merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution); provided that, subject to Section 6.04,
and so long as after giving effect thereto no Default shall have occurred and be
continuing hereunder, (i) any Consolidated Subsidiary of the Borrower may merge
into or consolidate with the Borrower or a Consolidated Subsidiary so long as
the Borrower or (if the Borrower is not a party) a Consolidated Subsidiary is
the continuing or surviving party, (ii) any Consolidated Subsidiary of the
Borrower may liquidate or dissolve into the Borrower or a Consolidated
Subsidiary and (iii) the Borrower and its Consolidated Subsidiaries may enter
into the transactions permitted under clauses (B) or (C) of paragraph (b) below,
and under clause (iv) of paragraph (c) below.
(b) Dispositions. The Borrower will not, nor will it permit any of its
Consolidated Subsidiaries to, sell, transfer, lease or otherwise dispose of all
or any substantial part of its assets, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing, (i) any Consolidated Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Borrower or another Consolidated
Subsidiary and (ii) the Borrower and any of its Consolidated Subsidiaries may
sell, transfer, lease, exchange or dispose of (in one transaction or in a series
of transactions and, in the case of clauses (B) and (C) below, in any form,
including by way of a merger or consolidation the effect of which is to result
in the disposition of the respective Station):
(A) any part of its assets in the ordinary course of business and on
ordinary business terms,
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(B) any Station to the extent that the Borrower or a Subsidiary is
required to sell such Station in order to comply with the FCC's
cross-ownership restrictions set forth in 47 C.F.R. ss.73.3555(b),
(C) any one or more Stations, so long as the Broadcast Cash Flow
attributed to all Stations sold or exchanged pursuant to this clause (C)
(but not pursuant to clause (B)) during any fiscal year shall not exceed
25% of the Broadcast Cash Flow for such fiscal year nor 50% of the
Broadcast Cash Flow for any period of five consecutive fiscal years
(Broadcast Cash Flow, for purposes hereof, to be determined under the
assumption that none of the sales otherwise permitted under this clause
(C) had occurred during such fiscal year or five fiscal year period and
that the Broadcast Cash Flow of any Station sold during such period
remained unchanged after such sale), and
(D) any non-broadcast assets acquired by the Borrower and its
Consolidated Subsidiaries.
(c) Acquisitions. The Borrower will not, nor will it permit any of
its Consolidated Subsidiaries to, acquire any business or property from, or
capital stock of, or be a party to any acquisition of, any Person except:
(i) purchases of equipment, programming rights and other property to
be sold or used in the ordinary course of business;
(ii) Investments permitted under Section 6.05;
(iii) Capital Expenditures; and
(iv) the Borrower and its Consolidated Subsidiaries may, pursuant to
a merger or consolidation, a purchase of stock or assets or entering into
an LMA Arrangement (any such transaction being herein called a "Subsequent
Acquisition"), acquire after the date hereof (or, in the case of an LMA
Arrangement, acquire the right to operate) additional television
broadcasting stations (any such station that is the subject of any
Subsequent Acquisition being hereinafter referred to as an "Acquired
Station"), additional broadcast industry related assets, and other assets
or businesses permitted under Section 6.04, so long as:
(A) immediately prior to such Subsequent Acquisition and after
giving effect thereto, (1) no Default shall have occurred and be
continuing and (2) the Borrower shall be in pro forma compliance
with Section 6.10 (the determination of such pro forma compliance to
be calculated, as at the end of and for the period of four fiscal
quarters most recently ended prior to the date of such Subsequent
Acquisition for which financial statements of the Borrower and its
Consolidated Subsidiaries are available, under the assumption that
such Subsequent Acquisition shall have occurred at the beginning of
the applicable period) and the Borrower shall have delivered to the
Administrative Agent a certificate of a Financial
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Officer showing such calculations in reasonable detail to
demonstrate such compliance; and
(B) promptly following the consummation of such Subsequent
Acquisition, the Borrower shall have supplemented Schedules IV and V
in order that such Schedules accurately reflect any additional
Consolidated Subsidiaries formed or acquired pursuant to such
Subsequent Acquisition and accurately identify the respective
Station Licenses (other than non-material incidental microwave relay
and remote transmitter Licenses) of any Acquired Station.
SECTION 6.04. Lines of Business. The Borrower will not engage in any
other business or line of business activity other than the businesses in which
the Borrower and its Subsidiaries have heretofore been engaged and businesses
reasonably related thereto.
SECTION 6.05. Investments. The Borrower will not, nor will it permit
any of its Consolidated Subsidiaries to, make or permit to remain outstanding
any Investments except:
(a) Investments outstanding on the date hereof and identified in
Part B of Schedule IV;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Borrower and its Consolidated Subsidiaries in
the Borrower and its Consolidated Subsidiaries;
(e) Hedging Agreements entered into in the ordinary course of the
Borrower's financial planning and not for speculative purposes;
(f) Investments (not including, however, Guarantees of obligations)
by the Borrower and its Consolidated Subsidiaries in Designated
Subsidiaries or other entities that are, in either case, involved in a
business related to the business of the Borrower and its Consolidated
Subsidiaries, so long as the amount of such Investments shall not exceed
$250,000,000 at any one time outstanding;
(g) Investments constituting transactions permitted under Section
6.03; and
(h) so long as at the time thereof, and after giving effect thereto,
no Default shall have occurred and be continuing, the Borrower may make
additional Investments (each a "Basket Investment") as follows:
(i) if after giving effect to such Basket Investment the
Leverage Ratio shall be greater than 4.00 to 1, the Borrower may
make any Basket Investment (the "Current Basket Investment") so long
as the aggregate amount of all Basket
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Investments and Restricted Payments made during the period
commencing on the Effective Date through and including the date upon
which the Current Basket Investment is to be made shall not exceed
the sum of (w) $150,000,000 plus (x) the net cash proceeds from all
Equity Issuances after the Effective Date plus (y) the aggregate
amount of Net Cash Proceeds from Dispositions not required to be
applied to the prepayment of Loans or the reduction of Commitments,
or to be reinvested by the Borrower, pursuant to Section 2.11(b)(ii)
plus (z) 33-1/3% of the cumulative amount of Excess Cash Flow for
the period commencing on the Effective Date through and including
the fiscal quarter most recently ended prior to the date of the
Current Basket Investment for which financial statements are
available; and
(ii) if after giving effect to such Basket Investment the
Leverage Ratio shall be less than or equal to 4.00 to 1, the
Borrower may make Basket Investments in any amount.
A Basket Investment permitted by Section 6.05(h) at the time of its making may
remain outstanding at a subsequent time notwithstanding that additional Basket
Investments could not be made at such subsequent time. The aggregate amount of
an Investment at any one time outstanding for purposes of clauses (f) and (h)
above, shall be deemed to be equal to (A) the aggregate amount of cash, together
with the aggregate fair market value of property, loaned, advanced, contributed,
transferred or otherwise invested that gives rise to such Investment minus (B)
the aggregate amount of dividends, distributions or other payments received in
cash in respect of such Investment; provided that the amount of an Investment
shall not in any event be reduced by reason of any write-off of such Investment.
SECTION 6.06. Restricted Payments. The Borrower will not, nor will
it permit any of its Consolidated Subsidiaries to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, except that, so
long as at the time thereof, and after giving effect thereto, no Default shall
have occurred and be continuing, the Borrower may make Restricted Payments as
follows:
(a) if after giving effect to such Restricted Payment the Leverage
Ratio shall be greater than 4.00 to 1, the Borrower may make any
Restricted Payment (the "Current Restricted Payment") so long as the
aggregate amount of all Restricted Payments and Basket Investments made
during the period commencing on the Effective Date through and including
the date upon which the Current Restricted Payment is to be made shall not
exceed the sum of (w) $150,000,000 plus (x) the net cash proceeds from all
Equity Issuances after the Effective Date plus (y) the aggregate amount of
Net Cash Proceeds from Dispositions not required to be applied to the
prepayment of Loans or the reduction of Commitments, or to be reinvested
by the Borrower, pursuant to Section 2.11(b)(ii) plus (z) 33-1/3% of the
cumulative amount of Excess Cash Flow for the period commencing on the
Effective Date through and including the fiscal quarter most recently
ended prior to the date of the Current Restricted Payment for which
financial statements are available; and
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(b) if after giving effect to such Restricted Payment the Leverage
Ratio shall be less than or equal to 4.00 to 1, the Borrower may make
Restricted Payments in any amount.
Nothing herein shall be deemed to prohibit the payment of dividends
by any Subsidiary of the Borrower to the Borrower or to any other Subsidiary of
the Borrower.
SECTION 6.07. Transactions with Affiliates. The Borrower will not,
nor will it permit any of its Consolidated Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except the following:
(a) transactions at prices and on terms and conditions not less
favorable to the Borrower or such Consolidated Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties;
(b) transactions between or among the Borrower and its Wholly Owned
Subsidiaries (other than Designated Subsidiaries) not involving any other
Affiliate;
(c) any Restricted Payment permitted by Section 6.06 or any
Investment permitted by Section 6.05;
(d) the options on certain television stations granted by Hearst in
favor of the Borrower and described in Section 9.01(i) of the Amended and
Restated Agreement and Plan of Merger dated as of March 26, 1997 by and
among Hearst, HAT Merger Sub, Inc., a Delaware corporation, HAT
Contribution Sub, Inc., a Delaware corporation, and the Borrower;
(e) arrangements between Hearst and the Borrower, with respect to
payroll, insurance, data processing, employee benefits, tax services,
accounting, corporate, financial, legal and other administrative items
that are on terms and conditions not less favorable to the Borrower than
those arrangements historically existing between Hearst and the Borrower's
Stations and reflected in the projections set forth in the Information
Memorandum, it being understood that such arrangements may provide for an
increase in payments to Hearst based upon an increase in the size of the
business of the Borrower and its Subsidiaries (resulting in an increase in
payroll, insurance, data processing, employee benefits, tax services,
accounting, corporate, financial, legal and other administrative items);
and
(f) those agreements listed on Schedule VII.
SECTION 6.08. Restrictive Agreements. The Borrower will not, and
will not permit any of its Consolidated Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon
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(a) the ability of the Borrower or any Consolidated Subsidiary to create, incur
or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Consolidated Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to the Borrower or any other Consolidated Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Consolidated Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by this Agreement, (ii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Consolidated Subsidiary pending such sale, provided that such restrictions and
conditions apply only to the Consolidated Subsidiary that is to be sold and such
sale is permitted hereunder, (iii) clause (a) of the foregoing shall not apply
to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (iv) clause (a)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof and (v) clauses (a) and (b) of the
foregoing shall not apply to any Indebtedness that is pari passu in right of
payment with the obligations of the Borrower hereunder (i.e. not subordinated in
right of payment to such obligations).
SECTION 6.09. Modifications of Certain Documents. Without the prior
consent of the Administrative Agent (to be given upon the approval of the
Required Lenders), the Borrower will not consent to any modification, supplement
or waiver of any of the provisions of the Private Placement Debt Documents,
Senior Notes Indentures or Senior Debenture Indenture, or any agreement,
instrument or other document evidencing or relating to Additional Permitted
Indebtedness, in a manner that, in any case, would be materially adverse to the
Lenders.
SECTION 6.10. Certain Financial Covenants.
(a) Leverage Ratio. The Borrower will not permit the Leverage Ratio
to exceed the following respective ratios at any time during the following
respective periods:
Period Ratio
------ -----
From the Effective Date
through December 30, 2001 5.50 to 1
From December 31, 2001
through December 30, 2002 5.00 to 1
From December 31, 2002
through December 30, 2003 4.50 to 1
From December 31, 2003
and at all times thereafter 4.00 to 1
(b) Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio to be less than (i) 2.00 to 1 as at the last day of any
fiscal quarter ending on or before the
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fiscal quarter ending September 30, 2001 and (ii) 2.50 to 1 as at the last day
of any fiscal quarter thereafter.
(c) Fixed Charges Ratio. The Borrower will not permit the Fixed
Charges Ratio to be less than 1.10 to 1 as at the last day of any fiscal
quarter.
(d) Consolidated Net Worth. The Borrower will not at any time permit
its Consolidated Net Worth to be less than the sum of (i) $249,259,000, plus
(ii) 75% of the aggregate amount by which Consolidated Net Worth was increased
upon consummation of the Kelly Acquisition plus (iii) 75% of the aggregate
amount by which Consolidated Net Worth was increased upon consummation of the
Pulitzer Acquisition, plus (iv) 25% of Consolidated Net Income for each fiscal
year (beginning with the fiscal year ending December 31, 1999 and without
duplication on account of the consummation of the Pulitzer Acquisition during
such fiscal year) for which Consolidated Net Income is positive.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
(after notice from any Lender or the Administrative Agent) any fee or any
other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or under any other Loan Document
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower in or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof, or
in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or any other
Loan Document or any amendment or modification hereof or thereof, shall
prove to have been incorrect when made or deemed made in any material
respect;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.03 (with respect to
the Borrower's existence), 5.08 or 5.09 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d)
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of this Article) or any other Loan Document and such failure shall
continue unremedied for a period of 30 or more days after notice thereof
from the Administrative Agent (given at the request of any Lender) is
received by the Borrower;
(f) the Borrower or any of its Consolidated Subsidiaries shall fail
to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity provided that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any of its Consolidated Subsidiaries
or the debts of the Borrower or any of its Consolidated Subsidiaries, or
of a substantial part of the assets of the Borrower or any of its
Consolidated Subsidiaries, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii)
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its
Consolidated Subsidiaries or for a substantial part of the assets of the
Borrower or any of its Consolidated Subsidiaries, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any of its Consolidated Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for it or for a substantial part of its assets, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing;
(j) the Borrower or any of its Consolidated Subsidiaries shall
become unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $25,000,000 shall be rendered against the Borrower or
any of its Subsidiaries or
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any combination thereof and the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Borrower to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, in the reasonable
judgment of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(m) a reasonable basis shall exist for the assertion against the
Borrower or any of its Subsidiaries, or any predecessor in interest of the
Borrower or any of its Subsidiaries or Affiliates, of (or there shall have
been asserted against the Borrower or any of its Subsidiaries) any claims
or liabilities, whether accrued, absolute or contingent, based on or
arising from the generation, storage, transport, handling or disposal of
Hazardous Materials by the Borrower or any of its Subsidiaries, Affiliates
or predecessors that, in the reasonable judgment of the Required Lenders,
are reasonably likely to be determined adversely to the Borrower or any of
its Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by the Borrower or any of its Consolidated
Subsidiaries but after deducting any portion thereof that is reasonably
expected to be paid by other creditworthy Persons jointly and severally
liable therefor);
(n) a Change of Control shall occur;
(o) the main station license of any Station shall be revoked or
canceled or expire by its term and not be renewed, or shall be modified in
a manner materially adverse to the Borrower or the respective Consolidated
Subsidiary operating such Station; provided that a modification of the
main station license to digital operation in compliance with the general
rules of the FCC and the Communications Act of 1934, as amended, shall not
be considered a materially adverse modification of such main station
license; or
(p) any material authorizations, licenses or permits issued by the
FCC (other than the main station license of any Station) shall be revoked
or canceled or expire by their terms and not be renewed, or shall be
modified in a manner materially adverse to the Borrower or the respective
Consolidated Subsidiary operating such Station, and such revocation,
cancellation, expiration, non-renewal or modification could reasonably be
expected to result in a Material Adverse Effect;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and
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(ii) declare the Loans then outstanding to be due and payable in
whole (or in part, in which case any principal not so declared to be due
and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations
of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower;
and in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.
The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders, and (c) except as expressly set
forth herein and in the other Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders or in the absence of its own gross
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negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise
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agreed between the Borrower and such successor (and, as provided in Section
2.12(c), the retiring Administrative Agent shall make available to the Borrower
a ratable portion of any fees theretofore paid to the Administrative Agent for
the period during which the resignation or removal of such retiring
Administrative Agent shall occur to the extent the Borrower is required to pay
fees for the balance of such period to the successor Administrative Agent).
After the Administrative Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
Each Lender acknowledges 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 credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges 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 from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
Except as otherwise provided in Section 9.02(b) with respect to this
Agreement, the Administrative Agent may, with the prior consent of the Required
Lenders (but not otherwise), consent to any modification, supplement or waiver
under any of the Loan Documents.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it c/o Hearst-Argyle Television, Inc. at
888 7th Avenue, Suite 2700, New York, New York 10106, Attention of Harry
T. Hawks (Telecopy No. 212-887-6855);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, 1
Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention Loan
and Agency Services Group (Telecopy No. (212) 552-5658), with a copy to
The Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017,
Attention of Mitchell Gervis (Telecopy No. 212-270-4584); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
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Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by
the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may
be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall (i) increase any Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of any reduction or expiration
of any Commitment, without the written consent of each Lender affected thereby,
(iv) so long as the Five Year Credit Agreement shall be in effect (including any
extensions of the Maturity Date thereunder), change Section 2.11(b) without the
written consent of the "Required Lenders" under and as defined in the Five Year
Credit Agreement, (v) change Section 2.18(b) or (d) in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent
of each Lender, or (vi) change any of the provisions of this Section or the
definition of the term "Required Lenders" or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; and provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent without the prior written consent of the
Administrative Agent.
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Anything in this Agreement to the contrary notwithstanding, no
waiver or modification of any provision of this Agreement that has the effect
(either immediately or at some later time) of enabling the Borrower to satisfy a
condition precedent to the making of a Loan shall be effective against the
Lenders for purposes of the Commitments unless the Required Lenders shall have
concurred with such waiver or modification.
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation of this Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by
the Administrative Agent or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, including its rights under this
Section, or in connection with the Loans made hereunder, including in connection
with any workout, restructuring or negotiations in respect thereof.
(b) Indemnification by Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrower fails
to pay any amount required to be paid by it to the Administrative Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or
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indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent in its capacity
as such.
(d) Waiver of Consequential Damages, etc. To the extent permitted by
applicable law, the Borrower shall not assert, and the Borrower hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan,
or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by the Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate
of a Lender, each of the Borrower and the Administrative Agent must give
their prior written consent to such assignment (which consent shall not be
unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment(s), the amount of the Commitment(s) of the
assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000
unless each of the Borrower and the Administrative Agent otherwise
consent,
(iii) each partial assignment of the Loans or Commitments shall be
made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement,
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(iv) the assignor and the assignee to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire;
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VII has occurred and is continuing. Upon acceptance and recording
pursuant to paragraph (d) of this Section, from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing from time to time by the Granting Bank to
the Administrative Agent and the Borrower, the option to provide to the Borrower
all or any part of any Loan that such Granting Bank would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided, that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Bank shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Bank to the same extent, and as if, such
Loan were made by such Granting Bank. Each party hereto hereby agrees that no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Bank). In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 9.04, any SPC may (i) with
notice to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, (x) assign
all or any portion of its interest in any Loans to the Granting Bank and (y)
pledge all or a portion of its interests in any Loans to the Granting Bank or to
any financial institutions (consented to by the Borrower and Administrative
Agent) providing liquidity and/or credit support to or for the
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account of such SPC to support the funding or maintenance of Loans (and assign
to the Granting Bank and to any such financial institution any such Loans upon a
realization in respect of such pledge or in connection with the performance by
such financial institution of its liquidity or credit support obligations) and
(ii) disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC, subject to the
requirements of Section 9.12(b)(f).
(c) Maintenance of Register by Administrative Agent. The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in New York City a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, absent manifest
error, and the Borrower, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Participations. Any Lender may, without the consent of the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such Lender's rights
and obligations under this Agreement and the other Loan Documents (including all
or a portion of its Commitments and the Loans owing to it); provided that (i)
such Lender's obligations under this Agreement and the other Loan Documents
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent and the other Lenders 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. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
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Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.
(f) Limitations on Rights of Participants. A Participant shall not
be entitled to receive any greater payment under Section 2.15 or 2.17 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender, provided that in no event shall the Borrower be required to pay a
greater sum to such Participant than it would have been required to pay to the
Lender from which such Participant acquired such participation.
(g) Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; 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 assignee for such Lender as a party hereto.
(h) No Assignments to Borrower or its Subsidiaries or Affiliates.
Anything in this Section 9.04 to the contrary notwithstanding, no Lender may
assign or participate any interest in any Loan held by it hereunder to the
Borrower or any of its Subsidiaries or Affiliates without the prior consent of
each Lender.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent, any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect so long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17, 3.03 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single
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contract. This Agreement and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York.
(b) Submission to Jurisdiction. The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in
the courts of any jurisdiction.
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(c) Waiver of Venue. The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Service of Process. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
9.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. The Borrower acknowledges that
from time to time financial advisory, investment banking and other services may
be offered or provided to the Borrower or one or more of its Subsidiaries (in
connection with this Agreement or otherwise) by any Lender or by one or more
subsidiaries or affiliates of such Lender and the Borrower hereby authorizes
each Lender to share any information delivered to such Lender by the Borrower
and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such subsidiary or
affiliate for the purpose of using the same in connection with such services.
(b) Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
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disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified
at the time of delivery as confidential. Unless specifically prohibited by
applicable law or court order, each Lender and the Administrative Agent shall,
prior to disclosure thereof, notify the Borrower of any request for disclosure
of any such non-public information (A) by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) or (B) pursuant to legal process (including agency subpoenas). Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
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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.
HEARST-ARGYLE TELEVISION, INC.
By:
---------------------------
Name:
Title:
364-DAY CREDIT AGREEMENT
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LENDERS
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By:
---------------------------------------
Name:
Title:
BANK OF MONTREAL
By:
---------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
---------------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
---------------------------------------
Name:
Title:
364-DAY CREDIT AGREEMENT
<PAGE>
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NATIONSBANK, N.A.
By:
----------------------
Name:
Title:
BANKBOSTON, N.A.
By:
----------------------
Name:
Title:
BANQUE NATIONALE DE PARIS
By:
----------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By:
----------------------
Name:
Title:
FLEET NATIONAL BANK
By:
----------------------
Name:
Title:
PARIBAS
By:
----------------------
Name:
Title:
By:
----------------------
Name:
Title:
364-DAY CREDIT AGREEMENT
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THE BANK OF NOVA SCOTIA
By:
--------------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
--------------------------------------
Name:
Title:
WACHOVIA BANK, N.A.
By:
--------------------------------------
Name:
Title:
KEY CORPORATE CAPITAL INC.
By:
--------------------------------------
Name:
Title:
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
364-DAY CREDIT AGREEMENT
<PAGE>
-82-
SUNTRUST BANK, CENTRAL FLORIDA,
N.A.
By:
----------------------------
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
By:
----------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
FIRST HAWAIIAN BANK
By:
----------------------------
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By:
----------------------------
Name:
Title:
364-DAY CREDIT AGREEMENT
<PAGE>
-83-
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By:
---------------------
Name:
Title:
THE SANWA BANK LIMITED
By:
---------------------
Name:
Title:
WELLS FARGO BANK, N.A.
By:
---------------------
Name:
Title:
MICHIGAN NATIONAL BANK
By:
---------------------
Name:
Title:
FIRSTAR BANK, N.A.
By:
---------------------
Name:
Title:
HIBERNIA NATIONAL BANK
By:
---------------------
Name:
Title:
364-DAY CREDIT AGREEMENT
<PAGE>
EXHIBIT 10.2
================================================================================
FORM OF FIVE-YEAR CREDIT AGREEMENT
dated as of
April 12, 1999
between
HEARST-ARGYLE TELEVISION, INC.
The LENDERS Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent
CHASE SECURITIES INC.,
as Lead Arranger and Book Manager
and
BANK OF MONTREAL,
THE BANK OF NEW YORK
and TD SECURITIES (USA) INC.,
as Co-Arrangers and Documentation Agents
--------------
$1,000,000,000
--------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...........................................1
SECTION 1.02. Classification of Loans and Borrowings.................27
SECTION 1.03. Terms Generally........................................27
SECTION 1.04. Accounting Terms; GAAP.................................27
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments........................................28
SECTION 2.02. Loans and Borrowings...................................29
SECTION 2.03. Requests for Syndicated Borrowings.....................29
SECTION 2.04. Competitive Bid Procedure..............................30
SECTION 2.05. Swingline Loans........................................33
SECTION 2.06. Letters of Credit......................................34
SECTION 2.07. Funding of Borrowings..................................38
SECTION 2.08. Interest Elections.....................................39
SECTION 2.09. Termination and Reduction of the Commitments...........40
SECTION 2.10. Repayment of Loans; Evidence of Debt...................41
SECTION 2.11. Prepayment of Loans....................................43
SECTION 2.12. Fees...................................................46
SECTION 2.13. Interest...............................................47
SECTION 2.14. Alternate Rate of Interest.............................48
SECTION 2.15. Increased Costs........................................49
SECTION 2.16. Break Funding Payments.................................51
SECTION 2.17. Taxes..................................................51
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs............................................52
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.........54
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers...................................55
SECTION 3.02. Authorization; Enforceability..........................55
SECTION 3.03. Governmental Approvals; No Conflicts...................56
SECTION 3.04. Financial Condition; No Material Adverse Change;
Solvency...............................................56
(i)
<PAGE>
SECTION 3.05. Properties.............................................57
SECTION 3.06. Litigation and Environmental Matters...................58
SECTION 3.07. Compliance with Laws and Agreements....................58
SECTION 3.08. Investment and Holding Company Status..................58
SECTION 3.09. Taxes..................................................58
SECTION 3.10. ERISA..................................................59
SECTION 3.11. Disclosure.............................................59
SECTION 3.12. Use of Credit..........................................59
SECTION 3.13. Material Agreements and Liens With Respect to
Indebtedness...........................................60
SECTION 3.14. Capitalization.........................................60
SECTION 3.15. Subsidiaries and Investments...........................60
SECTION 3.16. Station Licenses.......................................61
SECTION 3.17. Proxy Statement........................................61
SECTION 3.18. Year 2000 Issues.......................................62
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date.........................................62
SECTION 4.02. Each Credit Event......................................64
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements and Other Information.............64
SECTION 5.02. Notices of Material Events.............................67
SECTION 5.03. Existence; Conduct of Business.........................67
SECTION 5.04. Payment of Obligations.................................67
SECTION 5.05. Maintenance of Properties; Insurance...................68
SECTION 5.06. Books and Records; Inspection Rights...................68
SECTION 5.07. Compliance with Laws...................................68
SECTION 5.08. Use of Proceeds........................................68
SECTION 5.09. Certain Obligations Respecting Subsidiaries............68
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness...........................................69
SECTION 6.02. Liens..................................................71
SECTION 6.03. Fundamental Changes....................................72
SECTION 6.04. Lines of Business......................................74
SECTION 6.05. Investments............................................74
SECTION 6.06. Restricted Payments....................................75
SECTION 6.07. Transactions with Affiliates...........................76
(ii)
<PAGE>
SECTION 6.08. Restrictive Agreements.................................76
SECTION 6.09. Modifications of Certain Documents.....................77
SECTION 6.10. Certain Financial Covenants............................77
ARTICLE VII
EVENTS OF DEFAULT...................................78
ARTICLE VIII
THE ADMINISTRATIVE AGENT............................81
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices................................................83
SECTION 9.02. Waivers; Amendments....................................84
SECTION 9.03. Expenses; Indemnity; Damage Waiver.....................85
SECTION 9.04. Successors and Assigns.................................86
SECTION 9.05. Survival...............................................90
SECTION 9.06. Counterparts; Integration; Effectiveness...............90
SECTION 9.07. Severability...........................................90
SECTION 9.08. Right of Setoff........................................90
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process................................................91
SECTION 9.10. WAIVER OF JURY TRIAL...................................91
SECTION 9.11. Headings...............................................92
SECTION 9.12. Treatment of Certain Information; Confidentiality......92
(iii)
<PAGE>
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens with Respect to Indebtedness
SCHEDULE III - Litigation and Environmental Matters
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Station Licenses
SCHEDULE VI - Certain Equity Rights
SCHEDULE VII - Certain Affiliate Transactions
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Opinion of Counsel to the Borrower
EXHIBIT C - Form of Opinion of Special New York Counsel to Chase
(iv)
<PAGE>
FIVE-YEAR CREDIT AGREEMENT dated as of April 12, 1999, between
HEARST-ARGYLE TELEVISION, INC., the LENDERS party hereto and THE CHASE MANHATTAN
BANK, as Administrative Agent.
The Borrower has requested that the Lenders extend credit to it in an
aggregate amount up to $1,000,000,000 (which may, in the circumstances herein
provided, be increased to $1,250,000,000) for general corporate purposes of the
Borrower and its subsidiaries. The Lenders are willing to extend such credit
upon the terms and conditions hereof and, accordingly, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Acquisition" means, collectively, the Kelly Acquisition, the Pulitzer
Acquisition and any Subsequent Acquisition.
"Acquisition Related Compensation Expenses" means, with respect to any
Acquisition, (i) severance payments made to terminated employees in connection
with such Acquisition, (ii) stay bonuses paid in connection with such
Acquisition and (iii) costs and fees related to hiring and relocating new
employees in connection with such Acquisition, including payments to employee
search firms.
"Additional Permitted Indebtedness" means Indebtedness of the Borrower
incurred or assumed in accordance with the provisions of Section 6.01(g).
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
Five Year Credit Agreement
<PAGE>
-2-
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum 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%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" means, with respect to any Syndicated ABR Loan
(including any Swingline Loan) or Syndicated Eurodollar Loan, or with respect to
the commitment fees payable hereunder, as the case may be, the applicable rate
per annum set forth below under the caption "ABR Loans", "Eurodollar Loans" or
"Commitment Fee", as the case may be, based upon the Leverage Ratio as at the
last day of the fiscal quarter most recently ended as to which the Borrower has
either delivered financial statements pursuant to Section 5.01, or (in the case
of the fourth fiscal quarter in any fiscal year) as to which the Borrower has
otherwise delivered financial statements as at the end of and for such fiscal
quarter (or, prior to the delivery of the first of such statements after the
Effective Date, upon the Leverage Ratio set forth in the certificate of a
Financial Officer delivered pursuant to Section 4.01(g)):
================================================================================
Leverage ABR Eurodollar Commitment
Ratio: Loans Loans Fee
- --------------------------------------------------------------------------------
Greater than 5.00x 0.000% 1.250% 0.300%
- --------------------------------------------------------------------------------
Greater than 4.50x
but less than or
equal to 5.00x 0.000% 1.000% 0.250%
- --------------------------------------------------------------------------------
Greater than 4.00x
but less than or
equal to 4.50x 0.000% 0.875% 0.200%
- --------------------------------------------------------------------------------
Less than or equal
to 4.00x 0.000% 0.750% 0.200%
================================================================================
Each change in the "Applicable Margin" based upon any change in the
Leverage Ratio shall become effective for purposes of the accrual of interest
and commitment fees hereunder (including in respect of all then-outstanding
Loans and Commitments) on the date three Business Days after the delivery to the
Administrative Agent of the financial statements of the Borrower and its
Consolidated Subsidiaries for the most recently ended fiscal quarter pursuant to
Section 5.01, and shall remain effective for such purpose until three Business
Days after the next delivery of such financial statements to the Administrative
Agent hereunder,
Five Year Credit Agreement
<PAGE>
-3-
provided that, notwithstanding the foregoing, the Applicable Margin shall be the
highest rates provided for in the above schedule for any period during which
either (i) an Event of Default shall have occurred and be continuing or (ii) the
Borrower shall be in default of its obligation to deliver financial statements
for any fiscal quarter by the times specified in Section 5.01 (but upon the cure
or waiver of any such Event of Default or default, this proviso shall no longer
be applicable until another such Event of Default or default shall occur).
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Revolving Commitments represented by such Lender's Revolving
Commitment. If the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Revolving Commitments
most recently in effect, giving effect to any assignments.
"Applicable Prepayment Percentage" means, at any time, with respect to any
Commitments or Loans hereunder or under the 364-Day Credit Agreement, the
following:
(i) with respect to the Revolving Commitments hereunder, the ratio
(expressed as a percentage) of (x) the aggregate principal amount of the
Revolving Commitments hereunder at such time over (y) the sum (such sum
being herein called the "Total Borrower Exposure") of the aggregate
principal amount of the Revolving Commitments hereunder at such time plus
the aggregate principal amount of the Incremental Facility Commitments of
each Series hereunder at such time plus the aggregate principal amount of
the 364-Day Commitments at such time (or, after any conversion of the
364-Day Loans into term loans as provided in the 364-Day Credit Agreement,
plus the aggregate principal amount of the 364-Day Loans at such time);
(ii) with respect to the Incremental Facility Commitments of any
Series hereunder, the ratio (expressed as a percentage) of (x) the
aggregate principal amount of the Incremental Facility Commitments of such
Series at such time over (y) the Total Borrower Exposure at such time;
(iii) with respect to the 364-Day Commitments, the ratio (expressed
as a percentage) of (x) the aggregate principal amount of the 364-Day
Commitments at such time over (y) the Total Borrower Exposure at such time
and
(iv) with respect to the 364-Day Loans after any conversion thereof
into term loans as provided in the 364-Day Credit Agreement, the ratio
(expressed as a percentage) of (x) the aggregate principal amount of the
364-Day Loans at such time over the Total Borrower Exposure at such time.
"Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of
Five Year Credit Agreement
<PAGE>
-4-
such member in the United States; provided that if, as a result of any change in
any law, rule or regulation, it is no longer possible to determine the
Assessment Rate as aforesaid, then the Assessment Rate shall be such annual rate
as shall be determined by the Administrative Agent to be representative of the
cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of the party or parties whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Available Revolving Credit" means, at any date, the aggregate unused
amount of the Revolving Commitments hereunder (after giving effect to any
pending Borrowings or prepayments as to which notice shall have been given
hereunder) to the extent that (on a pro forma basis) such Revolving Commitments
could have been utilized through Borrowings hereunder for general working
capital purposes during the period of four fiscal quarters most recently ended
for which financial statements are available hereunder.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Basket Investments" has the meaning assigned to such term in Section
6.05(h).
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrower" means Hearst-Argyle Television, Inc., a Delaware corporation.
"Borrowing" means (a) all Syndicated ABR Loans made, converted or
continued on the same date, (b) all Syndicated Eurodollar Loans or Competitive
Loans of the same Class and Type that have the same Interest Period (or any
single Competitive Loan that does not have the same Interest Period as any other
Competitive Loan of the same Type) or (c) a Swingline Loan. For purposes hereof,
the date of a Syndicated Borrowing comprising one or more Loans that have been
converted or continued shall be the effective date of the most recent conversion
or continuation of such Loan or Loans.
"Borrowing Request" means a request by the Borrower for a Syndicated
Borrowing in accordance with Section 2.03.
"Broadcast Cash Flow" means, for any period, the sum (determined on a
consolidated basis without duplication in accordance with GAAP) for the Borrower
and its Consolidated Subsidiaries, of EBITDA for such period, calculated before
Corporate Overhead for such period.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
remain closed;
Five Year Credit Agreement
<PAGE>
-5-
provided that, when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, expenditures (including the
aggregate amount of Capital Lease Obligations incurred during such period) made
by the Borrower or any of its Consolidated Subsidiaries to acquire or construct
fixed assets, plant and equipment (including renewals, improvements and
replacements, but excluding repairs) during such period computed in accordance
with GAAP; provided that any such expenditures made in connection with any
Acquisition shall not constitute Capital Expenditures.
"Capital Lease Obligations" of any Person means 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 the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Casualty Event" means, with respect to any property of the Borrower or
any of its Consolidated Subsidiaries, any casualty or other insured damage to,
or any taking under power of eminent domain or by condemnation or similar
proceeding of, such property for which the Borrower or any of its Consolidated
Subsidiaries receives insurance proceeds, or proceeds of a condemnation award or
other compensation.
"Change of Control" means that (a) an aggregate of at least 35% of the
outstanding shares of capital stock of the Borrower shall cease to be owned
beneficially by (i) Hearst and (ii) all "Permitted Transferees" under and as
defined in the Amended and Restated Certificate of Incorporation of the Borrower
as in effect on the date hereof or (b) Hearst and such "Permitted Transferees",
collectively, shall cease to be able to elect a majority of the members of the
Board of Directors of the Borrower (or such greater number of the members of
such Board of Directors as shall be necessary, under the Certificate of
Incorporation and by-laws of the Borrower, to approve all actions requiring
approval of such Board of Directors assuming full attendance by all members of
such Board of Directors at a meeting thereof).
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or any Issuing
Lender (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender's or such Issuing Lender's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority with which, if the same does not have the
force of law, such Lender believes in good faith that it would be
disadvantageous not to comply, in each case made or issued after the date of
this Agreement.
"Chase" means The Chase Manhattan Bank.
Five Year Credit Agreement
<PAGE>
-6-
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Syndicated Loans,
Competitive Loans or Swingline Loans and, when used in reference to any Loan or
Commitment, refers to whether such Loan or Commitment is a Revolving Loan,
Revolving Commitment, Incremental Facility Loan or Incremental Facility
Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means a Revolving Commitment or Incremental Facility
Commitment, or any combination thereof (as the context requires).
"Competitive", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are made pursuant
to Section 2.04.
"Competitive Bid" means an offer by a Lender to make a Competitive Loan in
accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request by the Borrower for Competitive
Bids in accordance with Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Consolidated Net Income" for any period means the net income of the
Borrower and its Consolidated Subsidiaries for such period, determined on a
consolidated basis without duplication in accordance with GAAP, excluding
(a) the proceeds of any life insurance policy,
(b) any gains arising from (i) the sale or other disposition of any
assets (other than current assets) to the extent that the aggregate amount
of the gains during such period exceeds the aggregate amount of the losses
during such period from the sale, abandonment or other disposition of
assets (other than current assets), (ii) any write-up of assets or (iii)
the acquisition of outstanding securities of the Borrower or any
Consolidated Subsidiary,
(c) any amount representing any interest in the undistributed
earnings of any other Person (other than a Consolidated Subsidiary),
Five Year Credit Agreement
<PAGE>
-7-
(d) any earnings, prior to the date of acquisition, of any Person
acquired in any manner, and any earnings of any Consolidated Subsidiary
prior to its becoming a Consolidated Subsidiary,
(e) any earnings of a successor to or transferee of the assets of
the Borrower prior to its becoming such successor or transferee,
(f) any deferred credit (or amortization of a deferred credit)
arising from the acquisition of any Person, and
(g) any extraordinary gains not covered by clause (b) above.
"Consolidated Net Worth" means, at any date, on a consolidated basis
without duplication for the Borrower and its Consolidated Subsidiaries, (a) the
sum of (i) capital stock taken at par or stated value plus (ii) capital in
excess of par or stated value relating to capital stock plus (iii) retained
earnings (or minus any retained earning deficit) minus (b) the sum of treasury
stock, capital stock subscribed for and unissued and other contra-equity
accounts, all determined in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary of the Borrower other than
a Designated Subsidiary.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Corporate Overhead" means, for any period, all amounts paid or incurred
by the Borrower and its Consolidated Subsidiaries (determined on a consolidated
basis) during such period in respect of all items of general corporate overhead
and administrative expenses and the like including, without duplication, (x) all
amounts payable by the Borrower or any of its Consolidated Subsidiaries to any
of its Affiliates during such period in respect of items that would constitute
general corporate overhead or administrative expense of the Borrower if paid or
incurred by the Borrower and (y) all Management Fees.
"Debt Service" means, for any period, the sum, for the Borrower and its
Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all regularly
scheduled payments or regularly scheduled mandatory prepayments of principal of
any Indebtedness (including the principal component of any payments in respect
of Capital Lease Obligations, but excluding any prepayments of any part of such
Indebtedness made during such period plus (b) all Interest Expense for such
period.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
Five Year Credit Agreement
<PAGE>
-8-
"Designated Subsidiary" means any Subsidiary designated as a "Designated
Subsidiary" pursuant to Section 5.09(b).
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule III. The disclosure of information
in any schedule or exhibit to this Agreement shall not constitute an admission
by the Borrower that such information is material for any purpose, including
applicable securities laws.
"Disposition" means any sale, assignment, transfer or other disposition of
any property (whether now owned or hereafter acquired) by the Borrower or any of
its Consolidated Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition of (i) any property sold or disposed
of in the ordinary course of business and on ordinary business terms, (ii) any
Investment permitted under Section 6.05(f) and (iii) television broadcast
station WGAL-TV in Lancaster, Pennsylvania. The term "Disposition" shall include
the entering into by the Borrower or any of its Consolidated Subsidiaries of any
LMA Arrangement that in economic effect is functionally equivalent to the sale
of a Station (without limiting the obligation of the Borrower and its
Consolidated Subsidiaries to first obtain the consent of the Required Lenders to
such LMA Arrangement pursuant to Section 9.02, if required hereunder).
"Disposition Investment" means, with respect to any Disposition, any
promissory notes or other evidences of indebtedness or Investments received by
the Borrower or any of its Consolidated Subsidiaries in connection with such
Disposition.
"Dividend Payment" means dividends (in cash, property or obligations) on,
or other payments or distributions on account of, or the setting apart of money
for a sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of stock of the
Borrower or of any warrants, options or other rights to acquire the same (or,
other than in respect of employee compensation arrangements entered into in the
ordinary course of business, to make any payments to any Person, such as
"phantom stock" payments, where the amount thereof is calculated with reference
to the fair market or equity value of the Borrower or any of its Subsidiaries),
but excluding dividends payable solely in shares of common stock of the
Borrower.
"dollars" or "$" refers to lawful money of the United States of America.
"EBITDA" means, for any period, the sum, determined without duplication,
for the Borrower and its Consolidated Subsidiaries, of (a) net revenue (defined
as gross operating revenue, including network compensation and production
revenues, plus rental income minus the sum of barter and trade revenue, agency
and advertising commissions and sales representative fees) minus (b) operating
expenses (determined as provided in the next sentence) minus (c) Film Cash
Payments minus (d) Corporate Overhead. In calculating "EBITDA":
(i) "operating expenses" shall be determined exclusive of barter and
trade expenses, depreciation and amortization (including amortization in
respect of Film
Five Year Credit Agreement
<PAGE>
-9-
Obligations and barter expenses), Interest Expense, any non-cash charges
(including non-cash pension expenses and any write-offs of programming
rights), Acquisition Related Compensation Expenses, LMA Purchase Price
Payments, income taxes accrued for the relevant period, and any Capital
Expenditures, and "net revenue" and "operating expenses" shall both be
determined exclusive of (x) any payments made or received under Hedging
Agreements, (y) extraordinary and non-recurring gains or losses, and any
gains or losses from the sale of assets and (z) any non-cash stock option
expense or non-cash stock option gain in respect of options for the
capital stock of the Borrower issued to any of its or its Subsidiaries'
officers, directors or employees;
(ii) performance bonuses shall be treated as an "operating expense"
only in the period in which such bonuses are paid, whether or not such
bonuses are accrued during or in respect of such period;
(iii) for all purposes of this Agreement (other than for purposes of
EBITDA as used in the definition of Excess Cash Flow), any Film Cash
Payment to the extent consisting of an up-front payment made with respect
to a Film Obligation incurred during such period, shall not be deducted in
determining EBITDA for such period but shall instead (x) in the event such
contract has a term of twelve months or less, be amortized over the term
of such contract and (y) in the event such contract has a term of more
than twelve months, be amortized over the term of such contract (or, if
shorter, the pay period of such contract), and in the case of both (x) and
(y), only the portion of such Film Cash Payment so amortized during such
period shall be deducted in determining EBITDA for such period;
(iv) if during any period for which EBITDA is being determined the
Borrower or any Consolidated Subsidiary shall have acquired any new
Station or Stations, then, for all purposes of this Agreement (other than
for purposes of the definition of Excess Cash Flow, for which purpose
actual EBITDA for the relevant period shall be used), EBITDA shall be
determined on a pro forma basis for such period as if the relevant
Acquisition had been made or consummated on the first day of such period;
and
(v) in determining the components of EBITDA attributable to any
Subsidiary that is not a Wholly Owned Subsidiary, appropriate adjustments
shall be made to exclude the effect of the portion of such components
attributable to minority interests in such Subsidiaries.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
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"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Issuance" means (a) any issuance or sale by the Borrower after the
Effective Date of (i) any of its capital stock, (ii) any warrants or options
exercisable in respect of its capital stock (other than any warrants or options
issued to directors, officers or employees of the Borrower or any of its
Consolidated Subsidiaries, pursuant to employee benefit plans established in the
ordinary course of business and any capital stock of the Borrower issued upon
the exercise of such warrants or options) or (iii) any other security or
instrument representing an equity interest (or the right to obtain any equity
interest) in the Borrower or (b) the receipt by the Borrower whether directly
(or indirectly through one or more of its Consolidated Subsidiaries) after the
Effective Date of any capital contribution (whether or not evidenced by any
equity security issued by the Borrower).
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any
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Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or of a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to (a) in the case of a Syndicated Loan or
Borrowing, the Adjusted LIBO Rate or (b) in the case of a Competitive Loan or
Borrowing, the LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
"Excess Cash Flow" means, for any period, the sum, determined without
duplication, for the Borrower and its Consolidated Subsidiaries, of (a) EBITDA
for such period minus (b) Fixed Charges for such period plus (c) cash receipts
during such period in respect of any extraordinary or non-recurring gains to the
extent not required pursuant to Section 2.11(b)(ii) to be applied to the
reduction of Commitments hereunder or the 364-Day Commitments, or to the
prepayment of the Loans or the 364-Day Loans or to provide cover for LC Exposure
(or minus cash payments during such period in respect of any extraordinary or
non-recurring losses) minus (d) Acquisition Related Compensation Expenses for
such period.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Lender or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement or is attributable to such Foreign Lender's failure or
inability to comply with Section 2.17(e), except to the extent that such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).
"Existing Credit Agreement" means the Credit Agreement dated as of August
29, 1997 between Argyle Television, Inc. (predecessor in interest to the
Borrower, "Argyle"), each of the subsidiaries of Argyle named therein, the
lenders named therein and Chase as administrative agent for said lenders (as
amended, modified and supplemented and in effect on the Effective Date).
Five Year Credit Agreement
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"Existing Senior Debt" means, collectively, the Private Placement Debt,
Indebtedness evidenced by the Senior Notes and the Indebtedness evidenced by the
Senior Debentures.
"FCC" means the Federal Communications Commission or any governmental
authority substituted therefor.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Film Cash Payments" means, for any period, the sum (determined on a
consolidated basis and without duplication in accordance with GAAP) of all
payments by the Borrower and its Consolidated Subsidiaries made or scheduled to
be made during such period in respect of Film Obligations.
"Film Obligations" means 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 the Borrower and
its Consolidated Subsidiaries.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Fixed Charges" means, for any period, the sum, for the Borrower and its
Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) the aggregate amount of Debt Service for such period, plus
(b) the aggregate amount of taxes (excluding deferred taxes) paid or
payable in respect of the income or profit of the Borrower and its
Subsidiaries for such period, plus
(c) the aggregate amount of all Capital Expenditures made during
such period (such aggregate amount of Capital Expenditures to be deemed to
be equal to the lesser of (x) actual Capital Expenditures for such period
and (y) $15,000,000, provided that the amount of actual Capital
Expenditures in excess of $15,000,000 in such period, shall not be
excluded from the calculation of "Fixed Charges" unless and to the extent
that, at the time of calculation, the Borrower has Available Revolving
Credit), plus
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(d) commitment fees and letter of credit fees paid during such
period pursuant to this Agreement, plus
(e) Dividend Payments and Management Fees paid in cash during such
period.
In calculating "Fixed Charges" for any period, if any portion of such period
shall occur prior to an Acquisition of any Station, Fixed Charges shall be
calculated as if such Station had been acquired by the Borrower and its
Consolidated Subsidiaries at the beginning of such period.
"Fixed Charges Ratio" means, as at any date, the ratio of (a) EBITDA for
the period of four consecutive fiscal quarters ending on or most recently ended
prior to such date to (b) Fixed Charges for such period.
"Fixed Rate" means, with respect to any Competitive Loan (other than a
Competitive Eurodollar Loan), the fixed rate of interest per annum specified by
the Lender making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
Rate.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Fort Smith Preferred Stock" means, collectively, shares of Series A
Preferred Stock of the Borrower (in an aggregate face amount up to but not
exceeding $12,500,000) and shares of Series B Preferred Stock of the Borrower
(in an aggregate face amount up to but not exceeding $12,500,000).
"GAAP" means, subject to the terms of Section 1.04 hereof, generally
accepted accounting principles in the United States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" means a guarantee, an endorsement, a contingent agreement to
purchase or to furnish funds for the payment or maintenance of, or otherwise to
be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to
Five Year Credit Agreement
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assure a creditor against loss, and including causing a bank or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding (i) endorsements for collection or
deposit in the ordinary course of business and (ii) typical and customary
indemnification obligations, and representations and warranties, made in
connection with the purchase or sale of property or the issuance of securities.
The terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative
meaning.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hearst" means The Hearst Corporation, a Delaware corporation.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement, equity
derivative or other interest or currency exchange rate or commodity price
hedging arrangement.
"Incremental Facility Availability Period" means the period from and
including the Effective Date to but excluding the Maturity Date.
"Incremental Facility Commitment" of any Series means, with respect to
each Lender, the commitment, if any, of such Lender to make Incremental Facility
Loans of such Series, as such commitment may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The amount of each
Lender's Incremental Facility Commitment of any Series shall be determined in
accordance with the provisions of Section 2.01(b). The aggregate amount of the
Incremental Facility Commitments of all Series shall not exceed $250,000,000.
"Incremental Facility Lenders" means, in respect of any Series of
Incremental Facility Loans, a Lender with an Incremental Facility Commitment of
such Series or, if the Incremental Facility Commitments of such Series have
terminated or expired, a Lender with outstanding Incremental Facility Loans of
such Series.
"Incremental Facility Loans" means the Loans provided for by Section
2.01(b), which may be ABR Loans and/or Eurodollar Loans.
"Indebtedness" means, for any Person, the sum (determined on a
consolidated basis without duplication in accordance with GAAP), of the
following: (a) obligations created, issued or incurred by such Person for
borrowed money (whether by loan, the issuance and sale of debt securities or the
sale of Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other than for borrowed
money) arising, and accrued
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expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; and (f) Indebtedness of others
Guaranteed by such Person; provided that, such term shall not in any event
include (v) contingent consideration payable in connection with an Acquisition
where, as of the date of determination, the contingency requiring payment of
such consideration is unlikely to occur (except that in any event any such
contingent consideration required to be carried as a liability on a balance
sheet of the Borrower and its Subsidiaries, or required to be disclosed in a
footnote to such balance sheet, shall constitute Indebtedness), (w) obligations
under Hedging Agreements, (x) Film Obligations, (y) obligations in respect of
letters of credit or surety bonds issued in connection with fiduciary or
fidelity obligations of or with respect to such Person in the ordinary course of
business or (z) obligations in respect of shares of Fort Smith Preferred Stock.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information Memorandum
dated March, 1999, prepared in connection with the syndication to the Lenders of
the Commitments under this Agreement.
"Interest Coverage Ratio" means, as at any date of determination thereof,
the ratio of (a) EBITDA for the period of four fiscal quarters ending on or most
recently ended prior to such date to (b) Interest Expense for such period.
"Interest Election Request" means a request by the Borrower to convert or
continue a Syndicated Borrowing in accordance with Section 2.08.
"Interest Expense" means, for any period, the sum, for the Borrower and
its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including the interest component of any payments in
respect of Capital Lease Obligations but excluding any capitalized financing
fees) accrued or capitalized during such period (whether or not actually paid
during such period) plus (b) the net amount payable (or minus the net amount
receivable) under Hedging Agreements during such period (whether or not actually
paid or received during such period).
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Notwithstanding the foregoing provisions of this definition, "Interest
Expense" for any period shall not include any dividends paid in respect of the
Fort Smith Preferred Stock during such period.
"Interest Payment Date" means (a) with respect to any Syndicated ABR Loan,
each Quarterly Date, (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Eurodollar Loan is
a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period, (c) with respect to any Fixed Rate Loan, the
last day of the Interest Period therefor and any other dates that are specified
in the applicable Competitive Bid Request as Interest Payment Dates with respect
to such Loan and (d) with respect to any Swingline Loan, the day that such Loan
is required to be repaid.
"Interest Period" means:
(a) for any Syndicated Eurodollar Loan, the period commencing on the
date of such Loan and ending on the numerically corresponding day in the
calendar month that is one, three or six months (or, with the consent of
each Lender participating in such Loan, nine months) thereafter, as
specified in the applicable Borrowing Request or Interest Election
Request;
(b) for any Competitive Eurodollar Loan, the period commencing on
the date of such Loan and ending on a date not earlier than 7 days and not
later than 360 days thereafter, as specified in the applicable Competitive
Bid Request; and
(c) for any Fixed Rate Loan, the period (which shall not be less
than 7 days or more than 360 days) commencing on the date of such Loan and
ending on the date specified in the applicable Competitive Bid Request;
provided, that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (ii) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period and
(iii) no Interest Period may end after the Maturity Date. For purposes hereof,
the date of a Loan initially shall be the date on which such Loan is made and,
in the case of a Syndicated Loan, thereafter shall be the effective date of the
most recent conversion or continuation of such Loan.
"Investment" means, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement
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to make any such acquisition (including any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person), but excluding any such
advance, loan or extension of credit having a term not exceeding 90 days arising
in connection with the sale of programming or advertising time by such Person in
the ordinary course of business; (c) the entering into of any Guarantee of, or
other contingent obligation with respect to, Indebtedness or other liability of
any other Person and (without duplication) any amount committed to be advanced,
lent or extended to such Person; or (d) the entering into of any Hedging
Agreement.
"Issuing Lender" means Chase or any Lender designated by the Borrower and
consented to by the Administrative Agent (such consent not to be unreasonably
withheld), in its capacity as an issuer of Letters of Credit hereunder, and
their respective successors in such capacity as provided in Section 2.06(j).
"Kelly Acquisition" means the acquisition of all the partnership interests
of Kelly Broadcasting Co. pursuant to an Agreement and Plan of Merger dated as
of August 21, 1998 among Kelly Broadcasting Co., J.S. Kelly L.L.C., G.G. Kelly
L.L.C., Robert E. Kelly, the Borrower and Kelly Acquisition Corp.
"LC Disbursement" means a payment made by an Issuing Lender pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule I and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance. Unless the context otherwise requires, the term "Lenders"
includes each Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Letter of Credit Documents" means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such obligations, each as the
same may be modified and supplemented and in effect from time to time.
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"Leverage Ratio" means, at any date, the ratio of (a) the sum, for the
Borrower and its Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP) of the aggregate amount of all
Indebtedness as at such date to (b) EBITDA for the period of four consecutive
fiscal quarters ending on or most recently ended prior at such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Screen of
Bridge Information Services (or on any successor or substitute page of such
Screen, or any successor to or substitute for such Screen, providing rate
quotations comparable to those currently provided on such page of such Screen,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the LIBO Rate with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"LMA Arrangement" means, with respect to any Person that owns any
television broadcasting station, (i) any so-called "local marketing agreements"
or any other arrangements with any other television broadcasting station (other
than with the Borrower or another Consolidated Subsidiary with respect to one of
the Stations) whereby the parties agree to function cooperatively in terms of
programming, advertising, sales, management, consulting or similar services; or
(ii) any so-called "time brokerage agreements" or any other agreements or
arrangements under which any Station shall (A) sell broadcast time to any other
television broadcasting station (other than to any other Station) which programs
such broadcast time and sells its own commercial advertising announcements
during such broadcast time or (B) purchase broadcast time on any other
television broadcasting station (other than on any other Station) for the
purpose of programming such broadcast time and selling its commercial
advertisements during such time.
"LMA Purchase Price Payments" means any payment under an LMA Arrangement
that constitutes an Acquisition to the extent such payment constitutes all or a
portion of the purchase or acquisition price (whether or not deferred) of the
assets or the air time or both of the television station subject to such LMA
Arrangement.
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"Loan Documents" means, collectively, this Agreement, any promissory notes
executed and delivered by the Borrower pursuant hereto and the Letter of Credit
Documents.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Management Fees" means, for any period, any amounts paid or incurred by
the Borrower or any of its Consolidated Subsidiaries to any of its Affiliates
(excluding to the Borrower and its Consolidated Subsidiaries) on account of
fees, salaries, administrative expenses and other compensation (including on
account of any regular, special or accrued bonuses), provided that "Management
Fees" for any period shall not include any non-cash stock option expense (or be
reduced by any non-cash stock option gain) in respect of options for the capital
stock of the Borrower issued to any of its or its Subsidiaries' officers,
directors or employees.
"Margin" means, with respect to any Competitive Loan bearing interest at a
rate based on the LIBO Rate, the marginal rate of interest, if any, to be added
to or subtracted from the LIBO Rate to determine the rate of interest applicable
to such Loan, as specified by the Lender making such Loan in its related
Competitive Bid.
"Margin Stock" means "margin stock" within the meaning of Regulations T, U
and X.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property, operations, prospects or condition (financial or
otherwise) of the Borrower and its Consolidated Subsidiaries taken as a whole
(excluding adverse changes to prospects as a result of changes affecting the
television broadcasting industry generally), (b) the ability of the Borrower to
perform any of its obligations under this Agreement or any of the other Loan
Documents or (c) the rights of or benefits available to the Lenders under this
Agreement or any of the other Loan Documents.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and its Consolidated Subsidiaries in an
aggregate principal amount exceeding $15,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of any Person
in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Person would be
required to pay if such Hedging Agreement were terminated at such time.
"Maturity Date" means, the date falling on the fifth anniversary of the
Effective Date (or, if such date is not a Business Day, on the next succeeding
Business Day).
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
Five Year Credit Agreement
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"Net Cash Proceeds" means:
(a) in the case of any Casualty Event, the aggregate amount of cash
proceeds of insurance, condemnation awards and other compensation received
by the Borrower and its Consolidated Subsidiaries in respect of such
Casualty Event net of (i) reasonable expenses incurred by the Borrower and
its Consolidated Subsidiaries in connection therewith and (ii)
contractually required repayments of Indebtedness to the extent secured by
a Lien on such property and any income and transfer taxes payable by the
Borrower or any of its Consolidated Subsidiaries in respect of such
Casualty Event; and
(b) in the case of any Disposition, the aggregate amount of all cash
payments received by the Borrower and its Consolidated Subsidiaries
directly or indirectly in connection with such Disposition, whether at the
time of such Disposition or after such Disposition under deferred payment
arrangements or Investments entered into or received in connection with
such Disposition (including Disposition Investments); provided that
(i) Net Cash Proceeds shall be net of (A) the amount of any
legal, title, transfer, accounting and recording tax expenses,
commissions and other fees and expenses payable by the Borrower and
its Consolidated Subsidiaries in connection with such Disposition
and (B) any Federal, state and local income or other taxes estimated
to be payable by the Borrower and its Consolidated Subsidiaries as a
result of such Disposition, but only to the extent that such
estimated taxes are in fact paid to the relevant Federal, state or
local governmental authority within fifteen months of the date of
such Disposition; and
(ii) Net Cash Proceeds shall be net of any repayments by the
Borrower or any of its Consolidated Subsidiaries of Indebtedness to
the extent that (A) such Indebtedness is secured by a Lien on the
property that is the subject of such Disposition and (B) the
transferee of (or holder of a Lien on) such property requires that
such Indebtedness be repaid as a condition to the purchase of such
property.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
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(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, tenders, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and either (i) having, at such date of
acquisition, the highest credit rating obtainable from Standard & Poor's
Ratings Group or from Moody's Investors Services, Inc. or (ii) issued by
any Lender or any Lender's holding company;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 270 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, either (i) any domestic office of any
commercial bank organized under the laws of the United States of America
or any State thereof (or organized under the laws of any other
jurisdiction if such bank has a long-term senior debt rating of A or
better) which has a combined capital and surplus and undivided profits of
not less than $500,000,000 or (ii) any Lender or any Lender's holding
company;
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(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) of this
definition and entered into with a financial institution satisfying the
criteria described in clause (c) of this definition; and
(e) interest in any money market mutual fund offered by any Lender
or any Lender's holding company registered under the Investment Company
Act of 1940, as amended, the portfolio of which is limited primarily to
obligations described in the foregoing clauses (a), (b), (c) and (d) so
long as such fund has total assets of at least $1,000,000,000 and is rated
AAAm-G or better or AAA or better by Standard & Poor's Ratings Group or
Moody's Investors Services, Inc., respectively.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means 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; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
"Private Placement Debt" means the Indebtedness of the Borrower in respect
of its 7.18% Senior Notes due 2010, in an aggregate original principal amount of
$450,000,000, which Notes were issued by the Borrower pursuant to the several
separate Note Purchase Agreements, each dated as of December 1, 1998, between
the Borrower and the "Purchasers" referred to therein.
"Private Placement Debt Documents" means, collectively, the Senior Notes
evidencing the Private Placement Debt and the several separate Note Purchase
Agreements pursuant to which the Private Placement Debt was issued.
"Proxy Statement" means the Joint Proxy Statement of Hearst-Argyle
Television, Inc. and Pulitzer Publishing Company dated February 11, 1999.
"Pulitzer Acquisition" means the acquisition of the broadcasting assets
and related properties of Pulitzer Publishing Company pursuant to an Amended and
Restated Agreement and Plan of Merger dated as of May 25, 1998 among Pulitzer
Publishing Company, Pulitzer, Inc. and the Borrower.
"Quarterly Dates" means the last Business Day of March, June, September
and December in each year, the first of which shall be the first such day after
the date hereof.
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"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Incremental Facility Lenders" means, with respect to any Series
of Incremental Facility Loans at any time, Lenders having Incremental Facility
Loans and unused Incremental Facility Commitments of such Series representing
more than 50% of the sum of the total Incremental Facility Loans of such Series
and unused Incremental Facility Commitments of such Series at such time.
"Required Lenders" means, at any time, Lenders having Revolving Exposures,
Incremental Facility Loans and unused Commitments representing more than 50% of
the sum of the total Revolving Exposures, outstanding Incremental Facility Loans
and unused Commitments at such time (provided that, for purposes of declaring
the Loans to be due and payable pursuant to Article VII, and for all purposes
after the Loans become due and payable pursuant to Article VII or the
Commitments expire or terminate, the outstanding Competitive Loans of the
Lenders shall be included in their respective Revolving Exposures in determining
the Required Lenders).
"Required Revolving Lenders" means, at any time, Revolving Lenders having
Revolving Exposures and unused Commitments representing more than 50% of the sum
of the total Revolving Exposures and unused Commitments at such time.
"Restricted Debt Payment" means any purchase, redemption, retirement or
acquisition for value, or the setting apart of any money for a sinking,
defeasance or other analogous fund for the purchase, redemption, retirement or
other acquisition of, or any voluntary payment or prepayment of the principal of
or interest on, or any other amount owing in respect of, the Existing Senior
Debt or any Additional Permitted Indebtedness, provided that the term
"Restricted Debt Payment" shall not include regularly scheduled payments of
principal or interest in respect of the Existing Senior Debt or Additional
Permitted Indebtedness to the extent required pursuant to the instruments
evidencing such Existing Senior Debt or Additional Permitted Indebtedness.
"Restricted Payments" means, collectively, any Dividend Payment and any
Restricted Debt Payment.
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of (i) the Maturity Date and (ii)
the date of termination of the Commitments.
"Revolving Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit
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and Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The amount of each Lender's Revolving
Commitment as of the date hereof is set forth on Schedule I, and (after giving
effect to any assignment of any Commitment permitted under Section 9.04) in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The aggregate original amount of the
Lenders' Revolving Commitments is $1,000,000,000.
"Revolving Exposure" means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Revolving Loans and its
LC Exposure and Swingline Exposure at such time.
"Revolving Lenders" means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to Section 2.01(a).
"Senior Debentures" means the Borrower's 7.50% Senior Debentures Due 2027.
"Senior Debenture Indenture" means the Indenture dated as of November 13,
1997, as amended by the First Supplemental Indenture dated November 13, 1997,
between the Borrower and Bank of Montreal Trust Company, as trustee, pursuant to
which the Senior Debentures have been issued.
"Senior Notes" means the Borrower's 7.00% Senior Notes Due 2007 and the
Borrower's 7.00% Senior Notes Due 2018.
"Senior Notes Indentures" means, collectively, the Indenture dated as of
November 13, 1997 between the Borrower and Bank of Montreal Trust Company, as
trustee, pursuant to which the Borrower's Senior Notes Due 2007 have been issued
and (b) the Second Supplemental Indenture dated as of January 13, 1998 between
the Borrower and Bank of Montreal Trust Company, as trustee, pursuant to which
the Borrower's Senior Notes Due 2018 have been issued.
"Series" has the meaning set forth in Section 2.01(b).
"Station Licenses" means all authorizations, licenses or permits issued by
the FCC and granted or assigned to the Borrower or any Consolidated Subsidiary
thereof, or under which the Borrower or any Consolidated Subsidiary thereof has
the right to operate any Station, together with any extensions or renewals
thereof.
"Stations" means the television broadcasting stations from time to time
owned by the Borrower or any of its Consolidated Subsidiaries.
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"Statutory Reserve Rate" means, for any day, a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and in effect on such day to which the
Administrative Agent is subject (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage. The Statutory Reserve Rate as of the date hereof is zero.
"Subsequent Acquisition" shall have the meaning assigned to such term in
Section 6.03(c)(iv).
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless otherwise specified,
"Subsidiary" means a subsidiary of the Borrower.
"Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"Swingline Lender" means Chase, Bank of Montreal, The Bank of New York and
Toronto Dominion (Texas) Inc., each in its capacity as lender of Swingline Loans
hereunder, as the case may be.
"Swingline Loan" means a Loan made pursuant to Section 2.05.
"Syndicated Loan" means a Loan made pursuant to Section 2.01.
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"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"364-Day Commitment" means the commitment of each lender party to the
364-Day Credit Agreement to make loans thereunder.
"364-Day Loans" means the revolving loans (or, in the event of a
conversion as provided therein, the term loans) made pursuant to the 364-Day
Credit Agreement.
"364-Day Credit Agreement" means the 364-Day Credit Agreement dated as of
April 12, 1999 between the Borrower, the lenders party thereto and Chase, as
administrative agent for said lenders.
"Three-Month Secondary CD Rate" means, 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 is not 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 is not 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 is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transactions" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or,
in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.
"Wholly Owned Subsidiary" means, with respect to any Person, any
corporation, partnership or other entity of which all of the equity securities,
Equity Rights or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
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SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Syndicated
Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., an
"ABR Revolving Loan"); each Series of Incremental Facility Loans shall be deemed
a separate Class of Loans hereunder. Borrowings also may be classified and
referred to by Class (e.g., a "Syndicated Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., an "ABR Revolving
Borrowing"); each Series of Incremental Facility Borrowings and Incremental
Facility Commitments shall be deemed a separate Borrowing and Commitment (and,
therefore, a separate Class) hereunder.
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with, or derived by reference to, GAAP, as in effect
from time to time; provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any provision hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or in
the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith. References in this Agreement to the determination of items
"in accordance with GAAP" means that such items shall be derived by reference
to, and with the relevant components of such items being determined in
accordance with, GAAP even though (as is the case with terms such as "pro
forma", "Broadcast Cash Flow" and "Film Cash Payments") such terms may not have
a meaning under GAAP.
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To enable the ready and consistent determination of compliance with the
covenants set forth in Article VI, the Borrower will not change the last day of
its fiscal year from December 31 of each year, or the last days of the first
three fiscal quarters in each of its fiscal years from March 31, June 30 and
September 30 of each year, respectively.
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments.
(a) Revolving Loans. Subject to the terms and conditions set forth herein,
each Lender agrees to make Revolving Loans to the Borrower from time to time
during the Revolving Availability Period in an aggregate principal amount that
will not result in (i) such Lender's Revolving Exposure exceeding such Lender's
Revolving Commitment or (ii) the sum of the Revolving Exposures plus the
aggregate principal amount of outstanding Competitive Loans exceeding the total
Revolving Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.
(b) Incremental Facility Loans. In addition to borrowings of Revolving
Loans, at any time during the Incremental Facility Availability Period the
Borrower may from time to time request the Lenders offer to enter into
commitments to make additional revolving loans to the Borrower hereunder, which
commitment of any Lender shall not be less than $10,000,000 and not greater than
$250,000,000. In the event that one or more of the Lenders offer, in their sole
discretion, to enter into such commitments, and such Lenders and the Borrower
agree as to the amount of such commitments that shall be allocated to the
respective Lenders making such offers and the fees (if any) to be payable by the
Borrower in connection therewith, such Lenders shall become obligated to make
Incremental Facility Loans under this Agreement in an amount equal to the amount
of their respective Incremental Facility Commitments. The Incremental Facility
Loans to be made pursuant to any such agreement between the Borrower and one or
more Lenders in response to any such request by the Borrower shall be deemed to
be a separate "Series" of Incremental Facility Loans for all purposes of this
Agreement. Anything herein to the contrary notwithstanding, (i) the minimum
aggregate principal amount of Incremental Facility Commitments entered into
pursuant to any such request (and, accordingly, the minimum aggregate principal
amount of any Series of Incremental Facility Loans) shall be $25,000,000 and
(ii) the aggregate principal amount of all Commitments and Borrowings of
Incremental Facility Loans shall not exceed $250,000,000.
Following agreement by the Borrower and one or more of the Lenders as
provided above, subject to the terms and conditions set forth herein, each
Incremental Facility Lender of any Series agrees to make Incremental Facility
Loans of such Series to the Borrower from time to time during the period from
and including the date of such agreement to but not including the Maturity Date,
in an aggregate principal amount up to but not exceeding the
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amount of the Incremental Facility Commitment of such Series of such Incremental
Facility Lender. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Incremental Facility Loans of any Series as the Borrower shall from time to time
select.
SECTION 2.02. Loans and Borrowings.
(a) Obligation of Lenders. Each Syndicated Loan shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
Each Competitive Loan shall be made in accordance with the procedures set forth
in Section 2.04. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments and Competitive Bids of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Type of Loans. Subject to Sections 2.05 and 2.14, (i) each Syndicated
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith and (ii) each Competitive Borrowing
shall be comprised entirely of Eurodollar Loans or Fixed Rate Loans as the
Borrower may request in accordance herewith. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement, except that if the designation of any such foreign
branch or Affiliate shall result in any costs, reductions or taxes which would
not otherwise have been applicable, such Lender shall not be entitled to
compensation for such costs, reductions or taxes unless it shall in good faith
have determined such designation to be necessary or advisable to avoid any
material disadvantage to it.
(c) Minimum Amounts. At the commencement of each Interest Period for any
Syndicated Eurodollar Borrowing, such Borrowing shall be in an aggregate amount
of $5,000,000 or a larger multiple of $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount equal to
$1,000,000 or a larger multiple of $1,000,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments of the applicable Class or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(f). Each
Competitive Borrowing shall be in an aggregate amount equal to $10,000,000 or a
larger multiple of $5,000,000. Swingline Loans shall be in an aggregate amount
equal to at least $500,000 or a larger multiple of $100,000. Borrowings of more
than one Type and Class may be outstanding at the same time; provided that there
shall not at any time be more than a total of 12 Syndicated Eurodollar
Borrowings outstanding.
SECTION 2.03. Requests for Syndicated Borrowings. To request a Borrowing
(other than in respect of a Borrowing comprised of a Competitive Loan or a
Swingline Loan, as to which the provisions of Section 2.04 or 2.05,
respectively, shall apply), the Borrower shall
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notify the Administrative Agent of such request by telephone (a) in the case of
a Syndicated Eurodollar Borrowing, not later than 12:00 noon, New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one
Business Day before the date of the proposed Borrowing; provided that any such
notice of an ABR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(f) may be given not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing
or Incremental Facility Borrowing (including, if applicable, the
respective Series of Incremental Facility to which such Borrowing
relates);
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Syndicated Eurodollar Borrowing;
(v) in the case of a Syndicated Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.07.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Syndicated Eurodollar Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Competitive Bid Procedure.
(a) Requests for Bids by the Borrower. Subject to the terms and conditions
set forth herein, from time to time during the Revolving Availability Period the
Borrower may request Competitive Bids and may (but shall not have any obligation
to) accept Competitive Bids and borrow Competitive Loans; provided that the sum
of the total Revolving Exposures plus the aggregate principal amount of
outstanding Competitive Loans at any time shall not exceed the total Revolving
Commitments. To request Competitive Bids, the Borrower shall notify the
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Administrative Agent of such request by telephone, in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, four Business Days
before the date of the proposed Borrowing and, in the case of a Fixed Rate
Borrowing, not later than 10:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that the Borrower may submit
up to (but not more than) 3 Competitive Bid Requests on the same day, but a
Competitive Bid Request shall not be made within five Business Days after the
date of any previous Competitive Bid Request, unless any and all such previous
Competitive Bid Requests shall have been withdrawn or all Competitive Bids
received in response thereto rejected. Each such telephonic Competitive Bid
Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and
written Competitive Bid Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(iv) the Interest Period for such Borrowing, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.07.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b) Making of Bids by Lenders. Each Lender may (but shall not have any
obligation to) make one or more Competitive Bids to the Borrower in response to
a Competitive Bid Request. Each Competitive Bid by a Lender must be in a form
approved by the Administrative Agent and must be received by the Administrative
Agent by telecopy, in the case of a Competitive Eurodollar Borrowing, not later
than 9:30 a.m., New York City time, three Business Days before the proposed date
of such Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not
later than 9:30 a.m., New York City time, on the proposed date of such
Competitive Borrowing. Competitive Bids that do not conform substantially to the
form approved by the Administrative Agent may be rejected by the Administrative
Agent, and the Administrative Agent shall notify the applicable Lender of such
rejection as promptly as practicable. Each Competitive Bid shall specify (i) the
principal amount (which shall be $5,000,000 or a larger multiple of $1,000,000
and which may equal the entire principal amount of the Competitive Borrowing
requested by the Borrower) of the Competitive Loan or Loans that the Lender is
willing to make, (ii) the Competitive Bid Rate or Competitive Bid Rates at which
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the Lender is prepared to make such Loan or Loans (expressed as a percentage
rate per annum in the form of a decimal to no more than four decimal places) and
(iii) the Interest Period for each such Loan and the last day thereof.
(c) Notification of Bids by Administrative Agent. The Administrative Agent
shall promptly notify the Borrower by telecopy of the Competitive Bid Rate and
the principal amount specified in each Competitive Bid and the identity of the
Lender that shall have made such Competitive Bid.
(d) Acceptance of Bids by the Borrower. Subject only to the provisions of
this paragraph, the Borrower may accept or reject any Competitive Bid. The
Borrower shall notify the Administrative Agent by telephone, confirmed by
telecopy in a form approved by the Administrative Agent, whether and to what
extent it has decided to accept or reject each Competitive Bid, in the case of a
Competitive Eurodollar Borrowing, not later than 10:30 a.m., New York City time,
three Business Days before the date of the proposed Competitive Eurodollar
Borrowing, and in the case of a Fixed Rate Borrowing, not later than 12:00 noon,
New York City time, on the proposed date of the Competitive Borrowing; provided,
that (i) the failure of the Borrower to give such notice shall be deemed to be a
rejection of each Competitive Bid, (ii) the Borrower shall not accept a
Competitive Bid made at a particular Competitive Bid Rate if the Borrower
rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the aggregate amount of the requested Competitive Borrowing specified in
the related Competitive Bid Request, (iv) to the extent necessary to comply with
clause (iii) of this proviso, the Borrower may accept Competitive Bids at the
same Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such Competitive Bid, and (v) except pursuant
to clause (iv) of this proviso, no Competitive Bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a principal amount of
$5,000,000 or a larger multiple of $1,000,000 provided further that if a
Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) of the first proviso of this paragraph, such
Competitive Loan may be in an amount of $1,000,000 or any multiple thereof, and
in calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to such clause
(iv) the amounts shall be rounded to multiples of $1,000,000 in a manner
determined by the Borrower. A notice given by the Borrower pursuant to this
paragraph shall be irrevocable.
(e) Notification of Acceptances by the Administrative Agent. The
Administrative Agent shall promptly notify each bidding Lender by telecopy
whether or not its Competitive Bid has been accepted (and, if so, the amount and
Competitive Bid Rate so accepted), and each successful bidder will thereupon
become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) Bids by the Administrative Agent. If the Administrative Agent shall
elect to submit a Competitive Bid in its capacity as a Lender, it shall submit
such Competitive Bid
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directly to the Borrower at least one quarter of an hour earlier than the time
by which the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.
SECTION 2.05. Swingline Loans.
(a) Agreement to Make Swingline Loans. Subject to the terms and conditions
set forth herein, each Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans exceeding
$20,000,000 or (ii) the sum of the total Revolving Exposures plus the aggregate
principal amount of outstanding Competitive Loans exceeding the total Revolving
Commitments; provided that no Swingline Lender shall be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans. Swingline Loans made hereunder
shall constitute utilization of the Revolving Commitments and shall reduce the
availability of such Revolving Commitments on a dollar-for-dollar basis.
(b) Interest Rates. Swingline Loans shall be ABR Loans, except that a
Swingline Lender and the Borrower may agree that the interest rate in respect of
a Swingline Loan made by such Swingline Lender be at an alternative rate of
interest (and with such applicable margins and prepayment premiums) as may from
time to time be offered by such Swingline Lender to the Borrower in its sole
discretion; provided that upon any sale pursuant to Section 2.05(d) of
participations in any Swingline Loan the interest on which is determined by
reference to such an alternative rate, such Swingline Loans shall automatically
be converted into an ABR Loan.
(c) Notice of Swingline Loans by Borrower. To request a Swingline Loan,
the Borrower shall notify the Administrative Agent of such request by telephone
(confirmed by telecopy), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount of
the requested Swingline Loan and the respective Swingline Lender from which the
Borrower wishes to make such Borrowing. The Administrative Agent will promptly
advise the respective Swingline Lender of any such notice received from the
Borrower. A Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a credit to the general deposit account of the Borrower
with the Administrative Agent or such Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(f), by remittance to the Issuing Lender) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.
(d) Participations by Lenders in Swingline Loans. A Swingline Lender may
by written notice given to the Administrative Agent (with a copy to the
Borrower) not later than 10:00 a.m., New York City time, on any Business Day
require the Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans of such Swingline
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Lender outstanding. Such notice to the Administrative Agent shall specify the
aggregate amount of Swingline Loans in which Lenders will participate. Promptly
upon receipt of such notice, the Administrative Agent will give notice thereof
to each Lender, specifying in such notice such Lender's Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above in this paragraph, to pay to
the Administrative Agent, for the account of the respective Swingline Lender,
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and Section
2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the respective Swingline
Lender the amounts so received by it from the Lenders. The Administrative Agent
shall notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to such Swingline Lender.
Any amounts received by a Swingline Lender from the Borrower (or other party on
behalf of the Borrower) in respect of a Swingline Loan after receipt by such
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the respective Swingline Lender, as their interests may appear. The purchase
of participations in a Swingline Loan pursuant to this paragraph shall not
relieve the Borrower of any default in the payment thereof.
SECTION 2.06. Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, in
addition to the Loans provided for in Section 2.01, the Borrower may request any
Issuing Lender to issue, at any time and from time to time during the Revolving
Availability Period, Letters of Credit for its own account in such form as is
acceptable to such Issuing Lender in its reasonable determination. Letters of
Credit issued hereunder shall constitute utilization of the Revolving
Commitments.
(b) Notice of Issuance, Amendment, Renewal or Extension. To request the
issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the respective Issuing Lender) to an Issuing Lender selected by it
and the Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (d) of this
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Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the respective
Issuing Lender, the Borrower also shall submit a letter of credit application on
such Issuing Lender's standard form in connection with any request for a Letter
of Credit. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, an Issuing Lender relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
(c) Limitations on Amounts. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i)
the aggregate LC Exposure of the Issuing Lenders (determined for these purposes
without giving effect to the participations therein of the Lenders pursuant to
paragraph (e) of this Section) shall not exceed $50,000,000 and (ii) the sum of
the total Revolving Exposures plus the aggregate principal amount of outstanding
Competitive Loans shall not exceed the total Revolving Commitments.
(d) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date 12 months after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, 12 months after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.
(e) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) by any Issuing Lender, and
without any further action on the part of such Issuing Lender or the Lenders,
such Issuing Lender hereby grants to each Lender, and each Lender hereby
acquires from such Issuing Lender, a participation in such Letter of Credit
equal to such Lender's Applicable Percentage of the aggregate amount available
to be drawn under such Letter of Credit. Each Lender acknowledges and agrees
that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the respective Issuing Lender, such Lender's Applicable
Percentage of each LC Disbursement made by an Issuing Lender promptly upon the
request of such Issuing Lender at any time from the time of such LC Disbursement
until such LC Disbursement is reimbursed by the Borrower or at any time after
any reimbursement payment is required to be refunded to the Borrower for any
reason. Each such payment shall be made in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the respective Issuing Lender the
amounts so received by it from the Lenders. Promptly following receipt by
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the Administrative Agent of any payment from the Borrower pursuant to the next
following paragraph, the Administrative Agent shall distribute such payment to
the respective Issuing Lender or, to the extent that the Lenders have made
payments pursuant to this paragraph to reimburse such Issuing Lender, then to
such Lenders and such Issuing Lender as their interests may appear. Any payment
made by a Lender pursuant to this paragraph to reimburse an Issuing Lender for
any LC Disbursement shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(f) Reimbursement. If an Issuing Lender shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such Issuing Lender
in respect of such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 12:00 noon, New York City
time, on (i) the Business Day that the Borrower receives notice of such LC
Disbursement, if such notice is received prior to 10:00 a.m., New York City
time, or (ii) the Business Day immediately following the day that the Borrower
receives such notice, if such notice is not received prior to such time,
provided that, if such LC Disbursement is not less than $100,000 the Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 or 2.05 that such payment be financed with an ABR
Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent
so financed, the Borrower's obligation to make such payment shall be discharged
and replaced by the resulting ABR Revolving Borrowing or Swingline Loan.
If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable LC Disbursement, the payment
then due from the Borrower in respect thereof and such Lender's Applicable
Percentage thereof.
(g) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by respective Issuing Lender under a Letter of Credit
against presentation of a draft or other document that does not comply strictly
with the terms of such Letter of Credit, and (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor any Issuing Lender, nor
any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
by the respective Issuing Lender or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of
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technical terms or any consequence arising from causes beyond the control of the
respective Issuing Lender; provided that the foregoing shall not be construed to
excuse an Issuing Lender from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by such Issuing Lender's gross
negligence or willful misconduct when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that:
(i) an Issuing Lender may accept documents that it believes in good
faith appear on their face to be in substantial compliance with the terms
of a Letter of Credit without responsibility for further investigation,
regardless of any notice or information to the contrary, and may make
payment upon presentation of documents that appear on their face to be in
substantial compliance with the terms of such Letter of Credit;
(ii) an Issuing Lender shall have the right, in its sole discretion,
to decline to accept such documents and to decline to make such payment if
such documents are not in strict compliance with the terms of such Letter
of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by an Issuing Lender when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof
(and the parties hereto hereby waive, to the extent permitted by
applicable law, any standard of care inconsistent with the foregoing).
(h) Disbursement Procedures. The Issuing Lender for any Letter of Credit
shall, within a reasonable time following its receipt thereof, examine all
documents purporting to represent a demand for payment under such Letter of
Credit. Such Issuing Lender shall promptly after such examination notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether such Issuing Lender has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse such
Issuing Lender and the Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If the Issuing Lender for any Letter of Credit shall
make any LC Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Borrower reimburses such
LC Disbursement, at the rate per annum then applicable to ABR Loans; provided
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant
to paragraph (f) of this Section, then Section 2.13(e) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of such Issuing
Lender, except that interest accrued on and after the date of payment by any
Lender pursuant to paragraph (f) of this Section to reimburse such Issuing
Lender shall be for the account of such Lender to the extent of such payment.
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(j) Replacement of an Issuing Lender. Any Issuing Lender may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Lender and the successor Issuing Lender. The Administrative
Agent shall notify the Lenders of any such replacement of an Issuing Lender. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Lender pursuant to
Section 2.12(b). From and after the effective date of any such replacement, (i)
the successor Issuing Lender shall have all the rights and obligations of the
replaced Issuing Lender under this Agreement with respect to Letters of Credit
to be issued by it thereafter and (ii) references herein to the term "Issuing
Lender" shall be deemed to include such successor or any previous Issuing
Lender, or such successor and all previous Issuing Lenders, as the context shall
require. After the replacement of an Issuing Lender hereunder, the replaced
Issuing Lender shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Lender under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(k) Cash Collateralization. If either (i) an Event of Default shall occur
and be continuing and the Borrower receives notice from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has been accelerated,
Lenders with LC Exposure representing more than 50% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, or (ii) the
Borrower shall be required to provide cover for LC Exposure pursuant to Section
2.11, the Borrower shall immediately deposit into an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to, in the case of an Event of
Default, the LC Exposure as of such date plus any accrued and unpaid interest
thereon and, in the case of cover pursuant to Section 2.11, the amount required
under Section 2.11, provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (h) or
(i) of Article VII. Such deposit shall be held by the Administrative Agent as
collateral for the LC Exposure under this Agreement.
(l) Existing Letters of Credit. Pursuant to Section 2.05 of the Existing
Credit Agreement, Chase as the "Issuing Lender" thereunder, may have issued
various "Letters of Credit" under and as defined in the Existing Credit
Agreement. Each of the parties hereto agrees that any such "Letter of Credit"
that shall be outstanding on the Effective Date shall constitute, on and after
the Effective Date, a Letter of Credit for all purposes of this Agreement.
SECTION 2.07. Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section 2.05. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the
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Borrower maintained with the Administrative Agent in New York City and
designated by the Borrower in the applicable Borrowing Request or Competitive
Bid Request; provided that ABR Revolving Borrowings made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(f) shall be
remitted by the Administrative Agent to the respective Issuing Lender.
(b) Presumption by Administrative Agent. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.08. Interest Elections.
(a) Elections by Borrower. Each Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Syndicated
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Syndicated Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Competitive Borrowings or
Swingline Borrowings, which may not be converted or continued.
(b) Notice of Elections. To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
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(c) Information in Election Notices. Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
(including, if applicable, the respective Series of Incremental Facility
Loans to which such Interest Election Request relates) and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which
case the information to be specified pursuant to clauses (iii) and (iv) of
this paragraph shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Notice by Administrative Agent to Lenders. Promptly following receipt
of an Interest Election Request, the Administrative Agent shall advise each
relevant Lender of the details thereof and of such Lender's portion of each
resulting Borrowing.
(e) Presumptions if no Notice. If the Borrower fails to deliver a timely
Interest Election Request with respect to a Syndicated Eurodollar Borrowing
prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Syndicated Eurodollar Borrowing
and (ii) unless repaid, each Syndicated Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09. Termination and Reduction of the Commitments.
(a) Scheduled Termination. Unless previously terminated, (i) the Revolving
Commitments shall terminate on the Maturity Date and (ii) the Incremental
Facility Commitments shall terminate on the Maturity Date.
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(b) Voluntary Termination or Reduction. The Borrower may at any time
terminate, or from time to time reduce, the Commitments of any Class (including
the Commitments of any Series of Incremental Facility Loans); provided that (i)
each reduction of the Commitments of any Class pursuant to this Section shall be
in an amount that is $5,000,000 or a larger multiple of $1,000,000, (ii) the
Borrower shall not terminate or reduce the Revolving Commitments if, after
giving effect to any concurrent prepayment of Loans in accordance with Section
2.11, the sum of the total Revolving Exposures plus the aggregate principal
amount of outstanding Competitive Loans would exceed the total Revolving
Commitments and (iii) the Borrower shall not terminate or reduce the Incremental
Facility Commitments of any Series if, after giving effect to any concurrent
prepayment of Loans in accordance with Section 2.11, the aggregate principal
amount of the Incremental Facility Loans of such Series would exceed the total
Incremental Facility Commitments of such Series.
(c) Notice of Termination or Reduction. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments of
any Class under paragraph (b) of this Section at least three Business Days prior
to the effective date of such termination or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Revolving Commitments delivered by
the Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.
(d) Effect of Termination or Reduction. Any termination or reduction of
the Commitments of any Class shall be permanent. Each reduction of the
Commitments of any Class shall be made ratably among the Lenders in accordance
with their respective Commitments of such Class.
SECTION 2.10. Repayment of Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to pay the
Loans outstanding hereunder as follows:
(i) to the Administrative Agent for the account of each Lender the
outstanding principal amount of each Revolving Loan of such Lender on the
Maturity Date,
(ii) to the Administrative Agent for the account of each Incremental
Facility Lender the outstanding principal amount of each Incremental
Facility Loan of such Lender on the Maturity Date, and
(iii) to the Administrative Agent for account of the respective
Lender the then unpaid principal amount of each Competitive Loan of such
Lender on the last day of the Interest Period therefor, and
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(iv) to each Swingline Lender the outstanding principal amount of
each Swingline Loan made by such Swingline Lender on the earlier of the
Maturity Date and the first date after such Swingline Loan is made that is
the last day of a calendar month and that is at least two Business Days
after such Swingline Loan is made.
(b) Manner of Repayment. Prior to any repayment of any Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be paid and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of
such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such payment; provided that each payment of
Borrowings shall be applied to pay any outstanding ABR Borrowings before any
other Borrowings. If the Borrower fails to make a timely selection of the
Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied,
first, to pay any outstanding ABR Borrowings and, second, to other Borrowings
(including Competitive Borrowings) in the order of the remaining duration of
their respective Interest Periods (the Borrowing with the shortest remaining
Interest Period to be paid first). Each payment of a Borrowing shall be applied
ratably to the Loans included in such Borrowing.
(c) Maintenance of Loan Accounts by Lenders. Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(d) Maintenance of Loan Accounts by Administrative Agent. The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Class and Type thereof (including, in
the case of Incremental Facility Loans, the respective Series thereof) and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(e) Effect of Loan Accounts. The entries made in the accounts maintained
pursuant to paragraph (c) or (d) of this Section 2.10 shall be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.
(f) Promissory Notes. Any Lender may request that Loans of any Class made
by it be evidenced by a promissory note. In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
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SECTION 2.11. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any time
and from time to time to prepay any Borrowing in whole or in part, subject to
prior notice in accordance with paragraph (e) of this Section 2.11; provided
that (i) the Borrower shall not have the right to prepay any Competitive Loan
without the prior consent of the Lender thereof and (ii) any prepayments made
pursuant to this paragraph (a) in respect of (x) ABR Loans shall be in an
aggregate amount of $5,000,000 or a larger multiple of $1,000,000 and (y)
Eurodollar Loans shall be in an aggregate amount of $10,000,000 or a larger
multiple of $1,000,000.
(b) Mandatory Prepayments -- Casualty Events and Sales of Assets. The
Borrower shall make prepayments of the Loans (and reduce the Commitments)
hereunder as follows:
(i) Casualty Events. Upon the date twelve months following the
receipt by the Borrower or any of its Consolidated Subsidiaries of the
proceeds of insurance, condemnation award or other compensation in respect
of any Casualty Event affecting any property of the Borrower or any of its
Consolidated Subsidiaries (or upon such earlier date as the Borrower or
such Consolidated Subsidiary, as the case may be, shall have determined
not to repair or replace the property affected by such Casualty Event),
the Borrower shall prepay the Loans (and/or provide cover for LC Exposure
as specified in Section 2.06(k)), and the Commitments shall be subject to
automatic reduction, in an aggregate amount, if any, equal to 100% of the
Net Cash Proceeds of such Casualty Event not theretofore applied to the
repair or replacement of such property, such prepayment and reduction to
be effected in each case in the manner and to the extent specified in
clause (iii) of this Section 2.11(b).
(ii) Sale of Assets. Without limiting the obligation of the Borrower
to obtain the consent of the Required Lenders to any Disposition not
otherwise permitted hereunder, the Borrower agrees, on or prior to the
occurrence of any Disposition, to deliver to the Administrative Agent a
statement certified by a Financial Officer, in form and detail reasonably
satisfactory to the Administrative Agent, of the estimated amount of the
Net Cash Proceeds of such Disposition that will (on the date of such
Disposition) be received by the Borrower or any of its Consolidated
Subsidiaries in cash and, unless the Borrower shall elect to reinvest such
Net Cash Proceeds as provided below, the Borrower will prepay the Loans
hereunder (and provide cover for LC Exposure as specified in Section
2.06(k)), and the Commitments hereunder shall be subject to automatic
reduction, as follows:
(x) upon the date of such Disposition, in an aggregate amount
equal to 100% of such estimated amount of the Net Cash Proceeds of
such Disposition, to the extent received by the Borrower or any of
its Consolidated Subsidiaries in cash on the date of such
Disposition; and
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(y) thereafter, quarterly, on the date of the delivery by the
Borrower to the Administrative Agent pursuant to Section 5.01 of the
financial statements for any quarterly fiscal period or fiscal year,
to the extent the Borrower or any of its Consolidated Subsidiaries
shall receive Net Cash Proceeds during the quarterly fiscal period
ending on the date of such financial statements in cash under
deferred payment arrangements or Disposition Investments entered
into or received in connection with any Disposition, an amount equal
to (A) 100% of the aggregate amount of such Net Cash Proceeds minus
(B) any transaction expenses associated with Dispositions and not
previously deducted in the determination of Net Cash Proceeds plus
(or minus, as the case may be) (C) any other adjustment received or
paid by the Borrower or any of its Consolidated Subsidiaries
pursuant to the respective agreements giving rise to Dispositions
and not previously taken into account in the determination of the
Net Cash Proceeds of Dispositions, provided that if prior to the
date upon which the Borrower would otherwise be required to make a
prepayment under this subclause (y) with respect to any quarterly
fiscal period the aggregate amount of such Net Cash Proceeds (after
giving effect to the adjustments provided for in this subclause (y))
shall exceed $25,000,000, then the Borrower shall within three
Business Days make a prepayment under this subclause (y) in an
amount equal to such required prepayment.
Prepayments of Loans (and cover for LC Exposure) and reductions of
Commitments shall be effected in each case in the manner and to the extent
specified in clause (iii) of this Section 2.11(b).
Notwithstanding the foregoing, the Borrower shall not be required to
make a prepayment (or provide cover), and the Commitments shall not be
reduced, pursuant to this Section 2.11(b)(ii) with respect to the Net Cash
Proceeds from any Disposition in the event that the Borrower advises the
Administrative Agent at the time a prepayment is required to be made under
the foregoing subclauses (x) or (y) that it intends to reinvest such Net
Cash Proceeds into replacement assets pursuant to one or more Capital
Expenditures or Subsequent Acquisitions permitted hereunder, so long as
the Net Cash Proceeds from any Disposition are in fact so reinvested
within 350 days of such Disposition (it being understood that, in the
event more than one Disposition shall occur, such Net Cash Proceeds shall
be deemed to be applied in the same order in which such Dispositions
occurred and, accordingly, any such Net Cash Proceeds not so reinvested
within 350 days shall be forthwith applied to the prepayment of Loans (and
cover for LC Exposure as specified in Section 2.06(k)) and reductions of
Commitments as provided in clause (iii) of this Section 2.11(b).
Anything herein to the contrary notwithstanding, the Borrower shall
not be required to make any prepayment pursuant to this Section
2.11(b)(ii) (and the provisions of this Section 2.11(b)(ii) shall
accordingly be inapplicable) to the extent that after giving effect to any
Disposition the Leverage Ratio is less than 4.00 to 1.
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(iii) Application. Upon the occurrence of any of the events
described in the above clauses of this Section 2.11(b), the amount of the
required prepayment shall be applied simultaneously to the reduction of
the Revolving Commitments and the Incremental Facility Commitments of each
Series, and to the reduction of the 364-Day Commitments (or, after any
conversion of the 364-Day Loans into term loans as provided in the 364-Day
Credit Agreement, to the prepayment of the 364-Day Loans), in each case
ratably in accordance with their respective Applicable Prepayment
Percentages. In addition, to the extent that, after giving effect to any
such reductions:
(x) the aggregate Revolving Exposure shall exceed the
Revolving Commitments, the Borrower shall simultaneous prepay
Revolving Loans, and/or provide cover for LC Exposure as specified
in Section 2.06(k), in an aggregate amount equal to such excess;
(y) the Incremental Facility Loans of any Series shall exceed
the Incremental Facility Commitments of such Series, the Borrower
shall simultaneous prepay Incremental Facility Loans of such Series
in an aggregate amount equal to such excess; and
(z) the 364-Day Loans shall exceed the 364-Day Commitments,
the Borrower shall simultaneously prepay 364-Day Loans in an
aggregate amount equal to such excess.
Notwithstanding the foregoing, to the extent that the aggregate amount of
any of the required prepayments contemplated by this paragraph (b) shall
be in excess of the amount of the ABR Loans of any Class outstanding on
the date of such prepayment, only the portion of the amount of such
prepayment of such Class as is equal to the amount of such ABR Loans shall
be immediately prepaid and at the election of the Borrower, the balance of
such required prepayment shall be either (i) deposited with the
Administrative Agent to be held as collateral security for the Loans of
such Class and applied to the prepayment of the Eurodollar Loans of such
Class on the last day(s) of the then next-expiring Interest Period(s) for
Eurodollar Loans in the order in which such Interest Period(s) shall
expire (or immediately if any Event of Default shall occur and be
continuing), or (ii) made immediately, together with any amounts owing to
the Lenders under Section 2.16.
(c) Mandatory Prepayments -- Outstandings Exceeding Commitments. The
Borrower shall prepay the Revolving Loans (and/or provide cover for LC Exposure
as specified in Section 2.06(k)) in the event that the aggregate amount of the
sum of the Revolving Exposure plus the aggregate principal amount of outstanding
Competitive Loans shall at any time exceed the aggregate amount of the Revolving
Commitments. In addition, the Borrower shall prepay the Incremental Facility
Loans of any Series in the event that the aggregate amount of the Incremental
Facility Loans of such Series shall at any time exceed the aggregate amount of
the Incremental Facility Commitments of such Series.
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(d) Mandatory Prepayments -- Change of Control. In the event that any
"Change of Control" shall occur in respect of any Existing Senior Debt, or any
similar event shall occur in respect of any Additional Permitted Indebtedness,
in either case at a time when the aggregate outstanding principal amount of the
respective Indebtedness affected thereby is in excess of $25,000,000, and as a
result thereof the Borrower shall be required to offer to repurchase, redeem or
prepay any portion of the Existing Senior Debt or such Additional Permitted
Indebtedness, the Borrower shall prepay the Loans (and/or provide cover for LC
Exposure as specified in Section 2.06(k)), and the Commitments shall be
automatically reduced to zero.
(e) Notices. The Borrower shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the respective Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Syndicated Eurodollar Borrowing or of a Competitive Borrowing,
not later than 11:00 a.m., New York City time, two Business Days before the date
of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of
prepayment or (iii) in the case of prepayment of a Swingline Loan, not later
than 12:00 noon, New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date, the principal amount
of each Borrowing or portion thereof to be prepaid and in the case of a
mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice relating to a Syndicated Borrowing or Competitive
Borrowing, the Administrative Agent shall advise the relevant Lenders of the
contents thereof. Each partial optional prepayment of any Borrowing shall be in
an amount that would be permitted in the case of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
SECTION 2.12. Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
account of each Lender a commitment fee, which shall accrue at the Applicable
Margin on the daily average unutilized amount of such Lender's Incremental
Facility Commitment and Revolving Commitment (for which purpose the aggregate
amount of any LC Exposure shall be deemed to be a pro rata (based on the
Revolving Commitments) utilization of each Lender's Revolving Commitment and the
aggregate principal amount of any Swingline Loans shall be deemed to be a
utilization of the respective Swingline Lender's Revolving Commitment), for the
period from and including the date hereof to but not including the earlier of
the date such Commitment is terminated and the Maturity Date. Accrued commitment
fees shall be payable on each Quarterly Date and on the earlier of the date the
relevant Commitments are terminated and the Maturity Date, as the case may be.
All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
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(b) Letter of Credit Fees. The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Revolving Lender a participation
fee with respect to its participations in Letters of Credit, which shall accrue
at a rate per annum equal to the Applicable Margin used to determine interest on
Syndicated Eurodollar Revolving Loans on the average daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Revolving Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and
(ii) to the respective Issuing Lender a fronting fee, which shall accrue at the
rate of 3/16 of 1% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as such Issuing Lender's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including each Quarterly Date shall be
payable on the third Business Day following such Quarterly Date, commencing on
the first such date to occur after the Effective Date; provided that all such
fees shall be payable on the date on which the Revolving Commitments terminate
and any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Any other fees payable to any Issuing
Lender pursuant to this paragraph shall be payable within 10 days after demand.
All participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent (it being understood that if the Administrative Agent shall resign or be
removed, a ratable portion of any fees theretofore paid to the Administrative
Agent for the period during which such resignation or removal shall occur shall
be promptly paid by the Administrative Agent to the Borrower to the extent the
Borrower is required to pay fees for the balance of such period to a replacement
Administrative Agent).
(d) Payment of Fees. All fees payable hereunder shall be paid on the dates
due, in immediately available funds, to the Administrative Agent (or to the
respective Issuing Lender, in the case of fees payable to it) for distribution,
in the case of commitment fees and participation fees, to the Lenders entitled
thereto. Except as otherwise expressly provided in paragraph (c) above, fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest.
(a) ABR Borrowings. The Loans comprising each ABR Borrowing (other than
Swingline Loans, as to which paragraph (d) below shall apply) shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin.
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(b) Eurodollar Borrowings. The Loans comprising each Eurodollar Borrowing
shall bear interest at a rate per annum equal to (i) in the case of a Syndicated
Eurodollar Loan, the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin, or (ii) in the case of a Competitive
Eurodollar Borrowing, the LIBO Rate for the Interest Period for such Borrowing
plus (or minus, as applicable) the Margin applicable to such Loan.
(c) Fixed Rate Loans. Each Fixed Rate Loan shall bear interest at a rate
per annum equal to the Fixed Rate applicable to such Loan.
(d) Swingline Borrowings. Each Swingline Loan shall bear interest at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin, or
at such alternate rate of interest as may be applicable thereto as contemplated
by Section 2.05(b).
(e) Default Interest. Notwithstanding the foregoing, if any principal of
or interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration,
by mandatory prepayment or otherwise, such overdue amount (or, in case the
amount in default is principal of a Loan, all amounts outstanding hereunder)
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided above or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of
this Section.
(f) Payment of Interest. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and, in the case of
Revolving Loans, upon termination of the Revolving Commitments; provided that
(i) interest accrued pursuant to paragraph (e) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Revolving Loan prior to the Maturity Date), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Syndicated Eurodollar Borrowing prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(g) Computation. All interest hereunder shall be computed on the basis of
a year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
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(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Interest
Period; or
(b) if such Borrowing is of a particular Class of Loans (including
of a particular Series of Incremental Facility Loans), the Administrative
Agent is advised by the Required Revolving Lenders, or Required
Incremental Facility Lenders of such Series or, in the case of a
Competitive Eurodollar Loan, the Lender that is required to make such
Loan, as the case may be, that the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) of such Class included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Syndicated Borrowing as, a Syndicated Eurodollar Borrowing
shall be ineffective, (ii) if any Borrowing Request requests a Syndicated
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing; and
(iii) any request by the Borrower for a Competitive Eurodollar Borrowing shall
be ineffective; provided that a Lender and the Borrower may agree that, in lieu
of the interest rate on such affected Borrowing being calculated by reference to
the Alternate Base Rate while such circumstances shall continue, such interest
rate shall instead be at an alternative rate of interest (and with such
applicable margins and prepayment premiums) as may from time to time be offered
by such Lender to the Borrower in its sole discretion ; provided further that if
the circumstances giving rise to such notice do not affect all the Lenders, then
requests by the Borrower for Competitive Eurodollar Borrowings may be made to
Lenders that are not affected thereby.
SECTION 2.15. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or any Issuing Lender; or
(ii) impose on any Lender or any Issuing Lender or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans or Fixed Rate Loans made by such Lender or any Letter of
Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or such Issuing Lender of participating in,
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issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or such Issuing Lender hereunder (whether
of principal, interest or otherwise), then the Borrower will pay to such Lender
or such Issuing Lender, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Lender, as the case may be, for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or any Issuing Lender determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's or such Issuing Lender's
capital or on the capital of such Lender's or such Issuing Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by such Issuing Lender, to a level below that which such Lender or
such Issuing Lender or such Lender's or the Issuing Lender's holding company
could have achieved but for such Change in Law (taking into consideration such
Lender's or such Issuing Lender's policies and the policies of such Lender's or
such Issuing Lender's holding company with respect to capital adequacy), then
from time to time the Borrower will pay to such Lender or such Issuing Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Issuing Lender or such Lender's or such Issuing Lender's holding
company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender or an Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender
or such Issuing Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section, and setting forth in reasonable detail
the manner in which such amount or amounts have been determined, shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or such Issuing Lender, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or any
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or such Issuing Lender's right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender or an Issuing Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender or such Issuing Lender, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender's or the Issuing Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
(e) Competitive Loans. Notwithstanding the foregoing provisions of this
Section, a Lender shall not be entitled to compensation pursuant to this Section
in respect of any Competitive Loan if the Change in Law that would otherwise
entitle it to such compensation shall have been publicly announced prior to
submission of the Competitive Bid pursuant to which such Loan was made.
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SECTION 2.16. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan or Fixed Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Syndicated Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Syndicated Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice is
permitted to be revocable under Section 2.11(e) and is revoked in accordance
herewith), (d) the failure to borrow any Competitive Loan after accepting the
Competitive Bid to make such Loan or (e) the assignment of any Eurodollar Loan
or Fixed Rate Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.19, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, the
loss to any Lender attributable to any such event shall be deemed to include an
amount determined by such Lender to be equal to the excess, if any, of (i) the
amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for such Interest Period, over (ii)
the amount of interest that such Lender would earn on such principal amount for
such period if such Lender were to invest such principal amount for such period
at the interest rate that would be bid by such Lender (or an affiliate of such
Lender) for dollar deposits from other banks in the eurodollar market at the
commencement of such period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes.
(a) Payments Free of Taxes. Any and all payments by or an account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) Payment of Other Taxes by Borrower. In addition, the Borrower shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
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(c) Indemnification by Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and each Issuing Lender, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or such Issuing Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or an Issuing Lender, or by the Administrative Agent on its
own behalf or on behalf of a Lender or an Issuing Lender, shall be conclusive
absent manifest error.
(d) Receipt for Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Payments by the Borrower. The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, under Section 2.15, 2.16 or 2.17, or
otherwise) or under any other Loan Document (except to the extent otherwise
provided therein) prior to 12:00 noon, New York City time, on the date when due,
in immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except as otherwise expressly provided in the relevant Loan
Document, and except payments to be made directly to an Issuing Lender or a
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder or
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under any other Loan Document (except to the extent otherwise provided therein)
shall be made in dollars.
(b) Application if Payments Insufficient. If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, then such funds as shall actually have been received shall be applied
(i) first, to pay interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided herein:
(i) each borrowing of Loans of a particular Class (including of a particular
Series of Incremental Facility Loans) from the Lenders under Section 2.01 shall
be made from the relevant Lenders, each payment of commitment fee under Section
2.12 in respect of Commitments of a particular Class (including of a particular
Series of Incremental Facility Loans) shall be made for account of the relevant
Lenders, and each termination or reduction of the amount of the Commitments of a
particular Class (including of a particular Series of Incremental Facility
Loans) under Section 2.09 shall be applied to the respective Commitments of such
Class of the relevant Lenders, pro rata according to the amounts of their
respective Commitments of such Class; (ii) Eurodollar Loans of any Class
(including of a particular Series of Incremental Facility Loans) having the same
Interest Period shall be allocated pro rata among the relevant Lenders according
to the amounts of their Commitments of such Class (in the case of the making of
Loans) or their respective Loans of such Class (in the case of conversions and
continuations of Loans); (iii) each payment or prepayment by the Borrower of
principal of Loans of a particular Class (including of a particular Series of
Incremental Facility Loans) shall be made for account of the relevant Lenders
pro rata in accordance with the respective unpaid principal amounts of the Loans
of such Class held by them; (iv) each payment by the Borrower of interest on
Loans of a particular Class (including of a particular Series of Incremental
Facility Loans) shall be made for account of the relevant Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders; and (v) each payment by the Borrower of participation
fees in respect of Letters of Credit shall be made for the account of the
Revolving Lenders pro rata in accordance with the amount of participation fees
then due and payable to the Revolving Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Syndicated Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Syndicated Loans and
participations in LC Disbursements and Swingline Loans and accrued interest
thereon then due than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Syndicated Loans and participations in LC Disbursements
and Swingline Loans of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their
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respective Loans and participations in LC Disbursements and Swingline Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders or an Issuing Lender
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
such Issuing Lender, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or such
Issuing Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or such Issuing Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by Administrative Agent. If any Lender shall fail
to make any payment required to be made by it pursuant to Section 2.05(d),
2.06(e) or (f), 2.07(b) or 2.18(e), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) Designation of Different Lending Office. If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.17, then such Lender shall, at Borrower's
request, use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the good
faith judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17 as the case
may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be
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disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.15, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights and obligations under this
Agreement (other than any outstanding Competitive Loans held by it) to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, each Issuing Lender and each
Swingline Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans (excluding, however, any amounts outstanding in respect
of its Competitive Bid Loans) and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
Consolidated Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within
the Borrower's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each of the other
Loan Documents to which it is a party when executed and delivered by the
Borrower and the other parties thereto will constitute, a legal,
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valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as such enforceability may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a)
do not require any material consent or approval of, registration or filing with,
or any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Consolidated Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its Consolidated Subsidiaries or assets, or give rise to a right thereunder to
require any payment to be made by any such Person and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Consolidated Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change; Solvency.
(a) Financial Statements. The Borrower has heretofore delivered, or made
available, to the Lenders the following financial statements:
(i) the audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries as of and for the fiscal years ended December 31, 1997 (as
set forth in the Proxy Statement, or incorporated by reference therein
from the Borrower's SEC Form 10-K, for such fiscal year) and December 31,
1998, reported on by Deloitte & Touche LLP, independent public
accountants;
(ii) the unaudited condensed consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
Borrower and its Subsidiaries as of and for the three-month period ended
September 30, 1998 (as set forth in the Proxy Statement, or incorporated
by reference therein from the Borrower's SEC Form 10-K, for the applicable
period);
(iii) the unaudited (or, to the extent available, audited)
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows of the broadcasting assets acquired in
the Kelly Acquisition and the Pulitzer Acquisition, as of and for the
fiscal years ended December 31, 1996 and December 31, 1997, respectively;
(iv) the unaudited condensed consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
broadcasting assets being acquired in the Kelly Acquisition and the
Pulitzer Acquisition, as of and for the three-month period ended September
30, 1998; and
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(v) the unaudited pro forma combined condensed balance sheet as at
September 30, 1998 prepared under the assumption that the Pulitzer
Acquisition and the Kelly Acquisition (including the Transactions
contemplated under this Agreement) had occurred on September 30, 1998 (as
set forth in the Proxy Statement).
Such financial statements present fairly, in all material respects, the actual
or pro forma (as the case may be) financial position and the actual or pro forma
(as the case may be) results of operations and cash flows of the respective
entities as of such dates and for such periods in accordance with GAAP, subject
to year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clauses (ii), (iii), (iv) and (v) above.
(b) No Material Adverse Change. Since December 31, 1998, there has been no
material adverse change in the business, condition (financial or otherwise),
operations, properties or prospects (excluding adverse changes to prospects as a
result of changes affecting the television broadcasting industry generally) of
the Borrower and its Subsidiaries, taken as a whole, and during the period since
December 31, 1998 and prior to the Effective Date, there has been no material
adverse change in the business, condition (financial or otherwise), operations,
properties or prospects (excluding adverse changes to prospects as a result of
changes affecting the television broadcasting industry generally) of the
Borrower and its Subsidiaries, taken as a whole, from that set forth in the pro
forma combined condensed balance sheet as at said date referred to above.
(c) Solvency. After giving effect to the Transactions, none of the
Borrower or any of its Subsidiaries is insolvent nor will any of them be left
with unreasonably small capital with which to engage in its business or incurred
debts beyond its ability to pay such debts as they mature.
SECTION 3.05. Properties.
(a) Real and Personal Property. Each of the Borrower and its Consolidated
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, subject only to Liens permitted
by Section 6.02 and except for minor defects in title or interests that do not
interfere with their ability to conduct their business as currently conducted or
to utilize such properties for their intended purposes.
(b) Trademarks and Licenses, Etc. Each of the Borrower and its
Consolidated Subsidiaries owns or is licensed to use all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business,
and the use thereof by the Borrower and its Consolidated Subsidiaries does not
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
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SECTION 3.06. Litigation and Environmental Matters.
(a) Litigation. There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority now pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Consolidated Subsidiaries (i) as to which there is a reasonable
likelihood of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement or the Transactions.
(b) Environmental Matters. Except for the Disclosed Matters and except
with respect to any other matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of its Consolidated Subsidiaries (i) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law, (ii) has become subject
to any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) No Change in Disclosed Matters. Since the date of this Agreement,
there has been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower
and its Consolidated Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the Borrower
nor any of its Subsidiaries is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. The Borrower and its Subsidiaries are members of an
affiliated group of corporations filing consolidated returns for Federal income
tax purposes, of which the Borrower is the "common parent" (within the meaning
of Section 1504 of the Code). Except with respect to tax sharing arrangements
among the Borrower and its Subsidiaries and the Tax Sharing Agreement between
Hearst and the Borrower dated August 29, 1997, there is no tax sharing
allocation or similar agreement to which the Borrower or any of its Subsidiaries
is subject that is currently in effect providing for the manner in which tax
payments owing by members of such affiliated group are allocated among members
of the group. The Borrower has filed (either directly or indirectly through
Hearst Broadcasting Inc. or Hearst, for periods prior to the Pulitzer
Acquisition) all Tax returns and reports required to have been filed and has
paid
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(either directly or indirectly through Hearst Broadcasting Inc. or Hearst, for
periods prior to the Pulitzer Acquisition) all Taxes required to have been paid
by it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which such Person has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans, in either case by an amount that could reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders (i)
all agreements, instruments and corporate or other restrictions to which it or
any of its Consolidated Subsidiaries is subject, and (ii) all other matters
known to it, that, in the case of either of the foregoing clauses (i) or (ii),
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other written information (including the Information Memorandum) furnished by
or on behalf of the Borrower to the Lender in connection with the negotiation of
this Agreement and the other Loan Documents or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, when taken as a whole, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time in light of circumstances in effect on the date
prepared, it being understood that such projections do not constitute a
representation or warranty as to the future performance of the Borrower and that
actual results may vary from such projections.
SECTION 3.12. Use of Credit. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
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SECTION 3.13. Material Agreements and Liens With Respect to Indebtedness.
(a) Material Agreements. Part A of Schedule II is a complete and correct
list of each credit agreement, loan agreement, indenture, purchase agreement,
guarantee, letter of credit or other arrangement providing for or otherwise
relating to any Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or guarantee by, the Borrower or any of its
Consolidated Subsidiaries outstanding on the date hereof the aggregate principal
or face amount of which equals or exceeds (or may equal or exceed) $10,000,000,
and the aggregate principal or face amount outstanding or that may become
outstanding under each such arrangement is correctly described in Part A of
Schedule II.
(b) Liens. Part B of Schedule II is a complete and correct list of each
Lien securing Indebtedness of any Person outstanding on the date hereof the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $10,000,000 and covering any property of the Borrower or any of its
Consolidated Subsidiaries, and the aggregate Indebtedness secured (or that may
be secured) by each such Lien and the property covered by each such Lien is
correctly described in Part B of Schedule II.
SECTION 3.14. Capitalization. On the date hereof, the authorized capital
stock of the Borrower consists of an aggregate of 301,000,000 shares consisting
of (i) 300,000,000 shares of Common Stock, par value $.01 per share, of which
200,000,000 are designated as Series A Common Stock and 100,000,000 are
designated as Series B Common Stock and (ii) 1,000,000 shares of preferred
stock, of which 12,500 shares are designated as Series A Preferred Stock and
12,500 shares are designated as Series B Preferred Stock. Except as disclosed in
Schedule VI, as of the date hereof, there are no outstanding obligations of the
Borrower or any of its Subsidiaries to repurchase, redeem, or otherwise acquire
any shares of capital stock of the Borrower nor are there any outstanding
obligations of the Borrower or any of its Subsidiaries to make payments to any
Person, such as "phantom stock" payments, where the amount thereof is calculated
with reference to the fair market value or equity value of the Borrower or any
of its Subsidiaries.
SECTION 3.15. Subsidiaries and Investments.
(a) Subsidiaries. As at the date hereof, and as at the most recent date
such Schedule shall be supplemented pursuant to Section 6.03(c)(iv) (in the case
of any Subsidiary formed or acquired pursuant to any Subsequent Acquisition),
set forth in Part A of Schedule IV is a complete and correct list of all of the
Subsidiaries of the Borrower (excluding any Subsidiary that shall have been
sold, or the existence of which shall have been terminated, in accordance with a
transaction permitted hereunder), together with, for each such Subsidiary, (i)
the jurisdiction of organization of such Subsidiary, (ii) each Person (other
than the holders of shares of stock of the Borrower) holding ownership interests
in such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and the percentage of ownership of such Subsidiary represented by
such ownership interests. As at the date hereof, except as disclosed in Part A
of Schedule IV, (x) each of the Borrower and its Subsidiaries owns, free and
clear of Liens, and has the unencumbered right to vote, all outstanding
ownership interests in each Person
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shown to be held by it in Part A of Schedule IV, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no outstanding
Equity Rights with respect to such Person.
(b) Investments. Set forth in Part B of Schedule IV is a complete and
correct list of all Investments (other than Investments disclosed in Part A of
Schedule IV) held by the Borrower or any of its Subsidiaries in any Person on
the date hereof and, for each such Investment, (x) the identity of the Person or
Persons holding such Investment and (y) the nature of such Investment. Except as
disclosed in Part B of Schedule IV, each of the Borrower and its Subsidiaries
owns, free and clear of all Liens, all such Investments.
(c) No Indenture Restrictions, Etc. None of the Consolidated Subsidiaries
of the Borrower is on the date hereof subject to any indenture, agreement,
instrument or other arrangement of the type described in Section 6.08.
SECTION 3.16. Station Licenses. As at the date hereof, and as at the most
recent date such Schedule shall be supplemented pursuant to Section 6.03(c)(iv)
(in the case of any Station acquired pursuant to any Subsequent Acquisition):
(a) Schedule V accurately and completely lists all Station Licenses
(other than non-material incidental microwave relay and remote transmitter
licenses) granted or assigned to the Borrower or any Consolidated
Subsidiary, or under which the Borrower and its Consolidated Subsidiaries
have the right to operate such Station. The Station Licenses listed on
said Schedule V 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 Consolidated Subsidiaries with respect to
such Station.
(b) The Station Licenses listed in said Schedule V are validly
issued in the name of, or the FCC has consented to the assignment of or
transfer of control of such Station Licenses to, the Borrower or one or
more of its Subsidiaries.
(c) Each such Station License is in full force and effect, and the
Borrower and its Consolidated Subsidiaries have fulfilled and performed in
all material respects all of their obligations with respect thereto and
have full power and authority to operate thereunder.
(d) All operating assets, rights and other property relating to, and
material to the operations of, any Station, are owned (or are available
for use under lease, license or other arrangements entered into with third
parties) by the Borrower or one or more of its Subsidiaries.
SECTION 3.17. Proxy Statement. The Borrower has heretofore delivered to
the Administrative Agent a complete copy (including all modifications, waivers
and supplements thereto, and exhibits and schedules) of the Proxy Statement
(including, as an exhibit thereto, the
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Amended and Restated Agreement and Plan of Merger referred to in the definition
of "Pulitzer Acquisition").
SECTION 3.18. Year 2000 Issues. The Borrower and its Subsidiaries have (a)
initiated a review and assessment of all areas within their respective
businesses operations (including those affected by information received from
suppliers and vendors) that could reasonably be expected to be adversely
affected by the Year 2000 Problem, (b) developed a plan and timetable for
addressing the Year 2000 Problem on a timely basis, and (c) to date, implemented
that plan substantially in accordance with that timetable. The Borrower
reasonably believes that all computer applications (including those affected by
information received from its suppliers and vendors) will on a timely basis be
Year 2000 Compliant, except to the extent that a failure to be so could not
reasonably be expected to have a Material Adverse Effect. The Borrower does not
believe that the costs of ensuring that the Borrower and its Subsidiaries will
be Year 2000 Compliant will be material. As used in this Agreement, the term
"Year 2000 Compliant" means all computer applications (including those affected
by information received from suppliers and vendors) that are material to the
businesses and operations of the Borrower and its Subsidiaries will on a timely
basis be able to perform properly date-sensitive functions involving all dates
on and after January 1, 2000; and the term "Year 2000 Problem" means the risk
that computer applications used by the Borrower or any of its Subsidiaries
(including those affected by information received from suppliers and vendors)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates on and after January 1, 2000.
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans, and of the Issuing Lender to issue Letters of Credit hereunder, shall not
become effective until the date on which the Administrative Agent shall have
received each of the following documents, each of which shall be satisfactory to
the Administrative Agent (and to the extent specified below, to each Lender) in
form and substance (or such condition shall have been waived in accordance with
Section 9.02):
(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) Opinions of Counsel to the Borrower. A written opinion
(addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Rogers & Wells LLP, counsel for the Borrower,
substantially in the form of Exhibit B. The Borrower hereby requests such
counsel deliver such opinions to the Lenders.
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(c) Opinion of Special New York Counsel to Chase. An opinion, dated
the Effective Date, of Milbank, Tweed, Hadley & McCloy LLP, special New
York counsel to Chase, substantially in the form of Exhibit C (and Chase
hereby instructs such counsel to deliver such opinion to the Lenders).
(d) Corporate Documents. Such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to
the Borrower, this Agreement or the Transactions, all in form and
substance reasonably satisfactory to the Administrative Agent and its
counsel.
(e) Officer's Certificate. A certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer,
confirming compliance with the conditions set forth in the lettered
clauses of the first sentence of Section 4.02.
(f) Repayment of Existing Indebtedness. Evidence that the principal
of and interest on, and all other amounts owing in respect of, the
Indebtedness in respect of the Existing Credit Agreement shall have been
(or shall be simultaneously) paid in full, that any commitments to extend
credit under the agreements or instruments relating to such Indebtedness
shall have been canceled or terminated and that all Guarantees in respect
of, and all Liens securing, any such Indebtedness shall have been released
(or arrangements for such release satisfactory to the Administrative Agent
shall have been made).
(g) Leverage Ratio. A certificate of a Financial Officer setting
forth a calculation of the Leverage Ratio as at the Effective Date.
(h) Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to Chase may reasonably
request (including any promissory note that any Lender shall have
requested prior to the Closing Date pursuant to Section 2.10(f)).
The obligation of any Lender to make its initial extension of credit
hereunder is also subject to the payment by the Borrower of such fees as the
Borrower shall have agreed to pay to any Lender, the Administrative Agent and
its affiliates in connection herewith, including the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to
Chase, in connection with the negotiation, preparation, execution and delivery
of this Agreement and the other Loan Documents and the extensions of credit
hereunder (to the extent that statements for such fees and expenses have been
delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Lenders to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
9.02) on or prior to 3:00 p.m., New York City time, on April 30,
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1999 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of each Issuing Lender to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(a) the representations and warranties of the Borrower set forth in
this Agreement shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, unless such representation or warranty is
expressly stated to have been made as of a specific date (such as the date
hereof or the Effective Date), in which case such representation and
warranty shall be true and correct on and as of such specific date; and
(b) at the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in the preceding
sentence.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed or covered, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, consolidated statements of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries and of the Borrower and its Consolidated Subsidiaries (and,
separately stated, of each Designated Subsidiary) for such fiscal year and
the related consolidated balance sheets of the Borrower and its
Subsidiaries and of the Borrower and its Consolidated Subsidiaries (and,
separately stated, of each Designated Subsidiary) as at the end of such
fiscal year, setting forth in each case in comparative (or, for periods
prior to any Acquisition, comparative historical) form the corresponding
consolidated (or, in the case of a Designated Subsidiary, separately
stated) figures for the preceding fiscal year, and accompanied
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(i) in the case of said consolidated statements and balance
sheet of the Borrower and its Subsidiaries, by an opinion thereon of
independent certified public accountants of recognized national
standing, which opinion shall state that said consolidated financial
statements fairly present the consolidated financial condition and
results of operations of the Borrower and its Subsidiaries as at the
end of, and for, such fiscal year in accordance with GAAP,
consistently applied (except as noted pursuant to paragraph (c)
below),
(ii) in the case of said consolidated statements and balance
sheet of the Borrower and its Consolidated Subsidiaries, by a report
of independent certified public accountants of recognized national
standing stating that the consolidated balance sheet and such other
financial statements of the Borrower and its Subsidiaries (x) have
been subjected to the auditing procedures applied in the audits of
the consolidated financial statements of the Borrower and its
Subsidiaries, (y) have been prepared in conformity with GAAP, and
(z) are fairly stated, in all material respects, in relation to such
audited consolidated financial statements of the Borrower and its
Subsidiaries taken as a whole, and
(iii) in the case of said consolidated statements and balance
sheet of the Borrower and its Consolidated Subsidiaries (and
separate statements and balance sheets for a Designated Subsidiary),
by a certificate of a Financial Officer, which certificate shall
state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of the
Borrower and its Consolidated Subsidiaries (and, in the case of each
Designated Subsidiary, said separately stated financial statements
fairly present the respective results of operations of such
Designated Subsidiary), in each case in accordance with (except, in
the case of the consolidated financial statements of the Borrower
and its Consolidated Subsidiaries for the exclusion therefrom of the
Designated Subsidiaries) GAAP, consistently applied (except as noted
pursuant to paragraph (c) below), as at the end of, and for, such
fiscal year;
(b) as soon as available and in any event within 60 days after the
end of each of the first three quarterly fiscal periods of each fiscal
year of the Borrower, consolidated statements of operations, stockholders'
equity and cash flows of the Borrower and its Subsidiaries and of the
Borrower and its Consolidated Subsidiaries (and, separately stated, of
each Designated Subsidiary) for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and the
related consolidated balance sheets of the Borrower and its Subsidiaries
and of the Borrower and its Consolidated Subsidiaries (and, separately
stated, of each Designated Subsidiary) as at the end of such period,
setting forth in each case in comparative (or for periods prior to any
Acquisition, comparative historical) form the corresponding consolidated
(or, in the case of a Designated Subsidiary, separately stated) figures
for the corresponding periods in the preceding fiscal year (except that,
in the case of balance sheets, such comparison shall be to the last day of
the prior fiscal year), accompanied by a certificate of a
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Financial Officer, which certificate shall state that said consolidated
financial statements fairly present the consolidated financial condition
and results of operations of, as the case may be, the Borrower and its
Subsidiaries and the Borrower and its Consolidated Subsidiaries (or of
such Designated Subsidiary, as the case may be), in each case in
accordance with (except, in the case of the consolidated financial
statements of the Borrower and its Consolidated Subsidiaries, for the
exclusion therefrom of the Designated Subsidiaries) GAAP, consistently
applied (except as noted pursuant to paragraph (c) below), as at the end
of, and for, such period (subject to normal year-end audit adjustments);
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.01, 6.06 and 6.10
and (iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of the audited financial statements referred
to in Section 3.04 that affects (or in the future is reasonably likely to
affect) in any material respect the presentation of financial information
with respect to the Borrower and its Subsidiaries required hereunder and,
if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, a statement of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any default by the Borrower under Section 6.10 (insofar as
such Section relates to accounting matters) (which statement may be
limited by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any of its Subsidiaries with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its stockholders generally or to holders of
any class of Indebtedness generally, as the case may be;
(f) promptly upon their becoming available, copies of any and all
periodic or special reports filed by the Borrower or any of its
Consolidated Subsidiaries with the FCC or with any other Federal, state or
local governmental authority, if such reports indicate any material
adverse change in the business, operations, affairs or condition of the
Borrower and its Consolidated Subsidiaries, taken as a whole, or if copies
thereof are requested by any Lender or the Administrative Agent, and
copies of any and all notices and other communications from the FCC or
from any other Federal, state or local governmental authority with respect
to the Borrower, any of its Consolidated Subsidiaries
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or any Station that raises any matters that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Consolidated Subsidiaries, or compliance with the
terms of this Agreement and the other Loan Documents, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Borrower or any of its Affiliates that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.04. Payment of Obligations. The Borrower will, and will cause
each of its Consolidated Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Consolidated Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect.
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SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and
will cause each of its Consolidated Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations, provided that the
Borrower will in any event maintain (with respect to itself and each of its
Consolidated Subsidiaries) casualty insurance and insurance against claims for
damages with respect to defamation, libel, slander, privacy or other similar
injury to person or reputation (including misappropriation of personal
likeness), in such amounts as are then customary for Persons engaged in the same
or similar business similarly situated.
SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and
will cause each of its Consolidated Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Consolidated Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Borrower will, and will cause each
of its Consolidated Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority, including, but not limited to,
Environmental Laws applicable to it or its property, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used for
general corporate purposes of the Borrower and its Subsidiaries. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
SECTION 5.09. Certain Obligations Respecting Subsidiaries.
(a) Wholly Owned Subsidiaries. Subject to paragraph (b) below and the
provisions of Section 6.03(b), the Borrower will, and will cause each of its
Subsidiaries to, take such action from time to time as shall be necessary to
ensure that each of the Stations and Station Licenses owned by it on the date
hereof are owned by Wholly Owned Subsidiaries which are Consolidated
Subsidiaries.
(b) Designated Subsidiaries. Notwithstanding the provisions of paragraph
(a) above, the Borrower may at any time after the date hereof designate any
Subsidiary (other than a Subsidiary holding any Station Licenses or the
operating assets of any Stations) as a "Designated Subsidiary" for purposes of
this Agreement, by delivering to the Administrative Agent a
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certificate of a senior officer of the Borrower (and the Administrative Agent
shall promptly deliver a copy thereof to each Lender following receipt)
identifying such Subsidiary, stating that such Subsidiary shall be treated as a
"Designated Subsidiary" for all purposes hereof and certifying that, after
giving effect to such designation, the Borrower will be in compliance with the
provisions of this Agreement applicable to such Designated Subsidiary (including
the provisions of Section 6.05(f) with respect to the type of business in which
a Designated Subsidiary shall be involved and the limitations upon the aggregate
amount of Investments in Designated Subsidiaries therein specified), and such
designation will not result in a Default hereunder. Any Subsidiary of a
Designated Subsidiary shall be deemed to be a "Designated Subsidiary".
(c) Incorporation by Reference. The Borrower agrees, for the benefit of
the Lenders and the Administrative Agent hereunder, to perform, comply with and
be bound by each of its covenants, agreements and obligations contained in
Section 10.7 and 10.8 of the Senior Notes Indentures as originally in effect and
without giving effect to any modifications or supplements thereto, or
termination thereof, after the date thereof. Without limiting the generality of
the foregoing, the above-mentioned provisions of the Senior Notes Indentures,
together with related definitions and ancillary provisions and schedules and
exhibits, are hereby incorporated by reference, as if set forth herein in full,
mutatis mutandis; provided that, as incorporated herein (i) each reference to
the "Company" shall be deemed to be reference to the Borrower hereunder and (ii)
each reference to the "Debt Securities" of any series shall be deemed to be a
reference to the Loans hereunder.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed or covered, the Borrower covenants and agrees with the
Lenders that:
SECTION 6.01. Indebtedness. The Borrower will not, nor will it permit any
of its Consolidated Subsidiaries to, create, incur, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness hereunder and under the 364-Day Credit Agreement;
(b) Indebtedness existing on the date hereof and set forth in Part A
of Schedule II (but excluding, following the making of the initial Loans
hereunder, the Indebtedness to be repaid with the proceeds of such Loans,
under the Existing Credit Agreement), together with any extensions,
renewals, refinancings or replacements of any such Indebtedness so long as
the principal thereof is not increased and such Indebtedness, as
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so extended, renewed, refinanced or replaced, would constitute
Indebtedness that could be incurred in compliance with Section 6.01(g);
(c) Indebtedness of any Consolidated Subsidiary to the Borrower or
any other Consolidated Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any Consolidated
Subsidiary and by any Consolidated Subsidiary of Indebtedness of any other
Consolidated Subsidiary;
(e) Indebtedness of the Borrower and its Subsidiaries in respect of
the deferred payment of insurance premiums up to an aggregate principal
amount not exceeding $10,000,000 at any one time outstanding;
(f) Indebtedness of any Person that becomes a Consolidated
Subsidiary after the Effective Date; provided that such Indebtedness
exists at the time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a Consolidated
Subsidiary;
(g) additional Indebtedness of the Borrower, incurred after the
Effective Date (or assumed in connection with any Subsequent Acquisition),
provided that
(i) the stated maturity date with respect to such Indebtedness
shall be at least six months after the Maturity Date,
(ii) no principal payments with respect to such Indebtedness
shall be stated to be due prior to the Maturity Date (other than in
respect of a Change of Control or similar event), except that if
such Indebtedness is pari passu in right of payment with the
obligations of the Borrower hereunder (i.e. not subordinated in
right of payment to such obligations), such Indebtedness may provide
for principal payments prior to the Maturity Date, so long as the
weighted average life to maturity of such Indebtedness (determined
in accordance with GAAP) is not earlier than the weighted average
life to maturity of the Loans hereunder,
(iii) all covenants with respect to such Indebtedness shall be
no more restrictive then the covenants set forth in this Agreement
and the Borrower shall be in compliance with such covenants,
(iv) such Indebtedness is not secured by any Lien on property
of the Borrower or any Consolidated Subsidiary, and
(v) at the time of such incurrence, and after giving effect
thereto, no Default shall have occurred and be continuing and the
Borrower shall be in pro forma compliance with Section 6.10 (the
determination of such pro forma compliance to be calculated, as at
the end of and for the period of four fiscal
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quarters most recently ended prior to the date of such incurrence
for which financial statements of the Borrower and its Consolidated
Subsidiaries are available, under the assumption that such
incurrence shall have occurred at the beginning of the applicable
period) and the Borrower shall have delivered to the Administrative
Agent a certificate of a Financial Officer showing such calculations
in reasonable detail to demonstrate such compliance;
provided that the Borrower may incur up to $300,000,000 of additional
Indebtedness under this Section 6.01(g) without complying with the
foregoing clauses (i) and (ii); and
(h) other Indebtedness (whether or not secured) of the Borrower or
any Consolidated Subsidiary in an aggregate principal amount not exceeding
$50,000,000 at any time outstanding, and other Indebtedness (not secured)
of the Borrower (but not of any Consolidated Subsidiary) in an aggregate
principal amount not exceeding $150,000,000 at any time outstanding, so
long as the aggregate principal amount of Indebtedness permitted under
this clause (h) shall not exceed $200,000,000 at any time outstanding.
SECTION 6.02. Liens. The Borrower will not, nor will it permit any of its
Consolidated Subsidiaries to, create, incur, assume or permit to exist any Lien
on any property or asset now owned or hereafter acquired by it, or assign or
sell any income or revenues (including accounts receivable) or rights in respect
of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any of its
Consolidated Subsidiaries existing on the date hereof, and either set
forth in Part B of Schedule II or not required to be so listed pursuant to
Section 3.13(b); provided that (i) no such Lien shall extend to any other
property or asset of the Borrower or any of its Consolidated Subsidiaries
and (ii) such Lien shall secure only those obligations which it secures on
the date hereof;
(c) any Lien existing on any property or asset of any Person that
becomes a Consolidated Subsidiary after the Effective Date prior to the
time such Person becomes a Consolidated Subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection with such Person
becoming a Consolidated Subsidiary, (ii) such Lien shall not apply to any
other property or assets of the Borrower or any Consolidated Subsidiary,
(iii) such Lien shall secure only those obligations which it secures on
the date such Person becomes a Consolidated Subsidiary and (iv) the
aggregate amount of Indebtedness or other obligations secured thereby
shall not exceed $50,000,000; and
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Consolidated Subsidiary; provided that (i)
such security interests secure Indebtedness permitted by clause (h) of
Section 6.01, (ii) such security interests and the Indebtedness secured
thereby are incurred prior to or within 90 days after such
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acquisition or the completion of such construction or improvement, (iii)
the Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets, (iv) such security
interests shall not apply to any other property or assets of the Borrower
or any Consolidated Subsidiary and (v) the aggregate amount of
Indebtedness or other obligations secured thereby shall not exceed
$50,000,000.
SECTION 6.03. Fundamental Changes.
(a) Mergers and Consolidations. The Borrower will not, nor will it permit
any of its Consolidated Subsidiaries to, enter into any transaction of merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution); provided that, subject to Section 6.04,
and so long as after giving effect thereto no Default shall have occurred and be
continuing hereunder, (i) any Consolidated Subsidiary of the Borrower may merge
into or consolidate with the Borrower or a Consolidated Subsidiary so long as
the Borrower or (if the Borrower is not a party) a Consolidated Subsidiary is
the continuing or surviving party, (ii) any Consolidated Subsidiary of the
Borrower may liquidate or dissolve into the Borrower or a Consolidated
Subsidiary and (iii) the Borrower and its Consolidated Subsidiaries may enter
into the transactions permitted under clauses (B) or (C) of paragraph (b) below,
and under clause (iv) of paragraph (c) below.
(b) Dispositions. The Borrower will not, nor will it permit any of its
Consolidated Subsidiaries to, sell, transfer, lease or otherwise dispose of all
or any substantial part of its assets, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing, (i) any Consolidated Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Borrower or another Consolidated
Subsidiary and (ii) the Borrower and any of its Consolidated Subsidiaries may
sell, transfer, lease, exchange or dispose of (in one transaction or in a series
of transactions and, in the case of clauses (B) and (C) below, in any form,
including by way of a merger or consolidation the effect of which is to result
in the disposition of the respective Station):
(A) any part of its assets in the ordinary course of business and on
ordinary business terms,
(B) any Station to the extent that the Borrower or a Subsidiary is
required to sell such Station in order to comply with the FCC's
cross-ownership restrictions set forth in 47 C.F.R. ss.73.3555(b),
(C) any one or more Stations, so long as the Broadcast Cash Flow
attributed to all Stations sold or exchanged pursuant to this clause (C)
(but not pursuant to clause (B)) during any fiscal year shall not exceed
25% of the Broadcast Cash Flow for such fiscal year nor 50% of the
Broadcast Cash Flow for any period of five consecutive fiscal years
(Broadcast Cash Flow, for purposes hereof, to be determined under the
assumption that none of the sales otherwise permitted under this clause
(C) had occurred during such fiscal year or five fiscal year period and
that the Broadcast Cash Flow of any Station sold during such period
remained unchanged after such sale), and
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(D) any non-broadcast assets acquired by the Borrower and its
Consolidated Subsidiaries.
(c) Acquisitions. The Borrower will not, nor will it permit any of its
Consolidated Subsidiaries to, acquire any business or property from, or capital
stock of, or be a party to any acquisition of, any Person except:
(i) purchases of equipment, programming rights and other property to
be sold or used in the ordinary course of business;
(ii) Investments permitted under Section 6.05;
(iii) Capital Expenditures; and
(iv) the Borrower and its Consolidated Subsidiaries may, pursuant to
a merger or consolidation, a purchase of stock or assets or entering into
an LMA Arrangement (any such transaction being herein called a "Subsequent
Acquisition"), acquire after the date hereof (or, in the case of an LMA
Arrangement, acquire the right to operate) additional television
broadcasting stations (any such station that is the subject of any
Subsequent Acquisition being hereinafter referred to as an "Acquired
Station"), additional broadcast industry related assets, and other assets
or businesses permitted under Section 6.04, so long as:
(A) immediately prior to such Subsequent Acquisition and after
giving effect thereto, (1) no Default shall have occurred and be
continuing and (2) the Borrower shall be in pro forma compliance
with Section 6.10 (the determination of such pro forma compliance to
be calculated, as at the end of and for the period of four fiscal
quarters most recently ended prior to the date of such Subsequent
Acquisition for which financial statements of the Borrower and its
Consolidated Subsidiaries are available, under the assumption that
such Subsequent Acquisition shall have occurred at the beginning of
the applicable period) and the Borrower shall have delivered to the
Administrative Agent a certificate of a Financial Officer showing
such calculations in reasonable detail to demonstrate such
compliance; and
(B) promptly following the consummation of such Subsequent
Acquisition, the Borrower shall have supplemented Schedules IV and V
in order that such Schedules accurately reflect any additional
Consolidated Subsidiaries formed or acquired pursuant to such
Subsequent Acquisition and accurately identify the respective
Station Licenses (other than non-material incidental microwave relay
and remote transmitter Licenses) of any Acquired Station.
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SECTION 6.04. Lines of Business. The Borrower will not engage in any other
business or line of business activity other than the businesses in which the
Borrower and its Subsidiaries have heretofore been engaged and businesses
reasonably related thereto.
SECTION 6.05. Investments. The Borrower will not, nor will it permit any
of its Consolidated Subsidiaries to, make or permit to remain outstanding any
Investments except:
(a) Investments outstanding on the date hereof and identified in
Part B of Schedule IV;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Borrower and its Consolidated Subsidiaries in
the Borrower and its Consolidated Subsidiaries;
(e) Hedging Agreements entered into in the ordinary course of the
Borrower's financial planning and not for speculative purposes;
(f) Investments (not including, however, Guarantees of obligations)
by the Borrower and its Consolidated Subsidiaries in Designated
Subsidiaries or other entities that are, in either case, involved in a
business related to the business of the Borrower and its Consolidated
Subsidiaries, so long as the amount of such Investments shall not exceed
$250,000,000 at any one time outstanding;
(g) Investments constituting transactions permitted under Section
6.03; and
(h) so long as at the time thereof, and after giving effect thereto,
no Default shall have occurred and be continuing, the Borrower may make
additional Investments (each a "Basket Investment") as follows:
(i) if after giving effect to such Basket Investment the
Leverage Ratio shall be greater than 4.00 to 1, the Borrower may
make any Basket Investment (the "Current Basket Investment") so long
as the aggregate amount of all Basket Investments and Restricted
Payments made during the period commencing on the Effective Date
through and including the date upon which the Current Basket
Investment is to be made shall not exceed the sum of (w)
$150,000,000 plus (x) the net cash proceeds from all Equity
Issuances after the Effective Date plus (y) the aggregate amount of
Net Cash Proceeds from Dispositions not required to be applied to
the prepayment of Loans or the reduction of Commitments, or to be
reinvested by the Borrower, pursuant to Section 2.11(b)(ii) plus (z)
33-1/3% of the cumulative amount of Excess Cash Flow for the period
commencing on the Effective Date through and including the fiscal
quarter most recently ended prior
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to the date of the Current Basket Investment for which financial
statements are available; and
(ii) if after giving effect to such Basket Investment the
Leverage Ratio shall be less than or equal to 4.00 to 1, the
Borrower may make Basket Investments in any amount.
A Basket Investment permitted by Section 6.05(h) at the time of its making may
remain outstanding at a subsequent time notwithstanding that additional Basket
Investments could not be made at such subsequent time. The aggregate amount of
an Investment at any one time outstanding for purposes of clauses (f) and (h)
above, shall be deemed to be equal to (A) the aggregate amount of cash, together
with the aggregate fair market value of property, loaned, advanced, contributed,
transferred or otherwise invested that gives rise to such Investment minus (B)
the aggregate amount of dividends, distributions or other payments received in
cash in respect of such Investment; provided that the amount of an Investment
shall not in any event be reduced by reason of any write-off of such Investment.
SECTION 6.06. Restricted Payments. The Borrower will not, nor will it
permit any of its Consolidated Subsidiaries to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment, except that, so long as
at the time thereof, and after giving effect thereto, no Default shall have
occurred and be continuing, the Borrower may make Restricted Payments as
follows:
(a) if after giving effect to such Restricted Payment the Leverage
Ratio shall be greater than 4.00 to 1, the Borrower may make any
Restricted Payment (the "Current Restricted Payment") so long as the
aggregate amount of all Restricted Payments and Basket Investments made
during the period commencing on the Effective Date through and including
the date upon which the Current Restricted Payment is to be made shall not
exceed the sum of (w) $150,000,000 plus (x) the net cash proceeds from all
Equity Issuances after the Effective Date plus (y) the aggregate amount of
Net Cash Proceeds from Dispositions not required to be applied to the
prepayment of Loans or the reduction of Commitments, or to be reinvested
by the Borrower, pursuant to Section 2.11(b)(ii) plus (z) 33-1/3% of the
cumulative amount of Excess Cash Flow for the period commencing on the
Effective Date through and including the fiscal quarter most recently
ended prior to the date of the Current Restricted Payment for which
financial statements are available; and
(b) if after giving effect to such Restricted Payment the Leverage
Ratio shall be less than or equal to 4.00 to 1, the Borrower may make
Restricted Payments in any amount.
Nothing herein shall be deemed to prohibit the payment of dividends by any
Subsidiary of the Borrower to the Borrower or to any other Subsidiary of the
Borrower.
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SECTION 6.07. Transactions with Affiliates. The Borrower will not, nor
will it permit any of its Consolidated Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except the following:
(a) transactions at prices and on terms and conditions not less
favorable to the Borrower or such Consolidated Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties;
(b) transactions between or among the Borrower and its Wholly Owned
Subsidiaries (other than Designated Subsidiaries) not involving any other
Affiliate;
(c) any Restricted Payment permitted by Section 6.06 or any
Investment permitted by Section 6.05;
(d) the options on certain television stations granted by Hearst in
favor of the Borrower and described in Section 9.01(i) of the Amended and
Restated Agreement and Plan of Merger dated as of March 26, 1997 by and
among Hearst, HAT Merger Sub, Inc., a Delaware corporation, HAT
Contribution Sub, Inc., a Delaware corporation, and the Borrower;
(e) arrangements between Hearst and the Borrower, with respect to
payroll, insurance, data processing, employee benefits, tax services,
accounting, corporate, financial, legal and other administrative items
that are on terms and conditions not less favorable to the Borrower than
those arrangements historically existing between Hearst and the Borrower's
Stations and reflected in the projections set forth in the Information
Memorandum, it being understood that such arrangements may provide for an
increase in payments to Hearst based upon an increase in the size of the
business of the Borrower and its Subsidiaries (resulting in an increase in
payroll, insurance, data processing, employee benefits, tax services,
accounting, corporate, financial, legal and other administrative items);
and
(f) those agreements listed on Schedule VII.
SECTION 6.08. Restrictive Agreements. The Borrower will not, and will not
permit any of its Consolidated Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Consolidated Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets, or (b) the ability of any Consolidated
Subsidiary to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Borrower or any
other Consolidated Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Consolidated Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement, (ii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Consolidated Subsidiary pending such
sale, provided that
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such restrictions and conditions apply only to the Consolidated Subsidiary that
is to be sold and such sale is permitted hereunder, (iii) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, (iv) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof and
(v) clauses (a) and (b) of the foregoing shall not apply to any Indebtedness
that is pari passu in right of payment with the obligations of the Borrower
hereunder (i.e. not subordinated in right of payment to such obligations).
SECTION 6.09. Modifications of Certain Documents. Without the prior
consent of the Administrative Agent (to be given upon the approval of the
Required Lenders), the Borrower will not consent to any modification, supplement
or waiver of any of the provisions of the Private Placement Debt Documents,
Senior Notes Indentures or Senior Debenture Indenture, or any agreement,
instrument or other document evidencing or relating to Additional Permitted
Indebtedness, in a manner that, in any case, would be materially adverse to the
Lenders.
SECTION 6.10. Certain Financial Covenants.
(a) Leverage Ratio. The Borrower will not permit the Leverage Ratio to
exceed the following respective ratios at any time during the following
respective periods:
Period Ratio
------ -----
From the Effective Date
through December 30, 2001 5.50 to 1
From December 31, 2001
through December 30, 2002 5.00 to 1
From December 31, 2002
through December 30, 2003 4.50 to 1
From December 31, 2003
and at all times thereafter 4.00 to 1
(b) Interest Coverage Ratio. The Borrower will not permit the Interest
Coverage Ratio to be less than (i) 2.00 to 1 as at the last day of any fiscal
quarter ending on or before the fiscal quarter ending September 30, 2001 and
(ii) 2.50 to 1 as at the last day of any fiscal quarter thereafter.
(c) Fixed Charges Ratio. The Borrower will not permit the Fixed Charges
Ratio to be less than 1.10 to 1 as at the last day of any fiscal quarter.
(d) Consolidated Net Worth. The Borrower will not at any time permit its
Consolidated Net Worth to be less than the sum of (i) $249,259,000, plus (ii)
75% of the
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aggregate amount by which Consolidated Net Worth was increased upon consummation
of the Kelly Acquisition plus (iii) 75% of the aggregate amount by which
Consolidated Net Worth was increased upon consummation of the Pulitzer
Acquisition, plus (iv) 25% of Consolidated Net Income for each fiscal year
(beginning with the fiscal year ending December 31, 1999 and without duplication
on account of the consummation of the Pulitzer Acquisition during such fiscal
year) for which Consolidated Net Income is positive.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
(after notice from any Lender or the Administrative Agent) any fee or any
other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or under any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower in or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof, or
in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or any other
Loan Document or any amendment or modification hereof or thereof, shall
prove to have been incorrect when made or deemed made in any material
respect;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.03 (with respect to
the Borrower's existence), 5.08 or 5.09 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article) or any other Loan
Document and such failure shall continue unremedied for a period of 30 or
more days after notice thereof from the Administrative Agent (given at the
request of any Lender) is received by the Borrower;
(f) the Borrower or any of its Consolidated Subsidiaries shall fail
to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
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(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity provided that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any of its Consolidated Subsidiaries
or the debts of the Borrower or any of its Consolidated Subsidiaries, or
of a substantial part of the assets of the Borrower or any of its
Consolidated Subsidiaries, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii)
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its
Consolidated Subsidiaries or for a substantial part of the assets of the
Borrower or any of its Consolidated Subsidiaries, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any of its Consolidated Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for it or for a substantial part of its assets, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing;
(j) the Borrower or any of its Consolidated Subsidiaries shall
become unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $25,000,000 shall be rendered against the Borrower or
any of its Subsidiaries or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the
Borrower to enforce any such judgment;
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(l) an ERISA Event shall have occurred that, in the reasonable
judgment of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(m) a reasonable basis shall exist for the assertion against the
Borrower or any of its Subsidiaries, or any predecessor in interest of the
Borrower or any of its Subsidiaries or Affiliates, of (or there shall have
been asserted against the Borrower or any of its Subsidiaries) any claims
or liabilities, whether accrued, absolute or contingent, based on or
arising from the generation, storage, transport, handling or disposal of
Hazardous Materials by the Borrower or any of its Subsidiaries, Affiliates
or predecessors that, in the reasonable judgment of the Required Lenders,
are reasonably likely to be determined adversely to the Borrower or any of
its Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by the Borrower or any of its Consolidated
Subsidiaries but after deducting any portion thereof that is reasonably
expected to be paid by other creditworthy Persons jointly and severally
liable therefor);
(n) a Change of Control shall occur;
(o) the main station license of any Station shall be revoked or
canceled or expire by its term and not be renewed, or shall be modified in
a manner materially adverse to the Borrower or the respective Consolidated
Subsidiary operating such Station; provided that a modification of the
main station license to digital operation in compliance with the general
rules of the FCC and the Communications Act of 1934, as amended, shall not
be considered a materially adverse modification of such main station
license; or
(p) any material authorizations, licenses or permits issued by the
FCC (other than the main station license of any Station) shall be revoked
or canceled or expire by their terms and not be renewed, or shall be
modified in a manner materially adverse to the Borrower or the respective
Consolidated Subsidiary operating such Station, and such revocation,
cancellation, expiration, non-renewal or modification could reasonably be
expected to result in a Material Adverse Effect;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in
whole (or in part, in which case any principal not so declared to be due
and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other
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obligations of the Borrower accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower;
and in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Lenders hereby irrevocably appoints
the Administrative Agent as its agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders, and (c) except as expressly set
forth herein and in the other Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any
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certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Lender and the Borrower. Upon any
such resignation, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Lender, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor (and, as
provided in Section 2.12(c), the retiring Administrative Agent shall make
available to the Borrower a ratable portion of any fees theretofore paid to the
Administrative Agent for the period during which the resignation or removal of
such retiring Administrative Agent shall occur to the extent the Borrower is
required to pay fees for the balance of such period to the successor
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Administrative Agent). After the Administrative Agent's resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges 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 credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges 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 from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.
Except as otherwise provided in Section 9.02(b) with respect to this
Agreement, the Administrative Agent may, with the prior consent of the Required
Lenders (but not otherwise), consent to any modification, supplement or waiver
under any of the Loan Documents.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it c/o Hearst-Argyle Television, Inc. at
888 7th Avenue, Suite 2700, New York, New York 10106, Attention of Harry
T. Hawks (Telecopy No. 212-887-6855);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, 1
Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention Loan
and Agency Services Group (Telecopy No. (212) 552-5658), with a copy to
The Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017,
Attention of Mitchell Gervis (Telecopy No. 212-270-4584);
(c) if (i) to Chase as an Issuing Lender, to it at The Chase
Manhattan Bank, Trade Services, 55 Water Street, Room 1710, New York, New
York 10041, Attention of Roshdy Botros, Assistant Manager (Telecopy No.
212-638-8200) or (ii) to any other Issuing Lender, to it at the address
specified in writing by it to the Borrower and the Administrative Agent;
and
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(d) if to a Lender (including any Lender in its capacity as a
Swingline Lender), to it at its address (or telecopy number) set forth in
its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the
Administrative Agent, any Issuing Lender or any Lender in exercising any right
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Lenders and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or any Issuing Lender may have had notice or knowledge of such
Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall (i) increase any Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of any reduction or expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) so long as the 364-Day
Credit Agreement shall be in effect (including any extensions of the Maturity
Date thereunder), change Section 2.11(b) without the written consent of the
"Required Lenders" under and as defined in the 364-Day Credit Agreement, (v)
change Section 2.18(b) or (d) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, or
(vi) change any of the provisions of this Section or the definition of the term
"Required Incremental Facility Lenders", "Required Lenders", "Required Revolving
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; and provided further that no such
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agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any Issuing Lender or any Swingline Lender hereunder
without the prior written consent of the Administrative Agent, such Issuing
Lender or such Swingline Lender, as the case may be.
Anything in this Agreement to the contrary notwithstanding, no waiver or
modification of any provision of this Agreement that has the effect (either
immediately or at some later time) of enabling the Borrower to satisfy a
condition precedent to the making of a Revolving Loan, or Incremental Facility
Loans of any Series, shall be effective against the Revolving Lenders or
Incremental Facility Lenders of such Series, as the case may be, for purposes of
the Revolving Commitments or Incremental Facility Commitments of such Series
unless the Required Revolving Lenders or Required Incremental Facility Lenders
of such Series, as applicable, shall have concurred with such waiver or
modification.
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation of this Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Issuing Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, any Issuing Lender or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Issuing Lender or
any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including in connection with any workout, restructuring
or negotiations in respect thereof.
(b) Indemnification by Borrower. The Borrower shall indemnify the
Administrative Agent, each Issuing Lender and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the
use of the proceeds therefrom (including any refusal by any Issuing Lender to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability
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related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrower fails to pay
any amount required to be paid by it to the Administrative Agent, any Issuing
Lender or any Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, such Issuing Lender
or such Swingline Lender, as the case may be, such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, such Issuing Lender or such Swingline Lender in its
capacity as such.
(d) Waiver of Consequential Damages, etc. To the extent permitted by
applicable law, the Borrower shall not assert, and the Borrower hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or Letter of Credit or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by the Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Lenders and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or more assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitments and the Loans at the time owing to it);
provided that
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(i) except in the case of an assignment to a Lender or an Affiliate
of a Lender, each of the Borrower and the Administrative Agent (and, in
the case of an assignment of all or a portion of a Commitment or any
Lender's obligations in respect of its LC Exposure or Swingline Exposure,
each Issuing Lender and each Swingline Lender) must give their prior
written consent to such assignment (which consent shall not be
unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment(s), the amount of the Commitment(s) of the
assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000
unless each of the Borrower and the Administrative Agent otherwise
consent,
(iii) each partial assignment of the Loans, LC Exposure or
Commitments of any Class shall be made as an assignment of a proportionate
part of all the assigning Lender's rights and obligations under this
Agreement in respect of such Class except that this clause (iii) shall not
apply to rights in respect of outstanding Competitive Loans,
(iv) the assignor and the assignee to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire;
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (h) or (i)
of Article VII has occurred and is continuing. Upon acceptance and recording
pursuant to paragraph (d) of this Section, from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting Bank") may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing from time to time by the Granting Bank to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting
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Bank would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided, that (i) nothing herein shall constitute a commitment by
any SPC to make any Loan and (ii) if an SPC elects not to exercise such option
or otherwise fails to provide all or any part of such Loan, the Granting Bank
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by an SPC hereunder shall utilize the relevant Commitment of the Granting
Bank to the same extent, and as if, such Loan were made by such Granting Bank.
Each party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Bank). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this Section 9.04, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any processing fee therefor, (x) assign all or any portion of its interest in
any Loans to the Granting Bank and (y) pledge all or a portion of its interests
in any Loans to the Granting Bank or to any financial institutions (consented to
by the Borrower and Administrative Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans (and assign to the Granting Bank and to any such financial institution
any such Loans upon a realization in respect of such pledge or in connection
with the performance by such financial institution of its liquidity or credit
support obligations) and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC, subject to the requirements of Section 9.12(b)(f).
(c) Maintenance of Register by Administrative Agent. The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices in New York City a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, absent
manifest error, and the Borrower, the Administrative Agent, the Issuing Lenders
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, any Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Acceptance and record the information
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contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(e) Participations. Any Lender may, without the consent of the Borrower,
the Administrative Agent, any Issuing Lender or any Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement and
the other Loan Documents (including all or a portion of its Commitments and the
Loans owing to it); provided that (i) such Lender's obligations under this
Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent, the
Issuing Lenders and the other Lenders 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. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.
(f) Limitations on Rights of Participants. A Participant shall not be
entitled to receive any greater payment under Section 2.15 or 2.17 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender, provided that in no event shall the Borrower be required to pay a
greater sum to such Participant than it would have been required to pay to the
Lender from which such Participant acquired such participation.
(g) Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; 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 assignee for such Lender as a party hereto.
(h) No Assignments to Borrower or its Subsidiaries or Affiliates. Anything
in this Section 9.04 to the contrary notwithstanding, no Lender may assign or
participate any interest in any Loan or LC Exposure held by it hereunder to the
Borrower or any of its Subsidiaries or Affiliates without the prior consent of
each Lender.
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SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, any Issuing Lender or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect so
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17, 3.03 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although
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such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York.
(b) Submission to Jurisdiction. The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, any Issuing Lender or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement against the Borrower
or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Service of Process. Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in Section 9.01.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE
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BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. The Borrower acknowledges that from
time to time financial advisory, investment banking and other services may be
offered or provided to the Borrower or one or more of its Subsidiaries (in
connection with this Agreement or otherwise) by any Lender or by one or more
subsidiaries or affiliates of such Lender and the Borrower hereby authorizes
each Lender to share any information delivered to such Lender by the Borrower
and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such subsidiary or
affiliate for the purpose of using the same in connection with such services.
(b) Confidentiality. Each of the Administrative Agent, the Issuing Lenders
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, any Issuing Lender or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Administrative Agent, any Issuing Lender or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential.
Unless specifically prohibited by applicable law or court order, each Lender and
the Administrative Agent shall, prior to disclosure thereof, notify the Borrower
of any request for disclosure of any such non-public information (A) by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) or (B) pursuant to legal process (including agency
subpoenas). Any Person required to maintain the confidentiality of Information
as provided in
Five Year Credit Agreement
<PAGE>
-93-
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
Five Year Credit Agreement
<PAGE>
-94-
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.
HEARST-ARGYLE TELEVISION, INC.
By:__________________________
Name:
Title:
Five Year Credit Agreement
<PAGE>
-95-
LENDERS
THE CHASE MANHATTAN BANK,
individually, as Swingline Lender and as
Administrative Agent
By:__________________________
Name:
Title:
BANK OF MONTREAL,
individually and as Swingline Lender
By:__________________________
Name:
Title:
THE BANK OF NEW YORK
individually and as Swingline Lender
By:__________________________
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
individually and as Swingline Lender
By:__________________________
Name:
Title:
Five Year Credit Agreement
<PAGE>
-96-
NATIONSBANK, N.A.
By:__________________________
Name:
Title:
BANKBOSTON, N.A.
By:__________________________
Name:
Title:
BANQUE NATIONALE DE PARIS
By:__________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:__________________________
Name:
Title:
FLEET NATIONAL BANK
By:__________________________
Name:
Title:
PARIBAS
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
Five Year Credit Agreement
<PAGE>
-97-
THE BANK OF NOVA SCOTIA
By:__________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:__________________________
Name:
Title:
WACHOVIA BANK, N.A.
By:__________________________
Name:
Title:
KEY CORPORATE CAPITAL INC.
By:__________________________
Name:
Title:
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
Five Year Credit Agreement
<PAGE>
-98-
SUNTRUST BANK, CENTRAL FLORIDA,
N.A.
By:__________________________
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
By:__________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
FIRST HAWAIIAN BANK
By:__________________________
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By:__________________________
Name:
Title:
Five Year Credit Agreement
<PAGE>
-99-
THE MITSUBISHI TRUST AND
BANKING CORPORATION
By:__________________________
Name:
Title:
THE SANWA BANK LIMITED
By:__________________________
Name:
Title:
WELLS FARGO BANK, N.A.
By:__________________________
Name:
Title:
MICHIGAN NATIONAL BANK
By:__________________________
Name:
Title:
FIRSTAR BANK, N.A.
By:__________________________
Name:
Title:
HIBERNIA NATIONAL BANK
By:__________________________
Name:
Title:
Five Year Credit Agreement
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1999 AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 6,532
<SECURITIES> 0
<RECEIVABLES> 122,569
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 191,239
<PP&E> 253,498
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,889,080
<CURRENT-LIABILITIES> 116,608
<BONDS> 1,677,596
0
2
<COMMON> 910
<OTHER-SE> 1,289,774
<TOTAL-LIABILITY-AND-EQUITY> 3,889,080
<SALES> 0
<TOTAL-REVENUES> 113,424
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 89,015
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,216
<INCOME-PRETAX> 5,193
<INCOME-TAX> 2,364
<INCOME-CONTINUING> 2,829
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,829
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
