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EXHIBIT 10.10
WAIVER AND SECOND AMENDMENT
SECOND AMENDMENT, dated as of April 22, 1998 (this "Second
Amendment"), to the Credit Agreement, dated as of February 28, 1997 (as amended
by the First Amendment, dated as of March 25, 1997, the Waiver, dated as of
March 11, 1998 and as may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; capitalized terms used
herein and not otherwise defined are used herein as defined in the Credit
Agreement), among STC BROADCASTING, INC., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions or entities
from time to time parties thereto (the "Lenders"), NATIONSBANK OF TEXAS, N.A.,
as documentation agent (in such capacity, the "Documentation Agent"), and THE
CHASE MANHATTAN BANK, as administrative and syndication agent for the Lenders
thereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make, and have made, certain Loans to the Borrower;
WHEREAS, the Borrower and certain of its Subsidiaries have
either entered into or intend to enter into the following transactions
(collectively, the "Transactions"):
(a) pursuant to the Asset Purchase Agreement, dated as of February
3, 1998 (the "Purchase Agreement"), by and among Tuscaloosa
Broadcasting, Inc., WPTZ Licensee, Inc. and WNNE Licensee,
Inc. (collectively, the "Xxxxxxxx Subs") and STC Broadcasting
of Vermont, Inc. ("STCBV"), the Xxxxxxxx Subs have agreed to
assign, transfer and convey to STCBV (i) all of their right,
title and interest in the assets of television stations
WPTZ-TV, Channel 5, North Pole, New York (the "North Pole
Station") and WNNE-TV, Channel 31, Hartford, Vermont (the
"Hartford Station") and (ii) certain assets and rights of
television station WFFF-TV, Channel 44, Burlington, Vermont
(the "Burlington Station" and, collectively with the North
Pole Station and the Hartford Station, the "Xxxxxxxx
Stations") and STCBV has agreed to pay to the Xxxxxxxx Subs
$72,000,000 (subject to certain adjustments) as consideration
for the purchase of the assets of the Xxxxxxxx Stations under
the Purchase Agreement (all of the foregoing transactions,
collectively, the "Purchase Transactions");
(b) pursuant to the Assignment and Assumption Agreement, dated as
of April 20, 1998 (the "Assignment and Assumption Agreement"),
STCBV has assigned all of its rights and obligations under the
Purchase Agreement to its wholly-owned subsidiary, STC
Broadcasting of Vermont Subsidiary, Inc. ("STCBV Sub");
(c) it is intended that the closing of the Purchase Transactions
shall take place in two
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stages as follows: (i) (A) the Xxxxxxxx Subs shall transfer
the non-license assets relating to the Xxxxxxxx Stations to
STCBV Sub (such transfer, the "Xxxxxxxx Non-License Transfer")
in return for consideration from STCBV Sub of $70,000,000
(subject to certain adjustments) and (B) STCBV Sub shall enter
into a time brokerage agreement (the "Xxxxxxxx Time Brokerage
Agreement") with the Xxxxxxxx Subs, which shall provide for
STCBV Sub to operate the Xxxxxxxx Stations for the Xxxxxxxx
Subs and (ii) upon final approval by the Federal
Communications Commission (the "FCC") for the transfer of the
licenses relating to the North Pole Station and the Hartford
Station from the Xxxxxxxx Subs to STCBV Sub, the licenses
relating to those stations will be so transferred and the
balance of the consideration owing under the Purchase
Agreement will be paid;
(d) pursuant to the Asset Exchange Agreement, dated as of February
18, 1998 (the "Exchange Agreement"), among the Borrower,
STCBV, STCBV Sub and STC License Company ("STC License" and,
collectively with the Borrower, STCBV and STCBV Sub, the "STC
Parties") and Hearst-Argyle Stations, Inc. ("Hearst") (i) the
STC Parties have agreed to assign, transfer and convey to
Hearst all of their right, title and interest in the North
Pole Station, the Hartford Station and television station
KSBW-TV, Channel 8, Salinas, California (collectively, the
"STC Transferred Assets") and (ii) Hearst has agreed to (x)
assign, transfer and convey to the STC Parties all of its
right, title and interest in (A) television stations WNAC-TV,
Channel 64, Providence, Rhode Island (the "Providence
Station") and WDTN-TV, Channel 2, Dayton, Ohio (the "Dayton
Station") and (B) a Joint Marketing and Programming Agreement,
dated as of June 10, 1996 (the "Joint Marketing Agreement"),
between Clear Channel Television, Inc. ("Clear Channel") and
Hearst and a Reciprocal Right of First Refusal, dated June 10,
1996 (the "Right of Refusal" and, collectively with the Joint
Marketing Agreement, the Providence Station and the Dayton
Station, the "STC Acquired Assets"), between Clear Channel and
Hearst, (y) pay to the STC Parties $21,366,650 (subject to
certain adjustments) and (z) operate for the Borrower, the
Burlington Station for a period of up to two years from the
closing date of the Exchange Agreement, pursuant to a time
brokerage agreement (the "Hearst Time Brokerage Agreement")
which shall provide, among other things, that the Borrower
shall receive all income from the operation of the Burlington
Station (net of Hearst's out of pocket expenses for such
operation) and shall reimburse Hearst if the Burlington
Station is operated at a net deficit (all of the foregoing
transactions, collectively, the "Exchange Transactions");
(e) after the consummation of the Xxxxxxxx Non-License Transfer,
STCBV Sub shall transfer the non-license assets relating to
the Burlington Station to an entity ultimately controlled,
directly or indirectly, by Xxxxxx X. Xxxxx (such transfer, the
"Xxxxx Transfer"); and
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(f) upon the consummation of the Xxxxxxxx Non-License Transfer,
(i) Hearst has agreed pursuant to the Exchange Agreement to
make a loan to STCBV Sub on terms set forth in the credit
agreement attached as Exhibit E to the Exchange Agreement (the
"STCBV Sub Credit Agreement") in an aggregate amount of up to
$72,000,000, the proceeds of which would be used to finance
the purchase by STCBV Sub of the non-license assets of the
Xxxxxxxx Stations pursuant to the Purchase Agreement, which
loan (the "Hearst Loan") would be secured on a non-recourse
basis by all of STCBV's right, title and interest in the
capital stock of STCBV Sub and (ii) upon the consummation of
the Exchange Transactions, the Hearst Loan would be repaid in
full pursuant to the terms of the STCBV Sub Credit Agreement;
WHEREAS, the Borrower has requested that the Lenders amend and
waive, and the Lenders have agreed to amend and waive, certain of the
provisions of the Credit Agreement, to permit the Transactions and to effect
certain other amendments, all upon the terms and subject to the conditions set
forth below;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Consent to Transactions. (a) The Administrative
Agent and the Lenders hereby consent to the Transactions and waive compliance
with the provisions of:
(i) subsection 6.10(c) of the Credit Agreement to the extent, and
only to the extent, necessary to permit STCBV and STCBV Sub
not to become Guarantors and Grantors and to permit the
Borrower not to pledge the capital stock of STCBV and STCBV
not to pledge the capital stock of STCBV Sub for so long as
the Purchase Transactions and the Exchange Transactions shall
not have been consummated;
(ii) subsection 7.2 of the Credit Agreement to the extent, and only
to the extent, necessary to permit STCBV Sub to incur the
Hearst Loan;
(iii) subsection 7.3 of the Credit Agreement to the extent, and only
to the extent, necessary to permit STCBV to secure the Hearst
Loan with all of its right, title and interest in the capital
stock of STCBV Sub;
(iv) subsection 7.5(d) of the Credit Agreement to the extent, and
only to the extent, necessary to permit STCBV Sub to
consummate the Xxxxx Transfer;
(v) subsection 7.5(d) of the Credit Agreement to the extent, and
only to the extent, necessary to permit STCBV to assign all of
its rights under the Purchase Agreement and the documents
executed in connection therewith to STCBV Sub;
(vi) subsection 7.5(h) of the Credit Agreement to the extent, and
only to the extent, necessary to permit the STC Parties to
consummate the Exchange Transactions; and
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(vii) subsection 7.13 of the Credit Agreement to the extent, and
only to the extent, necessary to permit (i) the restriction
contained in the Exchange Agreement on the Borrower's ability
to assign any of its rights or obligations under the Hearst
Time Brokerage Agreement to any person other than one of its
affiliates or any person acceptable to Hearst, (ii) the
restriction contained in the Exchange Agreement on the ability
of the STC Parties to permit an encumbrance on the STC
Transferred Assets and (iii) STCBV Sub to enter into the STCBV
Sub Credit Agreement to the extent it limits the ability of
STCBV Sub to (A) create, incur, assume or suffer to exist any
Lien upon any of its Property or revenues or (B) pay dividends
or make any other distributions, or pay any indebtedness owed,
to Sunrise Television Corp. or the Borrower or any of its
Subsidiaries.
(b) The Administrative Agent and the Lenders hereby consent
that (i) the Incurrence by STCBV Sub of the Hearst Loan shall, for purposes of
subsection 2.9(a) only, be deemed not to constitute an Incurrence of
Indebtedness and hereby waive compliance with the provisions of subsection
2.9(a) of the Credit Agreement to the extent, and only to the extent, necessary
to permit STCBV Sub to Incur the Hearst Loan on the terms set forth in the
STCBV Sub Credit Agreement and not apply the Net Cash Proceeds thereof to the
prepayment of the Term Loans and the Revolving Credit Loans and the reduction
of the Revolving Credit Commitments and (ii) the Exchange Transactions shall be
deemed not to constitute Asset Sales and hereby waive compliance with the
provisions of subsection 2.9(b) of the Credit Agreement to the extent, and only
to the extent, necessary to permit the Borrower to consummate the Exchange
Transactions on the terms set forth in the Exchange Agreement and not apply the
Net Cash Proceeds thereof to the prepayment of the Term Loans and the reduction
of the Revolving Credit Commitments.
2. Amendment to Subsection 7.1(e). Subsection 7.1(e) of
the Credit Agreement is hereby amended by deleting the table set forth therein
in its entirety and substituting in lieu thereof the following:
"Year Amount
1997 $4,750,000
1998 $5,300,000
1999 $5,800,000
2000 $5,800,000
2001 $5,800,000
2002 $5,800,000
2003 $5,800,000
2004 $5,800,000"
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3. Amendment to Subsection 7.7. Subsection 7.7 of the
Credit Agreement is hereby amended by (i) deleting the number "$2,500,000" in
the fifth line and substituting in lieu thereof the number "$3,000,000" and
(ii) adding at the end thereof but immediately prior to the period the
following: "provided, that there shall be permitted during the 1998 and 1999
fiscal years additional Capital Expenditures in connection with the acquisition
and refurbishment of KRBC-TV, Abilene, Texas and KACB-TV, San Angelo, Texas,
not to exceed an aggregate of $2,000,000 during such fiscal years and which
additional amounts shall be expended on or prior to the date which is one year
from the date hereof".
4. Steubenville Station Waiver. The Lenders hereby
waive any Default or Event of Default resulting solely from the failure of the
Borrower to obtain FCC approval for the merger of the Steubenville Station into
the Borrower, to consummate such merger or to redeem the SBP Stock, pursuant to
subsection 6.11 of the Credit Agreement.
5. Effectiveness. This Second Amendment shall become
effective on the date on which the following conditions precedent shall have
been satisfied:
(a) the Administrative Agent shall have received counterparts
of this Second Amendment, duly executed and delivered by the Borrower
and each of the other parties hereto;
(b) the Administrative Agent shall have received a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of each of the STC Parties
authorizing the execution, delivery and performance of the Purchase
Agreement, the Exchange Agreement and this Second Amendment (to the
extent a party thereto) and the creation and perfection of the
security interests and liens described in paragraph 8 below and all
transactions in connection therewith, certified by the Secretary or an
Assistant Secretary of each such STC Party as of the date hereof,
which certificate shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded as of the date
of such certificate;
(c) the Administrative Agent shall have received, to the
extent that it has not theretofore received, a certificate of the
Secretary or Assistant Secretary of each of the STC Parties as to the
incumbency and signature of each of the officers signing this Second
Amendment, and any other instrument or document delivered by any of
the STC Parties in connection herewith, together with evidence of the
incumbency of such Secretary or Assistant Secretary; and
(d) executed versions of the Purchase Agreement and the
Exchange Agreement (and any waivers, amendments, supplements or other
modifications thereto) shall have been delivered and shall be in form
and substance satisfactory to the Lenders and the Xxxxxxxx Non-License
Transfer shall have been consummated pursuant to the terms of the
Purchase Agreement.
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6. Additional Conditions. In addition, the waivers
described in paragraphs 1(a)(vi) and 1(b)(ii) are subject to each of the
Lenders having received a certificate of the chief financial officer of the
Borrower, in form and substance satisfactory to the Lenders, certifying that
after giving effect to the Purchase Transactions and the Exchange Transactions,
on a pro forma basis for the most recently completed 12-month fiscal period for
which financial statements are available and on a projected basis for the
immediately succeeding 12 months (a) no Default or Event of Default will have
occurred and be continuing, (b) the Borrower will be able to meet its
obligations pursuant to the Loan Documents and (c) the Borrower will be in
compliance with all of the covenants contained in subsection 7.1 (which
certificate shall include appropriate supporting calculations for demonstrating
such compliance with subsection 7.1).
7. Representations and Warranties. On and as of the
date hereof after giving effect to this Second Amendment, the Borrower hereby
represents and warrants to the Lenders that:
(a) Each of its representations and warranties contained in
Section 4 of the Credit Agreement or in any certificate, document or
financial or other statement furnished at any time under or in
connection therewith are true and correct in all material respects on
and as of such date as if made on and as of such date, except to the
extent that such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier
date; provided that the references to the Credit Agreement
therein shall be deemed to include this Second Amendment; and
(b) No Default or Event of Default has occurred and is
continuing.
8. Covenants. The Borrower agrees to and agrees to cause its
Subsidiaries to, upon the consummation of the Purchase Transactions and the
Exchange Transactions:
(a) execute and deliver such documents (including, without
limitation, UCC financing statements and stock powers) and take such
other actions (including, without limitation, the filing of such UCC
financing statements and the delivery of stock certificates) as may be
requested by or on behalf of the Administrative Agent, and in the form
or manner as may be so requested, to perfect first priority security
interests and liens of the Administrative Agent and the Lenders in the
STC Acquired Assets;
(b) provide to the Administrative Agent promptly upon receipt
thereof, copies of FCC consents on Form 732 relating to the transfer
of control of the licenses of the various stations being transferred
pursuant to the Purchase Agreement and the Exchange Agreement and such
consents shall no longer be subject to reconsideration or review by
the FCC; and
(c) transfer the Station Licenses under the authority of which
the Providence Station and the Dayton Station are operated, to
separate License Subsidiaries.
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9. Continuing Effect; No Other Amendments. Except as
expressly amended or waived hereby, all of the terms and provisions of the
Credit Agreement and the other Loan Documents are and shall remain in full
force and effect. The amendments and waivers contained herein shall not
constitute an amendment or waiver of any other provision of the Credit
Agreement or the other Credit Documents or for any purpose except as expressly
set forth herein.
10. GOVERNING LAW; Counterparts. (a) THIS SECOND
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) This Second Amendment may be executed in any number of
counterparts, all of which counterparts, taken together, shall constitute one
and the same instrument. This Second Amendment may be delivered by facsimile
transmission of the relevant signature pages hereof.
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IN WITNESS WHEREOF, the parties have caused this Second
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
STC BROADCASTING, INC.
By: /s/ Xxxxx X. Xxxx
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Title: Executive Vice President and CFO
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By: /s/ Xxxxx Xxxxxxx
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Title: Vice President
NATIONSBANK OF TEXAS, N.A., as
Documentation Agent and as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: Vice President
FINOVA CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxx
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Title: Vice President
