Exhibit 10.1

 

SECOND AMENDMENT TO

CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of June
27, 2003, is by and among FISHER BROADCASTING COMPANY (the “Borrower”), certain
Subsidiaries of the Borrower (the “Guarantors”), the Lenders that agree to the
terms hereof and WACHOVIA BANK, NATIONAL ASSOCIATION (successor to First Union
National Bank) (“Wachovia”), in its capacity as Administrative Agent for the
Lenders (in such capacity, the “Administrative Agent”), BANK OF AMERICA, N.A.
and THE BANK OF NEW YORK, as co-syndication agents for the Lenders hereunder (in
such capacity, the “Co-Syndication Agents”), and NATIONAL CITY BANK, as
documentation agent for the Lenders hereunder (in such capacity, the
“Documentation Agent”). Capitalized terms used herein without definition shall
have the meanings given to them in that certain Credit Agreement described
below.

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the Guarantors, the Lenders party thereto, the
Administrative Agent, the Co-Syndication Agents and the Documentation Agent have
entered into that certain Credit Agreement dated as of March 21, 2002 (as
previously amended or modified and as further amended, modified, supplemented or
restated from time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower has requested certain amendments to the Credit Agreement;
and

 

WHEREAS, the Required Lenders have agreed to such amendments subject to the
terms and conditions set forth herein.

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NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT

 

1.1 Amendment to Pricing Grid. The pricing grid set forth in the definition of
“Applicable Percentage” in Section 1.1 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:

 

Level

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Leverage Ratio

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   Alternate Base Rate
Margin for
Revolving Loans and
Tranche A Term
Loans

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LIBOR Rate Margin

for Revolving
Loans, Tranche A
Term Loans and
Letter of Credit Fee

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Alternate Base
Rate Margin
for

Tranche B
Term Loans

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LIBOR Rate
Margin

for Tranche B
Term Loans

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    Commitment
Fee

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I

   > 6.0 to 1.0    3.00 %   4.25 %   3.50 %   4.75 %   0.625 %

II

   > 5.5 to 1.0 but < 6.0 to 1.0    2.75 %   4.00 %   3.25 %   4.50 %   0.625 %

III

   > 5.0 to 1.0 but < 5.5 to 1.0    2.75 %   4.00 %   3.25 %   4.50 %   0.625 %

IV

   > 4.5 to 1.0 but < 5.0 to 1.0    2.00 %   3.25 %   3.25 %   4.50 %   0.500 %

V

   > 4.0 to 1.0 but < 4.5 to 1.0    1.75 %   3.00 %   3.25 %   4.50 %   0.500 %

VI

   > 3.5 to 1.0 but < 4.0 to 1.0    1.50 %   2.75 %   3.25 %   4.50 %   0.500 %

VII

   > 3.0 to 1.0 but < 3.5 to 1.0    1.25 %   2.50 %   3.25 %   4.50 %   0.375 %

VIII

   > 2.5 to 1.0 but < 3.0 to 1.0    1.00 %   2.25 %   2.75 %   4.00 %   0.375 %

IX

   < 2.5 to 1.0    0.75 %   2.00 %   2.75 %   4.00 %   0.375 %

 

The Credit Parties and the Lenders acknowledge and agree that the foregoing
modifications to the pricing grid will become effective on the Second Amendment
Effective Date and the amended interest rate levels set forth in such pricing
grid shall apply to all Loans outstanding as of such date as well as any Loan
made after such date.

 

1.2 Amendment to Definition of Consolidated EBITDA. The definition of
“Consolidated EBITDA” in Section 1.1 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:

 

“Consolidated EBITDA” shall mean, as of any date of determination for the four
quarter period ending on such date, (i) Consolidated Net Income for such period
plus (ii) the sum of the following to the extent deducted in calculating
Consolidated Net Income: (A) Consolidated Interest Expense for such period, (B)
tax expense (including, without limitation, any federal, state, local and
foreign income, value added and similar taxes) of the Borrower and its
Subsidiaries for such period and (C) depreciation, amortization (including
Programming Amortization Expense) and other non-cash charges for such period
minus (iii) Programming Cash Payments minus (iv) Upfront Radio Broadcasting
Payments for such period; provided that, for purposes of calculating
Consolidated EBITDA, South West Oregon Television Broadcast Corporation, the
owner of the KPIC-TV license, shall be considered a Subsidiary of the Borrower
and 50% of each of the foregoing components of Consolidated EBITDA (e.g.
Consolidated Net Income) with respect to South West Oregon Television Broadcast
Corporation shall be included in such calculation for the applicable period. The
applicable period shall be for the four consecutive quarters ending as of the
date of computation.

 

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1.3 New Definition of Planned Property Sales. A new definition of “Planned
Property Sales” is hereby added to Section 1.1 of the Credit Agreement in the
appropriate alphabetical order to read as follows:

 

“Planned Property Sales” shall mean the sales of property and assets permitted
by Section 6.5(a)(iv) and Section 6.5(a)(viii).

 

1.4 Amendment to Definition of Program Contracts. The definition of “Program
Contracts” in Section 1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 

“Program Contracts” shall mean (a) all contracts for television, film and
Programs, (b) all music and related audio rights with respect to television,
film and Programs and (c) all syndicated television series exhibition rights and
other similar television or film rights acquired under license agreements.

 

1.5 New Definition of Second Amendment Effective Date. A new definition of
“Second Amendment Effective Date” is hereby added to Section 1.1 of the Credit
Agreement in the appropriate alphabetical order to read as follows:

 

“Second Amendment Effective Date” shall mean June 27, 2003.

 

1.6 New Definition of Upfront Radio Broadcasting Payments. A new definition of
“Upfront Radio Broadcasting Payments” is hereby added to Section 1.1 of the
Credit Agreement in the appropriate alphabetical order to read as follows:

 

“Upfront Radio Broadcasting Payments” shall mean, for any period commencing on
or after the Second Amendment Effective Date, the aggregate cash payments
actually made by the Borrower and its Subsidiaries on a Consolidated basis
during such period in connection with the acquisition of radio broadcasting
rights and other similar audio rights, excluding radio broadcasting programming
costs that shall be expensed in the twelve month period following the date such
radio broadcasting rights or other similar audio rights are acquired.

 

1.7 Treatment of Planned Property Sales. The third paragraph of Section 1.3 of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

For purposes of computing the financial covenants set forth in Section 5.9 for
any applicable test period, any Permitted Acquisition or permitted sale of
assets (including a stock sale, but excluding any Planned Property Sale for
computation of the Fixed Charge Coverage Ratio and Interest Coverage Ratio) that
was consummated during such period shall have been deemed to have taken place as
of the first day of such applicable test period.

 

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1.8 Additional Second Amendment Fee. A new subsection (e) is hereby added to
Section 2.6 of the Credit Agreement to read as follows:

 

(e) Additional Second Amendment Fee. If a Planned Property Sale is not
consummated by September 30, 2003, the Borrower agrees to pay to the
Administrative Agent, on behalf of each of the Lenders that executed the Second
Amendment to this Agreement by the deadline set forth in Section 2.1 thereof, an
additional amendment fee equal to 0.10% of the sum of such Lender’s Revolving
Commitment as of the Second Amendment Effective Date plus such Lender’s
outstanding Term Loans as of the Second Amendment Effective Date, such fee to be
due and payable on October 1, 2003.

 

1.9 Amendment to Leverage Ratio. Section 5.9(a) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

 

Section 5.9 Financial Covenants.

 

(a) Leverage Ratio. At all times, the Leverage Ratio during the following
periods shall be less than or equal to the ratios corresponding to such periods:

 

Period

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   Maximum Ratio

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Second Amendment Effective Date through

December 30, 2003

  

6.15 to 1.0

December 31, 2003 through June 29, 2004

   4.75 to 1.0

June 30, 2004 through September 29, 2004

   4.50 to 1.0

September 30, 2004 through December 30, 2004

   4.00 to 1.0

December 31, 2004 and thereafter

   3.00 to 1.0

 

;provided, however, upon the consummation of any one Planned Property Sale, the
foregoing Leverage Ratio levels shall be reduced as follows (and the following
required Leverage Ratio levels shall remain in effect until the earlier to occur
of (i) consummation of both Planned Property Sales and (ii) the latest Maturity
Date):

 

Period

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   Maximum Ratio

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Second Amendment Effective Date through
June 29, 2004

   4.75 to 1.0

June 30, 2004 through September 29, 2004

   4.50 to 1.0

September 30, 2004 through December 30, 2004

   4.00 to 1.0 December 31, 2004 and thereafter    3.00 to 1.0

 

;provided further, however, upon the consummation of both Planned Property
Sales, the foregoing Leverage Ratio levels shall be reduced as follows:

 

Period

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   Maximum Ratio

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Second Amendment Effective Date through
December 30, 2003

   4.00 to 1.0

December 31, 2003 through June 29, 2004

   3.50 to 1.0

June 30, 2004 and thereafter

   3.00 to 1.0

 

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1.10 Amendment to Asset Sale Negative Covenant. Section 6.5(a) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

Section 6.5 Consolidation, Merger, Sale or Purchase of Assets, etc.

 

No Credit Party shall:

 

(a) dissolve, liquidate or wind up its affairs, sell, transfer, lease or
otherwise dispose of its property or assets or agree to do so at a future time
except the following, without duplication, shall be expressly permitted:

 

(i) Specified Sales;

 

(ii) the disposition of property or assets as a result of a Recovery Event to
the extent the net proceeds therefrom are used to repay Loans pursuant to
Section 2.8(b) or repair or replace damaged property or to purchase or otherwise
acquire new assets or property, provided that such purchase or acquisition is
consummated within 270 days of such receipt;

 

(iii) the sale, lease or transfer of property or assets from a Credit Party to
another Credit Party (including the liquidation or consolidation of any Credit
Party (other than the Borrower) into another Credit Party);

 

(iv) the sale of the Television Stations WFXG-TV in Augusta, Georgia and WXTX-TV
located in Columbus, Georgia for a cash purchase price of approximately
$40,000,000;

 

(v) the contribution of certain assets by the Television Station KIDK-TV in
Idaho Falls, Idaho to a joint venture (or similar entity or arrangement) with
the American Broadcasting Company, Inc. affiliate located in Idaho Falls, Idaho
on terms acceptable to the Administrative Agent; provided that the
Administrative Agent, on behalf of the Lenders, shall be granted a security
interest in, or Lien on, the equity or contractual interests held by the Credit
Parties in such joint venture (or similar entity or arrangement) on terms
acceptable to the Administrative Agent;

 

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(vi) the sale of two (2) parcels of real property in Coos Bay, Oregon following
the relocation of Station KCBY to its new studio;

 

(vii) the sale of approximately 38 acres of real property located in Lane
County, Oregon and the fixtures located thereon for a cash purchase price of
approximately $110,000; and

 

(viii) the sale of substantially all of the assets used in operating the radio
broadcast stations KWJJ-FM and KOTK(AM) in Portland, Oregon for a cash purchase
price of approximately $44,000,000, including the station licenses, certain
tangible assets, customary agreements used in operating the stations and the
real property on which the KOTK(AM) tower is located; provided that 100% of the
Net Cash Proceeds from such sale shall be applied to prepay the Loans in
accordance with the terms of Section 2.8(b)(iii) and (vii) without giving effect
to any reinvestment right of the Credit Parties contained in Section
2.8(b)(iii);

 

provided, that, (A) with respect to clauses (i) and (ii) above (other than
Specified Sales consisting of trade-ins of vehicles or equipment), at least 75%
of the consideration received therefor by the applicable Credit Party shall be
in the form of cash or Cash Equivalents and (B) with respect to clauses (iv) and
(viii) above, (1) 100% of the consideration received therefor by the applicable
Credit Party shall be in the form of cash or Cash Equivalents and (2) the
Borrower shall deliver to the Administrative Agent, prior to the consummation of
any such sale of assets, a certificate of a Responsible Officer certifying that
no Default or Event of Default will exist both before and after giving to such
sale of assets; or

 

ARTICLE II

CONDITIONS TO EFFECTIVENESS

 

2.1 Closing Conditions.

 

This Amendment shall become effective as of the Second Amendment Effective Date
upon satisfaction of the following conditions (in form and substance reasonably
acceptable to the Administrative Agent):

 

(a) Executed Amendment. Receipt by the Administrative Agent of a copy of this
Amendment duly executed by each of the Credit Parties and the Required Lenders.

 

(b) Resolutions. Receipt by the Administrative Agent of copies of resolutions of
the Board of Directors of each of the Credit Parties approving and adopting this
Amendment, the transactions contemplated herein and authorizing execution and
delivery hereof, certified by a secretary or assistant secretary of such Credit
Party to be true and correct and in force and effect as of the date hereof.

 

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(c) Incumbency Certificate. Receipt by the Administrative Agent of an incumbency
certificate with respect to each of the Credit Parties.

 

(d) Legal Opinion. Receipt by the Administrative Agent of an opinion from
counsel to the Credit Parties relating to this Amendment and the transactions
contemplated herein, in form and substance satisfactory to the Administrative
Agent, addressed to the Administrative Agent and the Lenders and dated as of the
date hereof.

 

(e) Fees. (i) Receipt by the Administrative Agent, on behalf of each Lender that
executes this Amendment by 5:00 p.m. (EST) on June 26, 2003, of an amendment fee
equal to 0.15% of the sum of such Lender’s Revolving Commitment plus such
Lender’s outstanding Term Loans; and (ii) receipt by the Administrative Agent of
all fees and expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including, without
limitation, the fees and expenses of Moore & Van Allen PLLC.

 

ARTICLE III

MISCELLANEOUS

 

3.1 Amended Terms. The term “Credit Agreement” as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as specifically amended hereby or otherwise agreed, the Credit
Agreement is hereby ratified and confirmed and shall remain in full force and
effect according to its terms.

 

3.2 Representations and Warranties of Credit Parties. Each of the Credit Parties
represents and warrants as follows:

 

(a) It has taken all necessary action to authorize the execution, delivery and
performance of this Amendment.

 

(b) This Amendment has been duly executed and delivered by such Person and
constitutes such Person’s legal, valid and binding obligations, enforceable in
accordance with its terms, except as such enforceability may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors’ rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).

 

(c) No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is
required in connection with the execution, delivery or performance by such
Person of this Amendment.

 

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(d) The representations and warranties set forth in Article III of the Credit
Agreement are true and correct in all material respects as of the date hereof
(except for those which expressly relate to an earlier date).

 

3.3 Acknowledgment of Guarantors. The Guarantors acknowledge and consent to all
of the terms and conditions of this Amendment and agree that this Amendment and
all documents executed in connection herewith do not operate to reduce or
discharge the Guarantors’ obligations under the Credit Documents.

 

3.4 Credit Document. This Amendment shall constitute a Credit Document under the
terms of the Credit Agreement.

 

3.5 Entirety. This Amendment and the other Credit Documents embody the entire
agreement between the parties hereto and supersede all prior agreements and
understandings, oral or written, if any, relating to the subject matter hereof.

 

3.6 Counterparts; Telecopy. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. Delivery of an
executed counterpart to this Amendment by telecopy shall be effective as an
original and shall constitute a representation that an original will be
delivered.

 

3.7 General Release. In consideration of the Required Lenders entering into this
Amendment, the Credit Parties hereby release the Administrative Agent, the
Lenders, and the Administrative Agent’s and the Lenders’ respective officers,
employees, representatives, agents, counsel and directors from any and all
actions, causes of action, claims, demands, damages and liabilities of whatever
kind or nature, in law or in equity, now known or unknown, suspected or
unsuspected to the extent that any of the foregoing arises from any action or
failure to act under the Credit Agreement on or prior to the date hereof.

 

3.8 GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

3.9 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, services of process and waiver of jury trial provisions set forth
in Sections 9.14 and 9.17 of the Credit Agreement are hereby incorporated by
reference, mutatis mutandis.

 

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IN WITNESS WHEREOF the Borrower, the Guarantors and the Required Lenders have
caused this Amendment to be duly executed on the date first above written.

 

BORROWER:

     

FISHER BROADCASTING COMPANY

a Washington corporation

            By:  

    /s/    DAVID D. HILLARD         

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Name: David D. Hillard

Title: Assistant Secretary

 

GUARANTORS:

     

FISHER RADIO REGIONAL GROUP INC.,

a Washington corporation

       

FISHER BROADCASTING-PORTLAND RADIO, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-SEATTLE RADIO, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-PORTLAND TV, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-SEATTLE TV, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-S.E. IDAHO TV, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-IDAHO TV, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-GEORGIA, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-OREGON TV, L.L.C.,

a Delaware limited liability company

       

FISHER BROADCASTING-WASHINGTON TV, L.L.C.,

a Delaware limited liability company

 

                      By:  

    /s/    DAVID D. HILLARD       

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Name: David D. Hillard

Title: Assistant Secretary

 

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ADMINISTRATIVE AGENT

AND LENDERS:

 

WACHOVIA BANK, NATIONAL ASSOCIATION

as Administrative Agent and as a Lender

 

By:    /s/  Franklin M. Wessinger                

Name: Franklin M. Wessinger

Title: Managing Director

 

BANK OF AMERICA, N.A

As Co-Syndication Agent and as Lender

 

By:    /s/  Mark N. Crawford                        

Name: Mark N. Crawford

Title: Senior Vice President

 

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