EXHIBIT 10.5

 

REIMBURSEMENT AND REFINANCING AGREEMENT

 

This REIMBURSEMENT AND REFINANCING AGREEMENT, dated as of March 8, 2005 (this
“Agreement”), by and by and among MALARA BROADCAST GROUP OF DULUTH LLC, a
Delaware limited liability company (“KDLH(TV)”), MALARA BROADCAST GROUP OF
DULUTH LICENSEE LLC, a Delaware limited liability company (the “Duluth
Licensee”, and, together with KDLH(TV), the “Duluth Borrowers”), MALARA
BROADCAST GROUP OF FORT WAYNE LLC, a Delaware limited liability company
(“WPTA(TV)”), MALARA BROADCAST GROUP OF FORT WAYNE LICENSEE LLC, a Delaware
limited liability company (the “Fort Wayne Licensee”, and, together with
WPTA(TV), the “Fort Wayne Borrowers”; the Fort Wayne Borrowers and the Duluth
Borrowers being each referred to herein as a “Borrower” and collectively as
“Borrowers”) and GRANITE BROADCASTING CORPORATION, a Delaware corporation
(“Granite”).

 

WHEREAS, Borrowers are a party to that certain Credit Agreement, dated as of the
date hereof (“Credit Agreement”), by and between Borrowers, Malara Broadcast
Group, Inc., Lenders signatory thereto (the “Lenders”), Dresdner Bank AG New
York and Grand Cayman Branches, as Syndication Agent and D.B. Zwirn Special
Opportunities Fund, L.P., as Administrative Agent for Lenders (“Administrative
Agent”);

 

WHEREAS, as a condition to the delivery of the loan under the Credit Agreement,
Lenders have required that an irrevocable Letter of Credit (“LC”) issued by The
Bank of New York be delivered to the Administrative Agent, on behalf of the
Lenders, in the aggregate the sum of Twenty-Four Million Two Hundred Forty
Thousand Dollars ($24,240,000) to secure the obligations pursuant to the Tranche
A Term Loan (“TLA”) in the Credit Agreement;

 

WHEREAS, Granite has agreed to deliver the LC on the terms and in accordance
with this Agreement; and

 

WHEREAS, capitalized terms not defined in this Agreement shall have the meanings
given such terms in the Credit Agreement.

 

NOW THEREFORE, the parties hereto agree as follows:

 

1.             Issuance and Delivery of Letter of Credit.  On the date hereof,
there has been delivered to Administrative Agent, an LC issued by The Bank of
New York, effective as of the date hereof, in favor of Lenders, for the account
of Borrowers, for an amount in aggregate the sum of Twenty-Four Million Two
Hundred Forty Thousand Dollars ($24,240,000).

 

2.             Reimbursement of Amounts Drawn.  If any amounts under the LC are
drawn (the “LC Amount”) by Administrative Agent on behalf of the Lenders of the
TLA (the “TLA Lenders”), Borrowers hereby agree to repay Granite the LC Amount
plus interest at a rate of 8% per annum (the “Reimbursement Obligation”).  Any
interest on any portion of the Reimbursement Obligation that accrues after the
commencement of any proceeding, voluntary or involuntary, involving the

 

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bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Borrowers (or, if interest on any portion of the Reimbursement Obligation
ceases to accrue by operation of law by reason of the commencement of said
proceeding, such interest as would have accrued on such portion of the
Reimbursement Obligation if said proceeding had not been commenced) shall be
included in the Reimbursement Obligation because it is the intention of Granite
and Borrowers that the Reimbursement Obligation should be determined without
regard to any rule of law or order that may relieve Borrowers of any portion of
such Reimbursement Obligation.  The terms of repayment of the Reimbursement
Obligation will be agreed to by Granite and Borrowers at the time the
Reimbursement Obligation arises; provided, that, Granite and Borrowers
acknowledge that the Reimbursement Obligation of Borrowers to Granite pursuant
to this Agreement will be subordinate to the Obligations of Borrowers to Lenders
with respect to the Tranche B Term Loan and Revolving Loans under the Credit
Agreement.

 

3.             Refinancing Obligations.  In the event that the Reimbursement
Obligation arises as set forth in paragraph 2 above, Borrowers agree to use
their reasonable best efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to assist
Granite in obtaining refinancing for the Reimbursement Obligations.  Borrowers
shall provide such cooperation as may be requested by Granite in connection with
the refinancing, including (i) upon reasonable advance notice by Granite,
participation in meetings, drafting sessions, due diligence sessions, management
presentation sessions, and sessions with rating agencies and (ii) using
reasonable best efforts to prepare business projections and financial statements
for inclusion in offering memoranda, private placement memoranda, prospectuses
and similar documents.  Borrowers shall use their reasonable best efforts to
take, or cause to be taken, all appropriate action, do or cause to be done all
things necessary, proper or advisable under applicable Law, and execute and
deliver such documents and other papers, as may be required to consummate the
refinancing.

 

4.             Entire Agreement; No Third Party Beneficiaries.  This Agreement
constitutes the entire agreement and understanding of the parties hereto in
respect of its subject matters and supersedes all prior understandings,
agreements, or representations by or among the parties hereto, written or oral,
to the extent they relate in any way to the subject matter hereof.  There are no
third party beneficiaries having rights under or with respect to this Agreement.

 

5.             Governing Law.  This Agreement shall be governed by the laws of
the State of New York, without regard to conflicts of laws principles.

 

6.             Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.

 

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[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.

 

 

 

MALARA BROADCAST GROUP OF DULUTH
LLC

 

 

 

 

 

By:

/s/ Anthony C. Malara

 

 

 

Name: Anthony C. Malara

 

 

Title:   President

 

 

 

MALARA BROADCAST GROUP OF DULUTH
LICENSEE LLC

 

 

 

 

 

By:

/s/ Anthony C. Malara

 

 

 

Name: Anthony C. Malara

 

 

Title:   President

 

 

 

MALARA BROADCAST GROUP OF FORT
WAYNE LLC

 

 

 

 

 

By:

/s/ Anthony C. Malara

 

 

 

Name: Anthony C. Malara

 

 

Title:   President

 

 

 

MALARA BROADCAST GROUP OF FORT
WAYNE LICENSEE LLC

 

 

 

 

 

By:

/s/ Anthony C. Malara

 

 

 

Name: Anthony C. Malara

 

 

Title:   President

 

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GRANITE BROADCASTING CORPORATION

 

 

 

 

 

By:

/s/ Lawrence I. Wills

 

 

 

Name: Lawrence I. Wills

 

 

Title:   Senior Vice President

 

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