Document:

Exhibit 10.1

 

Execution Copy

 

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R §§ 200.80(B)4, AND 240.24B-2

 

RESEARCH AGREEMENT

 

THIS RESEARCH AGREEMENT (this “Agreement”), dated as of August 10, 2011 (the “Effective Date”), is entered into by and between ISIS PHARMACEUTICALS, INC., a Delaware corporation (“Isis”), and CHDI FOUNDATION, INC., a New Jersey corporation formerly known as CHDI, Inc. (the “Foundation”). Isis and the Foundation will hereinafter be referred to individually as a “Party” and collectively as the “Parties”.

 

The Foundation’s mission is to rapidly discover and develop drugs that delay or slow the progression of Huntington’s disease.

 

Isis is an RNA-based drug discovery and development company.

 

The Parties are parties to that certain Research Agreement (as amended, the “2007 Research Agreement”), dated October 22, 2007 (the “Original Effective Date”), pursuant to which the Foundation and Isis entered into a collaboration to seek therapies for Huntington’s disease.

 

Since April 2010, the Parties ceased collaborating with one another under the 2007 Research Agreement.

 

After the Parties ceased collaborating under the 2007 Research Agreement, Isis continued to work on therapies for Huntington’s disease without funding from the Foundation.

 

The Parties now desire to enter into this new Agreement to resume collaborating on therapies for Huntington’s disease.

 

In consideration of the mutual representations, warranties and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

Definitions

 

1.             Definitions. For the purposes of this Agreement, the following terms have the meanings set forth below:

 

(a)           “2007 Research Agreement Project” means the “Project” as defined in the 2007 Research Agreement.

 

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(b)           “2007 Research Agreement Project Compound” means any MOE Gapmer that was identified by Isis in the course of Isis’ conduct of the 2007 Research Agreement Project, including any Project Human Compound.

 

(c)           “2007 Research Agreement Project Intellectual Property” means any Intellectual Property conceived, discovered, invented, made or first reduced to practice in the course of Isis’ conduct of the 2007 Research Agreement Project other than any such Intellectual Property that constitutes Isis Background Intellectual Property or Foundation Background Intellectual Property.

 

(d)           “2007 Research Agreement Project Results” means all data, formulae, methods, outcomes, protocols or other results produced in the course of Isis’ conduct of the 2007 Research Agreement Project.

 

(e)           “Acquired Party” means the Party that consummates a Change of Control with an Acquirer.

 

(f)            “Acquirer” means, with respect to a Party, the Third Party or Affiliate of such Party that is a party to a Change of Control with such Party after the Effective Date.

 

(g)           “Acquirer Intellectual Property” means, with respect to an Acquirer, (i) all Intellectual Property (A) owned by, or licensed by a Third Party to, such Acquirer immediately prior to the consummation of the Change of Control involving such Acquirer and a Party or (B) acquired by, or licensed to, such Acquirer from a Third Party after the consummation of the Change of Control involving such Acquirer and a Party and (ii) all Intellectual Property conceived, discovered, invented, made or first reduced to practice by the Acquirer (or on behalf of Acquirer by a Third Party) after the consummation of the Change of Control involving such Acquirer and a Party, other than in the course of the performance of the Research or using or practicing Project Intellectual Property. Notwithstanding the foregoing, Acquirer Intellectual Property shall not include a) any Intellectual Property that constitutes the Background Intellectual Property of the Acquired Party before or on the date of the consummation of the Change of Control involving such Acquirer and a Party or b) any Intellectual Property that constitutes Project Intellectual Property before, on or after the date of the consummation of the Change of Control involving such Acquirer and a Party.

 

(h)           “Additional Project Activities Description” means the written document attached to this Agreement as Appendix C.

 

(i)            “Approved Foundation Requested Project Compound” means a Foundation Requested Project Compound (as defined in Section 8(c)(i) of this Agreement) approved in accordance with Section 8(c)(ii) and Section 5 of this Agreement for use by the Foundation and/or a Foundation Collaborator in an Approved Foundation Project Compound Study.

 

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(j)            “Approved Foundation Project Compound Study” means a Foundation Project Compound Study (as defined in with Section 8(c)(i) of this Agreement) approved in accordance with Section 8(c)(ii) and Section 5 of this Agreement to be conducted by the Foundation and/or a Foundation Collaborator.

 

(k)           “ASO” means an oligonucleotide compound, or analog thereof, having a sequence that is at least 6 bases long and that modulates expression of a gene target via the binding of such compound to a mRNA or pre-mRNA of such gene target.

 

(l)            “Affiliate” means any Person which directly or indirectly controls, is controlled by or is under common control with another Person. As used in this definition, the term “control” means, as to any Person: (i) direct or indirect ownership of 80% or more of the voting interests or other ownership interests in a Person; or (ii) direct or indirect ownership of 80% or more of the interest in the income of the Person in question. A Person will cease to be an Affiliate of another Person if such control relationship no longer exists.

 

(m)          “Background Intellectual Property” means Isis Background Intellectual Property and the Foundation Background Intellectual Property.

 

(n)           “Bankruptcy Event” means the (i) making of a general assignment for the benefit of creditors by an entity; (ii) filing of any petition by an entity, or the commencement of any proceeding voluntarily by an entity, for any relief under any bankruptcy or insolvency laws or any law relating to the relief of debtors; (iii) consent by an entity to the entry of an order in an involuntary bankruptcy or insolvency case; (iv) entry of an order or decree for relief against an entity by a court of competent jurisdiction in an involuntary case under any bankruptcy or insolvency laws or any law relating to the relief of debtors, which order or decree is unstayed and in effect for a period of 90 consecutive days; (v) appointment, with or without the consent of an entity, of any receiver, liquidator, custodian, assignee, trustee, sequestrator or other similar official of an entity or any substantial part of its property; or (vi) admission by an entity in writing of its inability to pay its debts generally as they become due.

 

(o)           “Change of Control” means, with respect to a Person, (i) a merger or consolidation of such Person with another Person which results in the voting securities of such Person outstanding immediately prior thereto ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving Person immediately after such merger or consolidation; (ii) a transaction or series of related transactions in which another Person, together with its Affiliates, becomes the owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of such Person; (iii) the sale or other transfer of all or substantially all of such Person’s assets to another Person; or (iv) the stockholders or equity holders of such Person approve a plan of complete liquidation of such Person.

 

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(p)           “Confidential Information” means all information of whatsoever type or kind (i) provided (either directly or indirectly in writing or other tangible form or orally) by one Party (the “Disclosing Party”) to another Party (the “Receiving Party”) that is clearly marked and identified as “Confidential” by the Disclosing Party at the time of disclosure or (ii) specifically deemed to be “Confidential Information” pursuant to Section 14(a)(i) of this Agreement. Any information communicated orally by the Disclosing Party will be considered “Confidential Information” only if identified as such by the Disclosing Party upon such first oral disclosure. Specifically excepted from Confidential Information is all information that the Receiving Party can demonstrate by written records (1) to have been known by, or in the possession of, the Receiving Party prior to the Disclosing Party’s disclosure of such Confidential Information to the Receiving Party; (2) has, after disclosure of such Confidential Information by the Disclosing Party to the Receiving Party, become known to the Receiving Party through a Third Party who is not known by the Receiving Party to be under any obligation of confidentiality to the Disclosing Party; (3) to have been part of the public domain or publicly known at the time of the Disclosing Party’s disclosure of such Confidential Information to the Receiving Party; (4) has, after disclosure of such Confidential Information by the Disclosing Party to the Receiving Party, become part of the public domain or publicly known, by publication or otherwise, not due to any unauthorized act or omission by the Receiving Party; or (5) to have been independently developed by the Receiving Party without reference to, use of, or reliance upon, such Confidential Information.

 

(q)           “Control” or “Controlled” means,  with respect to an Intellectual Property right, a Party (i) owns or has a license to use and practice such Intellectual Property right and (ii) such Party has the ability to grant a license or sublicense as provided for in this Agreement under such Intellectual Property right without violating the terms of any agreement or other arrangement between such Party and either an Affiliate of such Party or a Third Party.

 

(r)           “Detailed Project Description” means each written document developed and approved by the Steering Committee in accordance with Section 5(a)(ii) of this Agreement setting forth a detailed description of the Research to be performed in the conduct of the Project. The Detailed Project Description (the “Initial Detailed Project Description”) covering the twelve-month period beginning July 1, 2011 for the Project is attached to this Agreement as Appendix B. With respect to the Initial Detailed Project Description, the Parties agree that (i) the activities specified therein to be conducted during the six-month period beginning July 1, 2011 (except for any such activities specifically identified as requiring subsequent approval by the Steering Committee) are firm and agreed to in detail by Isis and the Foundation and (ii) the activities specified therein to be conducted during the six-month period beginning January 1, 2012 have been listed for planning purposes and are therefore estimated and agreed to by the Parties in concept; those activities are subject to further approval of the Steering Committee in accordance with this Agreement prior to their conduct by Isis.

 

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(s)           “Foundation Background Intellectual Property” means (i) all Intellectual Property (including Intellectual Property relating to any Foundation Provided Materials but excluding the Acquirer Intellectual Property of any Acquirer of the Foundation) (A) owned by, or licensed to, the Foundation or any of its Affiliates as of the Original Effective Date or (B) acquired by, or licensed to, the Foundation or any of its Affiliates from a Third Party after the Original Effective Date and (ii) all Intellectual Property conceived, discovered, invented, made or first reduced to practice by, or on behalf of, the Foundation or any of its Affiliates after the Original Effective Date (other than (X) in the course of Isis’ conduct of the Project or (Y) under the 2007 Research Agreement).

 

(t)            “Foundation Collaborators” means those (i) Third Parties and Affiliates of the Foundation to which the Foundation grants the right to use all or part of the Project Deliverables, Project Intellectual Property or Project Results for HD Research and Development, including any entity collaborating with the Foundation in the conduct of HD Research and Development and/or fee-for-service laboratories or repositories providing services to the Foundation in the furtherance of the Foundation’s conduct of HD Research and Development and (ii) fee-for-service laboratories providing services on behalf of any such Third Parties and Affiliates described in (i) above.

 

(u)           “Foundation Provided Materials” means (i) any animal species or model (e.g., mice, rats, etc.) (including progeny derived from inbreeding and crossbreeding of any such animal species or model and unmodified derivatives of any such animal species or model and their progeny) provided to Isis by, or on behalf of, the Foundation to enable Isis to perform the Research and (ii) the physical samples of cell lines, compounds, reagents and other materials provided to Isis by, or on behalf of, the Foundation to enable Isis to perform the Research, in each case that is (A) expressly identified as a Foundation Provided Material in the Project Description or (B) otherwise agreed upon by the Steering Committee as a Foundation Provided Material for the Project.

 

(v)            “Foundation Provided Material Information” means all information relating to a Foundation Provided Material that is provided to Isis by, or on behalf of, the Foundation.

 

(w)           “FTE” means the equivalent of the work of one employee of Isis working on a dedicated full-time basis for one year of work (excluding vacations and holidays), consisting of at least a total of 1,820 hours per year of dedicated effort.

 

(x)           “General Project Description” means the written document attached to this Agreement as Appendix A. For clarity, the General Project Description cannot be modified or amended except by the execution of a written amendment to this Agreement by an authorized signatory of each of the Parties.

 

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(y)           “HD Field of Use” means any activity useful for the creation, development, manufacture or distribution of a product or service for the diagnosis, treatment, cure or prevention of Huntington’s disease, including the manufacture or distribution of any such product or service for sale and the sale of any such product or service.

 

(z)           “HD Research and Development” means any activity useful for the creation, development, manufacture or distribution of a product or service for the diagnosis, treatment, cure or prevention of Huntington’s disease, including pre-clinical testing of a product or service or, subject to Section 10(b) of this Agreement, human clinical trials involving a product or service, in all cases other than (i) the manufacture or distribution of any such product or service for sale or (ii) the sale of any such product or service. For the avoidance of doubt, HD Research and Development shall not include any right to (A) manufacture or distribute any such product or service for sale or (B) sell any such product or service; except, in each case, for pre-clinical use or, subject to Section 10(b) of this Agreement, human clinical trials.

 

(aa)         “Huntington” means the human gene known as IT15 or HD (GenBank accession #NM_002111.5), or any alternative splice variants, mutants, polymorphisms and fragments thereof.

 

(bb)         “Huntington’s disease” or “HD” means the hereditary disorder caused by mutation associated with trinucleotide repeat expansion in the Huntington gene on chromosome 4p.

 

(cc)         “Intellectual Property” means any discovery, invention, formulation, know-how, method, technological development, enhancement, modification, improvement, work of authorship, computer software (including, but not limited to, source code and executable code) and documentation thereof, data or collection of data, whether patentable or not, or susceptible to copyright or any other form of legal protection (e.g., trade secret).

 

(dd)         “Isis Background Intellectual Property” means (i) all Intellectual Property (excluding (A) the Pre-Project Compound Intellectual Property, (B) the Acquirer Intellectual Property of any Acquirer of Isis, (C) the Isis/[***] Collaboration Intellectual Property and (D) the Regulus Intellectual Property) (1) owned by, or licensed to, Isis or any of its Affiliates as of the Original Effective Date or (2) acquired by, or licensed to, Isis or any of its Affiliates from a Third Party after the Original Effective Date and (ii) all Intellectual Property conceived, discovered, invented, made or first reduced to practice by, or on behalf of, Isis or any of its Affiliates after the Original Effective Date (other than (X) in the course of Isis’ conduct of the Project or (Y) under the 2007 Research Agreement).

 

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(ee)         “Isis Provided Materials” means any animal species or model (e.g., mice, rats, etc.) (including progeny derived from inbreeding and crossbreeding of any such animal species or model and unmodified derivatives of any such animal species or model and their progeny) and the physical samples of compounds, reagents, cell lines and other materials acquired by Isis from a Third Party to enable Isis to perform the Research.

 

(ff)           “Isis Provided Reimbursable Materials” means each Isis Provided Material that is (i) expressly identified as an Isis Provided Reimbursable Material in the Project Description or (ii) otherwise agreed upon by the Steering Committee (as defined in Section 5(a)(i) of this Agreement) as an Isis Provided Reimbursable Material for the Project.

 

(gg)         “Isis/[***] Collaboration Intellectual Property” means all Intellectual Property conceived, discovered, invented, made or first reduced to practice by, or on behalf of, Isis or [***] under (i) that certain Collaborative Research Agreement, dated [***], between Isis and [***] and/or (ii) that certain Amended and Restated Collaborative Research Agreement, dated [***] between Isis and [***].

 

(hh)         “MOE Gapmer” means a single-stranded ASO of less than 25 nucleotides comprising a region of at least 6 unsubstituted 2’ deoxy nucleotides with the remaining nucleotides having a 2’-O-(methoxyethyl) substitution at the 2’ position.

 

(ii)           “Patent Expenses” means, with respect to either Party, all out-of-pocket costs and expenses (including attorneys’ fees and government filing fees) incurred by that Party in accordance with Section 9(d) of this Agreement in connection with the preparation, review, filing, prosecution and maintenance of the appropriate filings and issued patents, including any extensions or supplemental protection certificates thereto, to protect the Parties’ rights in any Patentable Project HD Intellectual Property.

 

(jj)           “Patentable Project HD Intellectual Property” means any Project HD Intellectual Property which is or may be patentable or otherwise protectable under Title 35 U.S.C. and corresponding legislation in other jurisdictions.

 

(kk)        “Person” means any individual, corporation, company, partnership, trust, limited liability company, association or other business entity.

 

(ll)           “Pre-Project Compound” means all MOE Gapmers identified by Isis prior to the Original Effective Date in the course of Isis’ conduct of research activities pursuant to that certain Research Agreement, dated as of August 1, 2006, entered into between Isis and the Foundation which (i) Isis used in the conduct of the 2007 Research Agreement Project or (ii) are used in Isis’ conduct of the Project.

 

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(mm)       “Pre-Project Compound Intellectual Property” means any Intellectual Property in or relating to a Pre-Project Compound.

 

(nn)         “Project” means (i) the programs of Research performed by, or on behalf of, Isis as described in the Additional Project Activities Description together with (ii) the program of Research to be performed by Isis as described in the Project Description.

 

(oo)         “Project Compound” means all (i) Pre-Project Compounds, (ii) 2007 Research Agreement Project Compounds or (iii) MOE Gapmers that are identified by Isis in the course of Isis’ conduct of the Project, including any Project Human Compound. For the avoidance of doubt, Pre-Project Compounds will be Project Compounds for all purposes under this Agreement.

 

(pp)         “Project Deliverable” means (i) those Project Reports (as defined in Section 5(e) of this Agreement), those FTE Reports (as defined in Section 5(e) of this Agreement) and other items set forth in the Project Description which are to be delivered by Isis to the Foundation in connection with the conduct of the Project by Isis, (ii) those Approved Foundation Requested  Project Compounds which are to be delivered by Isis to the Foundation pursuant to Section 8(c) of this Agreement and (iii) any other item or material otherwise agreed to be such by the Steering Committee.

 

(qq)         “Project Description” means the General Project Description together with the Detailed Project Descriptions for the Project.

 

(rr)         “Project HD Intellectual Property” means any Project Intellectual Property that (i) claims the composition of matter of a Project Compound and/or a method of using a Project Compound for the treatment of Huntington’s disease or (ii) is necessary or useful for the creation, development, manufacture or distribution of a product or service for the diagnosis, treatment, cure or prevention of Huntington’s disease.

 

(ss)         “Project Human Compound” means any Project Compound that modulates the expression of Huntington and acts predominantly by hybridizing to mRNA or pre-mRNA in humans.

 

(tt)           “Project Intellectual Property” means all (i) Pre-Project Compound Intellectual Property, (ii) 2007 Research Agreement Project Intellectual Property and (iii) Intellectual Property conceived, discovered, invented, made or first reduced to practice in the course of Isis’ conduct of the Project other than any such Intellectual Property that constitutes Isis Background Intellectual Property or Foundation Background Intellectual Property.

 

(uu)         “Project Non-HD Intellectual Property” means any Project Intellectual Property that does not constitute Project HD Intellectual Property.

 

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(vv)                              “Project Non-Human Compound” means any Project Compound that does not constitute a Project Human Compound.

 

(ww)                        “Project Results” means all (i) 2007 Research Agreement Project Results and (ii) all data, formulae, methods, outcomes, protocols or other results produced in the course of Isis’ performance of the Research.

 

(xx)                            “Provided Research Materials” means (i) those Isis Provided Reimbursable Materials for which the Foundation has reimbursed Isis in accordance with Section 6(b)(i) of this Agreement and (ii) the Foundation Provided Materials for the Project.

 

(yy)                            “Regulus” means (i) Regulus Therapeutics Inc. and (ii) the successor Person of any Change of Control directly or indirectly involving Regulus Therapeutics Inc.

 

(zz)                            “Regulus Intellectual Property” means all Intellectual Property owned by, or licensed to, Regulus.

 

(aaa)                      “Research” means all of the activities undertaken by, or on behalf of, Isis under this Agreement to conduct and complete the Project.

 

(bbb)                      “Research FTE” means an FTE (or a fractional unit thereof) that has been designated to perform the Research.

 

(ccc)                      “Research FTE Rate” means, for all Research FTEs (on a quarterly basis), an amount equal to US$[***] per Research FTE per quarter (equivalent to an annual Research FTE Rate of US$[***]).

 

(ddd)                      “Research and Development” means any activity useful for the creation, development, manufacture or distribution of a product or service, including pre-clinical testing of a product or service or, subject to Section 10(b) of this Agreement, human clinical trials involving a product or service, in all cases other than (i) the manufacture or distribution of any such product or service for sale or (ii) the sale of any such product or service. For the avoidance of doubt, Research and Development will not include any right to (1) manufacture or distribute any such product or service for sale or (2) sell any such product or service; except, in each case, for pre-clinical use or, subject to Section 10(b) of this Agreement, human clinical trials.

 

(eee)                      “Third Party” means any Person other than a Party or its Affiliates.

 

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Research; Project

 

2.                                      Number of Research FTEs; Utilization of Research FTEs.

 

(a)                                  Number of Research FTEs.

 

(i)                                    Initial Number of Research FTEs. Beginning on the Effective Date, Isis will provide [***] Research FTEs to perform the Research. The Parties acknowledge and agree that the number of then-current Research FTEs performing the Research will only be subject to adjustment as provided in Section 2(a)(ii) of this Agreement.

 

(ii)                                Changes in the Number of Research FTEs. The number of Research FTEs performing Research may only be increased or decreased above the then-current number of Research FTEs required to be provided by Isis to perform the Research by the agreement of the Steering Committee; provided, that, (A) at no time will the number of Research FTEs performing the Research exceed [***] ([***])  Research FTEs (the “Research FTE Maximum Number”) and (B) any increase in the number of Research FTEs may only be for the fixed period of time set forth in the applicable Steering Committee meeting minutes. Any agreed upon increase or decrease in the then-current number of Research FTEs required to be provided by Isis to perform the Research will occur within a period of time mutually agreed upon by the Steering Committee. The Parties acknowledge and agree that the Research FTE Maximum Number may only be increased by the execution of a written amendment to this Agreement by an authorized signatory of each of the Parties.

 

(b)                                  Utilization of Research FTEs. Isis and the Foundation agree that each individual being provided by Isis to constitute all or a part of a Research FTE may (i) devote less than 100% of his or her full-time effort to perform the Research and (ii) perform activities of any type or nature for Isis or any Third Party; provided, that, the time spent by any such individual performing such non-Project activities will not be taken into account for any purpose under this Agreement (including for purposes of calculating (A) the number of Research FTEs being provided by Isis under this Agreement or (B) the amount of any payment owed by the Foundation under this Agreement). Similarly, Isis may satisfy its Research FTE obligations hereunder by having multiple individuals contribute toward one full Research FTE.

 

3.                                      Performance of the Research; Limited Right to Subcontract the Research; Certain Notifications Relating to the Project; Experimental Nature of the Research.

 

(a)                                  Performance of the Research; Limited Right to Subcontract the Research.

 

(i)                                    Performance of the Research. Isis agrees that (A) each Research FTE will perform the Research in accordance with this Agreement, including the Project Description and (B) no Research shall be performed except as expressly set forth in the Project Description or otherwise approved by the Steering Committee. During the Term (as defined in Section 17(a) of this Agreement), unless otherwise explicitly agreed to by the Steering Committee or expressly provided for in the Project Description, Isis will

 

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also provide such other resources (including all necessary administrative and support personnel, equipment, tools, Isis Provided Materials and supplies) and effort as is commercially reasonable to perform the Research in accordance with this Agreement, including the Project Description.

 

(ii)                                Limited Right to Subcontract the Research. The Parties acknowledge and agree that Isis may (A) sub-contract those activities which are expressly set forth in the Project Description or otherwise agreed upon by the Steering Committee as activities to be sub-contracted (such activities, “Subcontracted Research”) and (B) sub-contract such Subcontracted Research to the Third Party set forth in the Project Description or otherwise agreed upon by the Steering Committee as the Third Party or Affiliate to conduct such sub-contracted activities (each such Third Party or Affiliate, a “Subcontractor”). Isis agrees that (1) all Subcontracted Research shall be performed pursuant to a written agreement between Isis and the Subcontractor performing such Subcontracted Research upon terms and conditions that a) are consistent with the terms and conditions of this Agreement and b) do not conflict with Isis’ obligations or the Foundation’s rights under this Agreement and (2) Isis shall cause each Subcontractor to conduct the Subcontracted Research in accordance with, and subject to, the terms and conditions of such agreement. Upon the Foundation’s request, Isis will provide the Foundation with copies of such agreements between Isis and any such Subcontractor. Isis further agrees that Isis shall be solely responsible and liable to CHDI under this Agreement for the Subcontracted Research conducted by each Subcontractor as if such Research were conducted by Isis.

 

(b)                                  Certain Notifications Relating to the Research.

 

(i)                                    Change of Circumstances Notices. If at any time following the Effective Date Isis makes a good faith determination that, (A) the Research cannot be conducted and completed substantially in accordance with this Agreement and the Project Description; (B) the Research (or any portion thereof) cannot be substantially completed within the estimated time frame set forth in the Project Description; or (C) the continued performance of the Research in accordance with this Agreement and the Project Description (1) is unlikely to yield scientifically valid or useful results, (2) will violate any applicable federal, state, local, international, health authority and institutional laws, rules, regulations, orders or guidelines, or (3) will violate principles of ethics or scientific integrity, Isis will promptly give written notice (each, a “Change of Circumstances Notice”) to the Foundation. Each Change of Circumstances Notice will set forth a detailed description of Isis’ determination (including the facts and circumstances underlying such determination and Isis’ basis for such determination). Following the delivery of a Change of Circumstances

 

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Notice, Isis will, at the request of the Foundation, promptly make senior officers and appropriate scientific or technical personnel reasonably available to the Foundation to discuss the basis for Isis’ determination.

 

(ii)                                Post-Effective Date Knowledge Notice. If at any time following the Effective Date Isis acquires knowledge that would render one or more of the representations and warranties set forth in Section 16(b) of this Agreement untrue or incorrect if such representation or warranty were based upon Isis’ knowledge at such time (instead of being based upon Isis’ knowledge as of the Effective Date), Isis will promptly give written notice (each, a “Post-Effective Date Knowledge Notice”) to the Foundation. Each Post-Effective Date Knowledge Notice will set forth a detailed description of the facts and circumstances relating to the applicable representation or warranty (including details as to Isis’ basis for determining that such representation or warranty would no longer be true and correct). Following the delivery of a Post-Effective Date Knowledge Notice, Isis will, at the request of the Foundation, promptly make senior officers and appropriate scientific or technical personnel reasonably available to the Foundation to discuss (A) the facts and circumstances related to the subject matter of such Post-Effective Date Knowledge Notice and (B) potential courses of action to address such matter.

 

(c)                                  Experimental Nature of the Research. The Foundation acknowledges that (i) the Research is of an experimental and developmental nature and (ii) Isis cannot guarantee that the objectives of the Research will be achieved or that the performance of the Research will yield any specific deliverables, results or Intellectual Property.

 

4.                                      Obligation to Provide Foundation Provided Materials and Foundation Provided Material Information; Reimbursement for Isis Provided Reimbursable Materials; Use and Ownership of Provided Research Materials and Foundation Provided Material Information; Retention of Provided Research Materials; Risk of Loss of Provided Research Materials; Specialized Licenses or Services.

 

(a)                                  Obligation to Provide Foundation Provided Materials and Foundation Provided Material Information. The Foundation will provide Isis with (i) each Foundation Provided Material designated as a Foundation Provided Material for the Project and (ii) any information in respect of each such Foundation Provided Material that is reasonably necessary to enable Isis to use such Foundation Provided Material in the performance of the Research so long as such information is in the possession of the Foundation and the Foundation is permitted to provide such information to Isis without breaching any obligation to any Third Party.

 

(b)                                  Reimbursement for Isis Provided Reimbursable Materials. The Foundation will, in accordance with Section 6(b)(i) of this Agreement, reimburse Isis for the actual costs incurred by Isis to procure each Isis Provided Reimbursable Material

 

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designated as an Isis Provided Reimbursable Material for the Project (up to [***]% of the estimated cost of such Isis Provided Reimbursable Material as is set forth in the Project Description or the applicable mutually-approved Steering Committee meeting minutes). Isis agrees that (i) each Isis Provided Reimbursable Material shall be procured pursuant to a written agreement between Isis and the Third Party or Affiliate providing such Isis Provided Reimbursable Material upon terms and conditions that (A) are consistent with the terms and conditions of this Agreement and (B) do not conflict with Isis’ obligations or the Foundation’s rights under this Agreement and (ii) Isis shall cause each Third Party or Affiliate providing Isis Provided Reimbursable Materials to provide such Isis Provided Reimbursable Materials in accordance with, and subject to, the terms and conditions of such agreement. Upon the Foundation’s request, Isis will provide the Foundation with copies of such agreements between Isis and any such Third Party or Affiliate.

 

(c)                                  Use and Ownership of Provided Research Materials and Foundation Provided Material Information; Retention of Provided Research Materials; Risk of Loss of Provided Research Materials.

 

(i)                                    Use and Ownership of Provided Research Materials and Foundation Provided Material Information. Isis agrees that the Provided Research Materials and the Foundation Provided Material Information (A) will be used by Isis for the sole purpose of conducting the Project and for no other purpose, (B) will be used, handled, stored and disposed of in compliance with all applicable laws, regulations and rules and (C) will not be transferred to any Third Party or to any Affiliate of Isis except (1) as expressly required or contemplated by this Agreement (e.g., to a Subcontractor in accordance with Section 3(a)(ii) of this Agreement) or (2) pursuant to the written request of an authorized representative of the Foundation. Except to the extent expressly required by the Project Description, Isis further agrees that it will not: (a) directly or indirectly, reverse engineer, deconstruct or in any way analyze or determine the identity, structure or composition of any Foundation Provided Materials or the properties thereof (chemical, biochemical, physical, biological or other); b) use any Provided Research Materials in any human; or c) export any Provided Research Materials or Foundation Provided Material Information in any manner that would violate any applicable export law or regulation, including the United States. Isis acknowledges and agrees that (a) as between Isis and the Foundation, the Foundation owns the Provided Research Materials and Foundation Provided Material Information and (b) Isis will not, pursuant to this Agreement, acquire any ownership or other interest in any Provided Research Materials or Foundation Provided Material Information.

 

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(ii)                                Retention of Provided Research Materials. Except for live animals and animal-derived materials (e.g., tissue samples) that require consistent care or maintenance, Isis will retain all unused Provided Research Materials for a period of [***] following the earlier to occur of (A) the completion or cancellation of the Project or (B) the expiration or termination of this Agreement (such period, the “Provided Research Materials Retention Period”). Except with respect to any Isis Provided Reimbursable Material for which, prior to Isis’ purchase of such Isis Provided Reimbursable Material, the Foundation provided written consent that Isis is not required to provide such Isis Provided Reimbursable Material to the Foundation, during the Provided Research Materials Retention Period, Isis will, at the Foundation’s request and expense, ship all or part of any or all of the unused Provided Research Materials to the Foundation or to such Third Party as the Foundation will direct in writing. Upon the expiration of the Provided Research Materials Retention Period, Isis will appropriately discard or destroy all such unused Provided Research Materials.

 

(iii)                            [***] of Provided Research Materials. Immediately upon Isis’ receipt of a Provided Research Material and continuing until such Provided Research Material is delivered or disposed of by Isis pursuant to this Agreement (the “Handling Period”), Isis will [***], and will be [***], all [***], (A) [***] such Provided Research Material and (B) any preparation for shipment and shipment of such Provided Research Material pursuant to this Agreement, in all cases to the extent each such Provided Research Material is [***]. If a Provided Research Material that is not [***] is [***], the Parties will [***] such Provided Research Material. Isis will use commercially reasonable efforts to obtain and maintain [***] during the Handling Period [***] each Provided Research Material.

 

(d)                                  Reimbursement for Specialized Licenses or Services. The Foundation will, in accordance with Section 6(b)(ii) of this Agreement, reimburse Isis for the actual costs incurred by Isis to license or procure from a Third Party or one of its Affiliates, as the case may be, each license or service that is expressly identified as a license or service the costs of which are to be reimbursed by the Foundation in (i) the Project Description or (ii) otherwise agreed upon by the Steering Committee as a license or service the costs of which are to be reimbursed by the Foundation for the Project (up to [***]% of the estimated cost of such license or service as is set forth in the Project Description or the applicable mutually-approved Steering Committee meeting minutes) (any such license or service hereinafter referred to as a “Specialized License or Service”). Isis agrees that (A) each Specialized License or Service shall be licensed or procured pursuant to a written agreement between Isis and the Third Party or Affiliate licensing or providing such Specialized License or Service upon terms and conditions that (1) are consistent with the terms and conditions of this Agreement and (2) do not conflict with Isis’ obligations or the Foundation’s rights under this Agreement and

 

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(B) Isis shall cause each Third Party or Affiliate providing a Specialized License or Service to provide such Specialized License or Service in accordance with, and subject to, the terms and conditions of such agreement. Upon the Foundation’s request, Isis will provide the Foundation with copies of such agreements between Isis and any such Third Party or Affiliate.

 

Research/Project Management

 

5.                                      Steering Committee; Project Managers; Limited Authority of the Steering Committee and Project Managers; Recordkeeping; Project Reports.

 

(a)                                  Steering Committee.

 

(i)                                    Establishment and Make-Up of the Steering Committee; External Advisors.

 

(A)                               Establishment and Make-Up of the Steering Committee. Within a reasonable period of time following the Effective Date, not to exceed 30 days, the Parties will establish a committee (the “Steering Committee”). The Steering Committee will be comprised of four members. Each Party will designate two members of the Steering Committee. Each Party will appoint members who possess appropriate qualifications to conduct the responsibilities of the Steering Committee. Each Party may also, from time to time, invite other of its personnel to attend the Steering Committee meetings; provided, that, such other personnel will (1) act in an advisory, non-voting capacity only and (2) not be entitled to decide or approve any matter requiring decision by or approval of the Steering Committee. A Party may at any time replace one or both of its members of the Steering Committee upon written notice to the other Party. The Steering Committee, as a formal governing body under this Agreement, will be dissolved upon the expiration of the Term.

 

(B)                               External Advisors. The Steering Committee may, from time to time, identify and appoint Third Party experts to advise the Steering Committee on technical and other matters; provided, that, such experts will (1) act in an advisory, non-voting capacity only and will not be entitled to decide or approve any matter requiring decision by or approval of the Steering Committee and (2) be required to abide by confidentiality and non-use obligations at least as restrictive as those set forth in Section 14 of this Agreement in respect of Confidential Information to which such experts are granted access.

 

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(ii)                                Responsibilities of the Steering Committee; Scope and Content of Detailed Project Descriptions.

 

(A)                               Responsibilities of the Steering Committee. The Steering Committee will have the authority to make decisions about those matters that, by the express terms of this Agreement, are to be addressed by the Steering Committee. In addition to any other matter that, by the express terms of this Agreement are to be determined by the Steering Committee, the Steering Committee will be responsible for each of the following matters: (1) on at least a quarterly basis, reviewing the Detailed Project Description for the Project and, if deemed reasonably necessary by the Steering Committee, refining, updating and approving the Detailed Project Description for the Project for the 12-month period beginning on the date such Detailed Project Description is so updated and approved by the Steering Committee (each such Detailed Project Description to be developed in accordance with, and set forth the information specified in, Section 5(a)(ii)(B) of this Agreement), provided, that, the Parties shall use their respective commercially reasonable efforts to facilitate the approval by the Steering Committee of (and the Steering Committee will diligently endeavor to approve) at least two calendar quarters of Research activities;  (2) on at least a quarterly basis, subject to Section 2 of this Agreement, reviewing and, if deemed reasonably necessary by the Steering Committee, approving changes to the number of Research FTEs (not to exceed the Research FTE Maximum Number) to be provided by Isis to perform the Research, provided, that, the Parties shall use their respective commercially reasonable efforts to facilitate the approval by the Steering Committee of (and the Steering Committee will diligently endeavor to approve) the requisite number of Research FTEs to be provided by Isis to conduct the approved Research activities for at least two calendar quarters; (3) monitoring the coordination, implementation and conduct of the Project in accordance with the Project Description; (4) reviewing the status and progress of the conduct of the Project; (5) determining if changes are needed to the scope of the Project; (6) implementing any changes to the scope of the Project that have been approved by the Parties; (7) reviewing and discussing the Invention Notices (as defined in Section 9(c)(i) of this Agreement) in respect of the Project Intellectual Property; (8) reviewing and discussing the filing of any patent applications in respect of any Patentable Project Intellectual Property; (9) reviewing and discussing the Project Deliverables, Project Results and such other matters related to this Agreement and the Research as are reasonably requested by either of the Parties; (10) facilitating Isis’

 

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consideration of any Foundation Project Compound Request Notice submitted by the Foundation under Section 8(c) of this Agreement; and (11) facilitating on-going communications between the Parties. Notwithstanding the provisions of Section 5(a)(iii)(B) below, if the Steering Committee is unable to reach consensus regarding the activities to be included and performed in the Detailed Project Description (including without limitation, an inability to reach consensus regarding the Research activities for the next calendar quarter), the matter will first be submitted to B. Lynne Parshall, in the case of Isis (or such other individual identified in writing by Isis), and Robi Blumenstein, in the case of the Foundation (or such other individual identified in writing by the Foundation) within five days for resolution and any such resolution will be deemed to be a decision and approval by the Steering Committee for purposes of this Agreement.

 

(B)                               Scope and Content of Detailed Project Descriptions. Each Detailed Research Project Description developed and approved by the Steering Committee for the Project will be consistent with the scope of the Project as outlined in the General Project Description. The Detailed Project Description for the Project will include the following information: (1) a reasonably detailed description (including the details of all material scientific protocols) of the Research activities and the timing thereof to be undertaken during the period covered by such Detailed Project Description (all such Research activities to be consistent with the scope of the Project as outlined in the Project Description); (2) an estimated time frame for the completion of the Project; (3) a breakdown of the number of Research FTEs to be allocated to the conduct of the Project during the period covered by such Detailed Project Description; (4) a list of each Subcontractor together with a reasonably detailed description of the Subcontracted Research to be undertaken by each such Subcontractor in the conduct of the Project during the period covered by such Detailed Project Description; (5) a list of the Foundation Provided Materials to be provided for the conduct of the Project (including the amount and estimated cost thereof); (6) a list of any Isis Provided Reimbursable Materials required for the conduct of the Project (including the amount and estimated cost thereof); (7) a list of any Specialized Licenses or Services required for the conduct of the Project (including the cost thereof); and (8) such other information as may be necessary to appropriately describe the Research activities to be undertaken in the conduct of the Project during the period covered by such Detailed Project Description.

 

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(iii)                            Operating Procedures of the Steering Committee; Decisions by the Steering Committee; Steering Committee Minutes; Resolution of Steering Committee Disputes.

 

(A)                               Operating Procedures of the Steering Committee; Decisions by the Steering Committee; Steering Committee Minutes. The Steering Committee will establish its own internal operating procedures and meeting schedule (such meetings to be held in person or by video or telephone conference as mutually agreed upon by the Steering Committee members); provided, however, the Steering Committee will meet on a face-to-face basis at least once every calendar quarter following Isis’ delivery of the Project Report for the preceding calendar quarter in accordance with Section 5(e)(i) of this Agreement. Each Party may, as it deems reasonably necessary, call ad-hoc meetings of the Steering Committee by providing reasonable notice to the other Party. Any activity or matter that requires a decision by, or the approval of, the Steering Committee under this Agreement will require the affirmative consent of each member of the Steering Committee and will only be a valid and binding decision and/or approval of the Steering Committee if such decision and/or approval is expressly identified in the applicable mutually-approved Steering Committee meeting minutes. At each meeting of the Steering Committee, one meeting attendee will be appointed to record and, within a period of 30 days after each such meeting, distribute the minutes of such meeting to the Steering Committee members for approval (the approval of the content of each such meeting minutes to be evidenced by the initialing of such meeting minutes by at least one of each Party’s designated Steering Committee members).

 

(B)                               Resolution of Steering Committee Disputes. If the Steering Committee cannot reach consensus on any activity or matter that requires a decision by, or the approval of, the Steering Committee (each, a “Steering Committee Dispute”), either Party may, within 30 days after the Steering Committee Dispute arises, submit such Steering Committee Dispute to B. Lynne Parshall, in the case of Isis (or such other individual identified in writing by Isis), and Robi Blumenstein, in the case of the Foundation (or such other individual identified in writing by the Foundation), for resolution by providing a written notice (each, an “Internal Steering Committee Dispute Resolution Notice”) to the other Party setting forth in reasonable detail the basis of such dispute. Such individuals will, within 20 days after such Internal Steering Committee Dispute Resolution Notice is delivered, meet and attempt in good faith to resolve such Steering Committee Dispute.

 

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If such Steering Committee Dispute is not resolved within such 20-day period, either Party may require that the Parties submit such Steering Committee Dispute for resolution by an independent Third Party with appropriate qualifications for resolution to evaluate such matter (a “Neutral Expert”) by providing a written notice (an “External Steering Committee Dispute Resolution Notice”) to such effect that identifies the Steering Committee Dispute to be resolved. If the Parties fail to agree on a Neutral Expert within 10 days after an External Steering Committee Dispute Resolution Notice is delivered, then each Party will submit the name and qualifications of one proposed Neutral Expert, along with a written statement not to exceed five pages that identifies the issue(s) to be decided, to JAMS in Denver, Colorado, with a copy to the other Party, and JAMS will appoint a single arbitrator, who will be authorized solely to select, within 10 days of his or her appointment and pursuant to this Section 5(a)(iii)(B), which Party’s proposed Neutral Expert will be designated for resolution of such matter, which decision will be final and binding on both Parties. Upon the designation of the Neutral Expert, each Party will have 15 business days from the date of the designation of such Neutral Expert to submit any appropriate materials to such Neutral Expert, with copies to the other Party. No Party will communicate with the Neutral Expert except by written communications copied to the other Party, or orally in the physical or telephonic presence of the other Party. The Neutral Expert will render a written decision within 15 days after the deadline for submission of materials from the Parties. The decision of the Neutral Expert will be final and binding on both Parties; provided, however, in no event will either Party be obligated to violate any applicable federal, state, local, international, health authority and institutional laws, rules, regulations, orders or guidelines. The Parties agree that any and all such deliberations will be confidential.

 

(b)                                  Project Managers.

 

(i)                                    Appointment of the Project Managers; Operating Procedures of the Project Managers. Within a reasonable period of time following the Effective Date, not to exceed 30 days, each Party will appoint a project manager (each, a “Project Manager”) to oversee the day-to-day coordination, implementation and performance of the Research. The Project Managers will establish their own operating procedures and meeting schedule (such meetings to be held in person or by video or telephone conference as mutually agreed upon by the Project Managers); provided, however, the Project Managers will meet on a bi-weekly basis or at such other frequency as agreed upon by the Project Managers. Isis’

 

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Project Manager will keep the Foundation’s Project Manager fully informed as to the status and progress of the conduct of the Project (including the status of the completion time frame of the Project as compared to the estimated completion time frame specified in the Project Description) and such other matters related to this Agreement and the Research as are reasonably requested by the Foundation’s Project Manager. Upon the expiration of the Term, each Party’s obligation to have and maintain a Project Manager under this Agreement will terminate.

 

(ii)                                Responsibilities of the Project Managers. The Project Managers will be responsible for the following activities: (A) assisting the Steering Committee in the development of the revised Detailed Project Descriptions for the Project (each such Detailed Project Description to be developed in accordance with, and set forth the information specified in, Section 5(a)(ii)(B) of this Agreement); (B) overseeing the coordination, implementation and conduct of the Project in accordance with the Project Description; (C) reviewing the status and progress of the conduct of the Project; (D) determining if changes are needed to the scope of the Project; (E) implementing any changes to the scope of the Project that have been approved by the Parties; (F) reviewing and discussing the Project Deliverables, Project Results and such other matters related to this Agreement and the Research as are reasonably requested by either of the Parties; and (G) facilitating on-going communications between the Parties.

 

(c)                                  Limited Authority of the Steering Committee and Project Managers. For the avoidance of any doubt, the Parties agree that neither the Steering Committee nor any Project Manager will have the power or authority to (i) modify or make any amendments to this Agreement, (ii) except as otherwise provided in Section 5(a)(ii)(A) of this Agreement, modify or make any amendments to the Project Description, (iii) waive a Party’s rights under, or compliance with, this Agreement or (iv) determine whether there has been a breach of a Party’s obligations pursuant to this Agreement.

 

(d)                                  Recordkeeping. Isis will keep complete and accurate records of the Research performed by it under this Agreement and of all Project Deliverables, Project Intellectual Property and Project Results. Isis will retain all such records, including all raw data, for a period of not less than [***] following the date of the expiration or termination of the Term. During the Term of this Agreement and such [***] period, such records (including the relevant pages of all applicable laboratory notebooks containing data, information or notations relating to the performance of the Research) will, upon 10 business days prior written notice from the Foundation, be available at Isis’ facilities at all reasonable times during normal business hours for inspection, examination or copying by, or on behalf of, the Foundation at the Foundation’s expense, or alternatively, at Isis’ election, will be made available to the Foundation in electronic form at the Foundation’s

 

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expense. During the [***] period following the date of the expiration or termination of the Term, Isis will, at the Foundation’s request and expense, ship copies of all or part of such records to the Foundation or to such Third Party as the Foundation will direct in writing. Notwithstanding the foregoing, Isis may retain copies of all such records to allow Isis to exercise its rights and satisfy any of its obligations under this Agreement.

 

(e)                                  Project Reports; FTE Reports.

 

(i)                                    Project Reports. Isis will deliver to the Foundation (A) a written report on the performance of the Research within [***] after the end of each [***] during the conduct of the Project and continuing until the cancellation or completion of the Project, together with any additional reports specified in the Project Description (collectively, the “[***] Project Reports”), and (B) a final written report on the conduct of the Project (the “Final Project Report” and, together with the [***] Project Reports, the “Project Reports”) within [***] of the [***]. Each Project Report will address each of the following in substantially the same format and containing the same degree of detail as Isis generally uses to communicate such information internally and to its Third Party research collaborators: (1) a summary of the status and progress of the Project (including an update on the projected time frame for the completion of the Project), (2) material developments and issues relating to the conduct of the Project and (3) a summary of any Project Results produced during the period covered by the Project Report. Each Project Report will include a copy of (a) each report related to the Research activities received by Isis during the period from a Third Party or Affiliate and (b) all final versions of written documents created by Isis summarizing the Project Results for the Research activities and not otherwise included in the any of the reports described in (a) above that are or have been previously delivered to the Foundation.

 

(ii)                                FTE Reports. Isis will deliver to the Foundation Research FTE reports (each, a “FTE Report”) on a [***] basis (each such FTE Report to be delivered at least [***] prior to the Steering Committee’s regularly scheduled meeting for the period covered by such FTE Report) for each [***] through the [***]. Each FTE Report will contain [***].

 

(f)                                    Follow-Up Queries. Isis will provide the Foundation’s Steering Committee members with a reasoned response (including, if requested by a Foundation Steering Committee member, the raw data underlying the Project Results or the Additional Project Activities Project Results) to any follow-up scientific questions asked by a Foundation Steering Committee member concerning (i) the Research that is the subject of a Project Report or arises from a discussion at a Steering Committee meeting or (ii) the Additional Project Activities that are the subject of a Project Report or arises from a discussion at a Steering Committee meeting.

 

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Any requested raw data may be provided to the Foundation in the same format (e.g., electronic transfer, CD, DVD, SAS, Microsoft Excel spreadsheet, etc.) as is used by Isis for its own purposes.

 

Payments

 

6.                                      General Payment Obligation; Reimbursement Obligation for Isis Provided Reimbursable Materials Costs, Specialized Licenses or Services Costs and Shipping and Insurance Costs; Quarterly Research Payments; Conditions Precedent for the Payments; Invoicing; Payment Remittance.

 

(a)                                  General Payment Obligation. In full consideration of Isis’ performance of the Research and its other obligations under this Agreement, the Foundation will, subject to the terms and conditions set forth in this Agreement, make payments to Isis as provided in this Agreement. The calculation of the amount of such payments, the timing of the payment of such payments and conditions precedent for the payment of such payments are set forth in this Section 6.

 

(b)                                  Reimbursement Obligation for Isis Provided Reimbursable Materials Costs, Specialized Licenses or Services Costs and Shipping and Insurance Costs.

 

(i)                                    Isis Provided Reimbursable Materials Costs. Subject to Section 4(b) of this Agreement, the Foundation will reimburse Isis for the actual costs incurred by Isis to procure any Isis Provided Reimbursable Materials (all such costs hereinafter referred to as the “Isis Provided Reimbursable Materials Costs”).

 

(ii)                                Specialized Licenses or Services Costs. Subject to Section 4(d) of this Agreement, the Foundation will reimburse Isis for the actual costs incurred by Isis to license or procure any Specialized Licenses or Services (all such costs hereinafter referred to as the “Specialized Licenses or Services Costs”).

 

(iii)                            Shipping and Insurance Costs. The Foundation will reimburse Isis for (A) the actual costs of carriage, customs duties and insurance incurred by Isis in connection with the delivery of the Project Deliverables and Provided Research Materials to the Foundation (or such Third Party specified by the Foundation) and (B) for the actual costs and expenses incurred by Isis in connection with the shipping of the Project Deliverables and Provided Research Materials to the Foundation (or such Third Party specified by the Foundation) (all such costs hereinafter referred to as the “Shipping and Insurance Costs”), in each case provided that such costs are reasonable.

 

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(c)                                  Additional Project Activities Description Payment. For the performance of the Research performed by, or on behalf of, Isis as described in the Additional Project Activities Description (the “Additional Project Activities”), the Foundation will make a one-time payment (the “Additional Project Activities Payment”) to Isis in the amount of US$[***] (the “Additional Project Activities Payment Amount”). Isis agrees that (i) upon the payment of the Additional Project Activities Payment Amount by the Foundation, the Foundation will have paid Isis all amounts owed by the Foundation to Isis for the conduct of the Additional Project Activities and (ii) the Foundation has paid Isis all amounts owed by CHDI pursuant to Section 5 of the 2007 Research Agreement.

 

(d)                                  Advance Research Payment. The Foundation will make a payment (the “Advance Research Payment”) to Isis in the amount of US$[***] (the “Advance Research Payment Amount”). Isis acknowledges and agrees that the Advance Research Payment Amount shall, in accordance with Section 6(g)(i) of this Agreement, be applied as a credit against the final Quarterly Research Payment (as defined in Section 6(e) of this Agreement).

 

(e)                                  Quarterly Research Payments.

 

(i)                                    General. Promptly following the end of each calendar quarter, Isis will calculate the payment (each, a “Quarterly Research Payment”) to be made by the Foundation in respect of (A) the Research FTE costs incurred by Isis in performing the Research during such period, (B) Isis Provided Reimbursable Materials Costs incurred by Isis during such period, (C) the Specialized Licenses or Services Costs incurred by Isis during such period and (D) the Shipping and Insurance Costs incurred by Isis during such period.

 

(ii)                                Specific Calculation of each Quarterly Research Payment. Each Quarterly Research Payment in respect of the period covered by such Quarterly Research Payment will be calculated in accordance with the terms of this Agreement and will be an amount equal to [***].

 

(f)                                    Conditions Precedent for Payments.

 

(i)                                    Conditions Precedent for the Payment of the Additional Project Activities Payment. The obligation of the Foundation to pay the Additional Project Activities Payment is subject to Isis’ delivery to the Foundation, in accordance with [***] of this Agreement, of [***] on or prior to the date that Isis issues an invoice in respect of such Additional Project Activities Payment.

 

(ii)                                Conditions Precedent for the Payment of the Quarterly Research Payments. With respect to each Quarterly Research Payment, the obligations of the Foundation to pay such Quarterly Research Payment are subject to the fulfillment of each of the following conditions:

 

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[***]

 

provided, however, that the Foundation will pay each Quarterly Research Payment to Isis no later than [***] after the date of the Foundation’s receipt of the invoice for such Quarterly Research Payment, if Isis has, with respect to such Quarterly Research Payment [***].

 

(g)                                 Invoicing; Payment Remittance.

 

(i)                                    Invoicing. At such time as Isis has, in accordance with [***] of this Agreement, delivered to the Foundation the [***], Isis will also deliver to the Foundation an invoice for the Additional Project Activities Payment to be made by the Foundation for such period. At such time as Isis has, in accordance with Section 5(e) of this Agreement, delivered to the Foundation the [***] and [***] for a particular calendar quarter, Isis will also deliver to the Foundation an invoice for the Quarterly Research Payment to be made by the Foundation for such calendar quarter. Each invoice delivered by Isis for a payment under this Agreement will (A) reference the “RecID” number set forth in the footer of this Agreement, (B) be issued in US Dollars, (C) be itemized and contain detailed information in respect of the payment being billed under such invoice and (D) as applicable, include a copy of all relevant receipts and/or invoices related to the payment being billed under such invoice. Isis agrees that a) the invoice submitted by Isis in respect of the final Quarterly Research Payment shall credit the Advance Research Payment Amount against such final Quarterly Research Payment and b) if the amount of final Quarterly Research Payment is less than the Advance Research Payment Amount, Isis shall promptly make a payment to the Foundation in an amount equal to the amount by which the Advance Research Payment Amount exceeded the amount of the final Quarterly Research Payment.

 

(ii)                                Payment Remittance. Subject to the terms and conditions of this Agreement, each payment to be made by the Foundation under this Agreement will be due and payable by the Foundation within [***] of the date of the receipt by the Foundation of the invoice issued by Isis in accordance with this Agreement in respect of such payment. All payments made by the Foundation under this Agreement will be paid by check in US Dollars and remitted to Isis at the address set forth in Section 19 of this Agreement. Any payment made by the Foundation under this Agreement in respect of an invoice issued by Isis under this Agreement using a currency other than US Dollars will be converted by the Foundation to US Dollars at the exchange rate prevailing on or about the date that the Foundation remits such payment to Isis.

 

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Project Results

 

7.                                      Ownership of Project Results; Notification and Delivery of Project Results; Withdrawal of Project Results; Transfers of the Project Results to Collaborators.

 

(a)                                  Ownership of Project Results. Isis and the Foundation will own [***] all Project Results. The ownership of the Project Results will vest in the Parties in that manner immediately upon creation. Each Party hereby assigns, and agrees to assign, to the other Party sufficient right, title and interest in the Project Results to accomplish such ownership. Each of Isis and the Foundation agrees that it will not sell or otherwise transfer (including by sale of assets or stock or by merger or other business combination) its title to any Project Results to any Third Party or Affiliate unless such Third Party or Affiliate takes title to such Project Results (i) subject to the rights of the non-transferring Party in such Project Results under this Agreement and (ii) assumes the obligations of the transferring Party with respect to such Project Results under this Agreement; provided, however, that the transferring Party will (A) notify the non-transferring Party in writing within 10 days after any such transfer and (B) provide the non-transferring Party with a copy of the written assignment and assumption or similar agreement between the transferring Party and the Third Party or Affiliate transferee.

 

(b)                                  Notification and Delivery of Project Results; Withdrawal of Project Results.

 

(i)                                    Notification and Delivery of Project Results.

 

(A)                               General. Isis will inform the Foundation of, and deliver, the Project Results to the Foundation within a reasonable period of time following the conception, discovery, invention or production, as the case may be, of each such Project Result through the Steering Committee meetings, Project Reports and the transmittal of the raw data underlying the Project Results pursuant to Section 5(f) of this Agreement.

 

(B)                               Delivery of Additional Project Activities Project Results. Isis has informed the Foundation of, and delivered, the Project Results relating to the programs of Research performed by, or on behalf of, Isis as described in the Additional Project Activities Description to the Foundation in a series of reports (collectively, the “Additional Project Activities Project Results”). Within [***] of the Effective Date, the Additional Project Activities Project Results previously delivered to the Foundation will be compiled by Isis and organized into a master report and redelivered to the Foundation (the “Additional Project Activities Project Results Report”), and will include an activity index listing each slide/page of such report relevant to each particular activity.

 

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(ii)                                Withdrawal of Project Results. If at any time after informing the Foundation of the Project Results pursuant to Section 7(b)(i) of this Agreement Isis determines that there is a reasonable scientific basis to conclude that all or a portion of such Project Results are not scientifically valid or accurate, Isis will promptly so notify the Foundation in writing.

 

(c)                                  Transfers of the Project Results to Collaborators; Uses of Project Results.

 

(i)                                    Transfers of the Project Results by Isis to Third Party Collaborators; Uses of Project Results. Isis may transfer or have transferred the Project Results to any of its Affiliates or one or more Third Party collaborators; provided, that, any such Affiliate or Third Party collaborator has entered into an agreement with Isis which requires such Affiliate or Third Party collaborator to maintain similar, but no less burdensome, obligations of confidentiality and non-use set forth in Section 14(c) of this Agreement. Subject to the foregoing, Isis and each of its Affiliates and Third Party collaborators shall only have the right to use the Project Results for all uses and purposes permitted under this Agreement.

 

(ii)                                Transfers of the Project Results by the Foundation to Foundation Collaborators; Uses of Project Results. The Foundation may transfer or have transferred the Project Results to any of its Affiliates or one or more Foundation Collaborators; provided, that, any such Affiliate or Foundation Collaborator has entered into an agreement with the Foundation which requires such Affiliate or Foundation Collaborator to maintain similar, but no less burdensome, obligations of confidentiality and non-use set forth in Section 14(c) of this Agreement. Subject to the foregoing, the Foundation and each of its Affiliates and Foundation Collaborators shall only have the right to (A) use the Project Results for all uses and purposes relating to HD Research and Development and (B) exercise the license rights granted by Isis pursuant to Section 10 and Section 12 of this Agreement.

 

Project Deliverables; Requests for Project Compounds

 

8.                                      Ownership of Project Deliverables; Delivery of Project Deliverables; Transfers of the Project Deliverables to Foundation Collaborators; Grant of HD Field of Use License to Isis; Isis’ Option to Negotiate Additional License Rights Outside the HD Field of Use; Transfers of the Project Deliverables to Foundation Collaborators; Requests for Project Compounds; Approval of Foundation Project Compound Requests; Criteria for Approving Foundation Project Compound Requests; Basis for Determination to not Approve a Foundation Project Compound Request; Delivery of Approved Foundation Requested Project Compounds; Use of Approved Foundation Requested Project Compounds; Payment for Approved Foundation Requested Project Compounds; Invoicing; Payment Remittance; Delivery and Use of Results Arising from the use of the Project Deliverables.

 

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(a)                                  Ownership of Project Deliverables. Notwithstanding any provision of this Agreement to the contrary, as between the Foundation and Isis, the Foundation will solely own all Project Deliverables. Isis hereby assigns, and agrees to assign, to the Foundation any and all right, title and interest of Isis in and to the Project Deliverables. The ownership of each Project Deliverable will vest in the Foundation immediately upon production of such Project Deliverable. Upon the written request of the Foundation, Isis will execute such documents and do all other acts and things as may be reasonably deemed necessary by the Foundation to effectuate and assure that all right, title and interest of Isis in and to each Project Deliverable vest in the Foundation (or its designee). The Foundation will reimburse Isis for all reasonable out-of-pocket costs and expenses actually incurred by Isis to execute and deliver to the Foundation any such document(s) referred to immediately above. For the avoidance of any doubt, notwithstanding any provision of this Agreement to the contrary, the ownership of a Project Deliverable by the Foundation does not grant any ownership rights to the Foundation in any Intellectual Property embodied in or related to such Project Deliverable as the ownership of any such Intellectual Property is governed solely by the terms of Section 9 of this Agreement.

 

(b)                                  Delivery of Project Deliverables; Transfers of the Project Deliverables to Foundation Collaborators; Grant of HD Field of Use License to Isis; Isis’ Option to Negotiate Additional License Rights Outside the HD Field of Use.

 

(i)                                    Delivery of Project Deliverables. Promptly following the production of each Project Deliverable, Isis will deliver such Project Deliverable to the Foundation. All Project Deliverables will be shipped to the delivery point specified by the Foundation in writing to Isis.

 

(ii)                                Transfers of the Project Deliverables to Foundation Collaborators; Grant of HD Field of Use License to Isis; Isis’ Option to Negotiate Additional License Rights Outside the HD Field of Use.

 

(A)                               Transfers of the Project Deliverables to Foundation Collaborators. The Foundation may transfer or have transferred the Project Deliverables to one or more Foundation Collaborators; provided, that, any such Foundation Collaborator has entered into an agreement with the Foundation which requires such Foundation Collaborator to maintain similar, but no less burdensome, obligations of confidentiality and non-use set forth in Section 14(c) of this Agreement. The Foundation and the Foundation Collaborators shall have the right to (A) use the Project Deliverables for all uses and purposes relating to HD Research and Development and (B) exercise the license rights granted by Isis pursuant to Section 10 and Section 12 of this Agreement

 

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(B)                               Grant of HD Field of Use License to Isis. The Foundation hereby grants (and will require the Foundation Collaborators that use any Project Deliverables to grant) Isis a fully paid-up, royalty-free, irrevocable, perpetual, worldwide, non-exclusive license solely in the HD Field of Use under any Intellectual Property that claims a method of using a Project Compound conceived, discovered, invented, made or first reduced to practice in the course of the Foundation’s or a Foundation Collaborator’s use of the Project Deliverables.

 

(C)                               Isis’ Option to Negotiate Additional License Rights Outside the HD Field of Use. In addition to the non-exclusive license referred to in Section 8(b)(ii)(B) of this Agreement, the Foundation grants to Isis an exclusive option (each, a “Project Deliverable Option”) to acquire a worldwide license under any Intellectual Property that claims a method of using a Project Compound conceived, discovered, invented, made or first reduced to practice in the course of the Foundation’s or a Foundation Collaborator’s use of the Project Deliverables for uses outside of the HD Field of Use, which option will extend for a period (each, a “Project Deliverable Option Exercise Period”) of three (3) months following receipt of a notice from the Foundation disclosing any such Intellectual Property (which notice may be satisfied by the Foundation’s delivery of the written reports described in Section 8(d) of this Agreement). With respect to any such Intellectual Property that is subject to a Project Deliverable Option, Isis shall exercise such Project Deliverable Option  by providing written notice to the Foundation prior to the expiration of the Project Deliverable Option  Exercise Period in respect of such Project Deliverable Option. If Isis exercises a Project Deliverable Option, then Isis shall have a period (each, a “Project Deliverables License Negotiation Period”) of one hundred and twenty (120) days following the delivery by Isis of the Project Deliverable Option  Exercise Notice in respect of such Project Deliverable Option  within which to negotiate and execute a license in respect of the Intellectual Property subject to such Project Deliverable Option. Each of the Foundation and Isis agree (1) to negotiate any such license in good faith and (2) that, upon the mutual agreement of the Foundation and Isis, to extend the Project Deliverable License Negotiation Period in respect of such license for an additional period(s) not to exceed an additional one hundred and twenty (120) days, in the aggregate.

 

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(c)                                  Requests for Project Compounds; Approval of Foundation Project Compound Requests; Criteria for Approving Foundation Project Compound  Requests; Basis for Determination to not Approve a Foundation Project Compound Request; Delivery of Approved Foundation Requested Project Compounds; Use of Approved Foundation Requested Project Compounds; Grant of HD Field of Use License to Isis; Isis’ Option to Negotiate Additional License Rights Outside the HD Field of Use; Payment for Approved Foundation Requested Project Compounds; Invoicing; Payment Remittance.

 

(i)                                    Requests for Project Compounds. At any time, and from time to time, during the period beginning on [***] and ending on the date that is [***] following the expiration or termination of the Term (the “Foundation Project Compound Request Period”), the Foundation may request that Isis provide the Foundation with one or more Project Compounds for use by the Foundation to conduct defined research activities by providing a written notice (the “Foundation Project Compound Request Notice”) to Isis (A) identifying each Project Compound (each such Project Compound, a “Foundation Requested Project Compound”)  and the requested amount thereof (with a minimum requested amount per Foundation Requested Project Compound  of [***]) and (B) a reasonably detailed description of the proposed research activities (each such program of proposed research activities, a “Foundation Project Compound Study”) to be conducted using each Foundation Requested Project Compound.

 

(ii)                                Approval of Foundation Project Compound Requests; Criteria for Approving Foundation Project Compound Requests; Basis for Determination to not Approve a Foundation Project Compound Request.

 

(A)                               Approval of Foundation Project Compound Requests. Within [***] of the receipt by Isis of a Foundation Project Compound Request Notice, Isis will make a determination regarding the Foundation’s request for the use of the Foundation Requested Project Compounds for the Foundation Requested Project Compound Studies specified in such Foundation Project Compound Request Notice. As part of Isis’ consideration of any such request, Isis may request that the Parties convene a Steering Committee meeting (or, after the Term, convene representatives of each Party) to facilitate its consideration of any such request. With respect to any decision regarding the approval of any request by the Foundation to use Foundation Requested Project Compounds for the Foundation Requested Project Compound Studies, Isis will (1) act in good faith and on a responsive basis and (2) make such decision on a reasonable basis using the criteria set forth in this Section 8(c)(ii). Each Foundation Requested Project Compound and each Foundation Project Compound Study that is approved by

 

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Isis in accordance with this Section 8(c)(ii) will, for all purposes of this Agreement, be referred to as an “Approved Foundation Requested Project Compound” and “Approved Foundation Project Compound Study”, respectively.

 

(B)                               Criteria for Approving Foundation Project Compound Requests. Isis will approve each request by the Foundation to use a Foundation Requested Project Compound for a Foundation Project Compound Study unless any of the following are determined by Isis to be true:

 

[***]

 

(C)                               Basis for Determination to not Approve a Foundation Project Compound Request. If Isis does not approve a request by the Foundation to use a Foundation Requested Project Compound for a Foundation Project Compound Study, Isis will, no later than [***] of the receipt by Isis of a Foundation Project Compound Request Notice for such request, deliver to the Foundation a written notice setting forth in reasonable detail Isis’ basis under the criteria set forth in Section 8(c)(ii)(B) of this Agreement for not approving such request. Isis agrees that, if Isis does not approve such a request, the Foundation may dispute such determination by Isis and seek resolution pursuant to Section 5(a)(iii)(B) of this Agreement.

 

(iii)                            Delivery of Approved Foundation Requested Project Compounds. Following Isis’ approval of a request by the Foundation to use a Foundation Requested Project Compound for a Foundation Project Compound Study, Isis will use reasonable commercial efforts to (A) manufacture such Approved Foundation Requested Project Compound in accordance with the standards and specifications developed for such Approved Foundation Requested Project Compound during the course of the conduct of the Project and (B) supply the Foundation with the amount of such Approved Foundation Requested Project Compound within a reasonable period of time following such approval.

 

(iv)                               Use of Approved Foundation Requested Project Compounds; Grant of HD Field of Use License to Isis; Isis’ Option to Negotiate Additional License Rights Outside the HD Field of Use.

 

(A)                               Use of Approved Foundation Requested Project Compounds. The Foundation agrees that each Approved Foundation Requested Project Compound will be used by the Foundation and the Foundation Collaborators for the sole purpose of conducting the Approved Foundation Project Compound Study for which such Approved Foundation Requested Project Compound was approved.

 

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(B)                               Grant of HD Field of Use License to Isis. The Foundation hereby grants (and will require the Foundation Collaborators that use any Approved Foundation Requested Project Compound to grant) Isis a fully paid-up, royalty-free, irrevocable, perpetual, worldwide, non-exclusive license solely in the HD Field of Use under any Intellectual Property that claims a method of using an Approved Foundation Requested Project Compound conceived, discovered, invented, made or first reduced to practice in the course of the Foundation’s or a Foundation Collaborator’s use of an Approved Foundation Requested Project Compound.

 

(C)                               Isis’ Option to Negotiate Additional License Rights Outside the HD Field of Use. In addition to the non-exclusive license referred to in Section 8(c)(iv)(B) of this Agreement, the Foundation grants to Isis an exclusive option (each, an “Approved Foundation Requested Project Compound Option”) to acquire a worldwide license under any Intellectual Property that claims a method of using an Approved Foundation Requested Project Compound conceived, discovered, invented, made or first reduced to practice in the course of the Foundation’s or a Foundation Collaborator’s use of the Approved Foundation Requested Project Compound for uses outside of the HD Field of Use, which option will extend for a period (each, an “Approved Foundation Requested Project Compound Option Exercise Period”) of three (3) months following receipt of a notice from the Foundation disclosing any such Intellectual Property (which notice may be satisfied by the Foundation’s delivery of the written reports described in Section 8(d) of this Agreement). With respect to any such Intellectual Property that is subject to an Approved Foundation Requested Project Compound Option, Isis shall exercise such Approved Foundation Requested Project Compound Option by providing written notice to the Foundation prior to the expiration of the Approved Foundation Requested Project Compound Option Exercise Period in respect of such Approved Foundation Requested Project Compound Option. If Isis exercises an Approved Foundation Requested Project Compound Option, then Isis shall have a period (each, an “Approved Foundation Requested Project Compound License Negotiation Period”) of one hundred and twenty (120) days following the delivery by Isis of the Approved Foundation Requested Project Compound Option Exercise Notice in respect of such Approved Foundation Requested Project Compound Option within which to negotiate

 

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and execute a license in respect of the Intellectual Property subject to such Approved Foundation Requested Project Compound Option. Each of the Foundation and Isis agree (1) to negotiate any such license in good faith and (2) that, upon the mutual agreement of the Foundation and Isis, to extend the Approved Foundation Requested Project Compound License Negotiation Period in respect of such license for an additional period(s) not to exceed an additional one hundred and twenty (120) days, in the aggregate.

 

(v)                                   Payment for Approved Foundation Requested Project Compounds; Invoicing; Payment Remittance. The Foundation will pay Isis a fee of US$[***] per [***] (or portion thereof) per Approved Foundation Requested Project Compound delivered to the Foundation pursuant to, and in accordance with, this Section 8(c). Simultaneously with the delivery of each Approved Foundation Requested Project Compound, Isis will deliver to the Foundation an invoice for payment in respect of such Approved Foundation Requested Project Compound. Each invoice delivered by Isis for an Approved Foundation Requested Project Compound will (A) reference the “RecID” number set forth in the footer of this Agreement, (B) be issued in US Dollars and (C) be itemized and contain detailed information in respect of the Approved Foundation Requested Project Compound being billed for under such invoice. Subject to the terms and conditions of this Agreement, each payment to be made by the Foundation in respect of an Approved Foundation Requested Project Compound under this Agreement will be due and payable by the Foundation within 60 days of the date of the receipt by the Foundation of the invoice issued by Isis in accordance with this Agreement in respect of such payment. All such payments made by the Foundation under this Agreement will be paid by check in US Dollars and remitted to Isis at the address set forth in Section 19 of this Agreement. For the avoidance of doubt, unless otherwise approved by the Steering Committee pursuant to Section 13(a)(ii)(E) of this Agreement, the (1) cost of any Approved Foundation Requested Project Compound Studies conducted by the Foundation or the Foundation Collaborators and (2) amounts paid to Isis under this Section 8(c)(v) for Approved Foundation Requested Project Compounds, will not be reimbursed by Isis under this Agreement, and will not be considered “Revenue” under Section 13 of this Agreement.

 

(d)                                  Delivery and Use of Results Arising from the use of the Project Deliverables. The Foundation will deliver to Isis a written report setting forth a summary of all data, formulae, methods, outcomes, protocols or other results produced by the Foundation or any Foundation Collaborator using the Project Deliverables (including any Approved Foundation Requested Project Compound). Each such report (A) will be delivered to Isis within a reasonable period of time following the completion of the research activities in which the Project Deliverables were

 

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used, (B) will be in substantially the same format and contain the same degree of detail as the Foundation generally uses to communicate such information internally and to its Third Party research collaborators and (C) will include a copy of (1) each report related such results received by the Foundation from a Third Party or Affiliate and (2) all final versions of written documents created by the Foundation summarizing such results and not otherwise included in the any of the reports described in (1) above that are delivered to Isis. Isis agrees that all reports and results delivered by the Foundation to Isis pursuant to this Section 8(d) shall be deemed the Confidential Information of the Foundation and, notwithstanding any other provision of this Agreement,  may only be  (a) used by Isis for Research and Development, (b) disclosed in accordance with, and to only those Third Parties and Affiliates expressly permitted by, Section 14(c) of this Agreement, and (c) licensed by Isis to a Third Party under a Commercial License (subject to such Third Party’s agreement to keep such reports and results confidential under terms no less restrictive as those set forth in Section 14 of this Agreement). Isis acknowledges and agrees that, notwithstanding the foregoing, except as otherwise provided in this Section 8(d) or Section 8(b)(ii) or Section 8(c)(iv) of this Agreement, no license or other rights are granted to Isis with respect to any Intellectual Property covering or claiming, or otherwise embodied in, such reports or the information contained therein.

 

Intellectual Property

 

9.                                      Ownership of Background Intellectual Property; Ownership of Project Intellectual Property; Grant of Exclusive License to the Project HD Intellectual Property by the Foundation Outside the HD Field of Use; Disclosure of Inventions; Inventorship; Prosecution of Patentable Project HD Intellectual Property; Disclaimer of Interest in Patentable Project Intellectual Property; Infringement or Misappropriation of Project Intellectual Property.

 

(a)                                  Ownership of Background Intellectual Property.

 

(i)                                    Ownership of Isis Background Intellectual Property. As between the Foundation and Isis, Isis will solely own all Isis Background Intellectual Property. Except as expressly set forth in this Agreement, the Foundation will have no ownership or other interest in any Isis Background Intellectual Property.

 

(ii)                                Ownership of Foundation Background Intellectual Property. As between the Foundation and Isis, the Foundation will solely own all Foundation Background Intellectual Property. Except as expressly set forth in this Agreement, Isis will have no ownership or other interest in any Foundation Background Intellectual Property.

 

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(b)                                  Ownership of Project Intellectual Property; Grant of Exclusive License to the Project HD Intellectual Property by the Foundation Outside the HD Field of Use.

 

(i)                                    Ownership of Project Intellectual Property.

 

(A)                               Ownership of Project Non-HD Intellectual Property. As between the Foundation and Isis, Isis will solely own all Project Non-HD Intellectual Property. Except as expressly set forth in this Agreement, the Foundation will have no ownership or other interest in any Project Non-HD Intellectual Property.

 

(B)                               Ownership of Project HD Intellectual Property. Isis and the Foundation will own [***] all Project HD Intellectual Property. The ownership of the Project HD Intellectual Property will vest in the Parties in that manner immediately upon creation. Each Party hereby assigns to the other Party sufficient right, title and interest in the Project HD Intellectual Property to accomplish such ownership. Neither Isis nor the Foundation will sell or otherwise transfer (including by sale of assets or stock or by merger or other business combination) its title to any Project HD Intellectual Property (including any Reverted Project HD Intellectual Property (as defined in Section 9(b)(iii)(A) of this Agreement)) to any Third Party or Affiliate unless such Third Party or Affiliate takes title to such Project HD Intellectual Property (1) subject to the rights of the non-transferring Party in such Project HD Intellectual Property under this Agreement and (2) assumes in writing the obligations of the transferring Party with respect to such Project HD Intellectual Property under this Agreement, including the limitations under this Agreement relating to the transferring Party’s use of such Project HD Intellectual Property; provided, however, that the transferring Party will a) notify the non-transferring Party in writing within 10 days after any such transfer and b) provide the non-transferring Party with a copy of the relevant part of the written assignment and assumption or similar agreement between the transferring Party and the Third Party or Affiliate transferee.

 

(ii)                                Grant of Exclusive License to the Project HD Intellectual Property by the Foundation Outside the HD Field of Use. The Foundation grants to Isis a fully paid-up, royalty-free, worldwide exclusive license under any Project HD Intellectual Property (including (A) any patent application, divisional, continuation, continuation-in-part, substitute, renewal, reexamination, extension or reissue in respect of any applicable patent or (B) any intellectual property rights claimed in respect of any applicable patent), to use the Project HD Intellectual Property for any use or purpose outside the HD Field of Use. The license rights granted by the Foundation

 

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under this Section 9(b)(ii) will be subject to termination by the Foundation in the event of Isis’ material breach of this Agreement if such material breach is not cured within 45 days following receipt by Isis of notice of such material breach.

 

(iii)                            Reversion of Foundation’s Rights in Project HD Intellectual Property.

 

(A)                               Reversion of Foundation’s Rights in Project HD Intellectual Property. Upon the termination of this Agreement by the Foundation pursuant to Section 17(b)(i) of this Agreement, subject to (1) the rights reserved by the Foundation pursuant to Section 9(b)(iii)(B) of this Agreement and (2) the Foundation’s Revenue (as defined in Section 13(a) of this Agreement) sharing rights set forth in Section 13 of this Agreement, all of the Foundation’s right, title and interest in and to the Project HD Intellectual Property will revert to Isis (after such termination, all Project HD Intellectual Property shall also be referred to herein as “Reverted Project HD Intellectual Property”).

 

(B)                               The Foundation’s Right to Use Reverted Project HD Intellectual Property. With respect to all Reverted Project HD Intellectual Property, the Foundation hereby reserves, and Isis hereby grants to the Foundation, a fully paid-up, royalty-free, irrevocable, perpetual, world-wide non-exclusive license (including a license under any related Intellectual Property rights) for all uses and purposes related to HD Research and Development including to (1) make, have made, use and have used products or processes resulting from such Reverted Project HD Intellectual Property, (2) practice and have practiced such Reverted Project HD Intellectual Property and (3) use and have used the Confidential Information relating to such Reverted Project HD Intellectual Property; provided, however, that, the foregoing license (1) will be for HD Research and Development only, (2) will not include any right to manufacture or distribute for sale or sell, (3) will not be subject to royalties or other fees and (4) will include the right to grant sublicenses on the same terms; provided, further that, such sublicense (i) is granted without payment of royalties, other fees or profit and (ii) prohibits the sublicensee from granting sublicenses.

 

(c)                                  Disclosure of Inventions; Inventorship.

 

(i)                                    Disclosure of Inventions. If either Party believes that any Intellectual Property has been conceived, discovered, invented, made or first reduced to practice in the course of the performance of the Research, such Party will promptly give notice (each, an “Invention Notice”) of such Intellectual Property to the other Party.

 

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(ii)                                Inventorship. The identity of the inventor(s) of all patentable Intellectual Property that has been conceived, discovered, invented, made or first reduced to practice in the course of the performance of the Research will be determined in accordance with United States Patent law (or, if the jurisdiction in which patent or other protection is being sought does not permit the application of United States Patent law to identify the inventor, then in accordance with the applicable law in that jurisdiction).

 

(d)                                  Prosecution of Patentable Project HD Intellectual Property.

 

(i)                                    Responsibility for Prosecution of Patentable Project HD Intellectual Property. Isis will prepare, file, prosecute and maintain the appropriate filings in respect of any Patentable Project HD Intellectual Property including filing (A) a provisional patent application or (B) a patent application (including a patent application corresponding to a previously filed provisional patent application) claiming any such Patentable Project HD Intellectual Property in the United States and in such other jurisdictions as the Steering Committee jointly determine in good faith are necessary in order to protect Isis’ and the Foundation’s rights in such Patentable Project HD Intellectual Property. Isis will ensure that all such filings are filed in the name of Isis and the Foundation as co-owners.

 

(ii)                                Foundation Election to have Prosecution of Patentable Project HD Intellectual Property Initiated. At any time and from time to time, the Foundation will have the right to elect to cause Isis to prepare, file, prosecute and maintain the appropriate filings in respect of any Patentable Project HD Intellectual Property which is the subject of an Invention Notice by providing notice (a “Foundation Patent Filing Election Notice”) of such election to Isis. Promptly following the receipt of a Foundation Patent Filing Election Notice, Isis will, to the extent not prohibited by any Commercial License then in effect, prepare, file, prosecute and maintain the appropriate filings in respect of the Patentable Project Intellectual Property which is the subject of a Foundation Patent Filing Election Notice, including filing (A) a provisional patent application or (B) a patent application (including a patent application corresponding to a previously filed provisional patent application) claiming any such Patentable Project Intellectual Property in the United States and in such other jurisdictions as the Steering Committee jointly determine in good faith are necessary in order to protect Isis’ and the Foundation’s rights in such Patentable Project HD Intellectual Property. Isis will ensure that all such filings are filed in the name of Isis and the Foundation as co-owners.

 

(iii)                            Covenants of Isis. With respect to the prosecution and maintenance by Isis of any Patentable Project HD Intellectual Property pursuant to this Section 9(d), Isis will use commercially reasonable efforts to promptly (A)

 

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give all notices required by, and comply with all other requirements of, applicable law to reasonably preserve the Parties’ rights in such Patentable Project HD Intellectual Property as appropriate; (B) prepare, file, prosecute and maintain, as applicable, the appropriate filings and patents to reasonably protect the Parties’ rights in such Patentable Project HD Intellectual Property; (C) provide the Foundation with a copy of any proposed filings in respect of such Patentable Project HD Intellectual Property at least 15 days prior to the filing of such proposed filings; (D) provide the Foundation with a copy of any provisional patent application or patent application filed claiming such Patentable Project HD Intellectual Property; (E) provide the Foundation with copies of all correspondence and other documents relating to the prosecution and maintenance of such Patentable Project HD Intellectual Property that come into the possession or control of Isis; and (F) such other documents and information related to such Patentable Project HD Intellectual Property as the Foundation may reasonably request and Isis can provide without incurring unreasonable cost and expense.

 

(iv)                               Patent Expenses. Each Party will be responsible for 100% of the Patent Expenses incurred by such Party.

 

(e)                                  Disclaimer of Interest in Patentable Project HD Intellectual Property.

 

(i)                                    Disclaimer Notice. With respect to any Patentable Project HD Intellectual Property, either Party may, at any time, disclaim its interest in such Patentable Project HD Intellectual Property by providing notice of such election (“Patentable Project HD Intellectual Property Disclaimer Notice”) to the other Party. Isis will be deemed to have disclaimed its interest in any Patentable Project HD Intellectual Property that is the subject of a Foundation Patent Filing Election Notice if Isis fails to comply with the obligations set forth in Section 9(d) of this Agreement with respect to such Patentable Project HD Intellectual Property within 45 days of Isis’ receipt of the Patentable Project HD Intellectual Property Disclaimer Notice in respect of such Patentable Project HD Intellectual Property.

 

(ii)                                Effect of Disclaimer Notice. In the event that a Patentable Project HD Intellectual Property Disclaimer Notice is delivered by either Party in respect of Patentable Project HD Intellectual Property: (A) the disclaiming Party hereby assigns its ownership interest in such Patentable Project HD Intellectual Property to the non-disclaiming Party without consideration, and will execute all documents reasonably necessary to perfect such assignment at the non-disclaiming Party’s cost; (B) except as expressly set forth in this Agreement, the disclaiming Party will have no further rights to such Patentable Project HD Intellectual Property; and (C) the disclaiming Party will, at any time during and after the term of this

 

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Agreement, cooperate with the non-disclaiming Party without consideration but at the expense of the non-disclaiming Party in preparing, filing, prosecuting and maintaining, as applicable, the appropriate filings to protect the non-disclaiming Party’s rights in such Patentable Project HD Intellectual Property, including obtaining execution by its employees of any documents necessary in connection with such activities. Each of the Parties will use reasonable efforts to keep the other Party advised of its deliberations regarding its determinations as to electing to disclaim its interest in any Patentable Project HD Intellectual Property.

 

(f)                                    Infringement or Misappropriation of Project Intellectual Property.

 

(i)                                    Infringement or Misappropriation of Project Intellectual Property by Third Parties. Each Party will promptly notify each other in writing of any alleged or threatened infringement or misappropriation of any Project Intellectual Property of which it becomes aware. In connection with any such alleged or threatened infringement or misappropriation, each Party will confer and take such action and allocate recoveries in such manner as they in good faith may mutually agree. Neither Isis nor the Foundation will settle a claim brought against a Third Party in respect of such infringement or misappropriation without the consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned.

 

(ii)                                Infringement or Misappropriation Claims by Third Parties Related to Project Intellectual Property. Each Party will promptly notify the other Party in writing if any Third Party alleges that the use or practice of any Project Intellectual Property infringes or misappropriate such Third Party’s Intellectual Property rights. In connection with any such alleged infringement or misappropriation, each Party will confer and take such action in such manner as they in good faith may mutually agree. Neither Party will settle a claim brought by a Third Party in respect of such infringement or misappropriation without the consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned.

 

(iii)                            Infringement or Misappropriation Outside of the HD Field of Use. Notwithstanding the foregoing in this Section 9(f), Isis has the sole right (but not the obligation) to assume direction and control of the prosecution and/or defense of any claim against or alleged by a Third Party outside of the HD Field of Use that involves actual or potential infringement or misappropriation of any Project Intellectual Property, or alleges that the use or practice of any Project Intellectual Property infringes or misappropriates a Third Party’s Intellectual Property rights (Isis’ right shall include the sole right to settle such a claim in Isis’ sole discretion, provided that such settlement does not (A) admit any fault or negligence on the part of the Foundation and/or its Affiliates, (B) impose any obligation on the Foundation and/or its Affiliates or (C) without the prior

 

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written consent of the Foundation (which consent shall not unreasonably withheld, conditioned or delayed), adversely affect the Foundation and/or its Affiliates in any way.

 

10.                               Licenses to Project HD Intellectual Property and Project Compounds in the HD Field of Use.

 

(a)                                  Commercialization of Project HD Intellectual Property and Project Compounds; Reservation of Rights Regarding Project HD Intellectual Property and Project Compounds.

 

(i)                                    Commercialization of Project HD Intellectual Property and Project Compounds. Except as expressly permitted by this Agreement, neither Party will use or otherwise exploit any Project HD Intellectual Property or any Project Compound for any use or purpose or grant any license of any Project HD Intellectual Property or any Project Compound for any use or purpose. Except as expressly permitted by Section 10(a)(ii) of this Agreement, (1) the use or other exploitation of any Project HD Intellectual Property or any Project Compound by either of the Parties, an Affiliate of either Party or a Third Party and (2) the grant of any license of any Project HD Intellectual Property or any Project Compound by either of the Parties to an Affiliate of either Party or a Third Party, in each case for uses other than Research and Development in the HD Field of Use, will only be done pursuant to the grant of a commercial license under a license agreement executed by both Parties (any such license will hereinafter be referred to as a “Commercial License”). For the avoidance of any doubt, the Parties agree that this Section 10 shall not apply to a) the use or other exploitation or b) the grant of any license for any purpose of any Project HD Intellectual Property or any Project Compound outside the HD Field of Use.

 

(ii)                                Reservation of Rights by the Parties to Grant Certain Licenses.

 

(A)                               Isis’ Right to Use Project Intellectual Property and Project Compounds. Isis reserves the right to use any Project HD Intellectual Property and any Project Compound for all uses and purposes relating to Research and Development.

 

(B)                               Isis’ Right to Grant Research and Development Licenses. Isis reserves the right to grant non-exclusive licenses throughout the world in respect of any Project HD Intellectual Property or any Project Compound for all uses and purposes relating to Research and Development.

 

(C)                               Foundation’s Right to Use Project HD Intellectual Property and Project Compounds. The Foundation reserves the right to use

 

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any Project HD Intellectual Property and any Project Compound for all uses and purposes relating to HD Research and Development.

 

(D)                               Foundation’s Right to Grant HD Research and Development Licenses. The Foundation reserves the right to grant non-exclusive licenses throughout the world in respect of any Project HD Intellectual Property or any Project Compound for all uses and purposes relating to HD Research and Development.

 

(b)                                  Conduct of Human Clinical Trials.

 

(i)                                    Obligation to the Parties to Confer. Isis and the Foundation will confer with each other on the conduct of human clinical trials involving any Project Compound prior to the initiation of any human clinical trials for such Project Compound.

 

(ii)                                Isis’ Right to Conduct Human Clinical Trials. Subject to Section 10(b)(i) of this Agreement, but notwithstanding any other provision of this Agreement, Isis will have the right to conduct human clinical trials involving any Project Compound.

 

(iii)                            Foundation’s Right to Conduct Human Clinical Trials. Subject to Section 10(b)(i) of this Agreement, if (A) within [***] of Isis’ receipt of a request from the Foundation for Isis to undertake the conduct of a human clinical trial involving a Project Compound reasonably required to advance such Project Compound for the diagnosis, treatment, cure or prevention of Huntington’s disease, Isis does not agree to promptly initiate and conduct such a human clinical trial or (B) the Parties decide that the Foundation will conduct human clinical trials concurrently with a human clinical trial being conducted by Isis, the Foundation will have the right to conduct human clinical trials on its own or through or with a Third Party selected by the Foundation. For the avoidance of doubt, the Foundation will have the right to use Isis Background Intellectual Property, Project HD Intellectual Property and Project Compounds for the conduct of any such human clinical trials.

 

(c)                                  Right to Make Proposal Regarding the Granting of a Commercial License.

 

(i)                                    The Parties agree (1) that either Party may submit to the Parties for their consideration under this Section 10 a proposal for the granting of a Commercial License and (2) to consult and make a determination regarding the granting of a Commercial License in respect of such proposal in accordance with the provisions of this Section 10.

 

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(ii)                                If (1) the Parties are evaluating multiple proposals (including one submitted by Isis or an Affiliate of Isis pursuant to which Isis or an Affiliate of Isis would be granted a Commercial License (the “Isis Proposal”)) to determine whether or not the principles and guidelines set forth in this Section 10 for the granting of a Commercial License have been satisfied and (2) more than one of such proposals (including an Isis Proposal) satisfies the principles and guidelines set forth in this Section 10 on a substantially equivalent basis, the Foundation agrees to accept the Isis Proposal and agrees to grant a Commercial License to Isis in accordance with this Section 10.

 

(d)                                  Principles and Guidelines for Granting Commercial Licenses.

 

(i)                                    Good Faith Consultations. The Parties will consult, and work in a collaborative fashion, with each other in accordance with the provisions of this Section 10 concerning the grant of any Commercial License. With respect to any decision regarding the granting of any Commercial License, the Parties will (A) act in good faith and on a responsive basis and (B) make such decision on a reasonable basis using the principles and guidelines set forth in this Section 10(d). In addition, neither Isis nor the Foundation will unreasonably withhold, delay or condition their consent to a Commercial License or demand additional payments beyond those required under this Agreement.

 

(ii)                                Fundamental Principles and Guidelines. A Commercial License will be granted if and only if the Parties mutually agree that the granting of such Commercial License is reasonably likely to:

 

(A)                               maximize the impact on the health and well-being of Huntington’s disease patients;

 

(B)                               maximize the availability of diagnostic or therapeutic products to Huntington’s disease patients; and

 

(C)                               maximize the speed of which diagnostic or therapeutic products are available to Huntington’s disease patients.

 

(iii)                            Availability of Products as Primary Factor for Granting Commercial Licenses. Subject to Section 10(d)(iv), if (A) the Parties are evaluating multiple proposals (including an Isis Proposal) for the granting of a Commercial License, (B) more than one of the proposals satisfies the principles and guidelines set forth in this Section 10 (other than (1) the proposed economic terms and (2) the proposed time frame for making the diagnostic or therapeutic product which is to be the subject of such Commercial License available to Huntington’s disease patients) on a substantially equivalent basis; and (C) one of the proposals sets forth a

 

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time frame for making the diagnostic or therapeutic product which is to be the subject of such Commercial License available to Huntington’s disease patients that is substantially shorter than those set forth in the other proposals being considered by the Parties, then the proposal setting forth such substantially shorter time frame, if accompanied by firm diligence obligations, will be accepted by the Parties and a Commercial License granted to the entity making such proposal even if the economic terms of such proposal are substantially less than those set forth in the other proposals being considered by the Parties.

 

(iv)                               Commercial License Agreement Terms and Conditions. In addition to the principles and guidelines set forth in Section 10(d)(ii) and Section 10(d)(iii) of this Agreement, a Commercial License will be granted if and only if the Parties mutually agree that the terms and conditions of the license agreement in respect of such Commercial License incorporates the following terms, principles and guidelines:

 

(A)                               reasonable performance milestones and a demonstrated capacity of the licensee to be able to meet those milestones; and

 

(B)                               reasonable business and other terms and conditions that are in keeping with the then existing market standards for agreements of such type and nature in respect of similar technology and in similar disease indications.

 

(e)                                  Resolution of Disputes Regarding the Granting of Commercial Licenses. If the Parties cannot reach a mutual agreement regarding the granting of a Commercial License in respect of a proposal for the granting of a Commercial License submitted by either of the Parties for their consideration in accordance with the provisions of this Section 10 (each, a “Commercial License Grant Dispute”), either Party may submit such Commercial License Grant Dispute to B. Lynne Parshall, in the case of Isis (or such other individual identified in writing by Isis), and Robi Blumenstein, in the case of the Foundation (or such other individual identified in writing by the Foundation), for resolution by providing a written notice (each, a “Internal Commercial License Grant Dispute Resolution Notice”) to the other Party setting forth in reasonable detail the basis of such Commercial License Grant Dispute. Such individuals will, within 20 days after such Internal Commercial License Grant Dispute Resolution Notice is delivered, meet and attempt in good faith to resolve such Commercial License Grant Dispute. If such Commercial License Grant Dispute is not resolved within such 20-day period, either Party may require that the Parties submit such Commercial License Grant Dispute for resolution by an independent Third Party with appropriate qualifications for resolution to evaluate such matter (a “Neutral Expert”) by providing a written notice (an “External Commercial License Grant Dispute Resolution Notice”) to such effect that identifies the Commercial License Grant Dispute to be resolved to the other Party within 15 days after the end of

 

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such 20-day period. If the Parties fail to agree on a Neutral Expert within 10 days after an External Commercial License Grant Dispute Resolution Notice is delivered, then each Party will submit the name and qualifications of one proposed Neutral Expert, along with a written statement not to exceed five pages that identifies the issue(s) to be decided, to JAMS in Denver, Colorado, pursuant to its Streamlined Arbitration Rules and Procedures, with a copy to the other Party, and JAMS will appoint a single arbitrator, who will be authorized solely to select, within 10 days of his or her appointment and pursuant to this Section 10(e), which Party’s proposed Neutral Expert will be designated for resolution of such matter, which decision will be final and binding on both Parties. Upon the designation of the Neutral Expert, each Party will have 10 days to submit any appropriate materials to such Neutral Expert, with copies to the other Party. No Party will communicate with the Neutral Expert except by written communications copied to the other Party, or orally in the physical or telephonic presence of the other Party. The Neutral Expert will render a written decision within 15 days after the deadline for submission of materials from the Parties. The decision of the Neutral Expert will be final and binding on both Parties. The Parties agree that any and all such deliberations will be confidential.

 

(f)                                    Grants of Non-Exclusive Licenses Under Disclaimed Patentable Project Intellectual Property.

 

(i)                                    Grant of Non-Exclusive License to the Foundation. With respect to each patent (including (A) any patent application, divisional, continuation, continuation-in-part, substitute, renewal, reexamination, extension or reissue in respect of such patent or (B) any intellectual property rights claimed in respect of such patent) claiming Patentable Project HD Intellectual Property that the Foundation has disclaimed its interest pursuant to Section 9(e) of this Agreement (the “Foundation Disclaimed Intellectual Property”), Isis hereby grants the Foundation a fully paid-up, royalty-free, irrevocable, perpetual, worldwide non-exclusive license, with the limited right to sublicense as set forth in this Section 10(f)(i), under such Foundation Disclaimed Intellectual Property for HD Research and Development, including a license to (1) make, have made, use, have used, import and have imported any product covered by such Foundation Disclaimed Intellectual Property, (2) practice and have practiced any method or process covered by such Foundation Disclaimed Intellectual Property, and (3) use and have used the Confidential Information relating to such Foundation Disclaimed Intellectual Property, in each case solely for HD Research and Development. The foregoing license a) will be for HD Research and Development only, b) will not include any right to manufacture or distribute for sale or sell, c) will not be subject to royalties or other fees and d) will include the right to grant sublicenses on the same terms; provided, that, such sublicense 1) is granted without payment of royalties, other fees or profit and 2) prohibits the sublicensee from granting sublicenses.

 

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(ii)                                Grant of Non-Exclusive License to Isis. With respect to each patent (including (A) any patent application, divisional, continuation, continuation-in-part, substitute, renewal, reexamination, extension or reissue in respect of such patent or (B) any intellectual property rights claimed in respect of such patent) claiming Patentable Project HD Intellectual Property that Isis has disclaimed its interest pursuant to Section 9(e) of this Agreement (the “Isis Disclaimed Intellectual Property”), the Foundation hereby grants Isis a fully paid-up, royalty-free, irrevocable, perpetual, worldwide non-exclusive license, with the limited right to sublicense as set forth in this Section 10(f)(ii), under such Isis Disclaimed Intellectual Property for Research and Development, including a license to (1) make, have made, use, have used, import and have imported any product covered by such Isis Disclaimed Intellectual Property, (2) practice and have practiced any method or process covered by such Isis Disclaimed Intellectual Property and (3) use and have used the Confidential Information relating to such Isis Disclaimed Intellectual Property, in each case solely for Research and Development. The foregoing license a) will be for Research and Development only, b) will not include any right to manufacture or distribute for sale or sell, c) will not be subject to royalties or other fees and d) will include the right to grant sublicenses on the same terms; provided, that, such sublicense 1) is granted without payment of royalties, other fees or profit and 2) prohibits the sublicensee from granting sublicenses.

 

(g)                                 Grant of Non-Exclusive Licenses Under Isis Background Intellectual Property in Connection with Commercial Licenses. Subject to the disclosure set forth on Schedule 16(b)(iv)(B) - 2, Isis will grant to each Third Party or Affiliate of a Party that is a party to a Commercial License, in sole consideration for the amounts paid by such Third Party or Affiliate under such Commercial License, a worldwide non-exclusive license (with the right to grant sublicenses to any Affiliate or Third Party collaborator of such licensee, but without the right to grant further sublicenses) under any Isis Background Intellectual Property Controlled by Isis (including (A) any patent application, divisional, continuation, continuation-in-part, substitute, renewal, reexamination, extension or reissue in respect of any applicable patent within such Isis Background Intellectual Property Controlled by Isis or (B) any intellectual property rights claimed in respect of any applicable patent within such Isis Background Intellectual Property Controlled by Isis), to the extent necessary to enable such Third Party or Affiliate to exploit the Project HD Intellectual Property in accordance with the terms of such Commercial License and the terms of this Agreement. Any license granted by Isis to a Third Party or Affiliate of a Party pursuant to this Section 10(g) shall terminate only in accordance with the terms and conditions of the Commercial

 

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License granted to such Third Party or Affiliate. For the avoidance of doubt, any license to Isis Background Intellectual Property Controlled by Isis granted under this Section 10(g) will in no event entitle a licensee under a Commercial License to use such Isis Background Intellectual Property to research, develop or otherwise use or make any compound other than the Project Compound(s) subject to such Commercial License.

 

11.                               Non-Assert Covenants.

 

(a)                                  Mutual Non-Assert Regarding Validity. Each Party will not, and will not permit its Affiliates to, challenge, nor assist others in challenging, and will undertake to ensure, by contract or otherwise, that its licensees and assignees of any Project Intellectual Property will not challenge nor assist others in challenging, the validity of any Project Intellectual Property (including any Project Intellectual Property that is disclaimed by a Party); provided, however, that each Party (and its Affiliates, licensees and assignees) has the right to comply with applicable laws, including subpoenas in connection with a challenge by a Third Party to Project Intellectual Property.

 

(b)                                  Isis Non-Assert Regarding Infringement. Isis will not, and will not permit its Affiliates to, bring any action or assist others in bringing any action, and undertakes to ensure, by contract or otherwise, that its licensees and assignees of any Project Intellectual Property (including any Isis Disclaimed Intellectual Property) will not bring any action or assist others in bringing any action, against the Foundation or the Foundation’s licensees or assignees of any Project HD Intellectual Property (including any Foundation Collaborator) on the ground that the practice or use, as the case may be, of any Project HD Intellectual Property for HD Research and Development infringes or misappropriates the proprietary rights of Isis or Isis’ licensees or assignees of any Project Intellectual Property; provided, however, that Isis (and its Affiliates, licensees and assignees) has the right to comply with applicable laws, including subpoenas in connection with a challenge by a Third Party to Project HD Intellectual Property.

 

(c)                                  Foundation Non-Assert Regarding Infringement. The Foundation will not, and will not permit its Affiliates to, bring any action or assist others in bringing any action, and undertakes to ensure, by contract or otherwise, that its licensees and assignees of any Project HD Intellectual Property (including any Foundation Disclaimed Intellectual Property) will not bring any action or assist others in bringing any action, against Isis or Isis’ licensees or assignees of any Project Intellectual Property on the ground that the practice or use, as the case may be, of any Project Intellectual Property outside the HD Field of Use infringes or misappropriates the proprietary rights of the ‘Foundation or the Foundation’s licensees or assignees of any Project HD Intellectual Property; provided, however, that the Foundation (and its Affiliates, licensees and assignees) has the right to comply with applicable laws, including subpoenas in connection with a challenge by a Third Party to Project Intellectual Property.

 

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12.          Grant of Non-Exclusive License to the Foundation Under Isis Background Intellectual Property. Subject to the disclosure set forth on Schedule 16(b)(iv)(B) - 2, Isis hereby grants to the Foundation a fully paid-up, royalty-free, worldwide non-exclusive license (with the right to grant sublicenses to a Third Party designated by the Foundation, including a Foundation Collaborator) under the Isis Background Intellectual Property Controlled by Isis (including (A) any patent application, divisional, continuation, continuation-in-part, substitute, renewal, reexamination, extension or reissue in respect of any applicable patent within such Isis Background Intellectual Property Controlled by Isis, or (B) any intellectual property rights claimed in respect of any applicable patent within such Isis Background Intellectual Property Controlled by Isis), to the extent necessary to enable the Foundation and/or such Third Party (including Foundation Collaborators) to use the Project Results, any Project Deliverables, any Project HD Intellectual Property and any Project Compound solely for HD Research and Development. The license rights granted by Isis under this Section 12 will be subject to termination by Isis in the event of the Foundation’s material breach of this Agreement if such material breach is not cured within 45 days following receipt by Isis of notice of such material breach. For the avoidance of doubt, any license to Isis Background Intellectual Property Controlled by Isis granted under this Section 12 will in no event entitle a licensee to use such Isis Background Intellectual Property to research, develop or otherwise use or make any compound other than the Project Compound(s).

 

13.          Revenue Sharing.

 

(a)           Agreement to Share Revenue. All revenue (i) received by either of the Parties from a Third Party or an Affiliate of either Party in connection with the grant of any Commercial License (including a Commercial License pursuant to which Isis or an Affiliate of Isis is the Licensee) of any Project HD Intellectual Property (other than Project HD Intellectual Property which has been disclaimed by one of the Parties pursuant to Section 9(e) of this Agreement) to a Third Party or an Affiliate of either Party or (ii) received by Isis from a Third Party or any of Isis’ Affiliates in connection with the exploitation of any Reverted Project HD Intellectual Property (including in connection with any sale, transfer, license or other disposition of any such Reverted Project HD Intellectual Property or the sale of any product or service covered by any such Reverted Project HD Intellectual Property to a Third Party or an Affiliate of Isis) ((i) and (ii) immediately above collectively referred to herein as “Revenue”) will be distributed as follows:

 

(i)            First, to the Parties pro rata based upon the amount of Patent Expenses paid by each Party out of the total amount Patent Expenses paid by both of the Parties until the aggregate amount of Patent Expenses paid by each of the Parties has been received by each such Party.

 

(ii)           Second, to the Foundation and Isis equally until an amount equal to the sum of the following amounts has been received by the Foundation:

 

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(A)          an amount equal to US$[***] (such amount representing the aggregate payments made by the Foundation to Isis and Affiliates of Isis under the 2007 Research Agreement) plus

 

(B)          the aggregate amount of payments made by the Foundation to Isis under that certain Letter Agreement, dated as of [***], between Isis and the Foundation related to [***] (as amended from time to time) plus

 

(C)          the aggregate amount of payments made by the Foundation to Isis and Affiliates of Isis under this Agreement (as amended from time to time), including all amounts paid by the Foundation to Isis to reimburse Isis for Isis Provided Reimbursable Materials Costs and Specialized Licenses or Services Costs plus

 

(D)          the aggregate of the amounts set forth on Schedule 13(a)(ii)(D) attached hereto (each such amount representing a prior payment(s) made by the Foundation to a Third Party or Affiliate of Isis for the development of the Project HD Intellectual Property as a therapeutic product for Huntington’s disease patients) plus

 

(E)           the aggregate amount of payments made by the Foundation to Third Parties and Affiliates of Isis for research and development activities related to developing the Project HD Intellectual Property as a therapeutic product for Huntington’s disease patients that (1) are set forth on Schedule 13(a)(ii)(E) attached hereto or (2) have been approved by the Steering Committee (any such agreement to be set forth in the applicable mutually-approved Steering Committee meeting minutes) plus

 

(F)           [***].

 

(iii)         Thereafter, 100% of all Revenue to Isis.

 

(b)           Amounts not Subject to Revenue Sharing.

 

(i)            Revenue Sharing only Applicable to Amounts Received by either Party in Connection with Commercial License Granted to Third Parties and Affiliates. For the avoidance of doubt, the Parties agree that this Section 13 will only apply to Revenue received by either of the Parties.

 

(ii)           No Revenue Sharing for Amounts Received by Isis in Connection with Research and Development of the Project HD Intellectual Property. For the avoidance of doubt, the Parties agree that this Section 13 will only apply to Revenue and will not apply to any amounts received by Isis so

 

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long as any such amounts are paid (x) solely to reimburse Isis for the actual internal costs and expenses incurred by Isis from the use of Project HD Intellectual Property for Research and Development conducted internally by Isis or (y) for the use or other exploitation (including the grant of any license for any purpose) of any Project HD Intellectual Property outside the HD Field of Use.

 

(c)           Relation to Revenue Sharing under the 2007 Research Agreement. Isis and the Foundation agree that this Section 13 supersedes and replaces in its entirety Section 11 of the 2007 Research Agreement.

 

Confidentiality; Trademarks

 

14.          Certain Information Deemed Confidential Information; Certain Information Specifically Excepted from Being Deemed Confidential Information; Permitted Uses of Confidential Information; Confidentiality and Non-Use; Use by Representatives; Exceptions to Confidentiality and Non-Use.

 

(a)           Certain Information Deemed Confidential Information; Certain Information Specifically Excepted from Being Deemed Confidential Information.

 

(i)            Certain Information Deemed Confidential Information.

 

(A)          Certain Information Deemed Confidential Information of Isis. The Foundation agrees that all Isis Background Intellectual Property will be deemed Confidential Information of Isis (the foregoing, together with any additional information disclosed by Isis in accordance with clause (i) of the first sentence of Section 1(p) of this Agreement (except to the extent that any such information constitutes Project Intellectual Property or Project Results), the “Isis Confidential Information”).

 

(B)          Certain Information Deemed Confidential Information of the Foundation. Isis agrees that all Foundation Provided Material Information and Foundation Background Intellectual Property will be deemed Confidential Information of the Foundation (the foregoing, together with such additional information disclosed by the Foundation in accordance with clause (i) of the first sentence of Section 1(p) of this Agreement (except to the extent that any such information constitutes Project Intellectual Property or Project Results), the “Foundation Confidential Information”).

 

(C)          Certain Information Deemed Confidential Information of both Parties. The Parties agree that (1) the terms and conditions of this Agreement (including all appendices, supplements or exhibits attached to this Agreement) and all Project Intellectual Property

 

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and Project Results (including all Project Results set forth in the Project Reports) will be deemed Confidential Information of both Parties (“Joint Confidential Information”) and (2) each Party will be deemed both a “Disclosing Party” and a “Receiving Party” of all Joint Confidential Information. The Parties further agree to treat all Joint Confidential Information as Confidential Information of each of the Parties in accordance with the terms of this Section 14. Notwithstanding the foregoing, the Parties agree after the sixth anniversary of the Original Effective Date (the “Disclosure Date”) the Project Results shall no longer be deemed Confidential Information and may be disclosed by either Party to any Affiliate or Third Party without restriction unless prior to the Disclosure Date Isis notifies the Foundation that there exists good reasons for such disclosure to be withheld for an additional six-month period, in which case the Disclosure Date will be extended for an additional six months and the provisions of this Section 14(a)(i)(C) will apply to such new Disclosure Date.

 

(ii)           Certain Information Specifically Excepted from Being Deemed Confidential Information. For the avoidance of any doubt, the Parties acknowledge and agree that any information deemed to be Confidential Information pursuant to Section 14(a)(i) of this Agreement will not constitute Confidential Information under this Agreement if such information constitutes information which is specifically excepted from being Confidential Information in accordance with Section 1(p) of this Agreement; provided, however, the Parties acknowledge and agree that no Joint Confidential Information will be specifically excepted from being Confidential Information pursuant to clause (1) of the last sentence of Section 1(p) of this Agreement.

 

(b)           Permitted Uses of Confidential Information.

 

(i)            Permitted Uses of Joint Confidential Information.

 

(A)          Permitted Uses of Joint Confidential Information by Isis. The Foundation agrees that Isis may (1) use, or have used, the Joint Confidential Information for all uses and purposes to the extent necessary or useful to enable Isis to perform its obligations or exercise its rights under this Agreement and (2) subject to Section 14(c) of this Agreement, disclose the Joint Confidential Information to Third Parties and Affiliates of Isis.

 

(B)          Permitted Uses of Joint Confidential Information by the Foundation. Isis agrees that the Foundation may (1) use, or have used, the Joint Confidential Information for all uses and purposes to the extent necessary or useful to enable Isis to perform its

 

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obligations or exercise its rights under this Agreement and (2) subject to Section 14(c) of this Agreement, disclose the Joint Confidential Information to Third Parties and Affiliates of the Foundation.

 

(ii)           Permitted Uses of Foundation Confidential Information by Isis. Isis agrees that the Foundation Confidential Information may only (A) be used by Isis to the extent necessary or useful to enable Isis to perform its obligations or exercise its rights under this Agreement and (B) be disclosed in accordance with, and to only those Third Parties and Affiliates expressly permitted by, Section 14(c) of this Agreement.

 

(iii)         Permitted Uses of Isis Confidential Information by the Foundation. The Foundation agrees that Isis Confidential Information may only (A) be used by the Foundation to the extent necessary or useful to enable the Foundation to perform its obligations or exercise its rights under this Agreement and (B) be disclosed in accordance with, and to only those Third Parties and Affiliates expressly permitted by, Section 14(c) of this Agreement.

 

(c)           Confidentiality and Non-Use; Use by Representatives.

 

(i)            Confidentiality and Non-Use. Each Receiving Party will treat the Confidential Information of the Disclosing Party in the same manner, and with the same level of care (but, in no event, with less than a reasonable level of care), as the Receiving Party would treat its own confidential or proprietary information. Without limiting the generality of the foregoing, and except to the extent expressly permitted by this Agreement (including pursuant to Section 14(b) of this Agreement), no Receiving Party will, without the prior written consent of the Disclosing Party, (A) disclose, reveal, report, publish or give the Confidential Information of the Disclosing Party to any Third Party or Affiliate or (B) use the Confidential Information of the Disclosing Party for any purpose.

 

(ii)           Use by Representatives. Except as expressly permitted by this Agreement, each Receiving Party will limit disclosure of the Disclosing Party’s Confidential Information to (A) those of its Affiliates, directors, officers, employees, representatives, consultants, agents, service providers and advisors (including scientific advisors, legal counsel, etc.) (B) in the case of Isis only, any Third Party collaborator of Isis and (C) in the case of the Foundation only, the Foundation Collaborators (collectively, “representatives”) who (1) have a need to know such Confidential Information to enable such Receiving Party to perform its obligations or exercise its rights under this Agreement, (2) have similar, but no less burdensome, obligations of confidentiality and non-use to those contained in this Agreement and (3) have been advised of the confidential and

 

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proprietary nature of such Confidential Information and of their obligations with respect to such Confidential Information. Each Receiving Party will (x) direct its representatives not to disclose the Confidential Information of the Disclosing Party to any person or entity, except as expressly permitted under this Agreement and (y) be responsible for any breach by its representatives of the obligations under this Agreement relating to Confidential Information of the Disclosing Party.

 

(d)           Exceptions to Confidentiality and Non-Use. Each Receiving Party may, without the prior written authorization of the Disclosing Party, disclose the Confidential Information of the Disclosing Party to the limited extent it is required to pursuant to any applicable federal, state, local, or international law, or any judicial or government request, requirement or order; provided, that, such Receiving Party provides the Disclosing Party with sufficient prior notice, and cooperates with the Disclosing Party (at such Disclosing Party’s cost and expense), to allow the Disclosing Party to contest such request, requirement or order. In addition, each Party may disclose (i) the existence of this Agreement; (ii) a general summary of the Research being provided under this Agreement; (iii) the aggregate dollar amount of fees to be paid by the Foundation under this Agreement; and (iv) any specific terms of this Agreement that are a matter of public record except by breach of this Agreement; provided, that, if Isis determines that applicable securities laws or regulations require it to disclose additional information about this Agreement or its terms or conditions, Isis will notify the Foundation in writing of such disclosure requirement and will cooperate with the Foundation in requesting confidential treatment of any provision of this Agreement as reasonably requested by the Foundation.

 

(e)           [***] Collaboration. The Foundation has entered into a collaboration with [***] and [***] related to the development of therapeutics to treat Huntington’s disease (the “[***] Project”). Notwithstanding any provision to the contrary in this Agreement, the Foundation will not (i) disclose, reveal or give any Isis Confidential Information or Joint Confidential Information to [***] or [***] or (ii) provide any Project Compounds to [***] or [***], in each case for use in connection with the [***] Project. The Foundation will not (A) disclose, reveal or give any confidential information of any of the parties to the [***] Project to Isis or (B) provide any compounds resulting from the [***] Project to Isis or any of its Affiliates, in each case for use in connection with this Project. The Parties will implement reasonable safeguards, processes and procedures necessary to abide by the obligations in this Section 14(e).

 

15.          Use of Trademarks. No Party will use the name, trademarks, logos, physical likeness or other symbol of the other Party (or their employees) for any marketing, advertising, public relations or other purposes without the prior written authorization of the other Party, except that either Party may (a) make reference to the Foundation’s funding of the Research and (b) use the other Party’s name in any disclosure permitted pursuant to  Section 14(d) of this Agreement; provided, that, in each case the relationship of the Parties is accurately and appropriately described.

 

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Covenants; Representations and Warranties

 

16.          Covenants; Representations and Warranties.

 

(a)           Covenants. Isis agrees to each of the following:

 

(i)            Conduct of the Research; Compliance with Law. Isis will perform the Research using generally accepted industry standards and practices and in compliance with all applicable federal, state, local, international, health authority and institutional laws, rules, regulations, orders and guidelines.

 

(ii)           Audit; Access. At reasonably convenient times and dates and upon reasonable prior notice (in all cases at least 10 business days), (A) the Foundation and its representatives will have the right to audit Isis’ compliance with this Agreement and (B) Isis will provide the Foundation and its representatives with reasonable access to the facilities used in the performance of the Research, data and personnel in order to enable the Foundation to assess the status and progress of the Research being performed by Isis.

 

(iii)         Research Team. The Research will only be performed by individuals who have assigned to Isis any ownership or other rights they may acquire in any (A) Project Results produced or (B) Project Intellectual Property conceived, discovered, invented, made or first reduced to practice, in each case in the course of the performance of the Research under this Agreement, so that Isis may perform its obligations and convey the rights granted by it under this Agreement. Isis will not permit any individual to perform any Research or review, or have access to, any Project Results, prior to such individual’s execution and delivery of the invention assignments required by this Section 16(a)(iii). Isis will cause any such individual to assign any such (1) Project Results produced or (2) Project Intellectual Property conceived, discovered, invented, made or reduced to practice, in each case in the course of the performance of the Research under this Agreement to Isis.

 

(iv)          Consents, Licenses, Permits and Approvals. Isis will obtain all consents, permits and other approvals necessary for Isis to perform its obligations and convey the rights granted by it under this Agreement.

 

(v)            Conflicting Obligations. Isis will not enter into, any agreement, contract, license or other arrangement that conflicts with Isis’ discharge of its obligations under this Agreement or the Foundation’s exercise of its rights under this Agreement.

 

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(vi)          Third Party and Affiliate Intellectual Property. Except for the Isis Background Intellectual Property set forth on Schedule 16(a)(vi), without the prior written consent of the Foundation, Isis will not use or practice any (A) Intellectual Property (1) that is known by Isis to be owned by a Third Party or one of Isis’ Affiliates or (2) which is owned by, or licensed to, Isis (or otherwise subject to restrictions on use known to Isis), (B) Acquirer Intellectual Property of any Acquirer of Isis, (C) Isis/[***] Collaboration Intellectual Property or (D) Regulus Intellectual Property, in the performance of the Research, if the use or practice of any such Intellectual Property would be necessary to enable a) licensee under a Commercial License to practice any Project HD Intellectual Property to the extent necessary for such licensee to commercialize one or more Project Compounds under a Commercial License in accordance with the terms of this Agreement or b) the Foundation and the Foundation Collaborators to use any Project Results, Project Deliverables or Project HD Intellectual Property solely for HD Research and Development, unless (1) Isis Controls, and at all times retains Control of, such Intellectual Property, (2) except as set forth on Schedule 16(b)(iv)(B) - 2, Isis does not have to obtain the consent of any Third Party or Affiliate or pay any compensation to any Third Party or Affiliate to license or sublicense such Intellectual Property and (3) grants a license or sublicense, as the case may be, in respect of any such Intellectual Property to (a) a licensee under a Commercial License to the extent necessary for such licensee to commercialize one or more Project Compounds under such Commercial License in accordance with the terms of this Agreement, including under Section 10(g) of this Agreement and (b) the Foundation (with the right to grant sublicenses to the Foundation Collaborators), pursuant to the terms and conditions of this Agreement, including Section 12  of this Agreement, to use any Project Results, Project Deliverables or Project HD Intellectual Property solely for HD Research and Development.

 

(vii)         Further Assurances. Isis will, at the Foundation’s expense, (A) execute such further documents, instruments, licenses and assurances and (B) take such further actions, in each case as the Foundation may reasonably request from time to time to better enable the Foundation to exercise its rights under this Agreement; provided, that, such further documents, instruments, licenses, assurances and actions will not materially change either Party’s rights or obligations under this Agreement.

 

(viii)        No Debarment. Isis will not use a Debarred Individual (as defined below) or Debarred Entity (as defined below) to perform any activities or render any assistance on Isis’ behalf relating to activities performed pursuant to this Agreement. A “Debarred Entity” is a corporation, partnership or association that has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from submitting or assisting in the submission of any drug

 

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product application, or a member, subsidiary or Affiliate of a Debarred Entity; and a “Debarred Individual” is an individual who has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from providing services in any capacity to a person that has an approved or pending drug product application.

 

(b)           Representations and Warranties. Isis hereby represents and warrants to each of the following as of the Effective Date:

 

(i)            No Debarment. Isis represents and warrants that it has never been, and is not currently, a Debarred Entity.

 

(ii)           Consents, Licenses, Permits and Approvals. Isis has obtained all consents, licenses, permits and other approvals necessary for Isis to enter into this Agreement.

 

(iii)         Conflicting Obligations. Neither the execution and delivery of this Agreement by Isis nor the discharge by Isis of its obligations under this Agreement will conflict with, result in a breach of, constitute a default under, require any notice under or create in any Third Party the right to terminate, modify or cancel any agreement, contract, instrument, license or other arrangement to which Isis is or becomes a party or by which it is or becomes bound. Isis has not entered into any agreement, contract, license or other arrangement that conflicts with Isis’ discharge of its obligations under this Agreement or the Foundation’s exercise of its rights under this Agreement.

 

(iv)          Intellectual Property.

 

(A)          General Intellectual Property. To the knowledge of Isis, Isis owns or has the right to use pursuant to a valid and enforceable, written license, sublicense, agreement or other permission, all Intellectual Property necessary to perform the Research. To the knowledge of Isis, except as specifically disclosed in that certain letter dated as of the Original Effective Date from Grantland E. Bryce, Vice President, Corporate Development & Legal Counsel to Robi Blumenstein, Isis’ performance of the Research will not interfere with, infringe upon, violate or misappropriate any Intellectual Property rights of any Third Party or Affiliate of Isis.

 

(B)          Isis Background Intellectual Property.  Schedule 16(b)(iv)(B) - 1 sets forth a complete and accurate list of all Isis Background Intellectual Property that is not Controlled by Isis that would be necessary to enable (1) a Third Party licensee under a Commercial License to practice any Project HD Intellectual Property to the extent necessary for such Third Party to commercialize one or

 

54

 

more Project Compounds under a Commercial License in accordance with the terms of this Agreement and (2) the Foundation and the Foundation Collaborators to use the Project Results, any Project Deliverables and Project HD Intellectual Property solely for HD Research and Development. Except as set forth on Schedule 16(b)(iv)(B) - 2, Isis has the right to grant the licenses and sublicenses contemplated by this Agreement to the Isis Background Intellectual Property Controlled by Isis  without obtaining the consent of any Third Party or Affiliate and without the payment of any compensation to any Third Party or Affiliate.

 

(C)          Certain Third Party and Affiliate Intellectual Property. During the period beginning on the Original Effective Date and ending on the Effective Date, Isis did not use or practice any (A) Intellectual Property (1) that was known by Isis to be owned by a Third Party or one of Isis’ Affiliates or (2) which was owned by, or licensed to, Isis (or otherwise subject to restrictions on use known to Isis), (B) Acquirer Intellectual Property of any Acquirer of Isis,  (C) Isis/[***] Collaboration Intellectual Property or (D) Regulus Intellectual Property, in the conduct of the 2007 Research Agreement Project, that would be necessary to be used or practiced to enable a) licensee under a Commercial License to practice any Project HD Intellectual Property to the extent necessary for such licensee to commercialize one or more Project Compounds under a Commercial License in accordance with the terms of this Agreement or b) the Foundation and the Foundation Collaborators to use any Project Results, Project Deliverables or Project HD Intellectual Property solely for HD Research and Development, other than any such Intellectual Property that Isis (1) Controls, and at all times retains Control of, such Intellectual Property and (2) grants a license or sublicense, as the case may be in respect of any such Intellectual Property to (a) a licensee under a Commercial License to the extent necessary for such licensee to commercialize one or more Project Compounds under such Commercial License in accordance with the terms of this Agreement, including under Section 10(g) of this Agreement and (b) the Foundation (with the right to grant sublicenses to the Foundation Collaborators), pursuant to the terms and conditions of this Agreement, including Section 12  of this Agreement, to use any Project Results, Project Deliverables or Project HD Intellectual Property solely for HD Research and Development.

 

55

 

Term; Termination; Effect of Termination

 

17.          Term; Termination of Certain Sections by the Foundation; Termination of Certain Sections by Isis; Termination of Specified Sections; Survival of Remaining Sections; Effect of Termination of Certain Sections.

 

(a)           Term. The term (the “Term”) of this Agreement will commence on the Effective Date and will, unless earlier terminated in accordance with the terms hereof or by the mutual written agreement of the Parties, continue in effect until the date that is 30 days after the date on which all activities that have been approved by the Steering Committee to be conducted as part of the Project (as evidenced by such activities being set forth in the Detailed Project Description most recently approved by the Steering Committee) have been completed.

 

(b)           Termination of Certain Sections by the Foundation.

 

(i)            Termination with Notice. The Foundation may elect for any reason to immediately terminate all of the sections specified in Section 17(d)(i) of this Agreement and discontinue Isis’ performance of the Research by giving 60 days prior written notice to such effect to Isis.

 

(ii)           Termination Upon the Occurrence of Certain Events. The Foundation may, by giving notice to Isis, elect to terminate each of the sections specified in Section 17(d)(i) of this Agreement and discontinue Isis’ performance of the Research upon the occurrence of any of the following events:

 

(A)          Breach of this Agreement. If Isis (1) materially breaches any representation, warranty or covenant given by it under this Agreement or (2) materially defaults in the performance of its obligations under this Agreement and such breach or default is not remedied within 45 days of the receipt by Isis of notice of such breach or default from the Foundation.

 

(B)          Change of Circumstances Notice. Isis delivers a Change of Circumstances Notice to the Foundation pursuant to Section 3(b)(i) of this Agreement.

 

(C)          Post-Original Effective Date Knowledge Notice. If Isis delivers a Post-Original Effective Date Knowledge Notice to the Foundation pursuant to Section 3(b)(ii) of this Agreement.

 

(D)          Bankruptcy Event. If Isis is the subject of a Bankruptcy Event.

 

(c)           Termination of Certain Sections by Isis. Isis may, by giving notice to the Foundation, elect to terminate each of the sections specified in Section 17(d)(i) of this Agreement and discontinue Isis’ performance of the Research upon the occurrence of any of the following events:

 

56

 

(i)            Breach of this Agreement. If the Foundation (A) materially breaches any representation, warranty or covenant given by it under this Agreement or (B) materially defaults in the performance of any of its obligations under this Agreement and such breach or default is not remedied within 45 days of the receipt by the Foundation of notice of such breach or default from Isis.

 

(ii)           Bankruptcy Event. If the Foundation is the subject of a Bankruptcy Event.

 

(d)           Termination of Specified Sections; Survival of Remaining Sections; Effect of Termination of Certain Sections.

 

(i)            Termination of Specified Sections; Survival of Remaining Sections. Immediately upon the earlier to occur of either (A) the expiration of the Term, (B) the mutual agreement of the Parties to terminate this Agreement, (C) an election by the Foundation pursuant to Section 17(b) of this Agreement or (D) an election by Isis pursuant to Section 17(c) of this Agreement, then subject to Section 17(d)(ii) of this Agreement, each of Section 2, Section 3(a), Section 3(b), Section 4(a), Section 4(b), Section 4(c)(iii), Section 5(a), Section 5(b), Section 6(a) and Section 6(b) will a) immediately terminate and b) subject to Section 17(d)(ii) of this Agreement, have no further force or effect. The Parties acknowledge and agree that in the event of the termination of the sections specified in this Section 17(d)(i), all other sections of this Agreement will survive indefinitely and remain in full force and effect.

 

(ii)           Effect of Termination of Certain Sections.

 

(A)          Delivery of Final Project Reports, Provided Research Materials, Project Deliverables and Project Results. Upon the termination of the sections specified in Section 17(d)(i) of this Agreement, Isis will deliver to the Foundation each of the following: (1) in accordance with Section 5(e) of this Agreement, a Final Project Report for the Project for the period beginning on the Effective Date through the date of such termination, (2) in accordance with Section 5(e) of this Agreement, a final FTE Report for the period beginning on the end date of the period covered by the last FTE Report delivered through the date of such termination, (3) in accordance with Section 4(c) of this Agreement, all unused Provided Research Materials and (4) in accordance with Section 7(b) and Section 8(b), respectively, of this Agreement, all Project Results and Project Deliverables produced by Isis but not yet delivered to the Foundation through the date of such termination.

 

57

 

(B)          Foundation’s Payment Obligation Upon Termination. The Parties acknowledge and agree that, upon the termination of the sections specified in Section 17(d)(i) of this Agreement, the Foundation will, subject to Section 6 of this Agreement, make a payment (to the extent such payment is not in dispute) (1) in respect of the Research FTEs performing the Research through the effective date of the termination of the sections specified in Section 17(d)(i) of this Agreement (such payment to be calculated in accordance with Section 6 of this Agreement) and (2) to reimburse Isis for any Isis Provided Reimbursable Materials Costs and Specialized Licenses or Services Costs incurred by Isis in accordance with, and subject to, Section 4(b) and Section 4(d) of this Agreement, respectively, unless the obligations of Isis to procure Isis Provided Reimbursable Materials and Specialized Third Party Licenses and Services related to such costs may be cancelled by Isis in which case the Foundation will only reimburse Isis for the contractual cancellation fees associated with the cancellation of such obligations. Isis agrees that a) the invoice submitted by Isis in respect of the final Quarterly Research Payment shall credit the Advance Research Payment Amount against such final Quarterly Research Payment and b) if the amount of final Quarterly Research Payment is less than the Advance Research Payment Amount, Isis shall promptly make a payment to the Foundation in an amount equal to the amount by which the Advance Research Payment Amount exceeded the amount of the final Quarterly Research Payment.

 

(C)          Facilitation of Continued Research. Upon the termination of the sections specified in Section 17(d)(i) of this Agreement, if requested by the Foundation, Isis and the Foundation will, in good faith, discuss the use of reasonable efforts to facilitate the continuance of the Project elsewhere.

 

(D)          Liabilities and Obligations Accrued Prior to Termination. The Parties acknowledge and agree that the termination of the sections specified in Section 17(d)(i) of this Agreement will not (1) relieve any Party then in breach of this Agreement for any liabilities to the other Party in respect of any breach under this Agreement or (2) relieve either Party from any of the obligations such Party may have under this Agreement to the extent such obligations accrued prior to the date of such termination or (3) relieve either Party from any of the obligations such Party may have under any of the sections of this Agreement that expressly survive any such termination.

 

58

 

Miscellaneous

 

18.          Independent Contractor. Isis is acting as an independent contractor and not an agent, joint venturer or partner of the Foundation. Nothing in this Agreement will create, evidence or imply any agency, partnership or joint venture between the Parties. Neither Party will act or describe itself as the agent of the other Party nor will it represent that it has any authority to make commitments on the other Party’s behalf.

 

19.          Notices. Any notice required or permitted to be given by this Agreement will be in writing and will be delivered by personal delivery, US mail with postage prepaid and return receipt requested, facsimile (provided the sender has evidence of successful transmission) or next-day courier service. Any notice so delivered will be deemed to be given, delivered and received, if delivered by personal delivery or if delivered by US mail, on the day received as indicated by the postal receipt and if delivered by facsimile or courier service, on the day following dispatch. All such notices are to be given or made at the following addresses (or to such other address as may be designated by a notice given in accordance with the provisions of this Section 19):

 

If to the Foundation to:

 

CHDI Foundation, Inc.

c/o CHDI Management, Inc.

350 Seventh Avenue, Suite 601

New York, NY 10001

Attention: Ruth Basu, Chief Administrative Officer

Fax: 212-239-2101

 

With a copy to:

 

CHDI Foundation, Inc.

c/o CHDI Management, Inc.

350 Seventh Avenue, Suite 601

New York, NY 10001

Attention: David P. Rankin, Chief Legal Officer

Fax: 212-239-2101

 

If to Isis prior to August 22, 2011, to:

 

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008

Attention: C. Frank Bennett, Ph.D.

Fax: 760-603-4650

 

59

 

With copies to:

 

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008

Attention: Chief Operating Officer & Chief Financial Officer

Fax: 760-918-3592

 

and

 

Isis Pharmaceuticals, Inc.

1896 Rutherford Road

Carlsbad, CA 92008

Attention: Vice President, Legal & General Counsel

Fax: 760-268-4922

 

If to Isis on or after August 22, 2011, to:

 

Isis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, CA 92010

Attention: C. Frank Bennett, Ph.D.

Fax: 760-603-4650

 

With copies to:

 

Isis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, CA 92010

Attention: Chief Operating Officer & Chief Financial Officer

Fax: 760-918-3592

 

and

 

Isis Pharmaceuticals, Inc.

2855 Gazelle Court

Carlsbad, CA 92010

Attention: Vice President, Legal & General Counsel

Fax: 760-268-4922

 

20.          Indemnity; Limitation on Damages.

 

(a)           Indemnification by the Foundation. The Foundation will defend and indemnify Isis, its Affiliates and their respective directors, officers, employees, representatives, consultants, agents and service providers (collectively, the “Isis Indemnified Parties”), against any and all costs, damages, expenses (including reasonable legal fees) and losses suffered by any Isis Indemnified Party in

 

60

 

connection with any Third Party action, assessment, claim, demand, proceeding or suit to the extent arising or resulting from (i) the Foundation’s negligence or willful misconduct; (ii) the Foundation’s breach of this Agreement; (iii) Isis’ use, or alleged use, in the performance of the Research of any Foundation Provided Materials or Foundation Provided Material Information provided by the Foundation to Isis for the purpose of performing the Research; or (iv) the storage, distribution or use of a Project Compound by the Foundation or any Foundation Collaborator (but in each case only to the extent such claim does not result from, or arise out of, an action for which Isis is obligated to indemnify the Foundation pursuant to Section 20(b) of this Agreement). For clarity, the Parties agree that the parenthetical clause in the immediately preceding sentence is not intended to obviate or otherwise limit the possibility that both Isis and the Foundation may be determined to be joint tort-feasors and, therefore, share liability.

 

(b)           Indemnification by Isis. Isis will defend and indemnify the Foundation and its Affiliates, members, directors, officers, employees, representatives, consultants, agents and service providers (collectively, the “Foundation Indemnified Parties”), against any and all costs, damages, expenses (including reasonable legal fees) and losses suffered by any Foundation Indemnified Party in connection with any Third Party action, assessment, claim, demand, proceeding or suit to the extent arising or resulting from (i) Isis’ negligence or willful misconduct; (ii) Isis’ breach of this Agreement; (iii) the storage, distribution or use of a Project Compound by Isis or any collaborator of Isis (other than the Foundation) or (iv) the activities of Isis in the course of Isis’ performance of the Research, including activities which infringe upon, violate or misappropriate, or are alleged to infringe upon, violate or misappropriate, the Intellectual Property rights of a Third Party (but (A) excluding all activities that infringe upon, violate or misappropriate, or are alleged to infringe upon, violate or misappropriate, the Intellectual Property rights of a Third Party if (1) in accordance with Section 16(a)(vi) of this Agreement, the Foundation consented to the use or practice, as the case may be, of such Third Party Intellectual Property by Isis in the conduct of such activities or (2) in accordance with Section 3(b)(ii) of this Agreement, Isis notified the Foundation with respect to the to the use or practice, as the case may be, of such Third Party Intellectual Property by Isis in the conduct of such activities and the Foundation did not exercise, within 90 days of the Foundation’s receipt of Isis’ notice, its right to terminate the applicable Project(s) or this Agreement and (B) only to the extent such claim does not result from, or arise out of, an action for which the Foundation is obligated to indemnify Isis pursuant to Section 20(a) of this Agreement). For clarity, the Parties agree that the parenthetical clause in the immediately preceding sentence is not intended to obviate or otherwise limit the possibility that both Isis and the Foundation may be determined to be joint tort-feasors and, therefore, share liability.

 

61

 

(c)           Limitation on Damages; Damages Cap.

 

(i)            Limitation on Damages. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT BUT SUBJECT TO SECTION 20(d) OF THIS AGREEMENT, NEITHER PARTY NOR ITS AFFILIATES WILL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR ANY CONSEQUENTIAL, SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES OR OTHER SIMILAR OR LIKE DAMAGES (INCLUDING LOSS OF PROFITS) UNDER THIS AGREEMENT EVEN IF SUCH PARTY OR AFFILIATE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, THAT, NOTHING IN THIS AGREEMENT WILL EXCLUDE OR LIMIT THE LIABILITY OF EITHER PARTY FOR (A) A BREACH OF SECTION 14 OF THIS AGREEMENT; (B) DEATH OR PERSONAL INJURY; OR (C) FRAUD.

 

(ii)           Damages Cap. Isis’ liability to the Foundation under this Agreement and the 2007 Research Agreement shall not exceed the sum of (A) US$[***] plus (B) [***]. The Foundation’s liability to Isis under this Agreement and the 2007 Research Agreement shall not exceed [***]. Isis and the Foundation agree that this Section 20(c)(ii) supersedes and replaces in its entirety Section 18(c)(ii) of the 2007 Research Agreement.

 

(d)           Indemnity Amounts. Any amounts owing pursuant to a Party’s express indemnity obligations under this Agreement will not be subject to the limitation on damages restrictions set forth in Section 20(c) of this Agreement.

 

(e)           Indemnity Procedures. In the event that a Party that is entitled to indemnification under Section 20(a) or Section 20(b) of this Agreement, as the case may be (such Party the “Indemnified Party”) seeks indemnification from the other Party (such Party an “Indemnifying Party”), the Indemnified Party will (i) inform, in writing, the Indemnifying Party of the claim as soon as reasonably practicable after the Indemnified Party receives notice of such claim; (ii) permit the Indemnifying Party to assume direction and control of the defense of such claim (including the sole right to settle such claim in the Indemnifying Party’s sole discretion, provided that any such settlement does not (A) admit any fault or negligence on the part of the Indemnified Party, (B) impose any obligation on the Indemnified Party or (C) without the prior written consent of the Indemnified Party (which consent shall not unreasonably withheld, conditioned or delayed), adversely affect the Indemnified Party in any way; (iii) cooperate as reasonably requested (at the cost and expense of the Indemnifying Party) in the defense of such claim; and (iv) undertake commercially (at the cost and expense of the Indemnifying Party) reasonable steps to mitigate any loss, damage or expense with respect to such claim. Notwithstanding anything in this Agreement to the contrary, the Indemnifying Party will have no liability under Section 20(a) or Section 20(b), of this Agreement, as the case may be, with respect to any claims settled by the Indemnified Party without the Indemnifying Party’s prior written consent.

 

62

 

21.          Alternative Dispute Resolution.

 

(a)           General. Except for (i) Steering Committee Disputes which are to be resolved pursuant to Section 5(a)(iii)(B) of this Agreement and (ii) Commercial License Grant Disputes which are to be resolved pursuant to Section 10(e) of this Agreement, if a dispute arises out of or relates to this Agreement, or breach thereof, the Parties agree that such dispute will be resolved exclusively in accordance with this Section 21.

 

(b)           Resolution by Good Faith Negotiations. If a dispute arises out of or relates to this Agreement, or breach thereof, the Parties agree to negotiate in good faith to settle such dispute in accordance with this Section 21(b). If a dispute arises out of or relates to this Agreement, or breach thereof, either Party may submit such dispute to B. Lynne Parshall, in the case of Isis (or such other individual identified in writing by Isis), and Robi Blumenstein, in the case of the Foundation (or such other individual identified in writing by the Foundation), for resolution by providing a written notice (each, a “Senior Management Dispute Resolution Notice”) to the other Party setting forth in reasonable detail the basis of such dispute. If a dispute that is the subject of a Senior Management Dispute Resolution Notice is not resolved by the Parties within 60 days of the delivery of such Senior Management Dispute Resolution Notice, such dispute will be resolved in accordance with Section 21(c) of this Agreement. The Parties agree that any and all such negotiations will be confidential.

 

(c)           Resolution by Binding Arbitration. If a dispute that is the subject of a Senior Management Dispute Resolution Notice is not resolved by the Parties within 60 days of the delivery of such Senior Management Dispute Resolution Notice, either Party may submit such dispute for final resolution by an arbitrator in accordance with this Section 21(c) by providing a written notice (each, an “Arbitration Dispute Resolution Notice”) to the other Party to such effect within 30 days after the end of such 60-day period. The Parties agree that any dispute that is the subject of an Arbitration Dispute Resolution Notice will be settled by a single arbitrator in a binding arbitration in Denver, Colorado administered by JAMS under its Comprehensive Arbitration Rules and Procedures. The Parties will instruct the arbitrator that the prevailing party of any dispute (as determined by the arbitrator) will be awarded the reasonable attorneys’ fees, costs and other expenses incurred by the prevailing party in the course of the arbitration of such dispute. The award rendered by the arbitrator will be final and binding on the Parties, and judgment on the award may be entered in any court having jurisdiction thereof if reasonably necessary for enforcement. The Parties agree that, notwithstanding anything to the contrary in such rules, any and all such proceedings will be confidential.

 

63

 

22.          Assignment. Isis may not assign this Agreement without the prior written consent of the Foundation, except to an (a) Affiliate of Isis, or (b) entity that acquires all or substantially all of the business of Isis (whether by sale of assets or stock or by merger or other business combination), and in each case who agrees, in writing, to assume Isis’ obligations under this Agreement. Isis agrees that any such assignee will (i) acquire Isis’ interest in all of the Isis Background Intellectual Property, Project Compounds, Project Intellectual Property and Project Results and (ii) agree, in writing, to assume Isis’ obligations under this Agreement. The Foundation may assign this Agreement so long as the assignee expressly assumes in writing the Foundation’s obligations in this Agreement.

 

23.          Press Releases. Upon execution of this Agreement, the Parties will mutually agree to issue either a joint press release or separate press releases announcing the existence of this Agreement, in any case in a form and substance agreed to in writing by the Parties. Each Party agrees not to issue any other press release or other public statement disclosing other information relating to this Agreement or the transactions contemplated hereby without the prior written consent of the other Party, which consent will not be unreasonably withheld or delayed, provided however, that each Party may make disclosures permitted by, and in accordance with, Section 14 of this Agreement. Each Party agrees to provide to the other Party a copy of any public announcement regarding this Agreement or the subject matter thereof as soon as reasonably practicable under the circumstances prior to its scheduled release. Except under extraordinary circumstances, each Party will provide the other with an advance copy of any such announcement at least five business days prior to its scheduled release.

 

24.          Incorporation of Appendices, Exhibits and Schedules; Entire Agreement; Amendment. The appendices, exhibits and schedules identified in this Agreement are incorporated herein by reference and made a part hereof. If (a) any terms or conditions of the 2007 Research Agreement, (b) anything in any appendix, exhibit or schedule attached to this Agreement or (c) any notice, invoice or other document delivered by a Party under this Agreement conflicts with any terms or conditions set forth in the body of this Agreement, the terms and conditions set forth in the body of this Agreement will control. This Agreement constitutes the entire agreement among the Parties relating to the Research and all prior understandings and agreements relating to the Research are superseded hereby. This Agreement may not be amended except by a document signed by authorized representatives of each of the Parties.

 

25.          No Waiver. Any failure of a Party to enforce any provision of this Agreement will not be deemed a waiver of its right to enforce such provision on any subsequent occasion. No waiver of any provision of this Agreement will be valid unless it is in writing and is executed by the Party against whom such waiver is sought to be enforced. A waiver by any of the Parties of any provision of this Agreement will not be construed to be a waiver of any succeeding breach thereof or of any other provision of this Agreement.

 

26.          Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law. In the event a court of competent jurisdiction holds any provision of this Agreement to be invalid, such holding will have no effect on the remaining provisions of this Agreement, and they will continue in full force and effect.

 

64

 

27.          Interpretation; Headings. The word “including” will mean “including without limitation”. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. All terms defined in this Agreement in their singular or plural forms have correlative meanings when used herein in their plural or singular forms, respectively. Headings used in this Agreement are for convenience of reference only and are not intended to influence the interpretation hereof.

 

28.          Governing Law. This Agreement will be governed by and construed in accordance with the domestic laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

 

29.          No Strict Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event of an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any of the Parties by virtue of the authorship of any of the provisions of this Agreement.

 

30.          Counterparts. This Agreement may be signed, including by facsimile signature, in two or more counterparts and each such counterpart will constitute an original document and such counterparts, taken together, will constitute the same instrument.

 

65

 

In witness to the foregoing, the Parties have executed this Agreement as of the Effective Date.

 

 

	
FOUNDATION:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CHDI   Foundation, Inc.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robi Blumenstein
    	
 
    	
 
    
	
 
    	
Name: Robi Blumenstein
    	
 
    	
 
    
	
 
    	
Title: President, CHDI Management
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ISIS:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Isis Pharmaceuticals, Inc.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ B. Lynne Parshall
    	
 
    	
 
    
	
 
    	
Name: B. Lynne Parshall
    	
 
    	
 
    
	
 
    	
Title: Chief Operating Officer &   CFO
    	
 
    	
 
    

 

 

Appendix A to Research Agreement

 

(General Project Description)

 

 

Appendix A-1 to Research Agreement

 

[***]

 

 

Appendix A-2 to Research Agreement

 

[***]

 

 

Appendix A-3 to Research Agreement

 

[***]

 

 

Appendix B to Research Agreement

 

(Initial Detailed Project Description)

 

 

Appendix B-1 to Research Agreement

 

[***]

 

 

Appendix B-2 to Research Agreement

 

[***]

 

 

Appendix B-3 to Research Agreement

 

[***]

 

 

Appendix C to Research Agreement

 

(Additional Project Activities Description)

 

 

Schedule 13(a)(ii)(D)

 

(Schedule of Prior Payments Made by the Foundation
 to a Third Party of Affiliate of Isis)

 

[***]

 

 

Schedule 13(a)(ii)(E)

 

(Schedule of Approved Payments to be Made by the Foundation)

 

[***]

 

 

Schedule 16(a)(vi)

 

(Third Party Intellectual Property)

 

[***]

 

 

Schedule 16(b)(iv)(B) – 1

 

(Required Isis Background Intellectual Property — Not Controlled by Isis)

 

[***]

 

 

Schedule 16(b)(iv)(B) – 2

 

[***]Exhibit 10.1

 

EXECUTION VERSION

 

 

CREDIT AGREEMENT

 

dated as of October 26, 2011

 

among

 

LIN TELEVISION CORPORATION,
 as the Borrower,

 

The Lenders Party Hereto,

 

JPMORGAN CHASE BANK, N.A.,
 as Administrative Agent,
 as an Issuing Lender
 and as Swingline Lender

 

 

DEUTSCHE BANK SECURITIES INC.

and 
 WELLS FARGO BANK, N.A.

as Co-Syndication Agents

 

and

 

SUNTRUST BANK,

BANK OF AMERICA, N.A.

and

U.S. BANK, N.A.,

as Co-Documentation Agents

 

and

 

J.P. MORGAN SECURITIES LLC,
 DEUTSCHE BANK SECURITIES INC.,

WELLS FARGO SECURITIES, LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

SUNTRUST ROBINSON HUMPHREY, INC.

and

U.S. BANK, N.A.,

 

as Co-Lead Arrangers

 

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
SECTION 1.   DEFINITIONS
    	
1
    
	
 
    	
 
    
	
1.1
    	
Defined Terms
    	
1
    
	
1.2
    	
Other Definitional Provisions
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 2.   AMOUNT AND TERMS OF   COMMITMENTS
    	
30
    
	
 
    	
 
    
	
2.1
    	
Term Commitments; Incremental Term Loans
    	
30
    
	
2.2
    	
Procedure for Term Loan Borrowings
    	
31
    
	
2.3
    	
Repayment of Term Loans
    	
31
    
	
2.4
    	
Revolving Credit Commitments; Incremental Revolving   Loans
    	
32
    
	
2.5
    	
Procedure for Revolving Credit Borrowings
    	
35
    
	
2.6
    	
Commitment Fees, etc.
    	
35
    
	
2.7
    	
Termination or Reduction of Commitments
    	
36
    
	
2.8
    	
Optional Prepayments
    	
36
    
	
2.9
    	
Mandatory Prepayments
    	
37
    
	
2.10
    	
Conversion and Continuation Options
    	
38
    
	
2.11
    	
Minimum Amounts and Maximum Number of Eurodollar   Tranches
    	
39
    
	
2.12
    	
Interest Rates and Payment Dates
    	
39
    
	
2.13
    	
Computation of Interest and Fees
    	
39
    
	
2.14
    	
Inability to Determine Interest Rate
    	
40
    
	
2.15
    	
Pro Rata Treatment and Payments
    	
40
    
	
2.16
    	
Requirements of Law
    	
42
    
	
2.17
    	
Taxes
    	
43
    
	
2.18
    	
Indemnity
    	
45
    
	
2.19
    	
Change of Lending Office
    	
45
    
	
2.20
    	
Replacement of Lenders under Certain Circumstances
    	
46
    
	
2.21
    	
Notice of Certain Costs
    	
46
    
	
2.22
    	
Defaulting Lenders
    	
46
    
	
 
    	
 
    	
 
    
	
SECTION 3.   LETTERS OF CREDIT
    	
48
    
	
 
    	
 
    
	
3.1
    	
L/C Commitment
    	
48
    
	
3.2
    	
Procedure for Issuance of Letter of Credit
    	
48
    
	
3.3
    	
Commissions, Fees and Other Charges
    	
49
    
	
3.4
    	
L/C Participations
    	
49
    
	
3.5
    	
Reimbursement Obligation of the Borrower
    	
50
    
	
3.6
    	
Obligations Absolute
    	
50
    
	
3.7
    	
Letter of Credit Payments
    	
51
    
	
3.8
    	
Applications
    	
51
    
	
3.9
    	
Existing Letters of Credit
    	
51
    
	
 
    	
 
    	
 
    
	
SECTION 4.   REPRESENTATIONS AND   WARRANTIES
    	
51
    
	
 
    	
 
    
	
4.1
    	
Financial Condition
    	
51
    
	
4.2
    	
No Change
    	
51
    
	
4.3
    	
Corporate Existence; Compliance with Law
    	
51
    

 

i

 

	
4.4
    	
Corporate Power; Authorization; Enforceable   Obligations
    	
52
    
	
4.5
    	
No Legal Bar
    	
52
    
	
4.6
    	
No Material Litigation
    	
52
    
	
4.7
    	
Ownership of Property; Liens
    	
52
    
	
4.8
    	
Intellectual Property
    	
52
    
	
4.9
    	
Taxes
    	
53
    
	
4.10
    	
Federal Regulations
    	
53
    
	
4.11
    	
ERISA
    	
53
    
	
4.12
    	
Investment Company Act
    	
53
    
	
4.13
    	
Subsidiaries
    	
53
    
	
4.14
    	
Use of Proceeds
    	
53
    
	
4.15
    	
Environmental Matters
    	
54
    
	
4.16
    	
Accuracy of Information, etc.
    	
54
    
	
4.17
    	
Security Documents
    	
54
    
	
 
    	
 
    	
 
    
	
SECTION 5.   CONDITIONS PRECEDENT
    	
55
    
	
 
    	
 
    
	
5.1
    	
Conditions to Effectiveness
    	
55
    
	
5.2
    	
Conditions to Each Extension of Credit
    	
56
    
	
 
    	
 
    	
 
    
	
SECTION 6.   AFFIRMATIVE COVENANTS
    	
57
    
	
 
    	
 
    
	
6.1
    	
Financial Statements
    	
57
    
	
6.2
    	
Certificates; Other Information
    	
58
    
	
6.3
    	
Payment of Obligations
    	
59
    
	
6.4
    	
Conduct of Business and Maintenance of Existence,   etc.
    	
59
    
	
6.5
    	
Maintenance of Property; Insurance
    	
59
    
	
6.6
    	
Inspection of Property; Books and Records;   Discussions
    	
59
    
	
6.7
    	
Notices
    	
60
    
	
6.8
    	
Environmental Laws
    	
60
    
	
6.9
    	
Additional Collateral, etc.
    	
60
    
	
6.10
    	
After-Acquired Stations
    	
62
    
	
6.11
    	
Sale or Unwinding of LLC; Release of LIN TV
    	
62
    
	
 
    	
 
    	
 
    
	
SECTION 7.   NEGATIVE COVENANTS
    	
62
    
	
 
    	
 
    
	
7.1
    	
Financial Condition Covenants
    	
62
    
	
7.2
    	
Limitation on Indebtedness
    	
64
    
	
7.3
    	
Limitation on Liens
    	
65
    
	
7.4
    	
Limitation on Fundamental Changes
    	
67
    
	
7.5
    	
Limitation on Sale of Assets
    	
68
    
	
7.6
    	
Limitation on Dividends
    	
69
    
	
7.7
    	
[RESERVED]
    	
70
    
	
7.8
    	
Limitation on Investments, Loans and Advances
    	
70
    
	
7.9
    	
Limitation on Optional Payments
    	
71
    
	
7.10
    	
Limitation on Transactions with Affiliates
    	
71
    
	
7.11
    	
Limitation on Sales and Leasebacks
    	
71
    
	
7.12
    	
Limitations on Change in Holding Company Status
    	
72
    
	
 
    	
 
    	
 
    
	
SECTION 8.   EVENTS OF DEFAULT
    	
72
    

 

ii

 

	
SECTION 9.   THE ADMINISTRATIVE AGENT
    	
75
    
	
 
    	
 
    
	
9.1
    	
Appointment
    	
75
    
	
9.2
    	
Delegation of Duties
    	
75
    
	
9.3
    	
Exculpatory Provisions
    	
75
    
	
9.4
    	
Reliance by Administrative Agent
    	
76
    
	
9.5
    	
Notice of Default
    	
76
    
	
9.6
    	
Non-Reliance on the Administrative Agent and Other   Lenders
    	
76
    
	
9.7
    	
Indemnification
    	
77
    
	
9.8
    	
Agent in Its Individual Capacity
    	
77
    
	
9.9
    	
Successor Administrative Agent
    	
77
    
	
9.10
    	
Co-Documentation Agents, Co-Syndication Agents and   Co-Lead Arrangers
    	
78
    
	
 
    	
 
    	
 
    
	
SECTION 10.   MISCELLANEOUS
    	
78
    
	
 
    	
 
    
	
10.1
    	
Amendments and Waivers
    	
78
    
	
10.2
    	
Notices
    	
79
    
	
10.3
    	
No Waiver; Cumulative Remedies
    	
80
    
	
10.4
    	
Survival of Representations and Warranties
    	
80
    
	
10.5
    	
Payment of Expenses and Taxes
    	
80
    
	
10.6
    	
Successors and Assigns; Participations and   Assignments
    	
81
    
	
10.7
    	
Adjustments; Set-off
    	
84
    
	
10.8
    	
Counterparts
    	
85
    
	
10.9
    	
Severability
    	
85
    
	
10.10
    	
Integration
    	
85
    
	
10.11
    	
GOVERNING LAW
    	
85
    
	
10.12
    	
Submission To Jurisdiction; Waivers
    	
85
    
	
10.13
    	
Acknowledgments
    	
86
    
	
10.14
    	
WAIVERS OF JURY TRIAL
    	
86
    
	
10.15
    	
Confidentiality
    	
86
    
	
10.16
    	
FCC Compliance
    	
87
    
	
10.17
    	
USA Patriot Act
    	
87
    

 

iii

 

	
SCHEDULES:
    
	
 
    	
 
    
	
1.1A
    	
Loans   and Commitments
    
	
1.1B
    	
Mortgaged   Properties
    
	
1.1D
    	
Stations   and License Subsidiaries
    
	
4.6
    	
Litigation
    
	
4.13
    	
Subsidiaries
    
	
4.15
    	
Environmental   Matters
    
	
7.2(e)
    	
Existing   Indebtedness
    
	
7.3(f)
    	
Existing   Liens
    
	
7.8(f)
    	
Existing   Investments
    
	
 
    	
 
    
	
EXHIBITS:
    
	
 
    	
 
    
	
A
    	
Form of   Guarantee and Collateral Agreement
    
	
B
    	
Form of   Compliance Certificate
    
	
C
    	
Form of   Closing Certificate
    
	
D
    	
[RESERVED]
    
	
E
    	
Form of   Assignment and Assumption
    
	
F
    	
Form of   Legal Opinion of Covington & Burling LLP
    
	
G-1
    	
Form of   Incremental Revolving Loan Activation Notice
    
	
G-2
    	
Form of   Incremental Term Loan Activation Notice
    
	
H
    	
Form of   Swingline Loan Participation Certificate
    
	
I-1
    	
Form of   Revolving Note
    
	
I-2
    	
Form of   Term Note
    
	
I-3
    	
Form of   Swingline Note
    
	
J
    	
Form of   Borrowing Notice
    
	
K
    	
Form of   Joinder Agreement
    
	
L
    	
Form of   Stock Pledge Agreement
    
	
M
    	
Form of   Permitted Acquisition Closing Certificate
    

 

iv

 

CREDIT AGREEMENT, dated as of October 26, 2011, among LIN TELEVISION CORPORATION, a Delaware corporation (the “Borrower”), the several banks and other financial institutions or entities from time to time parties to this Agreement (the “Lenders”), JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”), as an Issuing Lender (as defined below) and as swingline lender (in such capacity, the “Swingline Lender”), DEUTSCHE BANK SECURITIES INC. and WELLS FARGO BANK, N.A., as co-syndication agents (in such capacities, the “Co-Syndication Agents”), SUNTRUST BANK, BANK OF AMERICA, N.A. and U.S. BANK, N.A., as co-documentation agents (in such capacities, the “Co-Documentation Agents”), and J.P. MORGAN SECURITIES LLC, DEUTSCHE BANK SECURITIES INC., WELLS FARGO SECURITIES, LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, SUNTRUST ROBINSON HUMPHREY, INC. and U.S. BANK, N.A., as co-lead arrangers and joint bookrunners (in such capacities, the “Co-Lead Arrangers”).

 

The parties hereto agree as follows:

 

SECTION 1.   DEFINITIONS

 

1.1                                 Defined Terms.  As used in this Agreement, the following terms shall have the following meanings:

 

“ABR”:  for any day, a rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the Eurodollar Rate for a Eurodollar Loan with a one month interest period commencing on such day plus 1%. For purposes hereof, “Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by JPMorgan Chase as its prime rate in effect at its principal office in New York City (the Prime Rate not being intended to be the lowest rate of interest charged by JPMorgan Chase in connection with extensions of credit to debtors); and “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it. Any change in the ABR due to a change in the Prime Rate, the Federal Funds Effective Rate or such Eurodollar Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate, the Federal Funds Effective Rate or such Eurodollar Rate, respectively.

 

“ABR Loans”:  Loans the rate of interest applicable to which is based upon the ABR.

 

“Adjustment Date”:  as defined in the definition of the term “Applicable Pricing Grid”.

 

“Administrative Agent”:  JPMorgan Chase, together with its affiliates, as the arranger of the Commitments and as the administrative agent for the Lenders under this Agreement and the other Loan Documents, together with any of its successors.

 

“Affected Eurodollar Loans”:  as defined in subsection 2.9(h).

 

“Affiliate”:  as to any Person, any other Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to

 

 

(a) vote 51% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

 

“Agreement”:  this Credit Agreement, as further amended, supplemented or otherwise modified from time to time.

 

“Applicable Margin”:  (a) for all Loans, other than Incremental Term Loans and Incremental Revolving Loans, the rate per annum set forth under the relevant column heading below (such rate, the “Initial Rate”):

 

	
 
    	
 
    	
ABR Loans
    	
 
    	
Eurodollar Loans
    	
 
    
	
Revolving Loans and Swingline Loans
    	
 
    	
2.00
    	
%
    	
3.00
    	
%
    
	
Tranche A Term Loans
    	
 
    	
2.00
    	
%
    	
3.00
    	
%
    

 

provided, that on and after the first Adjustment Date occurring after the completion of one full fiscal quarter of the Borrower after the Closing Date, the Applicable Margin with respect to Revolving Loans, Swingline Loans and Tranche A Term Loans will be determined pursuant to the Applicable Pricing Grid; and (b) with respect to Incremental Term Loans or Incremental Revolving Loans, the rate per annum agreed to by the Borrower and the applicable Incremental Lenders in the applicable Incremental Term Loan Activation Notice or the Incremental Revolving Loan Activation Notice, as the case may be.

 

“Applicable Pricing Grid”:  the table set forth below:

 

	
Consolidated Senior
   Secured Leverage
   Ratio
    	
 
    	
Applicable Margin for
   Eurodollar Loans
    	
 
    	
Applicable Margin for
   ABR Loans
    	
 
    	
Commitment Fee Rate
    	
 
    
	
<2.00x
    	
 
    	
2.75
    	
%
    	
1.75
    	
%
    	
0.375
    	
%
    
	
3 2.00x and £ 3.50x 
    	
 
    	
3.00
    	
%
    	
2.00
    	
%
    	
0.50
    	
%
    
	
>3.50x
    	
 
    	
3.25
    	
%
    	
2.25
    	
%
    	
0.625
    	
%
    

 

For the purposes of the Applicable Pricing Grid, changes in the Applicable Margin resulting from changes in the Consolidated Senior Secured Leverage Ratio shall become effective on the date (the “Adjustment Date”) that is one Business Day  after the date on which financial statements are delivered to the Lenders pursuant to subsection 6.1 and shall remain in effect until the next change to be effected pursuant to this paragraph; provided that no decrease in the Applicable Margin to a rate per annum less than the Initial Rate shall be effective until the date on which the Borrower has refinanced, repurchased, redeemed, discharged or defeased (in each case, in full) the 2013 Notes.  If any financial statements referred to above are not delivered within the time periods specified in subsection 6.1, then, at the option of the Administrative Agent or the Required Lenders, until the date that is one Business Day after the date on which such financial statements are delivered, the highest rate set forth in each column of the Applicable Pricing Grid shall apply.  In addition, at the option of the Administrative Agent or the Required Lenders, at all times while an Event of Default shall have occurred and be continuing, the highest rate set forth in each column of the Applicable Pricing Grid shall apply.  Each determination of the

 

2

 

Consolidated Senior Secured Leverage Ratio pursuant to the Applicable Pricing Grid shall be made in a manner consistent with the determination thereof pursuant to subsection 7.1.

 

“Application”:  an application, in such form reasonably acceptable to the Borrower and the Issuing Lender, requesting the Issuing Lender to open a Letter of Credit.

 

“Approved Fund”:  as defined in subsection 10.6(b).

 

“Asset Sale”:  any Sale (excluding any sale and leaseback of assets permitted under subsection 7.11(a) (but for the avoidance of doubt, including any transactions permitted by subsection 7.11(b)), but including a Sale in connection with an Asset Swap Transaction (other than Asset Swap Transactions described in clause (iii) below)) by LIN TV, the Borrower or any of its Subsidiaries of any of its property (including property subject to any Lien under any Security Document), other than (i) a Sale pursuant to subsection 7.5(a), 7.5(b), 7.5(d) through (h) or 7.5(k) (as it relates to a Sale referred to in subsection 7.11(a); (ii) [RESERVED]; and (iii) a Sale in respect of which the Net Cash Proceeds received by LIN TV, the Borrower and its Subsidiaries are $5,000,000 or less.

 

“Asset Swap Transaction”:  a substantially concurrent sale and purchase, or exchange, of a Broadcasting Asset of the Borrower or any Subsidiary or all the Capital Stock of, or other equity interests in, a Subsidiary owning a Broadcasting Asset, for a Broadcast Station or Broadcast Enterprise of another Person or group of affiliated Persons, or at least a majority of the Capital Stock of, or other equity interests in, a Person or group of affiliated Persons owning a Broadcast Station or Broadcast Enterprise which is a broadcasting business or a business reasonably related thereto, provided that (a) the Borrower and its Subsidiaries shall receive, in exchange for such Broadcasting Asset, or Capital Stock of, or other equity interests in, such Subsidiary owning a Broadcasting Asset, a Broadcast Station or Broadcast Enterprise or Capital Stock of, or other equity interests in, a Person or group of affiliated Persons owning a Broadcast Station or Broadcast Enterprise, (b) no Default or Event of Default will have occurred and be continuing or will result therefrom (including, without limitation, pursuant to subsection 7.1), (c) (i) the Consolidated EBITDA of the Broadcasting Assets disposed of in such sale or exchange plus the Consolidated EBITDA of all Broadcasting Assets that were sold or exchanged pursuant to subsection 7.5(j) in such fiscal quarter and in the immediately preceding four-fiscal-quarter period (in each case calculated for the four fiscal quarters immediately preceding the sale or exchange) shall not exceed 25% of the Consolidated EBITDA of the Borrower for such immediately preceding four-fiscal-quarter period and (ii) the Consolidated EBITDA of such Broadcasting Assets disposed of in such sale or exchange plus the Consolidated EBITDA of all Broadcasting Assets disposed of in other sales and exchanges pursuant to subsection 7.5(j) since the Closing Date (in each case calculated for the four fiscal quarters immediately preceding the sale or exchange) shall not exceed 50% of the Consolidated EBITDA of the Borrower in the aggregate, and (d) the Borrower shall take such actions as may be required or reasonably requested to ensure that the Administrative Agent, for the ratable benefit of the Lenders, has a perfected first priority security interest, to the extent contemplated by the Guarantee and Collateral Agreement, in any acquired assets required to become collateral pursuant to subsection 6.9 or any other Loan Document, subject to Liens permitted by subsection 7.3, and provided  further  that in the case of any exchange involving the acquisition of a Broadcasting Asset with a value in excess of $50,000,000 (i) the Borrower provides the Administrative Agent with appropriate supporting documentation if reasonably requested by the Administrative Agent, including, without limitation, a certificate of a Senior Responsible Officer substantially in the form of Exhibit M, copies of any exchange agreement in connection with such transaction, copies of opinions of counsel, including FCC counsel, delivered in connection therewith and copies of

 

3

 

an FCC consent on Form 732 (or any comparable form issued by the FCC) relating to the transfer of control or assignment of the Station Licenses of the acquired Broadcast Station and (ii) on a pro forma basis (including any recurring improvements related to the acquired asset or the assets of the Person acquired) for the most recently completed four-fiscal quarter period for which financial statements are available on the date of such acquisition, no Default or Event of Default pursuant to subsection 7.1 will have occurred and be continuing, provided that for purposes of calculating Consolidated EBITDA pursuant to this clause (ii), the Consolidated EBITDA of such Broadcast Stations or Broadcast Enterprises being acquired for such four-fiscal quarter period shall be equal to the Consolidated EBITDA of such Broadcast Stations or Broadcast Enterprises for the 12-month period immediately preceding such acquisition, and the Borrower shall provide the Administrative Agent with appropriate supporting documentation if reasonably requested by the Administrative Agent.

 

“Assignee”:  as defined in subsection 10.6(b).

 

“Available Amount”: at any time (the “Reference Time”), an amount equal to (a) the sum of (i) $50,000,000 plus (ii) the Excess Cash Flow for each fiscal year of the Borrower completed at the Reference Time, commencing with the fiscal year ending December 31, 2012, not required to be applied to a prepayment pursuant to subsection 2.9(c)  minus (b) the sum of (i) all Restricted Payments made pursuant to subsections 7.6(b), (d) and (f), (ii) all Investments made pursuant to subsections 7.8(n) and (iii) all prepayments made pursuant to subsection 7.9(ii), in each case since the Closing Date and prior to the Reference Time; provided that if at the end of the fiscal quarter of the Borrower on or immediately preceding the Reference Time, the Consolidated Leverage Ratio shall not be less than 0.25: 1.00 below the Consolidated Leverage Ratio required under subsection 7.1(a) at the end of such fiscal quarter, the Available Amount at the Reference Time, for purposes of subsections 7.6(b), 7.6(f) and 7.9(ii) only, shall be deemed to be zero (without prejudice to any subsequent calculation thereof).

 

“Available Revolving Credit Commitment”:  as to any Lender at any time, an amount equal to (a) such Lender’s Revolving Credit Commitment minus (b) such Lender’s Revolving Extensions of Credit.

 

“Bankruptcy Event”:  with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent or the Borrower, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

“Benefited Lender”:  as defined in subsection 10.7(a).

 

“Board”:  the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

4

 

“Borrower”:  as defined in the introductory paragraph of this Agreement.

 

“Borrowing Date”:  any Business Day specified by the Borrower as a date on which the Borrower requests the Lenders or Swingline Lender to make Loans or Swingline Loans hereunder.

 

“Broadcast Enterprise”:  any business or line of business which is a broadcasting, media (including digital media) or entertainment business or a business reasonably related thereto.

 

“Broadcast Station”:  all or substantially all the assets used and useful for operating a full service commercial television broadcast station pursuant to a Station License, including without limitation the rights to use such Station License.

 

“Broadcasting Assets”:  collectively, any Stations and any Non-Station Assets of the Borrower and its Subsidiaries.

 

“Business Day”:  a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close, provided that when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which commercial banks are not open for dealing in Dollar deposits in the London interbank market.

 

“Capital Expenditures”:  for any period, with respect to any Person, the aggregate of all expenditures (whether paid in cash or accrued as a liability) by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period).  Acquisitions of the Capital Stock of any other Person or any line of business (including Permitted Acquisitions and Asset Swap Transactions) will be excluded from the definition of “Capital Expenditures”.

 

“Capital Lease Obligations”:  as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP; provided that changes to GAAP which become effective after the Closing Date and may have the effect of converting certain operating leases into capital leases shall not be applicable for purposes of this definition.

 

“Capital Stock”:  any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Equivalents”:  (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing on or within one year from the date of acquisition; (b) certificates of deposit, time deposits, Eurodollar time deposits, bankers’ acceptances and repurchase agreements, or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus (or whose obligations are guaranteed by an affiliated commercial bank which has capital and surplus)

 

5

 

of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by Standard & Poor’s Ratings Services or P-2 by Moody’s Investors Service, Inc., or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally; (d) money market accounts or funds with or issued by Qualified Issuers; and (e) repurchase agreements with a term of not more than one year for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above.

 

“Change of Control”:  the earliest to occur of (a) a majority of directors of LIN TV consisting of directors who are not, as of the date of determination, Continuing Directors, (b) any “Person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) excluding the holders of record and “beneficial owners” (as defined in Rules 13(d) 3 and 13(d) 5 under such Act) of outstanding shares of Class B and Class C common stock of LIN TV on the Closing Date (including Hicks Muse and their Affiliates and Subsidiaries and their respective general or limited partners), becoming beneficial owner, directly or indirectly, of more than 50% of the then outstanding voting stock of LIN TV and (c) a Change of Control as defined in any document pertaining to any Subordinated Indebtedness in an aggregate outstanding principal amount in excess of $100,000,000 or any Senior Unsecured Indebtedness in an aggregate outstanding principal amount in excess of $100,000,000; provided that the conversion by Hicks Muse (or any of its Affiliates or Subsidiaries or any of their respective general or limited partners) of Class B Common Stock of LIN TV into Class A Common Stock, Class C Common Stock or any other voting common stock of LIN TV pursuant to the terms of the Class B Common Stock and any conversion of the Class C Common Stock in connection therewith shall not constitute a Change of Control.

 

“Closing Date”:  the date on which the conditions precedent set forth in subsection 5.1 shall have been satisfied or waived, which date is October 26, 2011.

 

“Code”:  the Internal Revenue Code of 1986, as amended from time to time.

 

“Co-Documentation Agents”:  as defined in the introductory paragraph of this Agreement.

 

“Co-Syndication Agents”:  as defined in the introductory paragraph of this Agreement.

 

“Commitment”:  as to any Lender at any time, the sum of the Term Loan Commitments, the Revolving Credit Commitment and the commitments to any Incremental Revolving Loan Facility of such Lender then in effect.

 

“Commitment Fee Rate”:  (a) for the Revolving Credit Facility, 0.50%  per annum; provided, that on and after the first Adjustment Date occurring after the completion of one full fiscal quarter of the Borrower after the Closing Date, the Commitment Fee Rate will be determined pursuant to the Applicable Pricing Grid and (b) with respect to any Incremental Revolving Loan Amount, the rate per annum agreed to, or the rate per annum determined pursuant to a pricing grid agreed to, by the Borrower and the applicable Incremental Lenders in the applicable Incremental Revolving Loan Activation Notice.

 

“Commonly Controlled Entity”:  an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

 

6

 

“Compliance Certificate”:  a certificate duly executed by a Responsible Officer substantially in the form of Exhibit B.

 

“Consolidated Cash Interest Expense”:  for any period, Consolidated Interest Expense (including, without limitation, that attributable to Capital Lease Obligations but excluding capitalized financing fees), net of cash interest income of the Borrower and its Subsidiaries, for such period minus (a) in each case to the extent included in determining such Consolidated Interest Expense for such period, the sum of (i) non-cash expenses for interest payable in kind and (ii) amortization of debt discount and fees plus (b) the sum of cash payments made by the Borrower or any of its Subsidiaries during such period in respect of the items referred to in clause (a)(i) of this definition to the extent previously subtracted pursuant to clause (a) of this definition (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Interest Rate Protection Agreements to the extent such net costs are allocable to such period in accordance with GAAP).

 

“Consolidated Current Assets”:  at any date, all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at such date.

 

“Consolidated Current Liabilities”:  at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at such date, but excluding (a) the current portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness consisting of Loans to the extent otherwise included therein.

 

“Consolidated EBITDA”:  for any period:

 

(a)          Consolidated Net Income for such period; plus

 

(b)         without duplication, the sum of the following items (to the extent deducted in the computation of such Consolidated Net Income for such period):

 

(i)                                     depreciation expense;

 

(ii)                                  amortization expense (including amortization in respect of Film Obligations and other amortized film expense) and amortization of intangibles (including goodwill, organizational costs and impairments);

 

(iii)                               Consolidated Interest Expense;

 

(iv)                              income and franchise tax expense;

 

(v)                                 any extraordinary and unusual losses (net of income taxes);

 

(vi)                              to the extent identified and reasonably satisfactory to the Administrative Agent, any cost savings to be realized on a run-rate basis in connection with any acquired Broadcasting Assets;

 

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(vii)                           for any pro forma period for an acquisition, any recurring improvements to Consolidated EBITDA as a result of any Broadcasting Assets acquired in such acquisition;

 

(viii)                        other non-cash charges (excluding barter expenses and trade expenses);

 

(ix)                                (A) non-recurring charges for severance payments and similar activities and (B) acquisition-related charges and expenses in accordance with SFAS No. 141(R) (or any successor standard adopted by the Financial Accounting Standards Board, the International Accounting Standards Board or any other standard setter applicable to the Borrower) not exceeding, in the aggregate for both clauses (A) and (B) above, $20,000,000; and

 

less (c) without duplication, the sum of the following items for such period:

 

(i)                                     all cash payments originally scheduled to be made during such period in respect of Film Obligations;

 

(ii)                                  any extraordinary and unusual gains (net of income taxes), to the extent included in the computation of Consolidated Net Income for such period;

 

(iii)                               non-cash gains included in Consolidated Net Income for such period (excluding barter and trade revenues); and

 

(iv)                              cash dividends or other distributions made by the Borrower to LIN TV for its reasonable corporate overhead expenses.

 

Consolidated EBITDA for any period will be adjusted to (A) exclude the Consolidated EBITDA attributable to any material asset or business that was disposed of (either directly or as part of an exchange) by the Borrower or any of its Subsidiaries prior to the date of determination (as if such asset or business had not been owned by the Borrower or any of its Subsidiaries prior to the date of determination) and (B) include the Consolidated EBITDA attributable to any material asset or business that was acquired (either directly or as part of an exchange) by the Borrower or any of its Subsidiaries (including, to the extent identified and reasonably satisfactory to the Administrative Agent, pro forma cost savings in connection therewith) prior to the date of determination (as if such asset or business had been owned by the Borrower or any of its Subsidiaries prior to the date of determination).

 

“Consolidated Interest Coverage Ratio”:  for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Cash Interest Expense for such period.

 

“Consolidated Interest Expense”:  for any period, the amount of interest expense, both expensed and capitalized, of the Borrower and its Subsidiaries for such period on the aggregate principal amount of their Indebtedness determined on a consolidated basis in accordance with GAAP, after giving effect to any interest rate protection agreements with respect to such Indebtedness but excluding non-cash deferred financing costs (other than for purposes of the definition of the term “Consolidated EBITDA”).  Consolidated Interest Expense for any period will be adjusted on a pro forma basis to (A) exclude the Consolidated Interest Expense attributable to any Indebtedness repaid or assumed by a third party in connection with the Sale of any material asset or business that was disposed of (either directly or as part of an exchange) by the Borrower or any of its Subsidiaries prior to the date of determination (as if such Indebtedness 

 

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had not been outstanding prior to the date of determination) and (B) include the Consolidated Interest Expense attributable to any Indebtedness incurred or assumed in connection with the acquisition of any material asset or business that was acquired (either directly or as part of an exchange) by the Borrower or any of its Subsidiaries prior to the date of determination (as if such Indebtedness had been outstanding prior to the date of determination).

 

“Consolidated Leverage Ratio”:  as of the last day of any period of four fiscal quarters of the Borrower, the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such period.

 

“Consolidated Net Income”:  for any period, the consolidated net income (or loss) of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, which would be set forth opposite the caption “Net Income” (or any like caption) on a consolidated statement of operations of the Borrower and its Subsidiaries; provided that there shall be excluded (to the extent otherwise included therein), without duplication, (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of the Borrower and other than the LLC) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions, (c) the undistributed earnings of any Subsidiary of the Borrower (other than the LLC) to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary and (d) any earnings or losses attributable to the interest of the Borrower or any of its Subsidiaries in the LLC, except for any such earnings to the extent of (i) actual distributions of Distributable Cash (as defined in the LLC Agreement) in respect of such interest made to the Borrower or any of its Subsidiaries and (ii) amounts that would have constituted Distributable Cash and would have been required to be distributed to the Borrower and its Subsidiaries in respect of such interest but for the reserve requirement of Section 8.06 of the LLC Agreement.

 

“Consolidated Senior Secured Debt”: at any date, Consolidated Total Debt secured by a Lien on any of the assets of the Borrower or any of its Subsidiaries at such date, less the aggregate principal amount at such date of all Indebtedness of the Borrower and its Subsidiaries that is subordinated in right of payment to the Obligations, including all Subordinated Indebtedness, including, without limitation, any subordinated Indebtedness assumed in connection with a Permitted Acquisition or an Asset Swap Transaction.

 

“Consolidated Senior Secured Leverage Ratio”: as of the last day of any period of four fiscal quarters of the Borrower, the ratio of (a) Consolidated Senior Secured Debt on such day to (b) Consolidated EBITDA for such period.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amount of all Indebtedness for borrowed money of the Borrower and its Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP, net of unrestricted cash and Cash Equivalents reflected on a consolidated balance sheet of the Borrower as of such date not to exceed $35,000,000.

 

“Consolidated Working Capital”:  at any date, the excess of Consolidated Current Assets on such date over Consolidated Current Liabilities on such date.

 

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“Continuing Directors”: (i) any member of the board of directors of LIN TV who was a member of such board of directors on the Closing Date, (ii) any member of the board of directors of LIN TV who was nominated for election or elected to such board of directors with the approval of a majority of the members of such board of directors referred to in clause (i), and (iii) any member of the board of directors nominated for election or elected to such board of directors with the approval of a majority of the then members of such board of directors referred to in clause (i) and (ii).

 

“Contractual Obligation”:  as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking (including, without limitation, any undertaking made to the FCC) to which such Person is a party or by which it or any of its property is bound.

 

“Credit Party”:  the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender.

 

“Default”:  any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, unless cured or waived, has been satisfied.

 

“Defaulting Lender”:  any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower, the Administrative Agent or the Issuing Lender or Swingline Lender in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s receipt of such certification or (d) has (or is controlled by an entity that has) become the subject of a Bankruptcy Event.

 

“Dollars” and “$”:  lawful currency of the United States of America.

 

“Domestic Subsidiary”:  any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States.

 

“ECF Percentage”:  50%; provided, that, with respect to each fiscal year of the Borrower ending on or after December 31, 2012, the ECF Percentage shall be reduced to (a) 25% if the Consolidated Senior Secured Leverage Ratio as of the last day of such fiscal year is greater than or equal to 1.50: 1.00 but less than 2.00: 1.00 and (b) 0% if such Consolidated Senior Secured Leverage Ratio is less than 1.50:  1.00.

 

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“Environmental Laws”:  any and all applicable foreign, Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, legally binding requirements of any Governmental Authority or other Requirements of Law (including common law) regulating, relating to or imposing liability or standards of conduct concerning protection of the environment, as now or may at any time hereafter be in effect.

 

“Environmental Liability”:  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 Materials of Environmental Concern, (c) exposure to any Materials of Environmental Concern, (d) the release or threatened release of any Materials of Environmental Concern 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.

 

“ERISA”:  the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including, without limitation, basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Base Rate”:  with respect to each day during each Interest Period pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period.  In the event that such rate does not appear on such page (or otherwise on such screen), the “Eurodollar Base Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.

 

“Eurodollar Loans”:  Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to each day during each Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):

 

             Eurodollar Base Rate             
 1.00 - Eurocurrency Reserve Requirements

 

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“Eurodollar Tranche”:  the collective reference to Eurodollar Loans under the same Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

 

“Event of Default”:  any of the events specified in Section 8; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

“Excess Cash Flow”:  for any fiscal year of the Borrower, the excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for such fiscal year, (ii) the amount of all non-cash charges (including depreciation and amortization) deducted in arriving at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital for such fiscal year, and (iv) the aggregate net amount of any non-cash losses, to the extent deducted in arriving at such Consolidated Net Income, over (b) the sum, without duplication, of (i) the amount of all non-cash credits included in arriving at such Consolidated Net Income, (ii) the aggregate amount actually paid by the Borrower and its Subsidiaries in cash during such fiscal year on account of Capital Expenditures (excluding the principal amount of Indebtedness incurred in connection with such expenditures), (iii) solely for the purpose of calculating Excess Cash Flow for purposes of the definition of “Available Amount”, the aggregate amount of all prepayments of Revolving Loans and Swingline Loans during such fiscal year to the extent accompanying permanent optional reductions of the Revolving Credit Commitments or the commitments to any Incremental Revolving Loan Facility and all optional prepayments of the Term Loans during such fiscal year, (iv) the aggregate amount of all regularly scheduled principal payments of Funded Debt (including the Term Loans) of the Borrower and its Subsidiaries made during such fiscal year (other than in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commitments thereunder), (v) increases in Consolidated Working Capital for such fiscal year, (vi) the aggregate net amount of any non-cash gains, to the extent included in arriving at such Consolidated Net Income and (vii) the aggregate amount of all payments made pursuant to subsections 7.6(a) and (c) (to the extent not deducted in arriving at such Consolidated Net Income) during such fiscal year.

 

“Excess Cash Flow Application Date”:  as defined in subsection 2.9(c).

 

“Existing Credit Agreement”:  the Credit Agreement, dated as of November 4, 2005, as amended by that certain First Amendment, dated as of December 31, 2005, that certain Second Amendment, dated as of June 24, 2007, that certain Third Amendment, dated as of August 25, 2008, and as amended and restated as of July 31, 2009, among the Borrower, the lenders and other agents from time to time party thereto and the Administrative Agent.

 

“Existing Letter of Credit”:  as defined in subsection 3.9.

 

“Facility”:  each of (a) the Tranche A Term Commitments and the Tranche A Term Loans made thereunder (the “Tranche A Term Loan Facility”), (b) the respective Incremental Term Loan Amounts and the Incremental Term Loans related thereto as provided in any Incremental Term Loan Activation Notice (an “Incremental Term Loan Facility”), (c) the Swingline Loan Commitment and the Swingline Loans made thereunder, (d) the aggregate Revolving Credit Commitments and the Total Revolving Extensions of Credit made thereunder (the “Revolving Credit Facility”) and (e) the respective Incremental Revolving Loan Amounts and the Incremental Revolving Loans related thereto as provided in any Incremental Revolving Loan Activation Notice (an “Incremental Revolving Loan Facility”).

 

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“FATCA”:  Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations issued thereunder or official interpretations thereof.

 

“FCC”:  the Federal Communications Commission or any Governmental Authority substituted therefor.

 

“Federal Funds Effective Rate”:  as defined in the definition of the term “ABR”.

 

“Fee Payment Date”:  (a) the third Business Day following the last day of each March, June, September and December and (b) with respect to the Revolving Credit Facility or any Incremental Revolving Loan Facility, the last day of the Revolving Credit Commitment Period or the commitment period for such Incremental Revolving Loan Facility, as the case may be.

 

“Film Obligations”:  all obligations in respect of the purchase, use, license or acquisition of programs, programming materials, films and similar assets used in connection with the business and operation of the Borrower and its Subsidiaries.

 

“Final Maturity Date”:  at any date of determination, the latest maturity date applicable to any Loan hereunder at such time, including the final maturity date of any Incremental Term Loans and any Replacement Term Loans, in each case, as extended in accordance with this Agreement from time to time.

 

“Final Order”:  with respect to the assignment or transfer of control of the Station Licenses for any Station, an order of the FCC approving such assignment or transfer that is final (i.e., no longer subject to further judicial or administrative review), as to which no requests for judicial or administrative review are pending, and that has not been reversed, stayed, enjoined, set aside, annulled or suspended.

 

“Foreign Subsidiary”:  any Subsidiary of the Borrower that is not a Domestic Subsidiary.

 

“Funded Debt”:  as to any Person, all Indebtedness of such Person that matures more than one year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness whether or not required to be paid within one year from the date of its creation and, in the case of the Borrower, Indebtedness in respect of the Loans.

 

“GAAP”:  generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board and the rules and regulations of the Securities and Exchange Commission, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, which are applicable to the circumstances of the Borrower as of the date of determination. In the event that any “Accounting Change” (as defined below) shall occur, if the Borrower notifies the Administrative Agent that the Borrower wishes to, or the Administrative Agent notifies the Borrower that the Required Lenders wish to, amend any financial covenants, standards or terms in this Agreement 

 

13

 

to eliminate the effect of such Accounting Change, then the Borrower and the Administrative Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the Borrower’s financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders or the Borrower or the Required Lenders, as the case may be, shall have withdrawn the request for amendment, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. The term “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board, the Accounting Principles Board or the American Institute of Certified Public Accountants, the Securities and Exchange Commission (if applicable), successors to any of the foregoing or agencies with similar functions to any of the foregoing, or such other entity the statements of which are in general use by significant segments of the accounting profession.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification 825 (or any other Accounting Standards Codification having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein.

 

“GECC”:  General Electric Capital Corporation, a New York corporation.

 

“Governmental Authority”:  any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement, dated the date hereof, executed and delivered by the Borrower and each Subsidiary Guarantor, as the same may be further amended, supplemented or otherwise modified from time to time.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counter indemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term “Guarantee Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary 

 

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obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith.

 

“Hicks Muse”:  HM Capital Partners LLC (formerly, Hicks, Muse, Tate & Furst Incorporated), any of its Affiliates and Subsidiaries, and any fund that it (or any of its Affiliates or Subsidiaries) sponsors or manages.

 

“Immaterial Subsidiary”:  on any date, any Subsidiary that has had less than 2.5% of consolidated total assets and 2.5% of annual consolidated revenues of the Borrower and its Subsidiaries as reflected on the most recent financial statements delivered pursuant to subsection 6.1 prior to such date, provided that (a) at such time as any such Subsidiary becomes a party to this Agreement or any other Loan Document or executes and delivers a guarantee, security agreement, mortgage or other similar agreement supporting the Obligations, such Subsidiary shall at all times thereafter not be an Immaterial Subsidiary irrespective of the value of its assets or its revenues, (b) the aggregate assets and aggregate annual consolidated revenues of all Immaterial Subsidiaries shall at no time exceed 5% of consolidated total assets or 5% of annual consolidated revenues of the Borrower and its Subsidiaries, respectively and (c) the Borrower will designate in writing to the Administrative Agent from time to time the Subsidiaries which will cease to be treated as “Immaterial Subsidiaries” in order to comply with the foregoing limitations.

 

“Incremental Lender”:  any Lender or, with the consent of the Borrower and the Administrative Agent (such consent not to be unreasonably withheld), any other bank, financial institution or other entity which becomes a signatory to an Incremental Term Loan Activation Notice or to an Incremental Revolving Loan Activation Notice, as the case may be, and each Lender which has acquired pursuant to an assignment made in accordance with subsection 10.6(b), an Incremental Term Loan or an Incremental Revolving Loan or a commitment under an Incremental Revolving Loan Facility, as the case may be.  Any other bank, financial institution or other entity which elects to become an Incremental Lender shall execute a Joinder Agreement with the Borrower and the Administrative Agent, whereupon such bank, financial institution or other entity shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement.

 

“Incremental Revolving Loan Activation Notice”: a notice substantially in the form of Exhibit G-1.

 

“Incremental Revolving Loan Amount”: as to each Incremental Lender in respect of any Incremental Revolving Loan Facility, the obligation of such Incremental Lender on and after the applicable Incremental Revolving Loan Closing Date to make Incremental Revolving Loans hereunder in a principal amount equal to the amount set forth under the heading “Incremental Revolving Loan Amount” opposite such Incremental Lender’s name on the applicable Incremental Revolving Loan Activation Notice.

 

“Incremental Revolving Loan Closing Date”:  as to any Incremental Revolving Loans to be made pursuant to an Incremental Revolving Loan Activation Notice, the date (which shall be a Business Day) specified in such Incremental Revolving Loan Activation Notice as the first date on which such Incremental Revolving Loans will be made available.

 

“Incremental Revolving Loan Facility”:  as defined in the definition of the term “Facility”.

 

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“Incremental Revolving Loan Maturity Date”: as to the Incremental Revolving Loans to be made pursuant to any Incremental Revolving Loan Activation Notice, the maturity date specified in such Incremental Revolving Loan Activation Notice, which date shall not be earlier than the Revolving Credit Termination Date.

 

“Incremental Revolving Loan Percentage”:  as to any Incremental Lender in respect of any Incremental Revolving Loan Facility, the percentage which such Lender’s Incremental Revolving Loan Amount then outstanding constitutes of the aggregate principal amount of the Incremental Revolving Loan Amounts then outstanding in respect of such Incremental Revolving Loan Facility.

 

“Incremental Revolving Loans”:  as defined in subsection 2.4(d).

 

“Incremental Term Loan Activation Notice”:  a notice substantially in the form of Exhibit G-2.

 

“Incremental Term Loan Amount”:  as to each Incremental Lender in respect of any Incremental Term Loan Facility, the obligation of such Incremental Lender on and after the applicable Incremental Term Loan Closing Date to make Incremental Term Loans hereunder in a principal amount equal to the amount set forth under the heading “Incremental Term Loan Amount” opposite such Incremental Lender’s name on the applicable Incremental Term Loan Activation Notice.

 

“Incremental Term Loan Closing Date”:  as to any Incremental Term Loans to be made pursuant to an Incremental Term Loan Activation Notice, the date (which shall be a Business Day) specified in such Incremental Term Loan Activation Notice as the date on which such Incremental Term Loans will be made available.

 

“Incremental Term Loan Facility”:  as defined in the definition of the term “Facility”.

 

“Incremental Term Loan Maturity Date”:  as to any Incremental Term Loans to be made pursuant to an Incremental Term Loan Activation Notice, the maturity date specified in such Incremental Term Loan Activation Notice, which date shall not be earlier than the Tranche A Maturity Date.

 

“Incremental Term Loan Percentage”:  as to any Incremental Lender in respect of any Incremental Term Loan Facility, the percentage which such Lender’s Incremental Term Loan Amount then outstanding in respect of such Incremental Term Loan Facility constitutes of the aggregate principal amount of the Incremental Term Loan Amounts then outstanding in respect of such Incremental Term Loan Facility.

 

“Incremental Term Loans”:  as defined in subsection 2.1(b).

 

“Incur”:  as defined in subsection 7.2; and the term “Incurrence” shall have a correlative meaning.

 

“Indebtedness”:  of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade payables and accrued expenses incurred in the ordinary course of such Person’s business and obligations created through the use of purchase cards and credit cards), (c) all obligations of such Person evidenced by notes, bonds, debentures

 

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or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), provided, however, that the amount of such Indebtedness of any Person described in this clause (d) shall, for the purposes of the Agreement, be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the fair market value of the property or asset encumbered, as determined by such Person in good faith, (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party under a bankers’ acceptance, letter of credit or similar facilities, (g) the obligations of such Person under any Interest Rate Protection Agreement, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above and (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation and on which obligations such Person has recourse only to such property; provided, however, that the amount of such Indebtedness of any Person described in this clause (i) shall, for the purposes of this Agreement, be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the fair market value of the property or asset encumbered, as determined by such Person in good faith.

 

“Initial Rate”:  as defined in the definition of the term “Applicable Margin”.

 

“Insolvency”:  with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Intellectual Property”:  as defined in subsection 4.8.

 

“Interest Payment Date”:  (a) as to any ABR Loan, the last day of each March, June, September and December to occur while such Loan is outstanding, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day which is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Loan, the date of repayment thereof at final stated maturity.

 

“Interest Period”:  as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three, six or (if available to all Lenders under the relevant Facility as determined in good faith by such Lenders) nine or twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three, six or (if available to all Lenders under the relevant Facility as determined in good faith by such Lenders) nine or twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto, provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

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(i)                                     if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii)                                  the Borrower may not select an Interest Period for Loans under a particular Facility that would extend beyond the Revolving Credit Termination Date in the case of any Revolving Credit Loans or beyond the date final payment is due thereon, in the case of any Incremental Revolving Loans or Term Loans, as the case may be; and

 

(iii)                               any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

 

“Interest Rate Protection Agreement”:  any interest rate protection agreement, interest rate futures contract, interest rate option, interest rate cap or other interest rate hedge arrangement, to or under which the Borrower or any of its Subsidiaries is a party or a beneficiary on the Closing Date or becomes a party or a beneficiary thereafter.

 

“Investment”:  as defined in subsection 7.8.

 

“ISP”:  with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

 

“Issuing Lender”:  JPMorgan Chase or any other Lender selected by the Borrower with the consent of the Administrative Agent (such consent not to be unreasonably withheld), and any of their respective affiliates, each in its capacity as issuer of any Letter of Credit (including as issuer of any Existing Letters of Credit); provided that such Lender has agreed to be an Issuing Lender.  Each reference herein to “the Issuing Lender” shall be deemed to be a reference to the relevant Issuing Lender with respect to the relevant Letter of Credit.

 

“Joinder Agreement”:  an agreement duly executed by any bank, financial institution or other entity which elects to become an Incremental Lender, substantially in the form of Exhibit K.

 

“Joint Venture Loan”:  the non-amortizing senior secured note due 2023 in the amount of $815,500,000 issued by LLC and payable to GECC.

 

“Joint Venture Loan Guarantee”:  the guarantee executed by LIN TV in connection with the Joint Venture Loan.

 

“JPMorgan Chase”:  JPMorgan Chase Bank, N.A.

 

“L/C Commitment”:  $15,000,000.

 

“L/C Fee Payment Date”:  the third Business Day following the last day of each March, June, September and December and the last day of the Revolving Credit Commitment Period.

 

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“L/C Exposure”: at any time, the total L/C Obligations.  The L/C Exposure of any Revolving Credit Lender at any time shall be its Revolving Credit Percentage of the total L/C Exposure at such time.

 

“L/C Obligations”:  at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to subsection 3.5.

 

“L/C Participants”:  with respect to any Letter of Credit, the collective reference to all the Revolving Credit Lenders other than the Issuing Lender that issued such Letter of Credit.

 

“Lenders”:  as defined in the introductory paragraph of this Agreement.  “Lender” shall in any event include any Incremental Lender, and, as the context may require, the Issuing Lender and the Swingline Lender.

 

“Letters of Credit”:  as defined in subsection 3.1(a), provided that to the extent the Borrower shall have deposited amounts in a cash collateral account for the benefit of the Lenders, the Letters of Credit relating thereto shall be deemed not to be Letters of Credit for purposes of this Agreement.

 

“License Subsidiary”:  (a) with respect to each Station owned on the Closing Date, each Subsidiary listed opposite such Station’s name on Schedule 1.1D and (b) with respect to any Station acquired after the Closing Date, the Subsidiary or Subsidiaries of the Borrower that shall hold the Station Licenses under the authority of which such Station is operated, provided that, in the case of Subsidiaries referred to in clause (b) above, each such Subsidiary shall be a single purpose entity the sole purpose of which shall be to hold Station Licenses and to perform related functions with respect thereto, unless otherwise agreed by the Administrative Agent (such agreement not to be unreasonably withheld).

 

“Lien”:  any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing) but not including a lien for taxes that are not delinquent.

 

“LIN TV”:  LIN TV Corp., a Delaware corporation and the parent of the Borrower.

 

“LIN TV Common Stock”:  the Class A Common Stock of LIN TV, par value $0.01 per share.

 

“LLC”:  Station Venture Holdings, LLC, a Delaware limited liability company.

 

“LLC Agreement”:  the Station Venture Holdings, LLC Amended and Restated Limited Liability Company Agreement dated as of January 15, 1998, between Outlet Broadcasting, Inc., a Rhode Island corporation and LIN Television of Texas, LP, a Delaware limited partnership.

 

“Loan”:  any loan made by any Lender pursuant to this Agreement.

 

“Loan Documents”:  this Agreement, the Security Documents, and the Notes, if any.

 

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“Loan Parties”:  the Borrower and each Subsidiary of the Borrower which is a party to a Loan Document.

 

“Majority Facility Lenders”:  with respect to any Facility, Lenders which collectively are the holders of more than 50% of the aggregate unpaid principal amount of the Loans and other Revolving Extensions of Credit thereunder (or, prior to the termination of the commitments to such Facility, Lenders which are collectively the holders of more than 50% of the aggregate commitments thereto).

 

“Material Adverse Effect”:  a material adverse effect on (a) the business, operations, properties or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, or (b) the validity or enforceability of this Agreement and the other Loan Documents or the rights or remedies of the Administrative Agent, the Swingline Lender, the Issuing Lender or the other Lenders hereunder and thereunder.

 

“Materials of Environmental Concern”:  any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

 

“Mortgaged Properties”:  the real properties listed in Part 2 of Schedule 1.1B under the caption “Mortgaged Properties”.

 

“Mortgages”:  each of the mortgages and deeds of trust made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for the benefit of the Lenders, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Multiemployer Plan”:  a Plan which is a multiemployer plan as defined in Section 4001 (a) (3) of ERISA.

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) of such Asset Sale or Recovery Event, net of attorneys’ fees, notarial fees, accountants’ fees, investment banking fees, appraisal fees, survey costs, title insurance premiums, amounts to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document) and other customary fees and expenses actually incurred in connection therewith, net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and net of purchase price adjustments reasonably expected to be payable in connection therewith and (b) in connection with any issuance or sale of equity securities or debt securities or instruments or the Incurrence of loans, the cash proceeds received from such issuance or Incurrence, net of attorneys’ fees, notarial fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually Incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof.

 

“Net Consolidated Revenue”: for any period, all amounts which would, in conformity with GAAP, be set opposite the caption “Net Revenues” (or any like caption) on a consolidated statement of operations of the Borrower and its Subsidiaries for such period.

 

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“Non-Consenting Lender”:  as defined in subsection 2.20.

 

“Non-Excluded Taxes”:  as defined in subsection 2.17(a).

 

“Non-Station Assets”:  all of the assets used and useful for the operation of the Borrower’s and its Subsidiaries’ broadcasting, media (including digital media) and entertainment businesses, other than the Stations.

 

“Non-U.S. Lender”:  as defined in subsection 2.17(b).

 

“Note”:  as defined in subsection 10.6(e).

 

“Obligations”:  the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement Obligations and all other obligations and liabilities of the Borrower to the Administrative Agent, the Swingline Lender, the Issuing Lender or any other Lender (or, in the case of Interest Rate Protection Agreements or Specified Cash Management Agreements, any counterparty thereto who was a Lender (or any affiliate of any Lender) at the time such Interest Rate Protection Agreement or such Specified Cash Management Agreement was entered into), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any Notes, any other Loan Document, the Letters of Credit, any Interest Rate Protection Agreement, or any Specified Cash Management Agreement entered into with counterparty who was a Lender (or any affiliate of any Lender) at the time such Interest Rate Protection Agreement or such Specified Cash Management Agreement was entered into or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to the Administrative Agent, to the Swingline Lender, to the Issuing Lender or to any other Lender that are required to be paid by the Borrower pursuant hereto).

 

“Parent Guarantee”: the guarantee, dated as of the date hereof, executed and delivered by LIN TV in favor of JP Morgan Chase as Administrative Agent under this Agreement, as the same may be further amended, supplemented or otherwise modified from time to time

 

“Participant”:  as defined in subsection 10.6(c).

 

“Participant Register”:  as defined in subsection 10.6(c).

 

“PBGC”:  the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted Acquisition”:  the acquisition by the Borrower or any of its Subsidiaries of one or more Broadcast Stations or Broadcast Enterprises, or at least a majority of the capital stock of, or other equity interests in, any other Person whose primary business is the ownership and operation of one or more Broadcast Stations or Broadcast Enterprises, in the United States; provided that (a) no Default or Event of Default will have occurred and be continuing or will result therefrom (including, without limitation, pursuant to subsection 7.1), and (b) the Borrower shall take such actions as may be required or reasonably requested to ensure that the

 

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Administrative Agent, for the ratable benefit of the Lenders, has a perfected first priority security interest, to the extent contemplated by the Guarantee and Collateral Agreement, in any assets acquired in such acquisition and required to become collateral pursuant to subsection 6.9 or any other Loan Document, subject to Liens permitted by subsection 7.3, and provided  further that for any acquisition involving consideration in excess of $50,000,000, (i) the Borrower provides the Administrative Agent with appropriate supporting documentation if reasonably requested by the Administrative Agent, including, without limitation, a certificate of a Senior Responsible Officer substantially in the form of Exhibit M, copies of any acquisition documents in connection with such acquisition and copies of opinions of counsel, including FCC counsel, delivered in connection therewith and copies of an FCC consent on Form 732 (or any comparable form issued by the FCC) relating to the transfer of control or assignment of the Station Licenses of any acquired Broadcast Station to the Borrower or its Subsidiary and (ii) on a pro forma basis (including any recurring improvements related to the acquired asset or the assets of the Person acquired) for the most recently completed four-fiscal quarter period for which financial statements are available on the date of such acquisition, no Default or Event of Default pursuant to subsection 7.1 will have occurred and be continuing, provided that for purposes of calculating Consolidated EBITDA pursuant to this clause (ii), the Consolidated EBITDA of such Broadcast Stations or Broadcast Enterprises being acquired for such four-fiscal quarter period shall be equal to the Consolidated EBITDA of such Broadcast Stations or Broadcast Enterprises for the 12-month period immediately preceding such acquisition, and the Borrower shall provide the Administrative Agent with appropriate supporting documentation if reasonably requested by the Administrative Agent.

 

“Person”:  an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Plan”:  at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledged Stock”:  as defined in the Guarantee and Collateral Agreement.

 

“Prime Rate”:  as defined in the definition of the term “ABR”.

 

“Projections”:  as defined in subsection 6.2(b).

 

“Property”:  any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

 

“Qualified Issuer”:  any Lender (or affiliate of a Lender) or any financial institution (a) which has, or whose obligations are guaranteed by an affiliated financial institution which has, capital and surplus in excess of $500,000,000 and (b) the outstanding short-term debt securities of which are rated, or whose parent’s outstanding short-term debt securities are rated, at least A-2 by Standard & Poor’s Ratings Services or at least P-2 by Moody’s Investors Service, Inc., or carry an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of investments.

 

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“Recovery Event”:  any settlement of or payment in respect of any property insurance or casualty insurance claim or any condemnation proceeding or deed in lieu thereof relating to any Property of LIN TV, the Borrower or any of its Subsidiaries, excluding any such settlement or payment which, together with any related settlement or payment, yields Net Cash Proceeds to LIN TV, the Borrower and its Subsidiaries of $5,000,000 or less.

 

“Reference Time”: as defined in the definition of “Available Amount”.

 

“Refunded Swingline Loans”:  as defined in subsection 2.4(c)(ii).

 

“Register”:  as defined in subsection 10.6(b).

 

“Reimbursement Obligations”:  with respect to any Letter of Credit, the obligation of the Borrower to reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn under the Letters of Credit.

 

“Reinvestment Deferred Amount”:  with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by LIN TV, the Borrower or any of its Subsidiaries in connection therewith which are not applied to the prepayment of Term Loans pursuant to subsection 2.9(d) as a result of the delivery of a Reinvestment Notice.

 

“Reinvestment Event”:  any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice.

 

“Reinvestment Notice”:  a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing and that LIN TV or the Borrower (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire assets useful in its business (including pursuant to a Permitted Acquisition or an Asset Swap Transaction).

 

“Reinvestment Prepayment Amount”:  with respect to any Reinvestment Event, the excess, if any, of (a) the Reinvestment Deferred Amount relating thereto over (b) the sum of (i) any amount expended prior to the relevant Reinvestment Prepayment Date to acquire assets useful in the business of LIN TV, the Borrower or any of its Subsidiaries and (ii) $2,000,000.

 

“Reinvestment Prepayment Date”:  with respect to any Reinvestment Event, the earlier of (a) the date occurring 365 days after such Reinvestment Event and (b) the date on which LIN TV, the Borrower or any of its Subsidiaries shall have determined not to acquire assets useful in their businesses with all or any portion of the relevant Reinvestment Deferred Amount, provided that if the Reinvestment Notice with respect to such Reinvestment Event relates to the acquisition of a new Station by the Borrower or any of its Subsidiaries (whether as a result of a Permitted Acquisition, an Asset Swap Transaction or otherwise) and the Borrower or such Subsidiary has filed within 365 days of the Reinvestment Event an application with the FCC for the approval of the transfer of control or assignment of the Station License of such acquired Station, the period specified in paragraph (a) shall be extended to a period equal to five Business Days  after the time required for the FCC to issue a Final Order relating to the transfer of control of such Station License.

 

“Reorganization”:  with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

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“Replaced Revolving Facility”:  as defined in subsection 10.1.

 

“Replaced Term Loans”:  as defined in subsection 10.1.

 

“Replacement Revolving Facility”:  as defined in subsection 10.1.

 

“Replacement Term Loans”:  as defined in subsection 10.1.

 

“Reportable Event”:  any of the events set forth in Section 4043(b) of ERISA, other than those events as to which the thirty day notice period is waived under the regulations issued pursuant to Section 4043(b) of ERISA.

 

“Required Lenders”:  Lenders which collectively are the holders of more than 50% of (a) prior to the Closing Date, the aggregate Commitments held by Lenders and (b) after the Closing Date, the sum of (i) the Term Loans, (ii) the aggregate Revolving Credit Commitments (determined without duplication for commitments of the Issuing Lender and the Swingline Lender to issue Letters of Credit or make Swingline Loans) held by Lenders or, if the Revolving Credit Commitments have been terminated, the Total Revolving Extensions of Credit held by Lenders and (iii) the aggregate Incremental Revolving Loan Amounts under any Incremental Revolving Loan Facilities or, if the commitments to any such Incremental Revolving Loan Facility have been terminated, the aggregate outstanding principal amount of Incremental Revolving Loans thereunder.

 

“Requirement of Law”:  as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation (including, without limitation, Environmental Laws or rules, regulations or orders, whether addressed to the Borrower or any of its Subsidiaries, of the FCC) or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, the president, any vice president or senior or executive vice president, the treasurer or any assistant treasurer, the secretary or assistant secretary, the chief financial officer (or officer having comparable duties) and the controller of the Borrower in each case acting solely in such capacity and without personal liability.

 

“Restricted Payment”:  as defined in subsection 7.6.

 

“Revolving Credit Commitment”:  as to any Lender, the obligation of such Lender, if any, to make Revolving Credit Loans, and to participate in Swingline Loans and Letters of Credit, in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Credit Commitment” opposite such Lender’s name on Schedule 1.1A, as the same may be reduced from time to time pursuant to the terms hereof.  The aggregate amount of the Revolving Credit Commitments as of the Closing Date is $75,000,000.  In no event shall the Revolving Credit Commitments include Incremental Revolving Loan Amounts not incorporated in the Revolving Credit Commitments as contemplated by the fourth to last sentence of subsection 2.4(d) (in the case of an incorporation pursuant to said fourth to last sentence such Incremental Revolving Loan Amounts shall not be treated as Incremental Revolving Loan Amounts, and shall be treated as Revolving Credit Commitments, from and after the Incremental Revolving Loan Closing Date with respect thereto).

 

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“Revolving Credit Commitment Period”:  the period from and including the Closing Date to the Revolving Credit Termination Date.

 

“Revolving Credit Facility”:  as defined in the definition of the term “Facility”.

 

“Revolving Credit Lender”:  each Lender which has a Revolving Credit Commitment or which has, pursuant to an assignment made in accordance with subsection 10.6(b), Revolving Credit Loans or participations in outstanding Letters of Credit or Swingline Loans.

 

“Revolving Credit Loans”:  as defined in subsection 2.4(a).

 

“Revolving Credit Percentage”:  as to any Revolving Credit Lender at any time, the percentage which such Lender’s Revolving Credit Commitment then constitutes of the aggregate Revolving Credit Commitments (or, at any time after the Revolving Credit Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Credit Loans then outstanding constitutes of the aggregate principal amount of the Revolving Credit Loans then outstanding).

 

“Revolving Credit Termination Date”:  the earliest of (a) October 26, 2016 or, if such date is not a Business Day, the Business Day next preceding such date, (b) the date upon which the Revolving Credit Commitments shall be earlier terminated pursuant hereto and (c) November 13, 2012 or, if such date is not a Business Day, the Business Day next preceding such date, if the Borrower has not (i) refinanced, repurchased, redeemed, discharged or defeased (in each case, in full) the 2013 Notes on or prior to November 13, 2012 or (ii) entered into arrangements on or prior to November 13, 2012 reasonably satisfactory to the Administrative Agent pursuant to which the Borrower will refinance, repurchase, redeem, discharge or defease (in each case, in full) the 2013 Notes on or prior to December 31, 2012 (it being understood that in the event such refinancing, repurchase, redemption, discharge or defeasance pursuant to such arrangements or otherwise shall not occur by December 31, 2012, December 31, 2012 shall be the Revolving Credit Termination Date or, if such date is not a Business Day, the Business Day next preceding such date).

 

“Revolving Extensions of Credit”:  as to any Revolving Credit Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Credit Loans made by such Lender then outstanding, (b) such Lender’s Revolving Credit Percentage of the L/C Obligations then outstanding and (c) such Lender’s Swingline Exposure at such time.  In no event shall the Revolving Extensions of Credit include Incremental Revolving Loans not incorporated in the Revolving Extensions of Credit as contemplated by the fourth to last sentence of subsection 2.4(d) (in the case of an incorporation pursuant to said fourth to last sentence, such Incremental Revolving Loans shall not be treated as Incremental Revolving Loans and shall be treated as Revolving Extensions of Credit, from and after the Incremental Revolving Loan Closing Date with respect thereto).

 

“Revolving Loans”:  the collective reference to the Revolving Credit Loans and the Incremental Revolving Loans made by the Lenders to the Borrower.

 

“Sale”:  as defined in subsection 7.5.

 

“Security Documents”:  the collective reference to the Guarantee and Collateral Agreement, the Mortgages, the Parent Guarantee, the Stock Pledge Agreement and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any

 

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Property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.

 

“Senior Responsible Officer”: the chief executive officer, the president, any senior or executive vice-president, the treasurer, the chief financial officer and the general counsel of the Borrower in each case acting solely in such capacity and without personal liability.

 

“Senior Unsecured Indebtedness”:  unsecured Indebtedness of the Borrower including the 2018 Notes, provided that, to the extent incurred after the Closing Date, such Indebtedness (other than any additional senior unsecured notes of the Borrower issued pursuant to, and governed by, the indenture governing the 2018 Notes) has no maturity, amortization, mandatory redemption or purchase option (other than with asset sale proceeds, subject to the provisions of this Agreement, or following a change of control) or sinking fund payment prior to one year after the Final Maturity Date (determined at the time of such incurrence).

 

“Single Employer Plan”:  any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

 

“Specified Cash Management Agreement”:  any agreement providing for treasury, depositary, purchasing card or cash management services, including in connection with any automated clearing house transfers of funds or any similar transactions between the Borrower or any Subsidiary Guarantor and any Lender or affiliate thereof, which has been designated by such Lender and the Borrower, by notice to the Administrative Agent not later than 90 days after the execution and delivery by the Borrower or such Subsidiary Guarantor, as a “Specified Cash Management Agreement”.

 

“Station Licenses”:  (a) with respect to the Borrower or any of its Subsidiaries, all authorizations, licenses or permits issued by the FCC and granted or assigned to the Borrower or any of its Subsidiaries, or under which the Borrower or any of its Subsidiaries has the right to operate any Station, together with any extensions or renewals thereof and (b) with respect to any other Person, all authorizations, licenses or permits issued by the FCC and granted or assigned to such Person, or under which such Person has the right to operate any Broadcast Station, together with any extensions or renewals thereof.

 

“Stations”:  collectively, the Broadcast Stations owned from time to time by the Borrower and its Subsidiaries.  Schedule 1.1D sets forth a complete list of Stations as of the Closing Date.

 

“Stock Pledge Agreement”: the stock pledge agreement, in substantially the form of Exhibit L (Form of Stock Pledge Agreement) attached hereto, executed and delivered by LIN TV.

 

“Subordinated Indebtedness”: Indebtedness of the Borrower, including the 2013 Notes, that is subordinated in right of payment to the Obligations, provided that, to the extent incurred after the Closing Date, such Indebtedness has (a) no maturity, amortization, mandatory redemption or purchase option (other than with asset sale proceeds, subject to the provisions of this Agreement, or following a change of control) or sinking fund payment prior to the date that is one year after the Final Maturity Date (determined at the time of such incurrence), (b) no financial maintenance covenants and (c) customary subordination provisions as shall be reasonably satisfactory to the Administrative Agent.

 

“Subsidiary”:  as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power

 

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(other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise qualified, (a) all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower and (b) unless re-designated as a Subsidiary, the Unrestricted Subsidiaries shall not be treated as Subsidiaries (and, to the extent applicable, a Loan Party) other than for purposes of the provisions of subsection 6.1.  Notwithstanding the foregoing, none of (i) WBDT Management, LLC, (ii) WNAC Management, LLC and (iii) WBDT Television, LLC shall be considered to be a Subsidiary of LIN TV, the Borrower or any Subsidiary for purposes of any provision of any Loan Document (other than the provisions of subsection 6.1 of this Agreement).

 

“Subsidiary Guarantor”:  each Domestic Subsidiary of the Borrower other than Immaterial Subsidiaries.

 

“Swingline Exposure”:  at any time, the aggregate principal amount of all outstanding Swingline Loans at such time. The Swingline Exposure of any Revolving Credit Lender at any time shall mean its Revolving Credit Percentage of the aggregate Swingline Exposure at such time.

 

“Swingline Lender”:  as defined in the introductory paragraph of this Agreement.

 

“Swingline Loan Commitment”:  the obligation of the Swingline Lender to make Swingline Loans to the Borrower hereunder. The original amount of the Swingline Loan Commitment is $10,000,000.

 

“Swingline Loan Participation Certificate”:  a certificate in substantially the form of Exhibit H.

 

“Swingline Loans”:  as defined in subsection 2.4(c)(i).

 

“Term Loan Commitments”:  the collective reference to the Tranche A Term Commitment and any Incremental Term Loan Amounts in respect of Incremental Term Loan Facilities not yet drawn.

 

“Term Loan Facilities”:  the collective reference to the Tranche A Term Loan Facility and any Incremental Term Loan Facilities.

 

“Term Loan Lenders”:  the collective reference to the Tranche A Term Lenders and the Incremental Term Lenders and any Lender which has, pursuant to an assignment made in accordance with subsection 10.6(b), a Term Loan.

 

“Term Loans”:  the collective reference to the Tranche A Term Loans and the Incremental Term Loans made by the Lenders to the Borrower.

 

“Test Period”:  any period of four consecutive fiscal quarters of the Borrower most recently ended.

 

“Total Revolving Extensions of Credit”:  at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Credit Lenders at such time.

 

27

 

“Tranche A Maturity Date”:  the earliest of (a) October 26, 2017 or, if such date is not a Business Day, the Business Day next preceding such date, (b) the date upon which the Loans shall become due and payable pursuant to Section 8 and (c) November 13, 2012 or, if such date is not a Business Day, the Business Day next preceding such date, if the Borrower has not (i) refinanced, repurchased, redeemed, discharged or defeased (in each case, in full) the 2013 Notes on or prior to November 13, 2012 or (ii) entered into arrangements on or prior to November 13, 2012 reasonably satisfactory to the Administrative Agent pursuant to which the Borrower will refinance, repurchase, redeem, discharge or defease (in each case, in full) the 2013 Notes on or prior to December 31, 2012 (it being understood that in the event such refinancing, repurchase, redemption, discharge or defeasance pursuant to such arrangements or otherwise shall not occur by December 31, 2012, December 31, 2012 shall be the Tranche A Maturity Date or, if such date is not a Business Day, the Business Day next preceding such date).

 

“Tranche A Term Commitment”:  as to any Lender, the obligation of such Lender, if any, to make a Tranche A Term Loan to the Borrower in a principal amount not to exceed the amount set forth under the heading “Tranche A Term Commitment” opposite such Lender’s name on Schedule 1.1A.  The aggregate amount of the Tranche A Term Commitments as of the Closing Date is $125,000,000.

 

“Tranche A Term Lender”:  each Lender that has a Tranche A Term Commitment or that holds a Tranche A Term Loan.

 

“Tranche A Term Loan”:  as defined in subsection 2.1(a).

 

“Tranche A Term Percentage”:  as to any Tranche A Term Lender at any time, the percentage which such Lender’s Tranche A Term Commitment then constitutes of the aggregate Tranche A Term Commitments (or, at any time after the Closing Date, the percentage which the aggregate principal amount of such Lender’s Tranche A Term Loans then outstanding constitutes of the aggregate principal amount of the Tranche A Term Loans then outstanding).

 

“Transferee”:  as defined in subsection 10.6(f).

 

“2013 Notes”:  the 61⁄2% Senior Subordinated Notes due 2013, under the Indenture, dated as of May 12, 2003 among the Borrower, the Guarantors named therein and the Bank of New York, as Trustee, and the 6 1⁄2% Senior Subordinated Notes due 2013 - Class B, under the Indenture, dated as of September 29, 2005 among the Borrower, the Guarantors named therein and The Bank of New York Trust Company, N.A., as Trustee.

 

“2018 Notes”:  the 83/8% Senior Notes due 2018, under the Indenture, dated as of April 12, 2010 among the Borrower, the Guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as Trustee.

 

“Type”:  as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.

 

“UCC”: the Uniform Commercial Code as in effect in the State of New York or any other applicable jurisdiction.

 

“Uniform Customs”:  the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, as the same may be revised from time to time.

 

28

 

“Unrestricted Subsidiary”: any Subsidiary of the Borrower that is formed or acquired after the Closing Date and that at the time such Subsidiary is formed or acquired (or promptly thereafter) the Borrower designates such Subsidiary as an Unrestricted Subsidiary in a written notice to the Administrative Agent, provided, that (i) such designation shall be deemed an Investment under subsection 7.8(k) in an amount equal to the sum of the Borrower’s direct and indirect equity ownership percentage of the net worth of such Unrestricted Subsidiary immediately prior to or simultaneously with such designation and (ii) no Default or Event of Default would result from such designation, provided, however, that at the time of any written designation by the Borrower to the Administrative Agent that any Unrestricted Subsidiary shall no longer constitute an Unrestricted Subsidiary, such Unrestricted Subsidiary shall cease to be an Unrestricted Subsidiary and shall be treated as a Subsidiary to the extent no Default or Event of Default would result from such designation.  An Unrestricted Subsidiary which has been designated as a Subsidiary may not be subsequently re-designated as an Unrestricted Subsidiary.

 

“WBDT Loan”:  the term loan in the amount of $920,000 provided to WBDT Television LLC by JPMorgan Chase on May 20, 2011, as the same may be amended or extended from time to time, and, to the extent designated by the Borrower in a notice to the Administrative Agent as a “Successor WBDT Loan”, any direct or indirect refinancing, refunding, renewal, extension or replacement thereof.

 

“WBDT Loan Guarantee”:  any guarantee executed by LIN TV or the Borrower in connection with the WBDT Loan.

 

“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

 

“Wholly Owned Subsidiary Guarantor”:  any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

 

1.2                                 Other Definitional Provisions.  (a)  Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b)                                 As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms partly defined in subsection 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

 

(c)                                  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.  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”.  Except as otherwise provided in this Agreement, references to agreements and contracts shall be deemed to refer to such agreements or contracts as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof and, if applicable, hereof, and references to any law, treaty, rule or regulation of any Governmental Authority shall be deemed to refer to such law, treaty, rule or regulation as amended from time to time.

 

29

 

(d)                                 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

SECTION 2.   AMOUNT AND TERMS OF COMMITMENTS

 

2.1                                 Term Commitments; Incremental Term Loans.  (a)  Subject to the terms and conditions hereof, each Tranche A Term Lender severally agrees to make a term loan (a “Tranche A Term Loan”) to the Borrower on the Closing Date in an amount not to exceed the amount of the Tranche A Term Commitment of such Lender.

 

(b)                                 The Borrower and one or more Lenders or other Persons who may become Incremental Lenders may from time to time agree that such Persons shall become Incremental Lenders under an Incremental Term Loan Facility by executing and delivering to the Administrative Agent an Incremental Term Loan Activation Notice substantially in the form of Exhibit G-2 specifying (i) the respective Incremental Term Loan Amounts of such Incremental Lenders, (ii) the applicable Incremental Term Loan Closing Date, (iii) the applicable Incremental Term Loan Maturity Date, (iv) the amortization schedule for the applicable Incremental Term Loans, which shall comply with subsection 2.3(b) and (v) the Applicable Margin for the Incremental Term Loans to be made pursuant to such Incremental Term Loan Activation Notice, and which shall be otherwise duly completed.  Each Incremental Lender that is a signatory to an Incremental Term Loan Activation Notice severally agrees, on the terms and conditions of this Agreement, to make a term loan (an “Incremental Term Loan”) to the Borrower, as specified in such Incremental Term Loan Activation Notice, on the Incremental Term Loan Closing Date specified in such Incremental Term Loan Activation Notice in a principal amount equal to the Incremental Term Loan Amount of such Incremental Lender specified in such Incremental Term Loan Activation Notice and, in the case of any such Incremental Lender that is not already a Lender, to execute and deliver a Joinder Agreement in connection with making such Incremental Term Loan. Incremental Term Loans that are repaid or prepaid may not be reborrowed. Nothing in this subsection 2.1(b) shall be construed to obligate any Lender to execute an Incremental Term Loan Activation Notice. Notwithstanding the foregoing, the aggregate amount of Incremental Term Loans outstanding under all Incremental Term Loan Facilities, together with the aggregate amount of Incremental Revolving Amounts available under all Incremental Revolving Loan Facilities (including any incorporated into the Revolving Credit Commitments pursuant to the fourth to last sentence of subsection 2.4(d)), shall at no time exceed the sum of (x) $100,000,000, (y) any additional amount to be used solely for the purposes of funding Permitted Acquisitions or Asset Swap Transactions such that, if the Incremental Facilities aggregate in excess of $100,000,000, the Borrower shall be in compliance with the then required Consolidated Senior Secured Leverage Ratio on a pro forma basis and (z) any additional amount to be used solely for the purposes of funding the refinancing, repurchase, redemption, discharge or defeasance of the 2013 Notes outstanding after the use of proceeds pursuant to clause (b) of subsection 4.14.  Except to the extent waived in the applicable Incremental Term Loan Activation Notice, Incremental Term Loans under an Incremental Term Facility shall (i) share ratably with the Tranche A Term Loans in any optional or mandatory prepayments (other than in connection with a replacement pursuant to the last paragraph of subsection 10.1) and (ii) be secured ratably with the Tranche A Term Loans and each other.  Any terms applicable to any Incremental Term Facility that are not substantially consistent with those applicable to the Tranche A Term Loans (other than as to pricing and amortization or termination) shall be reasonably satisfactory to the Administrative Agent.

 

(c)                                  Notwithstanding the foregoing, no Incremental Term Loan Amount shall become effective under this subsection 2.1 unless (i) on the date on which such Incremental Term Loan is made or of such effectiveness, the conditions set forth in subsection 5.2 shall be satisfied by the Borrower, and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Responsible Officer of the Borrower, (ii) the Administrative Agent shall have received legal opinions,

 

30

 

board resolutions and other closing certificates and documentation consistent with those delivered on the Closing Date under subsections 5.1(b), 5.1(e), 5.1(g), 5.1(l) and 5.1(m), and such additional documents and filings (including amendments to the Mortgages and other Security Documents and title endorsement bring downs) as the Administrative Agent may reasonably require to assure that the Incremental Term Loans are secured by the Collateral and guaranteed by the Loan Parties ratably with the existing Loans and (iii) the Borrower and its Subsidiaries shall be in compliance with the financial covenants set forth in subsection 7.1 on a pro forma basis after giving effect to such Incremental Term Loans and the application of the proceeds thereof as if made and applied on such date.

 

2.2                                 Procedure for Term Loan Borrowings.  The Borrower shall give the Administrative Agent irrevocable written (or telephonic promptly confirmed in writing) notice (which notice must be received by the Administrative Agent prior to (i) 12:00 Noon, New York City time, three Business Days prior to the Closing Date or the relevant Incremental Term Loan Closing Date, as the case may be, in the case of Eurodollar Loans, or (ii) 9:00 a.m., New York City time, on the Closing Date or the relevant Incremental Term Loan Closing Date, as the case may be, in the case of ABR Loans specifying (i) the amount and Type of Term Loans to be borrowed and (ii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor.  Such notice shall be given by the Borrower in the form of Exhibit J.  Not later than 12:00 Noon, New York City time, on the Closing Date or the relevant Incremental Term Loan Closing Date, as the case may be, each applicable Term Loan Lender shall make available to the Administrative Agent at its office specified in subsection 10.2 an amount in immediately available funds equal to the Term Loans to be made by such Lender on such date.  The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Loan Lenders in like funds as received by the Administrative Agent.  The provisions of the paragraph shall be subject to any applicable limitations or requirements in the relevant Incremental Term Loan Activation Notice.

 

2.3                                 Repayment of Term Loans.  (a)  The Tranche A Term Loan of each Tranche A Lender shall mature in consecutive quarterly installments payable by the Borrower on the last day of March, June, September and December of each year, commencing on December 31, 2012, in the Tranche A Term Percentage of such Tranche A Term Lender of the principal amount set forth opposite each of such installments specified below:

 

	
Installment
    	
 
    	
Amount
    	
 
    
	
March 31, 2013
    	
 
    	
$
    	
1,562,500.00
    	
 
    
	
June 30, 2013
    	
 
    	
$
    	
1,562,500.00
    	
 
    
	
September 30, 2013
    	
 
    	
$
    	
1,562,500.00
    	
 
    
	
December 31, 2013
    	
 
    	
$
    	
1,562,500.00
    	
 
    
	
March 31, 2014
    	
 
    	
$
    	
3,125,000.00
    	
 
    
	
June 30, 2014
    	
 
    	
$
    	
3,125,000.00
    	
 
    
	
September 30, 2014
    	
 
    	
$
    	
3,125,000.00
    	
 
    
	
December 31, 2014
    	
 
    	
$
    	
3,125,000.00
    	
 
    
	
March 31, 2015
    	
 
    	
$
    	
4,687,500.00
    	
 
    
	
June 30, 2015
    	
 
    	
$
    	
4,687,500.00
    	
 
    
	
September 30, 2015
    	
 
    	
$
    	
4,687,500.00
    	
 
    
	
December 31, 2015
    	
 
    	
$
    	
4,687,500.00
    	
 
    
	
March 31, 2016
    	
 
    	
$
    	
6,250,000.00
    	
 
    
	
June 30, 2016
    	
 
    	
$
    	
6,250,000.00
    	
 
    
	
September 30, 2016
    	
 
    	
$
    	
6,250,000.00
    	
 
    
	
December 31, 2016
    	
 
    	
$
    	
6,250,000.00
    	
 
    
	
March 31, 2017
    	
 
    	
$
    	
15,625,000.00
    	
 
    

 

31

 

	
Installment
    	
 
    	
Amount
    	
 
    
	
June 30, 2017
    	
 
    	
$
    	
15,625,000.00
    	
 
    
	
September 30, 2017
    	
 
    	
$
    	
15,625,000.00
    	
 
    
	
Tranche   A
   Maturity Date
    	
 
    	
Aggregate   principal amount of Tranche A Term Loans outstanding
    	
 
    

 

(b)                                 The Incremental Term Loans of each Incremental Lender shall mature in such installments as are specified in the Incremental Term Loan Activation Notice pursuant to which such Incremental Term Loans were made; provided that as of the applicable Incremental Term Loan Closing Date, such Incremental Term Loans shall have an average weighted life not less than that of the then outstanding Tranche A Term Loans.

 

2.4                                 Revolving Credit Commitments; Incremental Revolving Loans.  (a)  Subject to the terms and conditions hereof, each Revolving Credit Lender severally agrees to make revolving credit loans (“Revolving Credit Loans”) to the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding, when added to such Lender’s Swingline Exposure at such time and Revolving Credit Percentage of the L/C Obligations then outstanding, does not exceed the amount of such Lender’s Revolving Credit Commitment. During the Revolving Credit Commitment Period the Borrower may use the Revolving Credit Commitments by borrowing, prepaying and reborrowing the Revolving Credit Loans in whole or in part, all in accordance with the terms and conditions hereof.  The Revolving Credit Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with subsections 2.5 and 2.10, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Revolving Credit Termination Date.

 

(b)                                 The Borrower shall repay all outstanding Revolving Credit Loans on the Revolving Credit Termination Date and all outstanding Swingline Loans on the earlier of the Revolving Credit Termination Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least three Business Days after such Swingline Loan is made.

 

(c)                                  (i)  Subject to the terms and conditions hereof, the Swingline Lender agrees to make swingline loans (“Swingline Loans”) to the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding not to exceed $10,000,000, provided that at no time may the Total Revolving Extensions of Credit exceed the aggregate Revolving Credit Commitments. During the Revolving Credit Commitment Period, the Borrower may use the Swingline Loan Commitment by borrowing, prepaying, in whole or in part, and reborrowing the Swingline Loans, all in accordance with the terms and conditions hereof. All Swingline Loans shall be ABR Loans. The Borrower shall give the Swingline Lender irrevocable written (or telephonic promptly confirmed in writing) notice (which notice must be received by the Swingline Lender prior to 1:00 p.m. New York City time) on the requested Borrowing Date specifying the amount of the requested Swingline Loan which shall be in an aggregate minimum amount of $100,000, or a whole multiple of $25,000 in excess thereof. Each such notice shall be given by the Borrower in the form of Exhibit J. The proceeds of the Swingline Loan will be made available by the Swingline Lender to the Borrower at the office of the Swingline Lender by 2:00 p.m. New York City time on the Borrowing Date by crediting the account of the Borrower at such office with such proceeds. The Borrower may, at any time and from time to time, prepay the Swingline Loans, in whole or in part, without premium or penalty, by notifying the Swingline Lender prior to 12:00 noon New York City time on any Business Day of the date and amount of prepayment. If any such notice is given, the amount specified in such notice shall be due and payable on

 

32

 

the date specified therein. Partial prepayments shall be in an aggregate principal amount of $100,000, or a whole multiple of $25,000 in excess thereof.

 

(ii)                                  The Swingline Lender, at any time in its sole and absolute discretion, may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to act on its behalf), and without regard to the minimum amounts in subsection 2.5, request each Revolving Credit Lender including the Swingline Lender to make a Revolving Credit Loan in an amount equal to such Lender’s Revolving Credit Percentage of the amount of the Swingline Loans outstanding on the date such notice (a copy of which shall be provided to the Borrower) is given (the “Refunded Swingline Loans”). Unless any of the events described in paragraph (f) of Section 8 shall have occurred with respect to the Borrower (in which event the procedures of subparagraph (iii) of this subsection 2.4(c) shall apply), each Revolving Credit Lender shall make the proceeds of its Revolving Credit Loan available to the Administrative Agent for the account of the Swingline Lender at the office of the Administrative Agent specified in subsection 10.2 prior to 1:00 p.m. New York City time in immediately available funds on the Business Day next succeeding the date such notice is given. The proceeds of such Revolving Credit Loans shall be immediately applied to repay the Refunded Swingline Loans.  The Administrative Agent shall notify the Borrower of any repayment of the Refunded Swingline Loans hereunder.  Effective on the day such Revolving Credit Loans are made, the portion of such Loans so paid shall no longer be outstanding as Swingline Loans, shall no longer be due under any Swingline Note and shall be Revolving Credit Loans made by the Revolving Credit Lenders in accordance with their respective Revolving Credit Percentages.  The Borrower authorizes the Swingline Lender to charge its account with the Administrative Agent (up to the amount available in each such account) upon any Refunded Swingline Loan becoming due, after the expiration of any applicable cure period, in order to immediately pay the amount of such Refunded Swingline Loan to the extent amounts received from the Revolving Credit Lenders were not sufficient to repay in full such Refunded Swingline Loan.

 

(iii)                               If prior to the making of a Revolving Credit Loan pursuant to subparagraph (ii) of this subsection 2.4(c) one of the events described in paragraph (f) of Section 8 shall have occurred and be continuing with respect to the Borrower, each Revolving Credit Lender will, on the date such Revolving Credit Loan was to have been made pursuant to the notice in subsection 2.4(c)(ii), purchase an undivided participating interest in the Refunded Swingline Loan in an amount equal to (i) its Revolving Credit Percentage times (ii) the Refunded Swingline Loans. Each Revolving Credit Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its participation, and upon receipt thereof the Swingline Lender will deliver to such Revolving Credit Lender a Swingline Loan Participation Certificate dated the date of receipt of such funds and in such amount.  The Administrative Agent shall notify the Borrower of any participations in a Refunded Swingline Loan acquired hereunder.

 

(iv)                              Whenever, at any time after any Revolving Credit Lender has purchased a participating interest in a Swingline Loan, the Swingline Lender receives any payment on account thereof, the Swingline Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender’s participating interest was outstanding and funded); provided, however, that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving Credit Lender will return to the Swingline Lender any portion thereof previously distributed by the Swingline Lender to it.

 

(v)                                 Each Revolving Credit Lender’s obligation to make the Loans referred to in subsection 2.4(c)(ii) and to purchase participating interests pursuant to subsection 2.4(c)(iii) shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (A) any set-off, counterclaim, recoupment, defense or other right which such Revolving Credit Lender or

 

33

 

the Borrower may have against the Swingline Lender, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or an Event of Default; (C) any adverse change in the condition (financial or otherwise) of the Borrower; (D) any breach of this Agreement or any other Loan Document by the Borrower or any of its Subsidiaries or any other Lender; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

(d)                                 The Borrower and one or more Lenders or other Persons who may become Incremental Lenders may from time to time agree that such Persons shall become Incremental Lenders under an Incremental Revolving Loan Facility by executing and delivering to the Administrative Agent an Incremental Revolving Activation Notice substantially in the form of Exhibit G-2 specifying (i) the respective Incremental Revolving Loan Amounts of such Incremental Lenders, (ii) the applicable Incremental Revolving Loan Closing Date, (iii) the applicable Incremental Revolving Loan Maturity Date and (iv) the Applicable Margin and the Commitment Fee Rate for the Incremental Revolving Loans and the unused Incremental Revolving Loan Amount to be made available pursuant to such Incremental Revolving Loan Activation Notice, and which shall be otherwise duly completed.  Each Incremental Lender that is a signatory to an Incremental Revolving Loan Activation Notice severally agrees, on the terms and conditions of this Agreement, to make revolving credit loans (each, an “Incremental Revolving Loan”) to the Borrower from time to time on or after the Incremental Revolving Loan Closing Date specified in such Incremental Revolving Loan Activation Notice in an aggregate principal amount outstanding at any time up to but not exceeding the amount of the Incremental Revolving Loan Amount of such Incremental Lender specified in such Incremental Revolving Loan Activation Notice, and, in the case of any such Incremental Lender that is not already a Lender, to execute and deliver a Joinder Agreement in connection with making such Incremental Revolving Loan.  The Borrower may use the Incremental Revolving Loan Amounts by borrowing, prepaying and reborrowing the Incremental Revolving Loans in whole or in part, all in accordance with the terms and conditions hereof.  Nothing in this subsection 2.4(d) shall be construed to obligate any Lender to execute an Incremental Revolving Loan Activation Notice.  Notwithstanding the foregoing, the aggregate amount of Incremental Revolving Loan Amounts available under all Incremental Revolving Loan Facilities, together with the aggregate amount of Incremental Term Loans outstanding under all Incremental Term Loan Facilities, shall at no time exceed the sum of (x) $100,000,000, (y) any additional amount to be used solely for the purposes of funding Permitted Acquisitions or Asset Swap Transactions such that, if the Incremental Facilities aggregate in excess of $100,000,000, the Borrower shall be in compliance with the then required Consolidated Senior Secured Leverage Ratio on a pro forma basis and (z) any additional amount to be used solely for the purposes of funding the refinancing, repurchase, redemption, discharge or defeasance of the 2013 Notes outstanding after the use of proceeds pursuant to clause (b) of subsection 4.14.  An Incremental Revolving Loan Facility may take the form of an increase to the Revolving Credit Facility or any other Incremental Revolving Loan Facility and, if so, shall be treated thereunder accordingly and the Administrative Agent may specify procedures as reasonably determined by it to effect an incorporation of such Incremental Revolving Loan Facility therein.  Letters of Credit and Swingline Loans shall not be made under any Incremental Revolving Loan Facility which is not incorporated in the Revolving Credit Facility.  The Incremental Revolving Loans under an Incremental Revolving Loan Facility shall be secured ratably with the Revolving Credit Loans and each other.  Any terms applicable to any Incremental Revolving Loan Facility that are not substantially consistent with those applicable to the Revolving Credit Facility (other than as to pricing or maturity) shall be reasonably satisfactory to the Administrative Agent.

 

(e)                                  On the date any increase in the aggregate Revolving Credit Commitments becomes effective pursuant to this subsection 2.4, (i) the Borrower agrees to prepay any outstanding Revolving Credit Loans with the proceeds of new Revolving Credit Loans in order to make the then outstanding Revolving Credit Loans ratable in accordance with the then effective Revolving Credit Commitments and (ii) the participating interests in the then outstanding Letters of Credit and Swingline

 

34

 

Loans shall be deemed to be reallocated among the Revolving Credit Lenders in order to make the participating interests in each such Letter of Credit and Swingline Loan ratable in accordance with the then effective Revolving Credit Commitments.

 

(f)                                    Notwithstanding the foregoing, no Incremental Revolving Loan Amount shall become effective under this subsection 2.4 unless (i) on the date of such effectiveness, the conditions set forth in subsection 5.2 shall be satisfied by the Borrower, and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Responsible Officer of the Borrower, (ii) the Administrative Agent shall have received legal opinions, board resolutions and other closing certificates and documentation consistent with those delivered on the Closing Date under subsections 5.1(b), 5.1(e), 5.1(g), 5.1(l) and 5.1(m), and such additional documents and filings (including amendments to the Mortgages and other Security Documents and title endorsement bring downs) as the Administrative Agent may reasonably require to assure that the Incremental Revolving Loans are secured by the Collateral and guaranteed by the Loan Parties ratably with the existing Loans and (iii) the Borrower and its Subsidiaries shall be in compliance with the financial covenants set forth in subsection 7.1 on a pro forma basis after giving effect to the Incremental Revolving Loans to be made thereunder on the Incremental Revolving Loan Closing Date and the application of the proceeds thereof as if made and applied on such date.

 

2.5                                 Procedure for Revolving Credit Borrowings.  The Borrower may borrow under the Revolving Credit Commitments or under any Incremental Revolving Loan Facility during the Revolving Credit Commitment Period or the commitment period applicable thereto, as the case may be, on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable written (or telephonic promptly confirmed in writing) notice (which notice must be received by the Administrative Agent prior to (a) 12:00 Noon, New York City time, three Business Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) 11:00 a.m., New York City time, on the requested Borrowing Date (which notice may be conditional upon the closing of a Permitted Acquisition to be financed by such borrowing), in the case of ABR Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date, and (iii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Each such notice shall be given by the Borrower in the form of Exhibit J. Each borrowing under the Revolving Credit Commitments or under any Incremental Revolving Loan Facility shall be in an amount equal to (A) in the case of ABR Loans, $1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then aggregate Available Revolving Credit Commitments or available commitments under such Incremental Revolving Loan Facility, as the case may be, are less than $1,000,000, such lesser amount) and (B) in the case of Eurodollar Loans, $5,000,000 or a whole multiple of $100,000 in excess thereof. Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each applicable Lender thereof. Each applicable Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the office of the Administrative Agent specified in subsection 10.2 prior to 12:00 Noon, New York City time, on the Borrowing Date, requested by the Borrower in funds immediately available to the Administrative Agent on such date. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by such Lenders and in like funds as received by the Administrative Agent on such date.  The provisions of the paragraph shall be subject to any applicable limitations or requirements in the relevant Incremental Revolving Loan Activation Notice.

 

2.6                                 Commitment Fees, etc.  (a)  The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Credit Lender and each Incremental Lender with an Incremental Revolving Loan Amount, a commitment fee for the period from and including the Closing Date or the date of the Incremental Revolving Loan Activation Notice with respect thereto, to the last day of the

 

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Revolving Credit Commitment Period or the commitment period with respect thereto, computed at the Commitment Fee Rate on the average daily amount of the Available Revolving Credit Commitment of such Revolving Credit Lender or of the unused Incremental Revolving Loan Amount, as the case may be, during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date, commencing on the first Fee Payment Date to occur after the Closing Date or the date of the Incremental Revolving Loan Activation Notice, as the case may be.  For purposes of calculating commitment fees under this subsection 2.6(a) only, no portion of the Revolving Credit Commitments shall be deemed utilized as a result of outstanding Swingline Loans (other than Refunded Swingline Loans).

 

(b)                                 The Borrower agrees to pay the Administrative Agent and the Co-Lead Arrangers the fees in the amounts and on the dates agreed to in writing by the Borrower and the Administrative Agent and Co-Lead Arrangers.

 

2.7                                 Termination or Reduction of Commitments.  (a)  The Revolving Credit Commitments shall be automatically and permanently terminated at 5:00 p.m., New York City time, on the Revolving Credit Termination Date.

 

(b)                                 The Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the Revolving Credit Commitments or any Incremental Revolving Loan Amounts or, from time to time, to reduce the amount thereof, provided that (i) no such termination or reduction with respect to Revolving Credit Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Swingline Loans and the Revolving Credit Loans made on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Revolving Credit Commitments then in effect and (ii) no such termination or reduction of with respect to any Incremental Revolving Loan Amount shall result in the aggregate outstanding principal amount of the related Incremental Revolving Loans being greater than such Incremental Revolving Loan Amount as so reduced or terminated.  Any reduction pursuant to this subsection 2.7(b) shall be in an amount equal to $1,000,000, or a whole multiple of $100,000 in excess thereof, and shall reduce permanently the Revolving Credit Commitments or the applicable Incremental Revolving Loan Amount then in effect, as the case may be. Upon receipt of any notice pursuant to this subsection 2.7(b), the Administrative Agent shall promptly notify each Revolving Credit Lender, each affected Incremental Lender, and the Swingline Lender, as applicable, of the contents thereof.

 

(c)                                  Each notice of termination or reduction delivered by the Borrower under this subsection 2.7 shall be irrevocable, provided that any such notice may state that such notice is conditioned upon effectiveness of other financing or of an asset sale, 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.

 

2.8                                 Optional Prepayments.  The Borrower may at any time and from time to time prepay its Loans, in whole or in part, without premium or penalty, upon written (or telephonic promptly confirmed in writing) notice delivered to the Administrative Agent at least three Business Days prior thereto in the case of Eurodollar Loans and at least one Business Day prior thereto in the case of ABR Loans, which notice shall specify the date and amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each, provided that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to subsection 2.18. Each notice of prepayment delivered by the Borrower under this subsection 2.8 shall be irrevocable, provided that any such notice may state that such notice is conditioned upon effectiveness of other financing or of an asset sale, 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.  Upon

 

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receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given (and not revoked), the amount specified in such notice shall be due and payable on the date specified therein.  Amounts prepaid on account of the Term Loans may not be reborrowed.  Partial prepayments of Eurodollar Loans shall be in an aggregate principal amount of $5,000,000 or a whole multiple of $100,000 in excess thereof. Partial prepayments of ABR Loans (other than Swingline Loans) shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000 thereof.  Optional prepayments on account of the Term Loans shall be allocated among the Term Loans under the Term Loan Facilities and any Incremental Term Loan Facilities ratably based on the outstanding principal amount of the Term Loans under each such Facility (unless the Incremental Term Loan Activation Notice with respect to any Incremental Term Loan Facility waives the entitlement of such Incremental Term Loan Facility to such ratable allocation) and applied to the then remaining installments under each such Facility in accordance with subsection 2.15(d)

 

2.9                                 Mandatory Prepayments.  (a)  If any Indebtedness shall be incurred by the Borrower or any of its Subsidiaries (excluding any Indebtedness permitted under subsection 7.2), an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of such incurrence (or, if such Net Cash Proceeds are received after 2:00 P.M., New York City time, on the immediately succeeding Business Day) toward the prepayment of the Term Loans as set forth in subsection 2.9(g).

 

(b)                                 [RESERVED].

 

(c)                                  If, for any fiscal year of the Borrower commencing with the fiscal year ending December 31, 2012 there shall be Excess Cash Flow, the Borrower shall, on the relevant Excess Cash Flow Application Date, apply toward the prepayment of the Term Loans as set forth in subsection 2.9(g) the excess, if any, of (i) the ECF Percentage of such Excess Cash Flow over (ii) the aggregate amount of all prepayments of Revolving Loans and Swingline Loans during such fiscal year to the extent accompanying permanent optional reductions of the Revolving Credit Commitments or the commitments to any Incremental Revolving Loan Facility and all optional prepayments of the Term Loans during such fiscal year.  Each such prepayment shall be made on a date (an “Excess Cash Flow Application Date”) no later than five Business Days after the earlier of (i) the date on which the financial statements of the Borrower referred to in subsection 6.1(a), for the fiscal year with respect to which such prepayment is made, are required to be delivered to the Lenders and (ii) the date such financial statements are actually delivered.

 

(d)                                 If on any date the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then (i) unless a Reinvestment Notice shall be delivered in respect thereof, the Net Cash Proceeds (if any) with respect to such Asset Sale or Recovery Event shall be applied, within five Business Days after such date, toward the prepayment of the Term Loans, and (ii) if a Reinvestment Notice shall have been delivered in respect thereof, on the applicable Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied toward the prepayment of the Term Loans, as set forth in subsection 2.9(g).

 

(e)                                  [RESERVED].

 

(f)                                    [RESERVED].

 

(g)                                 The application of any prepayment pursuant to this subsection 2.9 shall be made first to ABR Loans and second to Eurodollar Loans.  Each prepayment of Eurodollar Loans under subsection 2.9 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.  Amounts repaid or prepaid on account of the Term Loans may not be reborrowed.  Prepayment

 

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of the Term Loans required by this subsection 2.9 shall be allocated among the Term Loans under the Term Loan Facilities and any Incremental Term Loan Facilities ratably based on the outstanding principal amount of the Term Loans under each such Facility (unless the Incremental Term Loan Activation Notice with respect to any Incremental Term Loan Facility waives the entitlement of such Incremental Term Loan Facility to such ratable allocation) and applied to the then remaining installments under each such Facility in accordance with subsection 2.15(d).

 

(h)                                 Notwithstanding the foregoing provisions of this subsection 2.9, if at any time the mandatory prepayment of any Loans pursuant to this Agreement would result, after giving effect to the procedures set forth in this Agreement, in the Borrower incurring costs under subsection 2.16, 2.17 or 2.18 as a result of Eurodollar Loans (“Affected Eurodollar Loans”) being prepaid other than on the last day of an Interest Period applicable thereto, which costs are required to be paid pursuant to subsection 2.18, then, the Borrower may, in its sole discretion, initially deposit a portion (up to 100%) of the amounts that otherwise would have been paid in respect of the Affected Eurodollar Loans with the Administrative Agent (which deposit must be equal in amount to the amount of the Affected Eurodollar Loans not immediately prepaid) to be held as security for the obligations of the Borrower to make such mandatory prepayment pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Administrative Agent, with such cash collateral to be directly applied upon the first occurrence (or occurrences) thereafter of the last day of an Interest Period applicable to the relevant Loan that is a Eurodollar Loan (or such earlier date or dates as shall be requested by the Borrower), to repay an aggregate principal amount of such Loan equal to the Affected Eurodollar Loans not initially repaid pursuant to this sentence.

 

2.10                           Conversion and Continuation Options.  (a)  The Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent at least one Business Day’s prior irrevocable written (or telephonic promptly confirmed in writing) notice of such election (but no later than 12:00 Noon, New York City time on the Business Day immediately prior to such election), provided that unless the Borrower elects to deposit with the Administrative Agent the amount of any breakage costs and other Eurodollar Loans related costs to be incurred by the Borrower under this Agreement with respect to any prepayment or conversion of such Eurodollar Loans prior to the end of an Interest Period, any such conversion of Eurodollar Loans may only be made on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent at least three Business Days’ prior irrevocable written (or telephonic promptly confirmed in writing) notice of such election by 12:00 Noon, New York City time (which notice shall specify the length of the initial Interest Period therefor), provided that no ABR Loan may be converted into a Eurodollar Loan (i) when any Event of Default has occurred and is continuing and the Administrative Agent or the Required Lenders have determined that such a conversion is not appropriate or (ii) after the date that is one month prior to the final scheduled termination or maturity date of such Facility. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

(b)                                 Any Eurodollar Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in subsection 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders have determined that such a continuation is not appropriate or (ii) after the date that is one month prior to the final scheduled termination or maturity date of any Facility, and provided  further that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Eurodollar Loans shall be automatically converted to ABR Loans on the last day of such

 

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then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

2.11                           Minimum Amounts and Maximum Number of Eurodollar Tranches.  Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans hereunder and all selections of Interest Periods hereunder shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, (a) the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $100,000 in excess thereof, (b) no more than eight Eurodollar Tranches under a particular Facility shall be outstanding at any one time and (c) no more than 12 Eurodollar Tranches in the aggregate shall be outstanding at any one time.

 

2.12                           Interest Rates and Payment Dates.  (a)  Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

 

(b)                                 Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

 

(c)                                  Upon the occurrence and during the continuance of an Event of Default under subsection 8(a), (i) all outstanding Loans and any overdue amounts hereunder shall bear interest at a rate per annum which is (A) in the case of overdue principal of any Loan, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this subsection 2.12 plus 2% or (B) in the case of overdue Reimbursement Obligations, interest, commitment fees or other amounts, the rate applicable to ABR Loans under the relevant Facility plus 2% (or, in the case of any such other amounts that do not relate to a particular Facility, the rate applicable to ABR Loans under the Revolving Credit Facility plus 2%), in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (after judgment as well as before judgment).

 

(d)                                 Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this subsection 2.12 shall be payable from time to time on demand.

 

2.13                           Computation of Interest and Fees.  (a)  Interest, fees and other amounts payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate.

 

(b)                                 Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to subsection 2.12.

 

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(c)                                  For the avoidance of doubt, any increases in interest rates and fees (including fees and interest payable pursuant to subsections 2.6, 2.12 and 3.3) effected by the this Agreement shall not have any retroactive effect and shall only apply from (and after) the Closing Date.

 

2.14                           Inability to Determine Interest Rate.  If prior to the first day of any Interest Period:

 

(a)                                  the Administrative Agent shall have determined (which determination, absent manifest error, shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

 

(b)                                 the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

 

the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be converted to ABR Loans on the last day of the Interest Period applicable thereto. Until such notice has been withdrawn by the Administrative Agent (which the Administrative Agent agrees to do when the circumstances that prompted delivery of such notice no longer exist), no further Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.

 

2.15                           Pro Rata Treatment and Payments.  (a)  Each borrowing by the Borrower from the Lenders hereunder, each payment on account of any commitment fee, letter of credit fee, interest or principal and any reduction of any of the commitments of the Lenders shall be made, with regard to the applicable Facility, pro  rata according to the respective Tranche A Term Percentages, applicable Incremental Term Loan Percentages, Revolving Credit Percentages or applicable Incremental Revolving Loan Percentages, as the case may be, of the relevant Lenders.

 

(b)                                 Whenever (i) any payment received by the Administrative Agent under this Agreement or any Note or (ii) any other amounts received by the Administrative Agent for or on behalf of the Borrower (including, without limitation, proceeds of collateral or payments under any guarantee) is insufficient to pay in full all amounts then due and payable to the Administrative Agent and the Lenders under this Agreement, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the following order: first, to the payment of fees and expenses due and payable to the Administrative Agent under and in connection with this Agreement; second, to the payment of all expenses due and payable under subsection 10.5, ratably among the Administrative Agent and the Lenders in accordance with the aggregate amount of such payments owed to the Administrative Agent and each such Lender; third, to the payment of fees due and payable under subsections 2.6 and 3.3, and interest then due and payable under the Loans, ratably in accordance with the aggregate amount thereof due and owing to each such Lender; and fourth, to the payment of the principal amount of the Loans and the L/C Obligations then due and payable and, in the case of proceeds of collateral or payments under any guarantee, to the payment of any other obligations to any Lender or affiliate thereof not covered in first through fourth above ratably secured by such collateral or ratably guaranteed under any such guarantee, ratably among the Lenders in accordance with the aggregate principal amount and, in

 

40

 

the case of proceeds of collateral or payments under any guarantee, the obligations secured or guaranteed thereby owed to each such Lender or affiliate thereof.

 

(c)                                  The amount of each optional prepayment on account of principal of the Tranche A Term Loans or Incremental Term Loans shall be applied to reduce the then remaining installments of the Tranche A Term Loans and Incremental Term Loans, as the case may be, as directed by the Borrower.

 

(d)                                 The amount of each mandatory prepayment on account of principal of the Tranche A Term Loans or any Incremental Term Loans shall be applied first, to the scheduled installments of the Tranche A Term Loans or such Incremental Term Loans, as the case may be due within the next 24 months in direct order of maturity, and second, to reduce the then remaining installments thereof pro  rata based upon the respective then remaining principal amounts of such installments (unless the Incremental Term Loan Activation Notice with respect to such Incremental Term Loan Facility specifies otherwise).

 

(e)                                  [RESERVED].

 

(f)                                    All payments (including prepayments) to be made hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 2:00 P.M., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Administrative Agent’s office specified in subsection 10.2, in Dollars and in immediately available funds. Payments received by the Administrative Agent after such time shall be deemed to have been received on the next Business Day. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day (except, in the case of Eurodollar Loans, as otherwise provided in clause (i) of the definition of “Interest Period”). In the case of any extension of any payment of principal pursuant to the preceding sentence, interest thereon shall be payable at the then applicable rate during such extension.

 

(g)                                 Unless the Administrative Agent shall have been notified in writing by any Lender prior to a Borrowing Date that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the greater of the daily average Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this subsection 2.15(g) shall be conclusive in the absence of manifest error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the relevant Facility, on demand, from the Borrower. The failure of any Lender to make any Loan to be made by it shall not relieve any other Lender of its obligation, if any, hereunder to make its Loan on such Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on such Borrowing Date.

 

(h)                                 If any Lender shall fail to make any payment required to be made by it pursuant to subsection 2.4(c)(ii), 2.4(c)(iii), 2.15(g), 2.17(d), 3.4(a) or 9.7, then the Administrative Agent may, in

 

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its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent, the Swingline Lender or the Issuing Lender to satisfy such Lender’s obligations to it under such Section until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

 

2.16                           Requirements of Law.  (a)  If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the Closing Date:

 

(i)                                     shall subject any Lender (such term, for purposes of this subsection 2.16(a)(i), to include the Issuing Lender) to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for (A) Non-Excluded Taxes covered by subsection 2.17 and (B) the establishment of a tax based on the net income of such Lender and changes in the rate of tax on the net income of such Lender, or any franchise taxes imposed on or measured by such Lender’s net income, or any branch profits taxes imposed on payments made under this Agreement to such Lender);

 

(ii)                                  shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; or

 

(iii)                               shall impose on such Lender any other condition;

 

and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or issuing or participating in Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable, provided that before making any such demand, each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, in its reasonable discretion, in any legal, economic or regulatory manner) to designate a different Eurodollar lending office if the making of such designation would allow the Lender or its Eurodollar lending office to continue to perform its obligations to make Eurodollar Loans or to continue to fund or maintain Eurodollar Loans and avoid the need for, or materially reduce the amount of, such increased cost. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection 2.16, it shall promptly notify the Borrower through the Administrative Agent, of the event by reason of which it has become so entitled. If the Borrower notifies the Administrative Agent within ten Business Days after any Lender notifies the Borrower of any increased cost pursuant to the foregoing provisions of this subsection 2.16(a) with respect to Eurodollar Loans, the Borrower may convert all Eurodollar Loans of such Lender then outstanding into ABR Loans in accordance with subsection 2.10 and shall, additionally, reimburse such Lender for any cost in accordance with subsection 2.18.

 

(b)                                 If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority

 

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made subsequent to the Closing Date shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender, to the Borrower through the Administrative Agent, of a written request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

 

(c)                                  Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to a change in law regardless of the date enacted, adopted, issued or implemented.

 

(d)                                 A certificate as to any additional amounts payable pursuant to this subsection 2.16, showing in reasonable detail the calculation thereof and certifying that it is generally charging such costs to other similarly situated borrowers under similar credit facilities, submitted by any Lender through the Administrative Agent shall be conclusive in the absence of manifest error, provided that the determination of such amounts shall be made in good faith in a manner generally consistent with such Lender’s standard practices. The obligations of the Borrower pursuant to this subsection 2.16 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder for a period of six months thereafter.

 

2.17                           Taxes.  (a)  Except as provided below in this subsection, all payments made by or on behalf of the Borrower or any Loan Party under this Agreement or any other Loan Document shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding (i) income taxes (including alternative minimum taxes), franchise taxes (imposed on or measured by net income), and taxes imposed on branch profits imposed on the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document) , (ii) United States withholding taxes imposed on amounts payable to a Non-U.S. Lender at the time it becomes a party to this Agreement, except, in the case of a change of lending office,  to the extent that such Non-U.S. Lender was entitled, at the time of designation of a new lending office, to receive additional amounts from the Borrower (or any other applicable Loan Party) with respect to such Non-Excluded Taxes pursuant to this subsection 2.17(a) and (iii) any withholding taxes imposed on amounts payable to a Non-U.S. Lender pursuant to FATCA; provided, that if any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are required (as determined in good faith by the applicable withholding agent) to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder or under any other Loan Document, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement. In addition, the Borrower shall pay any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar

 

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levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, including any interest, additions to tax or penalties applicable thereto (“Other Taxes”) to the relevant Governmental Authority in accordance with applicable law. Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower or any Loan Party as promptly as possible thereafter the Borrower or any such Loan Party shall send to the Administrative Agent for its own account or for the account of such Lender or any such Loan Party, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. If the Borrower or any Loan Party fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority (except when such failure results from the gross negligence or willful misconduct of a Lender), fails to remit to the Administrative Agent the required receipts or other required documentary evidence, or any Non-Excluded Taxes or Other Taxes are imposed directly on the Administrative Agent or any Lender, the Borrower or such Loan Party shall indemnify the Administrative Agent and the Lenders for such amounts (whether or not such amounts were correctly or legally imposed) and any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure or direct imposition. The agreements in this subsection 2.17 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder for a period of nine months thereafter.

 

(b)                                 Each Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement three properly completed and duly signed copies of U.S. Internal Revenue Service Form W-9 (or any successor form) certifying that such Lender is exempt from U.S. federal withholding tax. Each Lender (or Transferee) that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower, and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) (i) three copies of U.S. Internal Revenue Service Form W-8ECI, Form W-8BEN or W-8IMY (together with any applicable underlying U.S. Internal Revenue Service forms), (ii) in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, an annual certificate representing, under penalty of perjury, that such Non-U.S. Lender is not a “bank” for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code) and the applicable Form W-8, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U. S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents, or (iii) any other form prescribed by applicable requirements of U.S. federal tax law (including FATCA, which, solely for purposes of this clause (iii), shall include any amendments made to FATCA after the date of this Agreement)) as a basis for claiming exemption from or a reduction in U.S. federal withholding tax, duly completed together with such supplementary documentation as may be prescribed by applicable requirements of law or reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower or the Administrative Agent to comply with its obligations under any such law, to determine that such Lender has or has not complied with its obligations under any such law, or to determine the amount to deduct or withhold from any payments subject to any such law. Such forms shall be delivered by each Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Lender shall deliver such forms on or before the expiration or obsolescence and promptly upon the invalidity of any form previously delivered by such Lender and after the occurrence of any event requiring a change in the most recently provided form. Each Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other

 

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provision of this subsection 2.17(b), a Lender shall not be required to deliver any form pursuant to this subsection 2.17(b) that such Lender is not legally able to deliver.

 

(c)                                  If the Administrative Agent or any Lender (or Transferee) receives a refund in respect of Non-Excluded Taxes paid by the Borrower or any other Loan Party, it shall promptly pay such refund, together with any other amounts paid by the Borrower or such Loan Party in connection with such refunded Non-Excluded Taxes, to the Borrower or such Loan Party, net of all out-of-pocket expenses of such Lender incurred in obtaining such refund, provided that the Borrower or such Loan Party, as the case may be, agrees to promptly return such refund to the Administrative Agent or the applicable Lender if it receives notices from the Administrative Agent or applicable Lender that such Administrative Agent or Lender is required to repay such refund.

 

(d)                                 Each Lender shall indemnify the Administrative Agent for the full amount of any taxes, levies, imposts, duties, charges, fees, deductions, withholdings or similar charges imposed by any Governmental Authority that are attributable to such Lender and that are payable or paid by the Administrative Agent, together with all interest, penalties, reasonable costs and expenses arising therefrom or with respect thereto, as determined by the Administrative Agent in good faith. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.

 

2.18                           Indemnity.  The Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss (excluding loss of profit) or expense which such Lender actually incurs as a consequence of (a) withdrawal of notice given by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) failure by the Borrower to make any prepayment of a Eurodollar Loan after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, any floor or the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this subsection 2.18, showing in reasonable detail the calculation thereof, submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder for a period of one month thereafter.

 

2.19                           Change of Lending Office.  Each Lender agrees that, upon the occurrence of any event giving rise to the operation of subsection 2.16 or 2.17(a) with respect to such Lender, it will, if requested by the Borrower (for itself), use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event, provided that such designation is made on terms that in the reasonable judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided  further that nothing in this subsection 2.19 shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to subsection 2.16 or 2.17(a).

 

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2.20                           Replacement of Lenders under Certain Circumstances.  If at any time (a) the Borrower becomes obligated to pay additional amounts described in subsection 2.16 or 2.17 as a result of any condition described in such subsections or any Lender ceases to make Eurodollar Loans pursuant to subsection 2.16, (b) any Lender becomes a Defaulting Lender or (c) any Lender becomes a “Non-Consenting Lender” (as defined below in this subsection 2.20), then the Borrower may, on ten Business Days’ prior written notice to the Administrative Agent and such Lender, replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to subsection 10.6(b) all of its rights and obligations under this Agreement to a Lender or other entity selected by the Borrower and reasonably acceptable to the Administrative Agent (and in the case of Revolving Credit Commitments or Revolving Loans, reasonably acceptable to the Issuing Lender and the Swingline Lender) for a purchase price equal to the outstanding principal amount of such Lender’s Loans and all accrued interest and fees and other amounts payable hereunder (including amounts payable under subsection 2.18 as though such Loans were being paid instead of being purchased), provided that (i) neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such entity, (ii) in the event of a replacement of a Non-Consenting Lender or a Lender to which the Borrower becomes obligated to pay additional amounts pursuant to clause (a) of this subsection 2.20, in order for the Borrower to be entitled to replace such a Lender, such replacement must take place no later than 180 days after (A) the date the Non-Consenting Lender shall have notified the Borrower and the Administrative Agent of its failure to agree to any requested consent, waiver or amendment or (B) the Lender shall have demanded payment of additional amounts under one of the subsections described in clause (a) of this subsection 2.20, as the case may be, and (iii) in no event shall the Lender hereby replaced be required to pay or surrender to such replacement Lender or other entity any of the fees received by such Lender hereby replaced pursuant to this Agreement. In the case of a replacement of a Lender to which the Borrower becomes obligated to pay additional amounts pursuant to clause (a) of this subsection 2.20, the Borrower shall pay such additional amounts to such Lender prior to such Lender being replaced and the payment of such additional amounts shall be a condition to the replacement of such Lender. In the event that (x) the Borrower or the Administrative Agent has requested the Lenders to consent to a departure or waiver of any provisions of the Loan Documents or to agree to any amendment thereto, (y) the consent, waiver or amendment in question requires the agreement of all Lenders in accordance with the terms of subsection 10.1 or all the Lenders with respect to a certain class of the Loans and (z) Required Lenders, Majority Facility Lenders or more than 50% of the class of such Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender”.  The Borrower’s right to replace a Defaulting Lender pursuant to this subsection 2.20 is, and shall be, in addition to, and not in lieu of, all other rights and remedies available to the Borrower against such Defaulting Lender under this Agreement, at law, in equity, or by statute.

 

2.21                           Notice of Certain Costs.  Notwithstanding anything in this Agreement to the contrary, to the extent any notice required by subsection 2.15 through and including subsection 2.18 is given by any Lender more than 90 days after such Lender has knowledge (or should have had knowledge) of the occurrence of the event giving rise to the additional cost, reduction in amounts, loss, tax or other additional amounts described in such subsections, such Lender shall not be entitled to compensation under such subsections for any such amounts incurred or accruing prior to the giving of such notice to the Borrower.

 

2.22                           Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Revolving Credit Lender or any Lender under an Incremental Revolving Loan Facility becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

 

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(a)                                  fees shall cease to accrue on the unfunded portion of the Revolving Credit Commitment or Incremental Revolving Loan Amount of such Defaulting Lender pursuant to subsection 2.6(a);

 

(b)                                 the Revolving Credit Commitment and Revolving Extensions of Credit, or the Incremental Revolving Loan Amount and Revolving Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders or Majority Facility Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to subsection 10.1); provided, that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification expressly requiring the consent of such Lender or each Lender affected thereby;

 

(c)                                  if any Swingline Exposure or L/C Exposure exists at the time such Lender becomes a Defaulting Lender then:

 

(i)                                     all or any part of the Swingline Exposure and L/C Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Revolving Credit Percentages but only to the extent that (x) the conditions set forth in subsection 5.2 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfed at such time) and (y) the sum of such non-Defaulting Lender’s Revolving Extensions of Credit plus its share of such Defaulting Lender’s Swingline Exposure and L/C Exposure does not exceed the total of such non-Defaulting Lender’s Revolving Credit Commitment;

 

(ii)                                  if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the Issuing Lender only the Borrower’s obligations corresponding to such Defaulting Lender’s L/C Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 8 for so long as such L/C Exposure is outstanding;

 

(iii)                               if the Borrower cash collateralizes any portion of such Defaulting Lender’s L/C Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to subsection 3.3(a) with respect to such Defaulting Lender’s L/C Exposure during the period such Defaulting Lender’s L/C Exposure is cash collateralized;

 

(iv)                              if the L/C Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to subsection 2.6(a) and subsection 3.3(a) shall be adjusted in accordance with such non-Defaulting Lenders’ Revolving Credit Percentages; and

 

(v)                                 if all or any portion of such Defaulting Lender’s L/C Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Lender or any other Lender hereunder, all fees payable under subsection 3.3(a) with respect to such Defaulting Lender’s L/C Exposure shall be payable to the Issuing Lender until and to the extent that such L/C Exposure is reallocated and/or cash collateralized; and

 

(d)                                 in the case of a Revolving Credit Lender that is a Defaulting Lender, so long as it is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding L/C Exposure will be 100% covered by the Revolving Credit Commitments of the non-Defaulting Lenders and/or cash collateral will 

 

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be provided by the Borrower in accordance with subsection 2.22(c) and participating interests in any newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with subsection 2.22(c)(i) (and such Defaulting Lender shall not participate therein).

 

In the event that the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Lender each agrees that a Defaulting Lender that is a Revolving Credit Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and L/C Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Credit Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Revolving Credit Percentage.

 

SECTION 3.   LETTERS OF CREDIT

 

3.1                                 L/C Commitment.  (a)  Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Revolving Credit Lenders set forth in subsection 3.4(a), agrees to issue letters of credit (“Letters of Credit”) for the account of the Borrower on any Business Day during the Revolving Credit Commitment Period in such form as may be approved from time to time by the Issuing Lender, provided that the Issuing Lender shall not have any obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the Available Revolving Credit Commitments would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date which is five Business Days prior to the Revolving Credit Termination Date, provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

 

(b)                                 Each Letter of Credit shall be subject to the rules of the Uniform Customs or the ISP, as the case may be, and, to the extent not inconsistent therewith, the laws of the State of New York.

 

(c)                                  The Issuing Lender shall not at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.  To the extent that the Issuing Lender is not also the Administrative Agent it shall promptly provide notice to the Administrative Agent of any request for a Letter of Credit, the issuance thereof, any payments thereunder and reimbursements of such payments and any termination, expiration and amendment thereof.

 

3.2                                 Procedure for Issuance of Letter of Credit.  The Borrower may from time to time request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing Lender at its address for notices specified herein an Application therefor, completed to the satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request. Upon receipt of any Application, the Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof.  To the extent that the Issuing Lender is not also the Administrative Agent, it shall promptly 

 

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furnish to the Administrative Agent notice of the issuance of each Letter of Credit (including the amount thereof). The Administrative Agent will furnish to the Revolving Credit Lenders (a) prompt notice of the issuance of each Letter of Credit and (b) a monthly report setting forth for the relevant month the total aggregate daily amount available to be drawn under Letters of Credit that were outstanding during such month.

 

3.3                                 Commissions, Fees and Other Charges.  (a)  The Borrower will pay to the Administrative Agent, for the account of each Revolving Credit Lender, a commission on the average daily drawable amount of each outstanding Letter of Credit at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Credit Facility, shared ratably among the Revolving Credit Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the issuance date.  In addition, the Borrower shall pay to the Issuing Lender for its own account a fronting fee of 0.20% per annum on the aggregate drawable amount of all outstanding Letters of Credit issued by it, such fee to be payable quarterly in arrears on each L/C Fee Payment Date after the issuance date of such Letter of Credit.

 

(b)                                 In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.

 

3.4                                 L/C Participations.  (a)  The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Credit Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued by the Issuing Lender and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit issued by the Issuing Lender for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement, such L/C Participant shall pay to the Administrative Agent for the account of the Issuing Lender upon demand an amount equal to such L/C Participant’s Revolving Credit Percentage of the amount of such draft or any part thereof, which is not so reimbursed.

 

(b)                                 If any amount required to be paid by any L/C Participant to the Administrative Agent for the account of the Issuing Lender pursuant to subsection 3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit is paid to the Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Administrative Agent for the account of the Issuing Lender on demand an amount equal to the product of (i) such amount, times (ii) the greater of the daily average Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any L/C Participant pursuant to subsection 3.4(a) is not made available to the Administrative Agent for the account of the Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, the Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under the Revolving Credit Facility. A certificate 

 

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of the Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error.

 

(c)                                  Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with subsection 3.4(a), the Administrative Agent for the account of the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto), or any payment of interest on account thereof, the Administrative Agent for the account of the Issuing Lender will distribute to such L/C Participant its pro rata share thereof, provided, however, that in the event that any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Administrative Agent for the account of the Issuing Lender the portion thereof previously distributed to it.

 

3.5                                 Reimbursement Obligation of the Borrower.  The Borrower agrees to reimburse the Issuing Lender through the Administrative Agent on each date on which the Issuing Lender notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Lender for the amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender in connection with such payment.  The Borrower (x) shall make such payment on the Business Day on which the Borrower receives such notice if the Borrower shall have received such notice prior to 10:30 A.M., New York City time, on the day of receipt, or (y) may make such payment on the Business Day immediately following the Business Day on which the Borrower receives such notice, if such notice is not received prior to 10:30 A.M., New York City time, on the day of receipt.  Interest shall be payable on any Reimbursement Obligation outstanding overnight at the rate applicable to the Revolving Credit Loans that are ABR Loans.   Each such payment shall be made to the Administrative Agent for the account of the Issuing Lender in Dollars and in immediately available funds.  The Administrative Agent shall promptly pay such reimbursed amounts over to the Issuing Lender on the day of receipt thereof.  Interest shall be payable on any and all amounts remaining unpaid by the Borrower under this subsection from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full at the rate set forth in subsection 2.12(c).

 

3.6                                 Obligations Absolute.  The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against the Issuing Lender (except to the extent resulting from the gross negligence or willful misconduct of the Issuing Lender), any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Issuing Lender that, subject to the last sentence of this subsection 3.6, the Issuing Lender shall not be responsible for, and the Borrower’s Reimbursement Obligations under subsection 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors, omissions or delays in transmission found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Issuing Lender. The Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards or care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender to the Borrower.

 

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3.7                                 Letter of Credit Payments.  If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly (and in any event within one Business Day) notify the Borrower and the Administrative Agent of the date and amount thereof. The responsibility of an Issuing Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit issued by it shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

 

3.8                                 Applications.  To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

 

3.9                                 Existing Letters of Credit.  On and as of the Closing Date, all letters of credit issued under the Existing Credit Agreement which are outstanding on the Closing Date (the “Existing Letters of Credit”) will automatically, and without any action on the part of any Person, constitute Letters of Credit under this Agreement and for purposes hereof and will be deemed to have been issued for the account of the Borrower on the Closing Date (it being understood that no additional fees shall be incurred by the Borrower as a result of such deemed issuance on the Closing Date).

 

SECTION 4.   REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent, the Lenders, the Swingline Lender and the Issuing Lender to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and warrants to the Administrative Agent and each Lender that:

 

4.1                                 Financial Condition.  The audited consolidated financial statements of the Borrower and its consolidated Subsidiaries as of and for the fiscal year ending December 31, 2010, reported on by PricewaterhouseCoopers LLP present fairly in all material respects the consolidated financial condition of the Borrower and the results of operations and cash flows as of such date and for such fiscal year. The unaudited consolidated financial statements of the Borrower and its consolidated Subsidiaries, in each case as of and for the six-month period ending June 30, 2011, certified by a Responsible Officer, present fairly in all material respects the consolidated financial condition of the Borrower and the results of operations and cash flows as of such date and for such period (subject to normal year-end adjustments and any other adjustments described therein and the absence of footnotes).  All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the relevant firm of accountants and disclosed therein and subject to normal year-end adjustments and the absence of footnotes).  The most recent audited balance sheet referred to above reflects, as required by GAAP, any material Guarantee Obligations, contingent liabilities and liabilities for taxes, and any long-term leases and unusual forward or long-term commitments, including, without limitation, any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, in each case as of the date of such balance sheet.

 

4.2                                 No Change.  Since the date of the most recent audited financial statements described in subsection 4.1, there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect.

 

4.3                                 Corporate Existence; Compliance with Law.  Each of the Borrower and its Subsidiaries (a) is duly organized or formed, as the case may be, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, (b) has the requisite power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the 

 

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business in which it is currently engaged as it is currently conducted, (c) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to so qualify could not, in the aggregate, reasonably be expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

4.4                                 Corporate Power; Authorization; Enforceable Obligations.  Each Loan Party has the requisite power and authority to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow and obtain other extensions of credit hereunder. Each Loan Party has taken all necessary corporate or other action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the borrowings and other extensions of credit hereunder on the terms and conditions of this Agreement.  No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority is required in connection with the borrowings and other extensions of credit hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the other Loan Documents, except (i) consents, authorizations, filings and notices which have been obtained or made and are in full force and effect, and (ii) filings in respect of Liens created pursuant to the Security Documents.  Each Loan Document has been duly executed and delivered on behalf of each Loan Party thereto.  This Agreement constitutes, and each Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

 

4.5                                 No Legal Bar.  The execution, delivery and performance of this Agreement and the Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law applicable to the Loan Parties or any material Contractual Obligation of any of the Loan Parties and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such material Contractual Obligation (other than the Liens created by the Security Documents).

 

4.6                                 No Material Litigation.  Except as has been set forth on Schedule 4.6, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened against any of the Loan Parties or against any of their respective properties or revenues which could reasonably be expected to have a Material Adverse Effect.

 

4.7                                 Ownership of Property; Liens.  Each of the Loan Parties has title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, and none of such property is subject to any Lien except as permitted by subsection 7.3.

 

4.8                                 Intellectual Property.  Each of the Borrower and each of the Loan Parties owns, or is licensed to use, all trademarks, tradenames, service marks, copyrights, technology, know-how and processes (“Intellectual Property”) necessary for the conduct of its business as currently conducted, except for those the failure of which to own or license could not reasonably be expected to have a Material Adverse Effect.  Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect and to the knowledge of the Borrower (a) no claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity of any 

 

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Intellectual Property (nor does the Borrower know of any valid basis for any such claim) and (b) the use of Intellectual Property by the Borrower and the Loan Parties does not infringe on the rights of, and no Intellectual Property of the Borrower or any of the Loan Parties is being infringed upon by, any Person.

 

4.9                                 Taxes.  Each of the Loan Parties has filed or caused to be filed all Federal and all other material tax returns which are required to be filed and has paid all taxes shown to be due and payable on said returns or on any material assessments made against it or any of its property by any Governmental Authority other than (a) any taxes the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the applicable Loan Party, and (b) taxes imposed by any Governmental Authority with respect to which a failure to make payment could not, by reason of the amount thereof or of the remedies available to such Governmental Authority, reasonably be expected to have a Material Adverse Effect.

 

4.10                           Federal Regulations.  No Letters of Credit and no part of the proceeds of any Loans will be used in a manner that creates a violation of Regulation U of the Board.  If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in said Regulation U.

 

4.11                           ERISA.  Except where the liability, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) neither a Reportable Event nor a failure to satisfy the minimum funding standards with respect to any Single Employer Plan (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Single Employer Plan; (b) each Plan (other than a Multiemployer Plan) has complied in all material respects with the applicable provisions of ERISA and the Code; (c) no termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Single Employer Plan has arisen and remains outstanding, during such five-year period; (d) the present value of all accrued benefits under each Single Employer Plan (determined based on the assumptions used by such Single Employer Plans pursuant to Section 430(h) of the Code) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Single Employer Plan (as determined pursuant to Section 430(g) of the Code) allocable to such accrued benefits in an amount that could reasonably be expected to have a Material Adverse Effect; (e) none of the Loan Parties nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan, and, to the knowledge of the Loan Parties, none of the Loan Parties nor any Commonly Controlled Entity would become subject to any liability under ERISA if the Loan Parties or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made; and (f) no such Multiemployer Plan is in Reorganization or Insolvent.

 

4.12                           Investment Company Act.  No Loan Party is an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

 

4.13                           Subsidiaries.  The Subsidiaries listed on Schedule 4.13 constitute all the Subsidiaries of the Borrower as of the Closing Date.

 

4.14                           Use of Proceeds.  The proceeds of the Tranche A Term Loans and Revolving Credit Loans will be used (a) to refinance and replace the loans under the Existing Credit Agreement, (b) to partially refinance, repurchase, redeem, discharge or defease the 2013 Notes and (c) to pay related premiums and accrued interest, fees and expenses.  In addition, the proceeds of the Revolving Credit 

 

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Loans, Swingline Loans, Incremental Term Loans, Incremental Revolving Loans and Letters of Credit shall be used to provide for working capital needs and general corporate purposes of the Borrower, its Subsidiaries and LIN TV, including, without limitation, share repurchases, funding any Permitted Acquisitions or Asset Swap Transactions and refinancing, repurchasing, redeeming, discharging or defeasing the 2013 Notes outstanding after the use of proceeds pursuant to clause (b) of this subsection 4.14.

 

4.15                           Environmental Matters.  Except for matters set forth on Schedule 4.15 and except with respect to any other matters that could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (a) 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, (b) has become subject to any Environmental Liability, (c) has received notice of any claim with respect to any Environmental Liability or (d) knows of any basis for any Environmental Liability.

 

4.16                           Accuracy of Information, etc. None of the reports, financial statements, certificates or other written information (but excluding all projections and pro forma financial information and other estimates covered by the next sentence) furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender for use in connection with the transactions contemplated by this Agreement or the other Loan Documents (taken together with all information so furnished and as modified or supplemented by the other information so furnished) contained as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained herein or therein not misleading. The projections and pro forma financial information and other estimates and opinions contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Administrative Agent and the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such projections, financial information and other estimates and opinions may differ from the projected results set forth therein by a material amount.

 

4.17                           Security Documents.  (a)  When executed and delivered, the Guarantee and Collateral Agreement will be effective to create in favor of the Administrative Agent, for the benefit of the Lenders, a valid and enforceable security interest in the collateral described therein and proceeds thereof, to the extent contemplated by the Guarantee and Collateral Agreement. All actions have been taken on or prior to the Closing Date which are necessary to cause the Guarantee and Collateral Agreement to constitute, to the extent contemplated by the Guarantee and Collateral Agreement, a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case prior and superior in right to any other Person subject, except in the case of such Pledged Stock, to Liens permitted by subsection 7.3.

 

(b)                                 Each of the Mortgages, upon execution and delivery by the parties thereto, will be effective to create in favor of the Administrative Agent, for the benefit of the Lenders, a legal, valid and enforceable Lien on the Mortgaged Properties described therein and proceeds thereof, and when the Mortgages are filed in the relevant offices, each such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the Mortgaged Properties and the proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each case prior and superior in right to any other Person, subject to Liens permitted by subsection 7.3.  Part 1 of Schedule 1.1B lists, as of the Closing Date, each parcel of owned real property located in the United States and held 

 

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by the Borrower or any of its Subsidiaries that has a value, based on the Borrower’s net book value, in excess of $500,000.

 

SECTION 5.   CONDITIONS PRECEDENT

 

5.1                                 Conditions to Effectiveness.  This Agreement shall become effective upon the satisfaction of the following conditions precedent on the Closing Date:

 

(a)                                  Loan Documents.  The Administrative Agent shall have received (i) this Agreement, executed and delivered by a duly authorized officer of the Borrower and the Lenders, (ii) the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of the Borrower and each Subsidiary Guarantor, (iii) the Parent Guarantee, executed and delivered by a duly authorized officer of LIN TV and (iv) the Stock Pledge Agreement, executed and delivered by a duly authorized officer of LIN TV.

 

(b)                                 Legal Opinion.  The Administrative Agent and the Lenders shall have received a legal opinion from Covington & Burling LLP, counsel for the Loan Parties, substantially in the form of Exhibit F.

 

(c)                                  Repayment of Existing Credit Agreement.  Except as otherwise provided in subsection 3.9, the administrative agent under the Existing Credit Agreement shall have received from the Borrower an amount sufficient to pay in full the principal amount of and accrued interest and fees on account of all commitments, loans and letters of credit under the Existing Credit Agreement and any other amounts due thereunder previously advised to the Borrower, and the outstanding commitments thereunder shall have been cancelled.  All such amounts will be paid with proceeds of Loans made on the Closing Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing Date.

 

(d)                                 Partial Repayment of 2013 Notes.  The Borrower shall have made arrangements reasonably satisfactory to the Administrative Agent for the concurrent or committed refinancing, repurchase, redemption, discharge or defeasance of a portion of the 2013 Notes on a basis that the borrowing of the Loans on the Closing Date does not result in any default in respect thereof.

 

(e)                                  Closing Certificates.  The Administrative Agent shall have received (i) a certificate of a Responsible Officer of LIN TV and each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments, including the incumbency and signature of its respective officers executing each Loan Document to which it is a party, together with satisfactory evidence of the incumbency of such Responsible Officer and the certificate of incorporation or formation, as applicable, certified as of a recent date by the Secretary of State of the State of Delaware,  (ii) a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors (or the executive committee or other governing authority thereof) of LIN TV and each Loan Party authorizing the execution, delivery and performance of each Loan Document to be entered into on the Closing Date to which it is a party and (iii) a long form good standing certificate with respect to LIN TV and each Loan Party issued as of a recent date by the Secretary of State of the State of Delaware.

 

(f)                                    Fees.  The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder, under this Agreement or under any other Loan Document and for which invoices have been presented at least two Business Days before

 

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the Closing Date. All such amounts will be paid with proceeds of Loans made on the Closing Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing Date.

 

(g)                                 Consents.  All consents and approvals, if any, required to be obtained from any Governmental Authority or other Person in connection with the continuing operations of the Loan Parties and the transactions contemplated hereby shall have been obtained, in each case without the imposition of any burdensome conditions, except to the extent that the failure to obtain any such consent or approval could not reasonably be expected to have a Material Adverse Effect.

 

(h)                                 Security Documents.  All documents and instruments required under the Security Documents in connection with the perfection of the Administrative Agent’s security interest in the Collateral (including any Uniform Commercial Code Financing Statement and delivery of any required stock certificates and undated stock powers executed in blank but excluding the Mortgages) shall have been executed and delivered to the Administrative Agent and shall (to the extent applicable) be in proper form for filing.

 

(i)                                     Lien Searches.  The Administrative Agent shall have received the results of a recent Lien search with respect to each Loan Party, and such search shall reveal no Liens on any of the assets of the Loan Parties except for Liens permitted by subsection 7.3 or discharged on or prior to the Closing Date pursuant to documentation reasonably satisfactory to the Administrative Agent.

 

(j)                                     [RESERVED].

 

(k)                                  No Default.  No Default or Event of Default shall have occurred and be continuing on such date.

 

(l)                                     Patriot Act and “Know Your Customer” Information. The Administrative Agent shall have received all documentation and other information mutually agreed to be required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the United States PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “USA Patriot Act”).

 

(m)                               Solvency Certificate.  The Administrative Agent shall have received a solvency certificate from the chief financial officer of the Borrower, in form and substance reasonably acceptable to the Administrative Agent, certifying that the Borrower and its Subsidiaries, on a consolidated basis after giving effect to the transactions contemplated hereby, are solvent.

 

(n)                                 Insurance.  The Administrative Agent shall have received insurance certificates satisfying the requirements of subsection 6.5 of this Agreement and subsection 5.2 of the Guarantee and Collateral Agreement.

 

(o)                                 Flood Determinations; Flood Insurance.  The Administrative Agent shall have received a completed Federal Emergency Management Agency Standard Flood Hazard Determination certified to the Administrative Agent in respect of each Mortgaged Property and, if such Mortgaged Property is located in an area identified as an area having special flood hazards, a policy of flood insurance in amounts reasonably acceptable to the Administrative Agent.

 

5.2                                 Conditions to Each Extension of Credit.  The agreement of each Lender to make any extension of credit requested to be made by it on any date (including, without limitation, any such 

 

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extension of credit on the Closing Date) is subject to the satisfaction of the following conditions precedent:

 

(a)                                  Representations and Warranties.  Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date except for any representation and warranty which is expressly made as of an earlier date, which representation and warranty shall have been true and correct in all material respects as of such earlier date.

 

(b)                                 No Default.  No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

 

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this subsection 5.2 have been satisfied.

 

SECTION 6.   AFFIRMATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder, the Borrower shall (except in the case of delivery of financial information reports and notices) cause each of the Subsidiary Guarantors to:

 

6.1                                 Financial Statements.  Furnish to the Administrative Agent which shall in turn be promptly distributed by the Administrative Agent to the Lenders:

 

(a)                                  as soon as available but in any event within 90 days after the end of each fiscal year of the Borrower a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of operations and of cash flows for such year, in each case setting forth in comparative form the figures for the previous year reported on without a “going concern” or like qualification or exception, or a qualification arising out of the scope of the audit, by independent certified public accountants of nationally recognized standing; and

 

(b)                                 as soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of the Borrower, as applicable the unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, in each case setting forth in comparative form the figures for the corresponding period in the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes).

 

All such financial statements shall fairly present in all material respects the consolidated financial condition of the Borrower and its consolidated Subsidiaries as of such date and shall be prepared in accordance with GAAP applied consistently throughout the periods reflected therein (except as approved by such accountants or officer, as the case may be, and disclosed therein and, in the case of financial statements delivered pursuant to subsection 6.1(b), subject to normal year-end audit adjustments and the absence of footnotes).

 

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6.2                                 Certificates; Other Information.  Furnish to the Administrative Agent (which shall in turn be promptly distributed by the Administrative Agent to the Lenders) or, in the case of clause (e), to the relevant Lender:

 

(a)                                  concurrently with the delivery of any financial statements pursuant to subsection 6.1(a) and 6.1(b), (i) a certificate of a Responsible Officer 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 and (ii) a Compliance Certificate setting forth reasonably detailed calculations demonstrating compliance with subsection 7.1 as of the last day of the relevant fiscal quarter or fiscal year;

 

(b)                                 as soon as available, and in any event no later than 45 days after the end of each fiscal year of the Borrower, a detailed consolidated budget for the Borrower and its consolidated Subsidiaries for such fiscal year (including a projected consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal year, and the related consolidated statements of projected cash flow, projected changes in financial position and projected income) (collectively, the “Projections”), which Projections shall in each case be accompanied by a certificate of a Responsible Officer stating that such Projections are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount;

 

(c)                                  within five days after the same are sent, copies of all financial statements and reports which the Borrower sends to the holders of any class of its debt securities or public equity securities and within five days after the same are filed, copies of all financial statements and reports which the Borrower may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Authority;

 

(d)                                 promptly following their submission with the FCC or any other Federal, state or local Governmental Authority, copies of any and all periodic or special reports filed by the Borrower or any of its Subsidiaries, if such reports are publicly available and indicate any material adverse change in the business, operations or financial condition of the Borrower and its consolidated Subsidiaries taken as a whole or if copies thereof are requested by any Lender or the Administrative Agent (but only to the extent such reports are publicly available);

 

(e)                                  promptly, such additional financial and other information as any Lender may from time to time reasonably request; and

 

(f)                                    promptly following receipt thereof, the Borrower will promptly furnish and will cause each Commonly Controlled Entity to promptly furnish to the Administrative Agent copies of any documents described in Sections 101(k) or 101(l) of ERISA that any Loan Party or any Commonly Controlled Entity may request with respect to any Multiemployer Plan; provided, that if the Loan Parties or any of their Commonly Controlled Entities have not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, then, upon reasonable request of the Administrative Agent, the Loan Parties and/or their Commonly Controlled Entities shall promptly make a request for such documents or notices from such administrator or sponsor and the Borrower shall provide copies of such documents and notices to the Administrative Agent promptly after receipt thereof.

 

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Documents required to be delivered pursuant to subsection 6.1 or subsection 6.2(c) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address at http://www.linmedia.com; or (ii) on which such documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent).

 

6.3                                 Payment of Obligations.  Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, that, if not paid, could reasonably be expected to result in a Material Adverse Effect, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrower or its Subsidiaries, as the case may be, provided that notwithstanding the foregoing, the Borrower and each of its Subsidiaries shall have the right to pay any such obligation and in good faith contest, by proper legal actions or proceedings, the validity or amount of such claims.

 

6.4                                 Conduct of Business and Maintenance of Existence, etc.  (a)  Except as contemplated by subsection 7.4, (i) continue to engage in the broadcasting, media (including digital media) and entertainment businesses (and businesses reasonably related thereto), (ii) preserve, renew and keep in full force and effect its existence and (iii) take all reasonable action to preserve and maintain all rights, privileges, licenses and franchises necessary or desirable in the normal conduct of its business, except (other than with respect to the Station Licenses), in the case of this clause (iii), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect and except if (A) in the reasonable business judgment of the Borrower or such Subsidiary Guarantor, as the case may be, it is in its best economic interest not to preserve and maintain such privileges, rights or franchises (other than the Station Licenses), and (B) such failure to preserve and maintain such privileges, rights or franchises (other than the Station Licenses) would not materially adversely affect the rights of the Lenders hereunder or the value of the collateral security for the Loans; and (b) comply with all Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

6.5                                 Maintenance of Property; Insurance.  (a)  Keep all Property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and maintain with financially sound and reputable insurance companies insurance in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to the Administrative Agent, upon written request, information in reasonable detail as to the insurance carried, except to the extent that the failure to do any of the foregoing with respect to any such property could not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least (A) ten (10) days after receipt by the Administrative Agent of written notice thereof in the case of cancellation due to nonpayment of premium or (B) thirty (30) days after receipt by the Administrative Agent of written notice thereof in all other cases, and (ii) name the Administrative Agent as insured party or loss payee.

 

6.6                                 Inspection of Property; Books and Records; Discussions.  (a)  Keep proper books of records and accounts in accordance with sound business practices and (b) upon reasonable prior notice and at any reasonable time, permit representatives of the Administrative Agent or any Lender to visit and

 

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inspect any of its properties and examine and, if reasonably requested, make copies of its books and records and to discuss the business, operations, properties and financial and other condition of the Borrower and its Subsidiaries with officers and employees of the Borrower and its Subsidiaries and with its independent certified public accountants, provided that the Administrative Agent or such Lender shall notify the Borrower prior to any contact with such accountants and give the Borrower the opportunity to participate in such discussions.

 

6.7                                 Notices.  Promptly, and in any event within five Business Days, after a Senior Responsible Officer of the Borrower becomes aware of the occurrence thereof, give notice to the Administrative Agent and each Lender of the occurrence of any Default or Event of Default if such Default or Event of Default, as applicable, is then continuing.  Each notice pursuant to this subsection 6.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Borrower or the relevant Subsidiary proposes to take with respect thereto.

 

6.8                                 Environmental Laws.  (a)  Except as could not reasonably be expected to have a Material Adverse Effect, comply with all applicable Environmental Laws, and obtain and comply with and maintain any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

 

(b)                                 Conduct and complete (or cause to be conducted and completed) in all material respects all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and in a timely fashion comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, except to the extent that the failure to do so could not be reasonably expected to have a Material Adverse Effect.

 

6.9                                 Additional Collateral, etc.  (a)  With respect to any new Subsidiary created or acquired after the Closing Date by the Borrower or any of its Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement as the Administrative Agent deems necessary or advisable in order to grant to the Administrative Agent, for the benefit of the Lenders, a perfected first priority security interest in the Capital Stock of such new Subsidiary which are owned by the Borrower or any of its Subsidiaries and required to be pledged pursuant to the Guarantee and Collateral Agreement, (ii) deliver to the Administrative Agent the certificates representing such Capital Stock, together with undated stock powers endorsed in blank executed and delivered by a Responsible Officer of the Borrower or such Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement to the extent required by this Agreement and the Guarantee and Collateral Agreement and (B) to take such actions necessary or advisable to grant to the Administrative Agent for the benefit of the Lenders a perfected first priority security interest in the collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary to the extent required, and as contemplated, by the Guarantee and Collateral Agreement, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or as may be reasonably requested by the Administrative Agent and (iv) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinion shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent, provided that notwithstanding the foregoing, (i) only 65% of the voting Capital Stock of any direct Foreign Subsidiary of the Borrower or any Domestic Subsidiary need be pledged under this clause (a), (ii) no voting Capital Stock of any Foreign Subsidiary other than a direct Foreign Subsidiary of the Borrower or any Domestic Subsidiary need be pledged under this clause (a), (iii) no Immaterial Subsidiary or any direct or indirect Foreign Subsidiary shall become a Guarantor or shall be required to pledge any of its assets hereunder or under any other Loan Document and (iv) no 

 

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Subsidiary shall become a Guarantor or shall be required to pledge any of its assets hereunder or under any other Loan Document if such Subsidiary is prohibited from doing so by any Requirement of Law or by any contractual obligation or if such Subsidiary would require a consent, approval, license or authorization from a Governmental Authority to do so.

 

(b)                                 Promptly, but in any event not later than 45 Business Days after the Closing Date, or such longer period (not to exceed 90 Business Days after the Closing Date) as may be agreed by the Administrative Agent in its reasonable discretion, in respect of each Mortgaged Property, execute and deliver to the Administrative Agent a Mortgage reasonably satisfactory to the Administrative Agent in respect of each Mortgaged Property, except in connection with any Mortgaged Property as to which the Administrative Agent shall determine in its reasonable discretion, after consultation with the Borrower, that the costs and burden of obtaining a security interest are excessive in relation to the value of the security afforded thereby, and provide to the Administrative Agent in respect of each Mortgaged Property (i) a mortgagee’s title insurance policy (or policies) or marked up unconditional binder for such insurance, together with a current ALTA survey thereof and a surveyor’s certificate, or, to the extent that the mortgagee’s title insurance policy delivered in connection therewith meets the requirements set forth in this subsection 6.9(b), an existing ALTA survey thereof (if acceptable to the Administrative Agent in its reasonable discretion) or an “ExpressMap” thereof, in each case in form reasonably satisfactory to the Administrative Agent, provided that each such policy shall (A) be in an amount reasonably satisfactory to the Administrative Agent with respect to each Mortgaged Property covered thereby (but not in excess of the fair market value thereof); (B) insure that the Mortgage insured thereby creates a valid first Lien on such Mortgaged Property free and clear of all defects and encumbrances, except as disclosed therein or otherwise permitted by subsection 7.3; (C) name the Administrative Agent for the benefit of the Lenders as the insured thereunder; (D) be in form reasonably satisfactory to the Administrative Agent; (E) contain such endorsements, coinsurance, reinsurance and affirmative coverage as the Administrative Agent may reasonably request to the extent available at commercially reasonable rates; and (F) be issued by First American Title Insurance Company or such other title companies reasonably satisfactory to the Administrative Agent (including any such title companies acting as co-insurers or reinsurers, at the option of the Administrative Agent), (ii) evidence reasonably satisfactory to it that all premiums in respect of each such policy, all charges for mortgage recording tax, and all related expenses, if any, have been paid or duly provided for and (iii) if requested by the Administrative Agent, legal opinions from local counsel and counsel in the jurisdictions where the owners of the Mortgaged Properties are organized relating to the matters described above, which opinions shall be in form and substance reasonably satisfactory to the Administrative Agent.

 

(c)                                  Upon the request of the Administrative Agent, to the extent permitted by applicable Requirements of Law at the time of such request, grant or cause its Subsidiaries to grant, to the Administrative Agent, a direct security interest in the Station Licenses within 30 days after receipt of such request, provided that to the extent FCC consent shall be required in connection with granting such security interest, such consent shall be requested within 30 days after receipt of such request and upon receipt of such FCC consent, such security interest shall be granted within 10 Business Days thereof.

 

(d)                                 Upon the occurrence and during the continuance of (i) any Event of Default with respect to paragraph (a) of Section 8, (ii) any payment default with respect to any Subordinated Indebtedness or Senior Unsecured Indebtedness, or (iii) any Event of Default with respect to subsection 7.1, promptly, but in any event not more than 30 Business Days (subject to necessary approvals by the FCC), following the request of the Administrative Agent, cause the assets relating to each Station held by the Borrower to be transferred to a related License Subsidiary or, at the election of the Administrative Agent or if there is no License Subsidiary related to such Station, another Subsidiary that has no other assets or liabilities.

 

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6.10                           After-Acquired Stations.  Unless the Borrower and the Administrative Agent shall otherwise agree, cause the Station Licenses relating to each after-acquired Station to be held in one or more License Subsidiaries, provided that to the extent the Borrower shall not have received FCC approval with respect to the foregoing at the scheduled closing of the acquisition of such Station, the Borrower shall comply with the foregoing requirement as soon as practicable following such acquisition (but in any event within 60 days after such acquisition).

 

6.11                           Sale or Unwinding of LLC; Release of LIN TV.  Notwithstanding any provision in any Loan Document to the contrary, at such time as (a) (i) the LLC is, directly or indirectly, unwound, liquidated or dissolved or (ii) any transaction permitted by subsection 7.5(i) occurs, (b) LIN TV is released from the Joint Venture Loan Guarantee in connection therewith and (c) LIN TV is, directly or indirectly, liquidated or dissolved (or merged or consolidated into or with the Borrower, with the Borrower being the continuing or surviving corporation), then, so long as such actions and events taken as a whole shall not result in any material net tax liability to the Borrower or be materially adverse to the interests of the Lenders, as reasonably determined by the Administrative Agent, then the Borrower may request the Administrative Agent to, and upon receipt of such request, the Administrative Agent shall acknowledge that (i) any collateral pledged by LIN TV shall be automatically released from the Liens created by the Stock Pledge Agreement, (ii) LIN TV shall be automatically released from its guarantee obligations under the Parent Guarantee and (iii) the Parent Guarantee and the Stock Pledge Agreement and all other obligations (other than those, if any, expressly stated to survive such termination) of LIN TV thereunder shall automatically terminate, all without any requirement for the delivery of any instrument or performance of any act by any Person.  Immediately upon the termination of the Parent Guarantee and the Stock Pledge Agreement pursuant to this subsection 6.11, subsection 7.12, subsection 8(j)(ii), subsection 8(l) and each of the references to LIN TV in the definitions of “Asset Sale”, “Recovery Event” and “Reinvestment Deferred Amount” shall automatically cease to be of any further effect and shall be deemed to have been deleted from this Agreement, all without any requirement for the delivery of any instrument or performance of any act by any Person.  Each of the Borrower and the Administrative Agent agrees that it shall enter into any amendment to this Agreement or take any other actions reasonably requested by the other as may be necessary or desirable to reflect or contemplate the actions and events described above, including any such amendment modifying the definition of Change of Control and related definitions.

 

SECTION 7.   NEGATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder, the Borrower shall not, and shall not permit (except with respect to subsection 7.1) any of its Subsidiaries to, directly or indirectly:

 

7.1                                 Financial Condition Covenants.

 

(a)                                  Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as of the last day of any Test Period set forth below to exceed the ratio set forth below opposite such period:

 

	
Period Ending
    	
 
    	
Consolidated Leverage Ratio
    
	
 
    	
 
    	
 
    
	
December 31,   2011
    	
 
    	
6.25: 1:00
    
	
March 31,   2012
    	
 
    	
6.00: 1:00
    
	
June 30,   2012
    	
 
    	
6.00: 1:00
    

 

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September 30, 2012
    	
 
    	
6.00: 1:00
    
	
December 31,   2012
    	
 
    	
6.00: 1:00
    
	
March 31,   2013
    	
 
    	
6.00: 1:00
    
	
June 30,   2013
    	
 
    	
6.00: 1:00
    
	
September 30,   2013
    	
 
    	
6.00: 1:00
    
	
December 31,   2013 and thereafter
    	
 
    	
6.00: 1:00
    

 

(b)                                 Consolidated Interest Coverage Ratio.  Permit the Consolidated Interest Coverage Ratio as of the last day of any Test Period set forth below to be less than the ratio set forth below opposite such period:

 

	
Period Ending
    	
 
    	
Consolidated Interest Coverage Ratio
    
	
 
    	
 
    	
 
    
	
December 31,   2011
    	
 
    	
2.00: 1:00
    
	
March 31,   2012
    	
 
    	
2.25: 1:00
    
	
June 30,   2012
    	
 
    	
2.25: 1:00
    
	
September 30,   2012
    	
 
    	
2.25: 1:00
    
	
December 31,   2012
    	
 
    	
2.25: 1:00
    
	
March 31,   2013
    	
 
    	
2.50: 1:00
    
	
June 30,   2013
    	
 
    	
2.50: 1:00
    
	
September 30,   2013
    	
 
    	
2.50: 1:00
    
	
December 31,   2013 and thereafter
    	
 
    	
2.50: 1:00
    

 

(c)                                  Consolidated Senior Secured Leverage Ratio.  Permit the Consolidated Senior Secured Leverage Ratio as of the last day of any Test Period set forth below to exceed the ratio set forth below opposite such period:

 

	
Period Ending
    	
 
    	
Consolidated Senior Secured
   Leverage Ratio
    
	
 
    	
 
    	
 
    
	
December 31,   2011
    	
 
    	
4.25: 1:00
    
	
March 31,   2012
    	
 
    	
4.00: 1:00
    
	
June 30,   2012
    	
 
    	
3.75: 1:00
    
	
September 30,   2012
    	
 
    	
3.25: 1:00
    
	
December 31,   2012
    	
 
    	
3.00: 1:00
    
	
March 31,   2013
    	
 
    	
3.00: 1:00
    
	
June 30,   2013
    	
 
    	
3.00: 1:00
    
	
September 30,   2013
    	
 
    	
3.00: 1:00
    
	
December 31,   2013 and thereafter
    	
 
    	
3.00: 1:00
    

 

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7.2                                 Limitation on Indebtedness.  Create, incur, assume or suffer to exist (in each case, to “Incur”) any Indebtedness, except:

 

(a)                                  Indebtedness of any Loan Party pursuant to any Loan Document;

 

(b)                                 Indebtedness owed to the Borrower or any Subsidiary;

 

(c)                                  purchase money Indebtedness, provided that the aggregate principal amount of Indebtedness incurred pursuant to this subsection 7.2(c) shall not exceed $25,000,000 at any one time outstanding;

 

(d)                                 Capital Lease Obligations, provided that the aggregate principal amount of Capital Lease Obligations incurred pursuant to this subsection 7.2(d) shall not exceed $25,000,000 at any one time outstanding;

 

(e)                                  Indebtedness (other than any Subordinated Indebtedness) outstanding on the Closing Date and listed on Schedule 7.2(e) and any refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof);

 

(f)                                    (i) Guarantee Obligations of the Borrower or any of its Subsidiaries in respect of any Indebtedness permitted under this subsection 7.2 (other than Indebtedness incurred under clause (g) of this subsection 7.2, which shall be governed by such clause (g)), (ii) Guarantee Obligations incurred in the ordinary course of business by the Borrower or any of its Subsidiaries, provided that the Incurrence of such Guarantee Obligations could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (iii) Guarantee Obligations permitted under subsection 7.8, and (iv) other Guarantee Obligations not to exceed $50,000,000 in aggregate principal amount at any time outstanding;

 

(g)                                 (i) Subordinated Indebtedness of the Borrower, (ii) Senior Unsecured Indebtedness of the Borrower and (iii) Guarantee Obligations of any Subsidiary Guarantor in respect of Indebtedness referred to in clause (i) or (ii) of this subsection 7.2(g), provided that, at the time of Incurrence of such Indebtedness and Guarantee Obligations, the Consolidated Leverage Ratio as of the last day of the Test Period ending immediately prior to such Incurrence (adjusted on a pro forma basis to give effect to such Incurrence) shall not be less than 0.25: 1.00 below the Consolidated Leverage Ratio required under subsection 7.1(a) as of the last day of the Test Period ending immediately prior to such Incurrence; provided  further that (A) at the time of incurrence of such Indebtedness and Guarantee Obligations, no Default or Event of Default shall have occurred and be continuing and (B) a Subsidiary Guarantor shall not guarantee any Subordinated Indebtedness unless such guarantee of Subordinated Indebtedness is subordinated to the guarantee of such Subsidiary Guarantor of the Obligations on terms no less favorable to the Lenders than the subordination provisions of the Subordinated Indebtedness to which such guarantee relates;

 

(h)                                 Indebtedness resulting from the endorsement of negotiable instruments in the ordinary course of business or arising from the honoring of a check, draft or similar instruments presented by the Borrower or a Subsidiary in the ordinary course of business against insufficient funds;

 

(i)                                     Indebtedness in respect of any Interest Rate Protection Agreements;

 

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(j)                                     Indebtedness (i) of the Borrower or any of its Subsidiaries to the seller representing all or part of the purchase price in a Permitted Acquisition or any Asset Swap Transaction or (ii) assumed in connection with Permitted Acquisitions or Asset Swap Transactions, or any Indebtedness of any Person existing at the time such Person is merged with or into or consolidated with, or becomes, a Loan Party or a Subsidiary of a Loan Party in connection with a Permitted Acquisition or Asset Swap Transaction, provided that such Indebtedness is not incurred in connection with or in contemplation of such other Person merging with or into, or becoming, a Loan Party or a Subsidiary of a Loan Party, and any refinancings, refundings, renewals or extensions of any Indebtedness referred to in this clause (j) (without any increase in the principal amount thereof or overall collateral therefor or any change in the status of any subordinated Indebtedness), in each case in an aggregate principal amount not to exceed $75,000,000 at any time outstanding.

 

(k)                                  [RESERVED];

 

(l)                                     Indebtedness secured by Liens permitted under subsections 7.3(a), (b), (c), (d), (m) and (o); and

 

(m)                               additional Indebtedness of the Borrower or any of its Subsidiaries in an aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed $25,000,000 at any one time outstanding, provided that, at the time of incurrence of such Indebtedness, no Default or Event of Default shall have occurred and be continuing.

 

7.3                                 Limitation on Liens.  Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

 

(a)                                  Liens imposed by any Governmental Authority for taxes, assessments or charges not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves are maintained on the books of the Borrower or one of its Subsidiaries, as the case may be, in conformity with GAAP;

 

(b)                                 carriers’, landlord’s, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business;

 

(c)                                  pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

 

(d)                                 deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, insurance contracts, surety and appeal bonds, performance bonds and other obligations of a like nature;

 

(e)                                  easements, rights-of-way, restrictions, covenants, minor exceptions to title and other similar encumbrances (i) previously or hereafter existing which, in the aggregate, are not material in amount and which, in the case of such encumbrances on any of the Mortgaged Properties, do not in the aggregate materially detract from the value of the Property subject thereto or, in the case of such encumbrances on property, materially interfere with the ordinary conduct of the business of the Borrower and its Subsidiaries, taken as a whole, or (ii) which are set forth in title insurance policies delivered to the Administrative Agent on or prior to the Closing Date or after the Closing Date pursuant to subsection 6.9(b);

 

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(f)                                    Liens in existence on the Closing Date listed on Schedule 7.3(f) securing Indebtedness permitted by subsection 7.2(e) (including refinancings, refundings, renewals and extensions of such Indebtedness as permitted by subsection 7.2(e)) or other obligations constituting current trade payables or accrued expenses incurred in the ordinary course of business or obligations created through the use of purchase cards and credit cards, permitted by this Agreement and not constituting Indebtedness, provided that no such Lien is spread to cover any additional property (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the instrument creating such Lien) after the Closing Date and that the principal amount of Indebtedness or other obligations constituting current trade payables or accrued expenses incurred in the ordinary course of business or obligations created through the use of purchase cards and credit cards, permitted by this Agreement and not constituting Indebtedness secured thereby is not increased except pursuant to the instrument creating such Lien (without any modification thereof after the Closing Date);

 

(g)                                 (i) Liens securing Indebtedness of the Borrower or any of its Subsidiaries permitted pursuant to subsections 7.2(c) and 7.2(d) (provided that (A) such Liens shall be created within 180 days of the acquisition of such fixed or capital assets, and (B) such Liens do not at any time encumber any property other than the property financed by such Indebtedness), (ii) Liens securing Indebtedness existing on any property or asset at the time of acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Closing Date at the time such Person becomes a Subsidiary (provided that (x) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (y) such Lien shall not apply to any other property or assets of the Borrower or any of its Subsidiaries and (z) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be) (including refinancings, refundings, renewals and extensions of such Indebtedness as permitted by subsection 7.2), and (iii) Liens securing Indebtedness of the Borrower or any of its Subsidiaries assumed in connection with a Permitted Acquisition or an Asset Swap Transaction in accordance with the terms of subsection 7.2(j);

 

(h)                                 Liens created pursuant to the Security Documents;

 

(i)                                     any obligations or duties affecting any of the Property of the Borrower or its Subsidiaries to any municipality or public authority with respect to any franchise, grant, license or permit;

 

(j)                                     Liens imposed by operation of law with respect to any judgments or orders not constituting an Event of Default;

 

(k)                                  Liens arising from precautionary Uniform Commercial Code financing statement filings with respect to operating leases or consignment arrangements entered into by the Borrower or any of its Subsidiaries in the ordinary course of business or Liens on Property which is the subject of a Sale permitted by subsection 7.5 relating to such Sale (it being understood that such Liens may not be perfected prior to the completion of such Sale except in the ordinary course of business);

 

(l)                                     Liens in favor of a banking institution arising by operation of law or otherwise encumbering deposits (including the right of set-off) held by such banking institution and which are within the general parameters customary in the banking industry;

 

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(m)                               Liens on Property of the Borrower or any of its Subsidiaries in favor of others securing licenses, subleases and leases permitted hereunder and granted to others and not interfering in any material respect in the business of the Borrower or any of its Subsidiaries;

 

(n)                                 Liens not otherwise permitted by this subsection 7.3 so long as the aggregate outstanding principal amount of the obligations secured thereby does not exceed $10,000,000 at any one time;

 

(o)                                 Liens granted by LIN Television of Texas, LP with respect to its interest in the LLC to GECC in connection with the Joint Venture Loan;

 

(p)                                 Liens securing the repayment or prepayment of the 2013 Notes; and

 

(q)                                 Liens in the form of the seller’s right or option to repurchase, or to cause the purchase or sale of, the Capital Stock of Unrestricted Subsidiaries that are not Wholly Owned Subsidiaries of the Borrower or any Subsidiary and that were acquired after the Closing Date.

 

7.4                                 Limitation on Fundamental Changes.  Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its property, business or assets, except:

 

(a)                                  any Subsidiary of the Borrower (other than, except as set forth below, any License Subsidiary or, at any time after any of the conditions set forth in subsection 6.9(d)(i), (ii) or (iii) shall have occurred, any Subsidiary holding the assets and liabilities of any Station) may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any Subsidiary Guarantor (other than, except as set forth below, any License Subsidiary or, at any time after any of the conditions set forth in subsection 6.9(d)(i), (ii) or (iii) shall have occurred, any Subsidiary holding the assets and liabilities of any Station) (provided that the Subsidiary Guarantor shall be the continuing or surviving corporation) or with or into any Subsidiary (provided that neither Subsidiary is a Subsidiary Guarantor); provided, however, that (i) a License Subsidiary and any Subsidiary holding the assets and liabilities of any Station may take any actions otherwise prohibited by this clause (a) to the extent such merger or consolidation occurs in contemplation of, and immediately preceding, a sale, transfer or other disposition (including an Asset Swap Transaction) of such License Subsidiary or other Subsidiary and (ii) any Subsidiary may take any actions otherwise prohibited by this clause (a) to the extent necessary to comply with the requirements of subsection 6.9(d) or subsection 6.10;

 

(b)                                 any Subsidiary of the Borrower (other than, except as set forth below, any License Subsidiary or, at any time after any of the conditions set forth in subsection 6.9(d)(i), (ii) or (iii) shall have occurred, any Subsidiary holding the assets and liabilities of any Station) may sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any Subsidiary Guarantor or, if such Subsidiary is not a Subsidiary Guarantor, to any other Subsidiary or the Borrower; provided, however, that (i) a License Subsidiary and any Subsidiary holding the assets and liabilities of any Station may take any actions otherwise prohibited by this clause (b) to the extent any sale, transfer or other disposition occurs in contemplation of, and immediately preceding, a sale, transfer or other disposition (including an Asset Swap Transaction) of such License Subsidiary or other Subsidiary, and (ii) any Subsidiary may take any actions otherwise prohibited by this clause (b) to the extent necessary to comply with the requirements of subsection 6.9(d) or subsection 6.10;

 

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(c)                                  the Borrower may be merged or consolidated, directly or indirectly, with or into LIN TV in connection with the activities contemplated by subsection 6.11, provided that the Borrower shall be the continuing or surviving corporation; and

 

(d)                                 any Subsidiary of the Borrower may enter into any merger, consolidation, amalgamation or sale transaction in connection with, or in order to consummate, a transaction permitted by subsection 7.5 or subsection 7.8.

 

7.5                                 Limitation on Sale of Assets.  Convey, sell, lease, assign, transfer or otherwise dispose of (each a “Sale”) any of its property, business or assets (including, without limitation, receivables, leasehold interests and its interest in the LLC but excluding any sale and leaseback of assets), whether now owned or hereafter acquired, except:

 

(a)                                  Sales of obsolete or worn out property in the ordinary course of business or Property that is no longer useful in the conduct of the Borrower’s business in the ordinary course of business;

 

(b)                                 Sales resulting from any casualty or condemnation of Property or assets;

 

(c)                                  any Sale of any Property or assets, provided that (i) the aggregate Net Cash Proceeds of Sales made pursuant to this paragraph plus the fair market value (as reasonably determined by the Borrower) of all real and personal property the subject of sale and leaseback arrangements made pursuant to subsection 7.11(b) shall not exceed $350,000,000 in the aggregate and (ii) at least 75% of the consideration received by the Borrower in respect of each such Sale is in the form of cash and Cash Equivalents (it being understood that any such Net Cash Proceeds received shall be applied toward the prepayment of the Term Loans to the extent required in accordance with subsection 2.9).

 

(d)                                 Sales of Investments made pursuant to subsection 7.8(a), (b), (h), (i) or (j);

 

(e)                                  Sales to the Borrower or a Subsidiary (in the case of a sale by a Subsidiary Guarantor, to the Borrower or to a Subsidiary Guarantor and in the case of the Borrower, to a Subsidiary Guarantor);

 

(f)                                    the Sale or discount of overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof;

 

(g)                                 licenses or sublicenses of intellectual property and general intangibles (other than any Station Licenses) and licenses, leases or subleases of other Property (other than any Station Licenses), in each case which do not materially interfere with the business of the Borrower and its Subsidiaries;

 

(h)                                 transactions permitted by subsection 7.4;

 

(i)                                     any Sale of interests in the LLC or assets of the LLC;

 

(j)                                     Asset Swap Transactions; and

 

(k)                                  transactions described in subsection 7.11.

 

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7.6                                 Limitation on Dividends.  Declare or pay any dividend (other than dividends payable solely in Capital Stock) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the Borrower or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any of its Subsidiaries (such declarations, payments, setting apart, purchases, redemptions, defeasance, retirements, acquisitions and distributions being herein called “Restricted Payments”), except that the Borrower may make the following Restricted Payments, so long as no Event of Default has occurred and is continuing or would be continuing after giving effect to such Restricted Payment, provided that the Borrower shall be permitted to make the Restricted Payments in clauses (a), (c) and (d) below notwithstanding any such Event of Default:

 

(a)                                  any payments the proceeds of which shall be used by LIN TV to pay administrative, legal and accounting costs and expenses (including tax expenses) of LIN TV that are reasonable and customary and incurred in the ordinary course of business, including franchise fees and similar costs; provided, however, any such administrative expenses shall not exceed an aggregate amount of $3,000,000 per fiscal year;

 

(b)                                 any payments the proceeds of which will be used to repurchase the Capital Stock or other securities of LIN TV from outside directors, employees or members of the management of LIN TV, the Borrower or any other Subsidiary of LIN TV, at a price not in excess of fair market value, in an aggregate net amount at the time of the making thereof not in excess of the Available Amount;

 

(c)                                  any payments the proceeds of which will be used to pay taxes of LIN TV, the Borrower and its Subsidiaries as part of a consolidated, combined or unitary tax filing group;

 

(d)                                 any payments the proceeds of which are used to fulfill the obligations of LIN TV, the Borrower or any other Subsidiary of LIN TV under an employee stock purchase plan or similar plan covering employees of LIN TV, the Borrower or any other Subsidiary of LIN TV as from time to time in effect, in an aggregate net amount at the time of the making thereof not to exceed the Available Amount;

 

(e)                                  any payments the proceeds of which will be used to (i) purchase or acquire the Capital Stock of the Borrower or LIN TV (or any warrants or options to purchase any such Capital Stock) or (ii) make one or more payments to General Electric Company, GECC and/or NBCUniversal Media, LLC (and/or any of their respective affiliates) in connection with a transaction permitted by subsection 7.5(i), for an aggregate amount under clauses (i) and (ii) of up to $150,000,000; provided that, in the case of purchases contemplated by clause (i), the Borrower shall be in compliance with a Consolidated Senior Secured Leverage Ratio as of the last day of the Test Period ending immediately prior to such purchase of (i) 3.25: 1.00, in the case of the Test Periods ending September 30, 2011, December 31, 2011, March 31, 2012 and June 30, 2012, and (ii) 3.00: 1.00 in the case of Test Periods ending thereafter; and

 

(f)                                    any payments the proceeds of which will be used to pay a dividend on the Capital Stock of the Borrower or LIN TV (and any declaration thereof) in an aggregate amount at the time of the declaration of the payment of such dividend not to exceed the Available Amount.

 

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7.7                                 [RESERVED].

 

7.8                                 Limitation on Investments, Loans and Advances.  Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any assets constituting a business unit of, or make any other investment in, any other Person (“Investments”), except:

 

(a)                                  extensions of trade credit in the ordinary course of business;

 

(b)                                 Investments in Cash Equivalents;

 

(c)                                  guarantees permitted by subsection 7.2;

 

(d)                                 (i) Investments in the Borrower or any of its Subsidiaries, and (ii) Investments in LIN TV, so long as a Restricted Payment for the same purpose would then be permitted to be made under subsection 7.6 (it being understood that any such Investment made in reliance on this clause (ii) shall reduce to an equivalent extent the Restricted Payments permitted by subsection 7.6);

 

(e)                                  loans and advances by the Borrower or its Subsidiaries to their respective directors, officers and employees in an aggregate principal amount not exceeding $5,000,000 at any one time outstanding;

 

(f)                                    Investments in existence on the Closing Date and listed on Schedule 7.8(f), and extensions, renewals, modifications or restatements or replacements thereof, provided that no such extension, renewal, modification or restatement shall (i) increase the amount of the original Investment or (ii) adversely affect the interests of the Lenders with respect to such original Investment or the interests of the Lenders under this Agreement or any other Loan Document in any material respect;

 

(g)                                 Investments permitted by subsections 7.2(b), (d), (f) and (l), subsections 7.4 and 7.6 and Investments constituting Capital Expenditures;

 

(h)                                 Capital Stock, promissory notes and other similar non-cash consideration received by the Borrower or any of its Subsidiaries in connection with any Sale permitted by subsection 7.5 and Capital Stock, promissory notes and other similar non-cash consideration received in connection with Permitted Acquisitions or Asset Swap Transactions;

 

(i)                                     Investments in Interest Rate Protection Agreements relating to the businesses and finances of the Borrower or any of its Subsidiaries and not for purposes of speculation;

 

(j)                                     Investments (including debt obligations and Capital Stock) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business;

 

(k)                                  in addition to Investments otherwise expressly permitted by this subsection, Investments made after the Closing Date by the Borrower and its Subsidiaries in an aggregate amount (in each case, valued at cost, without regard to any write down or write up thereof) at any one time outstanding not to exceed $10,000,000;

 

(l)                                     Investments after the Closing Date by the Borrower and its Subsidiaries constituting Permitted Acquisitions or Asset Swap Transactions;

 

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(m)                               Investments of Net Cash Proceeds not required to be applied to the prepayment of Term Loans pursuant to subsection 2.9;

 

(n)                                 Investments in the LLC solely for the purpose of curing any event of default or potential event of default under the Joint Venture Loan, in a net amount not to exceed the Available Amount;

 

(o)                                 Investments not otherwise permitted by this subsection 7.8 in a net amount not to exceed $10,000,000; and

 

(p)                                 Investments acquired in exchange for the issuance of Capital Stock of LIN TV and which, to the extent initially acquired by LIN TV, are contributed to the Borrower as equity.

 

7.9                                 Limitation on Optional Payments.  Make any optional payment or prepayment on or optional redemption of or any payments in optional redemption, defeasance or repurchase of (A) Subordinated Indebtedness (other than the 2013 Notes), (B) the 2018 Notes or any other Senior Unsecured Indebtedness incurred pursuant to subsection 7.2(g)(ii), or (C) Indebtedness incurred pursuant to subsection 7.2(j), except in each case (i), for the avoidance of doubt, mandatory payments of principal or interest, fees and expenses required by the terms of the agreement governing or instrument evidencing such Indebtedness, but only to the extent permitted under the subordination provisions, if any, applicable thereto and (ii) other payments in an aggregate amount not to exceed the Available Amount.

 

7.10                           Limitation on Transactions with Affiliates.  (a)  Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate unless such transaction is (i) otherwise expressly permitted under this Agreement, or (ii) upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.

 

(b)                                 In addition, notwithstanding the foregoing, the Borrower and its Subsidiaries shall be entitled to make the following payments and/or to enter into the following transactions:

 

(i)                                     transactions between or among the Borrower and its Subsidiaries;

 

(ii)                                  the payment of reasonable and customary fees and reimbursement of expenses payable to directors of LIN TV and the Borrower; and

 

(iii)                               employment arrangements with respect to the procurement of services of directors, officers and employees in the ordinary course of business and the payment of reasonable fees in connection therewith.

 

7.11                           Limitation on Sales and Leasebacks.  Enter into any arrangement with any Person providing for the leasing by the Borrower or any Subsidiary of real or personal, immovable or movable, property which has been or is to be sold or transferred by the Borrower or such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Borrower or such Subsidiary, except: (a) any sale and leaseback resulting from the incurrence of any lease in respect of any capital asset entered into within 180 days of the acquisition of such capital asset for the purpose of providing permanent financing of such capital asset; and (b) any sale of office and/or studio buildings or towers and the real property on which such towers are located in connection with which the buyer of such property leases back tower capacity or office and/or studio capacity to the seller so long as, in the case of this clause (b), (i) no Event of Default 

 

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has occurred or is continuing or would be continuing after giving effect thereto, (ii) the fair market value of all such real and personal property the subject of such arrangements (as reasonably determined by the Borrower) does not exceed $75,000,000 in the aggregate and (iii) the fair market value of all such real and personal property the subject of such arrangements (as reasonably determined by the Borrower)  plus the aggregate Net Cash Proceeds of Sales theretofore made pursuant to subsection 7.5(c) does not exceed $350,000,000 in the aggregate (it being understood that any such Net Cash Proceeds received shall be applied toward the prepayment of the Term Loans to the extent required in accordance with subsection 2.9).

 

7.12                           Limitations on Change in Holding Company Status.  Permit LIN TV to engage in any activities, make any Capital Expenditures, or incur any Indebtedness or Guarantee Obligations other than (a) activities customarily carried out or required of a publicly-owned company (including in connection with share repurchases, any issuance of Capital Stock and the appointment and employment of officers and employees), (b) performance of its obligations pursuant to each of (i) the Joint Venture Loan Guarantee, (ii) the Stock Pledge Agreement and (iii) the Parent Guarantee, (c) other activities incidental to its ownership of the Capital Stock and obligations of the Borrower and its Subsidiaries permitted hereunder and the management thereof (including in connection with guarantees of obligations of the Borrower and its Subsidiaries and reinvestments contemplated by Reinvestment Notices delivered pursuant to subsection 2.9), (d) activities necessary to convert LIN TV into a limited liability company, including by means of a merger or consolidation with or into a newly formed limited liability company and (e) activities contemplated by subsection 6.11, subsection 7.6 or subsection 7.8(o) or (p) and the ownership and management of cash and Cash Equivalents and like assets and other assets incidental to the conduct of its activities as a publicly owned company.

 

SECTION 8.   EVENTS OF DEFAULT

 

If any of the following events shall occur and be continuing:

 

(a)                                  The Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document, and such failure continues for a period of (i) in the case of fees and interest payable under subsections 2.6, 2.12 and 3.3(a), five Business Days after such fees or interest become due, and (ii) in the case of any other fees, interest or other amounts, five Business Days after the day on which written notice of such failure shall have been given to the Borrower by the Administrative Agent or any Lender; or

 

(b)                                 Any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or which is contained in any certificate delivered pursuant to subsection 6.2(a) or contained in any amendment or waiver of any Loan Document or in any Incremental Term Loan Activation Notice or Incremental Revolving Loan Activation Notice shall prove to have been inaccurate in any material respect on or as of the date made or deemed made; or

 

(c)                                  The Borrower shall default in the observance or performance of any agreement contained in subsection 6.4(a)(ii) (as to the continued existence of the Borrower only) or subsection 6.7, subsection 6.9(b) or subsection 6.9(d) or Section 7 (other than subsection 7.12) of this Agreement; or

 

(d)                                 The Borrower, any of its Subsidiaries or LIN TV shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this subsection), and such default shall continue unremedied for a period of 30 days after written notice thereof from the Administrative Agent to the Borrower; or

 

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(e)                                  The Borrower, any Subsidiary Guarantor or LIN TV shall (i) default in making any payment of any principal of or interest on any Indebtedness (other than pursuant to the Loan Documents) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause such Indebtedness to become due prior to its stated maturity, provided that a default, event or condition described in clause (i) or (ii) of this paragraph (e) shall not at any time constitute an Event of Default under this Agreement unless, at such time, one or more defaults, events or conditions (without duplication as to the same item of Indebtedness) of the type described in clauses (i) and (ii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $25,000,000; or

 

(f)                                    (i) The Borrower, any Subsidiary Guarantor or LIN TV shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or substantially all of its assets, or the Borrower, any Subsidiary Guarantor or LIN TV shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower, any Subsidiary Guarantor or LIN TV any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 90 days; or (iii) there shall be commenced against the Borrower or any Subsidiary Guarantor any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or substantially all of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 90 days from the entry thereof, or (iv) the Borrower, any Subsidiary Guarantor or LIN TV shall take any corporate action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any Subsidiary Guarantor shall not, or shall be unable to, or shall admit in writing its inability to, generally pay its debts (other than intercompany debt) as they become due; or

 

(g)                                 (i) The Borrower shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any failure by any Single Employer Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Single Employer Plan, whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed (or a trustee shall be appointed) to administer, or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower shall incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or receive a notice concerning the imposition of liability by a Multiemployer Plan or a notice concerning the determination that a Multiemployer Plan is or is expected to be, Insolvent, in Reorganization, in “endangered” or “critical” status within the meaning of Section 432 of the Code or Section 305 of ERISA, (vi) a determination that any Plan is or is expected to be in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA), (vii) the filing pursuant to Section 412 

 

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of the Code or Section 302 of ERISA of an application for a waiver of the minimum funding standard with respect to any Single Employer Plan, and (viii) the failure by the Borrower or any Commonly Controlled Entity to pay when due (after expiration of any applicable grace period) any installment payment with respect to withdrawal liability under Section 4201 of ERISA; and in each case in clauses (i) through (viii) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect; or

 

(h)                                 One or more judgments or decrees shall be entered against the Borrower, any Subsidiary Guarantor or LIN TV involving in the aggregate a liability (not paid or fully covered by insurance) of $25,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

 

(i)                                     Any Loan Document shall, at any time, cease to be in full force and effect (unless released by the Administrative Agent at the direction of the Required Lenders or all Lenders (to the extent required by subsection 10.1) or as otherwise permitted under this Agreement or the other Loan Documents) or shall be declared null and void (and, if such invalidity is such so as to be amenable to cure without materially disadvantaging the position of the Administrative Agent and the Lenders thereunder, the relevant Loan Party shall have failed to cure such invalidity within 30 days after notice from the Administrative Agent), or the validity or enforceability thereof shall be contested by any Loan Party, or any of the Liens intended to be created by any Security Document (including, without limitation, any Mortgage filed) shall cease to be or shall not be a valid and perfected Lien having the priority contemplated thereby (and, if such invalidity is such so as to be amenable to cure without materially disadvantaging the position of the Administrative Agent and the Lenders as secured parties thereunder, the relevant Loan Party shall have failed to cure such invalidity within 30 days after notice from the Administrative Agent); or

 

(j)                                     (i) A Change of Control shall occur or (ii) LIN TV shall fail to own directly or indirectly, beneficially and of record, 100% of the Capital Stock of the Borrower free and clear of all Liens other than Liens in favor of the Lenders pursuant to the Loan Documents; or

 

(k)                                  The principal broadcasting licenses of any Station, or any other material authorizations, licenses or permits issued by the FCC, shall be revoked or canceled or expire by its terms and not be renewed, or shall be modified, in each case in a manner which would have a Material Adverse Effect; or

 

(l)                                     Any event of default shall have occurred and be continuing under the Joint Venture Loan and the lender thereunder shall have instituted proceedings against LIN TV with respect to the Joint Venture Loan Guarantee, the outcome of which could reasonably be expected to have a Material Adverse Effect;

 

then (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or any of the following actions may be taken: (i) with the consent of the Majority Facility Lenders for the Revolving Credit Facility or any Incremental Revolving Loan Facility, as applicable, the Administrative Agent may, or upon the request of the Majority Facility Lenders for the Revolving Credit Facility or such Incremental Revolving Loan Facility, as applicable, the Administrative Agent shall, by notice to the Borrower declare the Revolving Credit Commitments or the Incremental Revolving Loan 

 

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Amount under such Incremental Revolving Loan Facility, as the case may be, to be terminated forthwith, whereupon the Revolving Credit Commitments or such Incremental Revolving Loan Amount shall immediately terminate and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the other Loan Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrower hereunder and under the other Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto). Except as otherwise expressly provided above in this Section 8, the Borrower waives presentment, demand, protest or other notice of any kind.

 

SECTION 9.   THE ADMINISTRATIVE AGENT

 

9.1                                 Appointment.  Each Lender hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender under this Agreement and the other Loan Documents, and each Lender irrevocably authorizes the Administrative Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto to the extent permitted by applicable law. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.

 

9.2                                 Delegation of Duties.  The Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

 

9.3                                 Exculpatory Provisions.  Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence or willful misconduct) or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or

 

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any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party a party thereto to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party.

 

9.4                                 Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans.

 

9.5                                 Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders), provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

 

9.6                                 Non-Reliance on the Administrative Agent and Other Lenders.  Each Lender expressly acknowledges that neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it 

 

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deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

 

9.7                                 Indemnification.  The Lenders agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their pro rata share of the aggregate Revolving Credit Exposure, Term Loans outstanding and unused Commitments in effect on the date on which indemnification is sought under this subsection 9.7 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such share immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing, provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements which are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the Administrative Agent’s gross negligence or willful misconduct.  The agreements in this subsection 9.7 shall survive the payment of the Loans and all other amounts payable hereunder.

 

9.8                                 Agent in Its Individual Capacity.  The Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though the Administrative Agent were not an Agent. With respect to its Loans made or renewed by it and with respect to any Letter of Credit issued or participated in by it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders” shall include the Administrative Agent in its individual capacity.

 

9.9                                 Successor Administrative Agent.  The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Lenders. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall be approved by the Borrower (which approval shall not be unreasonably withheld or delayed and which approval shall not be required if an Event of Default under subsection 8(a) or (f) has occurred and is continuing), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. After any retiring Administrative Agent’s resignation as Administrative Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.

 

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9.10                           Co-Documentation Agents, Co-Syndication Agents and Co-Lead Arrangers.  None of the Co-Documentation Agents, the Co-Syndication Agents or the Co-Lead Arrangers shall have any duties or responsibilities hereunder in their respective capacities as such.

 

SECTION 10.   MISCELLANEOUS

 

10.1                           Amendments and Waivers.  Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this subsection 10.1. The Required Lenders and each Loan Party to the relevant Loan Documents may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) forgive the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Tranche A Term Loan or Incremental Term Loan, reduce the stated rate of any interest, fee or letter of credit commission payable hereunder or extend the scheduled date of any payment thereof, or increase the amount or extend the expiration date of any Lender’s Revolving Credit Commitment or commitment to any Incremental Revolving Loan Facility without the consent of each Lender directly affected thereby; (ii) amend, modify or waive any provision of this paragraph or reduce any percentage specified in the definition of Required Lenders, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the collateral (it being understood that a release of the Stock Pledge Agreement shall not constitute a release of all or substantially all of the collateral) or release all or substantially all of the Subsidiary Guarantors from their obligations under the Guarantee and Collateral Agreement other than pursuant to a transaction permitted by this Agreement, in each case without the written consent of all Lenders (other than Defaulting Lenders); (iii) amend, modify or waive any condition precedent to any extension of credit under the Revolving Credit Facility or any Incremental Revolving Loan Facility set forth in subsection 5.2 without the written consent of the Majority Facility Lenders for the Revolving Credit Facility or such Incremental Revolving Loan Facility, as applicable; (iv) change the allocation of payments among the Term Loan Facilities and the Incremental Term Loan Facilities, as applicable, specified in subsection 2.15(b) or the allocation of payments between the Facilities pursuant to subsection 2.9(g), in each case without the consent of the Majority Facility Lenders in respect of each Facility adversely affected thereby; (v) amend the definition of the term “Majority Facility Lenders” or modify in any other manner the number, percentages or class of Lenders required to make any determinations or waive any rights hereunder or to modify any provision hereof without the consent of each Lender directly affected thereby; (vi) amend, modify or waive any provision of Section 9 without the written consent of the Administrative Agent; (vii) amend, modify or waive any provision of Section 3 without the written consent of the Issuing Lenders; or (viii) amend, modify or waive any provision of subsection 2.4(c) without the written consent of the Swingline Lender. In furtherance of clause (iii) of this paragraph, no amendment to or waiver of any representation or warranty or any covenant contained in this Agreement or any other Loan Document, or of any Default or Event of Default, shall be deemed to be effective for purposes of determining whether the conditions precedent set forth in subsection 5.2 to the making of any extension of credit after the Closing Date have been satisfied unless the Majority Facility Lenders for the Revolving Credit Facility or any Incremental Revolving Loan Facility, as the case may be, shall have consented to such amendment or waiver. Any waiver and any amendment, supplement or modification in accordance with this subsection 10.1 shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, 

 

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the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

 

Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share in the benefits of this Agreement and the other Loan Documents with, as applicable, the Term Loans and Revolving Extensions of Credit and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Majority Facility Lenders.

 

In addition, notwithstanding the foregoing, this Agreement may be amended (x) with the written consent of the Administrative Agent, the Borrower and the Lenders providing the relevant Replacement Term Loans (as defined below) to permit the refinancing, replacement or modification of all outstanding Tranche A Term Loans or the Term Loans under any Incremental Term Facility (“Replaced Term Loans”) with a replacement term loan tranche hereunder (“Replacement Term Loans”), provided that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Replaced Term Loans, (b) the Applicable Margin for such Replacement Term Loans shall not be higher than the Applicable Margin for such Replaced Term Loans, (c) the weighted average life to maturity of such Replacement Term Loans shall not be shorter than the weighted average life to maturity of such Replaced Term Loans at the time of such refinancing and (d) all other terms applicable to such Replacement Term Loans shall be substantially similar to, or less favorable, in the aggregate, to the Lenders providing, such Replacement Term Loans than those applicable to such Replaced Term Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of any Loans in effect immediately prior to such refinancing and (y) with the written consent of the Administrative Agent, the Borrower and the Lenders providing the relevant Replacement Revolving Facility (as defined below) to permit the refinancing, replacement or modification of the Revolving Credit Facility or any Incremental Revolving Loan Facility (a “Replaced Revolving Facility”) with a replacement revolving facility hereunder (a “Replacement Revolving Facility”); provided that (a) the aggregate amount of such Replacement Revolving Facility shall not exceed the aggregate amount of such Replaced Revolving Facility, (b) the termination date of such Replacement Revolving Facility shall be no earlier than the termination date of the Replaced Revolving Facility and (c) the Replacement Revolving Facility shall be on terms and pursuant to documentation to be determined by the Borrower, the Administrative Agent and the Persons willing to provide such Replacement Revolving Facility, provided that to the extent such terms and documentation are not substantially consistent with such Replaced Term Loans or such Replaced Revolving Facility, as the case may be (other than with respect to pricing and amortization or termination) they shall be reasonably satisfactory to the Administrative Agent.  It is understood and agreed that any Replacement Revolving Facility and any Replacement Term Loans, as the case may be, shall be entitled to be secured equally and ratably with any remaining (non-replaced) credit facilities hereunder.

 

10.2                           Notices.  All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy and, in the case of the Administrative Agent, by email in a pdf attachment), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or, in the case of telecopy or email notice, when received, addressed as follows in the case of the Borrower and the Administrative Agent, and as set forth on the signature pages hereto, in an administrative questionnaire provided to the Administrative Agent or in any 

 

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Assignment and Assumption in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

 

	
The   Borrower:
    	
 
    	
c/o   LIN Television Corporation
    
	
 
    	
 
    	
One   West Exchange Street, Suite 5A
    
	
 
    	
 
    	
Providence,   RI 02903
    
	
 
    	
 
    	
Attention:   Richard Schmaeling
    
	
 
    	
 
    	
Telecopy:   401-454-0089
    
	
 
    	
 
    	
 
    
	
The   Administrative
    	
 
    	
JPMorgan   Chase Bank, N.A.
    
	
Agent:
    	
 
    	
1111   Fannin Street, 10th Floor
    
	
 
    	
 
    	
Houston,   Texas 77002
    
	
 
    	
 
    	
Attention:   Talitha Bernard, Account Manager
    
	
 
    	
 
    	
Telecopy:   713-750-2878
    
	
 
    	
 
    	
Email:   talitha.bernard@jpmorgan.com
    
	
 
    	
 
    	
 
    
	
with   a copy to:
    	
 
    	
JPMorgan   Chase Bank, N.A.
    
	
 
    	
 
    	
383   Madison Avenue
    
	
 
    	
 
    	
New   York, New York 10179
    
	
 
    	
 
    	
Attention:   Tina Ruyter
    
	
 
    	
 
    	
Telecopy:   212-270-4676
    
	
 
    	
 
    	
Email:   tina.ruyter@jpmorgan.com
    

 

10.3                           No Waiver; Cumulative Remedies.  No failure to exercise and no delay in exercising, on the part of any party hereto, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

10.4                           Survival of Representations and Warranties.  All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder.

 

10.5                           Payment of Expenses and Taxes.  The Borrower agrees (a) to pay or reimburse the Administrative Agent for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements of a single counsel to the Administrative Agent and, if applicable, local counsel, (b) to pay or reimburse each Lender, the Administrative Agent and each Co-Lead Arranger for all its reasonable costs and expenses incurred in connection with the enforcement of any rights under this Agreement, the other Loan Documents and any such other documents, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent and, at any time after and during the continuance of an Event of Default, of one counsel of all the Lenders, (c) to pay, indemnify, and hold harmless each Lender, the Administrative Agent and each Co-Lead Arranger from and against any and all recording and filing fees and any and all liabilities with respect to, or (without duplication of amounts otherwise indemnified pursuant to subsection 2.17(a)) resulting from any delay in paying, stamp, excise and other similar taxes, if any, 

 

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which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify and hold harmless each Lender, the Administrative Agent and each Co-Lead Arranger and their respective officers, directors, trustees, professional advisors, employees, affiliates, agents and controlling persons (each, an “indemnitee”) from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including, without limitation, any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the Borrower, any of its Subsidiaries or any of the facilities or properties owned, leased or operated by the Borrower or any of its Subsidiaries (all the foregoing in this clause (d), collectively, the “indemnified liabilities”), provided that the Borrower shall have no obligation hereunder to any indemnitee with respect to indemnified liabilities to the extent such indemnified liabilities (i) are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such indemnitee or, in the case of indemnified liabilities arising under this Agreement, any Notes and the other documents, from material breach by the indemnitee of this Agreement, any Notes or the other Loan Documents, as the case may be, or (ii) arise from any settlement of any claim, litigation, investigation, action or proceeding without the Borrower’s written consent (which consent shall not be unreasonably withheld). The agreements in this subsection 10.5 shall survive repayment of the Loans and all other amounts payable hereunder.

 

10.6                           Successors and Assigns; Participations and Assignments.

 

(a)                                  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 (including any affiliate of any Issuing Lender that issues any Letter of Credit), except that (i) 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) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this subsection.

 

(b)                                 (i)                                     Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (other than to any natural persons, the Borrower or any of its Affiliates or Subsidiaries) (each, an “Assignee”) 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) with the prior written consent (such consent not to be unreasonably withheld) of:

 

(A)                              the Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an affiliate of a Lender, an Approved Fund (as defined below) or, if an Event of Default under subsection 8(a) or (f) has occurred and is continuing, any other Person; provided  further, that the Borrower shall be deemed to have consented to any such assignment unless the Borrower shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof;

 

(B)                                the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of (x) any Revolving Credit Commitment or an Incremental Revolving Loan Amount to an assignee that is a Lender with a Revolving Credit Commitment or an Incremental Revolving Loan Amount, as the case may be, immediately prior to giving effect to 

 

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such assignment or (y) all or any portion of a Term Loan to a Lender, an affiliate of a Lender or an Approved Fund; and

 

(C)                                the Issuing Lenders, provided that no consent of the Issuing Lenders shall be required for an assignment of all or a portion of a Term Loan or an Incremental Revolving Loan Amount, other than an Incremental Revolving Loan Amount that has been incorporated into the Revolving Credit Facility pursuant to the fourth to last sentence of subsection 2.4(d).

 

(ii)                                  Assignments shall be subject to the following additional conditions:

 

(A)                              except in the case of an assignment to a Lender, an affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 (or, in the case of the Term Loan Facilities, $1,000,000) unless each of the Borrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the Borrower shall be required if an Event of Default under subsection 8(a) or (f) has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its affiliates or Approved Funds, if any;

 

(B)                                assignments need not be ratable as among the Facilities;

 

(C)                                the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

 

(D)                               the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire.

 

For the purposes of this subsection 10.6, the terms “Approved Fund” has the following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

(iii)                               Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, and subject to paragraph (b)(vi) below, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, 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 Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption 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 subsections 2.16, 2.17, 2.18 and 10.5).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection 10.6 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 (c) of this subsection.

 

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(iv)                              The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Lender and the other Lenders shall (absent manifest error) 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, the Issuing Lender and any other Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

(v)                                 Upon its receipt of a duly completed Assignment and Assumption 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 subsection and any written consent to such assignment required by paragraph (b) of this subsection, the Administrative Agent shall accept such Assignment and Assumption 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.

 

(vi)                              Any Assignee that is a Non-U.S. Lender shall not be entitled to the benefits of subsection 2.17 unless such Assignee complies with subsection 2.17(b).  In no event shall an Assignee be entitled to receive any greater payment under subsection 2.16, 2.17 or 2.18 than the applicable Lender would have been entitled to receive as of the date of the assignment with respect to the Loan, Commitment or L/C Obligation (or portion of any thereof) sold to such Assignee (other than as a result of an adoption of or change in any Requirement of Law occurring after the date of the assignment).

 

(c)                                  (i)                                     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 (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) 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.  Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to the proviso to the second sentence of the first paragraph of subsection 10.1 and (2) directly affects such Participant.  Subject to paragraph (c)(ii) of this subsection, the Borrower agrees that each Participant shall be entitled to the benefits of subsections 2.16, 2.17 and 2.18 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this subsection.  To the extent permitted by law, each Participant also shall be entitled to the benefits of subsection 10.7(b) as though it were a Lender, provided such Participant shall be subject to subsection 10.7(a) as though it were a Lender. Each Lender that sells a participation, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) except to the extent that such 

 

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disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive, and such Lender, each Loan Party and the Administrative Agent shall (absent manifest error) treat each Person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such participation for all purposes of this Agreement, notwithstanding notice to the contrary.

 

(ii)                                  Any Participant that is a Non-U.S. Lender shall not be entitled to the benefits of subsection 2.17 unless such Participant complies with subsection 2.17(b) as if it were a Lender.  In no event shall a Participant be entitled to receive any greater payment under subsection 2.16, 2.17 or 2.18 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant.

 

(d)                                 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 pledge or assignment to secure obligations to a Federal Reserve Bank, and this subsection 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 pledgee or Assignee for such Lender as a party hereto.  Any Approved Fund may, without the consent of the Borrower or Administrative Agent, pledge all or any portion of its rights under this Agreement, including the Loans or any other instrument evidencing its rights as a Lender under this Agreement, to any holder of, trustee for, or any other representative of holders of, obligations owed or securities issued, by such fund, as security for such obligations or securities; provided that any foreclosure or similar action by such trustee or representative shall be subject to the provisions of this subsection 10.6(b) concerning assignments.

 

(e)                                  The Borrower, upon receipt of written notice from the relevant Lender and in order to facilitate transactions of the type described in paragraph (d) above, agrees to execute and deliver to such Lender a promissory note evidencing the Loans (including any Incremental Revolving Loans or Incremental Term Loans) of such Lender under any Facility, substantially in the form of Exhibit I-1, I-2 or I-3 (each, a “Note”).

 

(f)                                    The Borrower authorizes each Lender to disclose to any Participant or Assignee (each, a “Transferee”) and any prospective Transferee any and all financial information concerning the Loan Parties and their respective affiliates which has been delivered to such Lender by or on behalf of any Loan Party pursuant to this Agreement or any other Loan Document or which has been delivered to such Lender by or on behalf of any Loan Party in connection with such Lender’s credit evaluation of the Loan Parties and their respective affiliates, under the condition that such Transferee or prospective Transferee shall previously have agreed to be bound by the provisions of subsection 10.15.

 

10.7                           Adjustments; Set-off.

 

(a)                                  Except to the extent that this Agreement provides for payments to be allocated to the Lenders under a particular Facility, if any Lender (a “Benefited Lender”) shall at any time receive any payment of all or part of its Loans or the Reimbursement Obligations owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in subsection 8(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s Loans or the Reimbursement Obligations owing to such other Lender, or interest thereon, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender’s Loans and/or of the Reimbursement Obligations owing to each such other 

 

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Lender, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

(b)                                 In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

10.8                           Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of this Agreement by electronic communication or telecopy transmission shall be effective as delivery of a manually executed counterpart hereof.  The effectiveness of this Agreement and any such signatures shall, subject to applicable law, have the same force and effect as the manually executed originals and shall be binding on all Loan Parties and Credit Parties.  A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

 

10.9                           Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10.10                     Integration.  This Agreement and the other Loan Documents, together with any Incremental Revolving Loan Activation Notice or any Incremental Term Loan Activation Notice, represent the entire agreement of the Borrower, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof or thereof not expressly set forth or referred to herein or in the other Loan Documents.

 

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

 

10.12                     Submission To Jurisdiction; Waivers.  Each party hereto hereby irrevocably and unconditionally:

 

(a)                                  submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the Courts of the

 

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State of New York in the Borough of Manhattan, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

 

(b)                                 consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, as applicable, at its address set forth in subsection 10.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d)                                 agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)                                  waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this subsection 10.12 any special, exemplary, punitive or consequential damages.

 

10.13                     Acknowledgments.  Each party hereto hereby acknowledges that:

 

(a)                                  it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

 

(b)                                 neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to either the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and Lenders, on one hand, and the Borrower on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders.

 

10.14                     WAIVERS OF JURY TRIAL.  THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

10.15                     Confidentiality.  The Administrative Agent and each Lender agrees to keep information obtained by it pursuant hereto and the other Loan Documents confidential in accordance with such Lender’s customary practices and agrees that it will only use such information in connection with the transactions contemplated by this Agreement and not disclose any of such information other than (a) to such Lender’s employees, representatives, directors, attorneys, auditors, agents, professional advisors, trustees or affiliates who are advised of the confidential nature of such information or to any direct or indirect contractual counterparty in swap agreements or such contractual counterparty’s professional advisor (so long as such contractual counterparty or professional advisor to such contractual counterparty agrees to be bound by the provision of this subsection 10.15), (b) to the extent such information presently is or hereafter becomes available to such Lender on a non-confidential basis from any source or such 

 

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information is in the public domain at the time of disclosure, (c) to the extent disclosure is required by law (including applicable securities laws), regulation, subpoena or judicial order or process (provided that notice of such requirement or order shall be promptly furnished to the Borrower unless such notice is legally prohibited) or requested or required by bank, securities, insurance or investment company regulations or auditors or any administrative body or commission (including the National Association of Securities Dealers and the Securities Valuation Office of the National Association of Insurance Commissioners) to whose jurisdiction such Lender may be subject, (d) to any rating agency to the extent required in connection with any rating to be assigned to such Lender, (e) to Transferees or prospective Transferees who agree to be bound by the provisions of this subsection 10.15, (f) to the extent required in connection with any litigation between any Loan Party and any Lender with respect to the Loans or this Agreement and the other Loan Documents or (g) with the Borrower’s prior written consent. The agreements in this subsection 10.15 shall survive repayment of the Loans and all other amounts payable hereunder for a period of 24 months thereafter.

 

10.16                     FCC Compliance.  Notwithstanding anything to the contrary contained herein or in any other agreement, instrument or document executed in connection herewith, no party hereto shall take any actions hereunder that would constitute or result in a transfer or assignment of any Station License, permit or authorization or a change of control over such Station License, permit or authorization requiring the prior approval of the FCC without first obtaining such prior approval of the FCC.

 

10.17                     USA Patriot Act.  Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower, in accordance with the USA Patriot Act.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

	
 
    	
LIN   TELEVISION CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[LIN Credit Agreement — Signature Page]

 

 

	
 
    	
JPMORGAN CHASE BANK, N.A., as Administrative   Agent, Swingline Lender, Issuing Lender, and as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[LIN Credit Agreement — Signature Page]

 

 

	
 
    	
DEUTSCHE BANK SECURITIES INC., as Co-Syndication
   Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEUTSCHE BANK TRUST COMPANY AMERICAS., as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[LIN Credit Agreement — Signature Page]

 

 

	
 
    	
WELLS FARGO BANK, N.A., as Co-Syndication Agent   and as
   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[LIN Credit Agreement — Signature Page]

 

 

	
 
    	
SUNTRUST BANK, as Co-Documentation Agent and as a
   Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[LIN Credit Agreement — Signature Page]

 

 

	
 
    	
BANK OF AMERICA, N.A., as Co-Documentation Agent   and as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title
    

 

[LIN Credit Agreement — Signature Page]

 

 

	
 
    	
U.S.   BANK, N.A., as Co-Documentation Agent and as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title
    

 

[LIN Credit Agreement — Signature Page]

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