Exhibit 10.10
EXECUTION COPY
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SECOND AMENDED AND RESTATED CREDIT
AGREEMENT
among
BIG CITY RADIO, INC.
The Several Lenders
from Time to Time Parties Hereto
and
The Chase Manhattan Bank,
as Agent
Dated as of March 17, 1998
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . 15
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . . . 15
2.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . 15
2.2 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . 16
2.3 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4 Termination or Reduction of Commitments. . . . . . . . . . . . . . 17
2.5 Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . 17
2.6 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . 18
2.7 Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . . . 18
2.8 Conversion and Continuation Options. . . . . . . . . . . . . . . . 19
2.9 Minimum Amounts and Maximum Number of Tranches . . . . . . . . . . 19
2.10 Interest Rates and Payment Dates. . . . . . . . . . . . . . . . . 19
2.11 Computation of Interest and Fees. . . . . . . . . . . . . . . . . 20
2.12 Inability to Determine Interest Rate. . . . . . . . . . . . . . . 20
2.13 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . 21
2.14 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.15 Requirements of Law . . . . . . . . . . . . . . . . . . . . . . . 22
2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.17 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.18 Change of Lending Office or Replacement of Lender . . . . . . . . 25
2.19 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . . 26
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2. Procedure for Issuance of Letters of Credit.. . . . . . . . . . . 27
3.3. Fees, Commissions and Other Charges.. . . . . . . . . . . . . . . 27
3.4. L/C Participations. . . . . . . . . . . . . . . . . . . . . . . . 27
3.5. Reimbursement Obligation of the Borrower. . . . . . . . . . . . . 28
3.6. Obligations Absolute. . . . . . . . . . . . . . . . . . . . . . . 29
3.7. Letter of Credit Payments.. . . . . . . . . . . . . . . . . . . . 29
3.8. Application.. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 29
4.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . 29
4.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . 30
4.4 Corporate Power; Authorization; Enforceable Obligations. . . . . . 30
4.5 No Legal Documents Bar . . . . . . . . . . . . . . . . . . . . . . 31
4.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . 31
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4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . 31
4.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . 32
4.10 No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . . 32
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.12 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . 32
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.14 Investment Company Act; Other Regulations . . . . . . . . . . . . 33
4.15 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.16 Purpose of Loans. . . . . . . . . . . . . . . . . . . . . . . . . 33
4.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . 33
4.18 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.19 FCC Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 35
5.1 Conditions to Effectiveness. . . . . . . . . . . . . . . . . . . . 35
5.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . 37
SECTION 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 37
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 38
6.2 Certificates; Other Information. . . . . . . . . . . . . . . . . . 38
6.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . 39
6.4 Conduct of Business and Maintenance of Existence . . . . . . . . . 39
6.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . 39
6.6 Inspection of Property; Books and Records; Discussions . . . . . . 40
6.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . 41
6.9 Assignments of Leases. . . . . . . . . . . . . . . . . . . . . . . 41
6.10 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 42
7.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . . . 42
7.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . 43
7.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . 44
7.4 Limitation on Guarantee Obligations. . . . . . . . . . . . . . . . 45
7.5 Limitation on Fundamental Changes. . . . . . . . . . . . . . . . . 45
7.6 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . 45
7.7 Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . 46
7.8 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . 46
7.9 Limitation on Investments, Loans and Advances. . . . . . . . . . . 47
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments or Agreements. . . . . . . . . . . . . . . . . . . . . 47
7.11 Limitation on Transactions with Affiliates. . . . . . . . . . . . 48
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7.12 Limitation on Sales and Leasebacks. . . . . . . . . . . . . . . . 48
7.13 Limitation on Changes in Fiscal Year. . . . . . . . . . . . . . . 48
7.14 Limitation on Negative Pledge Clauses . . . . . . . . . . . . . . 48
7.15 Limitation on Lines of Business and Local Marketing and Sales
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.16 Restrictions on Member and License Subsidiaries.. . . . . . . . . 49
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . 53
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . 53
9.4 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . . . 53
9.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . 54
9.6 Non-Reliance on Agent and Other Lenders. . . . . . . . . . . . . . 54
9.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . 55
9.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 56
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . 57
10.4 Survival of Representations and Warranties. . . . . . . . . . . . 57
10.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . 57
10.6 Successors and Assigns; Participations and Assignments. . . . . . 58
10.7 Termination of Guarantee. . . . . . . . . . . . . . . . . . . . . 60
10.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.10 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.12 Submission To Jurisdiction; Waivers. . . . . . . . . . . . . . . 61
10.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . 61
10.14 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . 62
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SCHEDULES
I Lenders, Addresses and Commitments
4.8 Liens
4.15 Subsidiaries
4.19 FCC Licenses and Permits
7.2(f) Existing Indebtedness
7.4 Guarantee Obligations
7.9 Investments, Loans and Advances
EXHIBITS
A Form of Note
B Form of Closing Certificate
C Form of Legal Opinion of Counsel to the Borrower
D Form of Assignment and Acceptance
E Form of Acknowledgement and Consent
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 17,
1998, among BIG CITY RADIO, INC. a Delaware corporation (the "Borrower"), the
several banks and other financial institutions from time to time parties to this
Agreement (the "Lenders") and The Chase Manhattan Bank, a New York banking
corporation, as agent for the Lenders hereunder (in such capacity, the "Agent").
WHEREAS, the Borrower, the Agent, and the lenders parties thereto (the
"Existing Lenders") are parties to the Amended and Restated Credit Agreement,
dated as of December 24, 1997 (as amended and waived to the date hereof, the
"Existing Credit Agreement"), pursuant to which the Existing Lenders made loans
to the Borrower for the purposes set forth therein; and
WHEREAS, the Borrower intends to consummate an offering of
$174,000,000 of its 11.25% senior subordinated notes due 2005 ("the Offering");
and
WHEREAS, in connection with the Offering the Borrower has requested
that the Agent and the Lenders amend and restate the Existing Credit Agreement
as set forth herein;
WHEREAS, in connection with the execution and delivery of this
Agreement, the Agent has agreed to terminate the Guarantee made by Xxxxxx
Xxxxxxxxx on December 24, 1997 (the "Guarantee") in favor of the Agent,
guaranteeing a portion of the Existing Credit Facility; and
WHEREAS, the Agent and the Lenders are willing to so amend and restate
the Existing Credit Agreement, but only on the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, effective as of the Closing Date (as defined
herein), the parties hereto hereby amend and restate the Existing Credit
Agreement 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 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Agent 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 The Chase
Manhattan Bank in connection with extensions of credit to debtors); "Base
CD Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one and
the denominator of which is one
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minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it; 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
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 Base CD
Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate,
the Base CD Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"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 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"Agent": The Chase Manhattan Bank, together with its affiliates, as
the arranger of the Commitments and as the agent for the Lenders under this
Agreement and the other Loan Documents.
"Aggregate Outstanding Extensions of Credit": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of
all Loans made by such Lender then outstanding and (b) such Lender's
Commitment Percentage of the L/C Obligations then outstanding.
"Agreement": this Second Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Margin": the rate per annum set forth in the table below
opposite the ratio of Total Debt to EBITDA then in effect. Such Applicable
Margin shall be in
2
effect for the period beginning, and determined for each such period as of,
the second Business Day following the date on which the Responsible
Officer's certificate provided pursuant to subsection 6.2(b) is delivered
to the Lenders and ending on the first Business Day following the date on
which the next such Responsible Officer's certificate is delivered to the
Lenders; provided, that, if for any reason the Responsible Officer's
certificate required by subsection 6.2(b) is not delivered in accordance
with such subsection to the Lenders, the ratio of Total Debt to EBITDA
shall, for purposes of determining the Applicable Margin, be deemed to be
greater than or equal to 5.0 to 1 for each day during the period from and
including the day such Responsible Officer's certificate was required to be
delivered pursuant to subsection 6.2(b) to the day such Responsible
Officer's certificate is so delivered; and provided, further, that for the
period from and including the Closing Date to the first Business Day
following the date on which the Borrower is required to deliver the
Responsible Officer's certificate pursuant to subsection 6.2(b) for the
fiscal quarter ending June 30, 1998, the ratio of Total Debt to EBITDA
shall, for purposes of determining Applicable Margin, be deemed to be
greater than or equal to 7.0 to 1.
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Total Debt/
EBITDA ABR + LIBOR +
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GREATER THAN OR EQUAL TO 7.0X 2.000% 3.000%
GREATER THAN OR EQUAL TO 6.0X, LESS THAN 7.0X 1.750% 2.750%
GREATER THAN OR EQUAL TO 5.0X, LESS THAN 6.0X 1.500% 2.500%
GREATER THAN OR EQUAL TO 4.0X, LESS THAN 5.0X 1.000% 2.000%
GREATER THAN OR EQUAL TO 3.0X, LESS THAN 4.0X 0.750% 1.750%
LESS THAN 3.0X 0.500% 1.500%
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"Application": an application, in such form as the Issuing Bank may
specify from time to time, requesting the Issuing Bank to open a Letter of
Credit.
"Assignee": as defined in subsection 10.6(c).
"Assignment of Leases": any Assignment of Lease executed at any time
by the Borrower or any Subsidiary in favor of the Agent for the benefit of
the Lenders in form and substance reasonably satisfactory to the Agent as
the same may be amended, supplemented or otherwise modified from time to
time.
"Available Commitment": as to any Lender, at any time, an amount
equal to the excess, if any, of (a) such Lender's Commitment over (b) such
Lender's Aggregate Outstanding Extensions of Credit.
"Board": the Board of Governors of the Federal Reserve System (or any
successor thereto).
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"Borrower": as defined in the recitals hereto.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"Borrowing Limit": At any time, an aggregate amount not to exceed
four times the aggregate EBITDA of the Restricted Subsidiary Group for the
period of four fiscal quarters most recently ended for which financial
statements have been delivered pursuant to subsection 6.1.
"Business": as defined in subsection 4.17(b).
"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.
"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 or options to purchase any of the
foregoing.
"Cash Equivalents": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or
of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper
of a domestic issuer rated at least A-2 by S&P or P-2 by Xxxxx'x, (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at
least A by S&P or A by Xxxxx'x, (f) securities with maturities of one year
or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the FDIC classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification)
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within the meaning of 12 C.F.R. Section 327.3(d) (or any successor
provision) to the FDIC (or any successor) for the FDIC's (or such
successor's) insuring time deposits at offices of such institution in the
United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"Chase": The Chase Manhattan Bank.
"Closing Date": the date on which the conditions precedent set forth
in subsection 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commercial Letter of Credit": as defined in subsection 3.1(b)(i)(B).
"Commitment": as to any Lender, the obligation of such Lender to make
Loans to and/or issue or participate in Letters of Credit issued on behalf
of the Borrower hereunder in an aggregate principal and/or face amount at
any one time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule I.
"Commitment Percentage": as to any Lender at any time, the percentage
which such Lender's Commitment bears to the aggregate Commitments (or, at
any time after the Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Loans then
outstanding bears to the aggregate principal amount of all Loans then
outstanding).
"Commitment Period": the period from and including the Closing Date
to but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"Commonly Controlled Entity": any trade or business, 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 of the
Code.
"Communications Act": the Communications Act of 1934, as amended.
5
"Consolidated Net Income": for any period, net income of the Borrower
or the Restricted Subsidiary Group, as the case may be, determined on a
consolidated basis in accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"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, or
any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"EBITDA": with respect to the Borrower or the Restricted Subsidiary
Group, as the case may be, for any period, the sum of (a) the Consolidated
Net Income for such period plus, to the extent deducted in computing such
net income, the sum of (i) income tax expense, (ii) interest expense
(including deferred interest expense) or an allocated amount of interest
expense in the case of the Restricted Subsidiary Group, (iii) depreciation
and amortization expense, (iv) any extraordinary losses and (v) any expense
items with respect to acquisitions by the Borrower or any of its Affiliates
or the Restricted Subsidiary Group, as the case may be, of radio stations
and related assets, and minus to the extent added in computing such net
income, (i) any interest income and (ii) any extraordinary gains, all as
determined with respect to the Borrower or the Restricted Subsidiary Group,
as the case may be, on a consolidated basis (in the case of the Borrower),
in accordance with GAAP.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, 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 human health or the
environment, as now or may at any time hereafter be in effect.
"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 such Board) maintained by a
member bank of such System.
6
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chase is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are
then being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"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
"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, or any other condition, has been satisfied.
"Existing Credit Agreement": as defined in the recitals hereto.
"Existing Lenders": as defined in the recitals hereto.
"Existing Loans": as defined in subsection 2.1(b).
"FCC": the Federal Communications Commission or any successor to the
functions and powers thereof.
"FCC Licenses": with respect to any radio station owned or operated
by the Borrower or any Subsidiary, all FCC licenses, permits and approvals
necessary for the lawful construction of facilities for, and operation of,
such radio station.
"FCC Rules": as defined in subsection 4.19.
"FDIC": the Federal Deposit Insurance Corporation.
"Final Orders": with respect to the assignment of any FCC License or
transfer of control of any radio station authorized by such FCC License
from one Person to another, an order by the FCC consenting to such
assignment or transfer, in the case of a pro forma assignment or transfer
of control not involving a substantial change in ownership or control, when
effective and, in the case of all other assignments or transfers of
control, when the time for administrative or judicial review has expired
7
and the time for the filing of any protest, petition to deny, request for
stay, petition for reconsideration, or appeal has expired and no protest,
petition to deny, request for stay, petition for reconsideration or appeal
is pending.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Forestry Service License": the license in respect of the right to
operate the radio transmitter located on that certain parcel of land
situated within the Angeles National Forest.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"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 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, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (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 (1) for the purchase or payment of any such primary
obligation or (2) 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 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 the Borrower in
good faith.
8
"Indebtedness": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances or Letters of Credit issued or created for the
account of such Person, (e) all obligations of such Person in respect of
banker's acceptances issued or created for the account of such Person and
(f) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable
for the payment thereof. For purposes of any calculation hereunder, the
amount of any Indebtedness outstanding at any time, except Indebtedness
under clause (f) of this definition, shall be deemed to be equal to the
then outstanding principal amount of such Indebtedness (including, with
respect to Financing Leases, the implied principal amount thereof
calculated in accordance with GAAP) and the amount of any Indebtedness
outstanding at any time under clause (f) of this definition shall be equal
to the lesser of (i) the then outstanding principal amount of, and all
accrued and unpaid interest on, the liability secured by the applicable
property and (ii) the then fair market value of such property.
"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.
"Interest Expense": for any period, the amount of interest expense on
the Total Debt of the Borrower for such period, determined on a
consolidated basis in accordance with GAAP.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period in
excess of 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.
"Interest Period": with respect 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 nine 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,
9
two, three, six or nine months thereafter, as selected by the Borrower
by irrevocable notice to the 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:
(i) if any Interest Period pertaining to a Eurodollar Loan
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) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date or such date of
final payment, as the case may be; and
(iii) any Interest Period pertaining to a Eurodollar Loan 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 a calendar month.
"Issuing Bank": The Chase Manhattan Bank, in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $1,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December.
"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(a).
"L/C Participants": the collective reference to all the Lenders other
than the Issuing Bank.
"Landlord's Consent": A Landlord's Consent executed at any time by a
landlord in respect of any leased property subject to any Assignment of
Lease, in form and substance reasonably satisfactory to the Agent, as the
same may be amended, supplemented or otherwise amended from time to time.
"Letters of Credit": as defined in paragraph 3.1(a).
10
"Licenses": as defined in subsection 4.19.
"License Subsidiary": any wholly-owned sole purpose Subsidiary Loan
Party of the Borrower formed for the exclusive purpose of holding FCC
Licenses pursuant to organizational documents reasonably satisfactory to
the Agent.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever which makes
any property or asset available for the payment or performance of any
liability in priority to the payment or performance of ordinary unsecured
creditors (including, without limitation, any conditional sale or other
title retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement
including any Existing Loan.
"Loan Documents": this Agreement, any Notes, any Applications and the
Security Documents.
"Loan Parties": the Borrower and any of its Subsidiaries which is a
party to a Loan Document.
"Local Marketing and Sales Agreement": as to any Person, all
agreements to which such Person is a party pursuant to which such Person
has the right to direct the programming with respect to a radio station
(and related FCC License) owned by another Person and/or pursuant to which
such Person has the right to sell advertising in connection with a radio
station (and related FCC License) owned by another Person.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agent or the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount finally determined by
legal process or executed settlement agreement to be payable by the
Borrower in excess of $2,500,000 for remedial costs, compliance costs,
compensatory damages, punitive damages, fines, penalties or any combination
thereof.
"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.
11
"Member": the collective reference to the Borrower and any
wholly-owned Subsidiary Loan Party of the Borrower which is a member in, or
partner of, any License Subsidiary.
"Moody's": Xxxxx'x Investors Service, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Interest Expense": with respect to the Borrower for any
period, the sum of interest in respect of Total Debt paid by the Borrower
in cash during such period, minus all interest earnings received by the
Borrower in cash during such period, in each case determined on a
consolidated basis in accordance with GAAP.
"Non-Excluded Taxes": as defined in subsection 2.16.
"Note": as defined in subsection 2.5(e).
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans 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 or any Notes and all
other obligations and liabilities of the Borrower to the Agent or to the
Lenders, 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 or the other Loan
Documents and any other document made, delivered or given in connection
therewith or herewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of counsel to the
Agent or to the Lenders that are required to be paid by the Borrower
pursuant to the terms of this Agreement) or otherwise.
"Operating Agreement": with respect to any FCC License held by a
License Subsidiary, an agreement substantially in the form of Exhibit F to
the Existing Credit Agreement between such License Subsidiary and the
Borrower.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, limited liability company,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
12
"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.
"Properties": as defined in subsection 4.17.
"Register": as defined in subsection 10.6(d).
"Registration Rights Agreements": the Registration Rights Agreement,
dated as of December 18, 1997, by and among the Borrower, Xxxxxx Xxxxxxxxx
and Xxxxx Xxxxxxxxx and the Registration Rights Agreement, dated as of
December 23, 1997, by and between the Borrower and Xxxxxxx Xxxxxxxxxxx.
"Regulations G, T, U, and X": Regulations G, T, U, and X of the Board
as in effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Bank pursuant to subsection 3.5(a) for amounts drawn
under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"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 subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"Required Lenders": at any time, Lenders the Commitment Percentages
of which aggregate more than 50%.
"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 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 and
any vice president of the Borrower, or, with respect to financial matters,
the chief financial officer of the Borrower.
"Restricted Subsidiary Group": For as long as each shall be and
remain wholly-owned by the Borrower, the Stations consisting of (i) those
broadcasting using the FCC licenses held by Big City Radio-LA, L.L.C. and
(ii) any other Stations agreed to by the Agent from time to time.
"Revolving Credit Loans": as defined in subsection 2.1(a).
13
"Security Agreement": the Amended and Restated Security Agreement,
dated December 24, 1997, executed by the Borrower and its Subsidiaries, as
the same may be amended, supplemented or otherwise modified from time to
time.
"Security Documents": the collective reference to the Security
Agreement and, from and after its execution and delivery, any Assignment of
Lease.
"Senior Notes": The Borrower's 11.25% Senior Discount Notes due 2005.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"S&P": Standard and Poor's Ratings Services.
"Standby Letter of Credit": as defined in paragraph 3.1(b)(i)(A).
"Stations": any of the radio stations now owned or operated by or
hereafter acquired or operated by the Borrower or any of its Subsidiaries.
"Subordinated Indebtedness": any unsecured Indebtedness of the
Borrower no part of the principal of which is required to be paid (whether
by way of mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) except in the event of a change of control or
unapplied asset sale proceeds, prior to December 31, 2004; the payment of
the principal of and interest on which and other obligations of the
Borrower in respect thereof are subordinated to the prior payment in full
of the principal of and interest (including post-petition interest) on the
Loans and all other obligations and liabilities of the Borrower to the
Agent and the Lenders hereunder on terms and conditions approved in writing
by the Agent; having no financial maintenance covenants and all other terms
and conditions (including, without limitation, interest rates, covenants,
defeasance and defaults (which shall not include a cross default)) which
are satisfactory in form and substance to the Agent (as evidenced by their
prior written approval thereof).
"Subsidiary": as to any Person, a corporation, limited liability
company, partnership or other entity of which shares of stock or other
ownership interests having ordinary voting power (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, limited liability company, 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, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Termination Date": March 31, 2003.
14
"Total Debt": with respect to the Borrower at any time, (a) all
Indebtedness of the Borrower and its Subsidiaries minus, (b) all cash and
Cash Equivalents owned by the Borrower and its Subsidiaries free and clear
of any Liens (other than Liens to secure Indebtedness of the Borrower).
"Transferee": as defined in subsection 10.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, 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,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(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 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
(the "Revolving Credit Loans") to the Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Commitment Percentage of the then outstanding
L/C Obligations, does not exceed the lesser of (i) the amount of such Lender's
Commitment and (ii) such Lender's Commitment Percentage of the Borrowing Limit
then in effect. During the Commitment Period the Borrower may use the
Commitments by borrowing, prepaying the Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) The Borrower acknowledges and confirms that the Existing Lenders
have made
15
revolving credit loans to it under the Existing Credit Agreement (such
revolving credit loans, the "Existing Loans"). The Borrower hereby
represents, warrants, agrees, covenants and reaffirms that: (i) to the
extent arising on or prior to the Closing Date, it has no (and it
permanently and irrevocably waives, and releases the Agent and the Existing
Lenders from any) defense, setoff, claim or counterclaim against the Agent
or any Existing Lender in regard to its Obligations in respect of such
Existing Loans and (ii) reaffirms its obligation to pay such Existing Loans
in accordance with the terms and provisions of this Agreement and the other
Loan Documents.
(c) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans or (iii) a combination thereof, as determined by the Borrower and
notified to the Agent in accordance with subsections 2.2 and 2.8, provided
that no Loan shall be made as a Eurodollar Loan after the day that is one
month prior to the Termination Date.
2.2 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Commitments during the Commitment Period on any Business Day,
provided that the Borrower shall give the Agent irrevocable notice (which notice
must be received by the Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Loans are to be initially Eurodollar Loans or (b) one Business Day
prior to the requested Borrowing Date, otherwise), specifying (i) the amount to
be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the amount of each
such Loan and the length of the respective initial Interest Periods therefor.
Each borrowing under the Commitments shall be in an amount equal to (x) in the
case of ABR Loans, $100,000 or a whole multiple thereof (or, if the then
Available Commitments are less than $100,000, such lesser amount) and (y) in the
case of Eurodollar Loans, $500,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its
pro rata share of each borrowing available to the Agent for the account of the
Borrower at the office of the Agent specified in subsection 10.2 prior to 11:00
A.M., New York City time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the Agent.
2.3 Commitment Fee. The Borrower agrees to pay to the Agent for the
account of each Lender a commitment fee for the period from and including the
date hereof to the Termination Date, computed at the rate of 1/2 of 1% per annum
on the average daily amount of the Available Commitment of such Lender during
the period for which payment is made; payable quarterly in arrears on the last
day of each March, June, September and December and on the Termination Date or
such earlier date as the Commitments shall terminate as provided herein,
commencing on the first of such dates to occur after the date hereof.
16
2.4 Termination or Reduction of Commitments. The Borrower shall
have the right, upon not less than five Business Days' notice to the Agent,
to terminate the Commitments or, from time to time, to reduce the amount of
the Commitments, provided that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the aggregate
principal amount of the Revolving Credit Loans then outstanding , when added
to the then outstanding L/C Obligations, would exceed the Commitments then in
effect. Any such reduction shall be in an amount equal to $100,000 or a
whole multiple thereof and shall reduce permanently the Commitments then in
effect.
2.5 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Agent for the account of each Lender
the then unpaid principal amount of each Loan of such Lender on the
Termination Date (or such earlier date on which the Loans become due and
payable pursuant to Section 8). The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in subsection 2.10.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower
to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Agreement.
(c) The Agent, acting for this purpose as an agent of the Borrower,
shall maintain the Register pursuant to subsection 10.6(d), and a
subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Loan made hereunder, the Type thereof and, in the case of
Eurodollar Loans, each Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, (iii) both the
amount of any sum received by the Agent hereunder from the Borrower and
each Lender's share thereof and (iv) each continuation of a Loan and
each conversion of all or a portion of a Loan thereof to another Type.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.5(b) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence
and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Agent to
maintain the Register or any such account, or any error therein, shall
not in any manner affect the obligation of the Borrower to repay (with
applicable interest) the Loans made to such Borrower by such Lender in
accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by any
Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Loans of such Lender,
substantially in the form of Exhibit A with appropriate insertions as to
date and principal amount (a "Note").
17
2.6 Optional Prepayments. The Borrower may, on the last day of any
Interest Period with respect thereto, in the case of Eurodollar Loans, or at
any time and from time to time, in the case of ABR Loans, prepay the Loans,
in whole or in part, without premium or penalty, upon at least three Business
Days' irrevocable notice to the Agent, specifying 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. Upon receipt of any such notice the Agent shall promptly notify
each Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein, together
with any amounts payable pursuant to subsection 2.17.
2.7 Mandatory Prepayments. (a) The Borrower shall immediately
prepay the Loans made to it to the extent the aggregate principal amount of
such Loans outstanding at any time exceeds the total amount of the
Commitments to the Borrower as reduced pursuant to subsection 2.4.
(b) Unless the Borrower indicates otherwise, the mandatory
prepayments pursuant to this subsection 2.7 shall first be used to
prepay the then outstanding ABR Loans made to the Borrower and second to
prepay the then outstanding Eurodollar Loans made to the Borrower in the
order in which such Eurodollar Loans become due. In the event the
amount of any prepayment of Loans required to be made under this
subsection 2.7(b) shall exceed the aggregate principal amount of such
Loans which are ABR Loans (the amount of any such excess being called
the "Excess Amount"), the Borrower shall have the right, in lieu of
making such prepayment in full, to prepay all such outstanding ABR Loans
when due and to deposit on the date of the required prepayment an amount
equal to the Excess Amount with the Agent in a cash collateral account
maintained by and in the sole dominion and control of the Agent. Any
amounts so deposited shall be held by the Agent as collateral security
for the Obligations and applied to the prepayment of the applicable
Eurodollar Loans at the end of the current Interest Periods applicable
thereto. On any Business Day on which (A) collected amounts remain on
deposit in or to the credit of such cash collateral account after giving
effect to the payments made on such day pursuant to this subsection
2.7(b) and (B) the Borrower shall have delivered to the Agent a written
request or a telephonic request (which shall be promptly confirmed in
writing) that such remaining collected amounts be invested in the Cash
Equivalents specified in such request, the Agent shall invest such
remaining collected amounts in such Cash Equivalents on an overnight
basis; provided, however, that the Agent shall have continuous dominion
and full control over any such investments (and over any interest that
accrues thereon) to the same extent that it has dominion and control
over such cash collateral account. Any such deposited amounts so
invested (together with any interest thereon) shall be deposited in such
cash collateral account not later than 11:30 a.m. on the next succeeding
Business Day.
(c) The provisions of subsection 2.17 shall apply to all mandatory
prepayments pursuant to this subsection 2.7.
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2.8 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Agent at least two Business Days' prior irrevocable notice of such
election, provided that 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 Agent at least three Business Days' prior irrevocable notice of
such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Agent shall promptly notify
each Lender thereof. All or any part of outstanding Eurodollar Loans and ABR
Loans may be converted as provided herein, provided that (i) no Loan may be
converted into a Eurodollar Loan when any Event of Default has occurred and
is continuing and the Agent has or the Required Lenders have determined that
such a conversion is not appropriate and (ii) no Loan may be converted into a
Eurodollar Loan after the date that is one month or 30 days, respectively,
prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
the Borrower giving notice to the 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 Agent has or the Required Lenders have determined
that such a continuation is not appropriate or (ii) after the date that
is one month or 30 days prior to the Termination Date (in the case of
continuations of Loans) and provided, further, that if the Borrower
shall fail to give such notice or if such continuation is not permitted
such Loans shall be automatically converted to ABR Loans on the last day
of such then expiring Interest Period.
2.9 Minimum Amounts and Maximum Number of Tranches. All
borrowings, conversions and continuations of 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, the
aggregate principal amount of the Loans comprising each Eurodollar borrowing
shall be equal to $500,000 or a whole multiple of $100,000 in excess thereof.
In no event shall there be more than 5 Eurodollar borrowings outstanding at
any time.
2.10 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) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other
amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), the principal of the
Loans and any such overdue interest, commitment fee or other amount
shall bear interest at a rate per annum which is (x) in the case of the
overdue
19
principal, the rate that would otherwise be applicable thereto pursuant to
the foregoing provisions of this subsection plus 2% or (y) in the case of
any such overdue interest, commitment fee or other amount, the rate
described in paragraph (b) of this subsection 2.10 plus 2%, in each case
from the date of such non-payment until such overdue principal, interest,
commitment fee or other amount is paid in full (as well after 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 shall be payable from time to time on demand.
2.11 Computation of Interest and Fees. (a) Commitment fees and,
whenever it is calculated on the basis of the Prime Rate, interest shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed; and, otherwise, interest shall be calculated on the basis
of a 360-day year for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the 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 Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the 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 Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Agent in determining any interest rate
pursuant to subsection 2.10(a) or (b).
2.12 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Agent shall have determined (which determination, in the
absence of 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 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 Agent shall give telecopy or telephonic notice thereof to the Borrower and
the 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 (provided that prior to 1:00 p.m. on the Business Day
preceding the first day of such Interest Period, the Borrower may revoke its
notice of borrowing, in which case no such Loans shall be made),
20
(y) any Loans that were to have been converted on the first day of such Interest
Period to Eurodollar Loans that were to be continued as such for such Interest
Period, shall be converted to or continued as ABR Loans and (z) any outstanding
Eurodollar Loans that were to be continued as such for such Interest Period
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Agent, no further Eurodollar Loans
shall be made or continued as such, nor shall the Borrower have the right to
convert ABR Loans to Eurodollar Loans. The Agent agrees to withdraw any such
notice as soon as reasonably practicable after the Agent is notified of a change
in circumstances which makes such notice inapplicable.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without set off or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Agent, for the account of the Lenders,
at the Agent's office specified in subsection 10.2, in Dollars and in
immediately available funds. The Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on any Eurodollar Loan) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension, unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the
Agent, the Agent may assume that such Lender is making such amount
available to the Agent, and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by the required time on the
Borrowing Date therefor, such Lender shall pay to the Agent, on demand,
such amount with interest thereon at a rate equal to the daily average
Federal Funds Effective Rate (as defined in the Section 1.1 definition of
"ABR") for the period until such Lender makes such amount immediately
available to the Agent. A certificate of the Agent submitted to any Lender
with respect to any amounts owing under this subsection shall be conclusive
in the absence of manifest error. If such Lender's Commitment Percentage
of such borrowing is not made available to the Agent by such Lender within
three Business Days of such Borrowing Date, the Agent
21
shall also be entitled to recover such amount with interest thereon at the
rate per annum applicable to ABR Loans hereunder, on demand, from the
Borrower.
2.14 Illegality. (a) Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (i) such Lender shall
promptly, after becoming aware thereof, notify the Agent and the Borrower
thereof, (ii) the commitment of such Lender hereunder to make Eurodollar Loans,
continue Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans
shall forthwith be cancelled and (iii) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to subsection 2.17. If
circumstances subsequently change so that it is no longer unlawful for an
affected Lender to make or maintain Eurodollar Loans as contemplated hereunder,
such Lender will, as soon as reasonably practicable after such Lender knows of
such change in circumstances, notify the Borrower and the Agent, and upon
receipt of such notice, the obligations of such Lender to make or continue
Eurodollar Loans or to convert ABR Loans into Eurodollar Loans shall be
reinstated.
(b) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of subsection 2.14(a) with respect to such Lender, it
will, if requested by the Borrower and to the extent permitted by law or by
the relevant Governmental Authority, endeavor in good faith to change the
lending office at which it books its Eurodollar Loans hereunder if such
change would make it lawful for such Lender to continue to make or maintain
Eurodollar Loans as contemplated hereunder; provided, however, that such
change can be made in such a manner that such Term Loan Lender, in its sole
determination, suffers no increased cost or economic, legal or regulatory
disadvantage.
2.15 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 date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, 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
Non-Excluded Taxes covered by subsection 2.16 and changes in the rate of
tax on the overall net income of 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
22
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
such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(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 made subsequent to the date hereof 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 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, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for
such reduction. If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower
(with a copy to the Agent) of the event by reason of which it has become so
entitled. Notwithstanding any other provision of this subsection 2.15, no
Lender shall demand compensation for any increased cost or reduction
referred to above if it shall not at the time be the general policy or
practice of such Lender to demand such compensation in similar
circumstances under comparable provisions of other credit agreements, if
any.
(c) A certificate as to any additional amounts payable pursuant to
this subsection 2.15 submitted by such Lender to the Borrower (with a copy
to the Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.16 Taxes. (a) All payments made by the Borrower under this
Agreement and any Notes 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) any taxes imposed by jurisdictions outside
of the United States of America, (ii) any taxes imposed by the United States or
any political subdivision thereof by means of withholding at the source, if and
to the
23
extent that such taxes shall be in effect and shall be applicable on the date
hereof, to payments to be made to such lender, existing taxes on the date hereof
and (iii) any net income taxes and franchise taxes (imposed in lieu of net
income taxes), imposed on the Agent or any Lender as a result of a present or
former connection between the 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 Agent or such Lender having executed, delivered or performed its obligations
or received a payment under, or enforced, this Agreement or any Note). If any
such non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Agent or any Lender hereunder or under any Note, the amounts so
payable to the Agent or such Lender shall be increased to the extent necessary
to yield to the 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, provided, however, that the Borrower shall
not be required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any such failure.
The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and (B) an Internal Revenue
Service Form W-8 or W-9, or successor applicable form, as the case may be;
(ii) deliver to the Borrower and the Agent two further copies of any
such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously delivered by it
to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower or
the Agent;
24
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 10.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.17 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default 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) default by the Borrower in making any prepayment 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, 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 Bank on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank eurodollar market.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.18 Change of Lending Office or Replacement of Lender. (a) Each
Lender agrees that if it makes any demand for payment under subsection 2.15 or
2.16(a), or if any adoption or change of the type described in subsection 2.15
shall occur with respect to it, it will 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, as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under subsection 2.15 or 2.16(a), or would eliminate or reduce the effect of any
adoption or change described in subsection 2.15.
(b) If the Borrower becomes obligated to pay additional amounts
described in subsections 2.15 or 2.16(a) as a result of any condition described
in such subsections and
25
payment of such amounts is demanded by any Lender, then the Borrower may, on ten
(10) Business Days' prior written notice to the Agent and such Lender, cause
such Lender to (and such Lender shall) assign pursuant to subsection 10.6 all of
its rights and obligations under this Agreement to a Lender or other entity
selected by the Borrower for a purchase price equal to the outstanding principal
amount of such Lender's Loans and all accrued interest and fees and losses and
expenses of the types referred to in subsection 2.17, provided, that in no event
shall the assigning Lender be required to pay or surrender to such purchasing
Lender or other entity any of the fees received by such assigning Lender
pursuant to this Agreement.
2.19 Certain Fees. On the dates provided therein, the Borrower agrees
to pay to the Agent for its own account the fees set forth in the Fee Letter,
dated December 1, 1997 between the Borrower and Chase.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
the Issuing Bank, in reliance on the agreements of the other 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 Commitment Period
in such form as may be approved from time to time by the Issuing Bank; provided
that the Issuing Bank shall have no 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,(ii) the Available Commitment would be less than zero, or (iii)
the Aggregate Outstanding Extensions of Credit would exceed the Borrowing Limit.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (A) a
standby letter of credit issued to support obligations of the Borrower,
contingent or otherwise, in connection with the working capital and
business needs of the Borrower in the ordinary course of business,
including in connection with any acquisition permitted by Section 7.9(c)
(a "Standby Letter of Credit"), or (B) a commercial letter of credit
issued in respect of the purchase of goods or services by the Borrower
and its Subsidiaries in the ordinary course of business (a "Commercial
Letter of Credit") and
(ii) expire no later than the Termination Date.
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New
York.
(d) The Issuing Bank shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Bank or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
26
3.2. Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that the Issuing Bank issue a Letter of Credit by
delivering to the Issuing Bank at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Bank, and
such other certificates, documents and other papers and information as the
Issuing Bank may request. Upon receipt of any Application, the Issuing Bank 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 Bank 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 by the Issuing Bank and
the Borrower. The Issuing Bank shall furnish a copy of such Letter of Credit to
the Borrower promptly following the issuance thereof.
3.3. Fees, Commissions and Other Charges. (a) The Borrower shall pay
to the Agent, for the account of the Issuing Bank and the L/C Participants, a
letter of credit commission with respect to each Letter of Credit, computed
quarterly in arrears for the period from the date of issuance of such Letter of
Credit to the termination or expiration thereof at the rate per annum equal to
the Applicable Margin then in effect for Eurodollar loans, calculated on the
basis of a 365 (or 366-, as the case may be) year, of the daily average
available amount under such Letter of Credit during the period for which such
fee is calculated. Such commissions shall be payable in arrears on each L/C Fee
Payment Date.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
(c) The Agent shall, promptly following its receipt thereof,
distribute to the Issuing Bank and the L/C Participants all fees and commissions
received by the Agent for their respective accounts pursuant to this subsection.
3.4. L/C Participations. (a) The Issuing Bank irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank
to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Bank, 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
Commitment Percentage in the Issuing Bank's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Bank thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Bank that, if a draft is paid under any Letter of Credit
for which the Issuing Bank is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Bank upon demand at the Issuing Bank's address for notices specified
herein an amount equal to such L/C Participant's Commitment Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.
27
(b) If any amount required to be paid by any L/C Participant to the
Issuing Bank pursuant to paragraph 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Bank under any Letter of Credit is paid to
the Issuing Bank within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Bank on demand an amount equal to
the product of (1) such amount, times (2) the daily average Federal funds rate,
as quoted by the Issuing Bank, 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 Bank, times (3) 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 paragraph 3.4(a) is not in fact made available to the Issuing Bank by such
L/C Participant within three Business Days after the date such payment is due,
the Issuing Bank 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 hereunder. A certificate of the Issuing
Bank 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 Bank 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 Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Bank), or any payment of interest on account thereof, the Issuing
Bank 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 Bank shall be required to be returned by the Issuing Bank, such L/C
Participant shall return to the Issuing Bank the portion thereof previously
distributed by the Issuing Bank to it.
3.5. Reimbursement Obligation of the Borrower. (a) The Borrower
agrees to reimburse the Issuing Bank on each date on which the Issuing Bank
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Bank for the amount of (i) such draft
so paid and (ii)any taxes, fees, charges or other costs or expenses incurred by
the Issuing Bank in connection with such payment. Each such payment shall be
made to the Issuing Bank at its address for notices specified herein in lawful
money of the United States of America and in immediately available funds.
(b) 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 which would be payable on any outstanding ABR Loans which were then
overdue.
(c) Each drawing under any Letter of Credit shall constitute a request
by the Borrower to the Agent for a borrowing pursuant to subsection 2.2 of ABR
Loans in the amount of such drawing. The Borrowing Date with respect to such
borrowing shall be the date of such drawing.
28
3.6. Obligations Absolute. (a) The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank or any beneficiary of a
Letter of Credit.
(b) The Borrower also agrees with the Issuing Bank that the Issuing
Bank shall not be responsible for, and the Borrower's Reimbursement Obligations
under subsection 3.5(a) shall not be affected by, among other things,(i) 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 (ii)
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
(iii) any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee.
(c) The Issuing Bank 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 or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence of willful
misconduct and in accordance with the standards of 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 Bank to the Borrower.
3.7. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Bank shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing Bank
to the Borrower in connection with any draft presented for payment under any
Letter of Credit 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 in conformity with such Letter of Credit.
3.8. Application. 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.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders 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 Agent and each Lender that:
4.1 Financial Condition. (a) The audited balance sheet of the
Borrower as at December 31, 1996 and the related statements of operations and of
cash flows for the year
29
ended on such date, reported on by KPMG Peat Marwick LLP, copies of which
have heretofore been furnished to each Lender, present fairly, in all
material respects, the financial condition of the Borrower as at such date,
and the results of the Borrower's operations and its cash flows for the year
then ended.
(b) The unaudited balance sheet of the Borrower as at September 30,
1997 and the related unaudited statements of operations and of cash flows for
the nine-month period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly, in all material respects, the financial condition of
the Borrower as at such date, and the results of the Borrower's operations and
its cash flows for the nine-month period then ended (subject to normal year-end
audit adjustments).
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 such accountants or
Responsible Officer, as the case may be, and as disclosed therein). The
Borrower did not have, at the date of the most recent balance sheet referred to
above, any contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. During the
period from December 31, 1996 to and including the date hereof, there has been
no sale, transfer or other disposition by the Borrower of any material part of
its business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the financial condition of the Borrower at December 31, 1996.
4.2 No Change. (a) Since September 30, 1997 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from December 31, 1996 to and
including the date hereof no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Borrower nor has any of the
Capital Stock of the Borrower been redeemed, retired, purchased or otherwise
acquired for value by the Borrower.
4.3 Corporate Existence; Compliance with Law. The Borrower and each
of its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate or
other power and authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation or other
entity 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 and (d) is in compliance with all Requirements of
Law except in the cases of clauses (c) and (d) to the extent that the failure to
so qualify or comply therewith could not reasonably be expected, in the
aggregate, to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. The
Borrower and each Subsidiary has the corporate or other power and authority, and
the legal right, to
30
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow hereunder and has taken all necessary corporate
or other action to authorize the borrowings on the terms and conditions of this
Agreement and each of the other Loan Documents and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which any Loan
Party is a party other than (i) the consents of landlords to the collateral
assignments of leases pursuant to the Assignments of Leases and (ii) any filings
required by the Uniform Commercial Code in order to perfect and/or insure the
priority of Liens created pursuant to the Loan Documents. This Agreement has
been, and each other Loan Document to which any Loan Party is a party will be,
duly executed and delivered on behalf of such Loan Party. This Agreement
constitutes, and each other Loan Document to which any Loan Party is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of such Loan Party enforceable against such Loan Party in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
4.5 No Legal Documents Bar. The execution, delivery and performance
of the Loan Documents to which any Loan Party is a party and the borrowings
hereunder will not violate any Requirement of Law or Contractual Obligation of
such Loan Party and will not result in, or require, the creation or imposition
of any Lien (other than those Liens created or imposed pursuant to the Loan
Documents) on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation.
4.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower or any Subsidiary, threatened by or against the
Borrower or any Subsidiary or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. No Loan Party is in default under or with respect to
any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 Ownership of Property; Liens. The Borrower and its Subsidiaries
have good record and marketable title in fee simple to, or a valid leasehold
interest in, all their real property, and good title to, or a valid leasehold
interest in, all their other property, and none of such property is subject to
any Lien except as set forth on Schedule 4.8 and as otherwise permitted by
subsection 7.3.
31
4.9 Intellectual Property. The Borrower and its Subsidiaries own, or
are licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of their business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). No claim has been asserted and is pending by any Person challenging
or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower or any of
its Subsidiaries know of any valid basis for any such claim which could
reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.10 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
4.11 Taxes. The Borrower and its Subsidiaries have filed or caused to
be filed all material tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other material taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority (other than any 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 Borrower or such Subsidiary); no tax Lien has been filed, and, to
the knowledge of the Borrower and its Subsidiaries, no claim is being asserted,
with respect to any such tax, fee or other charge, which, in each case, could
reasonably be expected to have a Material Adverse Effect.
4.12 Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulations G, T, U or X as now and
from time to time hereafter in effect. If requested by any Lender or the Agent,
the Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-1 or FR Form
U-1 referred to in said Regulation G or U, as the case may be.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (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 Plan that could
reasonably be expected to have a Material Adverse Effect, and each Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code except where such non-compliance could not be reasonably expected to
have a Material Adverse Effect. No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period that could reasonably be expected to have a Material Adverse
Effect. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions
32
used to fund such Plans) 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 Plan allocable to such accrued benefits by more than
$500,000. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower 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 except in each instance where such withdrawal or liability could not
reasonably be expected to have a Material Adverse Effect. No such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. The Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X) which limits its ability to incur
Indebtedness.
4.15 Subsidiaries. All of the Subsidiaries of the Borrower at the
date hereof are listed on Schedule 4.15 to this Agreement.
4.16 Purpose of Loans. The proceeds of the loans shall be used by the
Borrower for working capital purposes in the ordinary course of business,
including the making of acquisitions in accordance with the provisions of
Section 7.9(c).
4.17 Environmental Matters.
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower and its Subsidiaries
(the "Properties") do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which (i)
constitute or constituted a violation of, or (ii) could reasonably be
expected to give rise to liability under, any Environmental Law except in
either case insofar as such violation or liability, or any aggregation
thereof, is not reasonably likely to result in the payment of a Material
Environmental Amount.
(b) To the best knowledge of the Borrower, the Properties and all
operations at the Properties are in compliance, and, to the Borrower's
knowledge, have in the last 5 years been in compliance (provided that, in
the case of any Properties acquired in the last 5 years, such knowledge is
based, for the period prior to such acquisition on the representations made
to the Borrower by the Person from which the Properties were acquired),
with all applicable Environmental Laws, and there is no contamination at,
under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower (the
"Business") except in either case with respect to any instances of
non-compliance or violation which
33
individually or in the aggregate would not be reasonably likely to result
in the payment of a Material Environmental Amount.
(c) The Borrower has not received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to
any of the Properties or the Business, nor does the Borrower have knowledge
or reason to believe that any such notice will be received or is being
threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that is or are
reasonably likely to result in the payment of a Material Environmental
Amount.
(d) To the knowledge of the Borrower (provided that, in the case of
any Properties acquired in the last 5 years, such knowledge is based, for
the period prior to such acquisition on the representations made to the
Borrower by the Person from which the Properties were acquired), materials
of Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law except insofar as any
such violation or liability referred to in this paragraph, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower is or will be named as a party with
respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business except
insofar as such proceeding, action, decree, order or other requirement, or
any aggregation thereof, is not reasonably likely to result in the payment
of a Material Adverse Amount.
(f) To the knowledge of the Borrower, there has been no release or
threat of release of Materials of Environmental Concern at or from the
Properties, or arising from or related to the operations of the Borrower in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could
reasonably give rise to liability to the Borrower or any Subsidiary under
Environmental Laws except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental
Amount.
4.18 Solvency. (a) The assets of the Borrower at their fair valuation
exceed the liabilities of the Borrower, including contingent liabilities; (b)
the capital of the Borrower
34
is not unreasonably small to conduct the business of the Borrower; and (c)
the Borrower has the ability to pay the Loans made to it and its obligation
under the other Loan Documents and its other debts arising in the normal
course of business as such debts mature and does not intend to, or believe
that it will, incur debt beyond its ability to pay as such debts mature.
4.19 FCC Matters. Each Loan Party has duly and timely filed all
material filings which are required to be filed by it under the
Communications Act, and is in all material respects in substantial compliance
with the Communications Act, including, without limitation, Section 310
thereof, and the rules and regulations of the FCC relating thereto (the "FCC
Rules") except as set forth on Schedule 4.19. Each Loan Party is qualified
to control, and the Borrower is qualified to be, a broadcast licensee under
the Communications Act and the FCC Rules. Schedule 4.19 lists all of the FCC
Licenses and all other material permits, authorizations and licenses of any
Governmental Authorities granted or assigned to the Loan Parties in
connection with the operation of the radio stations owned by the Loan Parties
(collectively, the "Licenses"), and such Licenses are the only material FCC
authorizations, licenses and permits necessary for the conduct of the
businesses of the Loan Parties as of the date hereof. All of such Licenses
are issued in the name of, or have been validly assigned to, the Borrower or
a License Subsidiary and are validly issued and in full force and effect, and
the Loan Parties have fulfilled and performed all of their obligations with
respect thereto and have full power and authority to operate thereunder, and
all applications with respect to FCC consents to the assignment of the
Licenses or the transfer of control of the radio stations which are owned by
the Borrower on the date hereof to the License Subsidiaries have been filed
with the FCC.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction, immediately prior to or
concurrently with such effectiveness on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender, (ii) for the account of
each Lender requesting the same, a Note conforming to the requirements
hereof and executed by a duly authorized officer of the Borrower and
(iii) the Acknowledgment and Consent, substantially in the form of
Exhibit E, executed and delivered by a duly authorized officer of each
Loan Party, with a counterpart or a conformed copy for each Lender.
(b) Consummation of the Offering. The Offering shall have been
consummated for net cash proceeds of at least $120,000,000 and the
terms of the Senior Notes shall be reasonably satisfactory to the Agent.
(c) Indenture; Related Agreements. The Agent shall have received,
with a copy for each Lender, true and correct copies, certified as to
authenticity by the Borrower, of the Indenture for the Senior Notes and
such other documents or
35
instruments as may be reasonably requested by the Agent, including, without
limitation, a copy of any debt instrument, security agreement or other
material contract to which the Borrower may be a party.
(d) Closing Certificate. The Agent shall have received, with a
counterpart for each Lender, a certificate of the Borrower, dated the
Closing Date, substantially in the form of Exhibit B, with appropriate
insertions and attachments, satisfactory in form and substance to the
Agent, executed by the President or any Vice President and the Secretary
or any Assistant Secretary of the Borrower.
(e) Proceedings of the Borrower. The Agent shall have received,
with a counterpart for each Lender, a copy of the resolutions, in form
and substance satisfactory to the Agent, of the Board of Directors of
the Borrower authorizing (i) the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party, (ii)
the borrowings contemplated hereunder and (iii) the granting by it of
the Liens created pursuant to the Security Documents, certified by the
Secretary or an Assistant Secretary of the Borrower as of the Closing
Date, which certificate shall be in form and substance satisfactory to
the Agent and shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded.
(f) Incumbency Certificate. The Agent shall have received, with a
counterpart for each Lender, a Certificate of the Borrower, dated the
Closing Date, as to the incumbency and signature of the officers of the
Borrower executing any Loan Document satisfactory in form and substance
to the Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Borrower.
(g) Corporate Documents. The Agent shall have received, with a
counterpart for each Lender, a true and complete copy of the certificate
of incorporation of the Borrower, certified as of the Closing Date as a
complete and correct copy thereof by the Secretary or an Assistant
Secretary of the Borrower.
(h) Consents, Licenses and Approvals. The Agent shall have
received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower (i) attaching copies of all
consents, authorizations and filings referred to in subsection 4.19, and
(ii) stating that such consents, licenses and filings are in full force
and effect, and each such consent, authorization and filing shall be in
form and substance satisfactory to the Agent.
(i) Fees. The Agent shall have received for the account of each
Lender, an annual administrative fee in the aggregate amount for all
banks of $20,000, payable on the Closing Date and on each March 31,
thereafter, commencing on March 31, 1999.
(j) Legal Opinion. The Agent shall have received, with a
counterpart for each Lender, the executed legal opinion of Xxxx, Weiss,
Wharton, Rifkind & Xxxxxxxx, counsel to the Borrower, substantially in
the form of Exhibit C;
36
Such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably
require;
(k) Insurance. The Agent shall have received evidence in form and
substance satisfactory to it that all of the requirements of Section 6.3
of the Security Agreement shall have been satisfied.
(l) Prepayment of Existing Credit Agreement. All Loans outstanding
under the Existing Credit Agreement (together with accrued interest
thereon) in excess of the Commitments hereunder and all accrued and
unpaid fees under the Existing Credit Agreement shall have been paid or
repaid simultaneously with the funding under this Agreement.
(m) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with
the transactions contemplated by this Agreement and the other Loan
Documents shall be satisfactory in form and substance to the Agent, and
the Agent shall have received such other documents in respect of any
aspect or consequence of the transactions contemplated hereby or thereby
as it shall reasonably request.
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, its initial extension of credit) is subject
to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by the Borrower and the other Loan Parties 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.
(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 Letter of Credit issued on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as
of the date thereof that the conditions contained in this subsection have
been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect or any other amount is owing to any Lender or the Agent hereunder
or under any other Loan Document, the Borrower shall, and (except in the case
of Sections 6.1 and 6.2) shall cause each Subsidiary to:
37
6.1 Financial Statements. Furnish to each Lender:
(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 consolidated
balance sheet of the Borrower as at the end of such year and the related
consolidated statements of income and retained earnings and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the
scope of the audit, by KPMG Peat Marwick LLP or other 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, the unaudited consolidated balance sheet of
the Borrower as at the end of such quarter and the related unaudited
consolidated statements of income and retained earnings and of cash
flows of the Borrower for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein) except that the quarterly financial statements
provided pursuant to subsection 6.1(b) shall only be required to include
footnotes to the extent such footnotes would be required to be included in a
Quarterly Report filed on Form 10-Q filed with the Securities and Exchange
Commission.
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), a certificate of a Responsible
Officer stating that to the best of such Responsible Officer's knowledge,
the Borrower during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained in
this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate;
(c) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), a certificate of a Responsible
Officer specifying the
38
Borrowing Limit and setting forth the calculations for such amounts in
reasonable detail satisfactory to the Agent.
(d) not later than thirty days prior to the end of each fiscal year
of the Borrower, a copy of the projections by the Borrower of the
operating budget and cash flow budget of the Borrower for the succeeding
fiscal year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been
prepared in good faith on the basis of reasonable assumptions and that
such Responsible Officer has no reason to believe they are incorrect or
misleading in any material respect;
(e) within five days after the same are sent, copies of all
financial statements which the Borrower sends to its stockholders, 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; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
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 obligations of whatever nature, 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 such Subsidiary.
6.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except if (i) in
the reasonable business judgment of the Borrower or such Subsidiary, as the
case may be, it is in its best economic interest not to preserve and maintain
such rights, privileges or franchises, and such failure to preserve and
maintain such rights, privileges or franchises would not, in the aggregate,
be reasonably likely to have a Material Adverse Effect or result in any Event
of Default; comply with all Contractual Obligations and Requirements of Law
except to the extent that failure to comply therewith could not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all property useful
and necessary in its business in good working order and condition (normal
wear and tear accepted), except to the extent that the failure to do so with
respect to any such property would not be reasonably likely to have a
Material Adverse Effect; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts
and against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business; and
furnish to each Lender, upon written request, full information as to the
insurance carried.
39
6.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and
permit representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records
at any reasonable time on any Business Day and as often as may reasonably be
desired 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 with its independent certified public
accountants; provided that the Agent or such Lender shall notify the Borrower
prior to any contact with such accountants and shall give the Borrower the
opportunity to participate in such discussions.
6.7 Notices. Promptly give notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any Subsidiary or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any Subsidiary and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
Subsidiary in which the amount involved is $1,000,000 or more and not
covered by insurance or which could reasonably be expected to have a
Material Adverse Effect;
(d) any filing or communication with the FCC constituting or
relating to any challenge to the validity of any FCC License or the
transfer thereof to the Borrower or any Subsidiary, or the qualification
of the licensee under such FCC License;
(e) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan; and
(f) any other development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection 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 proposes to take with respect
thereto.
40
6.8 Environmental Laws. (a) Comply with, and ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws
and obtain and comply with and maintain, and use its reasonable best efforts
to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect.
6.9 Assignments of Leases. Use all commercially reasonable efforts
to effectuate the due execution and delivery of Assignments of Leases in
respect of any real property leased by the Borrower or any Subsidiary and
used in the transmission or broadcasting of radio signals by any of the
Stations (except that the Forestry Service License shall not be assigned
pursuant to an Assignment of Leases or any other agreement) and related
Landlord's Consent within 180 days of the Closing Date or if later, the date
of entering into or acquisition of such lease. Upon execution, the Borrower
shall furnish any (i) Assignments of Leases, executed and delivered by a duly
authorized officer of the Borrower, and (ii) Landlords Consents, executed and
delivered by duly authorized representatives of the parties thereto, to the
Agent, with a conformed copy for each Lender.
6.10 Further Assurances. (a) From time to time hereafter, the
Borrower will execute and deliver, or will cause to be executed and
delivered, such additional instruments, certificates or documents, and will
take all such actions, as the Agent may reasonably request, for the purposes
of implementing or effectuating the provisions of this Agreement and the
other Loan Documents, or of more fully perfecting or renewing the rights of
the Agent and the Lenders with respect to the Collateral (or with respect to
any additions thereto or replacements or proceeds thereof or with respect to
any other property or assets hereafter acquired by the Borrower which may be
deemed to be part of the Collateral) pursuant hereto or thereto. Upon the
exercise by the Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any
Governmental Authority, including, without limitation, the FCC, the Borrower
will execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Agent or such Lender may reasonably require to obtain from the Borrower
for such governmental consent, approval, recording, qualification or
authorization.
(b) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary, promptly upon the request of the Agent: (i)
execute and deliver to the Agent, for the benefit of the Lenders, such
amendments or supplements to the Security Agreement as the Agent shall deem
necessary or advisable to grant to the Agent, for the benefit of the Lenders,
a Lien on the Capital Stock of such Subsidiary which is owned by the Borrower
or
41
any of its Subsidiaries, (ii) deliver to the Agent any certificates, if any,
representing such Capital Stock, together with undated stock powers executed
and delivered in blank by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become
a party to the Security Agreement pursuant to documentation which is in form
and substance reasonably satisfactory to the Agent, and (B) to take all
actions necessary or advisable to cause the Lien created by the Security
Agreement to be duly perfected in accordance with all applicable Requirements
of Law, including, without limitation, the filing of financing statements in
such jurisdictions as may be requested by the Agent and (iv) if requested by
the Agent, deliver to the Agent legal opinions relating to the matters
described in clauses (i), (ii) and (iii) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.
(c) Notwithstanding anything herein or in the Security Agreement,
to the extent this Agreement or any other Loan Document purports to require
any Loan Party to grant to the Agent, on behalf of the Lenders, a security
interest in the FCC Licenses of any Loan Party now owned or hereafter
acquired, as the case may be, the Agent, on behalf of the Lenders, shall only
have a security interest in such FCC Licenses at such times and to the extent
that a security interest in such licenses is permitted under applicable law.
Notwithstanding anything to the contrary contained herein or in the other
Loan Documents, the Agent will not take any action pursuant to this Agreement
or any other Loan Document that would constitute or result in any assignment
of any FCC License or any change of control of any Loan Party without first
obtaining the prior approval of the FCC or other state or Governmental
Authority, if, under the then existing law, such assignment of any FCC
License or change of control would require the prior approval of the FCC or
other state or Governmental Authority. Prior to the exercise by the Agent of
any power, right, privilege or remedy pursuant to this Agreement which
requires any consent, approval, recording, qualification or authorization of
any Governmental Authority or instrumentality, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certificates, instruments and other documents and papers that the Agent may
reasonably require to obtain for such governmental consent, approval,
recording, qualification or authorization. Without limiting the generality
of the foregoing, the Borrower will use its best efforts upon the reasonable
request of the Agent to assist in obtaining from the appropriate governmental
authorities the necessary consents and approvals, if any, for the assignment
or transfer of such authorizations, licenses and permits to the Agent or its
designee upon or following acceleration of the payment of the Loans in
accordance with the provisions hereof.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, or any other amount is owing to any Lender or the Agent hereunder
or under any other Loan Document, the Borrower shall not, and (except with
respect to subsection 7.1) shall not permit any of its Subsidiaries to,
directly or indirectly:
7.1 Financial Condition Covenants. Permit for any period of four
consecutive fiscal quarters ending during any "Test Period" set forth below
the ratio of (i) Consolidated
42
EBITDA of the Restricted Subsidiary Group for such period to (ii) the portion
of the Interest Expense for such period required to be paid in cash to be
less than the ratio set forth opposite such Test Period below:
Test Period Ratio
------------ ------
Closing Date - December 30, 2001 2.00 to 1.00
December 31, 2001 - June 29, 2002 1.75 to 1.00
June 30, 2002 - thereafter 2.00 to 1.00
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Loan Parties under this Agreement and the
other Loan Documents;
(b) Indebtedness of the Borrower incurred to finance the acquisition
of fixed or capital assets or additions thereto (whether pursuant to a
loan, a Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to the Borrower $2,000,000 at any time outstanding;
(c) current liabilities of the Borrower (other than for borrowed
money) incurred in the ordinary course of their business and in accordance
with customary trade practices;
(d) Indebtedness of the Borrower to any Subsidiary and of any Loan
Party to the Borrower or to any other Subsidiary;
(e) Indebtedness with respect to any surety bonds required in the
ordinary course of business of the Borrower and its Subsidiaries, provided
that such Indebtedness shall not at any time exceed $250,000 in the
aggregate;
(f) existing Indebtedness set forth on Schedule 7.2(f) and any renewal
or refinancing of such Indebtedness, provided the amount of such
Indebtedness is not increased and the maturity and weighted average life
thereof are not shortened;
(g) Subordinated Indebtedness incurred in connection with the
acquisition of the assets (and related liabilities) constituting a radio
station pursuant to subsection 7.9(c) in an aggregate amount outstanding
not to exceed $5,000,000 at any time;
(h) Indebtedness of the Borrower and its Subsidiaries represented by
the Senior Notes and the Guarantees of the Senior Notes in an aggregate
amount outstanding not to exceed $174,000,000; and
43
(i) additional Indebtedness (not otherwise permitted hereunder) of
the Borrower not exceeding $5,000,000 in aggregate principal amount at
any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) leases, subleases, easements, rights-of-way, encroachments and
other survey defects, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are
not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower;
(f) Liens securing Indebtedness of the Borrower permitted by
subsection 7.2(b) incurred to finance the acquisition of fixed or
capital assets or additions thereto, provided that (i) such Liens shall
be created substantially simultaneously with the acquisition of such
fixed or capital assets or additions thereto, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any
such Lien shall at no time exceed 100% of the original purchase price of
such property at the time it was acquired; and
(g) Liens created pursuant to the Security Documents; and
44
(h) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrower and all Subsidiaries)
$5,000,000 in aggregate amount at any time outstanding.
7.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except Guarantee Obligations (a)
pursuant to the Loan Agreements, (b) in existence on the date hereof and
listed on Schedule 6.4 and any renewals thereof, provided the amount thereof
is not increased or extended and the maturity thereof is not shortened, (c)
relating to the unsecured guarantees of the Senior Notes, or (d) Guarantee
Obligations incurred after the date hereof in an aggregate amount not to
exceed $2,000,000 at any one time outstanding.
7.5 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, or make any material change in its present method of
conducting business; except that so long as after giving effect thereto no
Default or Event of Default shall have occurred and be continuing, any
Subsidiary (other than a License Subsidiary) of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be
the surviving corporation) or with or into any one or more wholly owned
Subsidiaries (other than a License Subsidiary) of the Borrower (provided that
the wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation).
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, except:
(a) the sale or other disposition of property in the ordinary course
of business;
(b) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof;
(c) the sale of the assets together with the related liabilities
constituting radio station WRKL-AM;
(d) advances, loans, extensions of credit or capital contributions,
investments and the like permitted by subsection 7.9;
(e) as permitted by subsection 7.5;
(f) any sale or other transfer of any fixed or capital asset in
connection with the incurrence of Indebtedness permitted by subsection
7.2(b);
(g) any sale of obsolete assets in the ordinary course of business;
and
45
(h) the sale or other disposition of other assets (not otherwise
permitted hereunder) in an aggregate amount not to exceed $5,000,000 in
any twelve month period.
7.7 Limitation on Dividends. Declare or pay any dividend (other
than dividends payable solely in common stock of the Borrower) 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 Subsidiary, except that so long as after giving effect
thereto no Default or Event of Default shall have occurred and be continuing,
the Borrower may (a) repurchase its Capital Stock owned by management
employees or (b) make payments to management employees upon termination of
employment in connection with the exercise of stock options, stock
appreciation rights or similar equity incentives or equity based incentives
pursuant to management incentive plans in an aggregate amount per year not to
exceed $1,000,000.
7.8 Limitation on Capital Expenditures. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any
expenditure in respect of the purchase or other acquisition of fixed or
capital assets (excluding any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations
and any expenditure from the proceeds of casualty insurance used to repair or
replace the assets affected by such casualty loss and any asset acquired as
part of the acquisition of a Station permitted by Section 7.9(c)) except for
expenditures in the ordinary course of business not exceeding, in the
aggregate for the Borrower during any of the fiscal periods of the Borrower
set forth below, the amount set forth opposite such fiscal period below:
Fiscal Period Amount
--------------- ----------
The fiscal year ending
December 31, 1998 4,000,000
The fiscal year ending
December 31, 1999 2,000,000
Each fiscal year ending
thereafter 1,000,000
; provided that any amount not expended in any fiscal year (up to 50% of the
amount for such fiscal year set forth above) may be carried forward into the
next succeeding fiscal year.
7.9 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase
any stock, bonds, notes, debentures
46
or other securities of or any assets constituting a business unit of, or make
any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) the acquisition of the assets (and related liabilities)
constituting a radio station (including the right to hold and operate
all related Licenses issued by the FCC); provided that (i) after giving
effect thereto, no Default or Event of Default shall have occurred or be
continuing and (ii) on a pro forma basis, the Borrower shall be in
compliance with subsection 7.1 as of the last day of the period of four
fiscal quarters for which financial statements have most recently been
provided (assuming such acquisition (and any incurrence of Indebtedness)
had occurred on the first day of such period) and (iii) the Borrower
shall have provided the Agent with the necessary calculations under
clause (ii) in certificate form and in sufficient detail reasonably
satisfactory to the Agent.
(d) investments in the Loan Parties;
(e) loans and advances to officers, directors and other employees
of the Borrower or its Subsidiaries for (i) commissions and travel and
entertainment expenses in the ordinary course of business and (ii)
relocation expenses and other similar expenses;
(f) loans by the Borrower to its employees or employees of its
Subsidiaries in connection with management incentive plans in an amount
not to exceed $1,000,000 in the aggregate at any one time outstanding;
(g) investments, loans and advances in existence on the date hereof
and listed on Schedule 7.9, and extensions, renewals, modifications or
restatements thereof; provided the amount thereof is not increased; and
(h) if in the reasonable judgment of the Borrower or any of its
Subsidiaries, any customer is deemed to be in a reorganization or unable
to make a timely cash payment on Indebtedness of such customer owing to
it, each of the Borrower and its Subsidiaries may invest in securities
issued by such customer or any affiliate thereof in lieu of cash
payments; provided that the Borrower or such Subsidiary, as the case may
be, has paid no new consideration (other than forgiveness of
Indebtedness) therefor.
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments or Agreements. (a) Make any optional payment or prepayment on
or redemption or purchase of any Indebtedness (other than the Loans), or (b)
amend, modify or change, or consent or agree to any amendment, modification
or change to any of the terms of any such Indebtedness (other than any such
amendment, modification or change which would extend the maturity or
47
reduce the amount of any payment of principal thereof or which would reduce
the rate or extend the date for payment of interest thereon).
7.11 Limitation on Transactions with Affiliates. 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 (a) otherwise permitted under this Agreement, (b)
in the ordinary course of the Borrower's or a Subsidiary's business and (c)
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, except that the
foregoing restrictions shall not apply to (i) any transaction with an officer
or a member of the Board of Directors of the Borrower or a Subsidiary entered
into in the ordinary course of business (including compensation and employee
benefit arrangements), (ii) transactions and agreements in existence on the
date hereof (including without limitation the Registration Rights
Agreements), (iii) directors' fees, (iv) employment agreements approved by
the Board of Directors of the Borrower or a Subsidiary as in effect on the
date hereof and any extensions thereof on substantially equivalent terms, (v)
loans to employees not exceeding $1,000,000 in the aggregate outstanding at
any time and (vi) the provision of certain legal, tax and accounting services
by Metromedia Company and its employees to the Borrower and its Subsidiaries.
7.12 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 property which has been or is to be sold or
transferred by the Borrower or any 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 any
Subsidiary.
7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year
of the Borrower to end on a day other than December 31.
7.14 Limitation on Negative Pledge Clauses. Enter into with any
Person any agreement, other than this Agreement and any industrial revenue
bonds, purchase money mortgages or Financing Leases permitted by this
Agreement (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby), which prohibits or limits the
ability of the Borrower or any Subsidiary to create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired.
7.15 Limitation on Lines of Business and Local Marketing and Sales
Agreements. (a) Enter into any business, except for those businesses in
which the Borrower or any Subsidiary is engaged on the date of this Agreement
or which are directly related thereto or (b) without the consent of the
Required Lenders, enter into any Local Marketing and Sales Agreement.
48
7.16 Restrictions on Member and License Subsidiaries. (a) Permit
any FCC License to be held by any Person other than a License Subsidiary 90
days after the later of the Closing Date or acquisition of such FCC License.
(b) Permit any FCC License held by any License Subsidiary not to be
the subject of an Operating Agreement or amend any Operating Agreement
without the consent of the Agent.
(c) Permit any Member other than the Borrower to engage in any
activity or business or have any employees or incur any Indebtedness or
Contractual Obligations or grant any Liens other than (i) activities and
obligations incidental to its membership or partnership interest in a
License Subsidiary or (ii) pursuant to the Loan Documents.
(d) Permit any License Subsidiary to engage in any activity or
business or have any employees or incur any Indebtedness or Contractual
Obligations or grant any Liens other than (i) activities or obligations
incidental to its holding of FCC Licenses and the related Operating
Agreement or (ii) pursuant to the Loan Documents.
(e) (i) permit any License Subsidiary or Member to fail to satisfy
customary corporate or other applicable formalities, including the
holding of regular board of directors' and shareholders' or other
required meetings and the maintenance of offices and records, (ii)
permit any bank account of any License Subsidiary or any Member to be
commingled with any bank account of the Borrower or any of its other
Subsidiaries, (iii) any financial statements distributed to any
creditors of the Borrower or any of its other Subsidiaries to fail to
clearly establish the separateness of the Members and the License
Subsidiaries from the Borrower and its other Subsidiaries, and (iv)
take, and not permit any Member or any License Subsidiary to take, any
action, or conduct its affairs in a manner, which is likely to result in
the corporate existence of any Member or of any License Subsidiary being
ignored, or in the assets and liabilities of any Member or of any
License Subsidiary being substantively consolidated with those of the
Borrower or any of its other Subsidiaries in a bankruptcy,
reorganization or other insolvency proceeding.
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 any
Reimbursement Obligation when due in accordance with the terms thereof
or hereof; or the Borrower shall fail to pay any interest on any Loan,
or any other amount payable hereunder, within five days after any such
interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in
49
any certificate, document or financial or other statement furnished by it at
any time as required by this Agreement or any such other Loan Document shall
prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any covenant contained in Section 7 hereof
or Section 5 of the Security Agreement; or
(d) The Borrower or any other Loan Party 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 Section), and such default shall
continue unremedied for a period of 30 days; or
(e) The Borrower or any other Loan Party shall, unless waived by
the Lender in each instance, (i) default in any payment of principal of
or interest of any Indebtedness (other than the Loans) or in the payment
of any Guarantee Obligation, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created, after giving effect to any consents or
waivers relating thereto, if the aggregate amount of the Indebtedness
and/or Guarantee Obligations in respect of which such default or
defaults shall have occurred is at least $2,500,000; or (ii) default in
the observance or performance of any other agreement or condition
relating to any such Indebtedness or Guarantee Obligation 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 holders of such Indebtedness or beneficiary or beneficiaries of such
Guarantee Obligation (or a trustee or agent on behalf of such holder or
holders) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable; or
(f) (i) The Borrower or any other Loan Party 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, arrangement,
adjustment, 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 any substantial part of its assets, or the Borrower or
any other Loan Party shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower or
any other Loan Party 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 60 days; or (iii)
there shall be commenced against the Borrower or any other Loan Party
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets
50
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 60 days from the entry thereof; or (iv) the Borrower or any other
Loan Party shall take any 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 other
Loan Party shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), 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, in the reasonable opinion of the Required Lenders, likely to
result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is likely
to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan; and in
each case in clauses (i) through (vi) 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 or any other Loan Party involving in the aggregate a liability
(not paid or fully covered by insurance) of $2,500,000 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) (i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect, or the Borrower or any other Loan Party
which is a party to any of the Security Documents shall so assert or
(ii) the Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or
(j) The Borrower shall lose, fail to keep in force, suffer the
termination or revocation or nonrenewal of, or terminate, forfeit or
suffer an amendment to any FCC License at any time owned by it which in
any such case would have a Material Adverse Effect;
(k)(i) Any Person or "group" (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended) other than
Xxxxxx Xxxxxxxxx and his
51
family, affiliates and heirs shall obtain the power (whether or not
exercised) to elect a majority of the Borrower's directors or (ii) the
Borrower shall fail to own, directly or indirectly, free and clear of
all Liens (other than pursuant to the Security Documents) 100% of the
Capital Stock of any License Subsidiary or Member or (iii) the Board of
Directors of the Borrower shall not consist of a majority of Continuing
Directors; "Continuing Directors" shall mean the directors of the
Borrower on the Closing Date and each other director, if such other
director's nomination for election to the Board of Directors of the
Borrower is recommended by a majority of the then Continuing Directors;
or
(l) Any of the subordination provisions of any Subordinated
Indebtedness shall cease, for any reason to be in full force and effect,
or the Borrower or the holders of a majority of such Indebtedness shall
so assert;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) of this Section 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 (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 both of the following actions may be taken: (i) with
the consent of the Required Lenders, the Agent may, or upon the request of
the Required Lenders, the Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement (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
the preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. The Borrower hereby
grants to the Agent, for the benefit of the Issuing Bank and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of the Borrower under this Agreement and the other Loan
Documents. Amounts held in such cash collateral account shall be applied by
the 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 Notes. 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 Notes shall have been paid in full,
the balance, if any, in such cash collateral account shall be returned to the
Borrower. The
52
Borrower shall execute and deliver to the Agent, for the account of the
Issuing Bank and the L/C Participants, such further documents and instruments
as the Agent may request to evidence the creation and perfection of the
security interest in such cash collateral account.
Except as expressly provided above in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the 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 Agent by the terms of
this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the 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 Agent.
9.2 Delegation of Duties. The 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 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 Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) 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 for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower 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 Agent under or in connection with, this
Agreement or 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 the Borrower or any other
Loan Party to perform its obligations hereunder or thereunder. The 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 the Borrower or any other Loan Party.
9.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit,
53
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 Agent.
The 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 Agent. The 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 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 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, 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 Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the 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
Agent receives such a notice, the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Agent shall have received such directions,
the 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 Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower or any other Loan
Party, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the 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 Borrower
and the other Loan Parties 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 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 deems necessary to inform
itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the other Loan Parties.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the
54
business, operations, property, condition (financial or otherwise), prospects
or creditworthiness of the Borrower which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the 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 respective Commitment Percentages in effect on the date on which
indemnification is sought (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 their Commitment Percentages
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 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 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 resulting solely
from the Agent's gross negligence or willful misconduct. The agreements in
this subsection shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 Agent in Its Individual Capacity. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower and its Subsidiaries as though the Agent were not
the Agent hereunder and under the other Loan Documents. With respect to the
Loans made by it and with respect to any Letter of Credit issued or
participated in by it, the 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 the Agent, and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
9.9 Successor Agent. The Agent may resign as Agent upon 10 days'
notice to the Lenders. If the Agent shall resign as 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, whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the
term "Agent" shall mean such successor agent effective upon such appointment
and approval, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement or any holders of the
Loans. After any retiring Agent's resignation as 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 Agent under this Agreement and the other Loan
Documents.
55
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor 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. The
Required Lenders may, or, with the written consent of the Required Lenders,
the Agent may, from time to time, (a) enter into with the Borrower or the
other Loan Parties 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 Borrower or the other Loan Parties hereunder
or thereunder or (b) waive, on such terms and conditions as the Required
Lenders or the 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)
reduce the amount or extend the scheduled date of maturity of any Loan or of
any installment thereof, or reduce the stated rate of any interest or fee
payable hereunder or extend the scheduled date of any payment thereof or
increase the amount or extend the expiration date of any Lender's Commitment,
in each case without the consent of each Lender affected thereby, or (ii)
amend, modify or waive any provision of this subsection or reduce the
percentage specified in the definition of Required Lenders or Required
Lenders, or consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement and the other Loan Documents
or release all or substantially all of the Collateral, in each case without
the written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 9 without the written consent of the then Agent or any
provision of Section 3 without the consent of the Issuing Bank. Any such
waiver and any such amendment, supplement or modification shall apply equally
to each of the Lenders and shall be binding upon the Borrower, the Lenders,
the Agent, the Loan Parties and all future holders of the Loans. In the case
of any waiver, the Borrower, the Lenders, the Loan Parties and the Agent
shall be restored to their former positions 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; no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right
consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) in the case of delivery
by hand, when delivered, (b) in the case of delivery by mail, three days
after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows in the case of the Borrower and the Agent, and as set
forth in Schedule I in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto:
The Borrower: Big City Radio, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
56
Attention: Xx. Xxxxxxx Xxxxxxxxxxx,
President
Fax: 000-000-0000
with a copy to: Xxxxxx X. Xxxxxx, Esq.
c/o Metromedia Company
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Fax: 000-000-0000
The Agent: The Chase Manhattan Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Fax: 000-000-0000
and a copy to: Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
provided that any notice, request or demand to or upon the Agent, the Issuing
Bank or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.8, 2.13 or 3.2
shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, 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 Agent for all its reasonable and documented 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 counsel to the Agent,
(b) to pay or
57
reimburse the Agent and, from and after the occurrence of a Default or an
Event of Default, each Lender for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the reasonable and documented fees and disbursements of
counsel to each Lender and of counsel to the Agent, (c) to pay, indemnify,
and hold each Lender and the Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, 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
each Lender and the Agent harmless 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 violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of the Borrower or any of the Properties
(all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided, that the Borrower shall have no obligation hereunder
to the Agent or any Lender with respect to indemnified liabilities arising
from (i) the gross negligence or willful misconduct of the Agent or any such
Lender or (ii) legal proceedings commenced against the Agent or any such
Lender by any security holder or creditor thereof arising out of and based
upon rights afforded any such security holder or creditor solely in its
capacity as such. The agreements in this subsection shall survive repayment
of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its commercial
lending business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("Participants") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other
Loan Documents, and the Borrower and the Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. The Borrower
agrees that if amounts outstanding under this Agreement are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default,
58
each Participant shall, to the maximum extent permitted by applicable law, be
deemed to have the right of setoff in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in subsection 10.6 as fully as if it were a
Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 2.15, 2.16 and 2.17 with respect to
its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided that, in the case of subsection 2.16,
such Participant shall have complied with the requirements of said subsection
and provided, further, that no Participant shall be entitled to receive any
greater amount pursuant to any such subsection than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had
no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
lending business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the
consent of the Agent and the Borrower (which shall not, in either case, be
unreasonably withheld), to an additional bank or financial institution ("an
Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit D, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender
or an affiliate thereof, by the Agent) and delivered to the Agent for its
acceptance and recording in the Register of the aggregate principal amount of
the Loans and the aggregate amount of the Available Commitment of all the
Lenders then outstanding (or such lesser amount as may be agreed to by the
Borrower and the Agent); provided that no such assignment shall be effective
unless it is for a minimum amount of at least $5,000,000. Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the assigning
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto).
(d) The Agent, on behalf of the Borrower, shall maintain at the
address of the Agent referred to in subsection 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Loans owing to, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Agent and the Lenders may (and, in the case of
any Loan or other obligation hereunder not evidenced by a Note, shall) treat
each Person whose name is recorded in the Register as the owner of a Loan or
other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding
59
any notice to the contrary. Any assignment of any Loan or other obligation
hereunder not evidenced by a Note shall be effective only upon appropriate
entries with respect thereto being made in the Register. The Register shall
be available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Agent) together with payment to
the Agent of a registration and processing fee of $3,500, the Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders
and the Borrower.
(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 in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of the Borrower pursuant to this Agreement or which has been delivered
to such Lender by or on behalf of the Borrower in connection with such
Lender's credit evaluation of the Borrower and its Affiliates prior to
becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions
do not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
10.7 Termination of Guarantee. In connection with this Agreement,
the existing Guarantee of up to $6,000,000 of the Loans made by Xxxxxx
Xxxxxxxxx, dated May 30, 1996, as amended, supplemented or otherwise modified
from time to time, shall be terminated effective as of the Closing Date and
the Agent agrees to xxxx such Guarantee "cancelled" and return the original
document to the Borrower.
10.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of
the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the 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.
60
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with
respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Lender
relative to subject matter hereof 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 HEREUNDER 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. The Borrower 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 judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, 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 the
Borrower at its address set forth in subsection 10.2 or at such other
address of which the Agent shall have been notified pursuant thereto; and
(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 xxx in any other jurisdiction.
Each of the Borrower, the Agent and the Lenders hereby irrevocably
and unconditionally 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 any special, exemplary, punitive or
consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
61
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
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 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.
62
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.
BIG CITY RADIO, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxx
-----------------------------------
Title:
THE CHASE MANHATTAN BANK,
as Agent and as a Lender
By: /s/ Xxxx Xxxxxxxxx
-----------------------------------
Title:
63
SCHEDULE I
Lenders, Addresses and Commitments
The Chase Manhattan Bank $15,000,000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile number: (000) 000-0000
SCHEDULE 4.8
Liens
Liens in favor of Toshiba American Information Systems, Inc. on
equipment of the Borrower acquired pursuant to a lease transaction.
SCHEDULE 4.15
Subsidiaries
Big City Radio-NYC, L.L.C.
Big City Radio-CHI, L.L.C.
Big City Radio-LA, L.L.C.
Odyssey Traveling Billboards, Inc.
WRKL Rockland Radio, L.L.C.
SCHEDULE 4.19
FCC Licenses and Permits
The FFC authorizations for the following are held by Big City Radio,
Inc. or a License Subsidiary for Big City, Inc.:
Call Sign Station Location Renewal File No.
--------- ---------------- ----------------
WRKL(AM) Xxx Xxxx, XX XX-000000XX
WQA-988 Associated with WRKL(AM) X/X
XXXX(XX) Xxxxxxxxxx Xxxxx, XX XXX-000000XX
WWVY(FM) Xxxxxxx Xxxx, XX XXX-000000XX
WWZY(FM) Xxxx Xxxxxx, XX XXX-000000XX
WVVX-FM Xxxxxxxx Xxxx, XX XXX-000000XX
WJDK(FM) Xxxxxx, XX XXX-000000X0
WMG-515 Associated with WJDK(FM) N/A
KLYY(FM) Arcadia, CA BRH-970731XJ
KLYY-FM1 Burbank, CA Renewal associated with
KLYY(FM)
KSYY(FM) Xxxxxxxxx, XX XXX-000000XX
KVYY(FM) Ventura, CA BRH-970731XK
K252BF Temecula, CA BRFT-979731XR
The FCC license for WRKL(AM) is in the process of being assigned to
WRKL Rockland Radio, L.L.C. The FCC licenses for WWXY(FM), WWVY(FM), and
WWZY(FM) are in the process of being assigned to Big City Radio-NYC, L.L.C.
The FCC licenses for KLYY(FM), KSYY(FM), KVYY(FM), and K252BF are in the
process of being assigned to Big City Radio-LA, L.L.C. The FCC licenses for
WJDK(FM) and WVVX-FM are in the process of being assigned to Big City
Radio-CHI, L.L.C. Big City Radio, Inc. is the sole member manager of Big
City Radio-CHI, L.L.C., Big City Radio-LA, L.L.C., Big City Radio-NYC, L.L.C.
and WRKL Rockland Radio, L.L.C.
Big City Radio, Inc. has also requested the FCC to update the
licensee of each of the following to the Big City Radio, Inc. or one of its
License Subsidiaries:
WGW-933 Associated with WWVY(FM), Hampton Bays, NY
KPK-855 Associated with WWXY(FM), Briarcliff Manor, NY
WHE-822 Associated with WWZY(FM), Xxxx Xxxxxx, XX
XX-0000 Associated with WRKL(KAM), New City, NY
WLP-470 Associated with KVYY(FM), Ventura, CA
WLI-911 Associated with KVYY(FM), Ventura, CA
WLE-596 Associated with KLYY(FM), Arcadia, CA
2
SCHEDULE 7.2(f)
Existing Indebtedness
Notes Payable on Station Vans $47,706.00
Omnipoint Holdback from WZVU purchase $150,000,000
------------
Total $197,706.00
SCHEDULE 7.4
Guarantee Obligations
None.
SCHEDULE 7.9
Investments, Loans and Advances
Cablevision (Tower) Deposit $ 57,821.00
L-T Tax Deposit $ 73,155.00
----------
Total $130,976.00
