Exhibit 10.7
EXECUTION COPY
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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 December 24, 1997
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . . . . . 16
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . . . 17
2.1 REVOLVING CREDIT COMMITMENTS . . . . . . . . . . . . . . . . . . . 17
2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING . . . . . . . . . . . . . 17
2.3 COMMITMENT FEE . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.4 TERMINATION OR REDUCTION OF COMMITMENTS. . . . . . . . . . . . . . 18
2.5 REPAYMENT OF LOANS; EVIDENCE OF DEBT . . . . . . . . . . . . . . . 19
2.6 OPTIONAL PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . 20
2.7 MANDATORY PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . 20
2.8 CONVERSION AND CONTINUATION OPTIONS. . . . . . . . . . . . . . . . 21
2.9 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES . . . . . . . . . . 22
2.10 INTEREST RATES AND PAYMENT DATES. . . . . . . . . . . . . . . . . 22
2.11 COMPUTATION OF INTEREST AND FEES. . . . . . . . . . . . . . . . . 23
2.12 INABILITY TO DETERMINE INTEREST RATE. . . . . . . . . . . . . . . 23
2.13 PRO RATA TREATMENT AND PAYMENTS . . . . . . . . . . . . . . . . . 24
2.14 ILLEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.15 REQUIREMENTS OF LAW . . . . . . . . . . . . . . . . . . . . . . . 26
2.16 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.17 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.18 CHANGE OF LENDING OFFICE OR REPLACEMENT OF LENDER . . . . . . . . 29
2.19 CERTAIN FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 30
3.1 FINANCIAL CONDITION. . . . . . . . . . . . . . . . . . . . . . . . 30
3.2 NO CHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW . . . . . . . . . . . . . 31
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. . . . . . 31
3.5 NO LEGAL DOCUMENTS BAR . . . . . . . . . . . . . . . . . . . . . . 32
3.6 NO MATERIAL LITIGATION . . . . . . . . . . . . . . . . . . . . . . 32
3.7 NO DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.8 OWNERSHIP OF PROPERTY; LIENS . . . . . . . . . . . . . . . . . . . 32
3.9 INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 32
3.10 NO BURDENSOME RESTRICTIONS. . . . . . . . . . . . . . . . . . . . 33
3.11 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.12 FEDERAL REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . 33
3.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS . . . . . . . . . . . . 34
3.15 SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.16 PURPOSE OF LOANS. . . . . . . . . . . . . . . . . . . . . . . . . 34
3.17 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . 34
3.18 SOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.19 FCC MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 36
4.1 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT . . . . . . . . . . . . 36
4.2 CONDITIONS TO EACH EXTENSION OF CREDIT . . . . . . . . . . . . . . 00
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XXXXXXX 0. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 40
5.1 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . 40
5.2 CERTIFICATES; OTHER INFORMATION. . . . . . . . . . . . . . . . . . 41
5.3 PAYMENT OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . 42
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE . . . . . . . . . 42
5.5 MAINTENANCE OF PROPERTY; INSURANCE . . . . . . . . . . . . . . . . 42
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS . . . . . . 42
5.7 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.8 ENVIRONMENTAL LAWS . . . . . . . . . . . . . . . . . . . . . . . . 44
5.9 ASSIGNMENTS OF LEASES. . . . . . . . . . . . . . . . . . . . . . . 44
5.10 FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 46
6.1 FINANCIAL CONDITION COVENANTS. . . . . . . . . . . . . . . . . . . 46
6.2 LIMITATION ON INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . 47
6.3 LIMITATION ON LIENS. . . . . . . . . . . . . . . . . . . . . . . . 48
6.4 LIMITATION ON GUARANTEE OBLIGATIONS. . . . . . . . . . . . . . . . 49
6.5 LIMITATION ON FUNDAMENTAL CHANGES. . . . . . . . . . . . . . . . . 49
6.6 LIMITATION ON SALE OF ASSETS . . . . . . . . . . . . . . . . . . . 49
6.7 LIMITATION ON DIVIDENDS. . . . . . . . . . . . . . . . . . . . . . 50
6.8 LIMITATION ON CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . 50
6.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. . . . . . . . . . . 51
6.10 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS OR AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 52
6.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . 52
6.12 LIMITATION ON SALES AND LEASEBACKS. . . . . . . . . . . . . . . . 52
6.13 LIMITATION ON CHANGES IN FISCAL YEAR. . . . . . . . . . . . . . . 53
6.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES . . . . . . . . . . . . . . 53
6.15 LIMITATION ON LINES OF BUSINESS AND LOCAL MARKETING AND SALES
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.16 RESTRICTIONS ON MEMBER AND LICENSE SUBSIDIARIES.. . . . . . . . . 53
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.1 APPOINTMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.2 DELEGATION OF DUTIES . . . . . . . . . . . . . . . . . . . . . . . 58
8.3 EXCULPATORY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 58
8.4 RELIANCE BY AGENT. . . . . . . . . . . . . . . . . . . . . . . . . 58
8.5 NOTICE OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 59
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8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. . . . . . . . . . . . . . 59
8.7 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.8 AGENT IN ITS INDIVIDUAL CAPACITY . . . . . . . . . . . . . . . . . 60
8.9 SUCCESSOR AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.1 AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . 61
9.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.3 NO WAIVER; CUMULATIVE REMEDIES . . . . . . . . . . . . . . . . . . 62
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 62
9.5 PAYMENT OF EXPENSES AND TAXES. . . . . . . . . . . . . . . . . . . 63
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS . . . . . . 63
9.7 TERMINATION OF AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 66
9.8 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.9 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.10 INTEGRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.12 SUBMISSION TO JURISDICTION; WAIVERS . . . . . . . . . . . . . . . 67
9.13 ACKNOWLEDGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 67
9.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . 68
SCHEDULES
I Lenders, Addresses and Commitments
3.8 Liens
3.15 Subsidiaries
3.19 FCC Licenses and Permits
6.2(f) Existing Indebtedness
6.4 Guarantee Obligations
6.9 Investments, Loans and Advances
EXHIBITS
A Form of Note
B Form of Closing Certificate
C-1 Form of Legal Opinion of Counsel to the Borrower
C-2 Form of Legal Opinion of Special Counsel to the Borrower
D Form of Assignment and Acceptance
E Form of Amended and Restated Security Agreement
F Form of Operating Agreement
G Form of Guarantee Amendment
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 24, 1997,
among BIG CITY RADIO, INC.(formerly known as Odyssey Communications, 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 Credit Agreement, dated as of May 30,
1996 (as amended and waived to the date hereof, the "EXISTING CREDIT
AGREEMENT"), pursuant to which the Existing Lenders made loans to the Borrower
to enable the Borrower to consummate acquisitions of radio stations, to repay
Indebtedness (as defined herein), and for other corporate purposes; and
WHEREAS, the Borrower intends to consummate a registered initial
public offering of up to 35% of the common shares of the Borrower (the "IPO");
and
WHEREAS, the Borrower has requested that the Agent and the Lenders
amend and restate the Existing Credit Agreement to, INTER ALIA, refinance and
extend the Revolving Credit Commitments under the Existing Credit Agreement and
for working capital and general corporate purposes; 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
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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 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.
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"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.
"AGREEMENT": this 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 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 5.2(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 5.2(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 5.2(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 5.2(b) for the
fiscal quarter ending March 31, 1998, the ratio of Total Debt to EBITDA
shall, for purposes of determining Applicable Margin, be deemed to be
greater than or equal to 5.0 to 1.
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Total Debt/
EBITDA ABR + LIBOR +
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> or equal to 5.0X 2.00% 3.00%
> or equal to 4.0X, < 5.0X 1.50% 2.50%
> or equal to 3.0X, < 4.0X 1.00% 2.00%
< 3.0X 0.50% 1.50%
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"ASSIGNEE": as defined in subsection 9.6(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
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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) the amount of such Lender's Commitment
over (b) the aggregate principal amount of all Loans made by such Lender
then outstanding.
"BOARD": the Board of Governors of the Federal Reserve System (or any
successor thereto).
"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.
"BUSINESS": as defined in subsection 3.17(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
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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) 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 4.1 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.
"COMMITMENT": as to any Lender, the obligation of such Lender to make
Loans to the Borrower hereunder in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule I, as such amount may be reduced from time to time in
accordance with the provisions of this Agreement.
"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
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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.
"CONSOLIDATED FIXED CHARGES": for any period the sum of:
(a) Debt Service; and
(b) Consolidated Lease Expense, determined without duplication of
items included in Net Cash Interest Expense, in each case, of the Borrower
on a consolidated basis in accordance with GAAP.
"CONSOLIDATED LEASE EXPENSE": for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrower, determined on a
consolidated basis in accordance with GAAP, for such period with respect to
leases of real and personal property.
"CONSOLIDATED NET INCOME": for any period, net income of the
Borrower, 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.
"DEBT SERVICE": with respect to the Borrower for any period, the sum
of Net Cash Interest Expense for such period and scheduled principal
amortization or commitment reductions of Total Debt (including unborrowed
revolving credit commitments) for such period, whether or not made.
"DEFAULT": any of the events specified in Section 7, 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 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), (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
of radio stations and related assets, and MINUS to the extent added in
computing such net income, (i) any interest income and (ii) any
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extraordinary gains, all as determined with respect to the Borrower on a
consolidated basis 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.
"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 7,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
8
"EXCESS CASH FLOW": for any fiscal year of the Borrower, EBITDA for
such fiscal year, LESS the sum of (a) Debt Service of the Borrower for such
fiscal year, (b) capital expenditures paid in cash by the Borrower during
such fiscal year and (c) taxes paid in cash by the Borrower.
"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 3.19.
"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
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,
9
regulatory or administrative functions of or pertaining to government.
"GUARANTEE": the Guarantee of up to $6,000,000 of the Loans made by
Stuart Subtonick, dated May 30, 1996, as amended on the Closing Date and as
further amended, supplemented or otherwise modified from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, 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.
"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
10
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, two, three, six or nine months thereafter, as selected by
the Borrower by irrevocable notice to the Agent not
11
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.
"IPO": as defined in the recitals hereto.
"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.
"LICENSES": as defined in subsection 3.19.
"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).
12
"LOAN": any loan made by any Lender pursuant to this Agreement
including any Existing Loan.
"LOAN DOCUMENTS": this Agreement, any Notes, the Guarantee and the
Security Documents.
"LOAN PARTIES": the Borrower and any of its Subsidiaries which is a
party to a Loan Document and Xxxxxx Xxxxxxxxx.
"LOANS": as defined in subsection 2.1.
"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.
"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
13
during such period, in each case determined on a consolidated basis in
accordance with GAAP.
"NET CASH PROCEEDS": with respect to the sale, transfer or other
disposition of any assets of the Borrower or any Subsidiary, 100% of the
cash proceeds of such sale, transfer or other disposition (including when
received, any such proceeds, the payment of which is deferred) and when
received out of the escrow account any portion of the purchase price
deposited in an escrow account pursuant to the relevant acquisition
agreement (the "ESCROW AMOUNT") net of (i) attorneys' fees, accountants'
fees, investment banking fees, brokerage commissions, survey costs, title
insurance premiums, and related search and recording charges, transfer
taxes, deed or mortgage recording taxes, required debt payments (other than
pursuant hereto), amounts required to be paid to any Person (other than the
Borrower and its Subsidiaries) owning a beneficial interest in the assets
subject to such sale, transfer or other disposition, reasonable amounts to
be provided by the Borrower or any of its Subsidiaries, as the case may be,
as a reserve, against any liabilities (including, without limitation, any
anticipated purchase price adjustment) associated with such sale, transfer
or disposition and retained by the Borrower or such Subsidiary, as the case
may be (provided that if any amount of such reserve shall be released or
reversed, the amount of such release or reversal shall be "Net Cash
Proceeds"), and other customary expenses and brokerage, consultant and
other customary fees actually incurred in connection therewith (other than
such amounts payable to Affiliates) (ii) any portion of the Escrow Amount
retained by the purchaser of any Station pursuant to a final determination
under the relevant acquisition agreement and (iii) federal, state, local
and foreign taxes paid or payable by the Borrower or any Subsidiary as a
result thereof.
"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,
14
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
between such License Subsidiary and the Borrower.
"PARTICIPANT": as defined in subsection 9.6(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.
"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 3.17.
"REGISTER": as defined in subsection 9.6(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.
"REINVESTMENT AMOUNT": as defined in subsection 2.4(d).
"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
15
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.
"SECURITY AGREEMENT": the Amended and Restated Security Agreement,
dated the date hereof, to be executed by the Borrower and its Subsidiaries,
a form of which is attached as Exhibit G, 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.
"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.
"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
16
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": December 24, 2002.
"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 9.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
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 "LOANS") to the Borrower from time to time during the Commitment Period in
an aggregate principal amount at any one time outstanding which does not exceed
the amount of such Lender's Commitment. During the Commitment Period the
Borrower may use the Commitments by borrowing, prepaying the
17
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 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) it has no
(and it permanently and irrevocably waives, and releases the Agent and the
Existing Lenders from) any, to the extent arising on or prior to the
Closing Date, 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 9.2 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
18
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.
2.4 TERMINATION OR REDUCTION OF COMMITMENTS. (a) 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. 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.
(b) The total amount of the Commitments on the Closing Date shall be
an amount equal to $35,000,000. This amount shall be automatically and
permanently reduced on each of the dates specified below by the amount set
forth opposite each such date:
DATE AMOUNT OF REDUCTION
---- -------------------
December 24, 1999 7,000,000
December 24, 2000 7,000,000
December 24, 2001 7,000,000
December 24, 2002 14,000,000
(c) On each April 30 commencing April 30, 1999, the total amount of
the Commitments shall be reduced by an amount equal to 50% of the Excess
Cash Flow for the immediately prior fiscal year-ended December 31. Such
reductions shall be applied to the remaining scheduled reductions under (b)
above in inverse order.
(d) The total amount of the Commitments shall be reduced to the extent
of any Net Cash Proceeds received by the Borrower or any Subsidiary upon
any sale, transfer or other disposition of assets after the Closing Date
permitted hereunder in excess of (i) $5,000,000 in total for the fiscal
years of the Borrower ending December 31, 1997 and December 31, 1998 and
(ii) $5,000,000 in the aggregate for each fiscal year of the Borrower
thereafter, except for those Net Cash Proceeds utilized within 180 days of
such sale, transfer or other disposition to acquire assets utilized in the
Borrower's business (the "REINVESTMENT AMOUNT"). To the extent that any
Reinvestment Amount shall not be so utilized within 180 days of such sale,
transfer or other disposition the portion not so utilized shall be treated
as Net Cash Proceeds and on the last day of such 180 day period applied in
the manner specified in this paragraph. Such reductions shall be applied
to the remaining scheduled reductions under (b) above ratably in accordance
with the amounts of such scheduled reductions.
19
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 7). 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 9.6(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").
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
20
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.
2.8 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert Eurodollar Loans
21
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
22
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 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
23
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), (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 9.2, 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.
24
(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 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
25
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 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 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 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 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
26
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 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
27
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;
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 9.6 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
28
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 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 9.6 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.
29
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to the Agent and
each Lender that:
3.1 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 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 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.
3.2 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.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Borrower and each
of its Subsidiaries (a) is duly organized,
30
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, in the aggregate, have a Material Adverse Effect.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower and each Subsidiary has the corporate or other power and authority, and
the legal right, to 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 any Notes 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.
3.5 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.
3.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or
31
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.
3.7 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.
3.8 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 3.8 and as otherwise permitted by
subsection 6.3.
3.9 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 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, do not have a Material
Adverse Effect.
3.10 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.
3.11 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
32
other charge, which, in each case, could reasonably be expected to have a
Material Adverse Effect.
3.12 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.
3.13 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 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.
3.14 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.
3.15 SUBSIDIARIES. All of the Subsidiaries of the Borrower at the
date hereof are listed on Schedule 3.15 to this Agreement.
3.16 PURPOSE OF LOANS. The proceeds of the loans shall be used by the
Borrower to refinance the Existing Loans,
33
and for working capital purposes including the acquisition of additional radio
stations and related assets in the ordinary course of business.
3.17 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 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,
34
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.
3.18 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 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.
3.19 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 3.19. 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 3.19 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
35
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 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT. 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, (iii) the Security Agreement
executed and delivered by a duly authorized officer of each Loan Party,
with a counterpart or a conformed copy for each Lender and (iv) an
amendment to the Guarantee in the form of Exhibit G duly executed and
delivered by Xxxxxx Xxxxxxxxx.
(b) CONSUMMATION OF THE IPO. (i) Immediately prior to the
consummation of the IPO, Mr. Xxxxxx Xxxxxxxxx and Xxx. Xxxxx Xxxxxxxxx
shall have contributed the entire amount of certain outstanding
stockholders' loans made to the Borrower to the Borrower's capital (the
"EQUITY CONTRIBUTION"); (ii) simultaneously with the Equity Contribution
each share of the Borrower's Common Stock, par value $.01 per share (the
"OLD COMMON STOCK") shall have been reclassified into 7,610 shares of Class
A Common Stock, par value $.01 per share, of the Borrower (the "CLASS A
COMMON STOCK") and Mr. Xxxxxx Xxxxxxxxx and Xxx. Xxxxx Xxxxxxxxx shall have
exchanged each share of Class A Common Stock held by them for one share of
Class B Common Stock (the foregoing reclassification and exchange is
hereinafter referred to as the "RECLASSIFICATION"); and (iii) the IPO, in
which the Borrower receives a minimum of $29,000,000 in Net Cash Proceeds
from the sale of no more than 35% of the Company's common equity, shall
have been consummated.
(c) 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 such other documents or instruments as may be reasonably
36
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 EACH LOAN PARTY. 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 each Loan
Party (or Member in the case of a Loan Party which is a limited liability
company or partnership) 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 such Loan Party (or Member in
the case of a Loan Party which is a limited liability company or
partnership) 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 each Loan Party (or Member in
the case of a Loan Party which is a limited liability company or
partnership), dated the Closing Date, as to the incumbency and signature of
the officers of each Loan Party (or Member in the case of a Loan Party
which is a limited liability company or partnership) 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 such Loan Party (or Member in the case of a Loan Party which
is a limited liability company or partnership).
(g) CORPORATE DOCUMENTS. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of the certificate of
incorporation and by-laws or other organizational documents of each Loan
Party, certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the such Loan Party
(or Member in the case of a Loan Party which is a limited liability company
or partnership).
(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
37
filings referred to in subsection 3.19, 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 the fees required to be
received by it on the Closing Date referred to in subsection 2.19.
(j) LEGAL OPINIONS. The Agent shall have received, with a counterpart
for each Lender, the following executed legal opinions:
(i the executed legal opinion of Xxxx, Weiss, Wharton,
Rifkind & Xxxxxxxx, counsel to the Borrower, substantially in the form
of Exhibit C-1;
(ii the executed legal opinion of Xxxxx & Xxxxxxx LLP, special
communications counsel to the Borrower with respect to regulatory
matters, substantially in the form of Exhibit C-2; and
(iii) the executed legal opinions of local counsel in California
and Illinois as to the perfection of security interests under the
Security Agreement in such jurisdictions in form and substance
reasonably satisfactory to the Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably
require;
(k) ACTIONS TO PERFECT LIENS. The Agent shall have received evidence
in form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation,(i) the
filing of duly executed financing statements on form UCC-1 and (ii) receipt
of the certificates, if any, representing the certificated securities
pledged pursuant to the Security Agreement, together with an undated stock
power (or other appropriate instrument of transfer) for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof, necessary or, in the opinion of the Agent, desirable to perfect
the Liens created by the Security Documents shall have been completed.
(l) LIEN SEARCHES. The Agent shall have received the results of a
recent search by a Person satisfactory to the Agent, of the Uniform
Commercial Code, judgement and tax lien filings which may have been filed
with respect to personal property of the Borrower and the Subsidiaries and
the results of such search shall be satisfactory to the Agent.
(m) INSURANCE. The Agent shall have received evidence in form and
substance satisfactory to it that all of the
38
requirements of Section 5.3 of the Security Agreement shall have been
satisfied.
(n) 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.
(o) 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.
4.2 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 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 5. 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 5.1 and 5.2) shall cause each Subsidiary to:
5.1 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
39
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 5.1(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.
5.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(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 5.1(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) 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
40
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;
(d) 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
(e) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3 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.
5.4 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.
5.5 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.
41
5.6 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.
5.7 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
42
(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.
5.8 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.
5.9 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.
5.10 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
43
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 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
44
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 6. 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 6.1) shall not permit any of its Subsidiaries to, directly or
indirectly:
6.1 FINANCIAL CONDITION COVENANTS.
(a) MINIMUM EBITDA. Permit for any fiscal quarter ending during any
"Test Period" set forth below an EBITDA for such quarter to be less than the
amount set forth opposite such Test Period below:
Test Period Amount
----------- ------
June 30, 1998 -800,000
September 30, 1998 and 400,000
thereafter
(b) TOTAL DEBT TO EBITDA. Permit for any period of four consecutive
fiscal quarters ending during any "Test Period" set forth below the ratio of (i)
Total Debt outstanding at the end of such period to (ii) EBITDA for such period
to be greater than the ratio set forth opposite such Test Period below:
TEST PERIOD RATIO
----------- -----
December 31, 1998 6.00 to 1.00
March 31, 1999 5.50 to 1.00
June 30, 1999 5.00 to 1.00
September 30, 1999 4.50 to 1.00
December 31, 1999 4.00 to 1.00
Thereafter 4.00 to 1.00
(c) EBITDA TO INTEREST EXPENSE. Permit for any period of four
consecutive fiscal quarters ending during any "Test Period" set forth below the
ratio of (i) EBITDA for such period to (ii) Interest Expense for such period to
be less than the ratio set forth opposite such Test Period below:
TEST PERIOD RATIO
45
December 31, 1998 1.50 to 1.00
March 31, 1998 2.00 to 1.00
June 30, 1999 - December 31, 1999 2.50 to 1.00
March 31, 2000 and thereafter 3.00 to 1.00
(d) NET INCOME TO FIXED CHARGES. Permit for any period of four
consecutive fiscal quarters set forth below the ratio of (i) the sum of
Consolidated Net Income for such period plus income taxes deducted in
determining such Consolidated Net Income plus Consolidated Fixed Charges for
such period to (ii) Consolidated Fixed Charges for such period to be less than
the ratio set forth opposite such Test Period below:
Test Period Ratio
----------- -----
December 31, 1998 and thereafter 1.00 to 1.00
6.2 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 6.2(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 6.9(c) in an aggregate amount outstanding
not to exceed $5,000,000 at any time; and
(h) additional Indebtedness (not otherwise permitted hereunder) of the
Borrower not exceeding $5,000,000 in aggregate principal amount at any one
time outstanding.
46
6.3 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 6.2(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
(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.
47
6.4 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, or (c)
Guarantee Obligations incurred after the date hereof in an aggregate amount not
to exceed $2,000,000 at any one time outstanding.
6.5 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).
6.6 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, PROVIDED the Net Cash Proceeds are
applied in accordance with subsection 2.4(d);
(d) advances, loans, extensions of credit or capital contributions,
investments and the like permitted by subsection 6.9;
(e) as permitted by subsection 6.5;
(f) any sale or other transfer of any fixed or capital asset in
connection with the incurrence of Indebtedness permitted by subsection
6.2(b);
(g) any sale of obsolete assets in the ordinary course of business;
and
48
(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, PROVIDED the Net Cash Proceeds are applied in
accordance with subsection 2.4(d).
6.7 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.
6.8 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) 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 2,300,000
Each Fiscal year ending
thereafter 500,000
; 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.
6.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
49
(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 6.1 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 6.9, 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.
6.10 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 reduce the amount of
any payment of principal thereof
50
or which would reduce the rate or extend the date for payment of interest
thereon).
6.11 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.
6.12 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.
6.13 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year of
the Borrower to end on a day other than December 31.
6.14 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.
6.15 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.
51
6.16 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 7. 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 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
52
(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 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 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
53
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 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
54
(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 or the Guarantee 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 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 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 to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
55
SECTION 8. THE AGENT
8.1 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.
8.2 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.
8.3 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.
8.4 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, 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
56
(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.
8.5 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.
8.6 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
57
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 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.
8.7 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.
8.8 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, 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.
8.9 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
58
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 8 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.
SECTION 9. MISCELLANEOUS
9.1 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 8 without the written consent of the then Agent. 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.
9.2 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
59
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
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 or the Lenders
pursuant to subsection 2.2, 2.4, 2.6, 2.8 or 2.13 shall not be effective until
received.
9.3 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.
9.4 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.
60
9.5 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
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.
9.6 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
61
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, 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 9.6 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
62
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 9.2 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 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
63
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
9.7 TERMINATION OF AGREEMENTS. In connection with this Agreement, the
following agreements shall be terminated effective as of the Closing Date and
the Agent agrees to xxxx all such agreements "cancelled" and return the original
documents to the Borrower:
(a) the existing Pledge Agreement, dated as of May 30th, 1996, by Mr.
Xxxxxx Xxxxxxxxx, Xxx. Xxxxx Xxxxxxxxx, Xx. Xxxxxxx Xxxxxxxxxxx in favor of The
Chase Manhattan Bank (formerly known as "Chemical Bank"), as agent for the
lenders parties to the Existing Credit Agreement among the Borrower (formerly
known as "Odyssey Communications, Inc."), the Agent and the Lenders;
9.8 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.
9.9 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.
9.10 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.
9.11 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.
9.12 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;
64
(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 9.2 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.
9.13 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;
(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.
9.14 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.
65
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/ Xxxx X. Xxxxxxx
----------------------------------
Title: Vice President and Chief
Financial Officer
THE CHASE MANHATTAN BANK,
as Agent and as a Lender
By: Xxxx X. Xxxxxxxxx
----------------------------------
Title: Vice President
SCHEDULE I
Lenders, Addresses and Commitments
The Chase Manhattan Bank $35,000,000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile number: (000) 000-0000
2
SCHEDULE 3.8
Liens
Liens in favor of Toshiba American Information Systems, Inc. on equipment
of the Borrower acquired pursuant to a lease transaction.
SCHEDULE 3.15
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 3.19
The FCC authorizations for the following are held by Big City Radio,
Inc. or a License Subsidiary of Big City Radio, Inc.:
CALL SIGN STATION LOCATION RENEWAL FILE NO.
WRKL(AM) New City, NY BR-910201XE
WQA-998 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-000000X0
KVYY(FM) Ventura, CA BRH-970731XK
K252BF Temecula, CA XXXX-000000XX
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 be Big City Radio, Inc. or one of its License
Subsidiaries:
WGW-993 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(AM), 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
SCHEDULE 6.2(f)
EXISTING INDEBTEDNESS
Notes Payable on Station Vans $47,706.00
Omnipoint Holdback from WZVU purchase $150,000.00
-----------
TOTAL $197,706.00
SCHEDULE 6.4
Guarantee Obligations
N/A
SCHEDULE 6.9
Investments, Loans and Advances
Cablevision (Tower) Deposit $57,821.00
L-T Tax Deposit $73,155.00
-----------
Total $130,976.00
EXHIBIT A TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
[FORM OF NOTE]
$____________ New York, New York
December __, 1997
FOR VALUE RECEIVED, the undersigned, BIG CITY RADIO, INC., a Delaware
corporation (the "BORROWER"), hereby unconditionally promises to pay to the
order of (the "LENDER") at the office of The Chase Manhattan
Bank located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of
the United States of America and in immediately available funds, on the
Termination Date the principal amount of (a) DOLLARS ($_______), or,
if less, (b) the aggregate unpaid principal amount of all Loans made or
deemed made by the Lender to the Borrower pursuant to subsection 2.1 of the
Credit Agreement, as hereinafter defined. The Borrower further agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in subsections
2.8 and 2.10 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, type and amount of each Loan
made pursuant to the Credit Agreement and the date and amount of each payment or
prepayment of principal thereof, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period with respect thereto. Each such endorsement
shall constitute PRIMA FACIE evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.
This Note (a) is one of the Notes referred to in the Amended and
Restated Credit Agreement dated as of December ,1997 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among the Borrower, the Lender, the other banks and financial institutions from
time to time parties thereto and The Chase Manhattan Bank, as agent, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to optional
and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured as provided in the Loan Documents. Reference
is hereby made to the Loan Documents for a description of the properties and
assets in which a security interest has been granted, the nature and extent of
the security, the terms and conditions upon
2
which the security interests were granted and the rights of the holder of this
Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
BIG CITY RADIO, INC.
By: _________________________________
Name:________________________________
Title:_______________________________
Schedule A
TO NOTE
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
Amount Amount of ABR Loans Unpaid Principal Nototation
Converted to Amount of Principal of Converted to Balance Made
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans of ABR Loans By
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
------------ -------------------- -------------- ------------------------ -------------------- ------------------- --------------
Schedule B
TO NOTE
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
Amount of Unpaid
Amount of Eurodollar Principal
Interest Period and Principal Loans Balance of Notation
Amount of Amount Converted Eurodollar Rate of Eurodollar Converted to Eurodollar Made
Date Eurodollar Loans to Eurodollar Loans with Respect Thereto Loans Repaid ABR Loans Loans By
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
--------- ----------------- ------------------- ---------------------- --------------- -------------- ------------ ---------
EXHIBIT B TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
CLOSING CERTIFICATE
Pursuant to subsection 4.1(b),(c),(d),(e),(f),(g) and (h) of the
Amended and Restated Credit Agreement, dated as of December 24, 1997 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among Big City Radio, Inc. (the "BORROWER"), the Lenders parties
thereto and The Chase Manhattan Bank, as agent, the undersigned, Xxxxxxx
Xxxxxxxxxxx, President and Chief Executive Officer of the Borrower hereby
certifies that:
1. Unless otherwise defined herein, terms which are defined in the
Credit Agreement and used herein are so used as so defined.
2. The representations and warranties (i) set forth in the Credit
Agreement and the other Loan Documents or which are contained in any
certificate, document or financial or other statement furnished pursuant to or
in connection with any of the foregoing and (ii) made by the Borrower are true
and correct in all material respects on and as of the date hereof with the same
effect as if made on the date hereof, except for any representation and warranty
which is expressly made as of an earlier date, which representation and warranty
is true and correct in all material respects as of such earlier date.
3. Immediately prior to and immediately after the making of any
extension of credit requested to be made on the date hereof, no Default or Event
of Default will have occurred and will be continuing under the Credit Agreement.
4. Attached hereto as EXHIBIT A are copies of all consents,
authorizations and filings referred to in subsection 3.19 of the Credit
Agreement; and such consents, licenses and filings are in full force and effect.
5. The Equity Contribution by Mr. Xxxxxx Xxxxxxxxx and Xxx Xxxxx
Xxxxxxxxx has been consummated as of the Closing Date; and attached hereto as
EXHIBIT B are all the documents delivered in connection with the Equity
Contribution.
6. The Reclassification of the Common Stock has been consummated as
of the Closing Date; and attached hereto as EXHIBIT C are all the documents
delivered in connection with the Reclassification.
7. The IPO by the Borrower has been consummated as of the Closing
Date; and the Net Cash Proceeds of the IPO are $29,446,000.
8. Xxxxxx X. Xxxxxx is and at all times since September 1997 has
been the duly elected and qualified Secretary of the Borrower and the signature
set forth on the signature line of such officer below is such officer's true and
genuine signature; and the undersigned Secretary of the Borrower hereby
certifies as follows:
(a) There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against the Borrower nor has any other event
occurred affecting or threatening the existence of the Borrower; and
(b) The Borrower is duly organized and validly existing under the
laws of the jurisdiction of its organization;
(c) Attached hereto as EXHIBIT D is a true and complete copy of the
resolutions duly adopted by the Board of Directors and the
stockholders of the Borrower on December 18, 1997; such resolutions
have not in any way been rescinded or modified and have been in full
force and effect since their adoption to and including the date hereof
and are now in full force and effect; such resolutions are the only
corporate proceedings of the Borrower now in force relating to or
affecting the matters referred to therein; attached hereto as EXHIBIT
E is a true and complete copy of the By-laws of the Borrower as in
effect on the date such corporate resolutions were adopted and of the
Amended and Restated Bylaws of the Borrower as in effect on the date
hereof; and attached hereto as EXHIBIT F is a true and complete copy
of the Certificate of Incorporation of the Borrower as in effect on
the date such corporate resolutions were adopted and of the Amended
and Restated Certificate of Incorporation of the Borrower as in effect
on the date hereof;
(d) The persons listed on Schedule I hereto are now duly elected and
qualified officers of the Borrower, holding the offices indicated next
to their respective names, and such officers have held such offices
with the Borrower since the dates set forth on Schedule I to and
including the date hereof, and the signatures appearing opposite their
respective names are copies of the true and genuine signatures of such
officers, and each of such officers is duly authorized to execute and
deliver on behalf of the Borrower the Credit Agreement and any other
Loan Documents to which the Borrower is a party.
IN WITNESS WHEREOF, the undersigned have hereunto set our names.
------------------------------------ --------------------------------------
Name: Xxxxxxx Xxxxxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Title: Executive Vice President and
Officer Secretary
Date: December , 1997
SCHEDULE I TO CLOSING CERTIFICATE
Name Office Signature
Xxxxxxx Xxxxxxxxxxx President and Chief
Executive Officer since
August 1994 --------------------
Xxxxxx X. Xxxxxx Executive Vice President
since September 1997 --------------------
General Counsel since
December 1997
Xxxx X. Xxxxxxx Chief Financial Officer
since January 1996 --------------------
Vice President since
September 1997
EXHIBIT C-1 TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
[XXXX, WEISS, RIFKIND, XXXXXXX & XXXXXXXX]
December 24, 1997
The Chase Manhattan Bank, as Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
And each of the Lenders identified in the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as counsel to Big City Radio, Inc., a Delaware
corporation (the "Borrower"), and each subsidiary of the Borrower whose name and
jurisdiction of incorporation are set forth on Schedule I hereto (the
"Subsidiaries", and together with the Borrower, the "Loan Parties"), in
connection with (a) the Amended and Restated Credit Agreement, dated as of
December 24, 1997 (the "Credit Agreement"), among the Borrower, the lenders
parties thereto (the "Lenders") and The Chase Manhattan Bank, as agent for the
Lenders (in such capacity, the "Agent"), and (b) the Notes and the other Loan
Documents referred to in the Credit Agreement.
2
The opinions expressed below are furnished to you at the request of
the Borrower pursuant to subsection 4.1(j)(i) of the Credit Agreement. Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
In arriving at the opinions expressed below,
(a) we have examined and relied on the originals, or copies
certified or otherwise identified to our satisfaction, of each of (1) the Credit
Agreement, (2) the Notes dated the date hereof and (3) the Amended and Restated
Security Agreement, dated the date hereof, executed by the Borrower and the
other Loan Parties in favor of the Agent for the benefit of the Lenders (the
"Security Agreement") (the Credit Agreement, the Notes and the Security
Agreement being hereinafter referred to collectively as the "Transaction
Documents");
(b) we have examined unfiled copies of the financing statements
listed on Schedule 2 (collectively, the "Financing Statements") naming the
Borrower and the other Loan Parties as Debtor and the Agent as secured party and
describing the Collateral (as defined in the Security Agreement), which we
understand will be filed in the filing offices listed on Schedule 2 (the "Filing
Offices"); and
(c) we have examined such corporate documents and records of the
Borrower and the other Loan Parties and such other instruments and certificates
of public officials, officers and representatives of the Borrower and the other
Loan Parties as we have deemed relevant and necessary as a basis for the
opinions hereinafter expressed.
3
In our examination of the aforesaid documents, we have assumed,
without independent investigation, the genuineness of all signatures, the
enforceability of all documents against each party thereto other than the Loan
Parties, the legal capacity of all individuals who have executed any of the
documents, the authenticity of all documents submitted to us as originals, the
conformity to the original documents of all documents submitted to us as
certified, photostatic, reproduced or conformed copies of valid existing
agreements or other documents and the authenticity of all such latter documents.
In expressing the opinions set forth herein, we have relied upon the
factual matters contained in the representations and warranties of the Loan
Parties made in the documents and upon certificates of public officials and
officers of the Loan Parties.
Please be advised that whenever we indicate that our opinion with
respect to the existence or absence of facts is based on our knowledge, our
opinion is based solely on the actual knowledge of the attorneys in this firm
who are representing the Loan Parties in connection with the transactions
contemplated by the Transaction Documents.
Based upon the foregoing, and subject to the assumptions, exceptions
and qualifications set forth herein, we are of the opinion that:
1. Each of the Borrower and Odyssey Traveling Billboards, Inc. is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and each other Loan Party is a limited liability
company duly
4
formed, validly existing and in good standing under the laws of the State of
Delaware.
2. Each Loan Party has the corporate or limited liability company
power and authority to execute, deliver and perform its obligations under each
of the Transaction Documents to which it is a party and, in the case of the
Borrower, to borrow under the Credit Agreement. The Borrower has taken all
necessary corporate action to authorize the borrowings by it on the terms and
conditions of the Credit Agreement and each Loan Party has taken all necessary
corporate or limited liability company action to authorize the execution,
delivery and performance by it of the Transaction Documents to which it is a
party and to grant the security interests contemplated by the Security
Agreement. Except for (a) consents, authorizations, approvals, notices and
filings which have been obtained, made or waived and are in full force and
effect, and (b) the filings and recordings that are necessary to perfect the
security interests granted under the Security Agreement, no consent or
authorization, or approval by, notice to, filing with or other act by or in
respect of, any Governmental Authority of the United States or the State of New
York is required in connection with the execution, delivery or performance by
any Loan Party of the Transaction Documents to which it is a party.
3. Each of the Credit Agreement and the other Transaction Documents
has been duly executed and delivered on behalf of each Loan Party which is a
party thereto and constitutes a legal, valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its terms.
5
4. The execution and delivery of the Credit Agreement and the other
Transaction Documents to which any Loan Party is a party, the performance by
such Loan Party of its obligations thereunder, the compliance by such Loan Party
with any of the provisions thereof, the borrowings under the Credit Agreement,
all as provided therein, (a) will not violate, or constitute a default under,
the laws of the State of New York, the Federal laws of the United States, the
General Corporation Law of the State of Delaware (the "DGCL") or the Limited
Liability Company Act of the State of Delaware (6 Del. C. Section 18-101, et.
seq.) (the "LLC Act") or, to our knowledge, any indenture, credit agreement and
similar agreements and instruments of which we have knowledge and to which any
Loan Party is a party and (b) will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues under
any such agreement and instrument, except the security interests created
pursuant to the Security Documents.
5. To our knowledge, no litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or threatened by
or against the Borrower, any Subsidiary or against any of their properties or
revenues (a) with respect to the Credit Agreement or any of the other
Transaction Documents, or (b) which could reasonably be expected to have a
Material Adverse Effect.
6. The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
7. (a) After giving effect to the making of the Loans, on the date
hereof, the provisions of the Security Agreement create in favor of the Agent,
for the benefit of the Lenders and the Agent, a valid security interest in all
right, title
6
and interest of the Loan Parties to the Collateral (as defined in the Security
Agreement) to the extent Article 9 of the NY-UCC is applicable thereto.
(b) The Financing Statements are in appropriate form for filing,
and the Filing Offices are all of the offices in the state of New York in which
filings are required to perfect the security interest of the Agent for the
benefit of the Lenders and the Agent in the Collateral to the extent that
security interests in the Collateral may be perfected by filing under the
NY-UCC. Assuming such Financing Statements have been duly presented for filing
in the Filing Offices with the appropriate filing fees tendered, or duly
accepted for filing by the appropriate filing officers in each Filing Office,
and after giving effect to the making of the Loans on the date hereof, then to
the extent that security interests in the Collateral may be perfected by filing
under the NY-UCC, such filings have resulted in the perfection of such security
interests.
(c) The security interest of the Agent for the benefit of the
Lenders in that portion of the Collateral described in the Security Agreement
which are certificated securities (the "Pledged Shares") will be a perfected
security interest upon delivery of such certificated securities together with
stock powers duly executed in blank to the Agent in the State of New York
assuming that the Agent maintains thereafter continuous possession of the
Pledged Shares and the Lenders and the Agent are entering into the Credit
Agreement in good faith and without notice of any adverse claim to the Pledged
Shares, and after giving effect to the making of the Loans on the date hereof.
7
The foregoing opinion is subject to the following assumptions,
exceptions and qualifications:
(a) The enforceability of the Transaction Documents may be:
(i) subject to bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors' rights generally;
(ii) subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity); and
(iii) subject to the qualification that certain remedial provisions of the
Security Agreement are or may be unenforceable in whole or in part under the
laws of the State of New York, but the inclusion of such provisions does not
make the remedies afforded by such Security Agreement inadequate for the
practical realization of the rights and benefits purported to be provided
thereby except for the economic consequences resulting from any delay imposed
by, or any procedure required by, applicable New York laws, rules, regulations
and court decisions and by constitutional requirements in and of the State of
New York.
(b) We express no opinion as to: (i) the enforceability of any
provisions in the Security Agreement purporting to preserve and maintain the
liability of any party thereto despite the fact that the guarantied debt is
unenforceable due to illegality; (ii) the enforceability of any provisions
contained in the Transaction Documents that purport to establish (or may be
construed to establish) evidentiary standards; (iii) the enforceability of any
provisions contained in the Transaction Documents that constitute waivers which
are prohibited under the NY-UCC prior to default; or (iv) the enforceability of
forum selection clauses in the federal courts.
8
(c) In giving the opinions set forth in paragraph 7 above, we
express no opinion as to: (i) any Loan Party's right, title or interest in or
to any Collateral or the description of such Collateral in the Security
Agreement; (ii) the laws of any other state or the perfection and effect of
perfection or non-perfection of a security interest in the Collateral subject to
the laws of any State other than New York; (iii) the perfection of security
interests in fixtures, equipment used in farming operations, farm products,
consumer goods, inventory, timber or minerals or the like, or accounts resulting
from the sale thereof; or (iv) the creation, validity, perfection, priority or
enforceability of any security interest sought to be created in (x) any FCC
licenses or (y) any patents, trademarks, trade names, service marks, copyrights,
deposit accounts, insurance policies, real property or any other items of
property to the extent that a security interest therein is excluded from the
coverage of Article 9 of the NY-UCC. In addition, we express no opinion as to
the priority of any security interest and, except as specifically set forth in
paragraph 7 above, we express no opinion as to the perfection of any security
interest.
(d) We wish to point out that in the case of proceeds (as
defined in Article 9 of the NY-UCC), the continuation of perfection of any
security interest therein (i) is limited to the extent set forth in
Section 9-306 of the NY-UCC, and (ii) if such proceeds consist of property in
which a perfected security interest cannot be obtained or maintained by the
filing of the Financing Statements in the Filing Offices, will require
additional compliance with applicable provisions of the NY-UCC.
9
(e) We call to your attention the fact that (i) Article 9 of the
NY-UCC requires the filing of continuation statements withing the period of six
months prior to the expiration of each five year period from the date of the
original filing of financing statements, as applicable, in order to maintain the
effectiveness of the filings referred to in this opinion, and (ii) additional
filings may be necessary if any debtor changes its name, identity or corporate
structure or the jurisdictions in which its places of business, its chief
executive office or the Collateral are located.
Our opinions expressed above are limited to the laws of the State of
New York and the Federal laws of the United States that in each case in our
experience are normally applicable to transactions of this type, and the DGCL
and the LLC Act. Please be advised that we express no opinion with respect to
the provisions of the Communications Act of 1934, as amended, and the published
rules and regulations of the Federal Communications Commission. Please be
advised that no member of this firm is admitted to practice in the State of
Delaware. Our opinions are rendered only with respect to the laws, and the
rules, regulations and orders thereunder, which are currently in effect.
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Credit Agreement and may not be
circulated to, or
10
relied upon by, any other Person, except that, upon its request, you may furnish
copies of this letter to any governmental authority having jurisdiction over
you.
Very truly yours,
XXXX, WEISS, RIFKIND, XXXXXXX & XXXXXXXX
SCHEDULE 1
SUBSIDIARIES
Big City Radio - NYC, L.L.C., a Delaware limited liability company.
Big City Radio - LA, L.L.C., a Delaware limited liability company.
Big City Radio - CHI, L.L.C., a Delaware limited liability company.
WRKL Rockland Radio, L.L.C., a Delaware limited liability company.
Odyssey Traveling Billboards, Inc., a Delaware corporation.
SCHEDULE 2
FINANCING STATEMENTS
Uniform Commercial Code Filings to be filed in the following offices:
State Filing Office
----- -------------
New York Secretary of State Westchester County, Rockland
County, Suffolk County
EXHIBIT C-2 TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
[LETTERHEAD OF XXXXX & XXXXXXX L.L.P.]
December 24, 1997
The Chase Manhattan Bank, as Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
And each of the Lenders parties to the
Credit Agreement referred to below
Ladies and Gentlemen:
This firm has acted as special radio communications counsel to Big City
Radio, Inc., a Delaware corporation (the "Borrower"), and the License
Subsidiaries of the Borrower. This opinion letter is being provided pursuant to
subsection 4.1(j)(ii) of the Amended and Restated Credit Agreement, dated as of
December 24, 1997 (the "Credit Agreement"), among the Borrower, the lenders
parties thereto (the "Lenders"), and The Chase Manhattan Bank, as agent for the
Lenders (in such capacity, "Agent"). Capitalized terms used herein which are
defined in the Credit Agreement shall have the meanings set forth in the Credit
Agreement, unless otherwise defined herein.
For purposes of this opinion letter, we have made such examination of the
Communications Act of 1934, as amended (the "Communications Act") and the
published rules and regulations of the Federal Communications Commission (the
"FCC Rules") as we have deemed necessary for this opinion letter. We have also
examined copies of the Credit Agreement and the Amended and Restated Security
Agreement, dated as of December 24, 1997, among the Borrower, certain of its
Subsidiaries and the Agent ("Security Agreement") (collectively, the
"Transaction Documents").
With respect to certain factual matters relating to this opinion, we have
relied solely upon the above-mentioned documents and the publicly available
files of the Federal Communications Commission ("FCC") located in Washington,
D.C. and examined by us on December 11, 1997, relating to the Borrower, the
License Subsidiaries and the FCC authorizations ("FCC Licenses") necessary for
the radio broadcast stations identified in Schedule 3.19 of the Credit Agreement
(the
The Chase Manhattan Bank, as Agent
December 24, 1997
Page 2
"Stations") and pertinent statements and representations of FCC staff relating
to the Borrower, the License Subsidiaries or the Stations. We have not, except
as specifically identified above, made any independent review or investigation
of factual or other matters relating to the Borrower, the License Subsidiaries
or the Stations or of any other matters. In our examination of the aforesaid
documents, we have assumed the genuineness of all signatures, the accuracy and
completeness of all documents submitted to us, the authenticity of all original
documents and files and the conformity to authentic original documents of all
documents and files submitted to us as copies (including telecopies). We also
have assumed the accuracy, completeness and authenticity of the foregoing
documents, files and statements of fact or representations (of public officials,
governmental agencies and departments, and corporate officers) on which we are
relying, and have made no independent investigations thereof. We have not,
except as specifically identified herein, been retained or engaged to perform,
nor have we performed, except for the examination of available public files of
the FCC in Washington, D.C., and pertinent statements and representations of FCC
staff specified above, any independent review or investigation as to the
existence of any action, suit, notice of apparent liability, order of
forfeiture, investigation or other proceeding threatened by or before the FCC
against the Borrower, the License Subsidiaries or the Stations. We have not
examined or investigated the records which may be available in any other office
or branch of the FCC. You should be aware that certain records of the FCC are
public as a matter of law (for example, under the federal Freedom of Information
Act). However, such records may not have been included in the files routinely
available for public inspection at the time we examined those files in
connection with rendering this opinion. Accordingly, we express no opinion
regarding the completeness of the FCC files at the time we reviewed them.
Furthermore, there may be records of matters pending at the FCC that were not
available for inspection by the public as a matter of law and that we did not
examine. This opinion letter is given, and all statements herein are made, in
the context of the foregoing.
As used in this opinion letter, the phrase "to our knowledge" means the
actual knowledge (that is, the conscious awareness of facts or other
information) of lawyers in the firm who have given substantive legal attention
to representation of the Borrower and its License Subsidiaries in connection
with Communications Act matters.
This opinion letter is based as to matters of law solely on applicable
provisions of the Communications Act and the FCC Rules, and we express no
opinion as to any other laws, statutes, ordinances, rules or regulations (such
as
The Chase Manhattan Bank, as Agent
December 24, 1997
Page 3
federal or state securities laws or regulations, antitrust or unfair competition
laws or regulations or tax laws or regulations). We note that our firm only
requires lawyers to be qualified to practice law in the District of Columbia,
Virginia, Maryland or Colorado.
Nothing herein shall be construed to cause us to be considered "experts"
within the meaning of Section 11 of the Securities Act of 1933, as amended.
Based upon, subject to and limited by the foregoing, we are of the opinion
that no consent or authorization of the FCC, and no filing with the FCC, is
required by the Borrower or any party to the Credit Agreement or the borrowings
contemplated by the Credit Agreement in connection with the execution, delivery,
performance or enforcement on the date hereof of the Credit Agreement or the
borrowings contemplated by Credit Agreement. This opinion is subject to the
following qualifications:
1. Under currently applicable law, security interests in licenses issued by
the FCC are invalid. Because Section 5.10(c) of the Credit Agreement provides
that the Agent, on behalf of the Lenders, shall only have a security interest in
the FCC Licenses at such times and to the extent that a security interest in
such licenses is permitted under applicable law, the Credit Agreement must be
construed, consistent with current FCC requirements, as not currently creating a
security interest in the FCC Licenses.
2. To the extent that performance under or enforcement of the Credit
Agreement includes a transfer of voting rights in any entity that holds an FCC
License or controls an FCC Licensee, or operation of any of Station by a party
other than the Borrower or License Subsidiaries, or any other action that would
constitute an assignment of any of the FCC Licenses or a transfer of control of
any of the entities that currently hold any of the FCC licenses, prior FCC
approval of such assignment of license or transfer of control would be required.
3. If provisions of the Security Agreement are intended to give the Agent
authority to sign FCC applications or other filings on behalf of the Borrower,
those provisions are inconsistent with current FCC regulations and such
signature would not currently be recognized as effective by the FCC.
4. FCC regulations require that certain contracts and agreements relating
to ownership and control of broadcast licenses be filed with the FCC
The Chase Manhattan Bank, as Agent
December 24, 1997
Page 4
within 30 days of their execution. Pursuant to those regulations, it is our
opinion that the Transaction Documents, and other documents related to the
Transaction Documents, may need to be filed with the FCC within 30 days of
execution.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the Credit Agreement on the date
of this letter, and should not be quoted in whole or in part or otherwise be
referred to, nor be filed with or furnished to any governmental agency or other
person or entity, without the prior written consent of this firm, except insofar
as necessary to satisfy the requirements of regulatory authorities with
jurisdiction over the Agent.
Very truly yours,
--------------------------
XXXXX & XXXXXXX L.L.P.
EXHIBIT D TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
[FORM OF
ASSIGNMENT AND ACCEPTANCE]
Reference is made to the Amended and Restated Credit Agreement, dated
as of December 24, 1997 (as amended, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"), among Big City Radio, Inc. (the
"BORROWER"), the Lenders named therein and The Chase Manhattan Bank, as
administrative agent for the Lenders (in such capacity, the "AGENT"). Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "ASSIGNOR") and the
Assignee identified on Schedule l hereto (the "ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "ASSIGNED INTEREST") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"ASSIGNED FACILITY"; collectively, the "ASSIGNED FACILITIES"), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other obligor or the performance or
observance by the Borrower or any other obligor of any of their respective
obligations under the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (c) attaches
any Notes held by it evidencing the Assigned Facilities and (i) requests that
the Agent, upon request by the Assignee, exchange the attached Notes for a new
Note or Notes payable to the Assignee and (ii) if the Assignor has retained any
interest in the Assigned Facility, requests that the Agent exchange the attached
Notes for a new Note or Notes payable to the Assignor, in each case in amounts
2
which reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, 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 decisions in taking or not taking
action under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
2.16(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule 1 hereto (the "EFFECTIVE
DATE"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the Agent pursuant
to the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Agent, be earlier than five Business Days
after the date of such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Agent for periods prior to the Effective Date or with respect to the making
of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
3
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
Schedule 1
to Assignment and Acceptance
Name of Assignor: ____________________________
Name of Assignee: ____________________________
Effective Date of Assignment: ____________________________
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned(1)
----------------- --------------- ---------------------------------
$____________ __._____________%
[Name of Assignee] [Name of Assignor]
By: ___________________________ By: ___________________________
Title: Title:
Accepted: Consented To:
XXX XXXXX XXXXXXXXX XXXX,(0) [Big City Radio, Inc.](3)
as Administrative Agent
By: ___________________________ By: ___________________________
Title: Title:
----------------------------
(1) Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
(2) The Administrative Agent's consent as well as acceptance is required when
the Assignee is not a Lender or an Affiliate thereof.
(3) The Borrower's consent is required where the Assignee is not a Lender or
any Afffiliate thereof.
EXHIBIT E TO
AMENDED AND RESTATED CREDIT AGREEMENT
================================================================================
AMENDED AND RESTATED SECURITY AGREEMENT
made by
BIG CITY RADIO, INC.
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Agent
Dated as of December 24, 1997
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 OTHER DEFINITIONAL PROVISIONS. . . . . . . . . . . . . . . . . . . 5
SECTION 2. GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 RIGHT OF CONTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . 6
2.3 NO SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS. . . . . 6
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL . . . . . . . . . . . . . . . 7
2.6 REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.7 PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3. GRANT OF SECURITY INTEREST . . . . . . . . . . . . . . . . . . . 8
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 9
4.1 REPRESENTATIONS IN CREDIT AGREEMENT. . . . . . . . . . . . . . . . 9
4.2 TITLE; NO OTHER LIENS. . . . . . . . . . . . . . . . . . . . . . . 9
4.3 PERFECTED FIRST PRIORITY LIENS . . . . . . . . . . . . . . . . . . 9
4.4 CHIEF EXECUTIVE OFFICE . . . . . . . . . . . . . . . . . . . . . . 9
4.5 INVENTORY AND EQUIPMENT. . . . . . . . . . . . . . . . . . . . . . 10
4.6 FARM PRODUCTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.7 PLEDGED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . 10
4.8 RECEIVABLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.9 INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 10
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 COVENANTS IN CREDIT AGREEMENT. . . . . . . . . . . . . . . . . . . 11
5.2 DELIVERY OF INSTRUMENTS, CHATTEL PAPER AND CERTIFICATED
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3 MAINTENANCE OF INSURANCE . . . . . . . . . . . . . . . . . . . . . 11
5.4 PAYMENT OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . 11
5.5 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.6 CHANGES IN LOCATIONS, NAME, ETC. . . . . . . . . . . . . . . . . . 12
5.7 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.8 PLEDGED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . 13
5.9 RECEIVABLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.10 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6. REMEDIAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 15
6.1 CERTAIN MATTERS RELATING TO RECEIVABLES. . . . . . . . . . . . . . 15
i
6.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE . . . . . . . 16
6.3 PLEDGED STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4 PROCEEDS TO BE TURNED OVER TO AGENT. . . . . . . . . . . . . . . . 17
6.5 APPLICATION OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . 17
6.6 CODE AND OTHER REMEDIES. . . . . . . . . . . . . . . . . . . . . . 17
6.7 REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . 18
6.8 WAIVER; DEFICIENCY . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1 AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC . . . . . . . . . . . 19
7.2 DUTY OF AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.3 EXECUTION OF FINANCING STATEMENTS. . . . . . . . . . . . . . . . . 21
7.4 AUTHORITY OF AGENT . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 AMENDMENTS IN WRITING. . . . . . . . . . . . . . . . . . . . . . . 22
8.2 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. . . . . . . . 22
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. . . . . . . . . . . . . . . 22
8.5 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . 23
8.6 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.7 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.8 SECTION HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.9 INTEGRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.11 SUBMISSION TO JURISDICTION; WAIVERS . . . . . . . . . . . . . . . 23
8.12 ACKNOWLEDGEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 24
8.13 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . 24
8.14 ADDITIONAL GRANTORS . . . . . . . . . . . . . . . . . . . . . . . 24
8.15 RELEASES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SCHEDULES
Schedule 1 Notice of Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security
Interests
Schedule 4 Location of Jurisdiction of Organization and Chief Executive
Office
Schedule 5 Location of Inventory and Equipment
Schedule 6 Copyrights and Copyright Licenses; Patents and Patent Licenses;
Trademarks and Trademark Licenses
Annex 1 to Amended and Restated Security Agreement
ii
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"), dated as
of December 24, 1997, made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the "Grantors"),
in favor of THE CHASE MANHATTAN BANK, as Agent (in such capacity, the "Agent")
for the banks and other financial institutions (the "Lenders") from time to time
parties to the Amended and Restated Credit Agreement, dated as of December 24,
1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Big City Radio, Inc. (the "Borrower"), the Lenders
and the Agent.
W I T N E S S E T H:
WHEREAS, the Borrower entered into a Credit Agreement dated May 30,
1996 (as amended and waived to the date hereof, the "Existing Credit
Agreement"), and in connection therewith a Security Agreement dated May 30, 1996
(as amended, supplemented or otherwise modified to the date hereof, the
"Existing Security Agreement");
WHEREAS, the Existing Credit Agreement is being amended and restated
on the date hereof by the Credit Agreement;
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement, that the Borrower and each other Grantor enter into this
Agreement;
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make and maintain extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses; and
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement;
2
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make and maintain their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Agent, for the ratable
benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are used
herein as so defined: Accounts, Chattel Paper, Documents, Equipment, Farm
Products, Instruments, Inventory and Investment Property.
(b) The following terms shall have the following meanings:
"Agreement": this Amended and Restated Security Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans and all other obligations and
liabilities of the Borrower (including, without limitation, interest
accruing at the then applicable rate provided in the Credit Agreement after
the maturity of the Loans and interest accruing at the then applicable rate
provided in the Credit Agreement 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) to the
Agent or any Lender (or, in the case of any Hedge Agreement referred to
below, any Affiliate of any Lender), 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, the Credit Agreement,
this Agreement, the other Loan Documents or any Hedge Agreement entered
into by the Borrower with any Lender (or any Affiliate of any Lender) or
any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all reasonable fees and disbursements of counsel to the
Agent or, from and after the occurrence of a Default or an Event of
Default, to the Lenders that are required to be paid by the Borrower
pursuant to the terms of any of the foregoing agreements).
3
"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), including all ownership interests in any partnership or
limited liability company and any and all warrants or options to purchase
any of the foregoing.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the Agent
as provided in Section 6.1 or 6.4.
"Communications Act": the Communications Act of 1934, as amended.
"Copyrights": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"FCC": the Federal Communications Commission or any successor to the
functions and powers thereof.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements,
instruments and indentures in any form, and portions thereof, to which such
Grantor is a party or under which such Grantor has any right, title or
interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to damages arising
thereunder and (iii) all rights of such Grantor to perform
4
and to exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a security interest pursuant to this Agreement in
its right, title and interest in such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, would not give
any other party to such contract, agreement, instrument or indenture the
right to terminate its obligations thereunder, or is permitted with consent
if all necessary consents to such grant of a security interest have been
obtained from the other parties thereto (it being understood that the
foregoing shall not be deemed to obligate such Grantor to obtain such
consents); provided, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other amounts
due or to become due under any such contract, agreement, instrument or
indenture.
"Grantors": as defined in the recitals hereto.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all reasonable fees and
disbursements of counsel to the Agent or to the Lenders that are required
to be paid by such Guarantor pursuant to the terms of this Agreement or any
other Loan Document).
"Guarantors": the collective reference to each Grantor other than the
Borrower.
"Hedge Agreements": as to any Person, all interest rate swaps, caps
or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to xxx at
5
law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by any
Grantor to any of its Subsidiaries.
"Issuers": the collective reference to each issuer of a Pledged
Security.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in Schedule
6, and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor
in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged Notes
and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect.
6
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, shall include, without limitation,
all dividends or other income from the Pledged Securities, collections
thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6, and (ii) the
right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to
in Schedule 6.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" 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 and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
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SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Agent or any
Lender from the Borrower, any of the Guarantors, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Borrower Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Borrower Obligations or any payment received or
collected from such Guarantor in respect of the Borrower Obligations), remain
liable for the Borrower Obligations up to the maximum liability of such
Guarantor hereunder until the Borrower Obligations are paid in full and the
Commitments are terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
8
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Agent and the Lenders, and each Guarantor shall remain
liable to the Agent and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Agent or any Lender, no Guarantor shall be entitled to be subrogated to any
of the rights of the Agent or any Lender against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by the
Agent or any Lender for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Borrower or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Agent and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Agent and the Lenders, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Agent, if required), to be applied against the Borrower Obligations, whether
matured or unmatured, in such order as the Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Agent or any Lender may be rescinded by the Agent or
such Lender and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Agent or any Lender, and the Credit Agreement and the other Loan Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the Agent
(or the Required Lenders or all Lenders, as the case may be) may deem advisable
from time to time, and any collateral security, guarantee or right of offset at
any time held by the Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released.
9
Neither the Agent nor any Lender shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or for the guarantee contained in this Section 2 or any property
subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Agent or any
Lender upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Agent and the Lenders, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Agent or any Lender, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower or any other Person against the Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Agent or any Lender to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Agent or
10
any Lender against any Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Agent without set-off or counterclaim in Dollars
at the office of the Agent located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Agent, and hereby
grants (and, in the case of the Borrower, confirms and reaffirms its grant of
its Collateral under the Existing Security Agreement) to the Agent, for the
ratable benefit of the Lenders, a security interest in all of the following
property, to the extent of such Grantor's right, title and interest and to the
extent permitted by applicable laws and regulations (including but not limited
to, the Communications Act and the rules and regulations of the FCC thereunder),
now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "Collateral"), as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
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(f) all Instruments;
(g) all Intellectual Property;
(h) all Inventory;
(i) all Investment Property;
(j) all Pledged Securities;
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into the Credit Agreement
and to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby represents and warrants to the Agent
and each Lender that:
4.1 Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in subsection 3 of the
Credit Agreement as they relate and apply to such Guarantor or to the Loan
Documents to which such Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, and the Agent and each
Lender shall be entitled to rely on each of them as if they were fully set forth
herein, provided that each reference in each such representation and warranty to
the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed
to be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interest granted
to the Agent for the ratable benefit of the Lenders pursuant to this Agreement
and the other Liens permitted to exist on the Collateral by the Credit
Agreement, such Grantor owns or is a licensee with respect to each item of the
Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of, or, promptly after the date hereof, duly assigned to,
the Agent, for the ratable benefit of the Lenders, pursuant to
12
this Agreement or the Existing Security Agreement or as are permitted by the
Credit Agreement.
4.3 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement upon timely completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Agent, for the ratable
benefit of the Lenders, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof against all creditors of and
purchasers from such Grantor and any Persons purporting to purchase any
Collateral from such Grantor, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing. For purposes of
this subsection 4.3 as it relates to the items of Collateral described in
clauses (f) and (h) of Section 3, the word "timely" shall be defined
consistently with the provisions of Section 1060 of 15 U.S.C. The security
interests granted pursuant to this Agreement are prior to all other Liens on the
Collateral in existence on the date hereof except for unrecorded Liens permitted
by the Credit Agreement which have priority over the Liens on the Collateral by
operation of law.
4.4 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4, as amended or
supplemented from time to time.
4.5 Inventory and Equipment. On the date hereof, the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5, as amended or supplemented from time to time.
4.6 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
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(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable 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.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.9 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned or licensed by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and, to the
Grantor's knowledge, does not infringe upon the intellectual property rights of
any other Person.
(c) Except as set forth in Schedule 6, on the date hereof, none of
the Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the
14
validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Agent and the Lenders that,
from and after the date of this Agreement until the Obligations shall have been
paid in full and the Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each Guarantor,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments, Chattel Paper and Certificated
Securities. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Chattel Paper or
certificated security having a value in excess of $100,000, such Instrument,
Chattel Paper or certificated security shall be immediately delivered to the
Agent, duly indorsed in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Agent and (ii) insuring such
Grantor, the Agent and the Lenders against liability for personal injury and
property damage relating to such Inventory and Equipment, such policies to be in
such form and amounts and having such coverage as may be reasonably satisfactory
to the Agent and the Lenders;
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Agent of written notice
thereof, (ii) name the Agent as insured party or loss payee, (iii) if reasonably
requested by the Agent, include a breach of warranty clause and (iv) be
reasonably satisfactory in all other respects to the Agent.
(c) The Borrower shall deliver to the Agent and the Lenders a report
of a reputable insurance broker with respect to such insurance during the month
of
15
December in each calendar year and such supplemental reports with respect
thereto as the Agent may from time to time reasonably request.
5.4 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created
by this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Agent and the Lenders from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the Agent
may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of
the Agent, and at the sole expense of such Grantor, such Grantor will promptly
and duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby.
5.6 Changes in Locations, Name, etc. Such Grantor will not, except
upon 30 days' prior written notice to the Agent and delivery to the Agent of (a)
all additional executed financing statements and other documents reasonably
requested by the Agent to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to Schedule 5 showing any additional location at which Inventory or
Equipment shall be kept:
16
(i) permit any of the Inventory or Equipment to be kept at a location
other than those listed on Schedule 5 (unless such Inventory is conveyed,
sold, leased, transferred, assigned or otherwise disposed of as permitted
by the Credit Agreement);
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Agent in connection with
this Agreement would become misleading (unless such change is permitted by
the Credit Agreement; provided that, in connection therewith, the Grantor
shall have executed and delivered to the Agent such financing statements
and other documents as the Agent may reasonably request to evidence the
Agent's security interests hereunder).
5.7 Notices. Such Grantor will advise the Agent and the Lenders
promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Agent to exercise any of its remedies
hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.8 Pledged Securities. (a) If such Grantor shall, as a result of
its ownership of Pledged Securities, become entitled to receive or shall receive
any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Agent and the
Lenders, hold the same in trust for the Agent and the Lenders and deliver the
same forthwith to the Agent in the exact form received, duly indorsed by such
Grantor to the Agent, if required, together with an undated stock power covering
such certificate duly executed in blank by such Grantor and with, if the Agent
so requests, signature guaranteed, to be held by the Agent, subject to the terms
hereof, as additional collateral security for the Obligations. To the extent
resulting from a sale or disposition of assets not permitted under the Credit
Agreement, any
17
sums paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the Agent to be held by it
hereunder as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged Securities
or any property shall be distributed upon or with respect to the Pledged
Securities pursuant to the recapitalization or reclassification of the capital
of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Agent, be delivered to the Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Securities shall be
received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Agent, such Grantor will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Pledged Securities or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement), (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Pledged Securities or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement or as
permitted by the Credit Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the Agent to
sell, assign or transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and will comply with such terms insofar as such
terms are applicable to it, (ii) it will notify the Agent promptly in writing of
the occurrence of any of the events described in Section 5.8(a) with respect to
the Pledged Securities issued by it and (iii) the terms of Sections 6.3(c) and
6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to Section 6.3(c) or 6.7 with respect to the Pledged
Securities issued by it.
5.9 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for
18
the payment of any Receivable, (iv) allow any credit or discount whatsoever on
any Receivable or (v) amend, supplement or modify any Receivable in any manner
that could adversely affect the value thereof.
(b) Such Grantor will deliver to the Agent a copy of each material
demand, notice or document received by it that questions or calls into doubt the
validity or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.
5.10 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will, except with respect to any Trademark that such Grantor
shall reasonably determine is of negligible economic value to it, (i) continue
to use each material Trademark on each and every trademark class of goods
applicable to its current line as reflected in its current catalogs, brochures
and price lists in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, except as permitted by the Credit Agreement,
(ii) use its best efforts to maintain as in the past the quality of products and
services offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration or notice of trademark, as applicable, and
all other notices and legends required by applicable Requirements of Law, (iv)
not adopt or use any xxxx which is confusingly similar or a colorable imitation
of such Trademark unless the Agent, for the ratable benefit of the Lenders,
shall obtain a perfected security interest in such xxxx pursuant to this
Agreement, and (v) not (and not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
19
(e) Such Grantor will notify the Agent and the Lenders immediately if
it knows, or has reason to know, that any application or registration relating
to any material Intellectual Property may become forfeited, abandoned or
dedicated to the public, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in any country)
regarding such Grantor's ownership of, or the validity of, any material
Intellectual Property or such Grantor's right to register the same or to own and
maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Agent, such Grantor
shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Agent may reasonably request to
evidence the Agent's and the Lenders' security interest in any Copyright, Patent
or Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps as it
shall deem appropriate under the circumstances, in accordance with its
reasonable business judgment, including, without limitation, in any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain, to the extent permitted by
law, each registration of the material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the Agent
after it learns thereof and xxx for infringement, misappropriation or dilution
or take such other action as the Grantor shall deem appropriate under the
circumstances, to seek injunctive relief where appropriate and to recover any
and all damages for such infringement, misappropriation or dilution.
20
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Agent shall at
any time after the occurrence and during the continuance of an Event of Default,
and upon reasonable advance notice to the Grantor and at reasonable intervals,
have the right to make test verifications of the Receivables in any manner and
through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Agent may reasonably
require in connection with such test verifications. At any time and from time
to time, upon the Agent's request, at reasonable intervals, and at the expense
of the relevant Grantor, such Grantor shall cause independent public accountants
or others satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.
(b) The Agent hereby authorizes each Grantor to collect such
Grantor's Receivables and the Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
If required by the Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the Agent if required, in a Collateral Account maintained under
the sole dominion and control of the Agent, subject to withdrawal by the Agent
for the account of the Lenders only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Agent and the
Lenders, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
(c) At the Agent's request, each Grantor shall deliver to the Agent
all original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Agent's satisfaction
the existence, amount and terms of any Receivables.
(b) Upon the request of the Agent at any time after the occurrence
and during the continuance of an Event of Default, each Grantor shall notify
obligors on
21
the Receivables that the Receivables have been assigned to the Agent for the
ratable benefit of the Lenders and that payments in respect thereof shall be
made directly to the Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Agent nor any Lender shall have any obligation or liability under any Receivable
(or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Agent or any Lender of any payment relating
thereto, nor shall the Agent or any Lender be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Receivable (or
any agreement giving rise thereto), to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Agent shall have given notice to the relevant
Grantor of the Agent's intent to exercise its corresponding rights pursuant to
Section 6.3(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Pledged Stock and all payments made in respect of the
Pledged Notes, in each case paid to the extent permitted in the Credit
Agreement, and to exercise all voting and corporate rights with respect to the
Pledged Securities; provided, however, that no vote shall be cast or corporate
right exercised or other action taken which, in the Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Agent shall have the right to receive any and all
cash dividends, payments or other Proceeds paid in respect of the Pledged
Securities and make application thereof to the Obligations then due and payable
in such order as the Agent may determine, and (ii) any or all of the Pledged
Securities shall be registered in the name of the Agent or its nominee, and the
Agent or its nominee may thereafter exercise (x) all voting, corporate and other
rights pertaining to such Pledged Securities at any meeting of shareholders of
the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the
22
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Agent of any right, privilege or option pertaining to such Pledged
Securities, and in connection therewith, the right to deposit and deliver any
and all of the Pledged Securities with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Agent may determine), all without liability except to account for property
actually received by it, but the Agent shall have no duty to any Grantor to
exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing. All Proceeds received by the Agent
hereunder shall be held by the Agent for the benefit of the Lenders in a
Collateral Account. All Proceeds while held by the Agent in a Collateral
Account (or by a Grantor in trust for the Agent or the Lenders) shall continue
to be held as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 6.5.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Agent.
6.4 Proceeds to be Turned Over To Agent. In addition to the rights
of the Agent and the Lenders specified in Section 6.1 with respect to payments
of Receivables, if an Event of Default shall occur and be continuing, upon
request of the Agent, all Proceeds received by any Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor in trust for the
Agent and the Lenders, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the Agent, if
required). All Proceeds received by the Agent hereunder shall be held by the
Agent in a Collateral Account maintained under its sole dominion and control.
All Proceeds while held by the Agent in a Collateral Account (or by such Grantor
in trust for the Agent and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until
applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon
by the Borrower and the Agent, or, if an Event of Default shall have occurred
and be
23
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations
then due and payable in such order as the Agent may elect, and any part of such
funds which the Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Agent to the Borrower or to whomsoever may be lawfully entitled to receive
the same. Any balance of such Proceeds remaining after the Obligations shall
have been paid in full and the Commitments shall have terminated shall be paid
over to the Borrower or to whomsoever may be lawfully entitled to receive the
same.
6.6 Code and Other Remedies. If an Event of Default shall occur and
be continuing, the Agent, on behalf of the Lenders, may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the New York UCC or any other
applicable law. Without limiting the generality of the foregoing, the Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived to the extent
permitted by applicable law), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Agent's request, to assemble the Collateral and make it available
to the Agent at places which the Agent shall reasonably select, whether at such
Grantor's premises or elsewhere. The Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Agent may elect,
and only after such application and after the payment by the Agent of any other
amount required by any provision of law, including, without limitation, Section
9-
24
504(1)(c) of the New York UCC, need the Agent account for the surplus, if any,
to any Grantor. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against the Agent or any Lender
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition.
6.7 Registration Rights. (a) If the Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to Section
6.6, and if in the opinion of the Agent it is necessary or advisable to have the
Pledged Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the relevant Grantor will use its best efforts
to cause the Issuer thereof to (i) execute and deliver, and cause the directors
and officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,
(ii) use its best efforts to cause the registration statement relating thereto
to become effective and to remain effective for a period of one year from the
date of the first public offering of the Pledged Stock, or that portion thereof
to be sold, and (iii) make all amendments thereto and/or to the related
prospectus which, in the opinion of the Agent, are necessary or advisable, all
in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to use its best efforts to cause such Issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all jurisdictions
which the Agent shall designate and to make available to its security holders,
as soon as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Each Grantor acknowledges
and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under
25
the Securities Act, or under applicable state securities laws, even if such
Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Agent and the Lenders,
that the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section 6.7 shall be specifically enforceable against such Grantor, and such
Grantor hereby waives and agrees not to assert any defenses (to the extent
permitted by law) against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred and is continuing
under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the reasonable fees and disbursements of any attorneys employed
by the Agent or any Lender to collect such deficiency.
SECTION 7. THE AGENT
7.1 Agent's Appointment as Attorney-in-Fact, etc. (a) Each Grantor
hereby irrevocably constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by
26
the Agent for the purpose of collecting any and all such moneys due under
any Receivable or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Agent may reasonably request to evidence the Agent's and the
Lenders' security interest in such Intellectual Property and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (i) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Agent or as the Agent shall direct; (ii) ask for
or demand, collect, and receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (iii) sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (iv) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (v)
defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (vi) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Agent may deem appropriate; (vii) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which any
such Copyright, Patent or Trademark pertains), throughout the world for
such term or terms, on such conditions, and in such manner, as the Agent
shall in its sole discretion determine; and (viii) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Agent were
the absolute owner thereof for all purposes, and do, at the Agent's option
and such Grantor's expense, at any time, or from time to time, all acts and
things which the Agent deems necessary to protect, preserve or realize upon
the Collateral
27
and the Agent's and the Lenders' security interests therein and to effect
the intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the Agent
agrees that it will not exercise any rights under the power of attorney provided
for in this Section 7.1(a) unless an Event of Default shall have occurred and be
continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Agent, at its option, but without any
obligation so to do, may perform or comply with, or otherwise cause performance
or compliance, with such agreement.
(c) The reasonable expenses of the Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due ABR Loans under the Credit Agreement, from the date
of payment by the Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Agent deals with similar property for its
own account. Neither the Agent, any Lender nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Agent and the Lenders hereunder are solely to protect the
Agent's and the Lenders' interests in the Collateral and shall not impose any
duty upon the Agent or any Lender to exercise any such powers. The Agent and
the Lenders shall be accountable only for amounts that they actually receive as
a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
28
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the Agent
to file or record financing statements and other filing or recording documents
or instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Agent reasonably determines
appropriate to perfect the security interests of the Agent under this Agreement.
A photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.
7.4 Authority of Agent. Each Grantor acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the Agent
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Grantors, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with subsection 9.1 of the Credit Agreement; provided that any
provision of this Agreement for the benefit of the Agent and the Lenders may be
waived by the Agent and the Lenders in a letter or agreement executed by the
Agent or by facsimile transmission from the Agent.
8.2 Notices. All notices, requests and demands to or upon the Agent
or any Grantor hereunder shall be effected in the manner provided for in
subsection 9.2 of the Credit Agreement; provided that any such notice, request
or demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address and as set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Agent nor any Lender shall by any act (except by a written instrument pursuant
to Section 8.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default.
29
No failure to exercise, nor any delay in exercising, on the part of the Agent or
any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Agent or such Lender would otherwise have
on any future occasion. The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the Agent for all its reasonable
costs and expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any rights
under this Agreement and the other Loan Documents to which such Guarantor is a
party, including, without limitation, the reasonable fees and disbursements of
counsel to each Lender and of counsel to the Agent.
(b) Each Guarantor agrees to pay, and to save the Agent and the
Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Agent and the
Lenders harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent the Borrower would be required to do so pursuant to subsection 9.5 of the
Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns; provided that no Grantor
may assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Agent.
30
8.6 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.7 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.
8.8 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.9 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Agent and the Lenders with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Loan Documents.
8.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.11 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the 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;
31
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 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 Grantor, the Agent and the Lenders hereby irrevocably and
unconditionally waive, 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 Section any special, exemplary, punitive or consequential damages.
8.12 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Agent and Lenders, 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 Grantors and the Lenders.
8.13 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.14 Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to subsection 5.10 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
32
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans and the other
Obligations shall have been paid in full, and the Commitments shall have been
terminated, the Collateral shall be released from the Liens created hereby, and
this Agreement and the security interests created by this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Agent and each Grantor hereunder shall terminate, all without delivery of
any instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Agent shall deliver to such Grantor
any Collateral held by the Agent hereunder, and execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Agent, at the request and sole expense of such Grantor, shall execute
and deliver to such Grantor all releases or other documents reasonably necessary
or desirable for the release of the Liens created hereby on such Collateral. At
the request and sole expense of the Borrower, a Subsidiary Guarantor shall be
released from its obligations hereunder in the event that all the Capital Stock
of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of
in a transaction permitted by the Credit Agreement; provided that the Borrower
shall have delivered to the Agent, at least ten Business Days prior to the date
of the proposed release, a written request for release identifying the relevant
Subsidiary Guarantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
33
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
BIG CITY RADIO, INC.
By:
----------------------------
Name:
Title:
BIG CITY RADIO-CHI, L.L.C.
By:
----------------------------
Name:
Title:
BIG CITY RADIO-LA, L.L.C.
By:
----------------------------
Name:
Title:
BIG CITY RADIO-NYC, L.L.C.
By:
----------------------------
Name:
Title:
34
WRKL ROCKLAND RADIO, L.L.C.
By:
----------------------------
Name:
Title:
ODYSSEY TRAVELING BILLBOARDS, INC.
By:
----------------------------
Name:
Title:
00
XXXXX XX XXX XXXX )
ss:
COUNTY OF NEW YORK )
On December __, 1997, before me personally came ______________, to me
known, who, by me duly sworn, did depose and say that deponent resides at
_________________________, deponent is ________________ of each of Big City
Radio, Inc., Big City Radio-CHI, L.L.C., Big City Radio-LA, L.L.C., Big City
Radio-NYC, L.L.C., WRKL Rockland Radio, L.L.C. and Odyssey Traveling Billboards,
Inc., the corporations described in and which executed the foregoing instrument;
that the seal affixed to said instrument is the corporate seal of such
corporation and that it was so affixed by order to the Board of Directors of
such corporation; and that deponent signed deponent's name thereto by like
order.
__________________________
Notary Public
Schedule 1
NOTICE ADDRESSES OF ALL GUARANTORS
c/o Big City Radio, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: President
Facsimile number: (000) 000-0000
with a copy to:
Metromedia Company
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile number: (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.
Facsimile number: (000) 000-0000
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Stock
Issuer Class of Stock Certificate No. No. of Shares
-------------------------- -------------- --------------- -------------
Big City Radio-Chi, L.L.C. N/A
Big City Radio-LA, L.L.C. N/A
Big City Radio-NYC, L.L.C. N/A
WRKL Rockland Radio, L.L.C N/A
Odyssey Traveling Billboards, Common Stock 4 800
Inc.
PLEDGED NOTES:
Issuer Payee Principal Amount
---------------- ---------------- -------------------------
NONE
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
Financing Statement to be filed in the following offices of:
Debtor Jurisdiction
------ ------------
Big City Radio-CHI, L.L.C. Secretary of State of the State of New York
County Clerk of Westchester County
Big City Radio-LA, L.L.C. Secretary of State of the State of New York
County Clerk of Westchester County
Big City Radio-NYC, L.L.C. Secretary of State of the State of New York
County Clerk of Westchester County
WRKL Rockland Radio, L.L.C. Secretary of State of the State of New York
County Clerk of Westchester County
Big City Radio, Inc. Secretary of State of the State of New York
County Clerk of Westchester County
County Clerk of Rockland County
County Clerk of Suffolk County
Secretary of State of the State of New Jersey
Secretary of State of the State of Illinois
Secretary of State of the State of California
Odyssey Traveling Billboards, Inc.
Patent and Trademark Filings
----------------------------
None.
Actions with respect to Pledged Stock
-------------------------------------
Agent to take possession, for the ratable benefit
of the Lenders, of all certificates representing the Pledged Securities.
Other Actions
-------------
None.
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Jurisdiction Location
------- ------------ --------
Big City Radio, Inc. Delaware 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Big City Radio-CHI, L.L.C. Delaware 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Big City Radio-LA, L.L.C. Delaware 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Big City Radio-NYC, L.L.C. Delaware 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
WRKL Rockland Radio, L.L.C. Delaware 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Odyssey Traveling Billboards, Inc. Delaware 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
Big City Radio-CHI, L.L.C. None
Big City Radio-LA, L.L.C. None
Big City Radio-NYC, L.L.C. None
WRKL Rockland Radio, L.L.C. None
Big City Radio, Inc. Arcadia, CA
Fallbrook, CA
Pasadena, CA
Ventura, CA
Temecula, CA
Burbank, CA
Los Angeles, CA
Hampton Bays, NY
Hawthorne, NY
Long Branch, NJ
Westchester, NY
East Quogue, NY
Highland Park, IL
Morris, IL
Pomona, NY
Odyssey Traveling Billboards, Inc. Hawthorne, NY
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
None
PATENTS AND PATENT LICENSES
None
TRADEMARKS AND TRADEMARK LICENSES
Modern Rock Rewind
Y-107 Southern California's Modern Rock
X-107 Cyber Beach
X-107 Buzz Cuts
Y-107 Roadshow
Buzz Cuts
Annex 1 to
Amended and Restated Security Agreement
---------------------------------------
ASSUMPTION AGREEMENT, dated as of December __, 1997, made by
_____________, a ____________ (the "Additional Grantor"), in favor of THE CHASE
MANHATTAN BANK, as administrative agent (in such capacity, the "Agent") for the
banks and other financial institutions (the "Lenders") parties to the Credit
Agreement referred to below. All capitalized terms not defined herein shall
have the meaning ascribed to them in such Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, ________________________ (the "Borrower"), the Lenders and
the Agent have entered into an Amended and Restated Credit Agreement, dated as
of December __, 1997 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Amended and Restated Security Agreement, dated as of December , 1997 (as
amended, supplemented or otherwise modified from time to time, the "Security
Agreement") in favor of the Agent for the benefit of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Security Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Security Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Security Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 8.15 of the Security
Agreement, hereby becomes a party to the Security Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder (including,
without limitation, the guarantee of the Borrower Obligations in Section 2).
The Additional Grantor hereby assigns and transfers to the Agent, and hereby
grants to the Agent, for the ratable benefit of the Lenders, a security interest
in all of the Collateral, to the extent of such Grantor's right, title and
interest and to the extent permitted by applicable laws and regulations
(including, but not limited to, the Communications Act and the rules and
regulations of the FCC thereunder), now owned or at any time hereafter acquired
by the Additional Grantor or in which the Additional Grantor now has or at any
time in the future may acquire any right, title or
2
interest, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity,m by acceleration or
otherwise) of the Additional Grantor's Obligations. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
____________ to the Security Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Security Agreement is true and correct on and as
the date hereof (after giving effect to this Assumption Agreement) as if made on
and as of such date.
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
---------------------------------------
Name:
Title:
EXHIBIT F TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
[Exhibit F does not exist]
EXHIBIT G TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
AMENDMENT TO GUARANTEE
AMENDMENT TO GUARANTEE, dated as of December 24, 1997 (this as
"AMENDMENT"), made by Mr. Xxxxxx Xxxxxxxxx, an individual residing at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (the "GUARANTOR"), in favor of THE CHASE
MANHATTAN BANK (f/k/a Chemical Bank), a New York banking corporation having an
office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as agent (in such capacity,
the "AGENT") for the lenders (the "LENDERS") parties to the Amended and Restated
Credit Agreement dated as of December 24, 1997 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among BIG CITY
RADIO, INC. (f/k/a Odyssey Communications, Inc., the "BORROWER"), the Lenders
and the Agent.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement dated as of May 30, 1996
(as amended, supplemented or otherwise modified to the date hereof, the
"ORIGINAL CREDIT AGREEMENT") the lenders parties thereto have made loans to the
Borrower to enable the Borrower to consummate acquisitions of radio stations, to
repay Indebtedness (as defined therein), for other corporate purposes and upon
the terms and subject to the conditions set forth therein;
WHEREAS, the Borrower intends to consummate a registered initial public
offering of up to 35% of the common shares of the Borrower (the "IPO");
WHEREAS, in connection with the IPO, the Borrower has requested that the
Agent and the Lenders amend and restate the Original Credit Agreement (the
"CREDIT AGREEMENT") to, INTER ALIA, refinance and extend the Revolving Credit
Commitments (as defined therein) under the Original Credit Agreement and for
working capital and general corporate purposes;
WHEREAS, the Guarantor guaranteed a portion of the Obligations under the
Original Credit Agreement, pursuant to a Guarantee dated as of May 30, 1996 (the
"GUARANTEE");
WHEREAS, the Guarantor is a significant shareholder of the Borrower and the
Guarantor will derive substantial direct and indirect benefit from the amendment
and restatement of the Original Credit Agreement by the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders to
enter in to the Credit Agreement that the Guarantors shall have executed and
delivered this Amendment to the Agent for the ratable benefit of the Lenders.
2
NOW, THEREFORE, in consideration of the premises and to induce the Agent
and the Lenders to enter into the Credit Agreement and to induce the Lenders to
make and maintain their respective loans to the Borrower under the Credit
Agreement, the Guarantor hereby agrees with the Agent, for the ratable benefit
of the Lenders, as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as so
defined.
SECTION 2. AMENDMENT OF GUARANTEE. (a) All references to the terms
"Notes" and "Loans" in the Documents shall be amended to be references to Notes
and Loans, respectively, as defined in the Credit Agreement. The Guarantor
further agrees that the term "Lenders" in the Documents includes any lenders
from time to time parties to the Credit Agreement, that the term "Obligations"
means Obligations as defined in the Credit Agreement, and that the Guarantee
shall be amended accordingly.
(b) Section 2(a) of the Guarantee is hereby amended and restated to
read as follows:
"The Guarantor hereby unconditionally and irrevocably guarantees to
the Agent, for the ratable benefit of the Lenders and their respective
successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations.
Notwithstanding the aggregate amount of the Obligations at any time or
from time to time payable or to be payable by the Borrower to the
Agent or to any Lender, the liability of the Guarantor to the Agent
and the Lenders hereunder at any time shall not exceed $5,554,000
(such amount, the "GUARANTEED DEBT"), PLUS such portion of the
interest, fees, indemnities, costs and expenses included in the
Obligations as said principal sum shall bear to the principal amount
of all the Obligations at the time payment thereof is due or demanded
by the Agent. The Guarantor agrees that the Obligations may at any
time and from time to time exceed the amount of the liability of the
Guarantor hereunder without impairing this Guarantee or affecting the
rights and remedies of the Agent or any Lender hereunder."
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Guarantor represents
and warrants that upon the execution and delivery of this Amendment, the
Guarantee, as amended hereby, shall constitute a valid and enforceable guarantee
by the Guarantor enforceable against him as provided therein.
SECTION 4. ACKNOWLEDGMENT AND CONSENT. The guarantor hereby:
(a) acknowledges and consents to the execution, delivery and
performance of (i) the Credit Agreement, as amended, supplemented or otherwise
3
modified from time to time, and (ii) all of the documents and transactions
contemplated thereby;
(b) agrees that, except as amended hereby, such execution, delivery
and performance shall not in any way affect such Grantor's obligations under the
Guarantee, which obligations on the date hereof remain absolute and
unconditional and are not subject to any defense, set-off or counterclaim; and
SECTION 5. MISCELLANEOUS. (a) Except as expressly amended hereby,
the Guarantee shall remain in full force and effect and this Amendment shall not
constitute an amendment of any provision not expressly amended hereby.
(b) This Amendment may be executed in any number of separate
counterparts, and all of said counterparts taken together shall constitute one
and the same instrument.
(c) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
4
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered as of the day and year first above written.
By:
------------------------------
Mr. Xxxxxx Xxxxxxxxx
