[EXECUTION COPY)
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
among
ACME TELEVISION, LLC
THE SEVERAL LENDERS FROM
TIME TO TIME PARTIES HERETO
-and-
CANADIAN IMPERIAL BANK OF COMMERCE
as Agent
Dated as of December 2, 1997
TABLE OF CONTENTS
RECITALS................................................................ 1
I GENERAL TERMS....................................................... 2
Section 1.01. Revolving Lines of Credit................... 2
Section 1.02. Scheduled Reductions of the Commitments..... 3
Section 1.03. Interest on the Notes............... 3
Section 1.04. Requests for Advances; Type of Loan......... 6
Section 1.05. Loan Disbursements.......................... 7
Section 1.06. Payments, Prepayments and Termination or
Reduction of the Revolver Commitments..... 7
Section 1.07. Fees........................................ 11
Section 1.08. Requirements of Law......................... 12
Section 1.09. Limitations on LIBOR Loans; Illegality...... 13
Section 1.10. Taxes....................................... 14
Section 1.11. Indemnification............................. 15
Section 1.12. Payments Under the Notes.................... 16
Section 1.13. Set-Off, Etc................................ 17
Section 1.14. Pro Rata Treatment; Sharing................. 17
Section 1.15. Non-Receipt of Funds by the Agent........... 18
Section 1.16. Replacement of Notes........................ 19
II. SECURITY; SUBORDINATION; USE OF PROCEEDS........................... 19
Section 2.01. Security for the Obligations; Subordination;
Etc...................................... 19
Section 2.02. Use of Proceeds............................. 21
III. CONDITIONS OF MAKING THE LOANS................................... 21
Section 3.01. Conditions to Amendment and Restatement..... 21
Section 3.02. Acquisition Loans........................... 25
Section 3.03. All Loans................................... 28
Section 3.04. Lender Approvals............................ 28
IV. REPRESENTATIONS AND WARRANTIES................................... 29
Section 4.01. Financial Statements........................ 29
Section 4.02. Organization, Qualifications, Etc........... 29
Section 4.03. Authorization; Compliance; Etc.............. 29
Section 4.04. Governmental and Other Consents, Etc........ 30
Section 4.05 Litigation.................................. 30
Section 4.06. Compliance with Laws and Agreements......... 31
Section 4.07. Licenses.................................... 31
Section 4.08. The Stations................................ 32
Section 4.09. Title to Properties; Condition of
Properties............................... 33
Section 4.10. Interests in Other Businesses............... 33
Section 4.11. Solvency.................................... 33
Section 4.12. Full Disclosure............................. 34
Section 4.13. Margin Stock............................... 34
Section 4.14. Tax Returns................................ 34
Section 4.15. Pension Plans, Etc......................... 34
Section 4.16. Material Agreements........................ 35
Section 4.17. Projections................................ 35
Section 4.18. Brokers, Etc............................... 35
Section 4.19. Capitalization............................. 35
Section 4.20. Environmental Compliance................... 35
Section 4.21. Investment Company Act..................... 37
Section 4.22. Labor Matters.............................. 37
Section 4.23. Delaware Code Provisions................... 37
V. FINANCIAL COVENANTS.............................................. 37
Section 5.01. Minimum EBITDA............................. 37
Section 5.02. Maximum Total Debt Leverage................ 38
Section 5.03. Maximum Secured Debt Leverage.............. 38
Section 5.04. Cash Interest Coverage..................... 39
Section 5.05. Restricted Payments........................ 39
VI. AFFIRMATIVE COVENANTS............................................. 40
Section 6.01. Preservation of Assets; Compliance
with Laws, Etc........................... 40
Section 6.02. Insurance.................................. 41
Section 6.03. Taxes, Etc................................. 43
Section 6.04. Notice of Proceedings,
Defaults, Adverse Change, Etc............. 43
Section 6.05. Financial Statements and Reports........... 44
Section 6.06. Inspection................................. 46
Section 6.07. Accounting System.......................... 46
Section 6.08. Appraisals................................. 46
Section 6.09. Additional Assurances...................... 46
Section 6.10. Compliance with Environmental Laws......... 47
Section 6.11 Permitted Restructurings;
Acquisition Restructurings............... 48
VII. NEGATIVE COVENANTS............................................... 49
Section 7.01. Indebtedness............................... 49
Section 7.02. Liens...................................... 50
Section 7.03. Disposition of Assets; etc................. 51
Section 7.04. Fundamental Changes; Acquisitions.......... 52
Section 7.05. Local Marketing Agreements, Etc............ 52
Section 7.06. Management................................. 52
Section 7.07. Sale and Leaseback......................... 52
Section 7.08. Investments................................ 53
Section 7.09. Change in Business and Activities.......... 53
Section 7.10. Accounts Receivable............. 53
Section 7.11. Transactions with Affiliates............... 53
Section 7.12. Amendment of Certain Agreements, Etc....... 53
Section 7.13. ERISA...................................... 54
Section 7.14. Margin Stock............................... 54
Section 7.15. Negative Pledges, etc...................... 54
ii
VIII. DEFAULTS.......................................................... 54
IX. REMEDIES ON DEFAULT, ETC.......................................... 57
X. THE AGENT......................................................... 58
Section 10.01 Appointment, Powers and Immunities.............. 58
Section 10.02 Reliance by Agent............................... 59
Section 10.03. Events of Default............................... 59
Section 10.04. Rights as a Lender.............................. 59
Section 10.05. Indemnification................................. 59
Section 10.06. Non-Reliance on Agent and other Lenders......... 60
Section 10.07. Failure to Act.................................. 60
Section 10.08. Resignation or Removal of Agent................. 60
Section 10.09. Cooperation of Lenders.......................... 61
XI. DEFINITIONS....................................................... 61
XII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE
ACTIONS BY THE LENDERS............................................ 84
XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS.............. 85
XIV. MISCELLANEOUS...................................................... 87
Section 14.01. Survival......................................... 87
Section 14.02. Fees and Expenses; Indemnity; Etc................ 87
Section 14.03. Notice........................................... 88
Section 14.04. Governing Law.................................... 90
Section 14.05. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.... 90
Section 14.06. Severability..................................... 91
Section 14.07. Section Headings, Etc............................ 91
Section 14.08. Several Nature of Lenders' Obligations........... 91
Section 14.09. Counterparts..................................... 91
Section 14.10. Knowledge and Discovery.......................... 92
Section 14.11. Amendment of Other Agreements.................... 92
Section 14.12. FCC Approvals.................................... 92
Section 14.13. Disclaimer of Reliance........................... 92
Section 14.14. Environmental Indemnification.................... 93
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INDEX OF SCHEDULE
Schedule 1.01(a) Allocation of Loans and Commitments
Schedule 1.01(c) Form of Revolving Credit Note
Schedule 1.04(a) Request for Advances
Schedule 1.04(d) Interest Rate Option Notice
Schedule 1.06 Commitment Reduction Notice
Schedule 2.01 Exceptions to Security Requirements
Schedule 3.01(k) Officer's Closing Certificates
Schedule 3.02(c) Officer's Compliance Certificate; Acquisitions
Schedule 3.02(f)(i) Form General Counsel Opinion; Acquisitions
Schedule 3.02(f)(ii) Form FCC Counsel Opinion; Acquisitions
Schedule 3.02(f)(iii) Form Local Counsel Opinion; Acquisitions
Schedule 4.01(a) Financial Statements
Schedule 4.01(b) Opening Balance Sheet
Schedule 4.02 Opening Balance Sheet
Schedule 4.04 Organization, Etc.
Schedule 4.05 Governmental and Other Consents
Schedule 4.07 Litigation
Schedule 4.09 Licenses
Schedule 4.10 Real Properties; Tower Site Leases, Etc.
Schedule 4.15 Interests in Other Businesses
Schedule 4.16 Pension Plans
Schedule 4.17 Material Agreements
Schedule 4.19 Projections
Schedule 4.20 Capitalization
Schedule 6.05 Envirornmental Compliance; Site Assessments
Schedule 7.01 Compliance Certificate
Schedule 7.02 Indebtedness
Schedule 11.01 Liens
Schedule 11.02 Excluded Programming Payments
Schedule 11.02(a) Officer's Compliance Certificate; Acquisitions
Schedule 11.02(b) Form General Counsel Opinion; Acquisitions
Schedule 11.02(c) Form FCC Counsel Opinion; Acquisitions
Schedule 11.02(d) Form Local Counsel Opinion; Acquisitions
Schedule 11.03 Employment/Consulting Agreements
Schedule 13(b)(iv) Form of Assignment and Acceptance
Schedule 13(b)(v) Form of Notice of Assignment and Acceptance
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT dated as December 2,1997, by and among CIBC INC. ("CIBC") and the
various other financial institutions which are now, or in accordance with
Article XIII hereafter become, parties hereto by execution of the signature
pages to this Agreement (collectively, the "Lenders" and each individually, a
"Lendee'); CANADIAN IMPERIAL BANK OF COMMERCE [formerly referred to as Canadian
Imperial Bank of Commerce, New York Agency], as agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, the
"Agent"); and ACME TELEVISION, LLC, a limited liability company organized and
existing under the laws of the State of Delaware (the "Borrower Certain
capitalized terms used herein without definition are defined in Article XI of
this Agreement.
RECITALS
A. The Borrower's direct and indirect Subsidiaries (i) own and operate
broadcast television Station KWBP, Channel 32, broadcasting in the Portland,
Oregon DMA; (ii) own and operate broadcast television station XXXX, Channel 20,
broadcasting in the Knoxville, Tennessee DMA; (iii) operate pursuant to a time
brokerage agreement dated as of September 8, 1997, Station KPLR, Channel I 1,
broadcasting in the St. Louis, Missouri DMA, pending the FCC's grant of approval
to the transfer of the Missouri Station, and (iv) hold the rights to acquire or
construct other broadcast television stations in the Salt Lake city, Utah, and
Albuquerque, New Mexico DMA'S. Certain special purpose subsidiaries of the
Borrower, referred to herein as the License Companies, hold or will hold the
licenses for each broadcast television station.
B. The Borrower, the Agent and the Lenders are parties to that certain
Credit Agreement dated as of August 15, 1997 (the "Original A2reement"),
pursuant to which the Borrower issued its Secured Revolving Credit Note in the
principal amount of $22,500,000, payable to CIBC (the "Original Note").
C. On September 24, 1997, the Borrower and Acme Finance Corporation, a
Delaware corporation wholly-owned by the Borrower ("Acme Finance" and, together
with the Borrower the "Issuers"), offered (the "Offering") as their joint and
several obligation $175,000,000 in 10.875% Senior Discount Notes due 2004 (the
"Senior Notes"), which are issued pursuant to an Indenture dated as of September
30, 1997 between the Issuers, the Borrower's Subsidiaries (as guarantors) and
Wilmington Trust Company, as trustee (the "Indenture"). In connection with the
sale of the Senior Notes, the issuers prepared and circulated an Offering
Memorandum dated September 24, 1997, setting forth information regarding the
Issuers and the Senior Notes, a true and complete copy of which was provided to
the Agent (the "Offering Memorandum").
D. As conditions to the Offering, inter alia, (i) Acme Television Holdings,
LLC, the Borrower's ultimate parent ("Acme Holdings") issued its Convertible
Debentures and membership units (together, the "ACME Holdings Eguity
Financing,") for aggregate gross proceeds of approximately $45,042,000, from
which approximately $42,900,000 were contributed to the Borrower through Acme
Intermediate (the "Acme Holdings Equity Contribution"); and (ii) Acme
Intermediate Holdings, LLC, which owns 99.5% of the
Borrower's membership interests ("Acme Intermediate"), and Acme Intermediate
Finance, Inc. offered (the "Acme Intermediate Offering') $71,634,000 in 12%
Senior Secured Discount Notes due 2005 (the "Acme Intermediate Notes"), which
were issued pursuant to an Indenture dated as of September 30, 1997 between Acme
Intermediate, Acme Intermediate Finance, Inc. and Wilmington Trust Company, as
Trustee (the "Acme Intermediate Indenture") for aggregate gross proceeds of
approximately $40,000,000, from which $38,000,000 were contributed to the
Borrower (the "Acme Intermediate Eguity Contribution").
E. The proceeds to the Borrower from the Offering, together with the
proceeds of the Acme Holdings Equity Contribution and the Acme Intermediate
Equity Contribution, will be used to (i) pay the cash portion of the purchase
price of the Permitted Acquisitions; (ii) fund the required capital expenditures
to construct or upgrade the Stations; (iii) deliver the KPLR Escrow Funds; and
(iv) pay fees and expenses in connection with the Offering and the consummation
of the foregoing.
F. The Borrower desires to obtain additional funds for working capital and
capital expenditures and to finance Permitted Acquisitions and-, therefore,
desires to amend and restate the Original Agreement to (i) increase the
Revolving Credit Commitment from $22,500,000 to $40,000,000 and (ii) make
certain other amendments, modifications and revisions to the terms thereof.
G. The Lenders are willing to agree to such amendment and restatement, all
subject to the terms and conditions of this Agreement.
NOW THEREFORE the parties hereto, intending to be legally bound, and in
consideration of the foregoing and the mutual covenants contained herein, hereby
agree that the Original Agreement be, and it hereby is, amended and restated to
read in its entirety (but retaining references to the foregoing Recitals) as
follows:
I. GENERAL TERMS
Section 1.01. Revolving Lines of Credit.
(a) On the date hereof, subject to the terms and conditions contained in
this Agreement, the Lenders agree to establish in favor of the Borrower
revolving lines of credit (the "Revolving! Lines of Credit") in the aggregate
principal amount of up to $40,000,000, allocated among the Lenders as set forth
in Schedule 1.01(a) (collectively, as reduced pursuant to Section 1.06, the
"Commitments" and, with respect to each Lendees allocation of the Revolving
Lines of Credit, its "Commitment') which shall expire on the Expiration Date.
(b) Loans made under the Revolving Lines of Credit are hereinafter
sometimes referred to collectively as the "Advances". The aggregate principal
amount of Advances made by the Lenders as requested in any Request for Advances
shall be (i) at least $1,000,000 and, if more, a multiple of $100,000, in the
case of LIBOR Loans, and $500,000 and, if more, a multiple of $1 00,000, in the
case of Prime Rate Loans, or (ii) such lesser amount as equals the then
unadvanced portion of the aggregate Commitments. From the date hereof to and
including the
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Expiration Date and within the limits of the aggregate Commitments, the
Borrower may borrow, repay and reborrow under this Section 1.01.
(c) The borrowing under Section 1.01 shall be evidenced by the Borrower's
Amended and Restated Secured Revolving Credit Notes, each in the form attached
hereto as Schedule 1.0 I (c) (together with any additional Revolving Credit
Notes issued to any assignee(s) of the Commitments under Article XIII or
otherwise issued in substitution therefor, the "Notes"). The Notes are hereby
incorporated by reference herein and made a part hereof.
Section 1.02. Scheduled Reductions of the Commitments. The Commitments (i)
shall be automatically permanently reduced on September 30, 2000 and each
Quarterly Date thereafter, on each of which dates the Borrower shall repay such
amount of the aggregate Notes as shall cause the aggregate outstanding principal
balance thereunder to be less than or equal to the Commitments, as so reduced,
and (ii) shall expire on the Expiration Date, when all outstanding principal and
accrued interest on the Notes shall be due and payable in full. Such quarterly
reductions of the Commitments shall be in the amounts set forth below, without
giving effect to any other mandatory or optional Commitment reductions and,
after giving effect to such quarterly automatic reductions, the maximum
aggregate amount of the Commitments shall not exceed the levels set forth below:
Aggregate Amount of
Ouarterly Date Automatic Permanent Reduction Maximum Commitments
Closing Date $-0- $40,000,000
September 30, 2000 $ 2,000,000 $38,000,000
December 31, 2000 $ 2,000,000 $36,000,000
March 31, 2001 $ 2,000,000 $34,000,000
June 30, 2001 $ 2,000,000 $32,000,000
September 20, 2001 $ 3,000,000 $29,000,000
December 31, 2001 $ 3,000,000 $26,000,000
March 31, 2002 $ 3,000,000 $23,000,000
June 3 0, 2002 $ 3,000,000 $20,000,000
September 3 0, 2002 $20,000,000 $-0-
Section 1.03. Interest on the Notes.
(a) Interest Rate. Subject to the terms and conditions set forth in this
Section 1.03, including without limitation paragraph (b)(iii) below, the
Borrower may elect an interest rate for the outstanding principal balances from
time to time of the Notes, or any portion thereof, based on either the Prime
Rate or the applicable LIBOR Rate and determined as follows:
(i) the rate for any Prime Rate Loan shall be the Prime Rate plus the
Applicable Margin for Prime Rate Loans then in effect; and
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(ii) the rate for any LIBOR Loan shall be the applicable LIBOR Rate
plus the Applicable Margin for LIBOR Loans in effect on the first day of
the applicable Interest Period.
(b) Determination of Applicable Margin for Loans.
(i) The Applicable Margin for Loans during the period commencing on
the date hereof and ending on February 14, 1998 shall be 2.00%, with
respect to Prime Rate Loans, and 3.00%, with respect to LIBOR Loans.
(ii) Subject to the provisions of Section 1.03(b)(iii) below, the
Applicable Margin for Loans during the Pricing Period commencing on
February 15, 1998 and ending on May 14, 1999 and during each Pricing Period
thereafter shall be determined based upon the ratio of (A) Total Debt as of
the last day of the fiscal quarter ended immediately preceding the first
day of such Pricing Period to (B) Adjusted EBITDA for the period of four
(4) consecutive fiscal quarters ending on such Quarterly Date (the
"Pricing Ratio"). as indicated in the following Table:
Applicable Margin for Loans
Pricing Ratio Prime Rate Loans LIBOR Loans
Greater than or equal to
6.00:1.00 2.00% 3.00%
Less than 6.00: 1.00 but greater
than or equal to 5.5 0: 1.00 1.75% 2.75%
Less than 5.50:1.00 but greater
than or equal to 5.00: 1.00 1.50% 2.50%
Less than 5.00: 1.00 but greater
than or equal to 4.50:1.00 1.00% 2.00%
Less than 4.50: 1.00 .75% 1.75%
(iii) Notwithstanding the foregoing, so long as Adjusted EBITDA for
any period of four (4) consecutive fiscal quarters shall be negative, the
Applicable Margin for Loans during the Pricing Period commencing on the day
after the last day of such fiscal quarter shall be 2.00%, with respect to
Prime Rate Loans, and 3.00%, with respect to LIBOR Loans.
(c) Computations, Pricing Period, Etc.
(i) Nothing in Section 1.03(b) shall be deemed to constitute a waiver
of the requirements of Section 5.02, default under which will result in an
Event of Default and the application of the default rate of interest
specified in Section 1.03(f).
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(ii) As used in Section 1.03, the first "Pricing Period" shall
commence on November 15, 1998 and end on February 14, 1999 and, thereafter,
the term "Pricing Period" shall mean each period commencing on (A) the last
date as of which the Borrower is required, under Section 6.05(b) and
Section 6.05(d), to deliver financial statements and a Compliance Report
indicating the applicable Pricing Ratio, being February 15, May 15, August
15 and November I in each year (in each case, a "Compliance Report Delivery
Rate"), and ending on (B) the next following Compliance Report Delivery
Date.
(iii) The determination of the Applicable Margin for any Pricing
Period shall be based on the quarterly financial statements and Compliance
Report required to be delivered on the first date of such Pricing Period,
as provided above. Notwithstanding the preceding sentence, in the event of
any discrepancy between the computation based on such financial statements
and Compliance Report and the related audited financial statements
furnished pursuant to Section 6.05(a) (the "Audited Financial Statements"),
or any information disclosed in connection therewith, the computation based
upon the Audited Financial Statements shall govern, retroactive to the
first day of the applicable Pricing Period. In the event of a retroactive
correction in the determination of the Applicable Margin in favor of the
Borrower, the amount of interest thereby refundable to the Borrower shall
be applied on the date of such retroactive correction, to prepay interest
payable on the Notes. If the retroactive correction is in favor of the
Lenders, the amount of interest due to the Lenders shall be paid in full to
the Agent within five (5) days after written notice of such correction is
provided to the Borrower.
(iv) Notwithstanding the foregoing, no downward adjustment of the
Applicable Margin hereunder shall be permitted (A) unless the Compliance
Report for the relevant fiscal period delivered to the Agent includes a
request by the Borrower for such adjustment or (B) during the existence of
any Default.
(d) Interest Payment Dates. Interest on the Loans shall be payable in
arrears, without setoff, deduction or counterclaim, as follows:
(i) Interest on each Prime Rate Loan shall be due and payable on the
last Business Day of March, June, September and December of each year (the
"Ouarterly Dates"), commencing December 31, 1997, and at maturity, whether
by reason of acceleration, prepayment, payment or otherwise, provided that
interest accrued on any Prime Rate Loan which is converted to a LIBOR Loan
shall be paid on the Quarterly Date following the date of such conversion
(or, if accrued on a Prime Rate Loan which is so converted on a Quarterly
Date, on such Quarterly Date). The interest rate on Prime Rate Loans shall
change on the date of any change in the applicable Prime Rate.
(ii) Interest on each LIBOR Loan shall be due and payable on the last
day of the Interest Period applicable to such Loan and, if such Interest
Period exceeds three (3) months, every three (3) months after the beginning
thereof, until and at maturity, whether by reason of acceleration,
prepayment, payment or otherwise.
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(e) Computations. Interest on Prime Rate Loans (except to the extent based
on the Federal Funds Rate) shall be computed on the basis of the actual number
of days elapsed over a 365 or 366-day year, as applicable. Interest on Prime
Rate Loans, if based on the Federal Funds Rate, and on LIBOR Loans shall be
computed on the basis of the actual number of days elapsed over a 360-day year.
(f) Effect of Defaults, Etc.
(i) During the existence and continuance of any Event of Default, the
outstanding principal under the Notes and, to the extent permitted by
applicable law, overdue interest, fees or other amounts payable hereunder
or under the other Loan Documents shall bear interest, from and including
the date such Event of Default occurred until such Event of Default is
waived in writing as provided herein or cured, at a rate per annum equal to
two percent (2.00%) above (a) the interest rate or rates then applicable to
Prime Rate Loans and overdue interest, fees and other expenses (computed on
the basis of the actual number of days elapsed over a 365-day period), or
(b) with respect to any LIBOR Loans then in effect (and only until the end
of the Interest Period applicable to such LIBOR Loans) the interest rate or
rates then applicable to such LIBOR Loans (computed on the basis of the
actual number of days elapsed over a 360-day period).
(ii) Nothing in this Section 1.03(f) shall affect the rights of the
Agent or the Lenders to exercise any rights or remedies under the Loan
Documents or applicable law arising upon the occurrence of an Event of
Default.
Section 1.04. Requests for Advances; Type of Loan.
(a) Requests for Advances. Each request by the Borrower for Advances under
the Revolving Lines of Credit (other than the initial Advances, if made
concurrently herewith) shall be made not later than (i) I 1:00 A.M. (New York
time) on the Business Day of the proposed Borrowing Date, if such Advances are
Prime Rate Loans, or (ii) I 1:00 A.M. (New York time) on the third Business Day
prior to the proposed Borrowing Date, if any of such Advances are LIBOR Loans,
by a written Request for Advances, in the form of schedule 1.0 a (each, a
"Request for Advances"), signed by a duly authorized representative of the
Borrower and indicating (i) the date of such Advances, (ii) whether such
Advances shall be Prime Rate Loans or LIBOR Loans and, if so, the Interest
Period for such LIBOR Loans, and (iii) the use of proceeds thereof, to the
extent any such proceeds are not being used for working capital purposes. The
Agent shall promptly notify the Lenders of such Request for Advances and the
information contained therein. Such Request for Advances shall be irrevocable
and binding on the Borrower.
(b) Conversion to a Different Type of Loan. The Borrower may elect from
time to time to convert any outstanding Advances to Prime Rate Loans or LIBOR
Loans, as the case may be, provided that (i) with respect to any such conversion
of LIBOR Loans to Prime Rate Loans, the Borrower shall provide the appropriate
Interest Rate Option Notice by 12:00 Noon (New York time) on the date of such
proposed conversion; (ii) with respect to any such conversion of
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Prime Rate Loans to LIBOR Loans, the Borrower shall provide the appropriate
Interest Rate Option Notice by 12:00 Noon. (New York time ) at least three
Business Days' prior to the date of such proposed conversion; (iii) with respect
to any such conversion of LIBOR Loans into Prime Rate Loans, such conversion
shall only be made on the last day of the related Interest Period; (iv) no Loans
may be converted into LIBOR Loans when any Default has occurred and is
continuing; (v) the Borrower may have no more than eight (8) LIBOR Loans
outstanding at any time; (vi) any conversion of less than all of the outstanding
Prime Rate Loans into LIBOR Loans shall be in a minimum aggregate principal
amount of $1,000,000 and, if greater, an integral multiple of $1 00,000; and
(vii) any conversion of less than all of the outstanding LIBOR Loans into Prime
Rate Loans shall be in a minimum aggregate principal amount of $500,000 and, if
greater, an integral multiple of $1 00,000. The Agent shall promptly notify the
Lenders of such Interest Rate Option Notice and the information contained
therein.
(c) Continuance of an Interest Rate Option. The Borrower may continue any
LIBOR Loans as such upon the expiration of the related Interest Period by
providing to the Agent (i) an Interest Rate Option Notice in compliance with the
notice provisions set forth in Section 1.04(b) or (ii) standing written
instructions authorizing the automatic continuation of such Loans, which
instructions shall be effective until notice to the Agent by the Borrower
revoking the same (such notice to take effect no sooner than three (3) Business
Days after receipt by the Agent); provided that no LIBOR Loans may be continued
when any Default has occurred and is continuing, but shall be automatically
converted to Prime Rate Loans on the last day of the first applicable Interest
Period which ends during the continuance of such Default. Prime Rate Loans shall
be deemed to continue as such until receipt of an Interest Rate Option Notice
requesting conversion thereof to LIBOR Loans.
(d) Form of Notice. Each Interest Rate Option Notice shall be substantially
in the form of Schedule 1.04(d) and shall specify: (i) the aggregate principal
amount of Loans to be continued or converted; (ii) the proposed date thereof;
(iii) the Interest Period for such LIBOR Loans; and (iv) whether such Loans
shall be LIBOR Loans or Prime Rate Loans.
Section 1.05. Loan Disbursements. The Advances shall be made by the Lenders
pro rata as provided in Section 1.14. Not later than 12:00 noon (New York time),
in the case of LIBOR Loans, or 2:00 P.M. (New York time), in the case of Prime
Rate Loans, on the date specified for any Advances, each Lender shall make
available to the Agent the portion of the Advances to be made by it on such
date, in immediately available funds, for the account of the Borrower. The
amount so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower by depositing the same in
immediately available funds in the appropriate account or accounts of the
Borrower and by disbursing such funds as indicated in writing in the related
Request for Advances prior to the date such Advances are proposed to be made.
Section 1.06. Payments, Prepayments and Termination or Reduction of the
Revolver Commitments.
(a) Voluntary Reductions of Commitments and Related Prepayments. At any
time prior to the Expiration Date, upon at least three (3) Business Days'
written notice to the
7
Agent in the form of Schedule 1.06 (each, a "Commitment Reduction Notice")
signed by a duly authorized representative of the Borrower, the Borrower may
permanently terminate or permanently reduce the Commitments, without premium or
penalty (other than any indemnification payments owned under Section 1. II),
provided as follows:
(i) any such reduction shall be in an aggregate amount of not less
than $500,000 or, if greater, an integral multiple of $ 1 00,000;
(ii) any such reduction shall apply to each Lender's Commitment pro
rata as provided in Section 1.14; and
(iii) simultaneously with each such reduction, the Borrower (A) shall
pay to the Agent, for the ratable account of each Lender, any then accrued
unpaid Commitment Fee on the terminated or reduced portion of the
respective Commitments, (B) shall pay any indemnification payments due in
accordance with Section 1. 1 1 in respect of LIBOR Loans so prepaid and (C)
shall repay such amount of the aggregate principal amount of the Notes as
shall cause the outstanding principal balance thereunder to be less than or
equal to the aggregate Commitments, after giving effect to such reduction,
provided that any such prepayment shall be an aggregate amount of not less
than $1,000,000 or, if greater, an integral multiple of $ 1 00,000, in case
of LIBOR Loans so prepaid, or $500,000 or, if greater, an integral multiple
of $1 00,000, with respect to Base Rate Loans so prepaid.
Each Commitment Reduction Notice shall specify that date fixed for such
termination or reduction, the aggregate principal amount thereof and the
aggregate principal amount of the Notes required to be repaid hereunder on such
date.
(b) Mandatory Reductions of the Commitments; Casually Events. Subject to
the provisions of Section 6.02, if (i) the Borrower or any of the Subsidiaries
shall receive Insurance Proceeds in respect of any Casualty Event and shall not
have restored, repaired or replaced the Damaged Property within the applicable
Restoration Period and (ii) such Insurance Proceeds, together with all other
Insurance Proceeds theretofore received in respect of Casualty Events and not
applied to restore, repair or replace an asset or property, exceed $500,000 in
the aggregate, then, on the last day of such Restoration Period (or, if earlier,
the date as of which the Borrower or any Subsidiary shall have determined not to
restore, repair or replace the Damaged Property), (A) the Commitments shall be
automatically reduced, in an aggregate amount, if any, equal to the aggregate
amount of such Insurance Proceeds not theretofore applied to the repair,
restoration or replacement of the Damaged Property under Section 6.02(b) and (B)
the Borrower shall prepay the Notes accordingly, without premium or penalty
(other than any indemnification payments due under Section 1.11), all as
provided in Sections 1.06(e) and (i), respectively. Nothing in this Section
1.06(b) shall be deemed (x) to limit any obligation of the Companies pursuant to
Section 6.02 to remit Insurance Proceeds to the Collateral Account, (y) to
obligate the Agent to release Insurance Proceeds from the Collateral Account to
the Borrower or any Subsidiary during the existence and continuance of any Event
of Default or (z) to apply to temporary prepayments of the Notes from Insurance
Proceeds pending completion of repairs, replacements and restoration within the
applicable Restoration Period and subject to the provisions of Section 6.02(b).
8
(c) Mandatory Reductions of the Commitments; Dispositions of Assets.
Without limiting the obligation of the Borrower under Section 7.03 to obtain the
consent of the Required Lenders to any disposition of assets or LMA not
otherwise permitted hereunder, the Borrower agrees (i) two (2) Business Days
prior to the occurrence of any disposition of assets or properties other than
pursuant to Section 7.03(a) or any LMA (as defined in clause (b) of the
definition of such term in Article XI), to deliver to the Agent (in sufficient
copies for each Lender) a statement, certified by the chief executive officer or
chief financial officer of the Borrower and in reasonable detail, of the
respective estimated amounts of the Net Cash Proceeds and Adjusted Net Cash
Proceeds of such disposition or the estimated amounts payable under such LMA and
(ii) that, in the event such disposition is completed or such LMA is commenced
(but subject to the Borrower's right, under certain circumstances, to redeploy
certain of the proceeds thereof, as provided below), the Commitments shall be
automatically reduced as follows:
(A) on the date of such disposition or the commencement of such LMA,
in an aggregate amount equal to 100% of the Adjusted Net Cash Proceeds of
such disposition or the amounts paid under such LMA, as the case may be,
received by the Borrower or any of the Subsidiaries on such date; and
(B) thereafter, quarterly, on the date of the delivery to the Agent
pursuant to Section 6.05 hereof of the financial statements for each fiscal
quarter or (if earlier) the date which is forty-five (45) days after the
end of such fiscal quarter, to the extent the Borrower or any Subsidiary
shall receive Adjusted Net Cash Proceeds during such fiscal quarter under
deferred payment arrangements or investments entered into or received in
connection with any such disposition and/or further payments under such
LMA, an amount equal to I 00% of the aggregate amount of related Adjusted
Net Cash Proceeds and/or such LMA payments, provided that if, prior to the
date upon which the Borrower would otherwise be required to make a
prepayment under this paragraph (B) with respect to any fiscal quarter, all
such Adjusted Net Cash Proceeds and/or LMA payments received in cash shall
aggregate an amount that will require a prepayment of $250,000 or more
under this paragraph (B) with respect to such fiscal quarter, then the
Borrower shall immediately make a prepayment under this paragraph (B) in an
amount equal to such required prepayment.
In connection with each such reduction of the Commitments, the Borrower shall
prepay the Notes accordingly, as provided in Section 1.06(f), without premium or
penalty (other than any indemnification payments due under Section 1.11).
Notwithstanding the foregoing, provided that no Specified Default exists or is
continuing as of the date of any such disposition or the commencement of any
such LMA, no reduction of the Commitments or prepayment of the Notes shall be
required under this Section 1.06(c) with respect to the Adjusted Net Cash
Proceeds from any such disposition or LMA (or all dispositions of assets in the
aggregate) after the date hereof in the event that the Borrower advises the
Agent at the time the Net Cash Proceeds from such disposition or LMA (or the
last in any such series of dispositions) are received that it intends to
reinvest the Adjusted Net Cash Proceeds in replacement assets pursuant to a
Permitted Acquisition, so long as:
9
(1) such Adjusted Net Cash Proceeds are at the written election of the
Borrower (x) deposited in the Collateral Account and held therein by the
Agent pending such reinvestment, in which event the Agent need not release
such Adjusted Net Cash Proceeds except upon presentation of evidence
satisfactory to it that such Adjusted Net Cash Proceeds are to be so
reinvested in compliance with the provisions of this Agreement, (y) applied
by the Borrower to the prepayment of the Notes without permanent reduction
of the Commitments in such amount (each, a "Temporary Prepayment") (in
which event the Borrower agrees to advise the Agent in writing at the time
of such Temporary Prepayment that such prepayment is being made from the
proceeds of a disposition) or (z) held and applied in any combination of
clauses (x) and (y) above; and
(2) the Adjusted Net Cash Proceeds from any such disposition are. in
fact so reinvested (by withdrawal from the Collateral Account or under the
Revolvers and application to the purchase price of one or more Permitted
Acquisitions) prior to the earlier to occur of (x) 180 days following the
date of such disposition, unless a definitive agreement with respect to a
Permitted Acquisition utilizing Adjusted Net Cash Proceeds shall have been
entered into prior to or within such period, or (y) in such event, 360 days
following such disposition, it being understood that, in the event Adjusted
Net Cash Proceeds from more than one disposition of assets are paid into
the Collateral Account or applied to the prepayment of the Notes as
provided in subparagraph (1) above, such Adjusted Net Cash Proceeds shall
be deemed to be released in the same order in which such dispositions
occurred.
Accordingly, (aa) any such Adjusted Net Cash Proceeds held in the Collateral
Account without reinvestment for more than the 180 or 360 day period, as
applicable, referred to in subparagraph (2) above (as applicable, the
"Reinvestment Period") shall be forthwith applied to the prepayment of the Notes
and the reduction of the Commitments (by an amount equal to the portion of such
prepayments applied to the Notes) as provided above without premium or penalty
(other than any indemnification payments due under Section 1.11), and (bb) to
the extent that any such Adjusted Net Cash Proceeds so applied to a Temporary
Prepayment are not reborrowed for reinvestment within the Reinvestment Period,
the Commitments shall be permanently reduced as provided above. Nothing in this
Section 1.06 shall be deemed to obligate the Agent or the Lender, as the case
may be, to release any of Adjusted Net Cash Proceeds from the Collateral Account
to the Borrower or any Subsidiary, or to make Loans in the amount of any
Temporary Prepayment, in each case for purposes of reinvestment as aforesaid,
during the existence of any Specified Default. Upon the occurrence and during
the existence of any Specified Default, all Adjusted Net Cash Proceeds held in
the Collateral Account shall be subject to the provisions of the Security
Agreements.
(d) Mandatory Reductions of the Commitments; Debt Issuances. Without
limiting the obligation of the Borrower to obtain the consent thereto of the
Required Lenders under Section 7.01, upon any issuance of additional debt
securities of the Borrower, other than the Senior Notes, (i) the Commitments
shall be automatically reduced in an aggregate amount equal to the net proceeds
thereof and (ii) the Borrower shall prepay the Notes accordingly, without
premium or penalty (other than any indemnification payments due under Section
1.1 1) as provided in Sections 1.06(e) and (f).
10
(e) Application of Reductions of the Commitments. Upon the occurrence of
any of the events described in the above paragraphs of this Section 1.06, the
amount of the proposed or required reduction of the Commitments, if any, shall
be applied to the reduction of the Lenders' respective Commitments on a pro rata
basis, as provided in Section 1.14. Each such reduction of the aggregate
Commitments shall apply proportionately to reduce each dollar level of the
aggregate Commitments shown in the Table of scheduled automatic reductions in
Section 1.02, for reduction dates occurring after the date of such reduction.
(f) Mandatory Prepayments; Applications of Prepayments.
(i) Simultaneously with any mandatory automatic reduction of the
Commitments under Section 1.02 or Section 1.06(b), (e) or (d), the
Borrower (A) shall pay to the Agent, for the ratable account of each
Lender, any then accrued unpaid Commitment Fee on the reduced portion of
the respective Commitments, (B) shall repay such amount of the aggregate
principal amount of the Notes as shall cause the outstanding principal
balance thereunder to be less than or equal to the aggregate Commitments,
after giving effect to such reduction, and (C) shall pay any
indemnification payments due in accordance with Section 1.11 in respect of
LIBOR Loans so prepaid.
(ii) All voluntary and mandatory prepayments of the Notes under this
Section 1.06 (A) shall be made without set-off (other than for final
judgments for the payment of money against either Agent or any Lender),
deduction or counterclaim, and (B) unless otherwise specified in this
Section 1.06, shall be applied first, to overdue interest, fees,
indemnification payments and expenses hereunder and second, to pay
principal of the Notes, provided, in each case, that (A) payments of
principal of the Notes shall be applied to the Lenders' respective Notes
pro rata as provided in Section 1.14, unless otherwise agreed to by the
Lenders (in which case the Agent will provide notice to the Borrower of
such alternate application within a reasonable period of time thereafter),
and (B) applications of prepayments to principal shall be made first to
Base Rate Loans and then to LIBOR Loans.
Section 1.07. Fees.
(a) Commitment Fee. The Borrower shall pay to the Agent, for the ratable
account of each Lender, a non-refundable fee (the "Commitment Fee') on the
aggregate daily unused portion of the Commitments from the date hereof to and
including the earlier of the termination of the Commitments or the Expiration
Date, at the rate of one-half of one percent (1/20/o) (computed on the basis of
the actual number of days elapsed over a 365-366 day year), payable quarterly in
arrears on each Quarterly Date, without setoff, deduction or counterclaim, with
a final payment at the maturity of the Notes, whether by payment, prepayment,
acceleration or otherwise.
(b) Funding Fee. The Borrower shall pay CIBC a non-refundable funding fee
on the date hereof in the amount specified in the Fee Letter (the "Funding!
Fee").
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(c) Agency Fee. The Borrower shall pay the Agent semi-annually a
non-refundable agency fee in the amount specified in the Fee Letter (the "Agency
Fee").
Section 1.08. Requirements of Law.
(a) In the event that any Regulatory Change shall:
(i) change the basis of taxation of any amounts payable to any Lender
under this Agreement or the Notes in respect of any Loans, including
without limitation LIBOR Loans (other than taxes imposed on the overall net
income of such Lender);
(ii) impose or modify any reserve, compulsory loan assessment, special
deposit or similar requirement relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, any office
of such Lender (including any of such Loans or any deposits referred to in
the definition of "LIBOR Base Rate" in Article XI); or
(iii) impose any other conditions affecting this Agreement in respect
of Loans, including without limitation LIBOR Loans (or any of such
extensions of credit, assets, deposits or liabilities);
and the result of any of the foregoing shall be to increase such Lender's costs
of making or maintaining any Loans, including without limitation LIBOR Loans or
any Commitment, or to reduce any amount receivable by such Lender hereunder in
respect of any of its LIBOR Loans or any Commitment, in each case only to the
extent that such additional amounts are not included in the LIBOR Base Rate or
Prime Rate applicable to such Loans, then the Borrower shall pay on demand to
such Lender, through the Agent, and from time to time as specified by such
Lender, such additional amounts as such Lender shall reasonably determine are
sufficient to compensate such Lender for such increased cost or reduced amount
receivable.
(b) If at any time after the date of this Agreement any Lender shall have
determined that the applicability of any law, rule, regulation or guideline
adopted pursuant to or arising out of the July 1988 report of the Basle
Committee on Lending Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards", or the
adoption or implementation of any Regulatory Change regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof (whether or not having the
force of law), has or will have the effect of reducing the rate of return on
such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of the existence of its obligations hereunder to a level
below that which such Lender or its holding company could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount reasonably deemed by
such Lender to be material, then from time to time following written notice by
such Lender to the Borrower as provided in paragraph (c) of this Section, within
fifteen (I 5) days after demand by such Lender, the Borrower shall pay to such
Lender, through the Agent, such additional amount or amounts as such Lender
shall reasonably
12
determine will compensate such Lender or such corporation, as the case may be,
for such reduction, provided that to the extent that any or all of the
Borrower's liability under this Section arises following the date of the
adoption of any such Regulatory Change (the "Effective Date"), such compensation
shall be payable only with respect to that portion of such liability arising
after notice of such Regulatory Change is given by such Lender to the Borrower
(unless such notice is given within sixty (60) days after the Effective Date, in
which case such compensation shall be payable in respect of all periods before
and after the Effective Date).
(c) If any Lender becomes entitled to claim any additional amounts pursuant
to this Section, it shall promptly notify the Borrower of the event by reason of
which it has become so entitled. A certificate setting forth in reasonable
detail the computation of any additional amounts payable pursuant to this
Section submitted by such Lender to the Borrower shall be delivered to the
Borrower and the other Lenders promptly after the initial incurrence of such
additional amounts and shall be conclusive in the absence of manifest error. No
failure on the part of any Lender to demand compensation under paragraph (a) or
(b) above on any one occasion shall constitute a waiver of its rights to demand
compensation on any other occasion. The protection of this Section shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of any law, regulation or other condition which shall give
rise to any demand by such Lender for compensation thereunder.
(d) Upon notice to the Borrower from any Lender as contemplated in
subparagraph (c) above, Borrower may seek to locate a replacement Lender
therefor and arrange for an assigmnent of the original Lender's interest in the
Loans and the Loan Documents as provided under Article XIII, provided that (i)
any such replacement Lender shall be reasonably acceptable to the Agent and (ii)
any such replacement of the original Lender shall not relieve the Borrower of
any accrued obligations to the original Lender under subparagraph (b) above or
otherwise under this Agreement and the other Loan Documents.
Section 1.09. Limitations on LIBOR Loans; Illegality.
(a) Anything herein to the contrary notwithstanding, if, on or prior to the
determination of an interest rate for any LIBOR Loans for any applicable
Interest Period, the Agent shall determine (which determination shall be
conclusive absent manifest error) that:
(i) by reason of any event affecting United States money markets or
the London interbank market, quotations of interest rates for the relevant
deposits are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for such Loans
under this Agreement; or
(ii) the rates of interest referred to in the definition of "LIBOR
Base Rate" in Article XI, on the basis of which the rate of interest on any
LIBOR Loans for such period is determined, do not accurately reflect the
cost to the Lenders of making or maintaining such LIBOR Loans for such
period;
then the Agent shall give the Borrower prompt notice thereof (and shall
thereafter give the Borrower prompt notice of the cessation, if any, of such
condition), and so long as such condition
13
remains in effect, the Lenders shall be under no obligation to make LIBOR Loans
or to convert Prime Rate Loans into LIBOR Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for any outstanding LIBOR
Loans, either prepay such LIBOR Loans in accordance with Sections 1.01, 1.02 and
1.06 or convert such Loans into Prime Rate Loans in accordance with Section
1.04.
(b) Notwithstanding any other provision herein, if for any reason a Lender
shall be unable to make or maintain LIBOR Loans as contemplated by this
Agreement, such Lender shall provide prompt written notice to the Borrower and
(i) such Lender's commitment hereunder to make LIBOR Loans, continue LIBOR Loans
as such and convert Prime Rate Loans to LIBOR Loans shall thereupon terminate
and (ii) such Lender's Loans then outstanding as LIBOR Loans, if any, shall be
converted automatically to Prime Rate 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 LIBOR Loan occurs on a
day which is not the last day of the then current Interest Period with respect
thereto, and if the reason for such Lender's inability to make or maintain LIBOR
Loans as contemplated by this Agreement is a Regulatory Change, then the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 1.11.
(c) Upon notice to the Borrower from any Lender as contemplated in
subparagraph (b) above, Borrower may seek to locate a replacement Lender
therefor and arrange for an assignment of the original Lender's interest in the
Loans and the Loan Documents as provided under Article XIII, provided that (i)
any such replacement Lender shall be reasonably acceptable to the Agent and (ii)
any such replacement of the original Lender shall not relieve the Borrower of
any accrued obligations to the original Lender under subparagraph (b) above or
otherwise under this Agreement and the other Loan Documents.
Section 1.10. Taxes.
(a) All payments made by the Borrower under this Agreement and the 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 Govenmental Authority (all such
taxes, levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"); provided, however, that the term "Taxes" shall not
include net income taxes, franchise taxes (imposed in lieu of net income taxes)
and general intangibles taxes (such as those imposed by the State of Florida)
imposed on the Agent or any Lender, as the case may be, as a result of a present
or former connection or nexus between the jurisdiction of the government or
taxing authority imposing such tax (or any political subdivision or taxing
authority thereof or therein) and the Agent or such Lender other than that
arising solely from the Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement, the Notes or any of the Security Documents. If any Taxes are required
to be withheld from any amounts payable to the Agent or any Lender hereunder or
under the Notes, 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 Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts
14
specified in this Agreement and the Notes. Whenever any Taxes are payable by the
Borrower in respect of this Agreement or the Notes, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any 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. If, after any payment of Taxes by
the Borrower under this Section, any part of any Tax paid by the Agent or any
Lender is subsequently recovered by the Agent or such Lender, the Agent or such
Lender shall reimburse the Borrower to the extent of the amount so recovered. A
certificate of an officer of the Agent or such Lender setting forth the amount
of such recovery and the basis therefor shall, in the absence of manifest error,
be conclusive. The Agent and the Lenders shall use reasonable efforts to notify
the Borrower of their attempts, if any, to obtain abatements of any such Taxes
and the receipt by the Agent or the Lenders of any funds in connection
therewith. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
(b) Each Lender, if any, that is not incorporated under the laws of the
United States or a state thereof agrees that prior to the date any payment is
required to be made to it hereunder it will deliver to the Borrower and the
Agent (i) two duly completed copies of United States Internal Revenue Service
Form 1 00 1 or 4224 or successor applicable form, as the case may be, and (ii)
an Internal Revenue Service Form W-8 or W-9 or successor applicable form. Each
such Lender also agrees to deliver to the Borrower and the Agent two further
copies of the said Form I 00 I or 4224 and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, and such extensions or renewals thereof 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 (x)
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 (y) in the case of a Form W-8 or W-9, that it is
entitled to an exemption from United States backup withholding tax.
Section 1.11. Indemnification. The Borrower shall pay to the Agent, for the
account of each Lender, upon the request of such Lender delivered to the Agent
and thereafter delivered by the Agent to the Borrower, such amount or amounts as
shall compensate such Lender for any loss (including, in the case of LIBOR
Loans, loss of profit), cost or expense incurred by such Lender (as reasonably
determined by such Lender) as a result of.
(a) any payment or prepayment or conversion of any LIBOR Loan held by such
Lender on a date other than the last day of the Interest Period for such LIBOR
Loan (including
15
without limitation any such payment, prepayment or conversion required under
Section 1.04 or 1.06); or
(b) any failure by the Borrower to borrow, convert into or continue a LIBOR
Loan on the date for such borrowing specified in the relevant Request for
Advances or Interest Rate Option Notice under Section 1.04 or otherwise;
such compensation to include, without limitation, an amount equal to: (i) any
loss or expense suffered by such Lender during the period from the date of
receipt of such early payment or prepayment or the date of such conversion or
failure to borrow, convert or continue to the last day of such Interest Period,
if the rate of interest obtainable by such Lender upon the redeployment of an
amount of funds equal to the LIBOR Loans so paid, prepaid or converted or as to
which such failure to borrow, convert or continue applies is less than the rate
of interest applicable to such LIBOR Loans for such Interest Period and (ii) any
loss or expense suffered by such Lender in liquidating LIBOR deposits prior to
maturity which such Lender is unable to redeploy and which correspond to the
LIBOR Loans so paid, prepaid or converted or as to which such failure to borrow,
convert or continue applies. The determination by each such Lender of the amount
of any such loss or expense, when set forth in a written notice delivered to the
Agent (and thereafter delivered by the Agent to the Borrower), containing such
Lender's calculation thereof in reasonable detail, shall be presumed correct in
the absence of manifest error.
Section 1.12. Payments Under the Notes. All payments and prepayments made
by the Borrower of principal of, and interest on, the Notes and other sums and
charges payable under this Agreement, including without limitation the
Commitment Fee and any payments under Sections 1.08, 1.10 and 1.11, shall be
made in immediately available funds to the Agent (as specified in Section 14.03)
for the accounts of the Lenders as provided in Section 1.14 and otherwise herein
or in the Fee Letter, not later than 2:00 P.M. (New York Time), on the date on
which such payment shall become due. The failure by the Borrower to make any
such payment by such hour shall not constitute a Default hereunder so long as
payment is received later that day, provided that any such payment made after
2:00 P.M. (New York Time), on such due date shall be deemed to have been made on
the next Business Day for the purpose of calculating interest on amounts
outstanding on the Notes. The Borrower shall, at the time of making each payment
under this Agreement or the Notes, specify to the Agent the Notes or amounts
payable by the Borrower hereunder to which such payment is to be applied (and in
the event that it fails to so specify, or if an Event of Default has occurred
and is continuing, the Agent may distribute such payments in such manner as the
Required Lenders may direct or, absent such direction, as it determines to be
appropriate, subject to the provisions of Section 1.14). Except as otherwise
provided in the definition of "Interest Period" with respect to LIBOR Loans, if
any payment hereunder or under the Notes shall be due and payable on a day which
is not a Business Day, such payment shall be deemed due on the next following
Business Day and interest shall be payable at the applicable rate specified
herein through such extension period. The Agent, or any Lender for whose account
any such payment is made, may (but shall not be obligated to) debit the amount
of any such payment which is not made by such time to any deposit account of the
Borrower with the Agent or such Lender, as the case may be with prompt advice
thereof. Each payment received by the Agent under this Agreement or any Note for
the account of a Lender
16
shall be paid promptly to such Lender, in immediately available funds, for the
account of such Lender for the Note in respect to which such payment is made.
Section 1.13. Set-Off, Etc. The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, bankers' lien or counterclaim a
Lender may otherwise have and in addition to the debit right afforded in Section
1.12, each Lender (and each subsequent holder of any Note) shall be entitled, at
its option, to offset balances held by it, or by any of its respective branches
or agencies, for the account of the Borrower at any of its offices, in Dollars
or in any other currency, against any principal of or interest on the Notes held
by such Lender (or subsequent noteholder) or other fees or charges owed to such
Lender (or subsequent noteholder) hereunder which are not paid when due
(regardless of whether such balances are then due to the Borrower and regardless
of whether the Lenders are otherwise fully secured), in which case it shall
promptly notify the Borrower and the Agent thereof, provided that such Lender's
(or subsequent noteholder's) failure to give such notice shall not affect the
validity thereof and (as security for any Indebtedness hereunder) the Borrower
hereby grants to the Agent and the Lenders a continuing security interest in any
and all balances, credit, deposits, accounts or moneys of the Borrower
maintained with the Agent and any Lender now or hereafter. If a Lender (or
subsequent noteholder) shall obtain payment of any principal, interest or other
amounts payable under this Agreement through the exercise of any right of
set-off, bankees lien or counterclaim or otherwise or pursuant to the debit
right provided in Section 1.12, it shall promptly purchase from the other
Lenders participations in (or, if and to the extent specified by such Lender,
direct interests in) the Note(s) held by the other Lenders in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such payment (net of any
expenses which may be incurred by such Lender in obtaining or preserving such
benefit) pro rata based upon the unpaid principal amounts of and interest on the
Note(s) held by each of them. To such end, the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. The Borrower agrees
that any Lender or any other Person which becomes an assignee pursuant to
Article XIII(B) hereof with respect to the Loans (each being hereinafter
referred to as an "Assignee") may exercise all rights of setoff, bankers' lien,
counterclaim or similar rights with respect to such assignment. Nothing
contained herein shall be deemed to require any Assignee to exercise any such
right or shall affect the right of any Assignee to exercise, and retain the
benefits of exercising, any such right with respect to any indebtedness or
obligation of the Borrower, other than the Borrowees indebtedness and
obligations under this Agreement.
Section 1.14. Pro Rata Treatment; Sharing.
(a) Except to the extent otherwise provided herein and in the Fee Letter or
as otherwise agreed by the Lenders: (i) each borrowing from the Lenders under
the Commitments shall be made from the Lenders and each payment of the
Commitment Fee under Section 1.07 shall be made to the Lenders pro rata
according to the amounts of their respective unused Commitments; (ii) the
principal amount of LIBOR Loans made by each Lender shall be determined on a
pro rata basis in accordance with its respective Commitment (when making.
Advances) or the outstanding principal amounts of the Loans owed to such Lender
(in the case of conversions to or continuations of Loans as LIBOR Loans); (iii)
each payment and prepayment
17
of principal of the Notes shall be made to the Lenders pro rata in accordance
with the respective unpaid principal amounts of the respective Notes held by the
Lenders; (iv) each payment of interest on the Notes shall be made for the
accounts of the Lenders and each payment of any other sums and charges payable
under this Agreement (except for the Agency Fee and the Funding fee, which are
payable in accordance with the Fee Letter) shall be made to the Lenders pro rata
in accordance with the respective unpaid principal amounts of, and interest on,
the Loans made by each of them; (v) each payment under Section 1.08, 1.10 or
1.11 shall be made to each Lender in the amount required to be paid to such
Lender to adequately indemnify or compensate such Lender for losses suffered or
costs incurred by such Lender as provided in such Section; and (vi) each
distribution of cash, property, securities or other value received by any
Lender, directly or indirectly, in respect of the Borrower's Indebtedness
hereunder, whether pursuant to any attachment, garnishment, execution or other
proceedings for the collection thereof or pursuant to any bankruptcy,
reorganization, liquidation or other similar proceeding, after payment of
collection and other expenses as provided herein and in the Security Documents,
shall be apportioned among the Lenders pro rata in accordance with the
respective unpaid principal amounts of and interest on the Notes held by each of
them.
(b) Notwithstanding the foregoing, if any Lender ("Recovering Party") shall
receive any such distribution (a "Recovery") in respect thereof, such Recovering
Party shall pay to the Agent for distribution to the Lenders as set forth herein
their respective pro rata shares of such Recovery, based on the Lenders' pro
rata shares of all Loans outstanding at such time, unless the Recovering Party
is legally required to return any Recovery, in which case each party receiving a
portion of such Recovery shall return to the Recovering Party its @@o rata share
of the sum required to be returned without interest. For purposes of this
Agreement, calculations of the amount of the pro rata share of each Lender shall
be rounded to the nearest whole dollar.
(c) The Borrower acknowledges and agrees that, if any Recovering Party
shall be obligated to pay to the other Lenders a portion of any Recovery
pursuant to Section 1.14(b) and shall make such recovery payment, the Borrower
shall be deemed to have satisfied its obligations in respect of Indebtedness
held by such Recovering Party only to the extent of the Recovery actually
retained by such Recovering Party after giving effect to the pro rata payments
by such Recovering Party to the other Lenders. The obligations of the Borrower
in respect of Indebtedness held by each other Lender shall be deemed to have
been satisfied to the extent of the amount of the Recovery distributed to each
such other Lender by the Recovering Party.
Section 1.15. Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified in writing by a Lender or the Borrower prior to the date on
which such Lender or the Borrower is scheduled to make payment to the Agent of
(in the case of a Lender) the proceeds of a Loan to be made by it hereunder or
(in the case of the Borrower) a payment to the Agent for the account of any or
all of the Lenders hereunder (such payment being herein referred to as a
"Required Payment"), which notice shall be effective upon actual receipt, that
it does not intend to make such Required Payment to the Agent, the Agent may
(but shall not be required to) assume that the Required Payment has been made
and may (but shall not be required to), in reliance upon such assumption, make
the amount thereof available to the intended recipient(s) on such date and, if
such Lender or the Borrower (as the case may be) has not in fact made the
Required Payment to the Agent, the recipient(s) of such payment shall, on
demand, or with
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respect to payment received by the Borrower, within three (3) Business Days
after such receipt repay to the Agent for the Agents own account the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to (a)
the Federal Funds Rate for such day, with respect to interest paid by such
Lender, or (b) the applicable rate provided under Section 1.03, with respect to
interest paid by the Borrower. Nothing herein shall relieve any Lender or
Borrower from liability for failure to make the Required Payment.
Section 1.16. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Borrower of the loss, theft, destruction or mutilation of
any Note and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory to the Borrower provided,
however, that if the holder of such Note is the original holder of such Note or
a financial institution with net capital, capital surplus and undivided profits
in excess of $500,000,000 its own agreement of indemnity shall be deemed to be
satisfactory), or in the case of any such mutilation, upon the surrender of such
Note for cancellation, the Borrower will execute and deliver, in lieu of such
lost, stolen, destroyed, or mutilated Note, a new Note of like tenor.
II. SECURITY; SUBORDINATION; USE OF PROCEEDS
Section 2.01. Security for the Obligations; Subordination; Etc.
(a) Collateral. Except as limited in Schedule 2.01 attached hereto, the
Borrower's obligations hereunder, under the Notes and in respect of any Rate
Hedging Obligations entered into with any of the Lenders or any Affiliates of
any of the Lenders shall be secured at all times by:
(i) the unconditional guaranty of each of the Borrower's Subsidiaries
other than Acme Finance, including without limitation each of the Operating
Companies, the License Companies and the Holding Companies;
(ii) a first priority perfected security interest in and lien upon all
presently owned and hereafter acquired tangible and intangible personal
property and fixtures of each of the Companies, except Acme Finance,
including without limitation the Acme Missouri Note Documents, subject only
to (A) any prior Liens expressly permitted under this Agreement and (B) the
exclusion of any FCC License, except to the extent (if any) that such a
security interest is permitted or not prohibited by the Communication Act
of 1934, as amended, and the rules, regulations and policies of the FCC
(but including, to the maximum extent permitted by law, all rights incident
or appurtenant to any such FCC License, including without limitation the
right to receive all proceeds derived or arising from or in connection with
the sale, assignment or transfer thereof);
(iii) first mortgages on all presently owned and hereafter acquired
real estate owned by each of the Companies, subject only to any prior Liens
expressly permitted
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under this Agreement, together with mortgagee's title insurance policies
reasonably acceptable to the Lenders;
(iv) first priority perfected collateral assignments of or leasehold
mortgages on all real estate leases in which any of the Companies now has or may
in the future have an interest and such third party consents, lien waivers,
non-disturbance agreements and estoppel certificates as the Agent shall
reasonably require, together with mortgagee's title insurance policies
acceptable to the Agent (except to the extent that the Borrower, after the use
of commercially reasonable efforts, is unable to obtain any of the foregoing and
the result thereof could not reasonably be expected to have a Material Adverse
Effect);
(v) a first priority perfected collateral assignment and/or pledge of all
of the issued and outstanding stock, partnership, membership or other ownership
interests in each of the Borrower's Subsidiaries and all warrants, options and
other rights to purchase such ownership interests;
(vi) without limiting the generality of Section 2.01(a)(ii), a first
priority perfected assignment of such of the related Acquisition Documents as
the Agent shall require, together with the written consents thereto of the
related Seller(s) and its or their Affiliates, as necessary (except to the
extent that the Borrower, after the use of commercially reasonable efforts, is
unable to obtain any of the foregoing and the result thereof could not
reasonably be expected to have a Material Adverse Effect); and
(vii) without limiting the generality of Section 2.01(a)(ii), first
priority perfected collateral assignments of all such construction contracts,
management agreements, programming agreements, network affiliation agreements,
and other licenses, permits and authorizations (except for licenses and permits
issued by the FCC to the extent it is unlawful to grant a security interest in
such licenses and permits) and other agreements as the Agent shall reasonably
deem necessary to protect the interests of the Lenders, together with such third
party consents, lien waivers and estoppel certificates as the Agent shall
reasonably require (except to the extent that the Borrower, after the use of
commercially reasonable efforts, is unable to obtain any of the foregoing and
the result thereof could not reasonably be expected to have a Material Adverse
Effect).
(b) Subordination. Without limiting the prohibition thereon set forth in
Section 7.01, all existing and hereafter arising indebtedness of the Borrower
and its Subsidiaries to the Parent Companies or any of them shall be
subordinated to any Indebtedness of the Companies to the Agent and the Lenders
pursuant to subordination agreements satisfactory in form and substance to the
Required Lenders and to the Agents counsel (collectively, the "Parent
Subordination Agreements").
(c) Security Documents. All agreements and instruments described or
contemplated in this Section 2.01, together with any and all other agreements
and instruments heretofore or hereafter securing the Notes and the other
Obligations or otherwise executed in connection with this Agreement, are
sometimes hereinafter referred to collectively as the "Security Documents" and
each individually as a "Security Document". The Borrower agrees to execute and
deliver
20
all and all Security Documents, in form and substance satisfactory to the Agent,
and to take any and all such action as the Lenders may reasonably request from
time to time in order to cause the Agent and the Lenders to be secured at all
times as described in this Section.
Section 2.02. Use of Proceeds. The proceeds of the Advances shall be
applied (a) to finance Capital Expenditures and Permitted Acquisitions
permitted under this Agreement and (b) for working capital purposes of the
Borrower and the other Companies, including Transaction Costs.
III. CONDITIONS OF MAKING THE LOANS
Section 3.01. Conditions to Amendment and Restatement. The obligations of
the Lenders to enter into this Agreement, thereby increasing the Commitments and
otherwise amending the Original Agreement, on the date hereof and to make the
first Advances thereafter are subject to the following conditions:
(a) Representations and Warranties. The representations and warranties of
the Companies and the Parent Companies set forth in this Agreement and in the
other Loan Documents shall be true and correct in all material respects on and
as of the date hereof and the Borrowers shall have performed in all material
respect all obligations which were to have been performed by it hereunder prior
to the date hereof.
(b) Loan Documents and Organizational Documents. The Borrower shall have
executed and/or delivered to the Agent (or shall have caused to be executed and
delivered to the Agent by the appropriate Persons), the following:
(i) The Notes;
(ii) All of the Security Documents, including without limitation all
Uniform Commercial Code Financing Statements and Termination Statements and
all mortgages, deeds of trusts and amendments thereto, lessor consents and
waivers and related title insurance policies required by the Agent or its
counsel in connection with the Borrower's compliance with the provisions of
Section 2.01 provided that the deliveries required under Section
2.01(a)(iv) may be deferred until the date of the first Loans under Section
1.01);
(iii) Certified copies of the resolutions of the Board of Directors or
Board of Advisors of each Company, or of each Company's stockholders,
partners, members, managers, officers and/or corporate general partner, as
the case may be, authorizing the execution and delivery of the Loan
Documents to which it is a party;
(iv) A copy of (A) the Certificate or Articles of Incorporation of
each corporate Company and each corporate general partner of a partnership
Company, with any amendments thereto, certified by the appropriate
Secretary of State and by the Secretary or an Assistant Secretary of such
Company or general partner, (B) the Articles of Organization or Certificate
of Formation of each Company which is a limited liability
21
company, certified by the appropriate Secretary of State and by the Manager
of each Company and (C) the Certificate of Limited Partnership of each
Company which is a limited partnership certified by the appropriate
Secretary of State and the Secretary of the corporate general partner of
such Company;
(v) A copy of the By-Laws of each corporate Company, with any
amendments thereto, certified by such Company's Secretary;
(vi) A copy of the operating agreement of each Company which is a
limited liability company, with any amendments thereto, certified by an
appropriate, duly authorized officer of such Company, each of which
operating agreements shall be reasonably satisfactory to the Agent and
shall provide, among other matters, for appropriate procedures to ensure
the full enforceability of the collateral assignment and pledge of
membership interests to the Agent contemplated by the applicable Security
Documents;
(vii) A copy of the partnership agreement of each Company which is a
partnership, with any amendments thereto, certified by the Secretary of the
corporate general partner;
(viii) For each Company, certificates of legal existence and good
standing (both as to corporate law, if applicable, and, if available, tax
matters) issued as of a reasonably recent date by such Company's state of
organization or formation and any other state in which such Company is
authorized or qualified to transact business;
(ix) To the extent requested by the Agent, true and complete copies of
all Licenses, all other material govermental licenses, franchises and
permits, all material third party consents and all other material leases,
contracts, agreements, instruments and other documents specified in
Schedules 4.04, 4.07, 4.11, 4.12, 4.18 and 4.19;
(x) Such Uniform Commercial Code, Federal tax lien and judgment
searches with respect to the Companies, any Seller transferring assets to a
Company under the related Acquisition Agreement and any other third parties
as the Agent shall require, the results thereof to be satisfactory to the
Agent;
(xi) True and complete copies of the Acquisition Documents, the
Indenture and the Acme Intermediate Indenture, which shall be reasonably
satisfactory to the Agent;
(xii) The Opening Balance Sheet;
(xiii) The Environmental Site Assessments referred to in Section 4.20
and Schedule 4.20;
(xiv) Certificates of insurance evidencing the insurance coverage and
policy provisions required in this Agreement; and
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(xv) Such other supporting documents and certificates as the Agent or
the Lenders may reasonably request from time to time.
(c) The Acme Holdings Equity Contribution. Acme Holdings shall have
consummated the Acme Holdings Equity Financing and shall have made the Acme
Holdings Equity Contribution to the Borrower, through Acme Intermediate, from
the net proceeds thereof and in an amount not less than $42,900,000, and the
Agent shall have received satisfactory evidence thereof.
(d) The Acme Intermediate Equity Contribution. Acme Intermediate and Acme
Finance shall have consummated the Acme Intermediate Offering substantially in
accordance with the Acme Intermediate Offering Memorandum and, from the net
proceeds thereof, shall have made the Acme Intermediate Equity Contribution to
the Borrower in an amount not less than $38,200,000, and the Agent shall have
received satisfactory evidence thereof.
(e) The Offering. The Borrower and Acme Finance shall have consummated the
Offering substantially in accordance with the Offering Memorandum and the
Indenture and the Agent shall have received satisfactory evidence thereof.
(f) Use of Proceeds. (a) The Borrower shall have applied approximately
$146,000,000 of the aggregate proceeds of the Equity Contributions and the
Offering to make an intercompany loan to Acme Missouri in the amount of at least
$132,000,000 and to make capital contributions to Acme Missouri in the amount of
at least $14,000,000 and (b) Acme Missouri shall have used the proceeds of such
loan and capital contributions to fund the KPLR Escrow as contemplated by
Section 1.1 of the KPLR Escrow Agreement.
(g) FCC Filings. The Agent shall have received a true and complete
date-stamped copy of the KPLR Transfer Application, as filed with the FCC on or
before October 1, 1997.
(h) Seller Consents. The Agent shall have received the written consent of
each of the Sellers and the Affiliates thereof (including without limitation the
KPLR Sellers and the KPLR Licensees) necessary in connection with the collateral
assignments required in Section 2.01(a)(vi).
(i) Agrreement of Parent Companies. Acme Holdings, for itself and on behalf
of each of the other Parent Companies, shall have entered into the Affiliate
Agreement.
(j) Xxxxxxx Consulting Agreement. Acme Holdings and Xxxxx Xxxxxxx shall
have entered into the Xxxxxxx Consulting Agreement, Acme Holdings shall have
assigned all of its rights and obligations thereunder to the Borrower, with Xx.
Xxxxxxx'x consent, and the same shall be in full force and effect.
(k) Officer's Certificates as to Compliance, Documents, Etc. The Borrower
shall have provided to the Agent a compliance certificate, substantially in the
form of Schedule 3.01(k) hereto or such other form as shall be satisfactory to
the Agent, duly executed
23
on behalf of the Borrower by its chief executive officer or chief financial
officer, certifying as to satisfaction by the Borrower of the conditions to
lending set forth in this Section 3.01 and in Sections 3.02 and 3.03, as
applicable, and, specifically, as to certain matters specified therein.
(1) Schedule of Cost Reductions. If, for any period ending on or after the
date hereof, the Borrower wishes to effect pro forma adjustments of EBITDA, as
provided in the definition of "Adjusted EBITDX", arising from cost and expense
reductions relating to any of the Stations acquired through and including the
date hereof (including KPLR-TV), the Borrower shall have delivered to the Agent
(in sufficient copies for all of the Lenders), with respect to each such
completed Acquisition, a detailed schedule of such cost and expense reductions,
which shall be subject to the consent of the Required Lenders.
(m) Company Counsel Opinions. The Agent shall have received:
(i) the favorable written opinions of Xxxxxxx, Procter & Xxxx, LLP and
Dickstein, Shapiro, Xxxxx & Xxxxxxxx, LLP, counsel to the Companies, each
dated as of the date hereof, addressed to the Agent and the Lenders and
reasonably satisfactory to the Agent in scope and substance;
(ii) the favorable written opinion of Dickstein, Shapiro, Xxxxx &
Xxxxxxxx, LLP, special communications counsel to the Companies, dated as of
the date hereof, addressed to the Agent and the Lenders and reasonably
satisfactory to the Lenders in scope and substance; and
(iii) the favorable written opinion of special local counsel to the
Companies in the States of Oregon and Tennessee dated as of the date
hereof, addressed to the Agent and the Lenders and reasonably satisfactory
to the Lenders in scope and substance (provided that the delivery of these
local counsel opinions may be deferred until the date of the first Loans
under Section 1.01).
(n) Repayment of Existing Indebtedness. As of the date hereof, the Agent
shall have received evidence that (i) the principal of and interest on, and all
other amounts owing in respect of, Indebtedness, if any, which is to be repaid
on the Closing shall have been (or shall simultaneously be) paid in full in
cash, (ii) any commitments to extend credit under the agreements or instruments
relating to such Indebtedness have been terminated or canceled and (iii) all
guaranties in respect of, and liens securing, any such Indebtedness have been
released (or arrangements for such releases made to the reasonable satisfaction
of the Agent), which requirement shall include receipt by the Agent of all such
executed pay-off letters, Uniform Commercial Code termination statements,
mortgage releases and other instruments as the Agent shall have requested to
release and terminate of record any such liens.
24
(o) No Material Adverse Change. As of the date hereof, and since August 15,
1997, no event or circumstance shall have occurred which could have a Material
Adverse Effect.
(p) Legal and Other Fees. As of the date hereof, all fees owed to the
Agent and the Lenders under the Fee Letter and all legal fees and expenses of
counsel to the Agent incurred through such date (including fees and expenses
incurred in connection with the preparation of the Original Agreements and all
related Loan Documents) shall have been paid in full.
(q) Review by Agent's Counsel. All legal matters incident to the
transactions hereby contemplated shall be reasonably satisfactory to counsel for
the Agent.
Section 3.02. Acquisition Loans. Without in any way limiting the discretion
of the Required Lenders to approve or withhold approval (to the extent provided
in the definition of Permitted Acquisitions) of any Acquisition after the date
hereof, or to impose additional reasonable conditions upon their consent to any
such acquisition, the obligations of the Lenders to make any Advances to finance
any Permitted Acquisition after the date hereof are subject to the following
conditions, except to the extent that the Required Lenders may waive such
conditions in writing:
(a) Acquisition Closings.
(i) The transactions contemplated by the applicable Acquisition
Agreement shall have been consummated (except for the payment of that
portion of the purchase price thereunder being paid with the proceeds of
Advances) substantially in accordance with the terms thereof and, in any
event, in a manner reasonably satisfactory to Agent, including without
limitation (A) the repayment in full in cash (simultaneously with, and from
the proceeds of, Advances, or otherwise) or other satisfactory disposition
of all Indebtedness of the applicable Sellers not being assumed by the
Borrower or an Operating Company, and the release of all related liens and
encumbrances on the properties transferred to the Companies under the
applicable Acquisition and (B) the valid assumption by the Borrower or such
Operating Company, or other satisfactory disposition, of all other
liabilities of the applicable Sellers in respect of the assets and
properties transferred under such Acquisition Agreement.
(ii) The Agent shall have received evidence of the receipt of all
material licenses, permits, approvals and consents, if any, required with
respect to such Acquisition and any other related transaction contemplated
by this Agreement (including without limitation the consents of the FCC to
the sale contemplated by such Acquisition Agreement and to the collateral
assignment of any related material agreements or licenses to the Agent, on
behalf of the Lenders), and any other material consents or filings of or
with applicable governmental authorities or other third parties.
(iii) The applicable Sellers shall have consented to the collateral
assignment to the Agent of the rights of the Borrower or the applicable
Operating Company under the Acquisition Agreement and any other agreements
executed thereunder, as required under Section 2.01(a)(vi).
25
(iv) The Agent shall have received copies of the legal opinions
delivered by the Seller(s) pursuant to the applicable Acquisition Agreement
in connection with the Acquisition, together with a letter from each Person
delivering an opinion (or authorization within the opinion) authorizing
reliance thereon by the Agent and the Lenders to the extent reasonably
obtainable.
(v) Any other conditions imposed by the Required Lenders in giving
their consent to such Permitted Acquisition shall have been satisfied.
(b) Due Diligence. The Agent and its counsel shall have completed their due
diligence review with respect to the proposed Acquisition, including a review of
all of material agreements and shall be reasonably satisfied with the results of
such review in all material respects.
(c) Officer's Certificates as to Compliance, Documents, Etc. The Borrower
shall have provided to the Agent a compliance certificate, substantially in the
form of Schedule 3.02(c) or such other form as shall be satisfactory to the
Agent, duly executed on behalf of the Borrower by its chief executive officer or
chief financial officer, certifying as to satisfaction by the Borrower of the
conditions to the consummation of the proposed Acquisition as a Permitted
Acquisition under Section 7.04 and the conditions to lending set forth in this
Section 3.02 and in Section 3.03.
(d) Compliance Certificate. If requested by the Agent, the Borrower shall
have executed and delivered (or caused to be executed and delivered by the
appropriate Operating Companies) to the Agent a certificate of representations,
warranties and compliance satisfactory in form and substance to the Agent,
together with updated versions of Schedules to this Agreement and of the
applicable Officer's Certificates delivered pursuant to the Security and Pledge
Agreements, and otherwise adjusting the Companies' representations and
warranties contained herein and therein. To the extent appropriate and related
to such Acquisition and verified by the Agent as such in writing, such
certificate, shall be deemed an amendment of this Agreement and such Security
Documents and shall be incorporated by reference herein and therein.
(e) Other Deliveries. The Companies shall have executed and/or delivered to
the Agent (or shall have caused to be executed and delivered to the Agent by the
appropriate Subsidiary or other person(s), the following:
(i) With respect to the assets to be acquired pursuant to such
Acquisition, and the applicable Seller(s), all Uniform Commercial Code
Financing Statements and Termination Statements and all security
agreements, security and pledge agreements, securities pledge agreements,
mortgages, deeds of trusts and amendments thereto and related title
insurance policies and all other Security Documents necessary and required
by the Agent or its counsel in connection with the Borrower's compliance
with the provisions of Section 2.01;
26
(ii) Certified copies of the resolutions of the Board of Directors or
Board of Advisors or of the stockholders, partners, members, managers,
officers or corporate general partner of each applicable Company, as the
case may be, authorizing such Acquisition, which resolutions shall not be
required, unless requested by the Agent, if the opinion of general counsel
required under Section 3.02(f) is provided;
(iii) Such certificates of public officials and copies of material
consents, agreements and other documents and such other supporting
documents and information as the Agent shall reasonably request;
(iv) Phase I Environmental Site Assessments with respect to all owned
and leased real properties to be acquired in connection with the proposed
Acquisition and designated by the Required Lenders, which shall be
reasonably satisfactory in all material respects to the Required Lenders;
(v) Such Uniform Commercial Code, Federal tax lien and judgment
searches as the Agent shall reasonably require, the results thereof to
disclose no liens except liens permitted by this Agreement and liens to be
discharged upon completion of the Acquisition;
(vi) A combined balance sheet for the Companies, pro forma for the
Acquisition and the proposed Advances;
(vii) In connection with any Acquisition involving properties in a new
jurisdiction, or the purchase or formation of a new Subsidiary, or if
required by the Agent, updated certificates of insurance evidencing the
additional insurance coverage and policy provisions required in this
Agreement;
(viii) To the extent applicable, one or more assignment agreements,
effecting the assignment to the appropriate Subsidiary by Acme Holdings or
such other applicable Parent Company, of all of its rights, title and
interest in and to the related Acquisition Documents, together with any
necessary Sellers' consents, which shall be reasonably satisfactory in all
material respects to the Agent;
(ix) In connection with the consummation of the transactions
contemplated by the KPLR Acquisition Documents (other than the KPLR Escrow
Agreement and the KPLR Time Brokerage Agreement), documentation reasonably
satisfactory to the Agent evidencing (i) the renaming of Koplar
Communications, Inc. and Koplar Communications Television, LLC to Acme
Television of Missouri, Inc. and Acme Television Licenses of Missouri,
L.L.C, respectively, as contemplated; and
(x) Such other supporting documents and certificates as the Agent or
the Lenders may reasonably request.
(f) General and Local Counsel Opinions.
27
(i) In connection with an Acquisition involving the purchase or
formation of a new Subsidiary and/or the execution of additional Security
Documents or any other Loan Document, or otherwise, if reasonably required
by the Agent, the Agent shall have received the favorable written opinions
of (A) general counsel or regularly employed outside counsel to the
Companies and (B) special FCC counsel to the Companies, in each case dated
the date of such Loans, addressed to the Agent and the Lenders and
substantially in the forms attached as Schedules 3.02(f)(i) and (ii),
respectively.
(ii) Only if reasonably requested in connection with the recording of
any mortgages or similar instruments or any material issues of state law
raised in connection with such Loans or the related Permitted Acquisition,
the Agent shall have received the favorable opinion of local counsel to the
Companies, dated the date of such Loans, addressed to the Agent and the
Lenders and substantially in the form attached as Schedule 3.02(f)(:iii).
(g) Legal Fees. All reasonable legal fees and expenses of counsel to the
Agent incurred through the date of such Loans shall have been paid in full.
(h) Review by Agent's Counsel. All legal matters incident to the
transactions hereby contemplated shall be reasonably satisfactory to counsel for
the Agent.
Section 3.03. All Loans. The obligations of the Lenders to make any Loans
(including the first Advances hereunder and all Advances in respect of Permitted
Acquisitions) are subject to the following conditions:
(a) All representations and warranties of the Companies and the Parent
Companies set forth in this Agreement and in the other Loan Documents shall be
true and correct in all material respects on and as of the Borrowing Date of
such Loans (except to the extent they expressly relate to an earlier specified
date or are affected by transactions or events occurring after the date hereof
and permitted or not prohibited hereunder). Each telephonic or written request
for such Loans shall constitute a representation to such effect as of the date
of such request and as of the date of such borrowing
(b) After giving effect to such Loans (both as of the proposed Borrowing
Date thereof and, on a pro forma basis, the last day of the most recent fiscal
quarter for which financial statements have been delivered to the Lenders under
Section 6.05), no Default shall have occurred and be continuing. Each telephonic
or written request for such Loans shall constitute a representation to such
effect as of the date of such request and as of the date of such borrowing.
(c) The Agent shall have received a properly completed Request for
Advances, together with all such financial and other information as the Agent
shall reasonably require to substantiate the current and pro forma
certifications of no Default contained therein.
(d) The Agent shall have received such other supporting documents and
certificates as the Agent and the Required Lenders may reasonably request.
28
Section 3.04. Lender Approvals. For purposes of determining compliance with
the conditions precedent referred to in Sections 3.01, 3.02 and 3.03, on the
date of the first Advances hereunder, each of the Lenders shall be deemed to
have consented to, approved or accepted or be satisfied with each document or
other matter which is the subject of such Lender's consideration under any of
the provisions of such Sections, unless an officer of the Agent responsible for
the transactions contemplated by the Loan Documents shall have received written
notice from such Lender prior to the first Advances hereunder specifying its
objection thereto and such Lender shall have failed to make available to the
Agent such Lender's ratable share of the first Advances.
IV. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Agent and to the Lenders (which representations and warranties
shall give effect to the consummation of all of the transactions referred to in
Section 3.01 and shall survive the delivery of the Notes and the making of the
Loans) that:
Section 4.01. Financial Statements. The Borrower has heretofore furnished
to the Lenders:
(a) the audited and unaudited balance sheets and related statements of
operations, members' equity and cash flow of the Borrower and its Subsidiaries
listed on Schedule 4.01(a) hereto (the "Financial Statements"); and
(b) the June 30, 1997, balance sheet of the Companies showing their pro
forma financial condition after the consummation of any and all transactions
contemplated to have occurred as of the date hereof, as if they had occurred on
August 31, 1997, attached as Schedule 4.01(b) (as updated pursuant to Section
3.01(b), the "Opening Balance Sheet").
The Financial Statements have been prepared in accordance with GAAP. Since
August 15, 1997, except for the Offering, the Tennessee Acquisition and the
transactions contemplated by the KPLR Acquisition Documents, there has been no
material adverse change in the assets, properties, business or condition
(financial or otherwise) of any of the Companies and no dividends or
distributions have been declared or paid by any of the Companies. None of the
Companies has any contingent obligations, liabilities for taxes or unusual
forward or long-term commitments except as specified in such Financial
Statements and except for the Offering and the transactions contemplated by the
KPLR Acquisition Documents. The Opening Balance Sheet fairly represents the pro
forma financial condition of the Companies as of its date. All financial
projections submitted to the Lenders by the Borrower at the time delivered
(including all projections set forth in the Budget) are believed by the Borrower
to be reasonable in light of all information presently known by the Borrower.
Section 4.02. Organization, Oualification, Etc. Each of the Companies (a)
is a corporation, limited partnership or limited liability company duly
organized or formed, as the case may be, validly existing and in good standing
under the laws of its state of organization or formation, all as specified in
Schedule 4.02, (b) has the power and authority to own its properties and to
carry on its business as now being conducted and as presently contemplated, (c)
has the power and authority to execute and deliver, and perform its respective
obligations under, this Agreement, the Notes and the Security Documents and all
other Loan Documents contemplated
29
hereby and (d) is duly qualified to transact business in the jurisdictions
specified in such Schedule 4.02 and in each other jurisdiction where the nature
of its activities requires such qualification except where the failure to so
qualify will not have a Material Adverse Effect. As of the date of this
Agreement neither the Borrower nor any of the other Companies has any
Subsidiaries, except as described in Schedule 4.19.
Section 4.03. Authorization-, Compliance; Etc. The execution and delivery
of, and performance by the Companies of their respective obligations under,
this Agreement, the Notes, the Security Documents, the Acquisition Documents,
the Indenture, the Senior Notes and the other agreements and instruments
relating thereto (all of the foregoing being hereinafter referred to
collectively as the "Transaction Documents") have been duly authorized by all
requisite corporate, partnership and limited liability company action, as
applicable, and will not violate any provision of law, any order, judgment or
decree of any court or other agency of govenment, including without limitation
the FCC, the charter documents or by-laws of any corporate Company, the limited
partnership agreement or certificate of limited partnership of any partnership
Company, the articles of organization or operating agreement of any limited
liability company, or any indenture, agreement or other instrument (including
without limitation any other Transaction Document or any Parent Agreement) to
which any Company is a party, or by which any Company is bound, or be in
conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under, or except as may be permitted under this
Agreement, result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of any
Company pursuant to, any such indenture, agreement or instrument. Each of the
Transaction Documents constitutes the valid and binding obligation of each of
the Companies and their Affiliates party thereto, enforceable against such party
in accordance with its terms, subject, however to bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the rights and remedies of
creditors generally or the application of principles of equity, whether in any
action in law or proceeding in equity, and subject to the availability of the
remedy of specific performance or of any other equitable remedy or relief to
enforce any right under any such agreement.
Section 4.04. Governmental and Other Consents, Etc.
(a) Except for filings and recordings required under Section 2.01 and the
Security Documents and except as set forth in Schedule 4.04, none of the
Companies is required to obtain any consent, approval or authorization from, to
file any declaration or statement with or to give any notice to, any
Govermnental Authority (including without limitation the FCC), or any other
Person (including, without limitation, any notices required under the applicable
bulk sales law) in connection with or as a condition to the execution, delivery
or performance of any of the Transaction Documents. Except as set forth in such
Schedule 4.04, all consents, approvals and authorizations described in such
Schedule have been duly granted and are in full force and effect on the date
hereof and all filings described in such Schedule have been properly and timely
made.
(b) Notwithstanding the foregoing, (i) from time to time, the Companies may
be required to obtain certain authorizations of or to make certain filings with
the FCC and which are required in the ordinary course of business, (ii) copies
of certain documents, including without limitation certain Transaction
Documents, may be required to be filed with the FCC pursuant to 47 C.F.R.
73.3613, (iii) the FCC must be notified of the consummation of any assignments
or
30
transfers of control of FCC authorizations for any television broadcast stations
and ownership reports are required to be filed with the FCC after such
consummation pursuant to 47 C.F.R. 73.3615, and (iv) prior to the exercise of
certain rights or remedies under the Loan Documents by the Agent or the Lenders,
FCC consents and notifications with respect to such exercise may be required to
be timely obtained or made.
Section 4.05. Litigation. Except as specified in Schedule 4.05, there is no
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency (including without limitation the FCC), now
pending or, to the knowledge of the Borrower, threatened (nor is any basis
therefor known to the Borrower), (a) which questions the validity of any of the
Transaction Documents, or any action taken or to be taken pursuant hereto or
thereto, in a manner or to an extent which would have a Material Adverse Effect,
or (b) against or affecting any Company which, if adversely determined, either
in any case or in the aggregate, could have a Material Adverse Effect.
Section 4.06. Compliance with Laws and Agreements. Except as disclosed in
this Agreement, none of the Companies is a party to any agreement or instrument
or subject to any partnership, membership or other restriction which could have
a Material Adverse Effect. None of the Companies is in violation of any
provision of its corporate charter or by-laws, partnership agreement, articles
of organization or operating agreement, as the case may be, or of any material
indenture, agreement or instrument to which it is a party or by which it is
bound or, to the best of the Borrower's knowledge and belief, of any provision
of law, the violation of which could have a Material Adverse Effect, or any
order, judgment or decree of any court or other agency of government (including
without limitation, the FCC, the FAA and the Copyright Office).
Section 4.07. Licenses. Schedule 4.07 accurately and completely lists all
Licenses (identified by issuing authority, licensee, Station call letters and
expiration date) granted, issued or assigned to any Company as of the date
hereof. Each FCC License specified in such Schedule is held by a License
Company. Except as set forth in Schedule 4.07, the Companies possess all such
Licenses and all copyrights, licenses, trademarks, service marks, trad6 names
and other contract rights, including agreements with public utilities, use,
access or rental agreements, utility easements, network affiliation agreements,
film rental agreements and talent employment agreements that are necessary for
the operation of the Stations, except to the extent the absence thereof could
not reasonably be expected to have a Material Adverse Effect. Each of such
Licenses, copyrights, licenses, patents, trademarks, service marks, trade names
and other rights and agreements is in full force and effect and no material
default by any Company has occurred and is continuing thereunder. As of the date
hereof, except as limited by the provisions of the Communications Act of 1934,
as amended, and the FCC's published rules and regulations and as otherwise
specified on the face of any FCC License, none of the FCC Licenses is subject to
any restriction or condition that would limit in any material respect the
operation of the business as it is now conducted. Except as specified in
Schedule 4.07, there is not, as of the date hereof, pending, or the knowledge of
the Borrower threatened, any action by or before the FCC to revoke, cancel,
rescind or modify (including a reduction in coverage area) any of the FCC
Licenses (other than proceedings to amend FCC rules of general applicability) or
refuse to renew the FCC Licenses, and there is not now issued or outstanding,
pending, or to the knowledge of Borrower threatened, by or before the FCC, any
order to show cause, notice of violation, notice
31
of apparent liability, or notice of forfeiture or complaint against Borrower and
or any of its Subsidiaries with respect to any of the FCC Licenses. Except as
specified in Schedule 4.07, none of the FCC Licenses is the subject of a pending
license renewal application and the Borrower has no reason to believe that any
of the FCC Licenses will be revoked or will not be renewed in the ordinary
course.
Section 4.08. The Stations.
(a) Each of the Companies and the Stations is in compliance with all
applicable federal, state and local laws, published rules and regulations,
including without limitation, the Telecommunications Act of 1996, the
Communications Act of 1934, as amended, and the published rules and policies of
the FCC and all rules and laws governing equal employment opportunity, except to
the extent that the failure to so comply could not (either individually or in
the aggregate) reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing (except to the extent that the failure
to comply with any of the following could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect):
(i) the Companies have filed all material reports and other
submissions required to be filed with the FCC by the Companies or any of
them with respect to the Stations and their operations;
(ii) the operation of the Stations is in compliance in all material
respects with ANSI Standards C95.1-1982 to the extent required under
applicable rules and regulations;
(iii) all of the existing towers used in the operation of the Stations
are obstruction-marked and lighted to the extent required by, and in
accordance with, the published rules and regulations of the FAA and
appropriate notification to the FAA has been filed for each such tower
where required by the published rules and policies of the FCC;
(iv) the Stations are being operated in compliance with the applicable
Licenses; and
(v) the Stations are in material compliance with the provisions of the
Communications Decency Act of 1996 in effect, as well as any and all
published FCC rules and policies in effect to implement such Act.
(b) None of the Companies which own or manage the Stations is subject to
any FCC proceedings in respect of EEO violations and, to the Borrowees best
knowledge, no such proceedings are threatened.
(c) The assets of the Stations are adequate and sufficient for all of the
current operations of the Stations as contemplated as of the date hereof.
Section 4.09. Title to Properties; Condition of Properties.
32
(a) Except as set forth on Schedule 4.09, the Companies have good title to
all of their properties and assets (including all of the Stations) free and
clear of all mortgages, security interests, restrictions (other than FCC
restrictions on the transfer of equity interests or FCC authorizations), liens
and encumbrances of any kind, including without limitation liens or encumbrances
in respect of unpaid taxes (collectively, "Liens"), except liens and
encumbrances permitted under this Agreement. Such Schedule 4.09 also sets forth
a description of all real properties owned by the Companies.
(b) Schedule 4.09 accurately and completely lists, and sets forth a
description of, all agreements between any Company and any Person relating to
the location of (i) tower and transmitter sites used in the operation of the
Stations (the "Tower Site Leases") and (ii) offices, studios and other
facilities, and the same constitute the only Tower Site Leases and other leases
necessary in connection with the conduct by the Companies of their businesses as
presently conducted. Each of the Companies enjoys quiet possession under all
leases (including without limitation Tower Site Leases) to which it is a party
as lessee, and all of such leases are valid, subsisting and in full force and
effect. None of such leases contains any provision restricting the incurrence of
indebtedness by the lessee.
(c) Except as specified in such Schedule 4.09, none of the real property
owned by any Company is located within any federal, state or municipal flood
plain zone.
Section 4.10. Interests in Other Businesses. Except as reflected in
Schedule 4.10 or Schedule 4.19 hereto, none of the Companies hold or own any of
the issued and outstanding capital stock, partnership interests, membership
interests or other equity interests, or any rights to acquire the same, of any
corporation, partnership, limited liability company, firm or other entity other
than as specified or permitted in this Agreement.
Section 4.11. Solvency.
(a) The aggregate amount of the full salable value of the assets and
properties of Companies, taken as a whole, exceeds the amount that will be
required to be paid on or in respect of the Companies' existing debts and other
liabilities (including contingent liabilities) as they mature.
(b) No Operating Company's assets and properties constitute unreasonably
small capital for such Company to carry out its business as now conducted and as
proposed to be conducted, including such Company's capital needs, taking into
the account the particular capital requirements of such Company's business and
the projected capital requirements and capital availability thereof.
(c) The Companies do not intend to, nor will the Companies, incur debts
beyond their ability to pay such debts as they mature, taking into account the
timing and amounts of cash reasonably anticipated to be received by each Company
and the amounts of cash reasonably anticipated to be payable on or in respect of
each Company's obligations. The Companies' aggregate cash flow, after taking
into account all anticipated sources and uses of cash, will at all
33
times be sufficient to pay all such amounts on or in respect of their
indebtedness when such amounts are required to be paid.
(d) The Borrower believes that no reasonably anticipated final judgment in
a pending action or, to its knowledge, any threatened actions for money damages
will be rendered at a time when, or in an amount such that, any Company will be
unable to satisfy such judgments promptly in accordance with their terms (taking
into account the maximum reasonable amount thereof and the earliest reasonable
time at which such judgments might be rendered). The Borrower believes that the
cash available to each Company, after taking into account all other anticipated
uses of cash (including the payment of all such Company's indebtedness) is
anticipated to be sufficient to pay any such judgments promptly in accordance
with their terms.
(e) No Company is contemplating either the filing of a petition by it under
any state or federal bankruptcy or insolvency laws or the liquidating of all or
a substantial portion of its property, and the Borrower has no knowledge of any
Person contemplating the filing of any such petition against any Company.
Section 4.12. Full Disclosure. No statement of fact made by or on behalf of
the Companies in this Agreement, the Security Documents or in any certificate or
schedule furnished to the Lenders pursuant hereto or thereto contains any untrue
statement of a material fact or omits to state any material fact. There is no
fact presently known to the Borrower which has not been disclosed to the Lenders
in writing which the Borrower reasonably believes has had, or, as far as the
Borrower can reasonably foresee, could have a Material Adverse Effect, other
than facts and circumstances generally known within the broadcast television
industry.
Section 4.13. Margin Stock. The Companies do not own or have any present
intention of acquiring any "margin stock" within the meaning of Regulation U (I
2 CFR Part 22 1), of the Board of Governors of the Federal Reserve System
(herein called "Margin Stock").
Section 4.14. Tax Returns. Each of the Companies has filed all federal,
state and local tax and information returns required to be filed, and has paid
or made adequate provision for the payment of all material federal, state and
local taxes, franchise fees, charges and assessments shown thereon.
Section 4.15. Pension Plans, Etc.
(a) Except as described in Schedule 4.15, neither the Borrower nor any
member of the Controlled Group has any pension, profit sharing or other similar
plan providing for a program of deferred compensation to any employee.
(b) Neither the Borrower nor any member of the Controlled Group has any
material liability (i) under Section 412 of the Code for failure to satisfy the
minimum funding requirements for pension plans, (ii) as the result of the
termination of a defined benefit plan under Title IV of ERISA, (iii) under
Section 4201 of ERISA for withdrawal or partial withdrawal from a multiemployer
plan, or (iv) for participation in a prohibited transaction with an employee
benefit plan as described in Section 406 of ERISA and Section 4975 of the Code.
34
Section 4.16. Material Agreements. Except for matters disclosed in
Schedules 4.06(b), 4.07, 4.09, 4.10, 4.16 and 4.22. Schedule 4.16 hereto
accurately and completely lists all agreements, if any, among the stockholders,
partners or members of any of the Companies or the Parent Companies and all
material construction, engineering, management, consulting and other agreements,
if any, which are in effect on the date hereof in connection with the conduct of
the business of the Borrower and the other Companies, including without
limitation the acquisition, construction, extension and/or operation of the
Stations.
Section 4.17. Projections. Attached as Schedule 4.17 are projections of the
operation of the Companies' businesses through December 31, 2002 (the
"Projections").
Section 4.18. Brokers, Etc. Other than fees, if any, that may be payable to
Communications Equity Associates, for which the Borrower has sole
responsibility, none of the Companies has dealt with any broker, finder,
commission agent or other similar Person in connection with the Loans (as
opposed to the Acquisitions) or is under any obligation to pay any broker's fee,
finder's fee or commission in connection with such transactions.
Section 4.19. Capitalization. Attached as Schedule 4.19 is a schematic
diagram of the ownership relationships among the Companies, showing accurate
ownership percentages of the equityholders of record and accompanied by a
statement of authorized and issued equity securities for each such entity as of
the date hereof. Such Schedule 4.19 also includes a narrative indicating, as of
the date hereof (a) which securities, if any, carry preemptive rights; (b) to
the best of the Borrower's knowledge whether there are any outstanding
subscriptions, warrants or options to purchase any securities; (c) whether any
Company is obligated to redeem or repurchase any of its securities, and the
details of any such committed redemption or repurchase; and (d) any other
agreement, arrangement or plan to which any Company is a party or participant or
of which any Company has knowledge which will directly or indirectly affect the
capital structure of the Companies. All such equity securities of the Companies
are validly issued and fully paid and non-assessable, and owned as set forth on
such Schedule 4.19. All such equity securities of the Companies are owned,
legally and beneficially, free of any assignment, pledge, lien, security
interest, charge, option or other encumbrance, except for liens and security
interests granted to the Agent or the Lenders or permitted under Section 7.02
and restrictions on transfer imposed by applicable securities laws, indicated on
the certificates evidencing such equity interests or imposed by the FCC or local
franchising authorities.
Section 4.20. Environmental Compliance.
(a) To the best of the Borrowees knowledge, all real property leased,
owned, controlled or operated by the Companies (the "Properties") and their
existing and, to the best of the Borrower's knowledge, prior uses and activities
thereon, including, but not limited to, the use, maintenance and operation of
each of the Properties and all activities in conduct of business related thereto
comply and have at all times complied in all material respects with all
Environmental Laws.
35
(b) None of the Companies, and to the best of the Borrower's knowledge, no
previous owner, tenant, occupant or user of any of the Properties or any other
Person, has engaged in or permitted any operations or activities upon any of the
Properties for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of a material amount of any Hazardous Materials the removal of which is
required or the maintenance of which is prohibited or penalized.
(c) To the best of the Borrower's knowledge, no Hazardous Material has been
or is currently located in, on, under or about any of the Properties in a manner
which materially violates any Environmental Law or which requires cleanup or
corrective action of any kind under any Environmental Law.
(d) No notice of violation, lien, complaint, suit, order or other notice or
communication concerning any alleged violation of any Environmental Law in, on,
under or about any of the Properties has been received by any Company or, to the
best of the Borrower's knowledge, any prior owner or occupant of any of the
Properties which has not been fully satisfied and complied with in a timely
fashion so as to bring such Property into full compliance with all Environmental
Laws.
(e) The Companies have all permits and licenses required under any
Environmental Law to be issued to them by any Governmental Authority on account
of any or all of its activities on any of the Properties, except to the extent
that the absence of any such permit or license could have a Material Adverse
Effect, and are in material compliance with the terms and conditions of such
permits and licenses. To the best of the Borrower's knowledge, no change in the
facts or circumstances reported or assumed in the application for or granting of
such permits or licenses exist, and such permits and licenses are in full force
and effect.
(f) No portion of any of the Properties has been listed, designated or
identified in the National Priorities List (NPL) or the CERCLA information
system (CERCLIS), both as published by the United States Environmental
Protection Agency, or any similar list of sites published by any Federal, state
or local authority proposed for or requiring cleanup, or remedial or corrective
action under any Environmental Law.
(g) The Borrower, at its expense, has provided (or, if indicated on
Schedule 4.20, will provide within the period specified thereon) prior to the
first Advances after the date hereof to the Agent and the Lenders a "Phase One"
site assessment for each of the Properties designated by the Lenders (including
those designated on Schedule 4.20 and required as a condition to the execution
of this Agreement under Section 3.01), including all owned Properties
(collectively the "Environmental Site Assessments"), prepared by an
environmental consulting firm of national reputation reasonably satisfactory to
the Lenders, together with a letter (to the extent that Borrower is able to
obtain such letter, after using commercially reasonable efforts), from such
firm to the Agent authorizing the Agent and the Lenders to rely thereon. Each
of the Environmental Site Assessments provided to the Agent and the Lenders is,
to the best of the Borrower's knowledge, true and accurate in all material
respects. In addition, the Borrower has provided (or, if indicated on Schedule
4.20, will provide within the period specified thereon) to
36
the Agent and the Lenders true and accurate responses to the Agent's
Environmental Questionnaire as to each of the other Properties.
Section 4.21. Investment Company Act. None of the Companies is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
Section 4.22. Labor Matters. No Company is experiencing any strike, labor
dispute, slow down or work stoppage due to labor disagreements which has had, or
could reasonably be expected to have, a Material Adverse Effect; there is no
such strike, dispute, slow down or work stoppage threatened against any Company;
none of the Companies is subject to any collective bargaining or similar
arrangements.
Section 4.23. Delaware Code Provisions. None of the charter documents,
partnership agreements, the operating agreements or other organizational
documents of the Borrower and its Subsidiaries contain any provision similar to
those set forth in Section 102(b)(2) of Title 8 of the Delaware Code.
V. FINANCIAL COVENANTS. The Borrower covenants and agrees that, so long as
any Lender has any obligation to extend credit to the Borrower hereunder, and
for so long thereafter as there remains outstanding any portion of any
Obligation, whether now existing or arising hereafter, the Borrower and its
Subsidiaries will (on a consolidated or combined basis, as applicable):
Section 5.01. Minimum EBITDA. For the periods of one (1), two (2) and three
(3) fiscal quarters ending March 3 1, June 30 and September 3 0, 1998 and for
each period of four (4) fiscal quarters ending on December 31, 1998 and each
Quarterly Date thereafter indicated below, maintain EBITDA not less than the
following:
Period Ending Minimum EBITDA
March 31, 1998 $1,300,000
June 30, 1998 $4,000,000
September 30, 1998 $6,300,000
December 31, 1998 $9,300,000
March 31, 1999 $12,000,000
.June 30, 1999 $12,600,000
September 30, 1999 $13,800,000
December 31, 1999 $14,100,000
March 31, 2000 $16,900,000
June 30, 2000 $19,700,000
September 30, 2000 $22,400,000
December 31, 2000 $25,200,000
March 31, 2001 $26,800,000
37
June 30, 2001 $28,300,000
September 30, 2001 $29,900,000
December 31, 2001 $31,400,000
March 31, 2002 $32,300,000
June 30, 2002 $33,250,000
September 30, 2002 $34,200,000
Section 5.02. Maximum Total Debt Leverage. As of each Quarterly Date
indicated below, maintain a ratio of Total Debt to Adjusted EBITDA for the
period of four (4) fiscal quarters ending on such Quarterly Date not exceeding
the following:
Maximum Ratio of Total
Ouarterly Date(s) Debt to Adjusted EBITDA
September 30,2000 and December 31, 2000 7.75:1.00
March 31, 2001 and June 30, 2001 6.50:1.00
September 30, 2001 and December 31, 2001 6.00:1.00
March 31, 2002 and each Quarterly Date
thereafter 5.50:1.00
Section 5.03. Maximum Secured Debt Leverage. (a) As of December 31, 1997,
March 31, 1998, and June 30, 1998, maintain a ratio of Secured Debt to
Annualized Adjusted EBITDA for the one (1), two (2) or three (3) fiscal quarter
period, respectively, ending on such Quarterly Date and (b) as of each Quarterly
Date thereafter indicated below, maintain a ratio of Adjusted EBITDA for the
period of four (4) fiscal quarters ending on such Quarterly Date, in each case
as set forth in the following table:
Maximum Ratio of Secured Debt to
Ouarterly Date(s) (Annualized) Adjusted EBITDA
December 31, 1997, through December 3 1,
1998 4.00:1.00
March 31, 1999 and June 3 0, 1999 3.50:1.00
September 30, 1999 and each Quarterly Date
thereafter 3.00:1.00
Section 5.04. Cash Interest Coverage, For each period indicated below,
maintain a ratio of EBITDA to Cash Interest Expense of at least the following:
Minimum Ratio of EBITDA
Period(s) to Cash Interest
Each of the periods commencing on the date
hereof and ending December 31, 1997, March
31, 1998 and June 30, 1998 2.50:1.00
Each four (4) fiscal quarter period ending
38
September 30, 1998, through September 30, 2.50:1.00
2000
Each four (4) fiscal quarter period ending
December 31, 2000 and each Quarterly Date 1.50:1.00
thereafter
Section 5.05. Restricted Payments. Not directly or indirectly declare,
order, pay or make any Restricted Payment or set aside any sum or property
therefor except that the Companies may make the following payments so long as no
Default shall exist as of the date of any such proposed payment or after giving
effect thereto:
(a) The Subsidiaries may pay dividends and make distributions to the
Borrower or other Subsidiaries holding equity interests in the payor.
(b) The Operating Companies may repay indebtedness owed to the Borrower.
(c) The Operating Companies and the Borrower may make intercompany loans,
distributions or capital investments to or in one another, subject to the
limitations set forth in Section 7.01 and 7.08.
VI. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees to and
with each of the Lenders that, so long as any Lender has any obligation to
extend credit to the Borrower hereunder, and for so long thereafter as there
remains outstanding any portion of any Obligation, whether now existing or
hereafter arising, the Borrower and each of its Subsidiaries shall:
Section 6.01. Preservation of Assets; Compliance with Laws, Etc.
(a) Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its corporate, partnership or limited liability company
existence, as the case may be, all material rights, licenses, permits and
franchises (including all Licenses) and comply in every material respect with
all laws and regulations applicable to it (including without limitation the
Communications Act of 1934, as amended, the Copyright Act of 1976, as amended,
and all other published rules, regulations, administrative orders and policies
of the FCC) and all material agreements to which it is a party, including
without limitation the Indenture, the Acquisition Documents, all network
affiliation agreements and all agreements with its stockholders, members or
partners, as the case may be, unless the non-compliance, non-renewal,
termination, or violation of any such material agreement or agreement has not
had, and could not have, a Material Adverse Effect;
(b) at all times maintain, preserve and protect all material trade names
and proprietary rights;
(c) at all times maintain in full force and effect a License Agreement
between each Operating Company holding Station assets and the related License
Company, and provide a true and complete copy thereof to the Agent;
39
(d) at all times maintain in full force and effect for each Subsidiary
which is a partnership or limited liability company a partnership agreement or
operating agreement, as the case may be, which is reasonably satisfactory to the
Agent and which provides, among other matters, for appropriate procedures to
ensure the full enforceability of the collateral assignment and pledge of
partnership or membership interests to the Agent contemplated by the applicable
Security Documents (it being understood and agreed that this requirement has
been waived as to the Oregon Subsidiaries and the Tennessee Subsidiaries until
the earlier to occur of December 15, 1997 or the consummation of the Permitted
Restructurings); and
(e) preserve all the remainder of its material property used or useful in
the conduct of its business and keep the same in good repair, working order and
condition (reasonable wear and tear and damage by fire or other casualty
excepted), and from time to time, make or cause to be made all needful and
proper repairs, renewals, replacements, betterments and improvements thereto, so
that the business carried on in connection therewith may be conducted at all
times in the ordinary course in a manner substantially consistent with past
practices.
Section 6.02. Insurance.
(a) Keep all of its insurable properties now or hereafter owned adequately
insured at all times against loss or damage by fire or other casualty to the
extent customary with respect to like properties of companies conducting similar
businesses; maintain public liability, business interruption, broadcasters'
liability and workers' compensation insurance insuring such Company to the
extent customary with respect to companies conducting similar businesses, all by
financially sound and reputable insurers and furnish to the Lenders satisfactory
evidence of the same (including certification by the chief executive officer of
the Borrower of timely renewal of, and timely payment of all insurance premiums
payable under, all such policies, which certification shall be included in the
next succeeding Compliance Report delivered pursuant to Section 6.05(d)); notify
each of the Lenders of any material change in the insurance maintained on its
properties after the date hereof and furnish each of the Lenders satisfactory
evidence of any such change; maintain insurance with respect to its tower,
transmission and studio facilities and related equipment in an amount equal to
the full replacement cost thereof-, provide that each insurance policy
pertaining to any of its insurable properties shall:
(i) name the Agent, on behalf of the Lenders, (A) as loss payee
pursuant to a so-called "standard mortgagee clause" or "Lender's loss
payable endorsement", with respect to property insurance, or (B) as
additional insured, with respect to liability insurance;
(ii) provide that no action of any Company shall void any such policy
as to the Agent or the Lenders, and
(iii) provide that the insurer(s) shall notify the Agent of any
proposed cancellation of such policy at least thirty (30) days in advance
thereof (unless such proposed cancellation arises by reason of non-payment
of insurance premiums in which case such notice shall be given at least ten
(10) days in advance thereof) and that the
40
Agent or the Lenders will have the opportunity to correct any deficiencies
justifying such proposed cancellation.
(b) Promptly following the occurrence of any Casualty Event affecting any
asset or property (whether or not such property constitutes Collateral) (the
"Damaged Property") of any Company resulting in Insurance Proceeds aggregating
$500,000 or more, give prompt notice thereof to the Agent and cause such
Insurance Proceeds to be paid to the Agent for deposit into the Collateral
Account, as additional collateral security for the payment of the Obligations,
pending disbursement thereof as hereinafter provided. If, on or before the last
day of the applicable Restoration Period, the Borrower or any Subsidiary shall
not have restored, repaired or replaced the Damaged Property (or, if earlier, on
the date such Company shall have determined not to restore, repair or replace
the Damaged Property) the Insurance Proceeds so deposited in the Collateral
Account shall be applied to repay the Notes, to the extent required in Section
1.06(b).
(c) In the event of a Casualty Event affecting any Damaged Property of any
Company, whether or not subject to Section 6.02(b), and provided that no Event
of Default shall have occurred and be continuing, the Agent or the Lenders will
deliver to the Borrower (for the benefit of such Company) any Insurance Proceeds
therefrom, if the Borrower so elects following notice thereof provided by the
Agent, provided that (i) such Company shall use such proceeds for the
restoration or replacement of the Damaged Property within the applicable
Restoration Period, (ii) the Borrower shall have demonstrated to the reasonable
satisfaction of the Lenders that the Damaged Property will be restored to
substantially its previous condition or will be replaced by substantially
identical property or assets and (iii) if the Agent, on behalf of the Lenders,
had a security interest in and lien upon the Damaged Property, the Lenders shall
have received, at their request, a favorable opinion from the Borrower's
counsel, in form and substance satisfactory to the Agent, as to the perfection
of the Agent's security interest in and lien upon such restored or replaced
property or asset and such evidence satisfactory to the Agent as to the priority
of such security interest and liens. If the Borrower fails to elect the
disbursement of such Insurance Proceeds as provided in the foregoing sentence
within five (5) Business Days following receipt of the Agent's notice, the
Borrower shall be deemed to have elected that such Insurance Proceeds be applied
to the prepayment of the Loans and, if the related Casualty Event was subject to
Section 6.02(b), the permanent reduction of the Commitments provided in such
Section and in Section 1.06.
(d) If the Borrower receives any disbursements of Insurance Proceeds as
contemplated by Section 6.02(c), but fails to restore or replace the Damaged
Property within the applicable Restoration Period, as required under Section
6.02(c), then the Borrower shall return all such disbursements to the Agent for
application, together with the balance of any related Insurance Proceeds not so
disbursed, to the prepayment of the Loans and, if the related Casualty Event was
subject to Section 6.02(b), the permanent reduction of the Commitments provided
in such Section and in Section 1.06.
(e) The Agent may, if directed by the Required Lenders upon the occurrence
and during the existence of any Event of Default, elect to apply any Insurance
Proceeds paid into the Collateral Account or otherwise received by the Agent
pursuant to this Section 6.02 to the
41
replacement, restoration and/or repair of the Damaged Property, in lieu of
effecting the prepayment of the Loans required under Section 1.06(b) or 6.02(d).
(f) If the Borrower or the Agent elects to replace, restore and/or repair
the Damaged Property as provided in Section 6.02(c) or (e), the related
Insurance Proceeds (and any earnings thereon) held in the Collateral Account
shall be applied to the replacement, restoration and repair of the Damaged
Property and advanced by the Agent in periodic installments upon compliance by
the Borrower with such reasonable conditions to disbursement as may be imposed
by the Agent, including, but not limited to, reasonable retention amounts and
receipt of lien releases and, if a Casualty Event results in the Agent's receipt
of Insurance Proceeds aggregating $ 1,000,000 or more, disbursement of such
Insurance Proceeds jointly to the Borrower and any contractors, subcontractors
and materialmen to whom payment is owed in connection with such repair,
replacement and/or restoration.
(g) Following the occurrence and the continuance of any Event of Default,
the Agent shall have no obligation to release any proceeds from the Collateral
Account to the Borrower as provided above and all such proceeds shall be subject
to the provisions of the Security Agreements. All Insurance Proceeds remaining
in the Collateral Account after application to the repair, replacement and/or
restoration of Damaged Property pursuant to this Section may, at the option of
the Agent, be applied to the prepayment of the Loans or (if consented to by the
Required Lenders) released to the Borrower.
(h) With respect to any Casualty Event resulting in Insurance Proceeds
aggregating $500,000 or more, the Agent shall be entitled at its option to
participate in any compromise, adjustment or settlement in connection with any
claims for damage or destruction under any policy or policies of insurance, and
the Borrower shall, within five (5) Business Days after request therefor,
reimburse the Agent for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and disbursements) incurred by the Agent in
connection with such participation. None of the Companies shall make any
compromise, adjustment or settlement in connection with any such claim without
the approval of the Agent.
(i) To the extent, if any, that any improved real property (whether owned
or leased) of the Companies that is mortgaged as required under Section
2.01(a)(iii) or Section 2.01(a)(iv) is situated in a flood zone designated as
type "X', "B", or "V" by the U.S. Department of Housing and Urban Development,
obtain and maintain flood insurance in coverage and amount satisfactory to the
Required Lenders.
Section 6.03 Taxes, Etc. Pay and discharge or cause to be paid and
discharged all taxes, assessments and governmental charges or levies imposed
upon it or upon its income and profits or upon any of its property, real,
personal or mixed, or upon any part thereof, before the same shall become in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might become a lien or charge upon such properties
or any part thereof; ]provided that no Company shall be required to pay and
discharge or cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings and it shall have set aside on its books adequate
reserves with respect to any such tax, assessment, charge, levy or claim, so
contested;
42
and provided, further that, in any event, payment of any such tax, assessment,
charge, levy or claim shall be made before any of its property shall be seized
or sold in satisfaction thereof.
Section 6.04. Notice of Proceedings, Defaults, Adverse Change, Etc.
Promptly (and in any event within five (5) days after the discovery by the
Borrower thereof) give written notice to the Agent of (a) any proceedings
instituted or threatened against it by or in any federal, state or local court
or before any commission or other regulatory body, whether federal, state or
local, including without limitation the FCC, which, if adversely determined,
could have a Material Adverse Effect; (b) any notices of default received by any
Company (together with copies thereof, if requested by any Lender) with respect
to (i) any alleged default under or violation of any of its material licenses,
permits or franchises (including the Licenses), any Tower Site Lease, or any
other material agreement (including without limitation the Indenture, the Senior
Notes and any material Acquisition Document) to which it is a party, or (ii) any
alleged default with respect to, or acceleration or other action under any
evidence of material Indebtedness of any Company or any mortgage, indenture or
other agreement relating thereto; (c) (i) any notice of any material violation
or administrative or judicial complaint or order filed or to be filed against
any Company and/or any real property owned or leased by it alleging any
violations of any law, ordinance and/or regulation or requiring it to take any
action in connection with the release and/or clean-up of any Hazardous
Materials, or (ii) any notice from any govenmental body or other Person
alleging that any Company is or may be liable for costs associated with a
release or clean-up of any Hazardous Materials or any damages resulting from
such release; (d) any change in the condition, financial or otherwise, of any
Company or Parent Company which could have a Material Adverse Effect; or (e) the
occurrence of any Default or Event of Default.
Section 6.05. Financial Statements and Reports. Furnish to the Agent (with
multiple copies for each of the Lenders):
(a) Within one hundred twenty (120) days after the end of fiscal year 1997
and within ninety (90) days after the end of each subsequent fiscal year, the
consolidated (or, if applicable, combined) balance sheets and statements of
income, equity and cash flows of the Borrower and each Holding Company, together
with supporting schedules in form and substance satisfactory to the Lenders,
audited (solely as to such consolidated or combined financial statements) by,
and accompanied with the opinion of, independent certified public accountants
selected by the Borrower and reasonably acceptable to the Required Lenders (the
"Accountants"), which opinion (i) shall not be qualified as to going concern or
scope of audit, (ii) shall be to the effect that such financial statements
present fairly the consolidated financial condition and results of operation of
the Companies as of the dates and for the periods indicated, in accordance with
GAAP applied on a basis consistent with that of the preceding year, and shall
otherwise be in form reasonably satisfactory to the Required Lenders, and (iii)
shall contain a report by the Accountants to the effect that the Accountants
have examined the provisions of this Agreement and that, to the best of their
knowledge, no Event of Default has occurred under Article V (or, if such an
event has occurred, a statement explaining its nature and extent); provided,
however, that in issuing such statement, the Accountants shall not be required
to exceed the scope of normal auditing procedures conducted in connection with
their opinion referred to above;
43
(b) Within forty-five (45) days after the end of each quarter in each
fiscal year, the consolidated (or, if applicable, combined) statements of
income, equity and cash flows of (i) the Borrower and (ii) each Holding Company,
together with supporting schedules, setting forth in each case in comparative
form the corresponding figures from the preceding fiscal period of the same
duration, prepared by the Borrower in accordance with GAAP (except for the
absence of notes) and certified by the Borrower's chief financial officer, such
statements of income, equity and cash flow to be for the quarter then ended and
the period from the beginning of the then current fiscal year to the end of such
quarter (in each case subject to normal audit and year-end adjustments) and to
include (i) a comparison of month to month actual results to results for the
comparable period of the preceding fiscal year and projected results set forth
in the Budget for such period for each Station that is on the air, and (ii) for
each Station not on the air, a schedule of Capital Expenditures made during such
quarter;
(c) Concurrently with the delivery of any annual financial statements
required by Section 6.05(a) and any quarterly financial statements required by
Section 6.05(b), a certificate in the form of Schedule 6.05 hereto (or in a form
otherwise satisfactory to the Agent) signed on behalf of the Borrower by the
chief financial officer or chief executive officer of the Borrower, setting
forth the calculations contemplated in Article V of this Agreement and
certifying as to the fact that such Person has examined the provisions of this
Agreement and that no Default has occurred and is continuing (or, if such event
has occurred, a statement explaining its nature and extent), which certificate
shall also provide detailed reconciliations breaking out the results of any
Operating Companies included in such financial statements;
(d) (i) On or before January 31 of each fiscal year, an updated cost budget
prepared on a monthly basis and approved by the Borrower, including planned
Capital Expenditures and other improvements, with updated financial projections
(collectively, the "Budget"), for the operation of the Borrower's businesses
during the current fiscal year, setting forth in detail reasonably satisfactory
to the Lenders the projected results of operations of the Borrower and its
subsidiaries and stating underlying assumptions, and (ii) within thirty (30)
days after the effective date thereof, notice of any material changes or
modifications in the Budget;
(e) Promptly upon their becoming available, and in any event within thirty
(30) Business Days after receipt thereof, all Xxxxxxx and other rating reports
regarding any Station, if any, received by any Company;
(f) Promptly, and in any event within ten (10) days, after the Borrower or
any member of the Controlled Group (i) is notified by the Internal Revenue
Service of its liability for the tax imposed by Section 4971 of the Code, for
failure to make required contributions to a pension, or Section 4975 of the
Code, for engaging in a prohibited transaction, (ii) notifies the PBGC of the
termination of a defined benefit pension plan, if there are or may not be
sufficient assets to convert the plan's benefit liabilities as required by
Section 4041 of ERISA, (iii) is notified by the PBGC of the institution of
pension plan termination proceedings under Section 4042 of ERISA or that it has
a material liability under Section 4063 of ERISA, or (iv) withdraws from a
multiemployer pension plan and is notified that it has withdrawal liability
under Section 4202 of ERISA which is material, copies of the notice or other
communication given or sent;
44
(g) Promptly upon receipt or issuance thereof, and in any event within
thirty (30) Business Days after such receipt, copies of all final audit reports
submitted to any Company by its accountants in connection with each yearly,
interim or special audit of the books of any Company made by such accountants,
including any material related correspondence between such accountants and the
Borrower's management;
(h) Promptly upon circulation thereof, and in any event within ten (10)
Business Days after such circulation, copies of any material written reports
issued by any Company to any of its stockholders, members, partners or material
creditors relating to the Notes or any material change in any Company's
financial condition;
(i) Within ten (1 0) days after the receipt or filing thereof by any
Company, as applicable, copies of any periodic or special reports filed by any
Company with the FCC or any state or local govenmental body having jurisdiction
over any Station or License, and copies of any material notices and other
material communications from the FCC or any such state or local governmental
body which specifically relate to any Company, any Station or any License, but
in each case only if such reports or communications indicate any material
adverse change in such Company's standing before the FCC, or in respect of any
License or if copies thereof are requested by the Agent;
(j) Within ten (10) days after the receipt or filing thereof by any
Company, copies of (i) any registration statements, prospectuses and any
amendments and supplements thereto, and any regular and periodic reports
(including without limitation reports on Form 10-K, Form 10-Q or Form 8-K), if
any, filed by any Company with any securities exchange or with the United States
Securities and Exchange Commission (the "SEC"); and (ii) any letters of comment
or correspondence with respect to filings or compliance matters sent to any
Company by any such securities commission or the SEC in relation to any Company
and its respective affairs; and
(k) As soon as reasonably possible after request therefor, such other
information regarding its operations, assets, business, affairs and financial
condition or regarding the Companies or (to the extent available to the Borrower
without undue effort and expense) their stockholders, members, partners or other
Affiliates, including the Parent Companies, as the Agent may reasonably request,
including without limitation copies of any and all material agreements to which
any Company is a party from time to time.
Section 6.06. Inspection. Permit employees, agents and representatives of
the Lenders to inspect, during normal business hours, its premises and its books
and records and to make abstracts or reproductions thereof. In connection with
any such inspections, the Lenders will use reasonable efforts to avoid an
unreasonable disruption of the Companies' businesses and, to the extent possible
or appropriate absent any Default, will give reasonable notice thereof.
Section 6.07. Accounting System. Maintain a system of accounting in
accordance with generally accepted accounting principles and maintain a fiscal
year ending December 31 for each of the Companies.
45
Section 6.08. Appraisals. If any Lender determines in good faith that it is
required, by applicable law or by the Comptroller of Currency or any other
Governmental Authority, to obtain appraisals as to the market value of any real
property constituting Collateral, obtain such appraisals, at the sole cost and
expense of the Borrower and in conformity with all requirements of applicable
law, as from time to time in effect.
Section 6.09. Additional Assurances. From time to time hereafter:
(a) without limiting the generality of Section 2.01, execute and deliver or
cause to be executed and delivered, such additional instruments, certificates
and documents, and take all such actions, as the Agent or the Lenders shall
reasonably request for the purpose of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, including without
limitation (i) the items set forth in Schedule 2.01 which require action after
the date hereof, as stated in such Schedule, and (ii) only if reasonably
requested by the Agent, the execution and delivery to the Agent of a mortgage or
deed of trust or collateral assignment of lease or leasehold mortgage in form
and substance satisfactory to the Agent (in a recordable form and in such number
of copies as the Agent shall have requested) covering any real properties
acquired by the Borrower or any of the Subsidiaries, together with any necessary
consents relating thereto;
(b) without limiting the generality of Section 2.01, at the request and
direction of the Agent, cooperate with the Agent and the Lenders from time to
time in preparing, executing and/or filing and recording such (i) timely
continuation statements under the Uniform Commercial Code with respect to
financing statements filed under Section 2.01(a), (ii) new financing statements
and (iii) conforming amendments to the Security Documents as shall be necessary
from time to time to reflect the passage of time and other changed circumstances
and to assure continued compliance with the Loan Documents and with Section
2.01; and
(c) upon the exercise by the Agent or the Lenders of any power, right,
privilege or remedy pursuant to this Agreement or any other Loan Document which
requires any consent, approval, registration, qualification or authorization of
any Governmental Authority, execute and deliver all applications,
certifications, instruments and other documents and papers that the Agent or
Lenders may be so required to obtain.
Section 6.10. Compliance with Environmental Laws.
(a) Comply, and cause all tenants or other occupants of any of the
Properties to comply in all material respects with all Environmental Laws and
not generate, store, handle, process, dispose of or otherwise use and use
commercially reasonable efforts not to permit any tenant or other occupant of
any of the Properties to generate, store, handle, process, dispose of or
otherwise use Hazardous Materials in, on, under or about the Property in
violation of any law, rule, regulation or statute that could lead or potentially
lead to imposition on any Company or the Agent or any Lender or any of the
Properties of any liability or lien of any nature whatsoever under any
Environmental Law.
46
(b) Notify the Agent promptly in the event of any spill or other release of
any Hazardous Material in, on, under or about any of the Properties which is
required to be reported to a Governmental Authority under any Environmental Law,
promptly forward to the Agent copies of any notices received by any Company
relating to any alleged violation of any Environmental Law and promptly pay
when due any fine or assessment against the Lenders, any Company or any of the
Properties relating to any Environmental Law; provided that, no Company shall be
obligated to pay any such fine or assessment so long as the validity thereof
shall be contested in good faith by appropriate proceedings and it shall have
set aside on its books adequate reserves with respect to any fine or assessment
and provided further that, in any event, such payment shall be made before any
of such Properties are seized or sold in satisfaction thereof.
(c) If at any time it is determined that the operation or use of any of
the Properties violates any applicable Environmental Law or that there is any
Hazardous Material located in, on, under or about the Properties which under any
Environmental Law requires special handling in collection, treatment, storage or
disposal or any other form of cleanup or remedial or corrective action, then,
within thirty (30) days after receipt of notice thereof from a Governmental
Authority (or such other time period as may be specified in the notice sent by
such Governmental Authority) take, at its sole cost and expense, such actions as
may be necessary to fully comply in all respects with all Environmental Laws,
upon becoming aware thereof, provided, however, that if such compliance cannot
reasonably be completed within such thirty (30) day period, the Borrower shall
commence such necessary action within such thirty (30) day period and shall
thereafter diligently and expeditiously proceed to fully comply in all respects
and in a timely fashion with all Environmental Laws. Nothing herein shall
prohibit the Borrower from asserting any good faith defenses against the
government in any govenmental demands and bringing in third parties.
(d) If a lien is filed against any of the Properties by any Govenmental
Authority resulting from the need to expend or the actual expending of monies
arising from an action or omission, whether intentional or unintentional, of any
Company or for which any Company is responsible, resulting in the releasing,
spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of
any Hazardous Material, then, within thirty (30) days from the date that such
Company is first given notice such lien has been placed against the Properties,
either (i) pay the claim and remove the lien or (ii) furnish a cash deposit,
bond or such other security with respect thereto as is satisfactory in all
respects to the Lenders and is sufficient to effect a complete discharge of such
lien on the Properties provided that, no Company shall be obligated to furnish a
cash deposit, bond or such other security so long as the validity of such lien
shall be contested in good faith by appropriate proceedings and it shall have
set aside on its books adequate reserves with respect thereto; and provided
further that, in any event, such payment shall be made in satisfaction of such
lien before any of such Properties shall be seized or sold in satisfaction
thereof.
(e) Perform any and all Remedial Work necessary under all Environmental
Laws applicable (now or in the future) to the Companies or their businesses
unless the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
47
Section 6.11. Permitted Restructurings, Acquisition Restructurings.
(a) Effect the Permitted Restructurings, and provide to the Agent
satisfactory evidence thereof, within three (3) Business Days following the
effective date of the necessary FCC approval thereof Following the consummation
of the Permitted Restructurings, all references to the Tennessee Subsidiaries
and the Oregon Subsidiaries in the Loan Documents shall be deemed to mean the
Delaware Entities (which are the survivors of the mergers contemplated by the
Permitted Restructurings).
(b) Within forty-five (45) days following the consummation of the Utah
Acquisition, cause (i) the FCC Licenses relating to Television Station K-ZAR-TV
to be transferred from Xxxxxxx Broadcasting to Acme Television Licenses of Utah,
L.L.C:, (ii) the assets used in operating such Station to be transferred from
Xxxxxxx Broadcasting to Acme Television of Utah, L.L.C., and (iii) the
concurrent dissolution of Xxxxxxx Broadcasting, and provide to the Agent
satisfactory evidence thereof.
(c) Subject to receipt of the necessary FCC consent (application for which
shall have been made within ten (10) Business Days after the date hereof), cause
(i) the FCC Licenses relating to Television Station VIBXX-TV (formerly XXXX-TV)
to be transferred from Crossville TV Limited Partnership to Acme Television
Licenses of Tennessee, L.L.C., (ii) the assets used in operating such Station to
be transferred from Crossville TV Limited Partnership to Acme Television of
Tennessee, L.L.C. and (iii) the concurrent dissolution of Crossville TV Limited
Partnership on or before December 15, 1997, and provide to the Agent
satisfactory evidence thereof (the transactions described in this paragraph (c)
and in paragraph (b) above being referred to collectively as the "Acquisition
Restructurings").
(d) On or before the consummation of each of the Permitted Restructurings
and each of the Acquisition Restructurings, (i) comply with all applicable
provisions of Section 2.01, including the execution and/ delivery (by the
Delaware Entities and any other Companies, as appropriate) of such additional
agreements, instruments, certificates, documents, consents and other papers as
the Agent or the Required Lenders may reasonably require, and (ii) deliver to
the Agent such additional opinions of counsel as the Agent or the Required
Lenders may reasonably require.
VII. NEGATIVE COVENANTS. The Borrower covenants and agrees that, so long as
any Lender has any obligation to extend credit to the Borrower hereunder for so
long thereafter as there remains outstanding any portion of any Obligation,
whether now existing or arising hereafter, unless the Required Lenders shall
otherwise consent in writing in accordance with the terms of Article XII,
neither the Borrower nor any of its Subsidiaries will, directly or indirectly:
Section 7.01. Indebtedness. Incur, create, assume, become or be liable,
directly, indirectly or contingently, in any manner with respect to, or permit
to exist, any Indebtedness or liability, except:
(a) Indebtedness of the Borrower to the Lenders hereunder, under the Loan
Documents and under the Notes;
48
(b) the guaranties of the Borrower's Subsidiaries required under Section
2.01;
(c) any Rate Hedging Obligations with one or more of the Lenders or their
affiliates;
(d) Indebtedness of the Borrower and the Operating Companies existing on
the date hereof and described in Schedule 7.01 hereto; provided however, that
the terms of such indebtedness shall not be modified or amended in any material
respect, nor shall payment thereof be extended, without the prior written
consent of the Required Lenders;
(e) Indebtedness of the Borrower and Acme Finance under the Indenture and
the Senior Notes and the guaranties thereof provided by the Borrower's
Subsidiaries as required under the Indenture;
(f) Indebtedness of the Borrower and the Operating Companies in respect of
endorsements of negotiable instruments for collection in the ordinary course of
business;
(g) Indebtedness of the Borrower and the Operating Companies under Capital
Leases and purchase money Indebtedness relating to the purchase price of real
estate and equipment to be used in the Companies' businesses, in the aggregate
principal amount (including any such amounts set forth on Schedule 7.01) of not
more than $20,000,000 outstanding at any time;
(h) Indebtedness owed by the Operating Companies to the Borrower, provided
that such Indebtedness is collaterally assigned to the Agent, and all evidences
thereof are collaterally assigned and delivered to the Agent, as required under
Section 2.01(a);
(i) Indebtedness in respect of (i) taxes, assessments, govermental
charges or levies and claims for labor, materials and supplies, and (ii)
judgments or awards which have been in force for less than the applicable appeal
peri6d and which do not constitute Events of Default under paragraph (c) of
Article VIII, so long as (A) execution is not levied thereunder or (B) in
respect of which any Borrower or Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a stay
of execution shall have been obtained pending such appeal or review; and
Indebtedness assumed by the Borrower, a Holding Company or an Operating
with the consent of the Required Lenders in connection with a Permitted
Acquisition.
Section 7.02. Liens. Create, incur, assume, suffer or permit to exist any
mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on
any of its assets or ownership interests, now or hereafter owned, other than:
(a) liens securing the payment of taxes, assessments or governmental
charges or levies either not yet due or the validity of which is being contested
in good faith by appropriate proceedings, and as to which it shall have set
aside on its books adequate reserves;
49
deposits under workers' compensation, unemployment insurance and social security
laws, or to secure the performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or to secure statutory obligations
or surety or appeal bonds, or to secure indemnity, performance or other similar
bonds arising in the ordinary course of business;
(c) liens existing on the date hereof and described on Schedule 7.02
attached hereto;
(d) liens against the Companies imposed by law, such as vendors',
carriers', lessors', warehouser's or mechanics' liens, incurred by it in good
faith in the ordinary course of business;
(e) liens arising out of a prejudgment attachment, a judgment or award
against it with respect to which it shall currently be prosecuting an appeal, a
stay of execution pending such appeal having been secured, except any such lien
arising in connection with a judgment, attachment or proceeding which gives rise
to an Event of Default under paragraph (k) or (1) of Article VIII;
(f) liens in favor of the Agent or the Lenders and their affiliates
securing the Notes or the other obligations of the Companies to the Lenders
hereunder or under Rate Hedging Obligations entered into with any Lender or its
affiliate;
(g) liens against the Borrower or the Operating Companies arising under or
securing Capital Leases and liens or mortgages securing purchase money
Indebtedness described in Section 7.01(g), Provided that the obligation secured
by any such lien shall not exceed one hundred percent (I 000/o) of the lesser of
cost or fair market value as of the time of the acquisition of the property
covered thereby and that each such lien or mortgage shall at all times be
limited solely to the item or items of property so acquired;
(h) the collateral assignment and pledge of the membership interests in the
Borrower to the holders of the Acme Intermediate Notes as required under the
Acme Intermediate Indenture;
(i) restrictions, easements and minor irregularities in title which do not
and will not materially interfere with the occupation, use and enjoyment by any
Company of such properties and assets in the normal course of its business as
presently conducted or materially impair the value of such properties and assets
for the purpose of such business;
(j) liens existing on any asset prior to their acquisition in connection
with a Permitted Acquisition thereof by any Borrower or Subsidiary and not
created in contemplation of such Permitted Acquisition; provided that the
Required Lenders shall have consented to such liens in connection with such
Permitted Acquisition;
(k) liens on security deposits with respect to leases of office space and
other liens arising by operation of law or under leases to secure landlords or
lessors, or under leases or rental agreements made in the ordinary course of
business and confined to the premises or property rented and the tangible
property located thereon; and
50
(1) Uniform Commercial Code financing statements filed solely for notice or
precautionary purposes under operating leases which do not secure Indebtedness
and which are limited to the items of equipment leased pursuant to the lease in
question.
Section 7.03. Disposition of Assets; etc. Sell, lease, transfer or
otherwise dispose of its properties, assets, rights, licenses and franchises to
any Person (including without limitation dispositions in exchange for similar
assets and properties and commonly referred to as "asset swaps"), except for:
(a) dispositions made in the ordinary course of business, including the
disposition, without replacement, of equipment which is obsolete or no longer
needed by the Companies in the conduct of their businesses and the replacement
of equipment with other equipment of at least equal utility and value', provided
that the Agent's or the Lenders' lien upon such newly acquired equipment shall
have the same priority as the Agent's or the Lenders' lien upon the replaced
equipment subject to any prior liens permitted by Section 7.02(e) and (g);
(b) the disposition by the Companies of additional assets (all of which
dispositions may be made free from the liens of the Security Documents);
provided, however, that (i) the selling Company or Companies shall have received
payment in cash or cash equivalents of at least eighty-five percent (85%) of
both gross and net proceeds from such disposition of assets (other than
like-kind exchanges under Section 1031 of the Internal Revenue Code), (ii) I 00%
of the Adjusted Net Cash Proceeds received by such Companies shall be used in
accordance with Section 1.06(c); (iii) no Specified Default shall exist on the
date of any such disposition, and immediately after giving effect thereto; (iv)
the Borrower shall have provided to the Agent updated Projections through the
Expiration Date showing compliance, after giving effect to such disposition,
with all of the Borrower's obligations under this Agreement through such date;
and (v) such disposition shall have been approved, pursuant to all required
corporate or other action, by the Companies and their equityholders and the
Agent shall have received satisfactory evidence to such effect.
Section 7.04. Fundamental Changes, Acquisitions.
(a) Form any subsidiary or otherwise change the capital structure or
organization of the Companies from that set forth in Schedule 4.19, except (i)
pursuant to the Permitted Restructurings and the Acquisition Restructurings and
(ii) in connection with the formation of any Operating Subsidiary, Holding
Company or License Company, as contemplated hereunder and in compliance with
Section 2.01 and all other applicable provisions of the Loan Documents, as part
of a Permitted Acquisition; (b) permit or suffer any amendment of its charter,
partnership, or limited liability company documents which could have a Material
Adverse Effect (it being expressly agreed that the inclusion in any such charter
documents of any provision similar to those set forth in Section 102(b)(2) of
Title 8 of the Delaware Code is prohibited under this Section); (c) (i)
dissolve, liquidate, consolidate with or merge with, or otherwise acquire any
Station, or all or any substantial portion of the ownership interests or assets
or properties of any corporation, partnership, limited liability company or
other entity or (ii) acquire any other material assets, other than pursuant to
(A) Permitted Acquisitions and Capital Expenditures
51
permitted hereunder and (B) purchases of inventory and supplies in the ordinary
course of business; (d) repurchase any shares of capital stock, partnership
interests or membership interests; or (e) issue any additional shares of capital
stock, membership interests or partnership interests, except for securities (i)
in respect of which the issuing Company has no obligation to redeem or to pay
cash distributions or dividends, (ii) the issuance of which does not result in
an Event of Default and (iii) which shall have been collaterally assigned or
pledged to the Agent as required hereunder.
(b) Notwithstanding the foregoing, the Companies may merge or consolidate
with each other if (i) the surviving or resulting corporation in a merger
involving the Borrower is the Borrower, (ii) the Lenders retain their collateral
position and security interests contemplated by Section 2.01 and (iii) the
Licenses with respect to the operation of the Stations remain- in the License
Companies.
Section 7.05. Local Marketing Agreements, Etc. Enter into any LMA or other
similar arrangement, other than Permitted LMAS.
Section 7.06. Management. Turn over the management of its properties,
assets, rights, licenses and franchises to any Person other than a full-time
employee of the Companies.
Section 7.07. Sale and Leaseback. Enter into any arrangements, directly or
indirectly, with any Person whereby it shall sell or transfer any property,
real, personal or mixed, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property; provided,
however, that the Borrower and the Operating Companies may engage in such
transactions to the extent structured as Capital Leases and subject to the
limitations in Section 7.01(g).
Section 7.08. Investments. Except for Permitted Investments, purchase,
invest in or otherwise acquire or hold securities, including without limitation
capital stock, partnership interests, membership interests and other equity
interests, and evidences of indebtedness of, or make loans or advances to, or
enter into any arrangement for the purpose of providing funds or credit to, any
other Person.
Section 7.09. Change in Business and Activities. Engage, directly or
indirectly, in any business other than the businesses in which it is currently
engaged or related businesses engaged in pursuant to any Permitted Acquisition.
Notwithstanding anything to the contrary set forth herein, (a) the Holding
Companies shall engage in no business other than to act as holding companies for
the Operating Companies and the License Companies, (b) the Operating Companies
and the License Companies shall not engage in any activities inappropriate to
the purposes for which they were formed, as specified in the respective
definitions of such terms set forth in Article XI, and (c) Acme Finance shall
engage in no business other than to act as a co-issuer of the Senior Notes.
Section 7.10. Accounts Receivable. Sell, assign, discount or dispose in any
way of any accounts receivable, promissory notes or trade acceptances held by
any Company, with or
52
without recourse, except for collection (including endorsements) in the ordinary
course of business.
Section 7.1 1. Transactions with Affiliates. Except for transactions (a)
contemplated by the License Agreements, (b) in accordance with existing
agreements, true and complete copies of which have been provided to the Lenders,
and (c) in connection with, and expressly contemplated by, Permitted
Acquisitions, enter into any transaction, including, without limitation, the
purchase, sale or exchange of property or assets or the rendering or accepting
of any service with or to any Affiliate of any Company, except in the ordinary
course of business and pursuant to the reasonable requirements of its business
and upon terms not less favorable to such Company than it could obtain in a
comparable arrm's-length transaction with a third party other than such
Affiliate.
Section 7.12. Amendment of Certain Agreements, Etc. (a) Amend, modify or
terminate any License, any agreement or instrument evidencing Subordinated Debt
or any material agreement to which any Company is a party (including without
limitation the Indenture, the Senior Notes and any material Acquisition
Document, which shall be deemed to include the KPLR Escrow Agreement, the KPLR
Acquisition Agreement and the KPLR Time Brokerage Agreement), or enter into any
material agreement, in each case, if the effect thereof would be (i) to confer
additional rights upon the other party or parties thereto which could have a
Material Adverse Effect or (ii) to increase materially the obligations of any
Company thereunder or (b), in any event, subject to applicable law, elect to
terminate or amend any License Agreement if the effect thereof could have a
Material Adverse Effect.
Section 7.13. ERISA. (a) Fail to make contributions to pension plans
required by Section 412 of the Code, (b) fail to make payments required by Title
IV of ERISA as the result of the termination of a single employer pension plan
or withdrawal or partial withdrawal from a multiemployer pension plan or (c)
fail to correct a prohibited transaction with an employee benefit plan with
respect to which it is liable for the tax imposed by Section 4975 of the Code.
Section 7.14. Margin Stock. Use or permit the use of any of the proceeds of
the Loans, directly or indirectly, for the purpose of purchasing or carrying, or
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any Margin Stock or for any other purpose which
might constitute the transactions contemplated hereby a "purpose credid" within
the meaning of Regulation U (I 2 CFR Part 22 1) of the Board of Governors of the
Federal Reserve System, or cause any Loan, the application of proceeds thereof
or this Agreement to violate Regulation G, Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or the Securities Exchange Act of 1934, as
amended, or any rules or regulations promulgated under such statutes.
Section 7.15 Negative Pledges, etc. Enter into any agreement after the
date hereof, prohibiting (a) any Company from amending or otherwise modifying
this Agreement or any other Transaction Document or (b) the creation or
assumption of any lien upon the properties, revenues or assets of any Company,
whether now owned or hereafter acquired.
53
VIII. DEFAULTS. In each case of happening of any of the following events
(each of which is herein sometimes called an "Event of Default"):
(a) any representation or warranty made by or on behalf of any Company or
any of its Affiliates (including without limitation the Parent Companies) in
this Agreement or any other Loan Documents or in any report, certificate,
financial statement or other instrument furnished in connection with this
Agreement or the borrowing hereunder, shall prove to be false or misleading in
any material respect when made or reconfirmed;
(b) default in the payment or mandatory prepayment of any installment of
the principal of any Note or any payment of any installment of the principal of
any other indebtedness of any Company to the Agent or any Lender, when the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or by acceleration or otherwise;
(c) default in the payment of any installment of any interest on any Note,
or any premium or fee, or any payment in respect of any Rate Hedging Obligations
entered into with the Agent or any Lender, or any other indebtedness of any
Company to the Agent or any Lender for more than five (5) Business Days after
the date when the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment or by acceleration or otherwise;
(d) default by any Person other than the Agent or any Lender in the due
observance or performance of, or compliance with, any covenant or agreement
contained in Article V, Sections 6.02 and 6.03 (but only if the same involves
any seizure of property), 6.06 and 6.10 or Article VII of this Agreement;
(e) default by any Person other than the Agent or any Lender in the due
observance or performance of, or compliance with, any other covenant, condition
or agreement to be observed or performed pursuant to the terms of this Agreement
or pursuant to the terms of any other Loan Document or of any Rate Hedging
Obligation entered into with the Agent or any Lender or its affiliate, which
default is not referred to in paragraphs (a) through (d), inclusive, of this
Article VIII and which default shall continue unremedied for thirty (30) days
after the earlier to occur of (i) the -Borrower's discovery of such default, or
(ii) written notice thereof from the Agent or any Lender to the Borrower,
provided, however, that if any such default cannot be remedied, then such
default shall be deemed to be an Event of Default as of the date of the
occurrence thereof;
(f) any default under or with respect to the Senior Notes or the Indenture
or with respect to any other evidence of Indebtedness of the Borrower or any
other Company (other than to the Lenders hereunder) for borrowed money which,
when aggregated with all other such defaults of the Companies or any of them,
exceeds $500,000, if the effect of such default is to permit the holder of such
Indebtedness to accelerate the maturity of such Indebtedness, unless such holder
shall have permanently waived the right to accelerate the maturity of such
Indebtedness on account of such default;
54
(g) (i) the Borrower or any Operating Company or License Company shall
lose, fail to keep in force, suffer the termination, suspension or revocation of
or terminate, forfeit or suffer an adverse amendment to any Main Station License
at any time held by it, the loss, termination, suspension, revocation or
amendment of which could have a Material Adverse Effect; (ii) any governmental
regulatory authority shall conduct a hearing on the renewal of any Main Station
License, where there is a substantial likelihood of the termination, revocation,
suspension or adverse amendment of such Main Station License and the same could
have a Material Adverse Effect; or (iii) any govenmental regulatory authority
shall commence an action or proceeding seeking the termination, suspension,
revocation or adverse amendment of any Main Station License, there is a
substantial likelihood of such termination, suspension, revocation or adverse
amendment and the same could have a Material Adverse Effect;
(h) the transmission of the broadcast signal(s) of any Station(s) shall be
interrupted at any time for more than (i) forty-eight (48) consecutive hours on
two (2) occasions, whether or not consecutive, in any twelve (12) month period,
unless such interruption occurs by reason of force majeure, or (ii) in the event
of force majeure, fourteen (14) days, in each case, unless (and only so long as)
all damages, liabilities and other effects of such interruption of service
(including any Material Adverse Effect) are fully covered by business
interruption insurance;
(i) any Company shall (i) discontinue its business (except as permitted
hereunder or as permitted in connection with a Permitted Acquisition or a
disposition of assets permitted under Section 7.03), (ii) apply for or consent
to the appointment of a receiver, trustee, custodian or liquidator of it or any
of its property, (iii) admit in writing its inability to pay its debts as they
mature, (iv) make a general assignment for the benefit of creditors, (v) be
adjudicated a bankrupt or insolvent or be the subject of an order for relief
under Title II of the United States Code or (vi) file a voluntary petition in
bankruptcy, or a petition or an answer seeking reorganization or an arrangement
with creditors or to take advantage of any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or liquidation law or statute, or
an answer admitting the material allegations of a petition filed against it in
any proceeding under any such law or corporate action shall be taken for the
purpose of effecting any of the foregoing;
(j) there shall be filed against any Company an involuntary petition
seeking reorganization of such company or the appointment of a receiver,
trustee, custodian or liquidator of such company or a substantial part of its
assets, or an involuntary petition under any bankruptcy, reorganization or
insolvency law of any jurisdiction, whether now or hereafter in effect and such
involuntary petition shall not have been dismissed within sixty (60) days
thereof;
(k) final judgment for the payment of money which, when aggregated with all
other outstanding judgments against the Companies or any of them, exceeds
$500,000 (exclusive of amounts covered by insurance or actually contributed in
cash by third party obligors with respect to such judgments) shall be rendered
against the Borrower or any other Company, and the same shall remain
undischarged (unless fully bonded upon terms reasonably satisfactory to the
Required Lenders) for a period of thirty (30) consecutive days, during which
execution shall not be effectively stayed;
55
(1) the occurrence of any attachment of any deposits or other property of
the Borrower or any other Company in the hands or possession of the Agent or any
of the Lenders, or the occurrence of any attachment of any other property of the
Borrower or any other Company in an amount which, when aggregated with all other
attachments against the Companies or any of them, exceeds $500,000 and which
shall not be discharged within sixty (60) days of the date of such attachment;
(m) for any reason, other than in connection with the Permitted
Restructurings, (i) Acme Holdings shall cease to control the Borrower, (ii) Acme
Intermediate shall cease to own all of the issued and outstanding membership and
other equity interests in the Borrower, (iii) the Borrower shall cease to own
and control all of the issued and outstanding equity interests of each of the
Holding Companies or (iv) the respective Holding Companies shall cease to own
and control, directly or indirectly, all of the issued and outstanding equity
interests of each of the License Companies and Operating Companies (in each case
except for de minimus membership interests in limited liability companies held
by other Companies, excluding Acme Finance, as specified in Schedule 4.19, for
purposes of complying with statutory requirements in jurisdictions which do not
acknowledge single-member limited liability companies);
(n) for any reason, a change in the ownership of the membership interests
in Acme Holdings shall occur and, as a result thereof, investment funds managed
by Alta Communications, Inc., CEA Capital Partners, BancBoston Ventures, Inc.
and Trust Company of the West shall cease to hold (i) as owners of at least
50.1% of the Class B Founder Units in Acme Holdings, the right to approve or
refuse approval of certain material actions specified in Section 3.04 of the
Amended and Restated Limited Liability Company Agreement of Acme Holdings dated
as of September 30, 1997, as originally executed and delivered, or (ii)
indirectly through their membership interests in Acme Holdings, a combined
interest in the Borrower representing at least 50.1% of the Borrower's
consolidated economic value;
(o) for any reason, Acme Missouri shall fail to consummate the KPLR
Acquisition on or before June 30, 1998; or
(p) for any reason (other than the gross negligence of the Agent or the
Lenders), any material Security Document or other Loan Document shall not be in
full force and effect in all material respects or shall not be enforceable in
all material respects in accordance with its terms, or any security interest(s)
or lien(s) granted pursuant thereto which is, or are in the aggregate, material
shall fail to be perfected, or any party thereto other than the Agent or the
Lenders shall contest the validity of any material lien(s) granted under, or
shall disaffirm its obligations under, any material Security Document or other
Loan Document;
then and upon every such Event of Default and at any time thereafter during the
continuance of such Event of Default, at the election of the Required Lenders as
provided in Article XII, the Commitments shall terminate and the Notes and any
and all other Indebtedness of the Borrower to the Lenders shall immediately
become due and payable, both as to principal and interest, without presentment,
demand, prior notice, or protest, all of which are hereby expressly waived,
anything contained herein or in the Notes or other evidence of such indebtedness
to the contrary notwithstanding (except in the case of an Event of Default under
paragraph (i) or (j) of this
56
Article VIII which, under applicable law, would result in the automatic
acceleration of the Borrower's Indebtedness, in which event the Commitments
shall automatically terminate and such Indebtedness shall automatically become
due and payable).
IX. REMEDIES ON DEFAULT, ETC. In case any one or more Events of Default
shall occur and be continuing, the Agent and the Lenders may proceed to protect
and enforce their rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained in this Agreement, any Security Document or the Notes, or for an
injunction against a violation of any of the terms hereof or thereof or in and
of the exercise of any power granted hereby or thereby or by law, all subject to
the provisions of Article XII. In the event that the Agent shall apply for the
appointment of, or taking possession by, a trustee, receiver or liquidator of
the Borrower or any other Company or of any other similar official, to hold or
liquidate all or any substantial part of the properties or assets of the
Borrower or such Company following the occurrence of a default in payment of any
amount owed to the Agent or any Lender hereunder, the Borrower, for itself and
on behalf of the Companies (with all due and proper authorization of the Boards
of Directors, Boards of Advisors, stockholders, partners, members and managers,
as the case may be, of the Companies), hereby jointly and severally consent to
such appointment and taking of possession and agree to execute and deliver any
and all documents requested by the Agent relating thereto (whether by joining in
a petition for the voluntary appointment of, or entering no contest to a
petition for the appointment of, such an official or otherwise, as appropriate
under applicable law), provided, however, that such appointment of a receiver or
liquidator shall only occur at such time and under conditions which are in
compliance with the rules, regulations and policies of the FCC, as further
described in Section 14.12. No right conferred upon the Agent or the Lenders
hereby or by any Security Document or the Notes shall be exclusive of any other
right referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise.
X. THE AGENT.
Section 10.01. Appointment, Powers and Immunities.
(a) Each Lender hereby irrevocably (subject to Section 10.08) designates
and appoints Canadian Imperial Bank of Commerce, which designation and
appointment is coupled with an interest, as the Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes Canadian Imperial Bank of Commerce, as the Agent of such Lender, 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.
(b) The Agent (which term as used in this sentence and in Section 10.05 and
the first sentence of Section 10.06 shall include reference to its affiliates
and its own and such affiliates' officers, directors, employees and agents)
shall not: (i) have any duties or responsibilities to be a trustee for any
Lender; (ii) be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by either of them
under, this Agreement, or for the
57
value, validity, effectiveness, genuineness, enforceability, perfection or
sufficiency of this Agreement, any Note, any Security Document or any other
document referred to or provided for herein or for any failure by any Company or
any other Person to perform any of its obligations hereunder or thereunder;
(iii) be required to initiate or conduct any litigation or collection
proceedings hereunder except to the extent requested by the Required Lenders;
and (iv) be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith, except for its own gross negligence or willful
misconduct.
(c) The Agent may employ agents and attoneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attoneys-in-fact it selects with reasonable care.
(d) Subject to the foregoing, to Article XII and to the provisions of any
intercreditor agreement among the Lenders in effect from time to time, the Agent
shall, on behalf of the Lenders, (i) hold and apply any and all Collateral, and
the proceeds thereof, at any time received by it, in accordance with the
provisions of the Security Documents and this Agreement; (ii) exercise any and
all rights, powers and remedies of the Lenders under this Agreement, the
Security Documents and the other Loan Documents, including the giving of any
consent or waiver or the entering into of any amendment, subject to the
provisions of Article XII; (iii) execute, deliver and file UCC Financing
Statements, mortgages, deeds of trust, lease assignments and other such
agreements, and possess instruments on behalf of any or all of the Lenders; and
(iv) in the event of acceleration of the Borrower's Indebtedness hereunder, sell
or otherwise liquidate or dispose of any portion of the Collateral held by it
and otherwise exercise the rights of the Lenders hereunder and under the
Security Documents.
(e) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in full of all of
the Obligations, (ii) constituting property sold or to be sold or disposed of as
part of or in connection with any disposition expressly permitted hereunder or
under any other Loan Document or to which the Required Lenders have consented or
(iii) otherwise pursuant to and in accordance with the provisions of any
applicable Loan Document. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release Collateral pursuant to
this Section.
Section 10.02. Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any communication by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. As to any matters not expressly provided
for by this Agreement, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Lenders or the Lenders, as the case may be, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on the Lenders.
Section 10.03. Events of Default. The Agent shall not be deemed to have
knowledge of the occurrence of an Event of Default (other than the non-payment
of principal of or interest on
58
the Notes) unless such Agent has received written notice from any Lender or the
Borrower specifying such Event of Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a notice of the
occurrence of an Event of Default, the Agent shall give prompt notice thereof to
the Lenders (and shall give each Lender prompt notice of each such non-payment).
The Agent shall (subject to Section 10.07) take such action with respect to such
Event of Default as shall be directed by the Required Lenders, as provided under
Article XII, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action on
behalf of the Lenders, or refrain from taking such action, with respect to such
Event of Default as it shall deem advisable in the best interest of the Lenders.
Section 10.04. Rights as a Lender. With respect to its Commitment and the
Advances made by CIBC hereunder, CIBC shall have the same rights and powers
hereunder as any other Lenders and may exercise the same as though its
affiliate, Canadian Imperial Bank of Commerce, were not acting as the Agent. The
Agent and its affiliates (including CIBC) may, without having to account
therefor to the Lenders and without giving rise to any fiduciary or other
similar duty to any Lender, accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with the Borrower and any
of their affiliates as if it were not acting as an Agent and as if CIBC were not
a Lender, and the Agent may accept fees and other consideration from any Company
for services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
Section 10.05. Indemnification. The Lenders agree to indemnify the Agent
(to the extent not reimbursed under Section 14.02, but without limiting the
obligations of the Borrower under such Section 14.02), ratably in accordance
with the aggregate principal amount of the Notes held by the Lenders (or, if no
such principal or interest is at the time outstanding, ratably in accordance
with their respective Commitments), for any and all liabilities, obligations,
losses, damages, penalties, action, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any Security Document or any other Loan Documents or the
transactions contemplated by or referred to herein or therein (including,
without limitation, the costs and expenses which the Borrower is obligated to
pay under Section 14.02) or the enforcement of any of the terms of this
Agreement or of any Security Document or of any other Loan Document, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified.
Section 10.06. Non-Reliance on Agent and other Lenders. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lenders, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Companies and its own decision
to enter into this Agreement and that it will, independently and' without
reliance upon the Agent or any other Lenders, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement. The
Agent shall not be required to keep itself informed as to the performance or
observance by the Companies or the Parent Companies of this Agreement or any
other Loan Document or to inspect the properties or books
59
of the Companies. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall have no duty or responsibility to provide and Lender
with any credit or other information concerning the affairs, financial condition
or businesses of the Companies (or the Parent Companies or any other of the
Borrower's Affiliates) which may come into the possession of the Agent or any of
its affiliates. Notwithstanding the foregoing, the Agent will provide to the
Lenders any and all information reasonably requested by them and reasonably
available to the Agent promptly upon such request.
Section 10.07. Failure to Act. Except for action expressly required of the
Agent hereunder, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall 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.
Section 10.08. Resignation or Removal of Agent. Canadian Imperial Bank of
Commerce (or any other Agent hereunder), may resign as the Agent at any time by
giving ten (1O) days' prior written notice thereof to the Lenders and the
Borrower. Any such resignation shall take effect at the end of such ten (10) day
period or upon the earlier appointment of a successor Agent by the Required
Lenders as provided below. Upon any resignation of Canadian Imperial Bank of
Commerce, (or any other Agent hereunder), the Required Lenders shall appoint a
successor agent from among the Lenders or, if such appointment is deemed
inadvisable or impractical by the Required Lenders, another financial
institution with a combined capital and surplus of at least $500,000,000, which
successor agent is reasonably acceptable to the Borrower, provided that the
Borrower consent to such appointment will not be required if a Default then
exists and is continuing hereunder. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent. After the effective date of the resignation of an Agent
hereunder, the retiring Agent shall be discharged from its duties and
obligations hereunder, provided that the provisions of this Article X shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent. In the event that there shall
not be a duly appointed and acting Agent, (i) the Borrower agrees to make each
payment due to the Agent hereunder and under the Notes and the other Loan
Documents, if any, directly to each Lender entitled thereto, pursuant to written
instructions provided by the resigning Agent or, after such resignation, the
Lenders, and to provide copies of each certificate or other document required to
be furnished to the Agent hereunder, if any, directly to each Lender, and (ii)
any and all obligations of the Borrower in respect of the Agency Fee incurred
after such event shall be suspended until the appointment of a new Agent.
Section 10.09. Cooperation of Lenders. Each Lender shall (a) promptly
notify the other Lenders and the Agent of any Event of Default known to such
Lender under this Agreement and not reasonably believed to have been previously
disclosed to the other Lenders; (b) provide the other Lenders and the Agent with
such information and documentation as such other Lenders or the Agent shall
reasonably request in the performance of their respective duties hereunder,
including, without limitation, all information relative to the outstanding
balance of principal, interest and other sums owned to such Lender by the
Borrower; and (c) cooperate with the Agent with respect to any and all
collections and/or foreclosure procedures at any time commenced
60
against the Borrower or otherwise in respect of the Collateral by the Agent in
the name and on behalf of the Lenders.
XI. DEFINITIONS.
As used herein the following terms have the following respective meanings:
Accountants. See Section 6.05.
Acme Finance. Acme Finance Corporation, a corporation wholly owned by the
Borrower.
Acme Holdings. Acme Television Holdings, L.L.C., a Delaware limited liability
company and the ultimate parent of the Borrower.
Acme Holdings Equity Financing. See the Recitals.
Acme Holdings Equity Contribution. See the Recitals.
Acme Intermediate. Acme Intermediate Holdings, LLC, a Delaware limited liability
company which owns 99.5% of the membership interests in the Borrower, the
remaining .5% being held by Acme Subsidiary Holdings II, LLC.
Acme Intermediate Equity Contribution. See the Recitals.
Acme Intermediate Indenture. See the Recitals.
Acme Intermediate Notes. See the Recitals.
Acme Intermediate Offering. See the Recitals.
Acme Missouri. Acme Television Licenses of Missouri, Inc., a Missouri
corporation and the wholly owned Subsidiary of the Borrower. The Borrower
contemplates that, upon the consummation of the YPLR Acquisition, Acme Missouri
will be renamed Acme Television Holdings of Missouri, Inc.
Acme Missouri Note Documents. The $132,000,000 promissory note dated as of
September 30, 1997 issued to the Borrower by Acme Missouri to evidence the
intercompany loan made to Acme Missouri on the date hereof with a portion of the
proceeds of the Offering, together with any and all documents executed in
connection therewith or related thereto.
Acme Subsidiary III. Acme Subsidiary Holdings III, LLC, a Delaware limited
liability company wholly owned by the Borrower which owns .5% of Acme Television
Licenses of New Mexico, L.L.C., Acme Television of New Mexico, L.L.C., Acme
Television Licenses of Utah, L.L.C. and Acme Television of Utah, L.L.C.
Aquisition. See the definition of "Permitted Acquisition" set forth below.
61
Acquisition Agreement. With respect to any Permitted Acquisition, the respective
acquisition, purchase or other agreement which sets forth the terms and
conditions of such acquisition.
Acquisition Documents. With respect to any Permitted Acquisition, the respective
Acquisition Agreement, escrow agreement, time brokerage agreement, LMA and other
agreements executed pursuant thereto and in connection therewith from time to
time.
Acquisition Restructurings. See Section 6.11.
Adjusted EBITDA. For any period, EBITDA for such period plus Programming
Payments made during such period and listed on Schedule 1 1.0 I hereto; adjusted
during any such period during which the Borrower or its Subsidiaries acquired or
disposed of any Station or other property (including, for purposes hereof,
acquisitions of cash flow accomplished through LMAs permitted under clause (a)
of the definition of "Permitted LMA" set forth below) other than in the ordinary
course, as permitted under this Agreement, subject to the approval of the
Lenders in the reasonable exercise of their discretion, by (a) excluding
therefrom the portion thereof attributable to any Station or other property sold
or disposed of by any Company other than in the ordinary course of business
during such period as if such Station or other property were not owned at any
time by the Companies during such period, and (b) including therein the portion
thereof attributable to any Station or other property (by Permitted Acquisition
or Permitted LMA) acquired by any Company other than in the ordinary course of
business during such period as if such Station or property were owned by the
Companies at all times during such period, such portion to include pro forma
adjustments for any net cost and expense reductions relating to such Station
specified in the related Schedule of Cost Reductions provided prior to the
consummation of such Acquisition or under Section 3.01(l), as applicable,
provided that the Required Lenders shall have consented to such adjustments in
writing. For purposes of this definition, the portion of EBITDA attributable to
any Station or other property for any period shall be determined in a manner
consistent in all relevant respects with the method used to determine EBITDA,
but on a non-consolidated basis. The determination of EBITDA of any Station
shall account for only those items included in the definition of, EBITDA that
are directly attributable to such Station and the operation thereof and shall
not include, for any period prior to the acquisition thereof by any Company
thereof, any corporate overhead or similar charges of the prior owner of such
Station.
Adjusted Net Cash Proceeds. With respect to any disposition of assets purchased
by the Companies after the date hereof in accordance with the requirements of
Section 7.04, the Net Cash Proceeds thereof minus the related Excluded Proceeds,
if any.
Advance(s). See Section 1.01.
Affiliate(s). Any Person that directly or indirectly controls, or is under
common control with, or is controlled by, the, Borrower and, if such Person is
an individual, any member of the immediate family (including parents, spouse,
children and siblings) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate
62
family and any Person who is controlled by any such member or trust. As used in
this definition, "control", including, its correlative meanings, "controlled
by" and "under common control with", shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership or securities or partnership or other ownership
interests, by contract or otherwise), provided that, in any event, any Person
that owns directly or indirectly securities having ten percent (I 00/o) or more
of the voting power for the election of directors or other governing body of a
corporation or ten percent (10%) or more of the ownership interests of any other
Person (other than as a limited partner of such other Person) will be deemed to
control such corporation or other Person. Notwithstanding the foregoing, no
individual shall be an Affiliate solely by reason of his or her being a
director, officer or employee of the Borrower or any Subsidiary.
Affiliate Agreement. The Affiliate Agreement of even date herewith by and
between the Borrower, the Parent Companies and the Agent.
Agency Fee. See Section 1.07.
A2ent. See the Preamble.
Annualized Adjusted EBITDA. (a) For any period of one fiscal quarter, Adjusted
EBITDA for such period multiplied by four( 4); (b) for any period of two (2)
fiscal quarters Adjusted EBITDA for such period multiplied by two (2); and (c)
for any period of three (3) fiscal quarters Adjusted EBITDA for such period
multiplied by one and one-third (I 1/3).
Applicable Margin. See Section 1.03.
Assignee. See Section 1.13.
Assignment and Acceptance. See Article XIII.
Audited Financial Statements. See Section 1.03.
Borrower. See the Preamble.
Borrowing Date. With respect to any Advances requested hereunder, the date such
Advances are to be made.
Budget. See Section 6.05.
Business Day. (a) For all purposes other than as provided in clause (b) below,
any day other than a Saturday, Sunday or legal holiday on which banks in New
York, New York are open for the transaction of a substantial part of their
commercial banking business; and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
LIBOR Loans, any day that is a Business Day described in clause (a) and that is
also a day for trading by and between banks in U.S. Dollar deposits in the
London interbank market.
63
Capital Expenditures. For any period, expenditures, (including the aggregate
amount of Capital Lease Obligations incurred during such period) made by the
Borrower and the Operating Companies to acquire or construct fixed assets, plant
or equipment (including renewals, improvements and replacements, but excluding
repairs and acquisitions permitted hereunder) during such period, computed in
accordance with GAAP.
Capital Lease. Any lease of property (real, personal or mixed) which, in
accordance with GAAP and Statement No. 13 of the Financial Accounting Standards
Board, would be permitted or required to be capitalized on the lessee's balance
sheet.
Capital Lease Obligations. All obligations of any of the Companies to pay rent
or other amounts under a lease of (or other agreement conveying the right to
use) property (real, personal or mixed) to the extent such obligations are
required to be classified and accounted for as a capital lease on any such
Company's balance sheet under GAAP. For purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.
Cash Interest Expense. For any period, Interest Expense for such period which is
payable, or currently paid, in cash.
Casually Event. Any loss of, or damages to, or any condemnation or other taking
of any assets or property of the Borrower or any of its Subsidiaries for which
the Borrower or any Subsidiary receives insurance proceeds, proceeds of a
condemnation award or other compensation.
CERCLA. The Comprehensive Environmental Response, Compensation and Liability Act
of 1989 (42 USC 9601, et. M.).
CIBC. See the Preamble.
Code. The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
Collateral. Collectively, any and all collateral referred to herein and in the
Security Documents.
Collateral Account. See Section l(d) of each of the Security Agreements.
Commitment Reduction Notice. See Section 1.06.
Commitment Fee. See Section 1.07.
Commitments. See Section 1.01.
Companies. Collectively, the Borrower and all of its Subsidiaries.
64
Compliance Report. See Section 6.05.
Compliance Report Delivery Date. See Section 1.03.
Controlled Group. All trades or businesses (whether or not incorporated) under
common control that, together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section 40001 of ERISA.
Copyright Office. The United States Copyright and Trademark Office or any other
federal government agency which may hereafter perform its functions.
Corporate Overhead. Amounts payable by a Subsidiary to the Borrower in respect
of reasonable accounting, legal and other general expenses applicable to the
operation of the Borrower and its Subsidiaries, which expenses are not
specifically related to the operation of a Station.
Damaged Property. See Section 6.02.
Default. (a) An Event of Default or (b) any event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
Defaulting Lender. Any Lender with respect to which a Lender Default is in
effect.
Delaware Entities. See the definition of "Permitted Restructurings" set
forth below.
DMA. Designated Market Area.
Dollars and Dollar. Lawful money of the United States of America.
EBITDA. For any period, Net Income for such period, plus, to the extent deducted
in the determination of such Net Income and not restored in accordance with the
definition of such term, (a) Interest Expense, (b) depreciation, (c)
amortization, (d) taxes in respect of income and profits expensed during such
period, (e) the recognition of expenses related to the amortization of program
license and rental fees; and (f) other non-cash expenses; in each case, for such
period and determined on a consolidated basis, after eliminating intercompany
items, in accordance with GAAP, minus Programming Payments made during such
period.
Effective Date. See Section 1.08.
Environmental Laws. Any and all present and future Federal, state, local and
foreign laws, rules or regulations, and any orders or decrees, in each case as
now or hereafter in effect, relating to the regulation or protection of human
health, safety or the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage,
65
disposal, transport or handling of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes.
Environmental Site Assessments. See Section 4.20.
Equity Contributions. Collectively, the Acme Holdings Equity Contribution and
the Acme Intermediate Equity Contribution.
ERISA. The Employee Retirement Security Act of 1974, as amended.
Expiration Date. September 30, 2002.
Event of Default. See Article VIII.
Excluded Proceeds. With respect to any disposition of assets purchased by the
Companies after the date hereof in accordance with the requirements of Section
7.04, that portion of the Net Cash Proceeds thereof which is less than or equal
to the portion of the funds used to finance the acquisition of such assets
derived from cash equity contributions to the Borrower, provided that (a) such
amount shall have been specified as such on the Schedule of Sources of
Acquisition Funds delivered to the Agent in connection with, and prior to, such
Acquisition, and (b) such equity contributions shall have been made on terms and
conditions reasonably satisfactory to the Required Lenders.
FAA. The Federal Aviation Administration or any other federal governmental
agency which may hereafter perform its functions.
FCC. The Federal Communications Commission or any other federal governmental
agency which may hereafter perform its functions.
FCC Licenses. Any Licenses issued by the FCC.
Federal Funds Rate. For any period, a fluctuating interest rate per annum (based
on a 360 day year) equal for each day during such period to the weighted average
of the rates of interest charged on overnight federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds brokers on
such day, as published for any day which is a Business Day by the Federal
Reserve Bank of New York (or, in the absence of such publication, as reasonably
determined by the Agent).
Fee Letter. The letter agreement dated as of September 18, 1997 between the
Borrower, CIBC and the Agent with respect to the payment of certain fees.
Financial Statements. See Section 4.01.
Funded Debt. Without duplication, all Indebtedness with respect to any of the
following: (a) money borrowed (whether recourse or non-recourse), including
principal and overdue interest and premiums, (b) Rate Hedging Obligations, (c)
obligations evidenced by a bond,
66
debenture, note or other like written obligation to pay money, (d) Capital
Lease Obligations, (e) obligations under conditional sales or other title
retention agreements or secured by any Lien, (f) any letters of credit, bankers
acceptances or similar instruments (including reimbursement obligations with
respect thereto), (g) the deferred unpaid purchase price of property or
services, except trade payables and accrued expenses incurred in the ordinary
course of business, or (h) any guaranty of any or all of the foregoing.
Funding Fee. See Section 1.07.
GAAP. Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other entity as may be approved by a
significant segment of the accounting profession, as in effect on December 31,
1996, applied on a basis consistent with (a) the application of the same in
prior fiscal periods, (b) that employed by the Accountants in preparing the
financial statements referred to in Section 6.05(a) and (c) the accounting
principles generally utilized in the broadcast television industry.
Governmental Authoritiy. Any nation or government, any state or other political
subdivision thereof and any entity exercising any executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government.
Hazardous Materials. (a) any petroleum or petroleum products, flammable
materials, explosives, radioactive materials, asbestos, urea formaldehyde foam
insulation, and transformers or other equipment that contain polychlorinated
biphenyls ("TCB's"), (b) any chemicals or other materials or substances that are
now or hereafter become defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
wastes", "restricted Hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any Environmental
Law and (c) any other chemical or other material or substance, exposure to which
is now or hereafter prohibited, limited or regulated under any Environmental
Law.
Holding Companies. Collectively, each of the wholly owned Subsidiaries of the
Borrower organized to wholly own the License Companies and Operating Companies
in a designated market.
Indebtedness or indebtedness. As applied to any Person, (a) all items (except
items of capital stock, capital or paid-in surplus or of retained earnings)
which, in accordance with GAAP, would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Indebtedness is to be determined, including Capital
Lease Obligations but excluding Indebtedness of the Companies with respect to
trade obligations and other normal accruals in the ordinary course of business
not yet due and payable or not more than ninety (90) days in arrears measured
from the date of billing (other than any such other obligations which such
Person is contesting in good faith and for which proper reserves have been
established); (b) all indebtedness secured by any mortgage, pledge, lien or
conditional sale or other title retention agreement to which any property or
asset owned
67
or held by such Person is subject, whether or not the indebtedness secured
thereby shall have been assumed; and (c) all indebtedness of others which such
Person has directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), discounted or sold
with recourse or agreed (contingently or otherwise) to purchase or repurchase or
otherwise acquire, or in respect of which such Person has agreed to supply or
advance funds (whether by way of loan, stock or equity purchase, capital
contribution, makewell or otherwise) or otherwise to become directly or
indirectly liable.
Indemnified Liabilities. See Section 14.14.
Indemnified Parties. See Section 14.14.
Indenture. See the Recitals.
Insurance Proceeds. With respect to any Casualty Event, any proceeds of
insurance, condemnation award or other compensation in respect thereof.
Interest Adjustment Date. See Section 1.03.
Interest Expense. For any period, the aggregate amount (determined on a
consolidated or consolidating basis, as appropriate, after eliminating
intercompany items, in accordance with GAAP) of interest accrued (whether or not
paid) during such period (including without limitation the Commitment Fee, the
Agency Fee the interest component of Capital Lease Obligations but excluding the
Funding fee and all interest in respect of overdue -trade payables) by the
Companies in respect of all Indebtedness for borrowed money.
Interest Period. With respect to each LIBOR Loan, the period commencing on the
date such Loan is made or converted from a Prime Rate Loan, or the last day of
the immediately preceding Interest Period, as to LIBOR Loans being continued as
such, and ending one (1), two (2), three (3) or six (6) months thereafter, as
the Borrower may elect in the applicable Request for Advances or Interest Rate
Option Notice, provided that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iv) below) that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case
such Interest Period shall end on the immediately preceding Business Day;
(ii) if the Borrower shall fail to give notice as provided in Section
1.04, the Borrower shall be deemed to have requested a conversion of the
affected LIBOR Loan to a Prime Rate Loan on the last day of the then
current Interest Period with respect thereto;
(iii) any Interest Period relating to a LIBOR 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, subject to clause (iv) below, end on the last
Business Day of a calendar month;
68
(iv) any Interest Period related to a LIBOR Loan that would otherwise
end after the final maturity date of the Loans shall end on such final
maturity date;
(v) notwithstanding clauses (iv) and (v) above, no Interest Period
shall have a duration of less than one (1) month.
Interest Rate Option Notice. A notice given by the Borrower to the Agent of the
Borrower's election to convert Loans to a different type or continue Loans as
the same type, in accordance with Section 1.04(a).
Issuers. See the Recitals.
Xxxxxxx Consulting Agreement. The Consulting Agreement by and between the
Borrower, as assignee of Acme Holdings, and Xxxxx Xxxxxxx dated as of June 17,
1997, as originally executed and delivered and as amended from time to time in
compliance with Section 7.12.
Koplar Management A2reement. The Management Agreement by and between Borrower,
as assignee of Acme Holdings, and Xxxxxx X. Xxxxxx, to be entered into upon
consummation of the KPLR Acquisition, as provided in, and substantially in the
form of Exhibit E to, the KPLR Acquisition Agreement, as originally executed and
delivered and as amended from time to time in compliance with Section 7.12.
KPLR Acquisition. The acquisition by Acme Missouri of all of the issued and
outstanding shares of capital stock (other than certain designated management
shares to be redeemed simultaneously therewith) of Koplar Communications, Inc.,
owner and operator of Television Station KPLR-TV licenses to St. Louis,
Missouri, pursuant to the KPLR Acquisition Agreement.
KPLR Acquisition Agreement. The Stock Purchase Agreement dated as of July _,
1997 among Acme Missouri (as assignee of Acme Holdings) and Koplar
Communications, Inc. and its stockholders.
KPLR Acquisition Documents. Collectively, the KPLR Acquisition Agreement, the
KPLR Escrow Agreement, the KPLR Time Brokerage Agreement and any and all other
documents executed in connection therewith.
KPLR Escrow Funds. The cash amount of $143,000,000, as adjusted under Section
1.1 of the KPLR Escrow Agreement, to be delivered to an escrow agent by Acme
Missouri pursuant to the KPLR Escrow Agreement.
KPLR Escrow Agreement. The Escrow Agreement dated as of September 8, 1997
among Acme Missouri (as assignee of Acme Holdings) and the KPLR Sellers.
KPLR Licensees. Koplar Communications, Inc. and Koplar Communications
Television, LLC.
69
KPLR Transfer Application. The application on FCC Form 315 requesting the FCC's
approval of the transfer of control of Koplar Communications, Inc., which
application was required to be filed by FCC counsel to the KPLR Sellers, or
delivered for filing to FCC counsel to the Borrower, immediately following
receipt of the KPLR Escrow Funds by the Escrow Agent (as defined in the KPLR
Escrow Agreement) under Article I of the KPLR Escrow Agreement.
KPLR Sellers. Collectively, Koplar Communications, Inc., and its stockholders.
Lender Default. (a) The refusal (which has not been retracted) of a Lender to
make available its portion of any Loan or (b) a Lender having notified the
Borrower and/or the Agent in writing that it does not intend to lend under this
Agreement; in either case other than by reason of any failure of the Borrower to
meet any material condition precedent thereto hereunder.
Lenders. See the Preamble.
LIBOR Base Rate. With respect to each day during each Interest Period pertaining
to any LIBOR Loan, the rate per annum determined by the Agent to be the
arithmetic mean of the offered rates for deposits in Dollars with a term
comparable to such Interest Period that appears on the Telerate British Bankers
Assoc. Interest Settlement Rates Page (as defined below) at approximately I 1:00
A.M., London time, on the second full Business Day preceding the first day of
such Interest Period; provided, however' that if there shall at any time no
longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page,
the term "LIBOR Base Rate" shall mean, with respect to each day during each
Interest Period pertaining to any LIBOR Loan, the rate per annum equal to the
rate at which the Agent is offered Dollar deposits at or about 1 0:00 A.M., New
York City time, two (2) Business Days prior to the beginning of such Interest
Period in the London interbank deposit market where the eurodollar and foreign
currency and exchange operations in respect of its LIBOR 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 wnount of its LIBOR
Loan to be outstanding during such Interest Period. As used herein, the term
"Telerate British Bankers Assoc. Interest Settlement Rates Pape7' means the
display designated as Page 3750 on the Telerate System Incorporated Service (or
such other page as may replace such page on such service for the purpose of
displaying the rates at which Dollar deposits are offered by leading banks in
the London interbank deposit market).
LIBOR Loans. Loans bearing interest at a rate determined on the basis of the
LIBOR Rate.
LIBOR Rate. With respect to each day during each Interest Period pertaining to a
LIBOR Loan, a rate per annum determined for such day in accordance with the
following formula (rounded upward, if necessary, to the nearest 1/16th of 1%):
LIBOR Base Rate
1.00 - LIBOR Reserve Requirements
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LIBOR Reserve Requirements. For any day as applied to a LIBOR 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 of Governors of the Federal Reserve System (or other Governmental
Authority having jurisdiction with respect thereto) prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) maintained by a member bank of the Federal Reserve System; provided,
however, that LIBOR Reserve Requirements shall be calculated without giving
effect to any increase of the rate of reserve applicable to any Lender which is
specifically imposed on such Lender under a memorandum of understanding with a
Federal Reserve Bank.
License Agreements. The several Operating Agreements between the Operating
Companies and the respective License Companies.
License Companies. Collectively, the wholly owned Subsidiaries of each of the
Holding Companies formed for the sole purpose of holding one or more FCC
Licenses in the market served by the Stations(s) owned and operated by the
related respective Operating Company, itself being a subsidiary of such Holding
Company.
Licenses. A license, authorization or permit to construct, own or operate any
Station granted by the FCC or any other Govenmental Authority. The term
"License" shall include each of the Licenses set forth on Schedule 4.07.
Liens. See Section 4.09.
LMA. A local marketing agreement, program service agreement or time brokerage
agreement between a broadcaster and a television station licensee pursuant to
which the broadcaster provides programming to, and retains the advertising
revenues of, such licensee's station in exchange for fees paid to such licensee.
Loan Documents. This Agreement, the Notes, the Security Documents, the Affiliate
Agreement and all other agreements, instruments and certificates contemplated
hereby and thereby, including without limitation any Rate Hedging Agreements
entered into with any of the Lenders or their Affiliates.
Loans. The Advances.
Main Station License. A main station license issued by the FCC authorizing a
Station's primary transmissions, and not any auxiliary licenses held by such
Station.
Management Services. Senior management and supervisory services provided to the
Borrower by the Parent Companies under the Management Agreement dated June 17,
1997 among the Borrower and the Parent Companies.
Margin Stock. See Section 4.13.
71
Material Adverse Effect. (a) An adverse effect on the validity or enforceability
of this Agreement or any of the other Loan Documents in any material respect,
(b) an adverse effect on the condition (financial or other), business, results
of operations or properties of the Borrower and its Subsidiaries, taken as a
whole, in any material respect or (c) an impairment of the ability of the
Companies to fulfill their obligations under this Agreement or any other Loan
Document to which any Company is a party, in any material respect.
Net Cash Proceeds. With respect to any disposition of assets by any Company
(including any LMA by any Company, as "licensee" thereunder), the aggregate
amount of all cash payments received by such Company, directly or indirectly, in
connection with such disposition, whether at the time thereof or after such
disposition under deferred payment arrangements or investments entered into or
received in connection with such disposition, minus the aggregate amount of any
legal, accounting, regulatory, title and recording tax expenses, commissions
and other fees and expenses paid by any Company in connection with such
disposition, and minus any income taxes payable by. any Company or its
stockholders, partners or members in connection with such disposition.
Net Income. For any period, net income of the Borrower and its Subsidiaries from
their respective operations, after deducting all operating expenses, provisions
for all taxes and reserves (including reserves for deferred income taxes) and
all other proper deductions (including Interest Expense), but excluding any
extraordinary gains derived from any sales of assets made during such period, to
the extent such gains or losses are properly includable in the determination of
Net Income for such period, and excluding the effect of Trades during such
period, all determined on a consolidated basis, after eliminating intercompany
items in accordance with GAAP.
New Mexico Acquisition. The acquisition of the right to construct Television
Station KAUOTV, licensed to Albuquerque New Mexico, pursuant to the Asset
Purchase Agreement dated as of August 22, 1997 by and among Minority
Broadcasters of Santa Fe, Inc. and ACME Television Licenses of New Mexico,
L.L.C.
Notes. See Section 1.01.
Obligations. The Loans and the other obligations of the Companies under this
Agreement and the other Loan Documents, including without limitation any and all
future loans, advances, debts, liabilities, obligations, covenants and duties
owing by the Companies to the Agent and the Lenders, or any of them, of any kind
or nature, whether or not evidenced by any note, mortgage or other instrument,
whether arising by reason of an extension of credit, loan, letter of credit
guarantee, indemnification or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
"Obligations" also includes, without limitation, all interest, charges,
expenses, fees (including attorneys', accountants', appraisers', consultants'
and other fees) and any other sums chargeable to the Companies under this
Agreement or any other Loan Documents.
Offering. See the Recitals.
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Offering Memorandum. See the Recitals.
Opening Balance Sheet. See Section 4.01.
Oregon Holdings. ACME Television Holdings of Oregon, L.L.C., an Oregon limited
liability company wholly owned 99% by the Borrower and 1% by the Oregon License
Company
Oregon License Company. ACME Television Licenses of Oregon, L.L.C., an Oregon
limited liability company owned 99% by the Oregon Holding Company and 1% by the
Oregon Operating Company
Oregon Operating Company. ACME Television of Oregon, L.L.C., an Oregon limited
liability company owned 99% by the Oregon Holding Company and 1% by the Oregon
License Company
Oregon Subsidiaries. The Oregon Holding Company, the Oregon License Company and
the Oregon Operating Company.
Operating Companies. Collectively, the wholly owned Subsidiaries of each of the
Holding Companies formed for the sole purpose of owning and operating the
television broadcast Station in the market served by such Holding Company.
Original Agreement. See the Recitals.
Original Note. See the Recitals.
Parent Companies. Collectively, Acme Holdings, Acme Intermediate, Acme
Subsidiary Holdings, LLC, Acme Subsidiary Holdings II, LLC, Acme Intermediate
Finance, Inc. and their controlled Affiliates from time to time.
Parent Subordination Agreements. See Section 2.01.
Permitted Acquisition. The acquisition by the Borrower or any Operating Company
and License Company, whether by way of the purchase of assets or stock, by
merger or consolidation or otherwise, of substantially all of the assets of or
ownership interests in a television broadcast property (each, an "Acquisition),
which Acquisition shall have been approved in writing by the Required Lenders in
their sole and absolute discretion. Without in any way limiting the discretion
of the Required Lenders, at a minimum, all Permitted Acquisitions will be
subject to the fulfillment of the following conditions:
(a) If such Acquisition involves the purchase of stock or other
ownership interests, the same shall be effected in such a manner as to
assure that the acquired entity becomes a wholly owned Subsidiary of the
Borrower or of a Holding Company;
73
(b) No later than (1) thirty (30) days prior to the consummation of
any such acquisition or, if earlier, ten (10) business days after the
execution and delivery of the related Acquisition Agreement, the Borrower
shall have delivered to the Agent (in sufficient copies for all the
Lenders) copies of executed counterparts of such Acquisition Agreement,
together with all Schedules thereto, the forms of any additional agreements
or instruments to be executed at the closing thereunder (to the extent
available), and all applicable financial information, including new
Projections, updated to reflect such acquisition and any related
transactions, (2) promptly following a request therefor, copies of such
other information or documents relating to such Acquisition as any Lender
shall have reasonably requested, and (3) promptly following the
consummation of such acquisition, certified copies of the agreements,
instruments and documents referred to above to the extent the same has been
executed and delivered at the closing under such Acquisition Agreement;
(c) The aggregate amount of all consideration payable by the Borrower
and/or any Subsidiaries in connection with such acquisition (other than
earn-outs and customary postclosing adjustments, escrows, holdbacks and
indemnities and indebtedness permitted under Section 7.01) or otherwise
expressly permitted by the Required Lenders in their sole discretion shall
be payable on the date of such acquisition;
(d) Neither the Borrower nor any Subsidiary shall, in connection with
any such Acquisition, assume or remain liable with respect to any
indebtedness (including any material tax or ERISA liability) of the related
Seller, except (i) to the extent permitted under Section 7.01 or otherwise
expressly permitted by the Required Lenders in their sole discretion and
(ii) obligations of the Seller incurred in the ordinary course of business
and necessary or desirable to the continued operation of the underlying
properties, and any other such liabilities or obligations not permitted to
be assumed or otherwise supported by any of the Companies hereunder shall
be paid in full or released as to the assets being so acquired on or before
the consummation of such acquisition;
(e) All other assets and properties acquired in connection with any
such Acquisition shall be free and clear of any liens, charges and other
encumbrances other than permitted under Section 7.02 or as otherwise
expressly permitted by the Required Lenders in their sole discretion;
(f) All FCC Licenses associated with such Acquisition shall be
acquired by a License Company (or acquired by a Holding Company and
immediately transferred to the related License Company), which shall enter
into a License Agreement with the related Operating Company with respect
thereto, and all other assets shall be acquired by such Operating Company;
(g) The Borrower shall have complied as applicable with all of the
provisions in Sections 2.01 and 3.02, including the execution and delivery
of such additional agreements, instruments, certificates, documents,
consents, environmental site assessments, opinions and other papers as the
Required Lenders may require;
74
(h) Immediately prior to any such Acquisition and after giving effect
thereto, no Default shall have occurred or be continuing;
(i) Without limiting the generality of the foregoing, after giving
effect to such Acquisition the Borrower shall be in compliance with the
provisions of Article V, (i) calculated on a pro forma basis as of the end
of and for the period of four (4) consecutive fiscal quarters most recently
ended prior to the date of such Acquisition for which financial statements
are required to be provided (and have been so delivered) under Section 6.05
and (ii) under the Borrower's updated Projections referred to above. The
Borrower shall provide to the Agent a certificate signed on behalf of the
Borrower by its chief financial officer demonstrating such compliance in
reasonable detail;
(j) If, for any subsequent fiscal period, the Borrower wishes to
effect 1)ro forma adjustments of EBITDA, as provided in the definition of
"Adjusted EBITDA" arising from cost and expense reductions relating to the
Station being acquired pursuant to such Acquisition, then, prior to the
consummation of such Acquisition, the Borrower shall deliver to the Agent
(in sufficient copies for all of the Lenders) a detailed schedule of such
cost and expense reductions (together with any such schedule delivered
under Section 3.01(i), in each case, a "Schedule of Cost Reductions"),
which shall be subject to the consent of the Required Lenders;
(k) If (i) such Acquisition is to be financed, directly or indirectly,
with the proceeds of equity contributions to the Borrower and (ii) the
Borrower wishes to exclude an amount equal thereto from the portion of the
Net Cash Proceeds of any Disposition of the acquired assets, for purposes
of Section 1.06(c), then, at least five (5) Business Days before the
consummation of such Acquisition, the Borrower shall deliver to the Agent
(in sufficient copies for all of the Lenders) (1) a schedule of its sources
of funds for such Acquisition, specifying the equity component thereof (in
each case, a "Schedule of Sources of Acquisition Funds"), and (2) the
documents pursuant to which such equity will be invested in the Borrower,
reflecting terms and conditions reasonably satisfactory to the Required
Lenders;
(1) On or before the consummation of each such Acquisition, the
Borrower shall deliver to the Agent (in sufficient copies for all the
Lenders) and to the Agent's counsel a compliance certificate, substantially
in the form of Schedule 11.02(a) hereto or such other form as shall be
satisfactory to the Agent, duly executed by the Borrower's chief executive
officer or chief financial officer, certifying as to the matters set forth
above with respect to such Acquisition. In the event that such Acquisition
is financed, in whole or in part, with the proceeds of Loans hereunder, the
foregoing requirement shall be deemed satisfied upon delivery of the
compliance certificate required under Section 3.02(c), in the form of
Schedule 3.02(c), in connection with such Loans;
(m) On or before the consummation of each such Acquisition involving
the purchase or formation of a new Subsidiary and/or the execution of
additional Security Documents or any other Loan Document, or otherwise, if
reasonably required by the Agent, the Agent shall have received the
favorable written opinions of (i) general counsel to the Companies
75
and (ii) special FCC counsel to the Companies, in each case dated the date
of such Loans, addressed to the Agent and the Lenders and substantially in
the forms attached as Schedules 11.02Ub and (c) hereto; and
(n) Only if reasonably requested in connection with the recording of
any mortgages or similar instruments or any material issues of state law
raised in connection with such Acquisition, the Agent shall have received
the favorable opinion of local counsel to the Companies, dated the date of
such Acquisition, addressed to the Agent and the Lenders and substantially
in the form attached as Schedule 11.02(d) hereto.
Notwithstanding anything contained in this Agreement to the contrary, the KPLR
Acquisition, the Tennessee Acquisition, the Utah Acquisition and the New Mexico
Acquisition shall constitute Permitted Acquisitions hereunder; provided, that
such Acquisitions are consummated substantially in accordance with the terms set
forth in the Acquisition Agreements with respect to each such acquisition, true
and complete copies of which have been provided to the Lenders.
Permitted Investments.
(a) Investments in property to be used by the Subsidiaries in the
ordinary course of business;
(b) current assets arising from the sale of goods and services in the
ordinary course of business;
(c) investments (of one year or less) in direct or guaranteed
obligations of the United States, or any agency thereof,
(d) investments (of 90 days or less) in certificates of deposit of the
Lenders or any other domestic commercial bank of recognized standing having
capital, surplus and undivided profits in excess of $1 00,000,000,
membership in the Federal Deposit Insurance Corporation ("FDIC") and senior
debt rated carrying one of the two highest ratings of Standard & Poor's
Ratings Service, A Division of McGraw Hill, Inc., or Xxxxx'x Investors
Service, Inc. (an "Approved Institution");
(e) investments (of 90 days or less) in commercial paper given one of
the two highest ratings by Standard and Poor's Ratings Service, A Division
of McGraw Hill, Inc., or by Xxxxx'x Investors Service, Inc;
(f) investments redeemable at any time without penalty in money market
instruments placed through the Lenders or Approved Institutions;
(g) existing investments by the Companies in wholly owned
Subsidiaries;
(h) repurchase agreements fully collateralized by United States
government securities;
76
(i) deposits fully insured by the FDIC;
(j) short-term loans to employees and advances to employees in the
ordinary course of business for the payment of bona fide, properly
documented, business expenses to be incurred on behalf of the Companies,
provided that the aggregate outstanding amount of all such loans and
advances shall not exceed $250,000 in the aggregate at any time;
(k) investments made in connection with Permitted Acquisitions
hereunder and otherwise in compliance with the terms and conditions of
this Agreement and the other Loan Documents;
(1) investments in wholly owned Subsidiaries formed after the date of
this Agreement, provided that (i) such Investments do not exceed $500,000
in aggregate amount as to all such Subsidiaries as a group and (ii) at the
time any such investment is made and after giving effect thereto, there
exists no Default;
(m) Rate Hedging Obligations entered into in the ordinary course of
the Borrower's or a Subsidiary's business;
(n) options to purchase television broadcast station licenses and
related assets (or capital stock of Persons owning such assets) having an
option price of any amount not in excess of $ 1 00,000 entered into in
connection with the execution of local marketing agreements and Investments
pursuant to local marketing agreements to operate television broadcast
stations which are combined with such an option; and
(o) deposits made pursuant to legally binding agreements to acquire
television broadcast station licenses and related assets (or capital stock
of Persons owing such assets), which acquisitions constitute Permitted
Acquisitions hereunder, in an amount not to exceed five percent (5%) of the
purchase price; provided that the Station to be acquired will be owned by
an Operating Company upon consummation of the contemplated Acquisition and
provided, further, that deposits made under this clause shall cease to be
treated as Permitted Investments upon forfeit of such deposit for any
reason.
Permitted LMA. (a) An LMA entered into in connection with, and in anticipation
of, including without limitation the LMA evidenced by the KPLR Time Brokerage
Agreement, a Permitted Acquisition, (b) an LMA of any Station owned by a
Company, where a License Company is the "licensee" thereunder, provided that
such LMA shall be treated as an asset sale for purposes of the provisions of
Section 1.06(b) and all payments received in connection therewith shall be
applied to repay the Notes as provided under such Section, or (c) an LMA of a
broadcast television station other than the Companies' Stations, where an
Operating Company is the "programmer" or "broker" thereunder, provided that the
aggregate amount payable to the licensee under such LMA, when aggregated with
all other payments under such LMAS, shall not exceed $500,000 in any fiscal
year.
Permitted Restructurings. (a) The formation of new Delaware limited liability
companies (the "Delaware Entities") with names and functions identical to those
of the respective existing
77
Oregon Subsidiaries and Tennessee Subsidiaries and (b) the merger of each
existing Oregon Subsidiary and each existing Tennessee Subsidiary into the new
Delaware entity of the same name, in each case with such Delaware entity being
the surviving company.
Person or Person. Any individual, corporation, partnership, joint venture,
trust, business unit, unincorporated organization, or other organization,
whether or not a legal entity, or any government or any agency or political
subdivision thereof.
Pricing Period. See Section 1.03.
Pricing Ratio. See Section 1.03.
Prime Rate. As of any date, the fluctuating interest rate per annum equal to the
greater of (a) the rate established by Canadian Imperial Bank of Commerce from
time to time at its office in New York City as its "Base Rate" for commercial
loans in United States Dollars, and (b) the Federal Funds Rate plus one half of
one percent (1/2%) in each case, including any applicable adjustments for
reserves or Federal Deposit Insurance Corporation requirements. The Prime Rate
is not necessarily intended to be the lowest rate of interest determined by
Canadian Imperial Bank of Commerce in connection with extensions of credit.
Prime Rate Loans. Loans bearing interest at a rate determined on the basis of
the Prime Rate.
Programming. All programming and film rights and all rights to broadcast
television programming of any kind, whether held under license, lease,
agreement, contract or otherwise for use by the Borrower or its Subsidiaries in
connection with any of the Stations, including without limitation all rights for
programming of movies, television series productions, children's programming,
sports productions, news coverage and other television viewing products, and the
rights to all video tapes, films and other materials now or hereafter
constituting or embodying such programming.
Programming Payments. For any period, all actual cash payments required to be
made by the Borrower or any of its Subsidiaries in respect of Programming and
all cancellations, buy-backs, reversals, termination or assignments of any of
the foregoing.
Projections. See Section 4.17.
Properties. See Section 4.20.
Ouarterly Dates. See Section 1.03(d).
Rate Hedging Agreements. Any written agreements evidencing Rate Hedging
Obligations, including without limitation the LIBOR provisions of this
Agreement.
Rate Hedging Obligations. Any and all obligations of the Borrower, whether
direct or indirect and whether absolute or contingent, at any time created,
arising, evidenced or acquired (including all renewals, extensions,
modifications and amendments thereof and all substitutions
78
therefor), in respect of-. (a) any and all agreements, arrangements, devices
and instruments designed or intended to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange transactions,
including without limitation dollar-denominated or cross currency interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options,
puts and warrants and so-called "rate swap" agreements; and (b) any and all
cancellations, buy-backs, reversals, terminations or assignments of any of the
foregoing.
Recovering Party. See Section 1.14.
Recovery. See Section 1.14.
Regulatory Change. With respect to any Lender, any change after the date of this
Agreement in any law, rule or regulation (including without limitation
Regulation D) of the United States, any state or any other nation or political
subdivision thereof, including without limitation the issuance of any final
regulations or guidelines, or the adoption or making after the date of this
Agreement of any interpretation, directive or request, applying to a class of
banks in which such Lender is included under any such law, rule or regulation
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary authority
charged with the interpretation thereof.
Regulation D. Regulation D of the Board of Governors of the Federal Reserve
System, as the same may be amended or supplemented from time to time.
Reinvestment Period. See Section 1.06.
Remedial Work. All activities, including, without limitation, cleanup design and
implementation, removal activities, investigation, field and laboratory testing
and analysis, monitoring and other remedial and response actions, taken or to be
taken, arising out of or in connection with Hazardous Materials, including
without limitation all activities included within the meaning of the terms
"removal," "remedial action" or "response," as defined in 42 U.S.C. Section
9601(23), (24) and (25).
Request for Advances. See Section 1.04.
Required Financial Statements. See Section 1.03.
Required Lenders. At any time (a) Lenders (excluding Defaulting Lenders) holding
at least fifty percent (500/o) of the sum of the aggregate outstanding principal
amount of the Loans and the aggregate amount of the unused Commitments; or (b)
if any one Lender and its affiliates own more than fifty percent (50%) of such
sum, Lenders (excluding Defaulting Lenders) holding at least sixty-six and
two-thirds percent (66 2/3%) of the sum of the aggregate outstanding principal
amount of the Loans and the aggregate amount of the unused Commitments.
79
Restoration Period. With respect to any Casualty Event resulting in the proceeds
of insurance, condemnation award or other compensation, one hundred eighty (I
80) days following receipt by the Borrower, or any other Company, of such
proceeds or such longer period as the Borrower shall reasonably request, if the
Borrower or such Company has commenced such restoration or replacement within
forty-five (45) days after receipt of such proceeds and thereafter diligently
pursues such restoration or replacement to completion.
Restricted Payment. Any distribution or payment of cash or property, or both,
directly or indirectly (a) in respect of any Subordinated Debt or (b) to any
Subsidiary or to any partner, member, stockholder, optionholder, warrantholder
or other equityholder of any of the Companies, any of the Parent Companies or of
any of their respective Affiliates for any reason whatsoever, including without
limitation, salaries, loans, debt repayment, consulting fees, management fees,
expense reimbursements and dividends, distributions, put, call or redemption
payments and any other payments in respect of equity interests; provided,
however, that Restricted Payments shall not include
(i) reasonable Transaction Costs,
(ii) transactions that comply with Section 7.11;
(iii) reasonable Corporate Overhead;
(iv) Tax Distributions; and
(v) monthly payments made to the Parent Companies for corporate
overhead expenses reasonably incurred by each Parent Company for Management
Services which do not relate to the operation of specific Stations directly
or indirectly owned or operated by the Borrower, including without
limitation the following:
(A) insurance premiums,
(B) organizational filing fees,
(C) SEC and other regulatory fees,
(D) legal, accounting, audit and tax fees,
(E) reimbursement payments to investors for their ordinary
course out-of-pocket expenses,
(F) trustee and rating agency fees and
(G) the fees and expenses of board meetings; and
(vi) payments made to fund obligations under the Xxxxxxx Consulting
Agreement, the Koplar Management Agreement and other reasonable
compensation payable under employment and/or consulting agreements.
Revolving Lines of Credit. See Section 1.01.
Xxxxxxx Broadcasting. Xxxxxxx Broadcasting of Salt Lake City, L.L.C.
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Schedule of Cost Reductions. See the definition of such term set forth above in
the definition of "Permitted Acquisitions".
Schedule of Sources of Acquisition Funds. See the definition of such term set
forth above in the definition of "Permitted Acquisition".
Secured Debt. All Indebtedness of the Borrower and its Subsidiaries (a) under
the Notes and (b) of the type secured as described in Section 7.02(g).
Security Agreements. Collectively, the Security and Pledge Agreements executed
from time to time by the Borrower and its Subsidiaries as required under Section
2.01, as amended, restated, replaced, supplemented or otherwise modified from
time to time.
Security Document(s). See Section 2.01.
Seller. With respect to any acquisition permitted hereunder, the owner of the
stock (or other ownership interests) to be acquired, or the entity the assets
and properties of which are to be acquired, by the related respective Company
pursuant to such acquisition.
Senior Notes. See the Recitals.
Specified Default. An Event of Default arising under any of the following
paragraphs of Article VIII:
(a) paragraph (b) or (c);
(b) paragraph (d), if such Event of Default arose from the Borrower's
failure to observe, perform or comply with its obligations under any of the
provisions of Article V or Section 6.06, 7.04, 7.09, 7.12 or 7.15;
(c) paragraph (d), if such Event of Default arose from the Borrower's
failure to observe, perform or comply with its obligations under any of the
provisions of Section 7.01, 7.02, 7.07 or 7.13, but only if the same shall
involve the incurrence of indebtedness or liens, the sale or transfer of
property, the making of investments or loans, the sale of receivables, the
consummation of transactions or the violation of the Code, ERISA or any
governmental regulation, as the case may be, valued, or involving
consideration, penalties or other payments, in excess of $250,000 in the
aggregate for all such Events of Default;
(d) paragraph (e), if such Event of Default arose from the Borrower's
failure to observe, perform or comply with its obligations under any of the
provisions of Sections 6.05 (a), (b) or (c), but only if the same shall
have continued without remedy for more than forty-five (45) days; and
(e) paragraph (f), (g), (h), (i), (k), (1), (o) or (p).
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None of the provisions of this Agreement which refer to any Specified Default
shall affect the rights of the Agent or the Lenders to exercise any rights or
remedies under the Loan Documents or applicable law arising upon the occurrence
of an Event of Default.
Stations. All of the television stations owned or managed by the Companies,
where each such station consists of all of the properties and operating rights
constituting a complete, fully integrated system for transmitting broadcast
television signals from a transmitter licensed by the FCC, together with any
subsystem ancillary thereto, without payment of any fee by the Persons receiving
such signals.
Subordinated Debt. Any Indebtedness which is subject to a Parent Subordination
Agreement.
Subsidiary. (a) Any corporation, association, joint stock company, business
trust or other similar organization of which more than 50% of the ordinary
voting power for the election of a majority of the members of the board of
directors or other governing body of such entity is held or controlled by the
Borrower or a Subsidiary of the Borrower; (b) any other such organization the
management of which is directly or indirectly controlled by the Borrower or a
Subsidiary of the Borrower through the exercise of voting power or otherwise; or
(c) any joint venture, association, partnership, limited liability company or
other entity in which the Borrower or a Subsidiary of the Borrower has more than
a 50% equity interest. All of the Borrower's Subsidiaries as of the date hereof
are listed on Schedule 4.02. For purposes of this Agreement, a Subsidiary of the
Borrower or of one of its Subsidiaries shall be deemed to be "wholly owned" so
long as the Borrower, or a wholly owned Subsidiary of the Borrower, shall own at
least 99.5% of the aggregate equity interests therein.
Tax Distributions. In any period, collectively, any and all distributions made
to Acme Intermediate, the proceeds of which are ultimately paid to members of
Acme Intermediate or Acme Holdings to provide for the payment of taxes, as
required under the Operating Agreement for Acme Intermediate or Acme Holdings in
respect of:
(a) the taxable income of the Borrower (after taking into account all
of the Borrower prior tax losses, to the extent such losses have not
previously been deemed to reduce the taxable income of the Borrower), based
on the approximate highest combined tax rate that applies to any one of
such members, and
(b) any audit of any member (or of the Borrower) with respect to a
prior taxable year and paid or payable by such member during the most
recent taxable year, as and to the extent that such amounts are
attributable to the member being allocated more taxable income than was
previously reported to such member as a result of any position taken by the
Borrower or Acme Holdings in determining and reporting its taxable income
for the year in question;
provided, however, that:
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(i) such Tax Distributions shall be made within a reasonable time on
or before the due date for tax payments by members on income of the
Borrower in respect of which the Tax Distribution is made;
(ii) the amount distributable under clause (b) above (relating to tax
audit adjustments) shall not exceed the sum of- (1) the excess of.- (A) the
amount that would have been distributable under clause (a) above in respect
of the income of the Borrower as adjusted by the tax audit, over (B) the
amount that was actually distributed by the Borrower in respect of such
income, plus (2) interest and penalties actually payable to the taxing
authority as a result of the audit adjustment; and
(iii) the Borrower shall provide to the Lenders not later than 30 days
prior to making each Tax Distribution a written explanation, prepared by
the Borrower's Chief Financial Officer, showing (A) the calculation of the
highest combined tax rate that the Borrower proposes to use in making such
Tax Distribution, (B) the due dates for tax payments by members in respect
of which the Tax Distribution is to be made, and (C) the calculation of any
Tax Distribution under clause (b) above, which explanation shall be subject
to the Lenders' approval as accurate prior to the making of the Tax
Distribution, which approval shall not be unreasonably withheld or delayed.
Taxes. See Section 1.10.
Temporary Prepayment See Section 1.06.
Tennessee Acquisition. The acquisition of all of the partnership interests of
Crossville TV Limited Partnership, the licensee of Television Station WBXX-TV
(formerly XXXX-TV), Channel 20, licensed to Crossville, Tennessee, pursuant to
the Purchase Agreement dated as of May 28, 1997 by and among Crossville TV
Limited Partnership, its limited partners, C.W. TV, Inc. and Acme Television
Licenses of Tennessee, LLC and Acme Television of Tennessee, LLC.
Tennessee Holdings. ACME Television Holdings of Tennessee, L.L.C., a Tennessee
limited liability company wholly owned 99% by the Borrower and I% by the
Tennessee License Company.
Tennessee License Company. ACME Television Licenses of Tennessee, L.L.C., a
Tennessee limited liability company owned 99% by the Tennessee Holding Company
and 1% by the Tennessee Operating Company.
Tennessee Operating Company. ACME Television of Tennessee, L.L.C., a Tennessee
limited liability company owned 99% by the Tennessee Holding Company and 1 % by
the Tennessee License Company.
Tennessee Subsidiaries. The Tennessee Holding Company, the Tennessee License
Company and the Tennessee Operating Company.
83
Total Debt. At any time, all outstanding Funded Debt of the Borrower and its
Subsidiaries, determined on a consolidated basis, after eliminating intercompany
items, in accordance with GAAP.
Tower Site Leases. See Section 4.09.
Trades. Those items of income and expense of the Companies which do not
represent the right to receive payment in cash or the obligation to make payment
in cash and which arise pursuant to so-called trade or barter transactions.
Transaction Costs. For any period, nonrecurring out-of-pocket expenses
(including attorneys' fees, investment banking fees and facility fees) accrued
by the Companies to Persons which are not Affiliates of any Company during such
period in connection with the closing of the transactions under this Agreement,
the Offering, any Permitted Acquisition and any other transactions occurring
after the date hereof which are consented to in writing by the Required Lenders.
Transaction Documents. See Section 4.03.
Utah Acquisition. The acquisition of all of the membership interests of Xxxxxxx
Broadcasting of Salt Lake City, L.L.C., which holds a construction permit from
the FCC for Television Station KZAR-TV, Channel 16, licensed to Salt Lake City,
Utah, pursuant to (a) the Membership Contribution Agreement dated as of August
22, 1997 by and among Xxxxxxx Broadcasting, Xxxxxxx X. Xxxxxxx and Xxxxxx X.
Xxxxxxx and ACME Television Holdings of Utah, L.L.C. ("ACME Utah"), as assignee
(under Section 9.4 thereof) of ACME Holdings, providing for the transfer to Acme
Utah of a forty-nine percent (49%) membership interest in Xxxxxxx Broadcasting,
and (b) the exercise of the Option, as defined in the Option Agreement referred
to in the foregoing Membership Contribution Agreement, providing for the
transfer to ACME Utah of the remaining fifty-one percent (5 1 %) in membership
interests in Xxxxxxx Broadcasting.
XII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; SEPARATE
ACTIONS BY THE LENDERS.
(a) This Agreement (including the Schedules hereto) and the other Loan
Documents constitute the entire agreement of the parties herein and supersede
any and all prior agreements, written or oral, as to the matters contained
herein, and no modification or waiver of any provision hereof or of the Notes or
any other Loan Documents, nor consent to the departure by any Company therefrom,
shall be effective unless the same is in writing, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as hereafter provided, the consent of the Required
Lenders shall be required and sufficient (i) to amend, with the consent of the
Borrower, any term of this Agreement, the Notes or any other Loan Document or to
waive the observance of any such term (either generally or in a particular
instance or either retroactively or prospectively); (ii) to take or refrain from
taking any action under this Agreement, the Notes, any other Loan Document or
applicable law, including without limitation (A) the acceleration of the payment
of the Notes, (B) the termination of the
84
Commitments, (C) the exercise of the Agent's and the Lenders' remedies hereunder
and under the Security Documents and (D) the giving of any approvals, consents,
directions or instructions required under this Agreement, the Security
Documents; provided that no such amendment, waiver or consent shall, without the
prior written consent of each of the Lenders directly affected thereby, (1)
extend the fixed maturity or reduce the principal amount of, or reduce the
amount or extend the time of payment of any principal of, or interest on, any
Note, (2) increase or extend any Commitment of any Lender or extend the
Expiration Date (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default shall not constitute any
such increase or extension), (3) release any guaranties or any Collateral,
unless such release of guaranty or Collateral is in connection with a sale of
Collateral permitted hereby or to which any required consent of the Required
Lenders has been given and substantially all of the Net Cash Proceeds of such
sale are used to repay the Borrower's indebtedness to the Lenders hereunder or
otherwise used in a manner permitted hereunder, (4) change the pro rata
provisions of Section 1.15 or the percentage referred to in the definition of
"Required Lenders" contained in Article XI or (5) amend the provisions of this
Article XII, and no such amendment, waiver or consent shall, without the prior
written consent of the Agent, amend, modify or otherwise affect the rights or
duties of the Agent under this Agreement or any other Loan Document; and
provided. further. that neither notice to, nor the consent of, the Borrower
shall be required for any modification, amendment or waiver of the provisions of
this Article XII governing the number of Lenders required to consent to any act
or omission under the Loan Documents or, subject to Article XIII, of the
definition of "Required Lenders".
(b) Any amendment or waiver effected in accordance with this Article XII
shall be binding upon each holder of any Note at the time outstanding, each
future holder of any Note and the Borrower. The Lenders' failure to insist
(directly or through the Agent) upon the strict performance of any term,
condition or other provision of this Agreement, any Note, or any of the Security
Documents or other Loan Documents, or to exercise any right or remedy hereunder
or thereunder, shall not constitute a waiver by the Lenders of any such term,
condition or other provision or default or Event of Default in connection
therewith, nor shall a single or partial exercise of any such right or remedy
preclude any other or future exercise, or the exercise ' of any other right or
remedy; and any waiver of any such term condition or other provision or of any
such default or Event of Default shall not affect or alter this Agreement, any
Note or any of the Security Documents or other Loan Documents, and each and
every term, condition and other provision of this Agreement, the Notes, the
Security Documents and the other Loan Documents shall, in such event, continue
in full force and effect and shall be operative with respect to any other then
existing or subsequent default or Event of Default in connection therewith. An
Event of Default hereunder and a default under any Note or under any of the
Security Documents or other Loan Documents shall be deemed to be continuing
unless and until cured or waived in writing by the Required Lenders or all of
the Lenders, as provided in paragraph (a) above.
XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders and the Agent and their respective successors and
permitted assigns, and all subsequent holders of any of the Notes or any portion
thereof.
85
(b) Each Lender may assign its rights and interests under this Agreement,
the Notes and the Security Documents and/or delegate its obligations hereunder
and thereunder, in whole or in part, and sell participations in the Notes and
the Security Documents as security therefor, to any bank or financial
institution with net capital, capital surplus and undivided profits in excess of
$500,000,000, provided as follows:
(i) No Lender shall make any assignment, other than an assignment in
whole or to a separately organized branch or an affiliate of the same
Lender, if, after giving effect thereto, such Lender would hold less than
$5,000,000 of the then aggregate outstanding principal amount of the Notes,
notwithstanding this provision any Lender may make assignments in any
amount to any other existing Lender, subject to the Agent's and the
Borrower's consent, which consent will not be unreasonably withheld or
delayed, provided that the Borrower's consent will not be required if a
Default (other than a de minimus default under the Loan Documents) then
exists and is continuing hereunder.
(ii) Any such assignment made other than to a separately organized
branch, or an affiliate of, a Lender shall reflect an assignment of such
assigning Lender's Notes and Commitments which is in an aggregate principal
amount of at least $ 1,000,000, and if greater, shall be an integral
multiple of $1,000,000.
(iii) Notwithstanding any provision of this Agreement to the contrary,
each Lender may at any time assign all or any portion of its rights under
this Agreement and each of the other Loan Documents, including, without
limitation, the Notes held by such Lender, to a Federal Reserve Bank (or
equivalent thereof in the case of Lenders chartered outside of the United
States); provided that no such assignment shall release a Lender from any
of its obligations and liabilities under the Loan Documents. Any Federal
Reserve Bank (or equivalent thereof) which receives such an assignment from
any Lender may make further assignments of such rights in accordance with
the provisions of this Section.
(iv) Any assignments and/or delegations made hereunder shall be
pursuant to an instrument of assignment and acceptance (the "Assignment
and Acceptance") substantially in the form of Schedule 13(b)(iv) and the
parties to each such assignment shall execute and deliver to the Agent for
its acceptance the Assignment and Acceptance together with any Note or
Notes subject thereto. Upon such execution and delivery, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (A) the assignee thereunder shall become a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with Commitments as set forth therein and
(B) the assigning Lender thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement as to
that portion of its obligation being so assigned and delegated. The
Assignment and Acceptance shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of the
assignee as a Lender and the resulting adjustment of Commitments arising
from the purchase by and delegation to such
86
assignee of all or a portion of the rights and obligations of such
assigning Lender under this Agreement.
(v) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and the assignee together with the Note or Notes subject
to such assignment and payment by the assignee to the Agent of a
registration and processing fee of $3,500, the Agent shall accept such
Assignment and Acceptance. Promptly upon delivering such Assignment and
Acceptance to the Agent, the assigning Lender shall give notice thereof to
the Borrower pursuant to a Notice of Assignment and Acceptance
substantially in the form of Schedule 13(b)(y) and addressed to the Agent
and the Borrower. Within five (5) Business Days after receipt of such
notice, the Borrower shall, execute and deliver to the Agent in exchange
for each such surrendered Note a new Note payable to the order of such
assignee in an amount equal to the portion of the applicable Commitment(s)
assumed by such assignee pursuant to such Assignment and Acceptance and a
new Note payable to the order of the assigning Lender in an amount equal to
the portion of the applicable Commitment(s) retained by it hereunder. Such
new Notes shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form provided in
Section 1.01. Canceled Notes shall be returned to the Borrower upon the
execution and delivery of such new Notes.
(vi) Each Lender may sell participations in all or a portion of its
rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and the Notes held by it); provided,
however, that, (A) the selling Lender shall remain obligated under this
Agreement to the extent as it would if it had not sold such participation,
(B) the selling Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (C) at no time shall the
selling Lender agree with such participant to take or refrain from taking
any action hereunder or under any other Loan Document, except that the
selling Lender may agree not to consent, without such participant's
consent, to any of the actions referred to Article XII, to the extent that
the same require the consent of each Lender hereunder, (D) all amounts
payable by the Borrower hereunder shall be determined as if such Lender had
not sold such participation and no participant shall be entitled to receive
any greater amount pursuant to this Agreement than the selling Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such Lender to such participant had no such transfer
occurred, and (E) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with the selling Lender in connection
with such Lendees rights and obligations under this Agreement.
(vii) Except for an assignment made to a separately organized branch
or an Affiliate of a Lender, no assignment or participation referred to
above shall be permitted without the prior written consent of the Agent and
the Borrower, which consent shall not be unreasonably withheld or delayed,
provided that the Borrower's consent will not be required if an Event of
Default (other than a de minimus default under the Loan Documents) then
exists and is continuing hereunder.
87
(viii) The Borrower may not assign any of its rights or delegate any
of its duties or obligations hereunder.
(ix) Any Lender may, in connection with any assignment or
participation pursuant to this Section, disclose to the assignee or
participant any information relating to the Companies, the Parent Companies
and their respective Affiliates furnished to such Lender by or on behalf of
the Borrower and such assignee or participant shall treat such information
as confidential.
XIV. MISCELLANEOUS.
Section 14.01. Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto, shall survive the making by the Lenders of the Loans and shall
continue in full force and effect so long as any Obligation is outstanding and
unpaid or any Lender has any obligation to advance funds to the Borrower or any
other Company hereunder. In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Loan Documents relating to indemnification or payment of fees, costs and
expenses, including without limitation the provisions of Sections 1.08, 1.10,
1.11, 10.05, 14.02 and 14.14, shall survive the payment in full of all Loans,
the termination or expiration of the Commitments and any termination of this
Agreement or of any other Loan Document.
Section 14.02. Fees and Expenses; Indemnity; Etc. The Borrower agrees (a)
to pay or reimburse the Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation, negotiation,
interpretation and execution of, and any amendment, supplement or modification
to, this Agreement, the Notes and any other Loan Documents and the consummation
and administration of the transactions contemplated hereby, including without
limitation the reasonable fees and disbursements of (i) counsel to the Agent,
and (ii) such agents of the Agent not regularly in its employ, and accountants,
other auditing services, consultants and appraisers engaged by or on behalf of
the Agent or by the Borrower at the request of the Agent (collectively, "Third
Parties"); (b) to pay or reimburse the Agent for all its reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and any other Loan Documents, including,
without limitation, the reasonable fees and disbursements of (i) counsel to the
Agent and (ii) Third Parties; (c) following the occurrence of an Event of
Default and during the continuance hereunder, to pay or reimburse the Lenders
for the reasonable fees and disbursements of counsel for the respective Lenders
engaged for the preservation or enforcement of such Lendees rights under this
Agreement or any other Loan Documents relating to such Event of Default; (d) to
pay, indemnify, and hold each Lender and the Agent harmless from, any and all
recording and filing fees and taxes, lien discharge fees and taxes, intangible
taxes 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 Notes and any other Loan Documents; and (e)
to pay, indemnify, and hold each Lender and the Agent (and their respective
directors, officers, employees, agents and other affiliates)
88
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, or any transaction contemplated
by, any Loan Document or the use or proposed use of the proceeds of the Loans or
the refinancing or restructuring of the credit arrangement provided under this
Agreement in the nature of a "workout 'or any proceedings with respect to the
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation of any Company or any other party other than the Lender or Agent to
any Loan Document (all the foregoing in this clause (e), 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 the gross negligence or willful misconduct of the Agent
or any such Lender.
Section 14.03. Notice.
(a) All notices, requests, demands and other communications
provided for hereunder (including without limitation Requests for Advances)
shall be in writing (including telecopied communication) and mailed or
telecopied or delivered to the applicable party at the addresses indicated
below.
If to the Agent:
Canadian Imperial Bank of Commerce
000 Xxxxxxxxx Xxxxxx
XxxXxxx, XxxXxxx 00000
Attention: Syndications
Telecopy No.: (000) 000-0000
and if to any Lender, at the address set forth on the appropriate signature page
hereto or, with respect to any assignee of the Notes under Article XIII, at the
address designated by such assignee in a written notice to the other parties
hereto;
in each case (except for routine communications), with a copy to:
Xxxxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 021 10
Telecopy No.: (000) 000-0000
89
If to the Borrower:
Acme Television, LLC
000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxx Xxxxx
Telecopy No.: (000) 000-0000
with a copy (except for routine communications) to:
Xxxxxxx Xxxxx, Esq.
Dickstein, Shapiro, Xxxxx & Xxxxxxxx LLP
00 00 X Xxxxxx X.X.
Xxxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
with a copy (except for routine communications) to:
H. Xxxxx Xxxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
with a copy (except for routine communications) to:
Xx. Xxxxx Xxxxxx
CEA Capital Partners
00 Xxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
or, as to each party, at such other address as shall be designated by such
parties in a written notice to the other party complying as to delivery with the
terms of this Section. All such notices, requests, demands and other
communication shall be deemed given upon receipt by the party to whom such
notice is directed.
90
(b) The address of the Agent for payment hereunder is as follows:
Xxxxxx Guaranty Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA: 000000000
Attention: For the Account of Canadian Imperial Bank of Commerce
Account No.: 000-00-000
For further credit to Agented Loans,
Re: Acme Television
Telecopy No.: (000) 000-0000
Section 14.04. Governing Law. This Agreement and the Notes shall be
construed in accordance with and governed by the internal laws of the State of
New York.
Section 14.05. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THE BORROWER, TO THE EXTENT THAT IT MAY LAWFULLY DO SO, HEREBY CONSENTS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF EACH OTHER
STATE WHERE A STATION IS NOW OR HEREAFTER LOCATED AND THE UNITED STATES DISTRICT
COURTS FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE DISTRICTS OF EACH SUCH
STATE WHERE A STATION IS NOW OR HEREAFTER LOCATED, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF ITS
OBLIGATIONS ARISING HEREUNDER OR UNDER THE NOTES OR THE OTHER LOAN DOCUMENTS OR
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND EXPRESSLY WAIVES ANY
AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE, INCLUDING, WITHOUT LIMITATION, THE
INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS. IN ADDITION, TO THE EXTENT
THAT IT MAY LAWFULLY DO SO, THE BORROWER CONSENTS TO THE SERVICE OF PROCESS BY
PERSONAL SERVICE OR U.S. CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
ADDRESSED TO THE BORROWER AT THE ADDRESS PROVIDED HEREIN. TO THE EXTENT THAT THE
BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN,
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS TO THE MAXIMUM EXTENT PERMITTED BY LAW.
(b) WAIVER OF JURY TRIAL. THE BORROWER HEREBY VOLUNTARILY AND IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY ACTION
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BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENTS.
Section 14.06. Severability. Any provision of this Agreement, the Notes or
any of the Security Documents or other Loan Documents 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 or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 14.07. Section Headings, Etc. Any Article and Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
Section 14.08. Several Nature of Lenders' Obligations. Notwithstanding
anything in this Agreement, the Notes or any of the Security Documents to the
contrary, all obligations of the Lenders hereunder shall be several and not
joint in nature, and in the event any Lender fails to perform any of its
obligations hereunder, the Borrower shall have no recourse against any other
Lender(s) who has (have) performed its (their) obligations hereunder. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement, subject to the provisions of Article XII,
and it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
Section 14.09. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts hereof and by the different parties hereto on
separate counterparts hereof, each of which shall be an original and all of
which counterparts shall together constitute one and the same agreement.
Delivery of an executed signature page of this Agreement by facsimile
transmission shall be effective as an in hand delivery of an original executed
counterpart hereof.
Section 14.10. Knowledge and Discovery. All references in this Agreement
to "knowledge" of, or "discovery" by, the Borrower shall mean actual knowledge
and shall be deemed to include, without limitation, any such knowledge of, or
discovery by, the Borrower or any executive officer of the Borrower.
Section 14.11. Amendment of Other Agreements. All references in this
Agreement to other documents and agreements to which the Lenders are not parties
shall be deemed to refer to such documents and agreements as presently
constituted and, except for any amendments and modifications not prohibited
under Section 7.12, not as hereafter amended or modified unless the Lenders
shall have expressly consented in writing to such amendment(s) or
modification(s).
Section 14.12. FCC Approvals. Notwithstanding anything herein or in any of
the Security Documents to the contrary, but without limiting or waiving in any
way the Borrower's obligations under Section 2.0 1, the Agents and the Lenders'
rights hereunder and under the Security Documents are subject to the
Communications Act of 1934, as amended, and all applicable policies, rules and
regulations of the FCC. The Agent and the Lenders will not take any action
pursuant to this Agreement or the Security Documents which would constitute or
92
result in any assignment or transfer control of any FCC License, whether de jure
or de facto, if such assignment or transfer of control would require under then
existing law (including the Communications Act of 1934, as amended, and the
published policies, rules and regulations promulgated by the FCC), the prior
approval of the FCC, without first obtaining such approval. The Agent and the
Lenders specifically agree that (a) voting rights in the ownership interests of
the Companies will remain with the holders thereof even in an Event of Default
unless and until any required prior consent of the FCC shall be obtained to the
transfer of such voting rights; (b) in an Event of Default, there will be either
a private or public sale of the membership interests of the Companies; and (c)
prior to the exercise of member or other equityholder rights by a purchaser at
such sale, the prior consent of the FCC, pursuant to 47 U.S.C. 3 1 0(d), in each
case only if required, will be obtained prior to such exercise. The Borrower
agrees to take any action which the Agent or any Lender may reasonably request
in order to cause the Agent and the Lenders to obtain and enjoy the full rights
and benefits granted to by this Agreement and the other Loan Documents,
including specifically, at the cost and expense of the Borrower, the use of its
commercially reasonable efforts to assist in obtaining approval of the FCC or
any state or municipality or other governmental authority for any action or
transaction contemplated by this Agreement or any Security Document which is
then required by law, and specifically, without limitation, upon request
following an Event of Default, to prepare, sign and file (or cause to be filed)
with the FCC or such state or municipality or other governmental authority the
assignors, transferor's or controlling person's portion of any application or
applications for consent to (i) the assignment of any FCC License or transfer or
control thereof, (ii) any sale or sales of property constituting any Collateral
by or on behalf of the Lenders or (iii) any assumption by the Agent or the
Lenders or their designees of voting rights or management rights in property
constituting any Collateral effected in accordance with the terms of this
Agreement.
Section 14.13. Disclaimer of Reliance. Neither the Borrower nor the Lenders
have relied on any oral representations concerning any of the terms or
conditions of the Loans, the Notes, this Agreement or any of the Security
Documents in entering into the same. The Borrower acknowledges and agrees that
none of the officers of the Agent or any Lender has made any representations
that are inconsistent with the terms and provisions of this Agreement, the Notes
and the Security Documents, and neither the Borrower nor any of its Affiliates
has relied on any oral promises or representations in connection therewith.
Section 14.14. Environmental Indemnification. Without limiting the
generality of Section 14.02, in consideration of the execution and delivery of
this Agreement by the Lenders and the making of the Loans, the Borrower hereby
indemnifies, exonerates and holds the Lenders and each of their respective
officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to:
93
(a) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the release by any Company of any Hazardous
Material; or
(b) the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, discharging or releases from, any real property owned or
operated by any Company of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expense or claims asserted or arising
under any Environmental Law), regardless of whether caused by, or within the
control of, any Company;
except, in cases (a) and (b) above, for any such Indemnified Liabilities arising
for the account of a particular Indemnified Party by reason of the relevant
Indemnified Party's negligence or misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower agrees
to make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
Notwithstanding anything to the contrary herein contained, the obligations and
liabilities under this Section shall survive and continue in full force and
effect and shall not be terminated, discharged or released in whole or in part
irrespective of whether all the Obligations have been paid in full or the
Commitments have been terminated and irrespective of any foreclosure of any
mortgage, deed of trust or collateral assignment on any real property or
acceptance by any Lender of a deed or assignment in lieu of foreclosure.
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IN WITNESS WHEREOF, the Agent, the Lenders and the Borrower have caused
this Agreement to be duly executed by their duly authorized representatives, as
a sealed instrument, all as of the day and year first above written.
BORROWER:
ACME TELEVISION, LLC
By:/s/Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, President
AGENT:
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY
By/s/Xxxxxxx Xxxx
---------------------------------------
Xxxxxxx Xxxxx, Executive Director
CIBC Xxxxxxxxxxx Corp., as agent
LENDER:
CIBC INC.
By:/s/Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxx, Executive Director
CIBC Xxxxxxxxxxx Corp., as agent
Address for Notices to CIBC Inc.:
CIBC Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Syndications
LENDER:
NATIONSBANK, N.A.
By:/s/Xxxx Xxxxxxx
-----------------------------------
Xxxx Xxxxxxx, Vice President
Address for Notices to NationsBank:
NationsBank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Telephone:(000) 000-0000
Attention: Xxxx Xxxxxxx
LENDER:
UNION BANK OF CALIFORNIA, N.A.
By:/s/Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx, Assistant Vice President,
Communications/Media Division
Address for Notices to Union Bank of
California:
Union Bank of California
000 Xxxxx Xxxxxxxx Xxxxxx - 15th Floor
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxxx
LENDER:
BANK OF MONTREAL, CHICAGO BRANCH
By:/s/Xxx Xxxxxx
-----------------------------------
Xxx Xxxxxx, Director
Communications Department
Address for Notices to Bank of Montreal:
Bank of Montreal
Media/Communications
U.S. Corporate Banking
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxx
