Exhibit 10.2
EXECUTION VERSION
SENIOR NOTE PURCHASE AGREEMENT
This SENIOR NOTE PURCHASE AGREEMENT (this "Agreement") is made as of
November 9, 2005 by and between Canadian Traffic Network ULC, an Alberta
business corporation (the "Company"), and Metro Networks Communications, Inc., a
Maryland corporation (the "Purchaser").
RECITALS
WHEREAS, the Company desires to issue and sell to the Purchaser, and the
Purchaser has agreed to purchase, pursuant and subject to the terms of this
Agreement, the Company's Senior Secured Note in an aggregate principal amount of
2,000,000 United States Dollars ("USD"), in the form attached hereto as Exhibit
A (the "Senior Note").
WHEREAS, the Company will use the proceeds of the issuance and sale of the
Senior Note to support the working capital needs of the Company's business in
connection with the execution of the Corus Affiliation Agreement (defined in
Section 2.3 below).
WHEREAS, as a condition to the willingness of the Purchaser to purchase the
Senior Note, the Company has granted, or will grant, to the Purchaser a first
priority Lien in all of its existing and hereafter acquired tangible and
intangible assets, except for aviation assets expressly included in the
definition of Excluded Collateral (defined in the Security Agreement) to secure
the Note Obligations.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties to
this Agreement mutually agree as follows:
1. DEFINITIONS. Certain capitalized terms are used in this Agreement as
defined in the preamble, recitals and sections of this Agreement. In
addition, certain other capitalized terms are used in this Agreement as
specifically defined in this Section 1 as follows:
"Affiliate" means, with respect to the Company (or any other specified
Person), any other Person which, directly or indirectly, controls or is
controlled by or is under direct or indirect common control with the
Company (or such specified Person).
"Applicable Interest Rate" means a per annum interest rate (on the basis of
a 365-day year) equal to ten percent (10%).
"ATN" means The Australia Traffic Network Pty Limited, an Australian
proprietary company registered under the Corporation Law of New South
Wales, Australia.
"Bankruptcy Code" means Title 11 of the Code, as now or hereafter in
effect, or any successor thereto.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City are required or authorized to be
closed.
"Capitalized Lease" means any lease which is required to be capitalized on
the balance sheet of the lessee in accordance with GAAP, including
Statement Nos. 13 and 98 of the Financial Accounting Standards Board.
"Capitalized Lease Obligations" means the amount of liability reflecting
the aggregate discounted amount of future payments under all Capitalized
Leases calculated in accordance with GAAP, including Statement Nos. 13 and
98 of the Financial Accounting Standards Board.
"Closing Date" means the date on which the Senior Note is purchased
pursuant to Section 2.2 hereof.
"Code" means the United States Internal Revenue Code of 1986, together with
all rules and regulations promulgated pursuant thereto, as amended from
time to time.
"Collateral" means all collateral on which a Lien is granted or purported
to be granted pursuant to the Security Agreement.
"Control Accounts" means the collateral accounts of the Company maintained
with the Control Banks which shall be subject to the Control Agreements.
"Control Agreements" means the Account Control Agreements among the
Company, each of the Control Banks, respectively, and the Purchaser in form
and substance satisfactory to the Purchaser.
"Control Banks" means Scotia Bank, Bank of Montreal and Fifth Third Bank
and/or any other financial institution determined by mutual agreement of
the Company and the Purchaser.
"Default" means any Event of Default and any event or condition which with
the passage of time, or giving of notice, or both, would become an Event of
Default.
"Default Interest Rate" means a rate equal to the lesser of (x) the
Applicable Interest Rate plus two percent (2%) or (y) the maximum rate
allowed under applicable law.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means United States generally accepted accounting principles as in
effect as of December 31, 2004, which are consistent with the principles
promulgated or adopted by the United States Financial Accounting Standards
Board and its predecessor, applied on a consistent basis and in a manner
consistent with the preparation of the Company's financial statements.
"GTC" means Global Traffic Canada, Inc., a Delaware corporation, subsidiary
of GTN and parent of CTN.
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"GTN" means Global Traffic Network, Inc., a Delaware corporation, and
parent of GTC.
"Guaranty Agreement" means the guaranty agreement, dated as of the Closing
Date, by and among GTN, GTC and ATN, as guarantors, and the Purchaser.
"Indebtedness" means, with respect to any Person, all obligations,
contingent or otherwise, which in accordance with GAAP are required to be
classified upon the balance sheet of such specified Person as liabilities,
but in any event including (without duplication) the following:
(a) all obligations of such Person for borrowed money or with respect
to deposits or advances of any kind;
(b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments or upon which interest charges are
customarily paid;
(c) all obligations of such Person for the deferred purchase price of
property or services, except current accounts payable arising in the
ordinary course of business and not overdue beyond such period as is
commercially reasonable for such Person's business;
(d) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person
and all Capitalized Lease Obligations;
(e) all payment obligations of such Person with respect to interest
rate or currency protection agreements;
(f) all obligations of such Person as an account party under any
letter of credit or in respect of bankers' acceptances;
(g) all obligations of any third party secured by property or assets
of such Person (regardless of whether or not such Person is liable for
repayment of such obligations);
(h) all guarantees of such Person, including existing guarantees for
lease obligations; and
(i) all reimbursement obligations of such Person under letters of
credit.
"Initial Public Offering" means a registration effected by either the
Company or GTN of its respective stock or other securities under the
Exchange Act in connection with the public offering of such securities
solely for cash (other than a registration relating solely to the sale of
securities to participants in a company stock plan, or a registration on
any form which does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
registrable securities) with aggregate gross proceeds to the Company or
GTN, as applicable, of at least 5,000,000 USD.
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"Investment" means, with respect to any specified Person:
(a) any share of capital stock, partnership or other equity interest,
evidence of Indebtedness or other security issued by any other Person;
(b) any loan, advance or extension of credit to, or contribution to
the capital of, any other Person;
(c) any guarantee of the obligations of any other Person;
(d) any acquisition of all, or any division or similar operating unit
of, the business of any other Person or the assets comprising such
business, division or unit; and
(e) any other similar investment.
The term "Investment" shall not include demand deposits in banks or similar
institutions.
"Legal Requirement" means any present or future requirement imposed upon
the Company or any Subsidiary by any law, statute, rule, regulation,
directive, order, decree or guideline (or any interpretation thereof by
courts or of administrative bodies), be it federal, state, provincial or
local, or domestic or foreign, or by any board, bureau, commission,
governmental or administrative agency, self-regulatory agency, central bank
or monetary authority of the United States of America or any other
jurisdiction in which the Company or any Subsidiary owns property or
conducts its business, or any political subdivision of any of the
foregoing.
"Lien" means, with respect to any specified Person: (a) any lien,
encumbrance, mortgage, pledge, adverse claim, charge or security interest
of any kind upon any property or assets of such specified Person, whether
now owned or hereafter acquired, or upon the income or profits therefrom;
or (b) the sale, assignment, pledge or transfer for security of any
accounts, general intangibles or chattel paper of such specified Person,
with or without recourse.
"Loan Documents" means this Agreement, the Senior Note, the Security
Agreement, the Guaranty Agreement, the Control Agreements and any other
document or instrument relating to the foregoing.
"Material Adverse Change" means any change, event, condition, development
or effect that, individually or in the aggregate, with all other changes,
events, conditions, developments, and effects (i) is or could be reasonably
expected to be materially adverse to the business, operations, assets,
liabilities, results of operations or condition (financial or otherwise),
or prospects of the Company and its Subsidiaries (if any), taken as a
whole, or (ii) would be reasonably expected to prevent consummation of the
Agreement or the issuance and sale of the Senior Note, in each case other
than general economic conditions.
"Maturity Date" means the earlier of: (x) the third anniversary of the
Original Issuance Date; (y) the first anniversary of the closing date of an
Initial Public Offering or (z) such
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earlier date on which said amount shall become due and payable on account
of acceleration by Purchaser according to the terms hereof, the date the
principal amount of the Senior Note shall become due and payable.
"Note Obligations" mean any and all Indebtedness and liabilities of the
Company under the Loan Documents, including, without limitation, the
obligation to pay principal, interest, premiums, if any, expenses, costs,
attorneys' fees and disbursements, indemnities and other amounts payable
thereunder or in connection therewith or related thereto.
"Obligor" means the Company, as an obligor under the Security Agreement.
"Original Issuance Date" means November 9, 2005, the date the Senior Note
is executed and issued.
"Payment Date" means (a) March 31, June 30, September 30 and December 31 of
each year and (b) the Maturity Date.
"Person" means any entity, whether of natural or legal constitution,
including any present or future individual, corporation, partnership, joint
venture, limited liability company, unlimited liability company, trust,
estate, unincorporated organization, government or any agency or political
subdivision thereof, domestic or foreign.
"Restricted Payment" means, with respect to any specified Person:
(a) the declaration or payment of any dividend or distribution on or
in respect of any shares of any class of capital stock of or other equity
interests in such specified Person;
(b) the purchase, redemption or other retirement of any shares of any
class of capital stock of or other equity interest in such specified
Person, or of options, warrants or other rights for the purchase of such
shares, directly, indirectly through a subsidiary or corporate parent or
otherwise (including any such purchase, redemption or other retirement of
any such securities held by employees upon termination of its employment);
(c) loans made by such specified Person to any director, shareholder,
member, partner, Affiliate, officer or employee of such Person; and
(d) all other payments to a holder of any class of capital stock of or
other equity interests or subordinated securities in such specified Person
or an Affiliate of such Person (other than reimbursement of reasonable
out-of-pocket expenses).
"Security Agreement" means the Security Agreement, dated as of the Closing
Date, by and between the Company and the Purchaser.
"Senior Noteholder(s)" means the holder(s) of the Senior Note.
"Subordinated Indebtedness" means Indebtedness incurred or to be incurred
by the Company that is subordinated to the Note Obligations (pursuant to a
subordination
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agreement to be entered into by and among the Company, the Senior
Noteholders and the subordinated creditor) in a manner satisfactory to the
Senior Noteholders and contains terms, including, without limitation,
payment terms, satisfactory to the Senior Noteholders.
"Subsidiary" means any future direct or indirect subsidiary of the Company
(all such entities collectively, "Subsidiaries").
2. AUTHORIZATION AND SALE.
2.1. Purchase and Sale of the Senior Note. Subject to the terms and
conditions of this Agreement and on the basis of the representations
and warranties set forth herein, the Company hereby agrees to sell to
the Purchaser, and by its acceptance hereof, the Purchaser agrees to
purchase from the Company for investment the Senior Note for an
aggregate purchase price of 2,000,000 USD (the "Purchase Price").
2.2. Closing. At the closing of the purchase and sale of the Senior Note
(the "Closing"), against payment of the Purchase Price to the Company
by wire transfer of immediately available funds, the Company will
deliver the Senior Note.
2.3. Use of Proceeds. The proceeds of the sale of the Senior Note shall be
used solely to support the working capital needs of the Company's
business taking into account the execution of the Traffic Network
Affiliation Agreement with Corus Entertainment Inc. (the "Corus
Affiliation Agreement"). When reference is made herein to the business
of the Company and the Subsidiaries, such includes the business after
giving effect to the Corus Affiliation Agreement.
3. TERMS OF THE SENIOR NOTE.
3.1. Interest on the Senior Note.
3.1.1. The Senior Note shall bear interest at a rate equal to the
Applicable Interest Rate on the unpaid principal amount thereof
from and including the Original Issuance Date until the Maturity
Date. Such interest shall accrue and be payable quarterly in
arrears. After and during the continuance of any Event of
Default, the Senior Note shall bear interest at the rate equal to
the Default Interest Rate, including, in the event of a payment
default, on any overdue principal and to the extent permitted by
applicable law, on any overdue amount, including overdue
interest. On each Payment Date, interest on the Senior Note shall
be payable in cash.
3.1.2. Interest on the Senior Note shall be computed on the basis of a
365-day year. In computing such interest, the date of the making
of the Senior Note shall be included and the date of payment
shall be excluded.
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3.2. Payment of Senior Note.
3.2.1. Payment at Maturity of the Senior Note. On the Maturity Date,
the Company will pay in cash the entire principal amount of all
the Senior Note then outstanding, together with all accrued and
unpaid interest thereon.
3.2.2. Voluntary Prepayments. The Senior Note may be prepaid at any
time, and from time to time, at the Company's option, in whole,
and not in part, on 30 days' prior notice to the Senior
Noteholders; provided, that any such voluntary prepayment of the
Senior Note shall include accrued and unpaid interest on the
amount so prepaid, if any, up to but not including the date of
such payment.
3.3. Prepayment Procedure. All payments, including any prepayment (whether
voluntary or mandatory), shall be made by wire transfer or other same
day funds to the accounts designated in writing by the Senior
Noteholders (or such other account or address or to the attention of
such other Person as the recipient party shall have specified by prior
written notice to the sending party).
3.4. Taxes.
3.4.1. If the Company shall be required by law to deduct any taxes,
levies, imposts, deductions, charges or withholdings imposed by
the United States, Canada or Australia or any political
subdivision thereof, excluding taxes imposed or based on the
recipient's overall net income, and franchise or capital taxes
imposed on it in lieu of net income taxes (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments under the Senior Note,
"Taxes") from or in respect of any sum payable hereunder or under
any Senior Note to any Senior Noteholder, (i) the Company shall
make such deductions and (ii) the Company shall remit the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. Within 30 days after
the date of any payment of Taxes, the Company shall furnish to
such Senior Noteholder the original or certified copy of a
receipt evidencing payment thereof.
3.4.2. In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement
or the Senior Note.
3.4.3. Each Senior Noteholder organized under the laws of a
jurisdiction outside the United States and/or Canada, prior to
its receipt of any payment on the Senior Note, shall provide the
Company with (i) the appropriate tax forms under such
jurisdiction certifying that such Senior Noteholder is entitled
to
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benefits under an income tax treaty to which the United States
and/or Canada is a party, which exempts the recipient from United
States and/or Canada withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement
is effectively connected with the conduct of a trade or business
in the United States and/or Canada, (ii) Internal Revenue Service
Form W-8 or W-9, as appropriate, or any successor form prescribed
by the Internal Revenue Service or its Canadian equivalent, and
(iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h)
and 881(c) of the Code), certifying that such Senior Noteholder
is entitled to an exemption from United States and/or Canada
withholding tax on interest payments made pursuant to this
Agreement.
3.4.4. For any period with respect to which a Senior Noteholder has
failed to provide the Company with the appropriate form pursuant
to Section 3.4.3, such Senior Noteholder shall not be entitled to
indemnification under this Section 3.4 with respect to Taxes
imposed by the United States and/or Canada; provided, however,
that should a Senior Noteholder which is otherwise exempt from
Taxes become subject to Taxes because of its failure to deliver a
form required hereunder, the Company shall, at such Senior
Noteholder's expense, take such steps as such Senior Noteholder
shall reasonably request to assist such Senior Noteholder to
recover such Taxes.
3.4.5. Without prejudice to the survival of any other agreement
hereunder, the agreements and obligations contained in this
Section 3.4 shall survive the payment in full of principal and
interest under the Senior Note.
3.5. Manner and Time of Payment.
3.5.1. All payments under the Senior Note of principal, interest,
premiums, expenses, costs and fees hereunder shall be made
without defense, set-off or counterclaim, in same day funds and
delivered to the Senior Noteholders not later than 2:00 p.m. (New
York time) on the date such payment is due, with such payment to
be made in each case, by wire transfer or other same day funds to
such accounts designated in writing by the Senior Noteholders (or
such other account or address or to the attention of such other
Person as the recipient party shall have specified by prior
written notice to the sending party); provided that funds
received by such holders after 2:00 p.m. (New York time) shall be
deemed to have been paid on the next succeeding Business Day.
3.5.2. Whenever any payment to be made hereunder or under the Senior
Note shall be stated to be due on a day which is not a Business
Day, the payment shall be made on the next succeeding Business
Day and such additional period shall be included in the
computation of the payment of interest hereunder or under the
Senior Note.
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4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Purchaser as follows:
4.1. Organization and Good Standing. The Company and each Subsidiary is a
company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. The Company and each
Subsidiary (a) has all requisite power and authority to conduct its
business as it is now being conducted and as proposed to be conducted,
and (b) is duly qualified and in good standing as a foreign company in
each jurisdiction where the failure to be so qualified and in good
standing would have a material adverse effect upon its operations or
condition (financial or otherwise). A copy of the certificate of
incorporation and by-laws (or other constituent documents, as
applicable) of the Company and each of its Subsidiaries (collectively,
the "Governing Documents") are attached hereto as Schedule 4.1.
4.2. Authorization. The Company and each Subsidiary has the full entity
power and authority to enter into this Agreement and each other Loan
Document to which it is party and to perform all of its obligations
hereunder and thereunder. The Company and each Subsidiary has duly
authorized by all necessary action, the execution, delivery and
performance of this Agreement and each other Loan Document to which it
is party. The Company and each Subsidiary has duly executed and
delivered this Agreement and each other Loan Document to which it is
party, and each such document constitutes a legal, valid and binding
obligation of the Company and each Subsidiary, as the case may be,
enforceable against the Company and each Subsidiary, in accordance
with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other equitable
principles of general application. No consent, approval, authorization
or order of, declaration by, or filing or registration with, any court
or governmental or regulatory agency or board, foreign or domestic, or
any other Person is or will be required in connection with their
execution and delivery of this Agreement or any other Loan Documents
and their consummation of the transactions contemplated hereby or
thereby.
4.3. Capitalization. Schedule 4.3 set forth the authorized capital of the
Company on the date hereof. After the Closing, the authorized and
issued capital of the Company shall be the same. No Person is entitled
to any preemptive rights or rights of first refusal with respect to
the purchase or sale of any securities by the Company. There are no
outstanding options, warrants or other rights, commitments or
arrangements, written or oral, to which the Company is a party or by
which the Company is bound, to purchase or otherwise acquire any
authorized but unissued securities of the Company or any security
directly or indirectly convertible into or exchangeable or exercisable
for any equity of the Company.
4.4. Valid Issuance of the Senior Note. The Senior Note being purchased by
the Purchaser hereunder, when issued, sold and delivered in accordance
with the
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terms hereof for the Purchase Price, will be duly and validly
authorized and issued and free of restrictions on transfer, other than
restrictions imposed under this Agreement and applicable United States
state or federal securities laws. The Senior Note will be issued in
compliance with all applicable United States and Canadian securities
laws.
4.5. Subsidiaries. The Company has no Subsidiaries and no Investment in any
other Person.
4.6. Security Interest. The Security Agreement when executed and delivered
as contemplated hereunder, will create and grant to the Purchaser a
legal, valid and binding first priority Lien in the Collateral
identified therein. Such Collateral is not subject to any other Liens
whatsoever.
4.7. Absence of Undisclosed Liabilities. The Company has not been engaged
in any business other than as contemplated by this Agreement. Except
as set forth on Schedule 4.7 hereto, the Company has no liabilities or
obligations (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due) other than liabilities and
obligations that were incurred by the Company in connection with the
transactions contemplated by this Agreement.
4.8. Compliance with Law and Other Instruments. Neither the issuance of the
Senior Note nor the execution and delivery of this Agreement and each
other Loan Document, nor the consummation of the transactions
contemplated hereby or thereby, will (a) conflict with or constitute a
breach or violation of, the Governing Documents, (b) conflict with,
constitute a breach of, constitute a default under, or constitute an
event which, with notice or lapse of time or both would be a breach of
or default under, any agreement, document, indenture, mortgage, deed
of trust or other instrument or undertaking to which the Company or
any Subsidiary or their Affiliates is a party or by which any of its
respective assets or properties are bound, (c) constitute a violation
of any Legal Requirement applicable to the Company or the Subsidiaries
or by which any of its respective assets or properties are bound, (d)
result in the creation or imposition of any Lien upon any asset or
property of the Company (other than the Liens to secure the Note
Obligations), or (e) permit any party to terminate any agreement to
which the Company or any Subsidiary is a party or under which the
Company or any Subsidiary is a beneficiary.
4.9. Litigation. Except as described on Schedule 4.9 hereto, there is no
litigation or governmental proceeding or investigation pending or, to
the best of the Company's knowledge, threatened against or affecting
the Company or any Subsidiary or any of their directors or officers,
that involves the possibility of any judgment or liability which might
materially and adversely affect any of the business, operations,
assets, liabilities, results of operations or condition (financial or
otherwise), or prospects of the Company or any Subsidiary, the
consummation of the transactions contemplated hereby or the right of
the
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Company to conduct its business as now conducted or as proposed to be
conducted, including after giving effect to the Corus Affiliation
Agreement.
4.10. Registration Rights. Except as described on Schedule 4.10 hereto and
as contemplated herein, the Company has not granted or agreed to grant
to any person or entity any rights (including "piggy-back"
registration rights) to have any securities of the Company registered
with the Securities and Exchange Commission, the Canadian equivalent
thereof or any other governmental entity, foreign or domestic, which
has not been satisfied.
4.11. Permits. The Company and the Subsidiaries possess all franchises,
certificates, licenses, authorizations and permits or similar
authority (the "Permits") necessary to conduct their respective
businesses, and neither the Company nor any Subsidiary has received
any notice of proceedings relating to the revocation or modification
of any such Permit or is in default in any material respect under any
such Permit.
4.12. Insurance. Set forth on Schedule 4.12 is a complete and correct list
of the insurance policies of the Company and the Subsidiaries in
effect on the date hereof. The Company and the Subsidiaries have valid
and effective insurance policies issued in favor of the Company and
the Subsidiaries with financially sound and reputable companies and in
such types and amounts and covering such risks as are consistent with
customary practices and standards of companies engaged in business and
operations substantially similar to the Company and the Subsidiaries.
4.13. Business Plan. The Company has prepared the business plan, dated as
of July 13, 2005, a copy of which was previously delivered to
Purchaser and is attached hereto as Schedule 4.13, in good faith,
based on facts believed by the Company to be accurate and based on
certain assumptions believed by the Company to be reasonable.
4.14. GTC. GTC is a holding company and does not conduct any business or
hold any assets, other than its ownership in CTN.
4.15. Disclosure. Neither this Agreement, nor any other Loan Document, nor
any other material furnished by or on behalf of the Company or any
Subsidiary to the Purchaser in connection with this Agreement or any
other Loan Document and the transactions contemplated hereby and
thereby, contains any untrue statement of any material fact, or omits
to state any material fact that is necessary in order to make the
statements contained herein or therein, in light of the circumstances
under which they were made, complete and not misleading.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser represents
and warrants to the Company as follows:
5.1. Organization; Legal Capacity; Due Authorization. The Purchaser is a
company duly incorporated, validly existing and in good standing under
the laws of the
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State of Maryland and has full corporate power and authority to
execute and deliver this Agreement and each other Loan Document to
which it is a party and to perform its obligations hereunder and
thereunder. This Agreement and each other Loan Document has been duly
authorized by all necessary action and has been executed and delivered
by the Purchaser and is the legal, valid and binding obligation of the
Purchaser enforceable against it in accordance with the terms hereof,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general
application.
5.2. No Consents. No consent, approval, authorization or order of,
declaration by, or filing or registration with, any court or
governmental or regulatory agency or board, foreign or domestic, or
any other Person is or will be required in connection with its
execution and delivery of this Agreement or any other Loan Documents
and its consummation of the transactions contemplated hereby or
thereby.
5.3. Restrictions on Transfer. The Purchaser has been advised that the
Senior Note has not been registered under the Securities Act of 1933,
as amended (the "Securities Act"); or any state securities laws in the
United States and, therefore, cannot be resold unless registered under
the Securities Act and/or applicable state securities laws or unless
an exemption from such registration requirements is available.
6. CONDITIONS OF CLOSING. The obligation of the Purchaser to purchase the
Senior Note at the Closing is subject to the satisfaction at or prior to
the Closing of the following conditions:
6.1. Representations and Warranties. The representations and warranties of
the Company contained in Section 4 shall be true and correct on and as
of the date hereof and on as of the Closing Date with the same effect
as though such representations and warranties had been made on and as
of the Closing Date.
6.2. Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it at or prior
to the Closing.
6.3. Compliance Certificate. The Company shall deliver to the Purchaser at
the Closing a certificate dated the Closing Date and signed by the
President of the Company certifying that (a) the conditions specified
in Sections 6.1 and 6.2 have been satisfied and (b) no Default shall
exist on the Closing Date prior to or immediately after giving effect
to the sale of Senior Note.
6.4. Approvals. All authorizations, consents, waivers, approvals or permits
of, notice to, or filings or registrations with, any Person or any
governmental authority or regulatory body of the United States, Canada
or of any state or province thereof
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that are required in connection with the lawful issuance and sale of
the Senior Note to the Purchaser pursuant to this Agreement (other
than those which are not required to be obtained before the Closing)
shall have been duly obtained and shall be effective on and as of the
Closing Date.
6.5. Related Agreements. The Company and the other parties thereto (other
than the Purchaser), as applicable, shall have duly authorized,
executed and delivered the Loan Documents, in each case in form and
substance satisfactory to the Purchaser.
6.6. No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any governmental authority or regulatory body of competent
jurisdiction which prohibits the consummation of any of the
transactions contemplated by the Loan Documents or otherwise relating
to the issuance and sale of the Senior Note.
6.7. Litigation; Proceedings. Other than that disclosed on Schedule 4.9, no
litigation, governmental proceeding or investigation shall have been
instituted or threatened against the Company which could reasonably be
expected to result in, individually or in the aggregate, a Material
Adverse Change.
6.8. Secretary's Certificates. The Company shall have delivered to the
Purchaser a certificate dated the Closing Date and signed by the
Secretary of the Company certifying: (a) that attached thereto is a
true and complete copy of all resolutions authorizing (i) the
execution, delivery and performance of this Agreement and each other
Loan Document and (ii) the issuance, sale and delivery of the Senior
Note, and that all such resolutions are in full force in effect and
are all the resolutions adopted in connection with the transactions
contemplated by this Agreement and the other Loan Documents; (b) that
attached thereto is a true and complete copy of the Company's
certificate of incorporation and by-laws, as in effect on the Closing
Date; (c) that attached hereto is a true and complete copy of the
Corus Affiliation Agreement, which was duly executed and delivered by
the parties thereto and is in full force and effect in accordance with
its terms; and (d) as to the incumbency and specimen signature of
certain officers of the Company. Each Subsidiary shall have delivered
to the Purchaser a certificate dated the Closing Date and signed by
the Secretary of such Subsidiary certifying that attached thereto is a
true and complete copy of such Subsidiary 's certificate of
incorporation and by-laws, as in effect on the Closing Date.
6.9. Legal Opinions. The Purchaser shall have received from each of Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP, US counsel for the Company and Gowling
Xxxxxxx Xxxxxxxxx LLP, Canadian counsel for the Company, a legal
opinion, dated as of the Closing Date, with respect to the
transactions contemplated by this Agreement and the other Loan
Documents, which opinion shall be in form and substance satisfactory
to the Purchaser.
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6.10. Sales Representation Agreement. The Company shall have entered into a
Sales Representation Agreement with Metro Networks Communications,
Limited Partnership, in the form attached hereto as Exhibit B.
6.11. Traffic Data Agreement. The Company shall have entered into a Traffic
Data Agreement with Metro Networks Communications, Limited
Partnership, in the form attached hereto as Exhibit C.
6.12. Good Standing Certificates. The Purchaser shall have received a
certificate of good standing dated not more than three business days
prior to the Closing Date from the respective jurisdictions of
organizations of the Company and the Subsidiaries and from any
jurisdiction in which such entities are qualified to do business.
7. AFFIRMATIVE COVENANTS. The Company hereby covenants as follows:
7.1. Payment of Note Obligations. The Company will duly and punctually pay
the principal, interest and any other amounts owing under this
Agreement and the Senior Note, in each case when due under the terms
of this Agreement and the Senior Note, and the Company will observe
and comply with all other requirements applicable to it pursuant to
this Agreement and the other Loan Documents.
7.2. Books and Records. The Company will keep adequate books and records
with respect to its business activities in which proper entries,
reflecting all financial transactions, are made on a consistent basis
in accordance with GAAP.
7.3. Taxes and Other Charges. The Company shall duly pay and discharge, or
cause to be paid and discharged, before the same becomes in arrears,
all taxes, assessments and other governmental charges imposed upon the
Company and its properties, sales or activities, or upon the income or
profits therefrom, as well as all claims for labor, materials or
supplies which if unpaid might by law become a Lien upon any of its
property; provided, however, that any such tax, assessment, charge or
claim need not be paid if the validity or amount thereof shall at the
time be contested in good faith by appropriate proceedings and if the
Company shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto; and provided, further, that
the Company shall pay or bond, or cause to be paid or bonded, all such
taxes, assessments, charges or other governmental claims immediately
upon the commencement of proceedings to foreclose any Lien which may
have attached as security therefor (except to the extent such
proceedings have been dismissed or stayed).
7.4. Legal Compliance. The Company shall comply with all Legal Requirements
applicable to it.
7.5. Use of Proceeds. The Company shall use the proceeds of the Senior Note
only for the purposes set forth in Section 2.3 hereof.
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7.6. Separate Existence. The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its separate
corporate existence and its rights, privileges and franchises.
7.7. Security Interest. The Company will at all times take, or cause to be
taken, all actions necessary to maintain the first priority Lien
granted to the Purchaser in the Collateral identified in the Security
Agreement as a valid and perfected Lien, and supply all information to
the Purchaser necessary for such maintenance.
7.8. Control Accounts. The Senior Noteholders shall have a first priority
security interest in the Control Accounts and the Company shall sign
such documents, including without limitation UCC financing statements,
and take such other actions from time to time reasonably requested by
the Purchaser to obtain and maintain a first priority security
interest in the Control Accounts, including causing the banks holding
the Control Accounts to execute any document and take such actions as
are reasonably requested by the Purchaser. The Company shall deposit
all of the Company's cash and cash equivalents in the Control Accounts
at the Closing; provided, however, that so long as no Default or Event
of Default exists or is continuing, the Purchaser shall consent to
withdrawals from the Control Accounts to permit the Company to pay its
fees and expenses.
7.9. Notice of Litigation, Material Adverse Change, Defaults. The Company
shall promptly furnish to the Senior Noteholders notice of any
litigation or any administrative or arbitration proceeding against the
Company. The Company shall promptly, and in no event later than five
(5) Business Days following the occurrence of the same, furnish to the
Senior Noteholders notice of any Material Adverse Change to the
Company or any Default or Event of Default hereunder.
7.10. Financial Statements and Reports. The Company shall maintain a system
of accounting in which correct entries shall be made of all
transactions in relation to its business and affairs in accordance
with GAAP. The Company shall deliver to the Senior Noteholders: (i)
within 90 days after the end of each fiscal year a complete copy of
the Company's financial statements, including its balance sheet,
statement of operations and cash flow statement, prepared in
accordance with GAAP, consistently applied, and (x) if such financial
statements were audited, certified in an audit report by independent
public accountants or (y) if such financial statements were not
audited, certified by the principal financial officer of the Company
as to its fair presentation in accordance with GAAP; (ii) within 45
days after the end of each of the first three fiscal quarters, a copy
of the Company's unaudited interim financial statements, including its
balance sheet, statement of operations and cash flow statement, to be
certified, subject to normal year-end audit adjustments and addition
of footnotes, by the principal financial officer of the Company as to
its fair presentation in accordance with GAAP as of such fiscal
quarter end; (iii) within 35 days after the end of each calendar
month, to the extent prepared, monthly financial statements, certified
in accordance with clause (ii) of this Section 7.10, or if no monthly
financial statements have been prepared, monthly sales reports; and
(iv) as promptly as available, but in no event
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later than January 31st of such fiscal year, a copy of the Company's
operating budget and a copy of its financial projections for the
upcoming fiscal year, which projections shall have been prepared in
good faith by the Company and shall have the same format as the
financial statements provided in accordance with this Section 7.10.
7.11. Other Information; Audit. From time to time at reasonable intervals
upon request of any authorized officer of any Senior Noteholder, the
Company shall furnish to such Senior Noteholder such other information
regarding the business, assets, financial condition, income or
prospects of the Company as such officer may reasonably request,
including copies of all tax returns, agreements, and instruments to
which the Company is party.
7.12. Books, Records and Inspections; Consultation Rights. From time to
time upon request of any Senior Noteholder, the Company will permit
such Senior Noteholder and its representatives to visit and inspect
any of the Company's properties, to examine its books of account and
records, to make copies and extracts therefrom, to observe the taking
of any physical inventories of its properties by them or its
accountants, to discuss its affairs, finances and accounts with, and
to be advised as to the same by, its officers and employees, and its
independent public accountants (whose reasonable fees and expenses
shall be paid by the Senior Noteholder), all upon reasonable prior
written notice to the Company and at such reasonable times (during
normal business hours) and intervals as such Person desires.
7.13. Further Assurances. The Company will, at its expense and upon the
reasonable request of Purchaser, duly execute and deliver, or cause to
be duly executed and delivered, to Purchaser such further instruments
and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of Purchaser to carry out more
effectively the provisions and purposes of this Agreement and the
other Loan Documents.
7.14. Governing Documents. The Company shall comply in all material
respects with the terms of its certificate of incorporation and
by-laws.
7.15. Preemptive Rights. If the Company proposes to issue or sell any
equity interests or any equity-linked securities, the Company shall,
no later than 30 days prior to the consummation of such transaction,
notify in writing the Purchaser. The Company's notice shall describe
the proposed sale or issuance, identify the proposed purchaser and
contain an offer to sell to the Purchaser, at the same price and for
the same consideration to be paid by the proposed purchaser,
Purchaser's pro rata portion of the securities to be issued or sold
(based on Purchaser's then percentage ownership of the Company's
issued and outstanding equity on a fully-diluted basis). If the
Purchaser fails to accept, or rejects, the Company's offer within 15
days after its receipt of the Company's notice, the Company may
proceed with the proposed sale or issuance of the securities offered
to the Purchaser. This Section shall not apply to: (i) securities
distributed or set aside
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ratably to all holders of equity securities of the Company on a per
share equivalent basis, (ii) securities issuable pursuant to a stock
option or equivalent plan approved by the Purchaser or (iii)
securities issued in an Initial Public Offering.
8. NEGATIVE COVENANTS. Subject to the last sentence of this Section, the
Company hereby covenants as follows:
8.1. Transfer of Securities. Prior to an Initial Public Offering, without
the prior written consent of the Purchaser (which shall not be
unreasonably withheld), the Company shall not permit the transfer of
any equity interests and other securities (other than the Senior Note)
of the Company to any Person.
8.2. Additional Securities. The Company shall not authorize, issue or enter
into any agreement providing for the issuance (contingent or
otherwise) of any equity interests or any equity-linked securities
(including debt securities) except in accordance with Section 7.15.
Without the prior written consent of the Purchaser, the Company shall
not reclassify any of its equity as in existence on the date hereof,
or permit any Subsidiary to authorize, issue or enter into, any
agreement providing for the issuance (contingent or otherwise) of any
equity interests or any other security (including debt securities).
8.3. No Amendment to Governing Documents. Without the prior written consent
of the Purchaser, the certificate of incorporation and by-laws of the
Company as in effect on the Closing Date shall not be amended,
modified, waived or terminated in any manner which is adverse to the
Purchaser, the Senior Note or the duty or ability of the Company to
repay the Note Obligations.
8.4. Incurrence of Indebtedness. The Company shall not create, assume,
incur or in any manner be or become liable in respect of or permit to
exist any Indebtedness, except for (a) the Senior Note; (b)
Subordinated Indebtedness in an amount not to exceed 2,000,000 USD;
(c) Subordinated Indebtedness to GTN; (d) Indebtedness incurred solely
in connection with the purchase of aviation assets to be secured by
the Excluded Collateral and (e) Indebtedness (the "Potential
Acquisition Indebtedness") incurred solely in connection with the
acquisition previously discussed and contemplated by the parties (the
"Potential Acquisition") in an amount not to exceed the greater of (i)
3,000,000 USD or (ii) the purchase price of the Potential Acquisition;
provided, that, the Indebtedness of the Company, when measured on a
consolidated basis with its affiliated group, shall not exceed the
lesser of (i) Twenty Million United States Dollars (20,000,000 USD) or
(ii) 500% of EBITDA for the most recently completed fiscal year of
GTN, measured on a consolidated basis. For purposes of this Section,
"EBITDA" means revenues, net of agency commissions and any other
directly chargeable contract costs, less all selling costs and other
direct and indirect operating expenses incurred, before interest,
taxes, depreciation and amortization, recorded in accordance with
GAAP.
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8.5. Prepayment of Indebtedness. The Company shall not directly or
indirectly, voluntarily purchase, redeem, defease or prepay any
principal of, premium, if any, interest or other amount payable in
respect of any Indebtedness (excluding the Note Obligations).
8.6. Liens. The Company shall not create, incur or enter into, or suffer to
be created or incurred or to exist, any Lien (or become contractually
committed to do so) on or with respect to any of its other properties
or assets (whether now owned or hereafter acquired), except (x) Liens
that secure the Note Obligations; (y) Liens permitted by Section 7.3
and (z) Liens that secure the Excluded Collateral.
8.7. Investments. Without the prior written consent of the Purchaser (not
to be unreasonably withheld or delayed), the Company shall not have
outstanding, acquire or hold any Investment (or become contractually
committed to do so) except for the Potential Acquisition; provided,
that, the Company shall notify the Purchaser of the final terms of the
Potential Acquisition and to the extent such terms differ materially
from those previously disclosed to Purchaser, Company shall receive
the consent of Purchaser thereto (such consent not to be unreasonably
withheld or delayed).
8.8. Mergers, Asset Dispositions and Acquisitions. Except as contemplated
by Section 8.7 hereto or the Initial Public Offering, the Company
shall not (a) merge or consolidate with or acquire any other Person,
unless (i) the target of such acquisition has an enterprise value of
less than 500,000 USD or (ii) the Purchaser has approved such
acquisition or (b) sell any, all or substantially all of its assets
unless (i) such asset sale is for at least fair market value as
determined in good faith by the Company, (ii) the consideration
therefrom received by the Company is in the form of cash and (iii) the
total cash proceeds from such asset sale are, within one Business Day
of receipt thereof, used to prepay the Senior Note (to the extent
outstanding) together with accrued and unpaid interest thereon, if
any, up to but not including the date of such payment. Notwithstanding
the foregoing, the Company may sell assets that are not required for
the ongoing business of the Company, such determination to be made by
the Company in its reasonable good faith determination; provided, that
Company shall provide prior notice to the Purchaser when the assets to
be sold exceed 50,000 USD.
8.9. Restricted Payments. The Company shall not directly or indirectly,
declare, order, pay, make or set apart any sum or property for any
Restricted Payment (or become contractually committed to do so),
except that the Company may make payments to GTN and GTC.
8.10. Subordinated Indebtedness; Material Agreements. The Company shall not
(i) make any payment of any part or all of any Subordinated
Indebtedness or take any other action or omit to take any other action
in respect of any Subordinated Indebtedness, except in accordance with
the subordination agreement relative thereto, or (ii) without the
Purchaser's prior written consent, agree to (a) any amendment or other
modification of the subordination provisions of any
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documentation evidencing or relating to any Subordinated Indebtedness;
(b) any amendment or other modification to any documentation
evidencing any Subordinated Indebtedness that would increase the
interest rate applicable thereto, accelerate the maturity date of any
payment owing in respect thereof (including any redemption, prepayment
or defeasance provision or the Company's obligation to pay cash
interest); or (c) otherwise amend or modify any of the provisions of
such Subordinated Indebtedness or any other material agreement of the
Company in any manner that adversely affects the Senior Noteholders.
The parties acknowledge that the Potential Acquisition Indebtedness
shall be pari passu with the Senior Note.
8.11. Business Activities. For as long as any principal remains outstanding
under the Senior Note, the Company shall not compete with the
Purchaser or any Business Affiliate (defined below) of the Purchaser
in the United States, including without limitation, any of the
following: (i) the management or operation of a traffic, news,
weather, sports, entertainment or other information report gathering
or broadcast service; (ii) soliciting client advertisers ("Sponsors")
of the Purchaser, its Subsidiaries and Business Affiliates, and
dealing with accounts with respect thereto; (iii) soliciting Business
Affiliates of the Purchaser to enter into any contract or arrangement
with any Person to provide traffic, news, weather, sports or other
information report gathering or broadcast services; (iv) the sale or
packaging of Competitive Broadcast Advertising Vehicles (defined
below); or (v) forming or providing operational assistance to any
business or a division of any business engaged in the foregoing
activities. The parties acknowledge that the Company generates the
majority of its revenue from the sale of advertising time and
accordingly, the parties agree that the Company may solicit in the
United States and elsewhere sales of advertising time to be broadcast
in Canada and that such activity shall not be considered a restricted
activity for purposes of this Section. For purposes hereof, "Business
Affiliates" means any Person with whom the Company has or had a
contract or other arrangement to provide traffic, news, weather,
sports, entertainment or other information, whether by broadcast,
computer or any other means. For purposes hereof, "Competitive
Broadcast Advertising Vehicles" means an advertising vehicle that
consists of a five to twenty second commercial mention and/or
announcement that is offered for sale in a package including the
broadcast of such commercial mentions or identification on more than
one radio station in any one metropolitan area.
8.12. Liquidation. The Company shall not liquidate, dissolve or effect a
recapitalization or reorganization in any form of transaction, or
permit any of its Subsidiaries to liquidate, dissolve or effect a
recapitalization or reorganization in any form of transaction.
8.13. Dealings with Affiliates. Except as otherwise expressly provided
hereunder, the Company shall not enter into, nor permit any Subsidiary
to enter into, any transaction(s) (including, without limitation, any
loans or extensions of credit, release of guarantee, management
contract or royalty agreement, deferred or contingent compensation
agreement, consulting or other agreement) with any
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Affiliate, except loans or extensions of credit, or transactions in
the ordinary course of business at prices and on terms not less
favorable to the Company or such Subsidiary than could be obtained on
an arms-length basis from unrelated third parties and otherwise
approved by the disinterested members of the Board.
8.14. Sale-Leasebacks. The Company shall not engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets,
other than as otherwise permitted pursuant to this Section 8.
8.15. Change of Corporate Name or Location. The Company shall not (a)
change its corporate name, or (b) change its chief executive office,
principal place of business, corporate offices or warehouses or
locations at which Collateral is held or stored, or the location of
its records concerning the Collateral, in any case without (i)
providing at least 30 days' prior written notice to Purchaser and (ii)
receiving Purchaser's written acknowledgment that any reasonable
action requested by Purchaser in connection therewith, including to
continue the perfection of any Liens in favor of Purchaser in any
Collateral, has been completed or taken, and provided that any such
new location shall be in the continental United States or Canada.
8.16. Changes in Certain Agreements. The Company shall not amend or
supplement any of the provisions of any agreement in which the terms
of such agreement would restrict or impair the right to perform of the
Company or any Subsidiary under this Agreement or any of the Loan
Documents.
8.17. Changes in Accounting Methods. The Company shall not modify or change
any method of accounting used by it in the preparation of its audited
financial statements for its first completed fiscal year.
9. EVENTS OF DEFAULT.
If one or more of the following events (each herein referred to as an
"Event of Default") shall occur and be continuing:
9.1. Payment Default. The Company shall fail to pay (i) any principal of,
or premium, if any, on the Senior Note when the same becomes due and
payable, whether upon maturity, prepayment, acceleration or otherwise,
(ii) any cash interest on the Senior Note after the same shall become
due and payable or (iii) any other amount due hereunder, and such
failure shall continue for a period of five (5) business days; or
9.2. Certain Covenants. The Company shall default in the performance or
observance of any covenant contained in Section 7 or Section 8 and
such default shall continue for a period of five (5) business days; or
9.3. Other Defaults. The Company shall default in the performance or
observance of any covenant, agreement or condition of this Agreement
(other than those described or referred to in any other paragraph of
this Section 9) or any other
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Loan Document and such Default shall continue for more than 30 days
after the first to occur of (i) any officer of the Company shall
obtain actual knowledge that such Default has occurred or (ii) receipt
by the Company of written notice of such Default from the Purchaser;
or
9.4. Breach of Representations or Warranties. Any representation or
warranty made by the Company in this Agreement, any other Loan
Document or in any statement or certificate at any time given by it in
writing pursuant hereto or in connection herewith or therewith shall
(taken as a whole) be false, misleading or incomplete in any material
respect on the date as of when made or deemed made; or
9.5. Involuntary Bankruptcy, Appointment of Receiver, etc. (a) A court
having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Company in an involuntary case under the
Bankruptcy Code or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect in the United States or any
other jurisdiction, domestic or foreign, which decree or order is not
stayed; or any other similar relief shall be granted and remain
unstayed under any applicable law; or (b) an involuntary case is
commenced against the Company under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Company or
over all or a substantial part of any of its respective properties,
shall have been entered, or an interim receiver, trustee or other
custodian of the Company for all or a substantial part of its
respective properties is involuntarily appointed; or a warrant of
attachment, execution or similar process is issued against any
substantial part of the property of the Company, and the continuance
of any such events in this clause (b) for 60 days unless dismissed,
bonded, stayed, vacated or discharged; or
9.6. Voluntary Bankruptcy, Appointment of Receiver, etc. The Company shall
have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect in the
United States or any other jurisdiction, domestic or foreign, or shall
consent to the entry of an order for relief in an involuntary case, or
to the conversion of an involuntary case to a voluntary case, under
any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a
substantial part of its property; the making by the Company of any
assignment for the benefit of creditors; or the board of directors of
the Company (or any committee thereof) adopts any resolution or
otherwise authorizes any action to approve any of the foregoing; or
9.7. Judgments and Attachments. One or more judgments or decrees shall be
entered against the Company involving a liability (to the extent not
paid or covered by insurance) in excess of 100,000 USD for all such
outstanding judgments and decrees and all such judgments or decrees
shall not have been paid, vacated, discharged or stayed or bonded
pending appeal within 30 days from the entry thereof; or
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9.8. Suspension of Business. The business of the Company shall be dissolved
or liquidated or the usual business of the Company shall be suspended
for a period of ten consecutive days; or
9.9. Sale of Assets. The Company shall, whether by merger, sale or
transfer, other than pursuant to an Initial Public Offering, sell more
than twenty-five percent (25%) of its voting capital stock, or
substantially all of its assets; or
9.10. Default of Obligor. An Obligor shall default in the performance or
observance of any obligation of an "Obligor" under the Security
Agreement and such default shall continue for more than ten days; or
9.11. Cross Defaults. Any default or event of default shall have occurred
under the Subordinated Indebtedness or any other item of Indebtedness
of the Company or any Subsidiary with a principal amount in excess of
100,000 USD individually or in the aggregate, beyond any applicable
grace period or waiver or extension thereof;
then, (i) upon the occurrence of any Event of Default described in the
foregoing Sections 9.5 or 9.6 with respect to the Company, the unpaid
principal amount of the Senior Note, together with accrued interest
thereon, shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by the Company, and (ii) upon the
occurrence of any other Event of Default, the Purchaser may, upon written
notice to the Company, declare the Senior Note to be due and payable,
whereupon the principal amount of the Senior Note, together with accrued
interest thereon, shall automatically become immediately due and payable,
such without any other notice of any kind, and without presentment, demand,
protest or other requirements of any kind, all of which are hereby
expressly waived by the Company.
10. RESTRICTIONS ON TRANSFER.
10.1. Assignments.
10.1.1. The Purchaser may at any time sell, assign, transfer or
negotiate all or any part of its Senior Note; provided that such
transfer is in compliance with applicable United States federal
and state securities laws. In the case of any sale, assignment,
transfer or negotiation of all or part of the securities
authorized under this Section 10.1, the assignee, transferee or
recipient shall have, to the extent of such sale, assignment,
transfer or negotiation, the same rights, benefits and
obligations as it would if it were a Purchaser with respect to
such Senior Note or the loans evidenced thereby.
10.1.2. The Company shall keep at its principal office, or the
principal office of its counsel, a register in which the Company
shall provide for the registration of the Senior Note and the
transfer of the same shall be provided. Upon surrender for
registration of transfer of such securities in accordance with
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Section 10.1 at the principal office of the Company, the Company
shall, at its expense, promptly execute and deliver one or more
new Senior Notes of like tenor and of a like principal or share
amount, as applicable, registered in the name of such transferee
or transferees and, in the case of a transfer in part, new Senior
Notes in the appropriate amount registered in the names of such
transferor. While the Senior Note is a "restricted security"
within the meaning of Rule 144(a)(3) under the Securities Act,
the Company shall provide the Purchaser with the information
specified in, and meeting the requirements of, Rule 144A(d)(4)
under the Securities Act in connection with any proposed
transfer.
10.2. Restrictive Securities Legend.
The Senior Note shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE OR PROVINCE, HAS
BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO ITS DISTRIBUTION, AND
MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN (I) EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, (II) OPINION OF COUNSEL ACCEPTABLE TO THE
PURCHASER THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED OR (III)
EXEMPTION UNDER THE ACT. THIS SECURITY IS SUBJECT TO THE PROVISIONS OF A
SENIOR NOTE PURCHASE AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE
COMPANY."
10.3. Termination of Restrictions. The restrictions imposed by Section 10.2
hereof upon the transferability of the Senior Note shall cease and
terminate as to any such particular security (i) when, in the opinion
of legal counsel to the Company, such restrictions are no longer
required in order to assure compliance with the Securities Act and any
other applicable securities laws or (ii) when such Senior Note shall
have been registered under the Securities Act or transferred pursuant
to Rule 144 thereunder. Whenever such restrictions shall cease and
terminate as to any security or such security shall be transferable
under paragraph (k) of Rule 144, the holder thereof shall be entitled
to receive from the Company, without expense, a replacement Senior
Note not bearing the legend set forth in Section 10.2 hereof.
11. MISCELLANEOUS.
11.1. Fees and Expenses. Each party shall be responsible for all fees and
expenses incurred by such party in connection with the negotiation,
preparation, execution, delivery and performance of the Loan
Documents; provided, that the Company agrees to pay in full upon
demand the costs and expenses set forth in Section 6 of the Senior
Note, including, without limitation, after the occurrence of an Event
of Default, all costs and expenses (including, without limitation,
reasonable fees and
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disbursements of counsel) incurred by the Senior Noteholders in
enforcing any obligations of, or in collecting any payments due
hereunder or under, the Senior Note by reason of such Event of Default
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a workout,
or any insolvency or bankruptcy proceedings.
11.2. Company Indemnity. In addition to the payment of expenses pursuant to
Section 11.1, the Company (the "Company Indemnitor") agrees to
indemnify, pay and hold the Senior Noteholders, and the officers,
directors, employees, agents, and Affiliates of the Senior Noteholders
(collectively referred to as the "Purchaser Indemnitees") harmless,
from and against any and all other actual costs, expenses,
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and
disbursements of one counsel for such Purchaser Indemnitees) (a)
resulting from any breach of any representation or warranty of the
Company or any covenant, obligation or agreement of the Company
contained herein or in any certificate or other document delivered in
connection herewith, or (b) in connection with any investigative,
administrative or judicial proceeding commenced or threatened
(excluding claims among Purchaser Indemnitees and, with the exception
of claims arising out of otherwise indemnifiable matters (e.g.,
actions to enforce the indemnification rights provided hereunder), and
excluding claims between the Company and a Purchaser Indemnitee),
whether or not such Purchaser Indemnitee shall be designated a party
thereto, which may be imposed on, incurred by, or asserted against
that Purchaser Indemnitee, in any manner relating to or arising out of
this Agreement, the Senior Note, the Loan Documents or the other
documents related to the transactions contemplated hereby, the
Purchaser's agreement to purchase the Senior Note or the use or
intended use of the proceeds of any of the proceeds thereof to the
Company (collectively, the "Purchaser Indemnified Liabilities");
provided, that the Company Indemnitor shall not have any obligation to
a Purchaser Indemnitee hereunder with respect to a Purchaser
Indemnified Liability to the extent that such Purchaser Indemnified
Liability arises from the gross negligence or willful misconduct of
that Purchaser Indemnitee.
11.3. Purchaser Indemnity. The Purchaser (the "Purchaser Indemnitor")
agrees to indemnify, pay and hold the Company, and the officers,
directors, employees, agents, and Affiliates of the Company
(collectively referred to as the "Company Indemnitees") harmless, from
and against any and all other actual costs, expenses, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of one
counsel for such Company Indemnitees) resulting from any breach of any
representation or warranty of the Purchaser or any obligation or
agreement of the Purchaser contained herein or in any certificate or
other document delivered in connection herewith (collectively, the
"Company Indemnified Liabilities"); provided, that the Purchaser
Indemnitor shall not have any obligation to a
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Company Indemnitee hereunder with respect to a Company Indemnified
Liability to the extent that such Company Indemnified Liability arises
from the gross negligence or willful misconduct of that Company
Indemnitee.
11.4. Indemnification Procedure. Any Indemnitee seeking indemnification
under Section 11.2 or Section 11.3 hereof shall give an Indemnitor
prompt written notice of any claim that might give rise to Indemnified
Liabilities setting forth a description of those elements of such
claim of which such Indemnitee has knowledge; provided, that any
failure to give such notice shall not affect the obligations of the
Indemnitor unless (and then solely to the extent) such Indemnitor is
actually prejudiced thereby. The Indemnitor shall have the right at
any time during which such claim is pending to select counsel to
defend and control the defense thereof and settle any claims for which
it is responsible for indemnification hereunder (provided that the
Indemnitor will not settle any such claim without (i) the appropriate
Indemnitee's prior written consent or (ii) obtaining an unconditional
release of the appropriate Indemnitee from all claims arising out of,
or in any way relating to, the circumstances involving such claim) so
long as in any such event the Indemnitor shall have stated in a
writing delivered to the Indemnitee that, as between the Indemnitor
and the Indemnitee, the Indemnitor is responsible to the Indemnitee
with respect to such claim to the extent and subject to the
limitations set forth herein; provided, that the Indemnitor shall not
be entitled to control the defense of any claim in the event that in
the reasonable opinion of counsel for the Indemnitee, there are one or
more material defenses available to the Indemnitee which are not
available to the Indemnitor; provided, further, that with respect to
any claim as to which the Indemnitee is controlling the defense, the
Indemnitor will not be liable to any Indemnitee for any settlement of
any claim pursuant to Section 11.2 or Section 11.3, as applicable,
that is effected without its prior written consent, which consent
shall not be unreasonably withheld. To the extent that the undertaking
to indemnify, pay and hold harmless set forth in Section 11.2 or
Section 11.3, as applicable, may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them. For purposes
hereof, "Indemnitor" means the Purchaser Indemnitor or the Company
Indemnitor, as applicable; "Indemnitee" means a Purchaser Indemnitee
or a Company Indemnitee and "Indemnified Liabilities" means either
Purchaser Indemnified Liabilities or Company Indemnified Liabilities.
11.5. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Default if such action is taken or condition exists.
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11.6. Notices. Notices shall be deemed to have been received (i) upon
delivery, if delivered in person, or (ii) on the next Business Day
after dispatch, if sent by nationally recognized, overnight courier.
Notices sent by facsimile transmission shall be deemed to have been
received on the date sent if a Business Day (or, if not sent on a
Business Day, on the next Business Day after the date sent by
telecopy), provided that the sender has a confirmed receipt. Notices
sent by registered or certified mail, postage prepaid shall be deemed
to have been received on the fifth Business Day following the mailing
thereof. The addresses for such communications shall be (i) with
respect to the Company, addressed to Canadian Traffic Network ULC,
Atria III, 0000 Xxxxxxxx Xxxxxx Xxxx Xxxxx 0000, Xxxxx Xxxx, Xxxxxxx
X0X 0X0 Attention: Xxxxxxx Xxx, Facsimile No.: n/a, with a copy to
Global Traffic Canada, Inc., 0000 Xxxx Xxxx Xxxx Xxxxxxxxx, Xxxxx 000,
Xxx Xxxxx, XX 00000, Attention: Xxxxxxx Xxx, Facsimile No.: (702)
562-4001 and (ii) with respect to the Purchaser, addressed to Metro
Networks Communications, Inc., 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: EVP, Business Affairs and Business
Development, Facsimile No: (000) 000-0000, with a copy to the General
Counsel, Facsimile No: (000) 000-0000, or to such other address or
facsimile number as any such party shall designate in writing to the
other.
11.7. Survival of Warranties and Certain Agreements. Any liability of the
Company for any (i) breach of, or inaccuracy in, the representations
and warranties made by it herein or (ii) breach of or default in the
performance of the agreements made by it herein, shall survive the
execution and delivery of this Agreement, the sale, issuance and
delivery of the Senior Note hereunder and shall continue until the
repayment of the Senior Note and the Note Obligations in full;
provided, that if all or any part of such payment is set aside, the
Company shall remain liable for any (i) breach of, or inaccuracy in,
the representations and warranties made by it herein or (ii) breach of
or default in the performance of such agreements, as applicable, in
each case as if no such payment had been made. Notwithstanding
anything in this Agreement or implied by law to the contrary, the
agreements of the Company set forth in Sections 11.1 and 11.2 shall
survive the payment of the Senior Note and the termination of this
Agreement for any reason.
11.8. Amendments and Waivers. No amendment, modification, termination or
waiver of any provision of this Agreement, shall in any event be
effective without the written consent of the Purchaser and the
Company; provided, that no amendment, modification, waiver or consent
shall, unless in writing and signed by the Senior Noteholder affected
thereby, do any of the following: (a) extend the maturity or time of,
or right to receive, payment of principal of, or premium, if any, or
interest on, any Senior Note (other than as a result of waiving a
Default or Event of Default giving rise to a right of acceleration,
which shall each be by written consent of the Purchaser); or (b)
reduce the rate of interest or the principal amount of any of the
Senior Note; or (c) impair or affect the right of any Senior
Noteholder to institute suit for enforcement of any such payment to
which such Senior Noteholder is entitled pursuant to this Agreement;
or (d) alter the percentage of Senior Note held by Senior Noteholders
necessary to modify or take
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action under this Agreement; or (e) amend this Section 11.6. Any
waiver or consent shall be effective only in the specific instance and
for the specific purpose for which it was given. No notice to or
demand on the Company in any case shall entitle the Company to any
further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in
accordance with this Section 11.6 shall be binding upon each holder of
the Senior Note at the time outstanding and each future holder
thereof.
11.9. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of the Purchaser in the exercise of any power, right
or privilege hereunder or under the Senior Note shall impair such
power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.
All rights and remedies existing under this Agreement or the Senior
Note are cumulative to and not exclusive of, any rights or remedies
otherwise available.
11.10. Severability. If and to the extent that any provision in this
Agreement or the Senior Note shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions of this Agreement, the
Senior Note or of the other obligations of the Company under any of
such provisions, or of such provision or obligation in any other
jurisdiction, or of such provision to the extent not invalid, illegal
or unenforceable shall not in any way be affected or impaired thereby.
11.11. Heading. Section and subsection 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 or be given
any substantive effect.
11.12. Applicable Law. This Agreement shall be governed by, and shall be
construed and enforced in accordance with, the laws of State of New
York, without regard to the principles of conflicts of laws.
11.13. Successors and Assigns; Subsequent Holders. This Agreement shall be
binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of the parties hereto and their
successors and assigns. The terms and provisions of this Agreement and
the Senior Note shall inure to the benefit of any assignee or
transferee of the Company, to the extent the assignment is permitted
hereunder, and in the event of such transfer or assignment, the rights
and privileges herein conferred upon the Company or Purchaser shall
automatically extend to and be vested in such transferee or assignee,
all subject to the terms and conditions hereof. The Company's
respective rights or any interest therein or hereunder may not be
assigned without the written consent of the Purchaser.
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11.14. Consent to Jurisdiction and Service of Process. The Company and the
Purchaser (including, but not limited to, their respective
subsidiaries, officers, directors and controlling persons) hereby (i)
irrevocably submit to the exclusive jurisdiction of any New York State
court or Federal court sitting in New York County in any action
related to, connected with or arising out of, in whole or in part,
this Agreement, the Loan Documents or any Senior Note, (ii) agree that
all claims in such action shall be decided in such court, (iii) waive,
to the fullest extent it may effectively do so, the defense of
inconvenient forum and (iv) consent to the service of process by
certified mail, return receipt requested. The Company and the
Purchaser hereby agree that service upon it in the manner provided for
the giving of notices in Section 11.6 shall constitute sufficient
notice. Nothing herein shall affect the right of any party to serve
legal process in any manner permitted by law or affect its right to
bring any action in any other court.
11.15. Waiver of Jury Trial. The Company hereby waives, to the full extent
permitted by applicable law, trial by jury in any litigation in any
court with respect to, in connection with, or arising out of this
Agreement or any other Loan Document or the validity, protection,
interpretation, collection or enforcement thereof. Notwithstanding
anything contained in this Agreement to the contrary, no claim may be
made by the Company against the Purchaser for any lost profits or any
special, indirect or consequential damages in respect of any breach or
wrongful conduct (other than willful misconduct constituting actual
fraud) in connection with, arising out of or in any way related to the
transactions contemplated hereunder or under the other Loan Documents,
or any act, omission or event occurring in connection therewith. The
Company hereby waives, releases and agrees not to xxx upon any such
claim for any such damages. The Company agrees that this Section 11.15
is a specific and material aspect of this Agreement and acknowledges
that the Purchaser would not extend to the Company any monies
hereunder if this Section 11.15 were not part of this Agreement.
11.16. Counterparts. This Agreement and any amendments, waivers, consents
or supplements may be executed in counterparts and by different
parties hereto in separate counterparts, including by facsimile, each
of which when so executed and delivered shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
11.17. Entirety. This Agreement and the other Loan Documents embody the
entire agreement among the parties and supersede all prior agreements
and understandings, if any, relating to the subject matter hereof and
thereof. In the event of any conflict between the Senior Note and the
terms set forth in Section 3 hereof, the terms and provisions of the
Senior Note shall govern.
11.18. Further Assurances. Either party, at the request of the other, will
take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate in doing, as may reasonably be
deemed necessary or desirable, all things necessary to consummate and
make effective in a practicable manner, the transactions contemplated
by this Agreement and the other Loan Documents, including,
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without limitation, the execution and delivery of any additional
waivers, consents, confirmations, agreements, instruments or
documents, or the taking of all actions, necessary to issue and sell
the Senior Note to the Purchaser and to otherwise carry out the
purpose and intent of this Agreement and the other Loan Documents.
11.19. Termination. When all Note Obligations have been paid, performed and
reasonably determined by the Purchaser to have been indefeasibly
discharged in full, and if at the time no Senior Noteholder continues
to be committed to extend any credit to the Company hereunder, this
Agreement shall terminate and, at the Company's written request,
accompanied by such certificates and other items as the Purchaser
shall reasonably deem necessary, the Collateral shall revert to the
Company and the right, title and interest of the Senior Noteholders
therein shall terminate. Thereupon, on the Company's demand and at
their cost and expense, the Purchaser shall execute proper
instruments, acknowledging satisfaction of and discharging this
Agreement, and shall re-deliver to the Company any Collateral then in
its possession; provided, however, that Sections 11.1, 11.2, 11.3,
11.7 and 11.19 shall survive the termination of this Agreement.
[Remainder of page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this Senior Note Purchase
Agreement as of the date first above written.
COMPANY:
CANADIAN TRAFFIC NETWORK ULC
By: /s/ Xxxxxxx X. Xxx III
------------------------------------
Name: Xxxxxxx X. Xxx III
----------------------------------
Title: Director
---------------------------------
PURCHASER:
METRO NETWORKS COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
----------------------------------
Title: EVP
---------------------------------