Exhibit 10.1
MCG CAPITAL CORPORATION
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
July 19, 2002
NBG Radio Network, Inc.
The Cascade Building
000 XX Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxx, III, President
Re: Waiver and Amendment Number Two to Credit Agreement
("Waiver and Amendment")
Sir or Madam:
Reference is hereby made to that certain Credit Facility
Agreement (as amended and modified from time to time, the "Credit Agreement")
dated as of June 29, 2001, by and among NBG Radio Network, Inc. ("NBG"), and
certain of its direct and indirect Subsidiaries (each, including NBG, a
"Borrower"; collectively, including NBG, the "Borrowers"), and the Lenders
referred to therein, and MCG Capital Corporation ("MCG"), for its own account as
Lender and as administrative agent ("Administrative Agent"). Capitalized terms
used herein but not defined shall have the meaning given to such terms in the
Credit Agreement.
Waiver.
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Under Section 4.1 of the Credit Agreement, as of May 31, 2002:
(i) Borrowers' Quarterly OCF should not have been less than $500,000, but was in
fact $293,225, and (ii) Borrowers' Cumulative Revenue should not have been less
than $5,900,000, but was in fact $5,696,084. Through this Waiver and Amendment,
Lenders hereby waive and agree that Borrowers' failure to comply with the
foregoing financial covenants as of May 31, 2002 only will no longer constitute
a Default or an Event of Default under Section 4.1 of the Credit Agreement or
Section 7.1.3 of the Credit Agreement.
Amendment.
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Borrowers have requested and Lenders have agreed to amend and
restate the financial covenants under Section 4.1 of the Credit Agreement.
Accordingly, for good and valuable consideration (receipt and sufficiency of
which are hereby acknowledged), and intending to be legally bound hereby, each
Borrower, Administrative Agent and each Lender hereby agree that Section 4.1 of
the Credit Agreement is hereby amended and restated in its entirety as follows:
"4.1. Financial and Operating Covenants and Ratios. As of the end of
each fiscal quarter - beginning with the respective fiscal quarters ending on
the dates set forth below - Borrowers (on a consolidated basis) will satisfy
each of the following financial ratios and characteristics, each of which will
be determined using GAAP consistently applied, except as otherwise expressly
provided:
4.1.1. Interest Coverage Ratio. A ratio of OCF to Interest
Expense of not less than the following:
a. 1.50-to-1.0, from November 30, 2002 through
February 27, 2003; and
b. 2.50-to-1.0, from and after February 28,
2003.
4.1.2. Total Charge Coverage Ratio. A ratio of OCF to Total
Charges of not less than 1.0-to-1.0 from and after November 30, 2002.
4.1.3. Cash Flow Leverage Ratio. A ratio of Funded Debt to OCF
of not more than the following:
a. 3.00-to-1.0, from November 30, 2002 through
February 27, 2003; and
b. 2.00-to-1.0, from February 28, 2003 through
November 29, 2003; and
c. 1.00-to-1.0, from and after November 30,
2003.
4.1.4. Maximum Programming Obligations and Affiliate Station
Expenses. The amount of Cumulative Programming Obligations of Borrowers
and Cumulative Affiliate Station Expenses of Borrowers (on a
consolidated basis) will not exceed the amounts set forth below,
compliance with such covenant to be measured on a cumulative basis as
of the end of each fiscal quarter:
Percentage of Upfront Revenues
------------------------------
Fiscal Year Cumulative Programming Cumulative Affiliate
Ending Obligations Station Expenses
11/30/2002 See Below See Below
11/30/2003 28.9% 6.7%
Thereafter 28.9% 4.6%
Notwithstanding the foregoing, the maximum aggregate amount of
Cumulative Programming Obligations shall not exceed $2.4 million and
Cumulative Affiliate Station Expenses shall not exceed $2.8 million for
fiscal year ending November 30, 2002.
4.1.5. Minimum Adjusted OCF. OCF for the immediately preceding
four fiscal quarters of not less than the following:
a. ($100,000) as of August 31, 2002; and
b. $2,000,000 as of November 30, 2002.
4.1.6. Minimum Quarterly OCF. OCF for the immediately
preceding fiscal quarter of not less than the following:
a. $500,000 as of August 31, 2002; and
b. $1,000,000 as of November 30, 2002.
4.1.7. Minimum Cumulative Revenue. Cumulative Revenue, meaning
Gross Revenue as determined in accord with GAAP, prior to agent
commissions and sales rep commission, dating from December 1, 2001 of
not less than the following:
a. $9,248,000 as of August 31, 2002; and
b. $12,800,000 as of November 30, 2002."
Upon execution of this Waiver and Amendment, Borrowers will
pay in immediately available funds to Administrative Agent a Documentation Fee
in the amount of $500 to cover all fees, costs and expenses in connection with
the preparation and execution of this Waiver and Amendment.
Except as expressly stated herein, all other terms of the Loan
Documents remain in full force and effect and unchanged. This Waiver and
Amendment will not obligate Administrative Agent or Lenders to otherwise consent
to any actions or inactions in the future or to amend any Loan Document in any
manner at any time in the future or to waive compliance (temporarily or
otherwise) with any provision of any Loan Document. This Waiver and Amendment
may be executed in counterparts and delivered by facsimile, and each such
counterpart and facsimile shall be considered an effective original.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned (where appropriate, by
their duly authorized officers) have executed this Waiver and Amendment, as an
instrument under seal (whether or not any such seals are physically attached
hereto), as of the day and year first above written.
ATTEST: NBG RADIO NETWORK, INC.
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx III
Name: Xxxx X. Xxxxxxxxx Name: Xxxx X. Xxxxxx III
Title: Secretary Title: President
[SEAL]
ATTEST: XXXXX XXXXXX ENTERTAINMENT CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx III
Name: Xxxx X. Xxxxxxxxx Name: Xxxx X. Xxxxxx III
Title: Secretary Title: President
[SEAL]
WITNESS: MCG CAPITAL CORPORATION
(in its own capacity as Administrative
Agent and Lender, and as servicer for
its funding affiliates and
securitization vehicles)
By: By: /s/ Xxxx X. Xxxxxxxx
----------------------------------- Name: Xxxx X. Xxxxxxxx
Title: Vice President
