EXHIBIT 10.1
==========================================
CREDIT AGREEMENT
among
THE XXXXXXXX GROUP, INC.,
THE LENDERS NAMED HEREIN,
FIRST UNION NATIONAL BANK,
as Administrative Agent
FLEET BANK, N.A.
as Documentation Agent
UNION BANK OF CALIFORNIA, N.A.,
KEYBANK NATIONAL ASSOCIATION
and
BANK OF MONTREAL, CHICAGO BRANCH
as Co-Agents
$325,000,000 Senior Credit Facilities
Arranged by
FIRST UNION CAPITAL MARKETS CORP.
Dated as of January 22, 1999
==========================================
TABLE OF CONTENTS
Page
RECITALS.................................................................... 1
ARTICLE I
DEFINITIONS
1.1. Defined Terms........................................................ 1
1.2. Accounting Terms..................................................... 22
1.3. Other Terms; Construction............................................ 22
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1. Commitments......................................................... 23
2.2. Borrowings.......................................................... 23
2.3. Disbursements; Funding Reliance; Domicile of Loans.................. 24
2.4. Notes............................................................... 25
2.5. Termination and Reduction of Commitments............................ 26
2.6. Mandatory Payments and Prepayments.................................. 27
2.7. Voluntary Prepayments............................................... 29
2.8. Interest............................................................ 30
2.9. Fees................................................................ 31
2.10. Interest Periods.................................................... 32
2.11. Conversions and Continuations....................................... 33
2.12. Method of Payments; Computations.................................... 34
2.13. Recovery of Payments................................................ 35
2.14. Use of Proceeds..................................................... 35
2.15. Pro Rata Treatment.................................................. 35
2.16. Increased Costs; Change in Circumstances; Illegality; etc........... 36
2.17. Taxes............................................................... 38
2.18. Compensation........................................................ 39
2.19. Optional Increase in Revolving Credit Commitment.................... 40
ARTICLE III
LETTERS OF CREDIT
3.1. Issuance............................................................. 41
3.2. Notices.............................................................. 43
3.3. Participations....................................................... 43
3.4. Reimbursement........................................................ 43
i
3.5. Payment by Revolving Loans........................................... 44
3.6. Payment to Lenders................................................... 44
3.7. Obligations Absolute................................................. 44
3.8. Cash Collateral Account.............................................. 46
3.9. Effectiveness........................................................ 46
ARTICLE IV
CONDITIONS OF BORROWING
4.1. Conditions of Initial Borrowing...................................... 47
4.2 Conditions of Tranche B Term Loans................................... 49
4.3 Conditions of Revolver Increase...................................... 51
4.4 Conditions of All Borrowings......................................... 52
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Corporate Organization and Power.................................... 53
5.2. Authorization; Enforceability....................................... 53
5.3. No Violation........................................................ 53
5.4. Governmental and Third-Party Authorization; Permits and Licenses.... 53
5.5. Litigation.......................................................... 54
5.6. Taxes............................................................... 54
5.7. Subsidiaries........................................................ 54
5.8. Full Disclosure..................................................... 55
5.9. Margin Regulations.................................................. 55
5.10. No Material Adverse Change.......................................... 55
5.11. Financial Matters................................................... 55
5.12. Properties; Assets.................................................. 56
5.13. ERISA............................................................... 56
5.14. Environmental Matters............................................... 57
5.15. Compliance With Laws................................................ 57
5.16. Regulated Industries................................................ 58
5.17. Insurance........................................................... 58
5.18. Material Contracts.................................................. 58
5.19. Security Documents.................................................. 58
5.20. Labor Relations..................................................... 58
5.21. Year 2000 Compatibility............................................. 59
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1. Financial Statements................................................ 59
ii
6.2. Other Business and Financial Information............................ 60
6.3. Corporate Existence; Franchises; Maintenance of Properties.......... 62
6.4. Compliance with Laws................................................ 62
6.5. Payment of Obligations.............................................. 62
6.6. Insurance........................................................... 62
6.7. Maintenance of Books and Records; Inspection........................ 63
6.8. Interest Rate Protection............................................ 63
6.9. Permitted Acquisitions.............................................. 63
6.10. Creation or Acquisition of Subsidiaries............................. 64
6.11 Additional Security................................................. 65
6.12. NBA Lockout......................................................... 66
6.12. Year 2000........................................................... 66
6.13. Further Assurances.................................................. 66
ARTICLE VII
FINANCIAL COVENANTS
7.1. Leverage Ratios...................................................... 66
7.2. Interest Coverage Ratio.............................................. 67
7.3. Fixed Charge Coverage Ratio.......................................... 67
7.4 Capital Lease Obligations............................................ 67
ARTICLE VIII
NEGATIVE COVENANTS
8.1. Merger; Consolidation............................................... 68
8.2. Indebtedness........................................................ 68
8.3. Liens............................................................... 70
8.4. Disposition of Assets............................................... 71
8.5. Investments; LMA's.................................................. 72
8.6. Restricted Payments................................................. 72
8.7. Transactions with Affiliates........................................ 73
8.8. Lines of Business................................................... 73
8.9. Certain Amendments.................................................. 73
8.10. Limitation on Certain Restrictions.................................. 74
8.11. No Other Negative Pledges........................................... 74
8.12. Fiscal Year......................................................... 74
8.13. Accounting Changes.................................................. 74
8.14. Waiver of Stay, Extension or Usury Laws............................. 74
8.15. Limitation on Preferred Stock of Subsidiaries....................... 74
8.16. Certain Restrictions................................................ 75
ARTICLE IX
iii
EVENTS OF DEFAULT
9.1. Events of Default.................................................... 75
9.2. Remedies: Termination of Commitments, Acceleration, etc.............. 78
9.3. Remedies: Set-Off.................................................... 79
ARTICLE X
THE AGENT
10.1. Appointment........................................................ 79
10.2. Nature of Duties................................................... 79
10.3. Exculpatory Provisions............................................. 80
10.4. Reliance by Agent.................................................. 80
10.5. Non-Reliance on Agent and Other Lenders............................ 80
10.6. Notice of Default.................................................. 81
10.7. Indemnification.................................................... 81
10.8. The Agent in its Individual Capacity............................... 82
10.9. Successor Agent.................................................... 82
10.10. Collateral Matters................................................. 82
10.11. Issuing Lender..................................................... 83
ARTICLE XI
MISCELLANEOUS
11.1. Fees and Expenses.................................................. 83
11.2. Indemnification.................................................... 83
11.3. Governing Law; Consent to Jurisdiction............................. 84
11.4. Arbitration; Preservation and Limitation of Remedies............... 85
11.5. Notices............................................................ 86
11.6. Amendments, Waivers, etc........................................... 86
11.7. Assignments, Participations........................................ 87
11.8. No Waiver.......................................................... 89
11.9. Successors and Assigns............................................. 89
11.10. Survival........................................................... 90
11.11. Severability....................................................... 90
11.12. Construction....................................................... 90
11.13. Confidentiality.................................................... 90
11.14. Counterparts; Effectiveness........................................ 90
11.15. Disclosure of Information.......................................... 90
11.16. Entire Agreement................................................... 91
iv
EXHIBITS
Exhibit A-1 Form of Tranche A Term Note
Exhibit A-2 Form of Tranche B Term Note
Exhibit A-3 Form of Revolving Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Conversion/Continuation
Exhibit B-3 Form of Letter of Credit Notice
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Subsidiary Guaranty
Exhibit H-1 Form of Opinion of Borrower's Counsel
Exhibit H-2 Form of Opinion of Borrower's FCC Counsel
Exhibit H-3 Form of Opinion of Borrower's Counsel Regarding Tranche B Term
Loans
Exhibit H-4 Form of Opinion of Borrower's FCC Counsel Regarding Tranche B
Term Loans
Exhibit H-5 Form of Opinion of Borrower's Counsel Regarding Revolver Increase
Exhibit H-6 Form of Opinion of Borrower's FCC Counsel Regarding Revolver
Increase
Exhibit H-7 Form of Opinion of Borrower's Counsel Regarding Subsidiary
Guaranty
Exhibit H-8 Form of Opinion of Borrower's FCC Counsel Regarding Subsidiary
Guaranty
Exhibit I Form of Financial Condition Certificate
Exhibit J Form of Lender Addition and Acknowledgment Agreement
SCHEDULES
Schedule 5.4 FCC Licenses
Schedule 5.5 Litigation
Schedule 5.7 Subsidiaries
Schedule 5.17 Insurance
Schedule 5.18 Material Contracts
Schedule 8.2 Indebtedness
Schedule 8.3 Liens
Schedule 8.5 Investments
Schedule 8.7 Transactions with Affiliates
Schedule 8.16 Existing FHS Indebtedness
v
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of the 22nd day of January, 1999 (this
"Agreement"), is made among THE XXXXXXXX GROUP, INC., a Delaware corporation
with its principal offices in Seattle, Washington (the "Borrower"), the banks
and financial institutions listed on the signature pages hereto or that become
parties hereto after the date hereof (collectively, the "Lenders"), FIRST UNION
NATIONAL BANK ("First Union"), as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent"), FLEET BANK, N.A., as documentation agent
("Documentation Agent"), UNION BANK OF CALIFORNIA, N.A., as co-agent and KEYBANK
NATIONAL ASSOCIATION, as co-agent and BANK OF MONTREAL, CHICAGO BRANCH, as co-
agent.
RECITALS
A. The Borrower has requested that the Lenders make available to the
Borrower a term loan facility in the initial aggregate principal amount of
$150,000,000 (consisting of Tranche A Term Loans in an aggregate principal
amount of $65,000,000 to be made on the Closing Date, and Tranche B Term Loans
in an aggregate principal amount of $85,000,000 to be made on the WOKR
Acquisition Date, as defined below) and a reducing revolving credit facility in
the initial aggregate principal amount of $175,000,000 (the amount of which
revolving credit facility may be increased by $75,000,000 under certain
circumstances as provided herein).
B. The Borrower will use the proceeds of these facilities to finance a
portion of the purchase price of the acquisition of substantially all of the
assets associated with station WOKR-TV in Rochester, New York, to refinance
certain existing indebtedness, to pay or reimburse certain fees and expenses in
connection herewith and therewith, to finance capital expenditures, to fund
certain other acquisitions as permitted hereunder, and for working capital and
general corporate purposes, all as more fully described herein.
C. The Lenders are willing to make available to the Borrower the credit
facilities described herein subject to and on the terms and conditions set forth
in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Defined Terms. For purposes of this Agreement, in addition to the
-------------
terms defined elsewhere herein, the following terms shall have the meanings set
forth below (such meanings to be equally applicable to the singular and plural
forms thereof):
1
"Account Designation Letter" shall mean a letter from the Borrower to the
Administrative Agent, duly completed and signed by an Authorized Officer and in
form and substance satisfactory to the Administrative Agent, listing any one or
more accounts to which the Borrower may from time to time request the
Administrative Agent to forward the proceeds of any Loans made hereunder.
"Acquired Preferred Stock" means Preferred Stock of any Person or any of
its Subsidiaries at the time such Person becomes a Subsidiary of the Borrower or
at the time it merges or consolidates with the Borrower or any of its
Subsidiaries and not issued by such Person in connection with, or in
anticipation or contemplation of, such acquisition, merger, or consolidation
together with any other Preferred Stock of such Person, the proceeds of which
are used to refinance or replace such Person's Acquired Preferred Stock;
provided that (i) the maximum aggregate liquidation preference of any such
refinancing or replacement Preferred Stock does not exceed the aggregate
liquidation preference of the Acquired Preferred Stock being refinanced or
replaced at the time of such refinancing or replacement and (ii) such
refinancing or replacement Preferred Stock (other than Capital Stock that is not
Disqualified Capital Stock) (x) shall not mature or become mandatorily
redeemable prior to the maturity of the Acquired Preferred Stock being
refinanced or replaced and (y) shall have a Weighted Average Life to Maturity
greater than the Weighted Average Life to Maturity of the Acquired Preferred
Stock being refinanced or replaced.
"Acquisition" shall mean any transaction or series of related transactions,
consummated on or after the date hereof, by which the Borrower directly, or
indirectly through one or more Subsidiaries, (i) acquires any going business, or
all or substantially all of the assets, of any Person, whether through purchase
of assets, merger or otherwise, or (ii) acquires securities or other ownership
interests of any Person having at least a majority of combined voting power of
the then outstanding securities or other ownership interests of such Person.
For purposes of this Agreement, any LMA (except for LMAs undertaken pursuant to
the Monterey LMA Agreement and the Utica LMA Agreement) shall be considered to
be an Acquisition.
"Acquisition Amount" shall mean, with respect to any Acquisition, the sum
(without duplication) of (i) the amount of cash paid by the Borrower and its
Subsidiaries in connection with such Acquisition, (ii) the Fair Market Value of
all Capital Stock of the Borrower issued or given in connection with such
Acquisition, (iii) the amount (determined by using the face amount or the amount
payable at maturity, whichever is greater) of all Indebtedness incurred, assumed
or acquired by the Borrower and its Subsidiaries in connection with such
Acquisition, (iv) all additional purchase price amounts in connection with such
Acquisition in the form of earnouts and other contingent obligations that should
be recorded as a liability on the balance sheet of the Borrower and its
Subsidiaries or expensed, in either event in accordance with GAAP, Regulation S-
X under the Securities Act of 1933, as amended, or any other rule or regulation
of the Securities and Exchange Commission, (v) all amounts paid in respect of
covenants not to compete, consulting agreements and other affiliated contracts
in connection with such Acquisition, (vi) the amount of all transaction fees and
expenses (including without limitation legal, accounting and finders' fees and
expenses) incurred by the Borrower and its Subsidiaries in connection with such
Acquisition and (vii) the aggregate fair market value of all other consideration
given by the Borrower and its Subsidiaries in connection with such Acquisition.
To the extent that consideration paid in connection with an Acquisition has been
applied to the Acquisition Amount in connection with an LMA, such consideration
will not be recounted in the calculation of the Acquisition Amount upon the
consummation of the acquisition ultimately being undertaken in connection with
such LMA.
2
"Adjusted Base Rate" shall mean, at any time with respect to any Base Rate
Loan, a rate per annum equal to the Base Rate as in effect at such time plus the
Applicable Margin Percentage for Base Rate Loans as in effect at such time.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Margin Percentage for LIBOR Loans as in effect at such time.
"Affiliate" shall mean, as to any Person, each other Person that directly,
or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person. For purposes of this definition, with respect to any
Person "control" shall mean (i) the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise, or
(ii) the beneficial ownership of securities or other ownership interests of such
Person having 10% or more of the combined voting power of the then outstanding
securities or other ownership interests of such Person ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors or other governing body of such Person.
"Administrative Agent" shall mean First Union, in its capacity as
Administrative Agent appointed under Article X, and its successors and permitted
assigns in such capacity.
"Agreement" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time.
"Applicable Margin Percentage" shall mean, at any time from and after the
Closing Date, the applicable percentage (a) to be added to the Base Rate
pursuant to Section 2.8 for purposes of determining the Adjusted Base Rate, (b)
to be added to the LIBOR Rate pursuant to Section 2.8 for purposes of
determining the Adjusted LIBOR Rate, and (c) to be used in calculating the
commitment fee payable pursuant to Sections 2.9(c) and 2.9(h), in each case as
determined under the following matrix with reference to the Leverage Ratio:
Leverage Ratio
------------------------------------- Applicable Margin Applicable Margin Applicable
Percentage for Percentage for Margin
Base Rate Term and LIBOR Term and Percentage for
Revolving Loans Revolving Loans Commitment Fee
--------------- ---------------- --------------
Greater than or equal to 6.75 to 1.00 2.000% 3.000% 0.500%
Greater than or equal to 6.50 to 1.00
but less than 6.75 to 1.00 1.750% 2.750% 0.500%
Greater than or equal to 6.00 to 1.00
but less than 6.50 to 1.00 1.500% 2.500% 0.500%
Greater than or equal to 5.50 to 1.00
but less than 6.00 to 1.00 1.250% 2.250% 0.500%
3
Leverage Ratio
------------------------------------- Applicable Margin Applicable Margin Applicable
Percentage for Percentage for Margin
Base Rate Term and LIBOR Term and Percentage for
Revolving Loans Revolving Loans Commitment Fee
--------------- ---------------- --------------
Greater than or equal to 5.00 to 1.00 1.000% 2.000% 0.500%
but less than 5.50 to 1.00
Greater than or equal to 4.50 to 1.00 0.750% 1.750% 0.375%
but less than 5.00 to 1.00
Less than 4.50 to 1.00 0.500% 1.500% 0.375%
On each Adjustment Date (as hereinafter defined), the Applicable Margin
Percentage for all Loans and the commitment fee payable pursuant to Sections
2.9(c) and 2.9(h) shall be adjusted effective as of such date (based upon the
calculation of the Leverage Ratio as of the last day of the fiscal period to
which such Adjustment Date relates) in accordance with the above matrix;
provided, however, that, notwithstanding the foregoing or anything else herein
-------- -------
to the contrary, (a) if at any time the Borrower shall have failed to deliver
the financial statements and a Compliance Certificate as required by Section
6.1(a) or Section 6.1(b), as the case may be, and Section 6.2(a), or if at any
time a Default or Event of Default shall have occurred and be continuing, then
at the election of the Required Lenders, at all times from and including the
date on which such statements and Compliance Certificate are required to have
been delivered (or the date of occurrence of such Default or Event of Default,
as the case may be) to the date on which the same shall have been delivered (or
such Default or Event of Default cured or waived, as the case may be), each
Applicable Margin Percentage shall be determined in accordance with the above
matrix as if the Leverage Ratio were greater than or equal to 6.75 to 1.00
(notwithstanding the actual Leverage Ratio); and (b) for the period commencing
on the Closing Date and ending as of the Adjustment Date (as defined below) in
respect of the fiscal quarter ended March 31, 1999, each Applicable Margin
Percentage shall be determined in accordance with the above matrix as if the
Leverage Ratio were no lower than 6.50 to 1.00. For purposes of this
definition, "Adjustment Date" shall mean, with respect to any fiscal quarter of
the Borrower beginning with the fiscal quarter ending December 31, 1998, the
fifth (5th) day (or, if such day is not a Business Day, on the next succeeding
Business Day) after delivery by the Borrower in accordance with Section 6.1(a)
or Section 6.1(b), as the case may be, of (i) financial statements for the most
recently completed applicable fiscal period and (ii) a duly completed Compliance
Certificate with respect to such fiscal period.
"Asset Disposition" shall mean any sale, assignment, transfer or other
disposition by the Borrower or any of its Subsidiaries to any other Person
(other than to the Borrower or to a Wholly Owned Subsidiary), whether in one
transaction or in a series of related transactions, of any of its assets,
business units or other properties (including any interests in property, whether
tangible or intangible, and including Capital Stock of Subsidiaries), excluding
(i) sales and licenses of inventory and other assets in the ordinary course of
business, and (ii) the sale or exchange of used or obsolete equipment to the
extent the proceeds of such sale are applied towards, or such equipment is
exchanged for, similar replacement equipment.
"Asset Swap" means the execution of a definitive agreement, subject only to
approval of the FCC and other customary closing conditions, that the Borrower in
good faith believes will be satisfied,
4
for a substantially concurrent purchase and sale, or exchange, of productive
assets between the Borrower or any of its Subsidiaries and another Person or
group of affiliated Persons.
"Assignee" shall have the meaning given to such term in Section 11.7(a).
"Assignment and Acceptance" shall mean an Assignment and Acceptance entered
into between a Lender and an Assignee and accepted by the Administrative Agent
and the Borrower, in substantially the form of Exhibit D.
"Authorized Officer" shall mean, with respect to any action specified
herein, any officer of the Borrower duly authorized by resolution of the board
of directors of the Borrower to take such action on its behalf, and whose
signature and incumbency shall have been certified to the Administrative Agent
by the secretary or an assistant secretary of the Borrower.
"Bankruptcy Code" shall mean 11 U.S.C. (S)(S) 101 et seq., as amended from
-- ---
time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime rate (which may not necessarily be its best lending
rate), as adjusted to conform to changes as of the opening of business on the
date of any such change in such prime rate, and (ii) the Federal Funds Rate plus
0.5% per annum, as adjusted to conform to changes as of the opening of business
on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any Loan that bears interest at
such time at the Adjusted Base Rate.
"Borrower Margin Stock" shall mean shares of capital stock of the Borrower
that are held by the Borrower or any of its Subsidiaries and that constitute
Margin Stock.
"Borrowing" shall mean the incurrence by the Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to Section
2.11) on a single date of a group of Loans of a single Class and Type and, in
the case of LIBOR Loans, as to which a single Interest Period is in effect.
"Borrowing Date" shall mean, with respect to any Borrowing, the date upon
which such Borrowing is made.
"Business Day" shall mean (i) any day other than a Saturday or Sunday, a
legal holiday or a day on which commercial banks in Charlotte, North Carolina or
New York, New York are required by law to be closed and (ii) in respect of any
determination relevant to a LIBOR Loan, any such day that is also a day on which
tradings are conducted in the London interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, the aggregate amount
(whether paid in cash or accrued as a liability) that would, in accordance with
GAAP, be included on the consolidated statement of cash flows of the Borrower
and its Subsidiaries for such period as additions to equipment, fixed assets,
real property or improvements or other capital assets (including without
limitation capital lease obligations); provided, however, that Capital
-------- -------
Expenditures shall not include any such expenditures (i) for replacements and
substitutions for capital assets, to the extent made with the proceeds of
insurance, or (ii) made to consummate any Permitted Acquisitions.
5
"Capital Lease" shall mean, with respect to the Borrower or any Subsidiary,
any lease of any property by the Borrower or such Subsidiary as lessee that, in
accordance with GAAP, is required to be classified and accounted for as a
capital lease on the consolidated balance sheet of the Borrower and its
Subsidiaries.
"Capital Lease Obligation" shall mean, with respect to any Capital Lease,
the amount of the obligation of the Borrower or any Subsidiary as lessee
thereunder that, in accordance with GAAP, is required to be included on the
consolidated balance sheet of the Borrower and its Subsidiaries as a liability
in respect of such Capital Lease.
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Collateral Account" shall have the meaning given to such term in
Section 3.8.
"Cash Equivalents" shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within 90 days from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 90 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor's Ratings Services or at least P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc., (iii) time deposits and certificates of deposit
maturing within 90 days from the date of issuance and issued by a bank or trust
company organized under the laws of the United States of America or any state
thereof that has combined capital and surplus of at least $500,000,000 and that
has (or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
seven (7) days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (v) money market funds at
least 95% of the assets of which are continuously invested in securities of the
type described in clause (i) above.
"Casualty Event" shall mean, with respect to any property (including any
interest in property) of the Borrower or any of its Subsidiaries, any loss of,
damage to, or condemnation or other taking of, such property for which the
Borrower or such Subsidiary receives insurance proceeds, proceeds of a
condemnation award or other compensation.
"Class" shall have the meaning given to such term in Section 2.2(a).
"Closing Date" shall mean the date upon which the initial extensions of
credit are made pursuant to this Agreement.
"Collateral" shall mean all the assets, property and interests in property
that shall from time to time be pledged or be purported to be pledged as direct
or indirect security for the Obligations pursuant to any one or more of the
Security Documents.
6
"Commitment" shall mean, with respect to any Lender, such Lender's Term
Loan Commitment and Revolving Credit Commitment.
"Communications Act" shall mean the Communications Act of 1934, as amended.
"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of Exhibit C, together with a Covenant Compliance
Worksheet.
"Consolidated EBITDA" shall mean, with respect to the Borrower and for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Subsidiaries paid or accrued in accordance with
GAAP for such period (other than income taxes attributable to extraordinary or
non-recurring gains or losses), (B) Consolidated Interest Expense and (C)
Consolidated Non-Cash Charges, all as determined on a consolidated basis for
such Person and its Subsidiaries in conformity with GAAP.
For purposes of this Agreement, calculations of Consolidated EBITDA for any
period shall (a) exclude net income from Investments in which the Borrower or a
Subsidiary holds a minority interest and (b) be adjusted with respect to
entities or assets that are acquired or disposed of during such period as
permitted under Sections 6.9, 6.10, 8.1 or 8.4 as if such transaction had
occurred as of the first day of such period (based on a certificate in form and
substance reasonably satisfactory to the Administrative Agent and signed by a
Financial Officer of the Borrower setting forth in reasonable detail the portion
of Consolidated EBITDA during such period attributable to the entity or assets
acquired or disposed of and stating that the assumptions of the Borrower in
respect thereof are reasonable). Notwithstanding the foregoing, the calculation
of Consolidated EBITDA shall exclude the operations and results thereof (whether
positive or negative) of FHS for the period from the Closing Date through the
earlier to occur of the following dates: (a) the end of the fiscal quarter
immediately preceding any fiscal quarter for which FHS EBITDA is greater than
zero; and (b) December 31, 1999 (the earlier of such dates, the "FHS Covenant
Calculation Date"); provided that from and after the FHS Covenant Calculation
--------
Date, FHS EBITDA shall be included in the calculation of Consolidated EBITDA
only as follows: (i) for the fiscal quarter following the fiscal quarter in
which the FHS Covenant Calculation Date occurs, Consolidated EBITDA shall
include FHS EBITDA only for such quarter; (ii) for the next succeeding fiscal
quarter, Consolidated EBITDA shall include FHS EBITDA only for that quarter and
the preceding fiscal quarter; (iii) for the next succeeding fiscal quarter,
Consolidated EBITDA shall include FHS EBITDA only for that quarter and the
preceding two fiscal quarters; and (iv) thereafter, FHS EBITDA shall be treated
in a manner consistent with determining Consolidated EBITDA of the Borrower and
its other Subsidiaries.
"Consolidated Fixed Charges" shall mean, for any period, the aggregate
(without duplication) of the following, all determined on a consolidated basis
for the Borrower and its Subsidiaries in accordance with GAAP for such period:
(a) Consolidated Interest Expense for such period, (b) aggregate cash expense
for federal, state, local and other income taxes for such period, (c) Capital
Expenditures for such period, (d) the aggregate (without duplication) of all
scheduled payments of principal on Consolidated Funded Debt required to have
been made by the Borrower and its Subsidiaries during such period (whether or
not such payments are actually made), including without limitation the aggregate
principal amount of the Term Loans due during such period under Section 2.6(a)
(as such amounts may have been previously adjusted in accordance with the terms
of this Agreement as a result of prior prepayments on the Term Loans, including
adjustments made pursuant to Section 2.6(h) or Section 2.7(b)) and (e) the
amount of any payments made under any LMA Agreements attributable to principal
being paid by the other parties to such LMA Agreements pursuant to their
respective senior credit facilities.
7
Notwithstanding the foregoing, Consolidated Fixed Charges shall not include
amounts of any Capital Expenditures in respect of the Borrower's 1998
acquisition of its Seattle Supersonics corporate jet.
"Consolidated Funded Debt" shall mean Funded Debt of the Borrower and its
Subsidiaries on a consolidated basis as determined in accordance with GAAP.
"Consolidated Interest Expense" shall mean, with respect to any Person and
for any period, the sum (without duplication) of (i) the interest expense of
such Person and its Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Hedge Agreements
(including any amortization of discounts), (c) the interest portion of any
deferred payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers , acceptance financing
or similar facilities, and (e) all accrued interest, (ii) the interest component
of Capitalized Lease Obligations paid or accrued by such Person and its
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP, and (iii) amounts paid during such period under any LMA
Agreements to the extent such amounts are attributable to interest being paid by
the other parties to such LMA Agreements pursuant to their respective senior
credit facilities, but, notwithstanding the foregoing, excluding any non-current
pay interest expense and the amortization of upfront fees related to the
incurrence of the Obligations and earlier financings.
"Consolidated Net Income" shall mean for any period, the aggregate net
income (or loss) of such Person and its Subsidiaries for such period on a
consolidated basis, determined in accordance with GAAP; provided that there
--------
shall be excluded therefrom, without duplication, (a) gains and losses from
Asset Dispositions or abandonments or reserves relating thereto and the related
tax effects, (b) items classified as extraordinary or nonrecurring gains and
losses, and the related tax effects according to GAAP, (c) the net income (or
loss) of any Person acquired in a pooling of interests transaction accrued prior
to the date it becomes a Subsidiary of such first referred to Person or is
merged or consolidated with it or any of its Subsidiaries, (d) the net income of
any Subsidiary to the extent that the declaration of dividends or similar
distributions by that Subsidiary of that income is restricted by contract,
operation of law, or otherwise, and (e) the net income of any Person, other than
a Subsidiary, except to the extent of the lesser of (x) dividends or
distributions paid to such first referred to Person or its Subsidiary by such
Person and (y) the net income of such Person (but in no event less than zero),
and the net loss of such Person shall be included only to the extent of the
aggregate Investment of the first referred to Person or a consolidated
Subsidiary of such Person.
"Consolidated Non-Cash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization, and other non-cash expenses of
such Person and its Subsidiaries reducing Consolidated Net Income of such Person
and its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP (excluding any such charges constituting an extraordinary
or nonrecurring item).
"Consolidated Senior Funded Debt" shall mean, as of the date of
determination, the amount of Funded Debt of the Borrower and its Subsidiaries on
a consolidated basis as determined in accordance with GAAP, minus the Existing
Subordinated Indebtedness and any other Subordinated Indebtedness that
constitutes Indebtedness.
"Contingent Obligation" shall mean, with respect to any Person, any direct
or indirect liability of such Person with respect to any Indebtedness, liability
or other obligation (the "primary obligation") of another Person (the "primary
obligor"), whether or not contingent, (a) to purchase, repurchase or
8
otherwise acquire such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or provide funds (i) for the payment
or discharge of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial condition of
the primary obligor, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor in respect thereof to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss or failure or inability to perform in
respect thereof; provided, however, that, with respect to the Borrower and its
-------- -------
Subsidiaries, the term Contingent Obligation shall not include (i) endorsements
for collection or deposit in the ordinary course of business or (ii) the pro
rata share (up to a maximum amount equal to $8,000,000 at any time) attributable
to the Borrower or any of its Subsidiaries, as a member of the National
Basketball Association ("NBA") of any advances or contributions required to be
made to the NBA in connection with the NBC or TBS/TNT broadcast contracts.
"Covenant Compliance Worksheet" shall mean a fully completed worksheet in
the form of Attachment A to Exhibit C.
"Credit Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Fee Letter, the Pledge Agreement, the Security Agreement, the
Subsidiary Guaranty (upon the execution thereof pursuant to Section 6.11(a)),
any other Security Documents, any Hedge Agreement to which the Borrower and any
Lender (or such Lender's Affiliate) are parties and that is permitted or
required to be entered into by the Borrower hereunder, and all other agreements,
instruments, documents and certificates now or hereafter executed and delivered
to the Administrative Agent or any Lender by or on behalf of the Borrower or any
of its Subsidiaries with respect to this Agreement and the transactions
contemplated hereby, in each case as amended, modified, supplemented or restated
from time to time.
"Debt Issuance" shall mean the issuance or sale by the Borrower or any of
its Subsidiaries of any debt securities, whether in a public offering of such
securities or otherwise.
"Default" shall mean any event or condition that, with the passage of time
or giving of notice, or both, would constitute an Event of Default.
"Disqualified Capital Stock" shall mean, with respect to any Person, any
Capital Stock of such Person that, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event or otherwise, (i) matures or is mandatorily redeemable or
subject to any mandatory repurchase requirement, pursuant to a sinking fund
obligation or otherwise, (ii) is redeemable or subject to any mandatory
repurchase requirement at the sole option of the holder thereof, or (iii) is
convertible into or exchangeable for (whether at the option of the issuer or the
holder thereof) (a) debt securities or (b) any Capital Stock referred to in (i)
or (ii) above, in each case under (i), (ii) or (iii) above at any time on or
prior to the Term Loan Maturity Date; provided, however, that only the portion
-------- -------
of Capital Stock that so matures or is mandatorily redeemable, is so redeemable
at the option of the holder thereof, or is so convertible or exchangeable on or
prior to such date shall be deemed to be Disqualified Capital Stock.
"Documentation Agent" shall mean Fleet Bank, N.A. and its successors and
assigns.
"Dollars" or "$" shall mean dollars of the United States of America.
9
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or business,
whether or not incorporated) that would be deemed to be under "common control"
with, or a member of the same "controlled group" as, the Borrower or any of its
Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code or Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by the Borrower
or any ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA, (iii) the distribution
by the Borrower or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a
notice of intent to terminate any Plan or the taking of any action to terminate
any Plan, (iv) the commencement of proceedings by the PBGC under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by the Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of
any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within thirty (30) days, (vi) the
imposition upon the Borrower or any ERISA Affiliate of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, or the imposition or threatened imposition of any Lien upon any
assets of the Borrower or any ERISA Affiliate as a result of any alleged failure
to comply with the Internal Revenue Code or ERISA in respect of any Plan, (vii)
the engaging in or otherwise becoming liable for a nonexempt Prohibited
Transaction by the Borrower or any ERISA Affiliate, (viii) a violation of the
applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit
rule under Section 401(a) of the Internal Revenue Code by any fiduciary of any
Plan for which the Borrower or any of its ERISA Affiliates may be directly or
indirectly liable or (ix) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Internal Revenue Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the trust of which such
Plan is a part if the Borrower or an ERISA Affiliate fails to timely provide
security to such Plan in accordance with the provisions of such sections.
"Eligible Assignee" shall mean (i) a commercial bank organized under the
laws of the United States or any state thereof and having total assets in excess
of $500,000,000, (ii) a commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $500,000,000, provided
--------
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other financial institution or fund that is
engaged in making, purchasing or otherwise investing in loans in the ordinary
course of its business and having total assets in excess of $100,000,000, (v)
any Affiliate of an existing Lender or (vi) any other Person approved by the
Agent and the Borrower, which approval shall not be unreasonably withheld or
delayed.
10
"Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of its business
and not in response to any third party action or request of any kind) or
proceedings relating in any way to any actual or alleged violation of or
liability under any Environmental Law or relating to any permit issued, or any
approval given, under any such Environmental Law (collectively, "Claims"),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury to human health or
the environment.
"Environmental Laws" shall mean any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of
common law and orders of courts or Governmental Authorities, relating to the
protection of human health or occupational safety or the environment, now or
hereafter in effect and in each case as amended from time to time, including,
without limitation, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Substances.
"Equity Issuance" shall mean the issuance, sale or other disposition by the
Borrower or any of its Subsidiaries of its Capital Stock, any rights, warrants
or options to purchase or acquire any shares of its Capital Stock or any other
security or instrument representing, convertible into or exchangeable for an
equity interest in the Borrower or any of its Subsidiaries; provided, however,
-------- -------
that the term Equity Issuance shall not include (i) the issuance or sale of
Capital Stock by any of the Subsidiaries of the Borrower to the Borrower or any
other Subsidiary, provided that such Capital Stock is pledged to the
--------
Administrative Agent pursuant to the Pledge Agreement, (ii) any Capital Stock of
the Borrower issued or sold in connection with any Permitted Acquisition and
constituting all or a portion of the applicable purchase price or (iii) any
Capital Stock of the Borrower issued or sold in connection with any director or
employee stock plan or stock purchase agreement.
"Xxxxxx LMA Agreement" shall mean the Time Brokerage Agreement, dated as of
November 30, 1998 by and between Xxxxx Broadcast Group Limited Partnership and
AK Media Group, Inc., as amended, restated, supplemented or otherwise modified
from time to time.
"Event of Default" shall have the meaning given to such term in Section
9.1.
"Excess Cash Flow" shall mean, for any fiscal year of the Borrower, (a) the
amount of Consolidated EBITDA for such fiscal year, minus (b) the sum (without
-----
duplication) of (i) Consolidated Fixed Charges for such fiscal year to the
extent paid in cash, (ii) optional prepayments on the Term Loans made during
such fiscal year, and (iii) optional prepayments on the Revolving Loans made
during such fiscal year that are accompanied by a corresponding reduction in the
Revolving Credit Commitments.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.
11
"Existing Subordinated Indebtedness" shall mean the Indebtedness of the
Borrower incurred pursuant to the Borrower's (i) 10.48% Senior Subordinated
Notes due 2000 and (ii) 9.00% Series A Senior Subordinated Notes due 2009, in
the aggregate principal amount of $175,000,000.
"FCC" shall mean the Federal Communications Commission, or any successor or
replacement commission, bureau, department, agency or other Governmental
Authority.
"FCC Licenses" shall mean all television, radio or other licenses, permits,
certificates of compliance, franchises, approvals or authorizations granted or
issued by the FCC to the Borrower or any of its Subsidiaries.
"FCC Regulations" shall mean the Communications Act of 1934, 47 USC (S)(S)
151 et seq., as amended from time to time, and any successor statute performing
------
the same or substantially the same function, and all regulations and written
policies promulgated thereunder from time to time by the FCC.
"FHS" shall mean Full House Sports and Entertainment, a division of AK
Media Group, Inc. (which is a Subsidiary of the Borrower).
"FHS EBITDA" shall mean, with respect to FHS and for any period, the sum
(without duplication) of (i) net income of FHS, as determined in conformity with
GAAP and (ii) to the extent such consolidated net income has been reduced
thereby, (A) income taxes attributable to FHS that have been paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary or non-recurring gains or losses), (B) the portion, if any, of
Consolidated Interest Expense attributable to FHS, and (C) the portion, if any,
of Consolidated Non-Cash Charges attributable to FHS, all as determined in
conformity with GAAP.
"Fair Market Value" shall mean, with respect to any Capital Stock of the
Borrower given in connection with an Acquisition, the value given to such
Capital Stock for purposes of such Acquisition by the parties thereto, as
determined in good faith pursuant to the relevant acquisition agreement or
otherwise in connection with such Acquisition.
"Federal Funds Rate" shall mean, for any period, a fluctuating per annum
interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fee Letter" shall mean the letter from First Union to the Borrower, dated
November 24, 1998, relating to certain fees payable by the Borrower in respect
of the transactions contemplated by this Agreement, as amended, modified or
supplemented from time to time.
"Financial Condition Certificate" shall mean a fully completed and duly
executed certificate, substantially in the form of Exhibit I, together with the
attachments thereto.
12
"Financial Officer" shall mean, with respect to the Borrower, the chief
financial officer, senior vice president-finance, principal accounting officer
or treasurer of the Borrower.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated EBITDA for the period of four consecutive
fiscal quarters then ending to (ii) Consolidated Fixed Charges for such period.
"Funded Debt" shall mean, with respect to any Person (without duplication),
(i) all indebtedness and obligations of such Person for borrowed money or in
respect of loans or advances of any kind, (ii) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, (iii) all
reimbursement obligations of such Person with respect to surety bonds, letters
of credit and bankers' acceptances (in each case, whether or not drawn or
matured and in the stated amount thereof), but, in the case of the Borrower and
its Subsidiaries, excluding obligations in respect of performance bonds or
contract performance guarantees the outstanding amount of which do not exceed
$20,000,000 in the aggregate at any time, (iv) all obligations of such Person to
pay the deferred purchase price of property or services, (v) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person, (vi) Capital Lease
Obligations, (vii) all Disqualified Capital Stock issued by such Person, with
the amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any (for
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the board of directors or other governing body of the issuer of such
Disqualified Capital Stock), (viii) all obligations attributable to guaranties
of Indebtedness of other Persons, (ix) obligations in respect of any earned
deferred compensation for which Person is liable (in the case of the Borrower
and its Subsidiaries, as customarily reflected on the Borrower's regularly
prepared financial statements), and (x) all indebtedness referred to in clauses
(i) through (ix) above secured by any Lien on any property or asset owned or
held by such Person regardless of whether the indebtedness secured thereby shall
have been assumed by such Person or is nonrecourse to the credit of such Person
(except for any Lien granted in connection with any operating lease (as defined
in accordance with GAAP) relating to the Borrower's corporate jet).
"GAAP" shall mean generally accepted accounting principles, as set forth in
the statements, opinions and pronouncements of the Accounting Principles Board,
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained, as in effect
from time to time (subject to the provisions of Section 1.2).
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Xxxxxx" shall mean Xxxxxx Television of Monterey, a California general
partnership.
13
"Hazardous Substances" shall mean any substances or materials (i) that are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health or safety hazard to Persons or
neighboring properties, (v) that consist of underground or aboveground storage
tanks, whether empty, filled or partially filled with any substance, or (vi)
that contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedge Agreement" shall mean any interest or foreign currency rate swap,
cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates.
"Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness and obligations of such Person for borrowed
money or in respect of loans or advances of any kind, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not drawn
or matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, (v) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person, (vi)
Capital Lease Obligations, (vii) all Disqualified Capital Stock issued by such
Person, with the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any (for purposes hereof, the "maximum fixed repurchase price" of
any Disqualified Capital Stock that does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Disqualified Capital Stock as
if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Agreement, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the board of directors or other governing body
of the issuer of such Disqualified Capital Stock), (viii) the net termination
obligations of such Person under any Hedge Agreements, calculated as of any date
as if such agreement or arrangement were terminated as of such date, (ix) all
Contingent Obligations of such Person and (x) all indebtedness referred to in
clauses (i) through (ix) above secured by any Lien on any property or asset
owned or held by such Person regardless of whether the indebtedness secured
thereby shall have been assumed by such Person or is nonrecourse to the credit
of such Person. For purposes of determining the amount of the Borrower's or any
Subsidiary's Indebtedness as of any date, each Contingent Obligation of the
Borrower and its Subsidiaries required to be included in such determination
shall be valued at the maximum aggregate principal amount (whether or not drawn
or outstanding) of the Indebtedness that is the corresponding "primary
obligation" (as such term is defined in the definition of Contingent Obligation)
as of such date.
"Interest Coverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of
(i) Consolidated EBITDA for the period of four consecutive fiscal quarters then
ending to
(ii) Consolidated Interest Expense of the Borrower for such period.
"Interest Period" shall have the meaning given to such term in Section
2.10.
14
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Issuing Lender" shall mean (i) First Union in its capacity as issuer of
the Letters of Credit other than the Outstanding Letters of Credit, or (ii)
Fleet Bank, N.A. in its capacity as issuer of any Outstanding Letter of Credit
(but only so long as any such Outstanding Letter of Credit or any Reimbursement
Obligation or other amount owing to Fleet Bank, N.A. with respect thereto
remains outstanding), and their respective successors in such capacities.
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at such
time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising part of
the same Borrowing for any Interest Period, an interest rate per annum obtained
by dividing (i) (y) the rate of interest appearing on Telerate Page 3750 or any
successor page (rounded upward, if necessary, to the nearest 1/16 of one
percentage point) or (z) if no such rate is available, the rate of interest
determined by the Administrative Agent to be the rate or the arithmetic mean of
rates (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) at which Dollar deposits in immediately available funds are offered by
First Union to first-tier banks in the London interbank Eurodollar market, in
each case under (y) and (z) above at approximately 11:00 a.m., London time, two
(2) Business Days prior to the first day of such Interest Period for a period
substantially equal to such Interest Period and in an amount substantially equal
to the amount of First Union's LIBOR Loan comprising part of such Borrowing, by
(ii) the amount equal to 1.00 minus the Reserve Requirement (expressed as a
decimal) for such Interest Period.
"LMA" means any management agreement, local marketing agreement, lease
management agreement, time brokerage agreement or similar arrangement relating
to programming or the sale of advertising or broadcast time entered into by
Borrower or any of its Subsidiaries with respect to any radio or television
station whether or not Borrower or such Subsidiary is the managing party
thereunder, and "LMAs" means all such agreements and arrangements collectively.
"LMA Obligations" means all monetary obligations of the Borrower or any
Subsidiary to any other Person with respect to management fees or other
compensation from time to time owed pursuant to LMAs, whether matured or
unmatured, absolute or contingent.
"Lender" shall mean each financial institution signatory hereto and each
other financial institution that becomes a "Lender" hereunder pursuant to
Section 11.7, and their respective successors and assigns.
"Lending Office" shall mean, with respect to any Lender, the office of such
Lender designated as its "Lending Office" on its signature page hereto or in an
Assignment and Acceptance, or such other office as may be otherwise designated
in writing from time to time by such Lender to the Borrower and the
Administrative Agent. A Lender may designate separate Lending Offices as
provided in the foregoing sentence for the purposes of making or maintaining
different Types of Loans, and, with respect to LIBOR Loans, such office may be a
domestic or foreign branch or Affiliate of such Lender.
"Letter of Credit Exposure" shall mean, with respect to any Lender at any
time, such Lender's ratable share (based on the proportion that its Revolving
Credit Commitment bears to the aggregate
15
Revolving Credit Commitments at such time) of the sum of (i) the aggregate
Stated Amount of all Letters of Credit outstanding at such time and (ii) the
aggregate amount of all Reimbursement Obligations outstanding at such time.
"Letter of Credit Notice" shall have the meaning given to such term in
Section 3.2.
"Letters of Credit" shall have the meaning given to such term in Section
3.1.
"Leverage Ratio" shall mean at any time the ratio of (i) Consolidated
Funded Debt as of such time to (ii) Consolidated EBITDA for the period of the
most recently ended four consecutive fiscal quarters.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, security
interest, lien (statutory or otherwise), preference, priority, charge or other
encumbrance of any nature, whether voluntary or involuntary, including, without
limitation, the interest of any vendor or lessor under any conditional sale
agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing, other
than interests of lessors under any operating leases (including motor vehicle
leases).
"Loans" shall mean any or all of the Term Loans and the Revolving Loans.
"Margin Stock" shall have the meaning given to such term in Regulation U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, business, properties or assets
of the Borrower and its Subsidiaries, taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect upon (i) the
condition (financial or otherwise), operations, business, properties or assets
of the Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the
Borrower or any Subsidiary to perform its obligations under this Agreement or
any of the other Credit Documents to which it is a party or (iii) the legality,
validity or enforceability of this Agreement or any of the other Credit
Documents or the rights and remedies of the Administrative Agent and the Lenders
hereunder and thereunder.
"Material Contracts" shall have the meaning given to such term in Section
5.18.
"Monterey Credit Agreement" shall mean that certain Credit Agreement, dated
April 14, 1996, between Xxxxxx, First Union and Fleet Bank, N.A., as amended,
restated, replaced or otherwise modified from time to time.
"Monterey LMA Agreement" shall mean the Time Brokerage Agreement, dated
April 24, 1996, between Xxxxxx Television of Monterey and Xxxxxxxx
Communications Group, Inc., as amended, restated, supplemented or otherwise
modified from time to time, or if this Agreement is terminated in connection
with the Borrower's acquisition of the station and concurrent sale of television
station KCBA in Salinas, California, to Seal Rock Broadcasters, L.L.C., the Time
Brokerage Agreement then entered into between Seal Rock Broadcasters, L.L.C. and
AK Media Group, Inc., as amended, restated, supplemented or otherwise modified
from time to time.
16
"Multiemployer Plan" shall mean any "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
makes, is making or is obligated to make contributions or has made or been
obligated to make contributions.
"Net Cash Proceeds" shall mean (i) in the case of any Equity Issuance or
Debt Issuance, the aggregate cash payments received by the Borrower and its
Subsidiaries less reasonable and customary fees and expenses (including
underwriting discounts and commissions) incurred by the Borrower and its
Subsidiaries in connection therewith, (ii) in the case of any Casualty Event,
the aggregate cash proceeds of insurance, condemnation awards and other
compensation received by the Borrower and its Subsidiaries in respect of such
Casualty Event less (y) reasonable fees and expenses incurred by the Borrower
and its Subsidiaries in connection therewith and (z) contractually required
repayments of Indebtedness to the extent secured by Liens on the property
subject to such Casualty Event and any income or transfer taxes paid or
reasonably estimated by the Borrower to be payable by the Borrower and its
Subsidiaries as a result of such Casualty Event, and (iii) in the case of any
Asset Disposition, the aggregate amount of all cash payments received by the
Borrower and its Subsidiaries in connection with such Asset Disposition less (x)
reasonable fees and expenses incurred by the Borrower and its Subsidiaries in
connection therewith, (y) Indebtedness to the extent the amount thereof is
secured by a Lien on the property that is the subject of such Asset Disposition
and the transferee of (or holder of the Lien on) such Property requires that
such Indebtedness be repaid as a condition to such Asset Disposition, and (z)
any income or transfer taxes paid or reasonably estimated by the Borrower to be
payable by the Borrower and its Subsidiaries as a result of such Asset
Disposition.
"Network Affiliation Agreement" shall mean any network affiliation
agreement to which the Borrower or any Subsidiary is a party.
"Notes" shall mean any or all of the Term Notes and the Revolving Notes.
"Notice of Borrowing" shall have the meaning given to such term in Section
2.2(b).
"Notice of Conversion/Continuation" shall have the meaning given to such
term in Section 2.11(b).
"Obligations" shall mean all principal of and interest (including, to the
greatest extent permitted by law, post-petition interest) on the Loans, all
Reimbursement Obligations and all fees, expenses, indemnities and other
obligations owing, due or payable at any time by the Borrower to the
Administrative Agent, any Lender, the Issuing Lender or any other Person
entitled thereto, under this Agreement or any of the other Credit Documents.
"Outstanding Letter of Credit" shall mean any of the following: (i) that
certain irrevocable letter of credit no. S149902, expiring January 15, 2000,
issued for the account of the Borrower in favor of Sage Realty Corp., (ii) that
certain irrevocable letter of credit no.S149887, expiring June 30, 1999, issued
for the account of the Borrower in favor of Employers Insurance of Wausau, (iii)
that certain irrevocable letter of credit no. S159333, expiring July 15, 1999,
issued for the account of the Borrower in favor of Xxxxxx Broadcasting Co., and
(iv) that certain irrevocable letter of credit no. S149900, expiring December
15, 1999, issued for the account of the Borrower in favor of Aetna Casualty &
Surety, all of which letters of credit were issued under the senior credit
facility replaced by the predecessor to this Agreement and treated as having
been issued originally hereunder pursuant to Section 3.1 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
17
"Participant" shall have the meaning given to such term in Section 11.7(d).
"Permitted Acquisition" shall mean (a) any Acquisition with respect to
which all of the following conditions are satisfied: (i) each business acquired
shall be within the permitted lines of business described in Section 8.8, (ii)
any Capital Stock given as consideration in connection therewith shall be
Capital Stock of the Borrower, (iii) in the case of an Acquisition involving the
acquisition of control of Capital Stock of any Person, immediately after giving
effect to such Acquisition such Person (or the surviving Person, if the
Acquisition is effected through a merger or consolidation) shall be the Borrower
or a Wholly Owned Subsidiary, (iv) such Acquisition is not hostile in nature,
and (v) all of the conditions and requirements of Sections 6.9 and 6.10
applicable to such Acquisition are satisfied; or (b) any other non-hostile
Acquisition to which the Required Lenders (or the Administrative Agent on their
behalf) shall have given their prior written consent (which consent may be in
their sole discretion and may be given subject to such additional terms and
conditions as the Required Lenders shall establish) and with respect to which
all of the conditions and requirements set forth in this definition and in
Section 6.9, and in or pursuant to any such consent, have been satisfied or
waived in writing by the Required Lenders (or the Administrative Agent on their
behalf).
"Permitted LMA Agreements" shall mean the Xxxxxx LMA Agreement, the Santa
Xxxxx LMA Agreement, the Monterey LMA Agreement and the Utica LMA Agreement and
any other LMA approved from time to time by the Administrative Agent with the
consent of the Required Lenders.
"Permitted Liens" shall have the meaning given to such term in Section 8.3.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
"Plan" shall mean any "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which the Borrower or any ERISA
Affiliate may have any liability.
"Pledge Agreement" shall mean a pledge agreement made by the Borrower and
its Subsidiaries that own Capital Stock of indirect Subsidiaries of the
Borrower, in favor of the Administrative Agent and dated as of the Closing Date,
in substantially the form of Exhibit E, as amended, modified or supplemented
from time to time.
"Preferred Stock" of any Person means any Capital Stock of such Person that
has preferential rights to any other Capital Stock of such Person with respect
to dividends or redemptions or upon liquidation.
"Pro Forma Balance Sheet" shall have the meaning given to such term in
Section 5.11(b).
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.
18
"Projections" shall have the meaning given to such term in Section 5.11(c),
as may be revised, amended, modified or supplemented in accordance with Section
6.12.
"Register" shall have the meaning given to such term in Section 11.7(b).
"Regulations D, G, T, U and X" shall mean Regulations D, G, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reimbursement Obligation" shall have the meaning given to such term in
Section 3.4.
"Reportable Event" shall mean (i) any "reportable event" within the meaning
of Section 4043(c) of ERISA for which the 30-day notice under Section 4043(a) of
ERISA has not been waived by the PBGC (including any failure to meet the minimum
funding standard of, or timely make any required installment under, Section 412
of the Internal Revenue Code or Section 302 of ERISA, regardless of the issuance
of any waivers in accordance with Section 412(d) of the Internal Revenue Code),
(ii) any such "reportable event" subject to advance notice to the PBGC under
Section 4043(b)(3) of ERISA, (iii) any application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Internal
Revenue Code, and (iv) a cessation of operations described in Section 4062(e) of
ERISA.
"Required Lenders" shall mean the Lenders holding outstanding Loans and
Commitments (or, after the termination of the Revolving Credit Commitments,
outstanding Loans and Letter of Credit Exposure) representing fifty-one percent
or more (51%) of the aggregate at such time of all outstanding Loans and
Commitments (or, after the termination of the Revolving Credit Commitments, the
aggregate at such time of all outstanding Loans and Letter of Credit Exposure).
"Requirement of Law" shall mean, with respect to any Person, the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person, and any statute, law,
treaty, rule, regulation, order, decree, writ, injunction or determination of
any arbitrator or court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject or otherwise pertaining to any or all of the
transactions contemplated by this Agreement and the other Credit Documents,
including without limitation the FCC Regulations.
"Reserve Requirement" shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal) in effect from time to time during
such Interest Period, as provided by the Federal Reserve Board, applied for
determining the maximum reserve requirements (including, without limitation,
basic, supplemental, marginal and emergency reserves) applicable to First Union
under Regulation D with respect to "Eurocurrency liabilities" within the meaning
of Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding.
"Responsible Officer" shall mean, with respect to the Borrower, any co-
president, the chief executive officer, the chief financial officer, any
executive officer, or any other Financial Officer of the Borrower, and any other
officer or similar official thereof responsible for the administration of the
obligations of the Borrower in respect of this Agreement.
"Revolver Increase" shall have the meaning assigned to such term in Section
2.19.
19
"Revolving Credit Commitment" shall mean, with respect to any Lender at any
time, the aggregate of the amounts set forth opposite such Lender's name on its
signature page hereto under the caption "Revolving Credit Commitment" or, if
such Lender has entered into one or more Assignment and Acceptances, the amount
set forth for such Lender at such time in the Register maintained by the
Administrative Agent pursuant to Section 11.7(b) as such Lender's "Revolving
Credit Commitment," as such amount may be reduced at or prior to such time
pursuant to the terms hereof.
"Revolving Credit Maturity Date" shall mean December 31, 2005.
"Revolving Credit Termination Date" shall mean the Revolving Credit
Maturity Date or such earlier date of termination of the Revolving Credit
Commitments pursuant to Section 2.5 or Section 9.2.
"Revolving Loans" shall have the meaning given to such term in Section
2.1(b).
"Revolving Notes" shall mean the promissory notes of the Borrower in
substantially the form of Exhibit A-3, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Santa Xxxxx LMA Agreement" shall mean the Time Brokerage Agreement, dated
December 30, 1998, by and between Benedek Broadcasting Corporation and AK Media
Group, Inc., as amended, restated, supplemented or otherwise modified from time
to time.
"Security Agreement" shall mean a security agreement made by the Borrower
and the Subsidiaries party thereto in favor of the Agent, in substantially the
form of Exhibit F, as amended, modified or supplemented from time to time.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement and all other pledge or security agreements, mortgages, deeds of
trust, assignments or other similar agreements or instruments executed and
delivered by the Borrower or any of its Subsidiaries pursuant to Sections 6.10
or 6.11 or otherwise in connection with the transactions contemplated hereby, in
each case as amended, modified or supplemented from time to time.
"Senior Leverage Ratio" shall mean at any time the ratio of (i)
Consolidated Senior Funded Debt as of such time to (ii) Consolidated EBITDA for
the most recently ended four consecutive fiscal quarters.
"Stated Amount" shall mean, with respect to any Letter of Credit at any
time, the aggregate amount available to be drawn thereunder at such time
(regardless of whether any conditions for drawing could then be met).
"Subordinated Indebtedness" shall have the meaning given to such term in
Section 8.2(vi).
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or more
of its other Subsidiaries or a combination thereof (irrespective of whether, at
the time, securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the happening of any
contingency). When used without reference to a parent entity, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of the Borrower.
20
"Subsidiary Guaranty" shall mean a subsidiary guaranty agreement made by
the Subsidiaries of the Borrower, in favor of the Administrative Agent, in
substantially the form of Exhibit G, as amended, modified or supplemented from
time to time.
"Term Loan Commitments" shall mean the Tranche A Term Loan Commitments and
the Tranche B Term Loan Commitments, as appropriate.
"Term Loan Maturity Date" shall mean December 31, 2005. Such date shall be
the date of maturity of all Term Loans.
"Term Loans" shall mean the Tranche A Term Loans and the Tranche B Term
Loans, as appropriate.
"Term Notes" shall mean the Tranche A Term Notes and the Tranche B Term
Notes, as appropriate.
"Tranche A Term Loans" shall have the meaning given to such term in Section
2.1(a).
"Tranche A Term Loan Commitment" shall mean, with respect to any Lender at
any time, the amount set forth opposite such Lender's name on its signature page
hereto under the caption "Tranche A Term Loan Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the Register maintained by the Administrative Agent
pursuant to Section 11.7(b) as such Lender's "Tranche A Term Loan Commitment,"
as such amount may be reduced at or prior to such time pursuant to the terms
hereof.
"Tranche A Term Notes" shall mean the promissory notes of the Borrower in
substantially the form of Exhibit A-1, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Tranche B Term Loans" shall have the meaning given to them in Section
2.1(a).
"Tranche B Term Loan Commitment" shall mean, with respect to any Lender at
any time, the amount set forth opposite such Lender's name on its signature page
hereto under the caption "Tranche B Term Loan Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the Register maintained by the Administrative Agent
pursuant to Section 11.7(b) as such Lender's "Tranche B Term Loan Commitment,"
as such amount may be reduced at or prior to such time pursuant to the terms
hereof.
"Tranche B Term Loan Commitment Expiration Date" shall mean April 30, 1999,
or such later date agreed to in writing by the Company and the Required Lenders.
"Tranche B Term Notes" shall mean the promissory notes of the Borrower in
substantially the form of Exhibit A-2, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Type" shall have the meaning given to such term in Section 2.2(a).
21
"Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Code for the applicable plan year.
"Unutilized Revolving Credit Commitments" shall mean, with respect to any
Lender at any time, such Lender's Revolving Credit Commitment at such time less
the sum of (i) the aggregate principal amount of all Revolving Loans made by
such Lender that are outstanding at such time and (ii) such Lender's Letter of
Credit Exposure at such time.
"Utica Credit Agreement" shall mean that certain Credit Agreement, dated as
of June 30, 1997, between Utica Television Partners, L.L.C., First Union and
Fleet Bank, N.A., as amended, restated, replaced or otherwise modified from time
to time.
"Utica LMA Agreement" shall mean the Time Brokerage Agreement, dated as of
June 30, 1997, between Utica Television Partners, L.L.C. and Central NY News,
Inc., as amended, restated, supplemented or otherwise modified from time to
time.
"Weighted Average Life to Maturity" means, when applied to any Preferred
Stock at any date, the number of years obtained by dividing (a) the then
outstanding aggregate liquidation value of such Preferred Stock into (b) the
total of the product obtained by multiplying (i) the amount of each then
remaining coupon, installment, sinking fund, serial maturity, or other required
payment in respect thereof, by (ii) the number of years (calculated to the
nearest one-twelfth) which will elapse between such date and the making of such
payment.
"Wholly Owned" shall mean, with respect to any Subsidiary of any Person,
that 100% of the outstanding Capital Stock of such Subsidiary is owned, directly
or indirectly, by such Person.
"WOKR Acquisition" shall mean the Borrower's acquisition of substantially
all of the assets associated with station WOKR-(TV) in Rochester, New York.
"WOKR Acquisition Date" shall mean the date of closing of the WOKR
Acquisition.
1.2. Accounting Terms. Except as specifically provided otherwise in this
----------------
Agreement, all accounting terms used herein that are not specifically defined
shall have the meanings customarily given them in accordance with GAAP.
Notwithstanding anything to the contrary in this Agreement, for purposes of
calculation of the financial covenants set forth in Article VII, all accounting
determinations and computations hereunder shall be made in accordance with GAAP
as in effect as of the date of this Agreement applied on a basis consistent with
the application used in preparing the most recent financial statements of the
Borrower referred to in Section 5.11(a). In the event that any changes in GAAP
after such date are required to be applied to the Borrower and would affect the
computation of the financial covenants contained in Article VII, such changes
shall be followed only from and after the date this Agreement shall have been
amended to take into account any such changes.
1.3. Other Terms; Construction. Unless otherwise specified or unless the
-------------------------
context otherwise requires, all references herein to sections, annexes,
schedules and exhibits are references to sections, annexes, schedules and
exhibits in and to this Agreement, and all terms defined in this Agreement shall
have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto. All references
herein to the Lenders or any of them shall be deemed
22
to include the Issuing Lender unless specifically provided otherwise or unless
the context otherwise requires.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1. Commitments. (a) Each Lender severally agrees, subject to and on
-----------
the terms and conditions of this Agreement, to make a loan (each, a "Tranche A
Term Loan," and collectively, the "Tranche A Term Loans") to the Borrower on the
Closing Date in a principal amount not to exceed its Tranche A Term Loan
Commitment. No Tranche A Term Loans shall be made at any time after the Closing
Date. To the extent repaid, Tranche A Term Loans may not be reborrowed. In
addition, each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make a loan (each, a "Tranche B Term Loan," and
collectively, the "Tranche B Term Loans," and collectively with the Tranche A
Term Loans, the "Term Loans") to the Borrower on the WOKR Acquisition Date in a
principal amount not to exceed its Tranche B Term Loan Commitment, provided that
--------
such date occurs on or before the Tranche B Term Loan Commitment Expiration Date
(it being understood that all Tranche B Term Loan Commitments shall terminate on
the Tranche B Term Loan Commitment Expiration Date unless the WOKR Acquisition
shall have been consummated as of such date). In the event of the termination
of the Tranche B Term Loan Commitments as provided above, for purposes of this
Agreement all Term Loans shall consist of the Tranche A Term Loans. No Tranche
B Term Loans shall be made at any time after the WOKR Acquisition Date. To the
extent repaid, Tranche B Term Loans may not be reborrowed.
(b) Each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make loans (each, a "Revolving Loan," and
collectively, the "Revolving Loans") to the Borrower, from time to time on any
Business Day during the period from and including the Closing Date to but not
including the Revolving Credit Termination Date, in an aggregate principal
amount at any time outstanding not greater than the excess, if any, of its
Revolving Credit Commitment at such time over its Letter of Credit Exposure at
such time, provided that no Borrowing of Revolving Loans shall be made if,
--------
immediately after giving effect thereto, the sum of (x) the aggregate principal
amount of Revolving Loans outstanding at such time and (y) the aggregate Letter
of Credit Exposure of all Lenders at such time would exceed the aggregate
Revolving Credit Commitments at such time. Subject to and on the terms and
conditions of this Agreement, the Borrower may borrow, repay and reborrow
Revolving Loans. Each Lender's obligation to fund its pro rata share of the
Revolver Increase is subject to the conditions set forth in Section 2.19 hereof.
2.2. Borrowings. (a) The Term Loans and the Revolving Loans (each a
----------
"Class" of Loan) shall, at the option of the Borrower and subject to the terms
and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans
(each, a "Type" of Loan), provided that (i) all Loans comprising the same
--------
Borrowing shall, unless otherwise specifically provided herein, be of the same
Type, (ii) the Loans (whether Revolving or Term Loans) made on the Closing Date
shall be made initially as Base Rate Loans and (iii) LIBOR Loans may be made, or
Base Rate Loans may be converted into LIBOR Loans, on the date which is three
(3) Business Days following the Closing Date (so long as proper notice is given
pursuant to Section 2.2(b) or Section 2.11(b)).
(b) The Borrower hereby requests a Borrowing of Tranche A Term Loans on the
Closing Date in an amount equal to the aggregate Tranche A Term Loan
Commitments. In order to make a
23
Borrowing of Tranche B Term Loans or Revolving Loans (other than Borrowings
involving continuations or conversions of outstanding Loans, which shall be made
pursuant to Section 2.11), the Borrower will give the Administrative Agent
written notice not later than 12:00 noon, Charlotte time, three (3) Business
Days prior to each Borrowing to be comprised of LIBOR Loans and on the date of
each Borrowing to be comprised of Base Rate Loans; provided, however, that
-------- -------
requests for the Borrowing of Revolving Loans to be made on the Closing Date
may, at the discretion of the Administrative Agent, be given later than the
times specified hereinabove. Each such notice (each, a "Notice of Borrowing")
shall be irrevocable, shall be given in the form of Exhibit B-1 and shall
specify (1) the aggregate principal amount, Class and initial Type of the Loans
to be made pursuant to such Borrowing, (2) in the case of a Borrowing of LIBOR
Loans, the initial Interest Period to be applicable thereto, and (3) the
requested date of such Borrowing (the "Borrowing Date"), which shall be a
Business Day. Upon its receipt of a Notice of Borrowing, the Administrative
Agent will promptly notify each Lender of the proposed Borrowing.
Notwithstanding anything to the contrary contained herein:
(i) the aggregate principal amount of the Borrowing of Tranche A
Term Loans shall be in the amount of the aggregate Tranche A Term Loan
Commitments, and the aggregate principal amount of the Borrowing of Tranche
B Term Loans shall be in the amount of the aggregate Tranche B Term Loan
Commitments;
(ii) the aggregate principal amount of each Borrowing comprised of
Base Rate Loans shall not be less than $1,000,000 or, if greater, an
integral multiple of $500,000 in excess thereof (or, in the case of a
Borrowing of Revolving Loans, if less, in the amount of the aggregate
Unutilized Revolving Credit Commitments), and the aggregate principal
amount of each Borrowing comprised of LIBOR Loans shall not be less than
$5,000,000 or, if greater, an integral multiple of $1,000,000 in excess
thereof;
(iii) if the Borrower shall have failed to designate the Type of
Loans comprising a Borrowing, the Borrower shall be deemed to have
requested a Borrowing comprised of Base Rate Loans; and
(iv) if the Borrower shall have failed to select the duration of the
Interest Period to be applicable to any Borrowing of LIBOR Loans, then the
Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
(c) Not later than 1:00 p.m., Charlotte time, on the requested
Borrowing Date (which shall be the Closing Date, in the case of the Term Loans),
each Lender will make available to the Administrative Agent at its office
referred to in Section 11.5 (or at such other location as the Administrative
Agent may designate) an amount, in Dollars and in immediately available funds,
equal to the amount of the Loan or Loans to be made by such Lender. To the
extent the Lenders have made such amounts available to the Administrative Agent
as provided hereinabove, the Administrative Agent will make the aggregate of
such amounts available to the Borrower in accordance with Section 2.3(a) and in
like funds as received by the Administrative Agent.
2.3. Disbursements; Funding Reliance; Domicile of Loans. (a) The
--------------------------------------------------
Borrower hereby authorizes the Administrative Agent to disburse the proceeds of
each Borrowing in accordance with the terms of any written instructions from any
of the Authorized Officers, provided that the Administrative Agent shall not be
--------
obligated under any circumstances to forward amounts to any account not listed
in an Account Designation Letter. The Borrower may at any time deliver to the
Administrative Agent an
24
Account Designation Letter listing any additional accounts or deleting any
accounts listed in a previous Account Designation Letter.
(b) Unless the Administrative Agent has received, prior to 1:00 p.m.,
Charlotte time, on the relevant Borrowing Date, written notice from a Lender
that such Lender will not make available to the Administrative Agent such
Lender's ratable portion, if any, of the relevant Borrowing, the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent in immediately available funds on such Borrowing Date in
accordance with the applicable provisions of Section 2.2, and the Administrative
Agent may, in reliance upon such assumption, but shall not be obligated to, make
a corresponding amount available to the Borrower on such Borrowing Date. If and
to the extent that such Lender shall not have made such portion available to the
Administrative Agent, and the Administrative Agent shall have made such
corresponding amount available to the Borrower, such Lender, on the one hand,
and the Borrower, on the other, severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount, together with interest
thereon for each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent, (i) in the
case of such Lender, at the Federal Funds Rate, and (ii) in the case of the
Borrower, at the rate of interest applicable at such time to the Type and Class
of Loans comprising such Borrowing, as determined under the provisions of
Section 2.8. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement. The failure of any Lender to
make any Loan required to be made by it as part of any Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its Loan
as part of such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Loan to be made by such other Lender as part of any
Borrowing.
(c) Each Lender may, at its option, make and maintain any Loan at, to
or for the account of any of its Lending Offices, provided that any exercise of
--------
such option shall not affect the obligation of the Borrower to repay such Loan
to or for the account of such Lender in accordance with the terms of this
Agreement.
2.4. Notes. (a) The Loans made by each Lender shall be evidenced
-----
(i) in the case of Term Loans, by a Term Note appropriately completed in
substantially the form of Exhibit A-1 or A-2, as appropriate, and (ii) in the
case of Revolving Loans, by a Revolving Note appropriately completed in
substantially the form of Exhibit A-3.
(b) Each Term Note shall (i) be executed by the Borrower, (ii) be
payable to the order of such Lender, (iii) be dated as of the Closing Date (or
in the case of a Term Note issued after the Closing Date, dated the effective
date of the applicable Assignment and Acceptance or in the case of Tranche B
Term Notes, dated as of the WOKR Acquisition Date), (iv) be in a stated
principal amount equal to such Lender's Tranche A or Tranche B Term Loan
Commitment, as appropriate (or in the case of a Term Note issued after the
Closing Date, in an amount equal to the unpaid principal amount of such Lender's
Term Loan), (v) bear interest in accordance with the provisions of Section 2.8,
as the same may be applicable from time to time to the Term Loan made by such
Lender, and (vi) be entitled to all of the benefits of this Agreement and the
other Credit Documents and subject to the provisions hereof and thereof.
(c) Each Revolving Note shall (i) be executed by the Borrower, (ii) be
payable to the order of such Lender, (iii) be dated as of the Closing Date (or
in the case of a Revolving Note issued after the Closing Date, dated the
effective date of the applicable Assignment and Acceptance), (iv) be in a stated
principal amount equal to such Lender's Revolving Credit Commitment, (v) bear
interest in accordance
25
with the provisions of Section 2.8, as the same may be applicable from time to
time to the Revolving Loans made by such Lender, and (vi) be entitled to all of
the benefits of this Agreement and the other Credit Documents and subject to the
provisions hereof and thereof.
(d) Each Lender will record on its internal records the amount and
Type of each Loan made by it and each payment received by it in respect thereof
and will, in the event of any transfer of any of its Notes, either endorse on
the reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount and Type of the Loans evidenced
thereby as of the date of transfer or provide such information on a schedule to
the Assignment and Acceptance relating to such transfer; provided, however, that
-------- -------
the failure of any Lender to make any such recordation or provide any such
information, or any error therein, shall not affect the Borrower's obligations
under this Agreement or the Notes.
2.5. Termination and Reduction of Commitments. (a) The Tranche A
----------------------------------------
Term Loan Commitments shall be automatically and permanently terminated on the
Closing Date, unless the Tranche A Term Loans have been made in full on or prior
to such date. The Tranche B Term Loan Commitments shall be automatically and
permanently terminated on the Tranche B Term Loan Commitment Expiration Date,
unless the Tranche B Term Loans shall have been made in full on or prior to such
date. The Revolving Credit Commitments shall be automatically and permanently
terminated on the Revolving Credit Termination Date.
(b) The Revolving Credit Commitments shall, on each date upon which a
prepayment of the Loans is required under any provision of Section 2.6 (and
exceeds in amount the aggregate principal amount of Term Loans then outstanding)
or would be required if Term Loans were then outstanding, be automatically and
permanently reduced by the amount, if any, by which the amount of such required
prepayment (determined as if an unlimited amount of Term Loans were then
outstanding) exceeds the aggregate principal amount of Term Loans then actually
outstanding, as more particularly set forth in Section 2.6(h).
(c) At any time and from time to time after the date hereof, upon not
less than five (5) Business Days' prior written notice to the Administrative
Agent, the Borrower may terminate in whole or reduce in part the aggregate
Unutilized Revolving Credit Commitments, provided that any such partial
--------
reduction shall be in an aggregate amount of not less than $5,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof. The amount of
any termination or reduction made under this subsection (c) may not thereafter
be reinstated.
(d) The Revolving Credit Commitments shall be permanently reduced on a
quarterly basis (on March 31, June 30, September 30 and December 31 of each
year), beginning March 31, 2001, based on the following annual percentages
(which percentages shall be applied to the aggregate Revolving Credit
Commitments as in effect immediately prior to the first such reduction) for each
of the following years (which quarterly payments for any one year shall be
equally divided among such year's annual percentage):
Year Percentage Reduction
---- --------------------
2001 10.0%
2002 20.0%
2003 20.0%
2004 25.0%
26
Year Percentage Reduction
---- --------------------
2005 25.0%
(e) Each reduction of the Revolving Credit Commitments pursuant to this
Section shall be applied ratably among the Lenders according to their respective
Revolving Credit Commitments.
2.6. Mandatory Payments and Prepayments. (a) Except to the extent
----------------------------------
due or paid sooner pursuant to the provisions of this Agreement, the Borrower
will repay the aggregate outstanding principal of the Term Loans made hereunder
on a quarterly basis (on March 31, June 30, September 30 and December 31 of each
year), based on the following annual percentages of the initial amounts of the
Term Loans for each of the following years (which quarterly payments for any one
year shall be equally divided among such year's annual percentage):
Term Loan Payment
Year Amount
---- ----------
2000 5.0%
2001 10.0%
2002 15.0%
2003 20.0%
2004 25.0%
2005 25.0%
(b) Except to the extent due or paid sooner pursuant to the provisions
of this Agreement, (i) the aggregate outstanding principal of the Term Loans
shall be due and payable in full on the Term Loan Maturity Date, and (ii) the
aggregate outstanding principal of the Revolving Loans shall be due and payable
in full on the Revolving Credit Maturity Date.
(c) In the event that, at any time, the sum of (x) the aggregate
principal amount of Revolving Loans outstanding at such time and (y) the
aggregate Letter of Credit Exposure at such time shall exceed the aggregate
Revolving Credit Commitments at such time (after giving effect to any concurrent
termination or reduction thereof), the Borrower will immediately prepay the
outstanding principal amount of the Revolving Loans in the amount of such
excess; provided that, to the extent such excess amount is greater than the
--------
aggregate principal amount of Revolving Loans outstanding immediately prior to
the application of such prepayment, the amount so prepaid shall be retained by
the Administrative Agent and held in the Cash Collateral Account as cover for
Letter of Credit Exposure, as more particularly described in Section 3.8, and
thereupon such cash shall be deemed to reduce the aggregate Letter of Credit
Exposure by an equivalent amount.
(d) Promptly upon (and in any event not later than five (5) Business
Days after) its receipt thereof, the Borrower will prepay the outstanding
principal amount of the Loans in an amount equal to 50% of the Net Cash Proceeds
from any Equity Issuance or 100% of the Net Cash Proceeds from any Debt
Issuance, made after the Closing Date (but in any event not including the
Existing Subordinated Indebtedness), and will deliver to the Administrative
Agent, concurrently with such prepayment, a certificate signed by a Financial
Officer of the Borrower in form and substance satisfactory to the Administrative
Agent and setting forth the calculation of such Net Cash Proceeds.
27
(e) Not later than sixty (60) days after its receipt of any proceeds
of insurance, condemnation award (other than awards respecting any billboards or
similar outdoor advertising structures, which awards in the aggregate do not
exceed, in any fiscal year, an amount equal to $5,000,000, or over the term
hereof, an aggregate amount equal to $12,500,000) or other compensation in
respect of any Casualty Event (and in any event upon its determination not to
repair or replace any property subject to such Casualty Event), the Borrower
will prepay the outstanding principal amount of the Loans in an amount equal to
100% of the Net Cash Proceeds from such Casualty Event (less any amounts
theretofore applied or to be applied within one year after the occurrence of
such Casualty Event to the repair or replacement of property subject to such
Casualty Event) and will deliver to the Administrative Agent, concurrently with
such prepayment, a certificate signed by a Financial Officer of the Borrower in
form and substance satisfactory to the Administrative Agent and setting forth
the calculation of such Net Cash Proceeds; provided, however, that,
-------- -------
notwithstanding the foregoing, (i) nothing in this subsection shall be deemed to
limit or otherwise affect any right of the Administrative Agent herein or in any
of the other Credit Documents to receive and hold such proceeds as loss payee
and to disburse the same to the Borrower upon the terms hereof or thereof, or
any obligation of the Borrower and each of its Subsidiaries herein or in any of
the other Credit Documents to remit any such proceeds to the Administrative
Agent upon its receipt thereof, and (ii) any and all such proceeds received or
held by the Administrative Agent or the Borrower or any of its Subsidiaries
during the continuance of an Event of Default (regardless of any proposed or
actual use thereof for repair or replacement) shall be applied to prepay the
outstanding principal amount of the Loans.
(f) Promptly upon (and in any event not later than five (5) Business
Days after) its receipt thereof, the Borrower will prepay the outstanding
principal amount of the Loans in an amount equal to 100% of the Net Cash
Proceeds from any Asset Disposition (except that with respect to Asset
Dispositions, the Borrower may elect, up to an aggregate cumulative amount of
Net Cash Proceeds of $35,000,000 while this Agreement remains in effect (so long
as, except for any Asset Swaps, no more than ten percent (10%) of gross sales
proceeds in respect thereof consists of non-cash payments and fees and expenses
incurred in connection therewith), to apply such proceeds to amounts of
Revolving Loans without a corresponding reduction to the Revolving Credit
Commitments) and will deliver to the Administrative Agent, concurrently with
such prepayment, a certificate signed by a Financial Officer of the Borrower in
form and substance satisfactory to the Administrative Agent and setting forth
the calculation of such Net Cash Proceeds. Notwithstanding the foregoing,
nothing in this subsection shall be deemed to permit any Asset Disposition not
expressly permitted under Section 8.4.
(g) Concurrently with the delivery of its annual financial statements
after the end of each fiscal year, beginning with the fiscal year ending
December 31, 2000, and in any event not later than one hundred twenty (120) days
after the last day of each such fiscal year, the Borrower will prepay the
outstanding principal amount of the Loans in an amount equal to the percentage
of Excess Cash Flow, if any, set forth below as determined with respect to the
Leverage Ratio as of the end of such fiscal year, and will deliver to the
Administrative Agent, concurrently with such prepayment, a certificate signed by
a Financial Officer of the Borrower in form and substance satisfactory to the
Administrative Agent and setting forth the calculation of such Excess Cash Flow:
Leverage Ratio Corresponding Percentage
-------------- ------------------------
Greater than or equal to 5.50 to 1.00 50.00%
Greater than or equal to 4.50 to 1.00 but 25.00%
28
less than 5.50 to 1.00
Less than 4.50 to 1.00 0.00%
(h) Each prepayment of the Loans made pursuant to subsections (d)
through (g) above (each, a "Prepayment Event") shall be applied (i) first, to
reduce the outstanding principal amount of the Term Loans, with such reduction
to be applied to the scheduled principal payments on the Term Loans (as set
forth in subsection (a) above) in inverse order of maturity, (ii) second, to the
extent of any excess remaining after application as provided in clause (i)
above, to reduce the outstanding principal amount of the Revolving Loans, with a
corresponding reduction to the Revolving Credit Commitments as provided in
Section 2.5(c), and (iii) third, to the extent of any excess remaining after
application as provided in clauses (i) and (ii) above, to pay any outstanding
Reimbursement Obligations, and thereafter to cash collateralize Letter of Credit
Exposure pursuant to Section 3.8, and within each Class of Loans shall be
applied first to prepay all Base Rate Loans before any LIBOR Loans are prepaid.
Each payment or prepayment pursuant to the provisions of this Section shall be
applied ratably among the Lenders holding the Loans being prepaid, in proportion
to the principal amount held by each.
(i) In the event and on each occasion that a Prepayment Event occurs,
the Borrower shall give to the Administrative Agent and the Lenders at least
three (3) Business Days' prior written notice of such event, the amount of Loans
anticipated to be prepaid and the application of such prepayment as set forth
above.
(j) Each payment or prepayment of a LIBOR Loan made pursuant to the
provisions of this Section on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
Section 2.18 to be paid as a consequence thereof.
2.7. Voluntary Prepayments. (a) At any time and from time to time,
---------------------
the Borrower shall have the right to prepay the Loans, in whole or in part,
without premium or penalty (except as provided in clause (iii) below), upon
written notice given to the Administrative Agent not later than 12:00 noon,
Charlotte time, three (3) Business Days prior to each intended prepayment of
LIBOR Loans and on the date of prepayment with respect to each intended
prepayment of Base Rate Loans, provided that (i) each partial prepayment shall
--------
be in an aggregate principal amount of not less than (A) $5,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof in the case of
LIBOR Loans or (B) $1,000,000 or, if greater, an integral multiple of $500,000
in excess thereof in the case of Base Rate Loans, (ii) no partial prepayment of
LIBOR Loans made pursuant to any single Borrowing shall reduce the aggregate
outstanding principal amount of the remaining LIBOR Loans under such Borrowing
to less than $5,000,000 or to any greater amount not an integral multiple of
$1,000,000 in excess thereof, and (iii) unless made together with all amounts
required under Section 2.18 to be paid as a consequence of such prepayment, a
prepayment of a LIBOR Loan may be made only on the last day of the Interest
Period applicable thereto. Each such notice shall specify the proposed date of
such prepayment and the aggregate principal amount, Class and Type of the Loans
to be prepaid (and, in the case of LIBOR Loans, the Interest Period of the
Borrowing pursuant to which made), and shall be irrevocable and shall bind the
Borrower to make such prepayment on the terms specified therein. Revolving
Loans (but not Term Loans) prepaid pursuant to this subsection (a) may be
reborrowed, subject to the terms and conditions of this Agreement.
(b) Each prepayment of the Term Loans made pursuant to subsection (a)
above shall be applied to reduce the outstanding principal amount of the Term
Loans, with such reduction to be applied to the scheduled principal payments on
the Term Loans (as set forth in Section 2.6(a)) in the inverse
29
order of maturity. Each prepayment of the Loans made pursuant to subsection (a)
above shall be applied ratably among the Lenders holding the Loans being
prepaid, in proportion to the principal amount held by each.
2.8. Interest. (a) The Borrower will pay interest in respect of the
--------
unpaid principal amount of each Loan, from the date of Borrowing thereof until
such principal amount shall be paid in full, (i) at the Adjusted Base Rate
applicable to the Class of such Loan, as in effect from time to time during such
periods as such Loan is a Base Rate Loan, and (ii) at the Adjusted LIBOR Rate
applicable to the Class of such Loan, as in effect from time to time during such
periods as such Loan is a LIBOR Loan.
(b) Upon the occurrence and during the continuance of an Event of
Default as the result of failure by the Borrower to pay any principal of or
interest on any Loan, any fees or other amount hereunder when due (whether at
maturity, pursuant to acceleration or otherwise), and (at the election of the
Required Lenders) upon the occurrence and during the continuance of any other
Event of Default, all outstanding principal amounts of the Loans and, to the
greatest extent permitted by law, all interest accrued on the Loans and all
other accrued and outstanding fees and other amounts hereunder, shall bear
interest at a rate per annum equal to the interest rate applicable from time to
time thereafter to such Loans (whether the Adjusted Base Rate or the Adjusted
LIBOR Rate) plus 2% (or, in the case of fees and other amounts, at the Adjusted
Base Rate plus 2%), and, in each case, such default interest shall be payable on
demand. To the greatest extent permitted by law, interest shall continue to
accrue after the filing by or against the Borrower of any petition seeking any
relief in bankruptcy or under any law pertaining to insolvency or debtor relief.
(c) Accrued (and theretofore unpaid) interest shall be payable as
follows:
(i) in respect of each Base Rate Loan (including any Base Rate Loan
or portion thereof paid or prepaid pursuant to the provisions of Section
2.6, except as provided hereinbelow), in arrears on the last Business Day
of each calendar quarter, beginning with the first such day to occur after
the Closing Date; provided, that in the event the Loans are repaid or
--------
prepaid in full and the Commitments have been terminated, then accrued
interest in respect of all Base Rate Loans shall be payable together with
such repayment or prepayment on the date thereof;
(ii) in respect of each LIBOR Loan (including any LIBOR Loan or
portion thereof paid or prepaid pursuant to the provisions of Section 2.6,
except as provided hereinbelow), in arrears (y) on the last Business Day of
the Interest Period applicable thereto (subject to the provisions of clause
(iv) in Section 2.10) and (z) in addition, in the case of a LIBOR Loan with
an Interest Period having a duration of six months or longer, on each date
on which interest would have been payable under clause (y) above had
successive Interest Periods of three months' duration been applicable to
such LIBOR Loan; provided, that in the event all LIBOR Loans made pursuant
--------
to a single Borrowing are repaid or prepaid in full, then accrued interest
in respect of such LIBOR Loans shall be payable together with such
repayment or prepayment on the date thereof; and
(iii) in respect of any Loan, at maturity (whether pursuant to
acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Credit
Document shall be deemed to establish or require the payment of interest to any
Lender at a rate in excess of the maximum rate
30
permitted by applicable law. If the amount of interest payable for the account
of any Lender on any interest payment date would exceed the maximum amount
permitted by applicable law to be charged by such Lender, the amount of interest
payable for its account on such interest payment date shall be automatically
reduced to such maximum permissible amount. In the event of any such reduction
affecting any Lender, if from time to time thereafter the amount of interest
payable for the account of such Lender on any interest payment date would be
less than the maximum amount permitted by applicable law to be charged by such
Lender, then the amount of interest payable for its account on such subsequent
interest payment date shall be automatically increased to such maximum
permissible amount, provided that at no time shall the aggregate amount by which
--------
interest paid for the account of any Lender has been increased pursuant to this
sentence exceed the aggregate amount by which interest paid for its account has
theretofore been reduced pursuant to the previous sentence.
(e) The Administrative Agent shall promptly notify the Borrower and
the Lenders upon determining the interest rate for each Borrowing of LIBOR Loans
after its receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Base Rate; provided,
--------
however, that the failure of the Administrative Agent to provide the Borrower or
-------
the Lenders with any such notice shall neither affect any obligations of the
Borrower or the Lenders hereunder nor result in any liability on the part of the
Administrative Agent to the Borrower or any Lender. Each such determination
(including each determination of the Reserve Requirement) shall, absent manifest
error, be conclusive and binding on all parties hereto.
2.9. Fees. The Borrower agrees to pay:
----
(a) To the Arranger, for its own account, on the date of its execution
of this Agreement, the fees described in paragraph 1 of the Fee Letter, in the
amounts set forth therein as due and payable on such date and to the extent not
theretofore paid to the Arranger;
(b) To the Administrative Agent, for the account of each Lender (other
than First Union) on the Closing Date, the fees set forth in paragraph 2 of the
Fee Letter;
(c) To the Administrative Agent, for the account of each Lender with a
Revolving Credit Commitment, a commitment fee for each calendar quarter (or
portion thereof) for the period from the date of this Agreement to the Revolving
Credit Termination Date, at a per annum rate equal to the Applicable Margin
Percentage in effect for such fee from time to time during such quarter, on such
Lender's ratable share (based on the proportion that its Revolving Credit
Commitment bears to the aggregate Revolving Credit Commitments) of the average
daily aggregate Unutilized Revolving Credit Commitments, payable in arrears (i)
on the last Business Day of each calendar quarter, beginning with the first such
day to occur after the Closing Date, and (ii) on the Revolving Credit
Termination Date;
(d) To the Administrative Agent, for the account of each Lender with a
Revolving Credit Commitment, a letter of credit fee for each calendar quarter
(or portion thereof) in respect of all Letters of Credit outstanding during such
quarter, at a per annum rate equal to the Applicable Margin Percentage in effect
from time to time during such quarter for Revolving Loans that are maintained as
LIBOR Loans, on such Lender's ratable share (based on the proportion that its
Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments)
of the daily average aggregate Stated Amount of such Letters of Credit, payable
in arrears (i) on the last Business Day of each calendar quarter, beginning with
the first such day to occur after the Closing Date, and (ii) on the later of the
Revolving Credit Termination Date and the date of termination of the last
outstanding Letter of Credit;
31
(e) To the applicable Issuing Lender, for its own account, a facing
fee for each calendar quarter (or portion thereof) in respect of all Letters of
Credit outstanding during such quarter, at a per annum rate of 0.125% on the
daily average aggregate Stated Amount of such Letters of Credit, payable in
arrears (i) on the last Business Day of each calendar quarter, beginning with
the first such day to occur after the Closing Date, and (ii) on the later of the
Revolving Credit Termination Date and the date of termination of the last
outstanding Letter of Credit;
(f) To the Issuing Lender, for its own account, such commissions,
issuance fees, transfer fees and other fees and charges incurred in connection
with the issuance and administration of each Letter of Credit as are customarily
charged from time to time by the Issuing Lender for the performance of such
services in connection with similar letters of credit, or as may be otherwise
agreed to by the Issuing Lender, but without duplication of amounts payable
under subsection (d) above;
(g) To the Administrative Agent, for its own account, the annual
administrative fee described in paragraph 3 of the Fee Letter, on the terms, in
the amount and at the times set forth therein; and
(h) To the Administrative Agent, for the account of each Lender with a
Tranche B Term Loan Commitment, a commitment fee for each calendar quarter (or
portion thereof) for the period from the date of this Agreement to the earlier
of the WOKR Acquisition Date or April 30, 1999 (such earlier date, the "WOKR
Commitment Fee Expiration Date"), at a per annum rate equal to the Applicable
Margin Percentage in effect for such fee from time to time during such quarter,
on such Lender's ratable share (based on the proportion that its Tranche B Term
Loan Commitment bears to the aggregate Tranche B Term Loan Commitments) of the
aggregate of the Lenders' Tranche B Term Loan Commitments, payable in arrears
(i) on the last Business Day of each calendar quarter, beginning with the first
such day to occur after the Closing Date, and (ii) on the WOKR Commitment Fee
Expiration Date.
2.10. Interest Periods. Concurrently with the giving of a Notice of
----------------
Borrowing or Notice of Conversion/Continuation in respect of any Borrowing
(whether in respect of Term Loans or Revolving Loans) comprised of Base Rate
Loans to be converted into, or LIBOR Loans to be continued as, LIBOR Loans, the
Borrower shall have the right to elect, pursuant to such notice, the interest
period (each, an "Interest Period") to be applicable to such LIBOR Loans, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six-month period; provided, however, that:
-------- -------
(i) all LIBOR Loans comprising a single Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any LIBOR Loan shall commence
on the date of the Borrowing of such LIBOR Loan (including the date of any
continuation of, or conversion into, such LIBOR Loan), and each successive
Interest Period applicable to such LIBOR Loan shall commence on the day on
which the next preceding Interest Period applicable thereto expires;
(iii) LIBOR Loans may not be outstanding under more than seven (7)
separate Interest Periods at any one time (for which purpose Interest
Periods shall be deemed to be separate even if they are coterminous);
(iv) if any Interest Period otherwise would expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless such next
32
succeeding Business Day falls in another calendar month, in which case such
Interest Period shall expire on the next preceding Business Day;
(v) the Borrower may not select any Interest Period that begins
prior to the Closing Date or that expires (x) after the Term Loan Maturity
Date, with respect to Term Loans that are to be maintained as LIBOR Loans,
or (y) after the Revolving Credit Maturity Date, with respect to Revolving
Loans that are to be maintained as LIBOR Loans;
(vi) no Interest Period may be selected with respect to any Term
Loans that would end after a scheduled date for repayment of principal of
the Term Loans, or with respect to any Revolving Loans that would end after
any date of reduction of the Revolving Credit Commitment, in either case
occurring on or after the first day of such Interest Period unless,
immediately after giving effect to such selection, the aggregate principal
amount of Loans that are Base Rate Loans or that have Interest Periods
expiring on or before such principal repayment date equals or exceeds the
principal amount required to be paid on such principal repayment date;
(vii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such
Interest Period would otherwise expire, such Interest Period shall expire
on the last Business Day of such calendar month; and
(viii) if, upon the expiration of any Interest Period applicable to
a Borrowing of LIBOR Loans, the Borrower shall have failed to elect a new
Interest Period to be applicable to such LIBOR Loans, then the Borrower
shall be deemed to have elected to convert such LIBOR Loans into Base Rate
Loans as of the expiration of the then current Interest Period applicable
thereto.
2.11. Conversions and Continuations. (a) The Borrower shall have
-----------------------------
the right, on any Business Day occurring on or after the Closing Date, to elect
(i) to convert all or a portion of the outstanding principal amount of any Base
Rate Loans of any Class into LIBOR Loans of the same Class, or to convert any
LIBOR Loans of any Class the Interest Periods for which end on the same day into
Base Rate Loans of the same Class, or (ii) to continue all or a portion of the
outstanding principal amount of any LIBOR Loans of any Class the Interest
Periods for which end on the same day for an additional Interest Period,
provided that (x) any such conversion of LIBOR Loans into Base Rate Loans shall
--------
involve an aggregate principal amount of not less than $1,000,000 or, if
greater, an integral multiple of $500,000 in excess thereof; any such conversion
of Base Rate Loans into, or continuation of, LIBOR Loans shall involve an
aggregate principal amount of not less than $5,000,000 or, if greater, an
integral multiple of $1,000,000 in excess thereof; and no partial conversion of
LIBOR Loans made pursuant to a single Borrowing shall reduce the outstanding
principal amount of such LIBOR Loans to less than $5,000,000 or to any greater
amount not an integral multiple of $1,000,000 in excess thereof, (y) except as
otherwise provided in Section 2.16(d), LIBOR Loans may be converted into Base
Rate Loans only on the last day of the Interest Period applicable thereto (and,
in any event, if a LIBOR Loan is converted into a Base Rate Loan on any day
other than the last day of the Interest Period applicable thereto, the Borrower
will pay, upon such conversion, all amounts required under Section 2.18 to be
paid as a consequence thereof), and (z) no conversion of Base Rate Loans into
LIBOR Loans or continuation of LIBOR Loans shall be permitted during the
continuance of a Default or Event of Default.
(b) The Borrower shall make each such election by giving the
Administrative Agent written notice not later than 1:00 p.m., Charlotte time,
three (3) Business Days prior to the intended effective
33
date of any conversion of Base Rate Loans into, or continuation of, LIBOR Loans
and on the intended effective date of any conversion of LIBOR Loans into Base
Rate Loans. Each such notice (each, a "Notice of Conversion/Continuation") shall
be irrevocable, shall be given in the form of Exhibit B-2 and shall specify (x)
the date of such conversion or continuation (which shall be a Business Day), (y)
in the case of a conversion into, or a continuation of, LIBOR Loans, the
Interest Period to be applicable thereto, and (z) the aggregate amount, Class
and Type of the Loans being converted or continued. Upon the receipt of a Notice
of Conversion/Continuation, the Administrative Agent will promptly notify each
Lender of the proposed conversion or continuation. In the event that the
Borrower shall fail to deliver a Notice of Conversion/Continuation as provided
herein with respect to any outstanding LIBOR Loans, such LIBOR Loans shall
automatically be converted to Base Rate Loans upon the expiration of the then
current Interest Period applicable thereto (unless repaid pursuant to the terms
hereof). In the event the Borrower shall have failed to select in a Notice of
Conversion/Continuation the duration of the Interest Period to be applicable to
any conversion into, or continuation of, LIBOR Loans, then the Borrower shall be
deemed to have selected an Interest Period with a duration of one month.
2.12. Method of Payments; Computations. (a) All payments by the
--------------------------------
Borrower hereunder shall be made without setoff, counterclaim or other defense,
in Dollars and in immediately available funds to the Administrative Agent, for
the account of the Lenders entitled to such payment (except as otherwise
expressly provided herein as to payments required to be made directly to the
Issuing Lender and the Lenders) at its office referred to in Section 11.5, prior
to 1:00 p.m., Charlotte time, on the date payment is due. Any payment made as
required hereinabove, but after 1:00 p.m., Charlotte time, shall be deemed to
have been made on the next succeeding Business Day. If any payment falls due on
a day that is not a Business Day, then such due date shall be extended to the
next succeeding Business Day (except that in the case of LIBOR Loans to which
the provisions of clause (iv) in Section 2.10 are applicable, such due date
shall be the next preceding Business Day), and such extension of time shall then
be included in the computation of payment of interest, fees or other applicable
amounts.
(b) The Administrative Agent will distribute to the Lenders like
amounts relating to payments made to the Administrative Agent for the account of
the Lenders as follows: (i) if the payment is received by 12:00 noon, Charlotte
time, in immediately available funds, the Administrative Agent will make
available to each relevant Lender on the same date, by wire transfer of
immediately available funds, such Lender's ratable share of such payment (based
on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant Lenders),
and (ii) if such payment is received after 12:00 noon, Charlotte time, or in
other than immediately available funds, the Administrative Agent will make
available to each such Lender its ratable share of such payment by wire transfer
of immediately available funds on the next succeeding Business Day (or in the
case of uncollected funds, as soon as practicable after collected). If the
Administrative Agent shall not have made a required distribution to the
appropriate Lenders as required hereinabove after receiving a payment for the
account of such Lenders, the Administrative Agent will pay to each such Lender,
on demand, its ratable share of such payment with interest thereon at the
Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Administrative Agent until the date repaid to such Lender. The
Administrative Agent will distribute to the Issuing Lender like amounts relating
to payments made to the Administrative Agent for the account of the Issuing
Lender in the same manner, and subject to the same terms and conditions, as set
forth hereinabove with respect to distributions of amounts to the Lenders.
(c) Unless the Administrative Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to any Lender
hereunder that such payment will not be made in full, the Administrative Agent
may assume that the Borrower has made such payment in full to
34
the Administrative Agent on such date, and the Administrative Agent may, in
reliance on such assumption, but shall not be obligated to, cause to be
distributed to such Lender on such due date an amount equal to the amount then
due to such Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Administrative Agent, and without limiting the
obligation of the Borrower to make such payment in accordance with the terms
hereof, such Lender shall repay to the Administrative Agent forthwith on demand
such amount so distributed to such Lender, together with interest thereon for
each day from the date such amount is so distributed to such Lender until the
date repaid to the Administrative Agent, at the Federal Funds Rate.
(d) All computations of interest hereunder (including computations of
the Reserve Requirement) shall be made on the basis of a year consisting of (i)
360 days with respect to LIBOR Loans and (ii) 365 days with respect to Base Rate
Loans, in each case based on the actual number of days (including the first day,
but excluding the last day) elapsed. All computations of fees hereunder shall be
made on the basis of a year consisting of 360 days.
2.13. Recovery of Payments. (a) The Borrower agrees that to the
--------------------
extent the Borrower makes a payment or payments to or for the account of the
Administrative Agent, any Lender or the Issuing Lender, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy, insolvency or similar state or
federal law, common law or equitable cause, then, to the extent of such payment
or repayment, the Obligation intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been received.
(b) If any amounts distributed by the Administrative Agent to any
Lender are subsequently returned or repaid by the Administrative Agent to the
Borrower or its representative or successor in interest, whether by court order
or by settlement approved by the Lender in question, such Lender will, promptly
upon receipt of notice thereof from the Administrative Agent, pay the
Administrative Agent such amount. If any such amounts are recovered by the
Administrative Agent from the Borrower or its representative or successor in
interest, the Administrative Agent will redistribute such amounts to the Lenders
on the same basis as such amounts were originally distributed.
2.14. Use of Proceeds. The proceeds of the Loans shall be used (i)
---------------
to finance a portion of the purchase price to be paid by the Borrower in
connection with the WOKR Acquisition, (ii) to refinance the Borrower's existing
senior credit facility, and (iii) to finance Capital Expenditures, working
capital and general corporate purposes and in accordance with the terms and
provisions of this Agreement (including to finance Permitted Acquisitions in
accordance with the terms and provisions of this Agreement, including without
limitation the provisions set forth in Section 6.9).
2.15. Pro Rata Treatment. (a) All fundings, continuations and
------------------
conversions of Loans of any Class shall be made by the Lenders pro rata on the
basis of their respective Commitments to provide Loans of such Class (in the
case of the initial funding of Loans of such Class pursuant to Section 2.2) or
on the basis of their respective outstanding Loans of such Class (in the case of
continuations and conversions of Loans of such Class pursuant to Section 2.11,
and additionally in all cases in the event the Commitments have expired or have
been terminated), as the case may be from time to time. All payments on account
of principal of or interest on any Loans, fees or any other Obligations owing to
or for the account of any one or more Lenders shall be apportioned ratably among
such Lenders in proportion to the amounts of such principal, interest, fees or
other Obligations owed to them respectively.
35
(b) Each Lender agrees that if it shall receive any amount hereunder
(whether by voluntary payment, realization upon security, exercise of the right
of setoff or banker's lien, counterclaim or cross action, or otherwise, other
than pursuant to Section 11.7) applicable to the payment of any of the
Obligations that exceeds its ratable share (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender at such time to
(ii) the aggregate amount of such Obligations due and payable to all Lenders at
such time) of payments on account of such Obligations then or therewith obtained
by all the Lenders to which such payments are required to have been made, such
Lender shall forthwith purchase from the other Lenders such participations in
such Obligations as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; provided,
--------
however, that if all or any portion of such excess payment is thereafter
-------
recovered from such purchasing Lender, such purchase from each such other Lender
shall be rescinded and each such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such other Lender's ratable share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to the provisions of this subsection may, to the
fullest extent permitted by law, exercise any and all rights of payment
(including, without limitation, setoff, banker's lien or counterclaim) with
respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this subsection applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders entitled under this
subsection to share in the benefits of any recovery on such secured claim.
2.16. Increased Costs; Change in Circumstances; Illegality; etc. (a)
---------------------------------------------------------
If, at any time after the date hereof and from time to time, the introduction of
or any change in any applicable law, rule or regulation or in the interpretation
or administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline or request from any such Governmental Authority (whether or not having
the force of law), shall (i) subject such Lender to any tax or other charge, or
change the basis of taxation of payments to such Lender, in respect of any of
its LIBOR Loans or any other amounts payable hereunder or its obligation to
make, fund or maintain any LIBOR Loans (other than any change in the rate or
basis of tax on the overall net income of such Lender or its applicable Lending
Office), (ii) impose, modify or deem applicable any reserve, special deposit or
similar requirement (but excluding any reserves to the extent actually included
within the Reserve Requirement in the calculation of the LIBOR Rate) against
assets of, deposits with or for the account of, or credit extended by, such
Lender or its applicable Lending Office, or (iii) impose on such Lender or its
applicable Lending Office any other condition, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
any LIBOR Loans or issuing or participating in Letters of Credit or to reduce
the amount of any sum received or receivable by such Lender hereunder (including
in respect of Letters of Credit), the Borrower will, promptly upon demand
therefor by such Lender, pay to such Lender such additional amounts as shall
compensate such Lender for such increase in costs or reduction in return.
(b) If, at any time after the date hereof and from time to time, any
Lender shall have reasonably determined that the introduction of or any change
in any applicable law, rule or regulation regarding capital adequacy or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by such Lender
with any guideline or request from any such Governmental Authority (whether or
not having the force of law),
36
has or would have the effect, as a consequence of such Lender's Commitment,
Loans or issuance of or participations in Letters of Credit hereunder, of
reducing the rate of return on the capital of such Lender or any Person
controlling such Lender to a level below that which such Lender or controlling
Person could have achieved but for such introduction, change or compliance
(taking into account such Lender's or controlling Person's policies with respect
to capital adequacy), the Borrower will, promptly upon demand therefor by such
Lender therefor, pay to such Lender such additional amounts as will compensate
such Lender or controlling Person for such reduction in return.
(c) If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of "LIBOR Rate" upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Administrative Agent will forthwith so notify
the Borrower and the Lenders. Upon such notice, (i) all then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Periods applicable thereto (unless then repaid in full), be converted into Base
Rate Loans, (ii) the obligation of the Lenders to make, to convert Base Rate
Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant
to the Borrowing to which such Interest Period applies), and (iii) any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans, in
each case until the Administrative Agent or the Required Lenders, as the case
may be, shall have determined that the circumstances giving rise to such
suspension no longer exist (and the Required Lenders, if making such
determination, shall have so notified the Administrative Agent), and the
Administrative Agent shall have so notified the Borrower and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at any
time after the date hereof and from time to time, any Lender shall have
determined in good faith that the introduction of or any change in any
applicable law, rule or regulation or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance with any guideline or request from any
such Governmental Authority (whether or not having the force of law), has or
would have the effect of making it unlawful for such Lender to make or to
continue to make or maintain LIBOR Loans, such Lender will forthwith so notify
the Administrative Agent and the Borrower. Upon such notice, (i) each of such
Lender's then outstanding LIBOR Loans shall automatically, on the expiration
date of the respective Interest Period applicable thereto (or, to the extent any
such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until such
expiration date, upon such notice), be converted into a Base Rate Loan, (ii) the
obligation of such Lender to make, to convert Base Rate Loans into, or to
continue, LIBOR Loans shall be suspended (including pursuant to any Borrowing
for which the Administrative Agent has received a Notice of Borrowing but for
which the Borrowing Date has not arrived), and (iii) any Notice of Borrowing or
Notice of Conversion/Continuation given at any time thereafter with respect to
LIBOR Loans shall, as to such Lender, be deemed to be a request for a Base Rate
Loan, in each case until such Lender shall have determined that the
circumstances giving rise to such suspension no longer exist and shall have so
notified the Administrative Agent, and the Administrative Agent shall have so
notified the Borrower.
(e) Determinations by the Administrative Agent or any Lender for
purposes of this Section of any increased costs, reduction in return, market
contingencies, illegality or any other matter shall, absent manifest error, be
conclusive, provided that such determinations are made in good faith. No
--------
failure by the Administrative Agent or any Lender at any time to demand payment
of any amounts
37
payable under this Section shall constitute a waiver of its right
to demand payment of any additional amounts arising at any subsequent time.
Nothing in this Section shall require or be construed to require the Borrower to
pay any interest, fees, costs or other amounts in excess of that permitted by
applicable law.
2.17. Taxes. (a) Any and all payments by the Borrower hereunder or
-----
under any Note shall be made, in accordance with the terms hereof and thereof,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, other than net income and franchise taxes imposed on the
Administrative Agent or any Lender by the United States or by the jurisdiction
under the laws of which the Administrative Agent or such Lender, as the case may
be, is organized or in which its principal office or (in the case of a Lender)
its applicable Lending Office is located, or any political subdivision or taxing
authority thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to the Administrative Agent or
any Lender, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section), the Administrative Agent or such
Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower will make such
deductions, (iii) the Borrower will pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and (iv)
the Borrower will deliver to the Administrative Agent or such Lender, as the
case may be, evidence of such payment.
(b) The Borrower will indemnify the Administrative Agent and each
Lender for the full amount of Taxes (including, without limitation, any Taxes
imposed by any jurisdiction on amounts payable under this Section) paid by the
Administrative Agent or such Lender, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Administrative
Agent or such Lender, as the case may be, makes written demand therefor.
(c) Each of the Administrative Agent and the Lenders agrees that if it
subsequently recovers, or receives a permanent net tax benefit with respect to,
any amount of Taxes (i) previously paid by it and as to which it has been
indemnified by or on behalf of the Borrower or (ii) previously deducted by the
Borrower (including, without limitation, any Taxes deducted from any additional
sums payable under clause (i) of subsection (a) above), the Administrative Agent
or such Lender, as the case may be, shall reimburse the Borrower to the extent
of the amount of any such recovery or permanent net tax benefit (but only to the
extent of indemnity payments made, or additional amounts paid, by or on behalf
of the Borrower under this Section with respect to the Taxes giving rise to such
recovery or tax benefit); provided, however, that the Borrower, upon the request
-------- -------
of the Administrative Agent or such Lender, agrees to repay to the
Administrative Agent or such Lender, as the case may be, the amount paid over to
the Borrower (together with any penalties, interest or other charges), in the
event the Administrative Agent or such Lender is required to repay such amount
to the relevant taxing authority or other Governmental Authority. The
determination by the Administrative Agent or any Lender of the amount of any
such recovery or permanent net tax benefit shall, in the absence of manifest
error, be conclusive and binding.
(d) If any Lender is incorporated or organized under the laws of a
jurisdiction other than the United States of America or any state thereof (a
"Non-U.S. Lender") and claims exemption from United
38
States withholding tax pursuant to the Internal Revenue Code, such Non-U.S.
Lender will deliver to each of the Administrative Agent and the Borrower, on or
prior to the Closing Date (or, in the case of a Non-U.S. Lender that becomes a
party to this Agreement as a result of an assignment after the Closing Date, on
the effective date of such assignment), (i) in the case of a Non-U.S. Lender
that is a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue
Code, a properly completed Internal Revenue Service Form 4224 or 1001, as
applicable (or successor forms), certifying that such Non-U.S. Lender is
entitled to an exemption from or a reduction of withholding or deduction for or
on account of United States federal income taxes in connection with payments
under this Agreement or any of the Notes, together with a properly completed
Internal Revenue Service Form W-8 or W-9, as applicable (or successor forms),
and (ii) in the case of a Non-U.S. Lender that is not a "bank" for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, a certificate in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower
and to the effect that (x) such Non-U.S. Lender is not a "bank" for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, is not subject to regulatory
or other legal requirements as a bank in any jurisdiction, and has not been
treated as a bank for purposes of any tax, securities law or other filing or
submission made to any governmental authority, any application made to a rating
agency or qualification for any exemption from any tax, securities law or other
legal requirements, (y) is not a 10-percent shareholder for purposes of Section
881(c)(3)(B) of the Internal Revenue Code and (z) is not a controlled foreign
corporation receiving interest from a related person for purposes of Section
881(c)(3)(C) of the Internal Revenue Code, together with a properly completed
Internal Revenue Service Form W-8 or W-9, as applicable (or successor forms).
Each such Non-U.S. Lender further agrees to deliver to each of the
Administrative Agent and the Borrower an additional copy of each such relevant
form on or before the date that such form expires or becomes obsolete or after
the occurrence of any event (including a change in its applicable Lending
Office) requiring a change in the most recent forms so delivered by it, in each
case certifying that such Non-U.S. Lender is entitled to an exemption from or a
reduction of withholding or deduction for or on account of United States federal
income taxes in connection with payments under this Agreement or any of the
Notes, unless an event (including, without limitation, any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required, which event renders all such forms inapplicable or the
exemption to which such forms relate unavailable and such Non-U.S. Lender
notifies the Administrative Agent and the Borrower that it is not entitled to
receive payments without deduction or withholding of United States federal
income taxes. Each such Non-U.S. Lender will promptly notify the Administrative
Agent and the Borrower of any changes in circumstances that would modify or
render invalid any claimed exemption or reduction.
(e) If any Lender is entitled to a reduction in (and not a complete
exemption from) the applicable withholding tax, the Borrower and the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If any of the forms or other documentation required under
subsection (d) above are not delivered to the Administrative Agent as therein
required, then the Borrower and the Administrative Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
2.18. Compensation. The Borrower will compensate each Lender upon
------------
demand for all losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund or
maintain LIBOR Loans) that such Lender may incur or sustain (i) if for any
reason (other than a default by such Lender) a Borrowing or continuation of, or
conversion into, a LIBOR Loan does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion/Continuation, (ii) if any repayment,
prepayment or conversion of any LIBOR Loan occurs on a date other than the last
day of an Interest
39
Period applicable thereto (including as a consequence of acceleration of the
maturity of the Loans pursuant to Section 9.2), (iii) if any prepayment of any
LIBOR Loan is not made on any date specified in a notice of prepayment given by
the Borrower or (iv) as a consequence of any other failure by the Borrower to
make any payments with respect to any LIBOR Loan when due hereunder. Calculation
of all amounts payable to a Lender under this Section shall be made as though
such Lender had actually funded its relevant LIBOR Loan through the purchase of
a Eurodollar deposit bearing interest at the LIBOR Rate in an amount equal to
the amount of such LIBOR Loan, having a maturity comparable to the relevant
Interest Period; provided, however, that each Lender may fund its LIBOR Loans in
-------- -------
any manner it sees fit and the foregoing assumption shall be utilized only for
the calculation of amounts payable under this Section. Determinations by any
Lender for purposes of this Section of any such losses, expenses or liabilities
shall, absent manifest error, be conclusive,provided that such determinations
--------
are made in good faith.
2.19. Optional Increase in Revolving Credit Commitment.
------------------------------------------------
(a) Subject to the conditions set forth below, the Borrower may at any
time after the Closing Date but prior to March 31, 2001, upon at least ten (10)
days prior written notice to the Administrative Agent and the Lenders, request
an increase in the total Revolving Credit Commitments by an amount of up to
$75,000,000 (the "Revolver Increase"). Such increase shall be subject to the
following terms and conditions:
(i) No Lender shall be deemed to have committed to lend to the
Borrower any portion of the Revolver Increase or to increase its Revolving
Credit Commitment, it being understood that any Revolver Increase shall be
funded at the discretion of any Lender and pursuant to paragraphs (b) - (d)
below.
(ii) The representations and warranties made by the Borrower and
contained in Article V shall be true and correct on and as of the effective
date of any Revolver Increase with the same effect as if made on and as of
such date (other than those representations and warranties that by their
terms speak as of a particular date, which representations and warranties
shall be true and correct as of such particular date).
(iii) No Default or Event of Default shall have occurred and be
continuing as of the effective date of any such increase.
(iv) First Union's and any other Lender's obligations to consummate
any additional loans in respect of the Revolver Increase shall be subject
to the conditions set forth in Sections 4.3 and 4.4 hereof.
(v) Once consummated, loans made by any Lenders in connection with
any Revolver Increase shall be considered for all purposes to be Revolving
Loans hereunder.
(b) The Revolver Increase may be funded either by one or more financial
institutions that are not theretofore Lenders hereunder ("Outside Lenders") and
that are designated by the Borrower to become Lenders (such designation to be
effective only with the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld) or by agreeing with an existing
Lender that such Lender's Revolving Credit Commitment shall be increased (thus
increasing the total Revolving Credit Commitment); provided that:
--------
40
(i) any such Outside Lender shall meet the criteria set forth in
the definition of Eligible Assignee;
(ii) the Borrower and the Lender or Outside Lender shall execute
and deliver to the Administrative Agent, for its acceptance and recording
in the Register, a Lender Addition and Acknowledgment Agreement
substantially in the form of Exhibit J attached hereto;
(iii) the allocations of Revolving Loans among the Lenders shall be
deemed to be amended to reflect the revised Revolving Credit Commitments of
the Lenders, and the Borrower shall pay any amount required to be paid
pursuant to Section 2.18 hereof resulting from the reallocation of
Revolving Credit Loans in connection with the increase in the total
Revolving Credit Commitments; and
(iv) the Administrative Agent may request any other documents or
information in its reasonable discretion in connection with the
consummation of the Revolver Increase.
(c) Upon the execution, delivery, acceptance and recording of the Lender
Addition and Acknowledgment Agreement, from and after the effective date
specified therein, such existing Lender shall have a Revolving Credit Commitment
as therein set forth or such other Lender shall become a Lender with a Revolving
Credit Commitment as therein set forth and all the rights and obligations of a
Lender with such a Revolving Credit Commitment hereunder.
(d) Upon its receipt of a properly completed and executed Lender
Addition and Acknowledgment Agreement together with any Note or Notes
subject to such addition and assumption and the written consent to such
addition and assumption, the Administrative Agent shall:
(i) accept such Lender Addition and Acknowledgment Agreement;
(ii) record the information contained therein in the Register; and
(iii) give prompt notice thereof to the Lenders and the Borrower.
ARTICLE III
LETTERS OF CREDIT
3.1. Issuance. Subject to and upon the terms and conditions herein
--------
set forth, so long as no Default or Event of Default has occurred and is
continuing, First Union National Bank, as Issuing Lender, will, at any time and
from time to time on and after the Closing Date and prior to the earlier of (i)
the seventh day prior to the Revolving Credit Maturity Date and (ii) the
Revolving Credit Termination Date, and upon request by the Borrower in
accordance with the provisions of Section 3.2, issue for the account of the
Borrower one or more irrevocable standby letters of credit denominated in
Dollars and in a form customarily used or otherwise approved by such Issuing
Lender, and on the Closing Date Fleet Bank, N.A., as Issuing Lender, shall be
deemed to have issued the Outstanding Letters of Credit (together with all
amendments, modifications and supplements thereto, substitutions therefor and
renewals and restatements thereof, collectively, the "Letters of Credit");
provided, however, that no more than ten (10) Letters of Credit may be
outstanding at any time. The Stated Amount of each Letter of
41
Credit shall not be less than such amount as may be acceptable to the Issuing
Lender. Notwithstanding the foregoing:
(a) No Letter of Credit (i) shall have a Stated Amount of less than
$20,000 or (ii) shall be issued the Stated Amount upon issuance of which (A)
when added to the aggregate Letter of Credit Exposure of the Lenders at such
time, would exceed $10,000,000 or (B) when added to the sum of (y) the aggregate
Letter of Credit Exposure of all Lenders at such time and (z) the aggregate
principal amount of all Revolving Loans then outstanding, would exceed the
aggregate Revolving Credit Commitments at such time;
(b) No Letter of Credit shall be issued that by its terms expires
later than the seventh day prior to the Revolving Credit Maturity Date or, in
any event, more than one (1) year after its date of issuance; provided, however,
-------- -------
that a Letter of Credit may, if requested by the Borrower, provide by its terms,
and on terms acceptable to the Issuing Lender, for renewal for successive
periods of one year or less (but not beyond the seventh day prior to the
Revolving Credit Maturity Date), unless and until the Issuing Lender shall have
delivered a notice of nonrenewal to the beneficiary of such Letter of Credit;
and
(c) The Issuing Lender shall be under no obligation to issue any
Letter of Credit if, at the time of such proposed issuance, (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall purport by
its terms to enjoin or restrain the Issuing Lender from issuing such Letter of
Credit, or any Requirement of Law applicable to the Issuing Lender or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Lender shall prohibit,
or request that the Issuing Lender refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose upon the
Issuing Lender with respect to such Letter of Credit any restriction or reserve
or capital requirement (for which the Issuing Lender is not otherwise
compensated) not in effect on the Closing Date, or any unreimbursed loss, cost
or expense that was not applicable, in effect or known to the Issuing Lender as
of the Closing Date and that the Issuing Lender in good xxxxx xxxxx material to
it, or (ii) the Issuing Lender shall have actual knowledge, or shall have
received notice from any Lender or the Administrative Agent, prior to the
issuance of such Letter of Credit that one or more of the conditions specified
in Sections 4.1 (if applicable) or 4.4 are not then satisfied (or have not been
waived in writing as required herein) or that the issuance of such Letter of
Credit would violate the provisions of subsection (a) above.
(d) The parties hereto agree that each Outstanding Letter of Credit will
be treated as if it had been originally issued under this Agreement, and as of
the Closing date each Outstanding Letter of Credit shall be deemed to be a
Letter of Credit for all purposes hereunder and under the other Credit
Documents. Specifically, and without limitation of the foregoing or the other
provisions of this Article, (i) the Stated Amount of each Outstanding Letter of
Credit, for so long as the same shall be outstanding, shall be included in
calculating (y) the limit set forth in clause (i) of Section 3.1(a) and (z) the
aggregate Letter of Credit Exposure, (ii) each Lender hereby absolutely and
unconditionally agrees to purchase as of the Closing Date a participation from
Fleet Bank, N.A. in each Outstanding Letter of Credit in accordance with Section
3.3 and to pay to Fleet Bank, N.A., as Issuing Lender, in accordance with
Section 3.5, such Lender's pro rata share of each payment made by such Issuing
Lender under any Outstanding Letter of Credit, together with interest in
accordance with Section 3.5, and (iii) with respect to each Outstanding Letter
of Credit, the Issuing Lender shall have the benefit of all rights, agreements,
covenants and indemnities of an Issuing Lender set forth in this Agreement and
shall comply with all agreements and obligations set forth herein that bind an
Issuing Lender, insofar as the same apply to Letters of Credit generally. The
Borrower agrees to use its reasonable best efforts to cause the
42
Outstanding Letters of Credit to be replaced by Letters of Credit to be issued
by First Union National Bank, as Issuing Lender, as soon as reasonably
practicable after the Closing.
3.2. Notices. Whenever the Borrower desires the issuance of a Letter of
-------
Credit (other than any Outstanding Letter of Credit), the Borrower will give the
Issuing Lender written notice with a copy to the Administrative Agent not later
than 1:00 p.m., Charlotte time, three (3) Business Days (or such shorter period
as is acceptable to the Issuing Lender in any given case) prior to the requested
date of issuance thereof. Each such notice (each, a "Letter of Credit Notice")
shall be irrevocable, shall be given in the form of Exhibit B-3 and shall
specify (i) the requested date of issuance, which shall be a Business Day, (ii)
the requested Stated Amount and expiry date of the Letter of Credit, and (iii)
the name and address of the requested beneficiary or beneficiaries of the Letter
of Credit. The Borrower will also complete any application procedures and
documents required by the Issuing Lender in connection with the issuance of any
Letter of Credit. Upon its issuance of any Letter of Credit, the Issuing Lender
will promptly notify the Administrative Agent of such issuance, and the
Administrative Agent will give prompt notice thereof to each Lender.
3.3. Participations. Immediately upon the issuance of any Letter of
--------------
Credit, the Issuing Lender shall be deemed to have sold and transferred to each
Lender, and each Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Lender, without recourse or warranty, an
undivided interest and participation, pro rata (based on the percentage of the
aggregate Revolving Credit Commitments represented by such Lender's Revolving
Credit Commitment), in such Letter of Credit, each drawing made thereunder and
the obligations of the Borrower under this Agreement with respect thereto and
any Collateral or other security therefor or guaranty pertaining thereto;
provided, however, that the fee relating to Letters of Credit described in
-------- -------
Section 2.9(e) or (f) shall be payable directly to the Issuing Lender as
provided therein, and the Lenders shall have no right to receive any portion
thereof. Upon any change in the Revolving Credit Commitments of any of the
Lenders pursuant to Section 11.7(a), with respect to all outstanding Letters of
Credit and Reimbursement Obligations there shall be an automatic adjustment to
the participations pursuant to this Section to reflect the new pro rata shares
of the assigning Lender and the Assignee.
3.4. Reimbursement. The Borrower hereby agrees to reimburse the Issuing
-------------
Lender by making payment to the Administrative Agent, for the account of the
Issuing Lender, in immediately available funds, for any payment made by the
Issuing Lender under any Letter of Credit (each such amount so paid until
reimbursed, together with interest thereon payable as provided hereinbelow, a
"Reimbursement Obligation") immediately after, and in any event within one (1)
Business Day after its receipt of notice of, such payment (provided that any
--------
such Reimbursement Obligation shall be deemed timely satisfied (but nevertheless
subject to the payment of interest thereon as provided hereinbelow) if satisfied
pursuant to a Borrowing of Revolving Loans made on or prior to the next Business
Day following the date of the Borrower's receipt of notice of such payment),
together with interest on the amount so paid by the Issuing Lender, to the
extent not reimbursed prior to 1:00 p.m., Charlotte time, on the date of such
payment or disbursement, for the period from the date of the respective payment
to the date the Reimbursement Obligation created thereby is satisfied, at the
Adjusted Base Rate applicable to Revolving Loans as in effect from time to time
during such period, such interest also to be payable on demand. The Issuing
Lender will provide the Administrative Agent and the Borrower with prompt notice
of any payment or disbursement made under any Letter of Credit, although the
failure to give, or any delay in giving, any such notice shall not release,
diminish or otherwise affect the Borrower's obligations under this Section or
any other provision of this Agreement. The Administrative Agent will promptly
pay to the Issuing Lender any such amounts received by it under this Section.
43
3.5. Payment by Revolving Loans. In the event that the Issuing Lender
--------------------------
makes any payment under any Letter of Credit and the Borrower shall not have
timely satisfied in full its Reimbursement Obligation to the Issuing Lender
pursuant to Section 3.4, and to the extent that any amounts then held in the
Cash Collateral Account established pursuant to Section 3.8 shall be
insufficient to satisfy such Reimbursement Obligation in full, the Issuing
Lender will promptly notify the Administrative Agent, and the Administrative
Agent will promptly notify each Lender, of such failure. If the Administrative
Agent gives such notice prior to 11:00 a.m., Charlotte time, on any Business
Day, each Lender will make available to the Administrative Agent, for the
account of the Issuing Lender, its pro rata share (based on the percentage of
the aggregate Revolving Credit Commitments represented by such Lender's
Revolving Credit Commitment) of the amount of such payment on such Business Day
in immediately available funds. If the Administrative Agent gives such notice
after 11:00 a.m., Charlotte time, on any Business Day, each such Lender shall
make its pro rata share of such amount available to the Administrative Agent on
the next succeeding Business Day. If and to the extent any Lender shall not have
so made its pro rata share of the amount of such payment available to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent, for
the account of the Issuing Lender, forthwith on demand such amount, together
with interest thereon at the Federal Funds Rate for each day from such date
until the date such amount is paid to the Administrative Agent. The failure of
any Lender to make available to the Administrative Agent its pro rata share of
any payment under any Letter of Credit shall not relieve any other Lender of its
obligation hereunder to make available to the Administrative Agent its pro rata
share of any payment under any Letter of Credit on the date required, as
specified above, but no Lender shall be responsible for the failure of any other
Lender to make available to the Administrative Agent such other Lender's pro
rata share of any such payment. Each such payment by a Lender under this Section
of its pro rata share of an amount paid by the Issuing Lender shall constitute a
Revolving Loan by such Lender (the Borrower being deemed to have given a timely
Notice of Borrowing therefor) and shall be treated as such for all purposes of
this Agreement; provided that for purposes of determining the aggregate
--------
Unutilized Revolving Credit Commitments immediately prior to giving effect to
the application of the proceeds of such Revolving Loans, the Reimbursement
Obligation being satisfied thereby shall be deemed not to be outstanding at such
time.
3.6. Payment to Lenders. Whenever the Issuing Lender receives a payment
------------------
in respect of a Reimbursement Obligation as to which the Administrative Agent
has received, for the account of the Issuing Lender, any payments from the
Lenders pursuant to Section 3.5, the Issuing Lender will promptly pay to the
Administrative Agent, and the Administrative Agent will promptly pay to each
Lender that has paid its pro rata share thereof, in immediately available funds,
an amount equal to such Lender's ratable share (based on the proportionate
amount funded by such Lender to the aggregate amount funded by all Lenders) of
such Reimbursement Obligation.
3.7. Obligations Absolute. The Reimbursement Obligations of the Borrower
--------------------
and the obligations of the Lenders under Section 3.5 to make payments to the
Administrative Agent, for the account of the Issuing Lender, with respect to
Letters of Credit, shall be irrevocable, shall remain in effect until the
Issuing Lender shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit, and,
except to the extent resulting from any gross negligence or willful misconduct
on the part of the Issuing Lender, shall be absolute and unconditional, shall
not be subject to counterclaim, setoff or other defense or any other
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(a) Any lack of validity or enforceability of this Agreement, any of
the other Credit Documents or any documents or instruments relating to any
Letter of Credit;
44
(b) Any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations in respect of any Letter of Credit
or any other amendment, modification or waiver of or any consent to departure
from any Letter of Credit or any documents or instruments relating thereto, in
each case whether or not the Borrower has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right that
the Borrower may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Issuing Lender, any
Lender or other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated hereby or any unrelated transactions
(including any underlying transaction between the Borrower and the beneficiary
named in any such Letter of Credit);
(d) Any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect
(provided that such draft, certificate or other document appears on its face to
---------
comply with the terms of such Letter of Credit), any errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
telecopier or otherwise, or any errors in translation or in interpretation of
technical terms;
(e) Any defense based upon the failure of any drawing under a Letter
of Credit to conform to the terms of the Letter of Credit (provided that any
--------
draft, certificate or other document presented pursuant to such Letter of Credit
appears on its face to comply with the terms thereof), any nonapplication or
misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;
(f) The exchange, release, surrender or impairment of any Collateral or
other security for the Obligations;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance or event whatsoever, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each Lender and shall not create or result in any liability of the Issuing
Lender to the Borrower or any Lender. It is expressly understood and agreed
that, for purposes of determining whether a wrongful payment under a Letter of
Credit resulted from the Issuing Lender's gross negligence or willful
misconduct, (i) the Issuing Lender's acceptance of documents that appear on
their face to comply with the terms of such Letter of Credit, without
responsibility for further investigation, regardless of any notice or
information to the contrary, (ii) the Issuing Lender's exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all matters
set forth therein, including the amount of any draft presented under such Letter
of Credit, whether or not the amount due to the beneficiary thereunder equals
the amount of such draft and whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any respect (so long as such
document appears on its face to comply with the terms of such Letter of Credit),
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or
45
invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and (iii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute gross negligence or willful misconduct of
the Issuing Lender.
3.8. Cash Collateral Account. At any time and from time to time (i)
-----------------------
after the occurrence and during the continuance of an Event of Default, the
Administrative Agent, at the direction or with the consent of the Required
Lenders, may require the Borrower to deliver to the Administrative Agent such
additional amount of cash as is equal to the aggregate Stated Amount of all
Letters of Credit at any time outstanding (whether or not any beneficiary under
any Letter of Credit shall have drawn or be entitled at such time to draw
thereunder) and (ii) in the event of a prepayment under Section 2.6(c), or to
the extent any amount of a required prepayment under any of Sections 2.6(d)
through 2.6(g) remains after prepayment of all outstanding Loans and
Reimbursement Obligations and termination of the Commitments, as contemplated by
Section 2.6(h), the Administrative Agent will retain such amount as may then be
required to be retained, such amounts in each case under clauses (i) and (ii)
above to be held by the Administrative Agent in a cash collateral account (the
"Cash Collateral Account"). The Borrower hereby grants to the Administrative
Agent, for the benefit of the Issuing Lender and the Lenders, a Lien upon and
security interest in the Cash Collateral Account and all amounts held therein
from time to time as security for Letter of Credit Exposure, and for application
to the Borrower's Reimbursement Obligations as and when the same shall arise.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
on the investment of such amounts in Cash Equivalents, which investments shall
be made at the direction of the Borrower (unless a Default or Event of Default
shall have occurred and be continuing, in which case the determination as to
investments shall be made at the option and in the discretion of the
Administrative Agent), amounts in the Cash Collateral Account shall not bear
interest. Interest and profits, if any, on such investments shall accumulate in
such account. In the event of a drawing, and subsequent payment by the Issuing
Lender, under any Letter of Credit at any time during which any amounts are held
in the Cash Collateral Account, the Administrative Agent will deliver to the
Issuing Lender an amount equal to the Reimbursement Obligation created as a
result of such payment (or, if the amounts so held are less than such
Reimbursement Obligation, all of such amounts) to reimburse the Issuing Lender
therefor. Any amounts remaining in the Cash Collateral Account after the
expiration of all Letters of Credit and reimbursement in full of the Issuing
Lender for all of its obligations thereunder shall be held by the Administrative
Agent, for the benefit of the Borrower, to be applied against the Obligations in
such order and manner as the Administrative Agent may direct. If the Borrower
is required to provide cash collateral pursuant to Section 2.6(c), such amount
(to the extent not applied as aforesaid) shall be returned to the Borrower on
demand, provided that after giving effect to such return (i) the sum of (y) the
--------
aggregate principal amount of all Revolving Loans outstanding at such time and
(z) the aggregate Letter of Credit Exposure of all Lenders at such time would
not exceed the aggregate Revolving Credit Commitments at such time and (ii) no
Default or Event of Default shall have occurred and be continuing at such time.
If the Borrower is required to provide cash collateral as a result of an Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three (3) Business Days after all Events of
Default have been cured or waived.
3.9. Effectiveness. Notwithstanding any termination of the Revolving
-------------
Credit Commitments or repayment of the Loans, or both, the obligations of the
Borrower under this Article shall remain in full force and effect until the
Issuing Lender and the Lenders shall have no further obligations to make any
payments or disbursements under any circumstances with respect to any Letter of
Credit.
46
ARTICLE IV
CONDITIONS OF BORROWING
4.1. Conditions of Initial Borrowing. The obligation of each Lender to
-------------------------------
make Loans in connection with the initial Borrowing hereunder, and the
obligation of the Issuing Lender to issue Letters of Credit hereunder on the
Closing Date, is subject to the satisfaction of the following conditions
precedent:
(a) The Administrative Agent shall have received the following, each
dated as of the Closing Date (unless otherwise specified), and, except for the
Notes, in sufficient copies for each Lender:
(i) A Tranche A Term Note for each Lender that is a party hereto
as of the Closing Date, in the amount of such Lender's Tranche A Term Loan
Commitment; and a Revolving Note for each Lender that is a party hereto as
of the Closing Date, in the amount of such Lender's Revolving Credit
Commitment, in each case duly completed in accordance with the relevant
provisions of Section 2.4 and executed by the Borrower;
(ii) the Security Agreement, duly completed and executed by the
Borrower and each of its Subsidiaries (other than SSI, Inc.); and the
Pledge Agreement, duly completed and executed by the Borrower and each of
its Subsidiaries that owns Capital Stock of another Subsidiary, together
with any certificates evidencing the Capital Stock being pledged thereunder
as of the Closing Date and undated assignments separate from certificate
for any such certificate duly executed in blank.
(iii) the favorable opinions of (A) Xxxxxx & Xxxx PC, special
counsel to the Borrower, in substantially the form of Exhibit H-1, and (B)
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P., FCC counsel to the
Borrower, in substantially the form of Exhibit H-2, in each case addressed
to the Administrative Agent and the Lenders and addressing such other
matters as the Administrative Agent or any Lender may reasonably request.
(b) The Administrative Agent shall have received a certificate, signed
by the president, the chief executive officer or the chief financial officer of
the Borrower, in form and substance satisfactory to the Administrative Agent,
certifying that (i) all representations and warranties of the Borrower contained
in this Agreement and the other Credit Documents are true and correct as of the
Closing Date, both immediately before and after giving effect to the
consummation of the transactions contemplated hereby, the making of the initial
Loans hereunder and the application of the proceeds thereof, (ii) no Default or
Event of Default has occurred and is continuing, both immediately before and
after giving effect to the consummation of the transactions contemplated hereby,
the making of the initial Loans hereunder and the application of the proceeds
thereof, (iii) both immediately before and after giving effect to the
consummation of the transactions contemplated hereby, the making of the initial
Loans hereunder and the application of the proceeds thereof, no Material Adverse
Change has occurred since December 31, 1997, and there exists no event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Change, and (iv) all conditions to the initial extensions of
credit hereunder set forth in this Section have been satisfied or waived as
required hereunder.
(c) The Administrative Agent shall have received a certificate of the
secretary or an assistant secretary of each of the Borrower and its
Subsidiaries, in form and substance satisfactory to the Administrative Agent,
certifying (i) that attached thereto is a true and complete copy of the articles
or
47
certificate of incorporation and all amendments thereto of the Borrower or such
Subsidiary, as the case may be, certified as of a recent date by the Secretary
of State (or comparable Governmental Authority) of its jurisdiction of
organization, and that the same has not been amended since the date of such
certification, (ii) that attached thereto is a true and complete copy of the
bylaws of the Borrower or such Subsidiary, as the case may be, as then in effect
and as in effect at all times from the date on which the resolutions referred to
in clause (iii) below were adopted to and including the date of such
certificate, and (iii) that attached thereto is a true and complete copy of
resolutions adopted by the board of directors of the Borrower or such
Subsidiary, as the case may be, authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which it is a
party, and as to the incumbency and genuineness of the signature of each officer
of the Borrower or such Subsidiary executing this Agreement or any of such other
Credit Documents, and attaching all such copies of the documents described
above.
(d) The Administrative Agent shall have received (i) a certificate as
of a recent date of the good standing of each of the Borrower and its
Subsidiaries under the laws of its jurisdiction of organization, from the
Secretary of State (or comparable Governmental Authority) of such jurisdiction,
and (ii) a certificate as of a recent date of the qualification of each of the
Borrower and its Subsidiaries to conduct business as a foreign corporation in
each jurisdiction in which such Person is qualified to do business, from the
Secretary of State (or comparable Governmental Authority) of such jurisdiction.
(e) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that the Borrower shall have received gross cash
proceeds of not less than $175,000,000 from the issuance of its 9.00%
Subordinated Notes due 2009, Series A, which Notes comprise a part of the
Existing Subordinated Indebtedness.
(f) All legal matters, documentation, and corporate or other
proceedings incident to the transactions contemplated hereby shall be
satisfactory in form and substance to the Administrative Agent; all approvals,
permits and consents of any Governmental Authorities or other Persons required
in connection with the execution and delivery of this Agreement and the other
Credit Documents and the consummation of the transactions contemplated hereby
and thereby shall have been obtained, without the imposition of conditions that
are not acceptable to the Administrative Agent, and all related filings, if any,
shall have been made, and all such approvals, permits, consents and filings
shall be in full force and effect and the Administrative Agent shall have
received such copies thereof as it shall have requested; all applicable waiting
periods shall have expired without any adverse action being taken by any
Governmental Authority having jurisdiction; and no action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before, and no order, injunction or decree shall have been entered
by, any court or other Governmental Authority, in each case to enjoin, restrain
or prohibit, to obtain substantial damages in respect of, or that is otherwise
related to or arises out of, this Agreement, any of the other Credit Documents
or the consummation of the transactions contemplated hereby or thereby, or that,
in the opinion of the Administrative Agent, could reasonably be expected to have
a Material Adverse Effect.
(g) The Administrative Agent shall have received certified reports from
an independent search service satisfactory to it listing any judgment or tax
lien filing or Uniform Commercial Code financing statement that names the
Borrower or any of its Subsidiaries as debtor, from each jurisdiction in which
such Person engages in its business, and the results thereof shall be
satisfactory to the Administrative Agent.
48
(h) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that all filings, recordings, registrations and
other actions (including without limitation the filing of duly completed and
executed UCC-1 financing statements in each jurisdiction listed on Annex A to
the Security Agreement) necessary, or in the reasonable opinion of the
Administrative Agent desirable, to perfect the Liens created by the Security
Documents shall have been completed, or arrangements satisfactory to the
Administrative Agent for the completion thereof shall have been made.
(i) Since December 31, 1997, both immediately before and after giving
effect to the consummation of the transactions contemplated by this Agreement,
there shall not have occurred any Material Adverse Change or any event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Change.
(j) The Borrower shall have paid (i) to the Arranger, the unpaid
balance of the fee described in paragraph 1 of the Fee Letter, (ii) to the
Administrative Agent, the initial payment of the annual administrative fee
described in paragraph 3 of the Fee Letter, (iii) to the Administrative Agent,
for the benefit of certain Lenders, the fees set forth in paragraph 2 of the Fee
Letter and (iv) all other fees and expenses of the Administrative Agent, First
Union Capital Markets Corporation and the Lenders required hereunder or under
any other Credit Document to be paid on or prior to the Closing Date (including
fees and expenses of counsel) in connection with this Agreement and the
transactions contemplated hereby.
(k) The Administrative Agent shall have received a Financial Condition
Certificate substantially in the form of Exhibit I, together with the Pro Forma
Balance Sheet and the Projections as described in Sections 5.11(b) and 5.11(c),
all of which shall be in form and substance satisfactory to the Administrative
Agent.
(l) The Administrative Agent shall have received a Covenant Compliance
Worksheet substantially in the form of Attachment A to Exhibit C, duly completed
and certified by the chief financial officer of the Borrower and in form and
substance satisfactory to the Administrative Agent, demonstrating the Borrower's
compliance with the financial covenants set forth in Sections 7.1 through 7.3,
determined on a pro forma basis as of December 31, 1998 after giving effect to
the making of the initial Loans hereunder and the consummation of the
transactions contemplated hereby.
(m) The Administrative Agent shall have received evidence in form and
substance reasonably satisfactory to it that all of the requirements of Section
6.6 and those provisions of the Security Agreement relating to the maintenance
of insurance have been satisfied, including receipt of certificates of insurance
evidencing the insurance coverages described on Schedule 5.17 and all other or
additional coverage required under the Security Agreement and naming the
Administrative Agent as loss payee or additional insured, as its interests may
appear.
(n) The Administrative Agent shall have received an Account
Designation Letter, together with written instructions from an Authorized
Officer, including wire transfer information, directing the payment of the
proceeds of the initial Loans to be made hereunder.
(o) The Administrative Agent and each Lender shall have received such
other documents, certificates, opinions and instruments in connection with the
transactions contemplated hereby as it shall have reasonably requested.
4.2 Conditions of Tranche B Term Loans. The obligation of each Lender
----------------------------------
(including any lender that was not a Lender prior to the execution and
delivery of a Lender Addition and
49
Acknowledgment Agreement) to make Tranche B Term Loans on the WOKR Acquisition
Date is subject to the satisfaction of the following additional conditions
precedent:
(a) The Administrative Agent shall have received the following, each
dated as of the WOKR Acquisition Date and, in sufficient copies for each Lender:
(i) A Tranche B Term Note for each Lender, in the amount of such
Lender's Tranche B Term Loan Commitment, duly executed by the Borrower; and
(ii) the favorable opinions of (A) Xxxxxx & Xxxx, PC, or such
other law firm reasonably acceptable to the Administrative Agent, as
special counsel to the Borrower, in substantially the form of Exhibit H-3,
and (B) Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P., or such other law
firm reasonably acceptable to the Administrative Agent, as FCC counsel to
the Borrower, in substantially the form of Exhibit H-4, in each case
addressed to the Administrative Agent and the Lenders and addressing such
other matters as the Administrative Agent or any Lender may reasonably
request.
(b) The Administrative Agent shall have received a certificate of the
secretary or an assistant secretary of the Borrower and each Subsidiary of the
Borrower, in form and substance satisfactory to the Administrative Agent,
certifying that subsequent to the delivery of the certificate with respect to
such entity required by Section 4.1(c), there has been no amendment to the
articles or certificate of incorporation or bylaws of such entity.
(c) The Administrative Agent shall have received a certificate as of a
recent date of the good standing of the Borrower and each Subsidiary under the
laws of its jurisdiction of organization, from the Secretary of State (or
comparable Governmental Authority) of such jurisdiction.
(d) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that all filings, recordings, registrations and
other actions (including, without limitation, the filing of duly completed and
executed UCC-1 financing statements, if applicable) as necessary or, in the
reasonable opinion of the Administrative Agent, desirable to perfect the Liens
created by the Security Documents shall have been completed, or arrangements
satisfactory to the Administrative Agent for completion thereof shall have been
made.
(e) The WOKR Acquisition shall have been consummated in accordance with
the definitive documentation therefore, a copy of which has provided to the
Administrative Agent, in compliance with applicable Requirements of Law
(including any necessary stockholder approvals), without being amended, modified
or supplemented, nor any provision thereof waived, in any material respect,
except as shall have been approved in writing by the Administrative Agent; the
Borrower and its Subsidiaries shall have duly complied with and performed in all
material respects all of their agreements and conditions set forth in such
definitive documentation required to be complied with or performed by them on or
prior to the closing date thereunder, and the Administrative Agent shall have
received satisfactory evidence thereof; all of the documents and instruments
executed and delivered in connection with the consummation of the WOKR
Acquisition shall be in full force and effect; and the Borrower will exercise
its commercially reasonable best efforts to provide the Administrative Agent
with a letter from counsel to seller addressed to the Administrative Agent and
the Lenders and in sufficient copies for each Lender, to the effect that the
Administrative Agent and the Lenders are entitled to rely on their opinion
delivered to the Borrower in connection with the WOKR Acquisition as if such
opinion were addressed to them and attaching a copy thereof
50
(f) Each of the conditions set forth in Section 4.4 shall have been
satisfied.
4.3 Conditions of Revolver Increase
-------------------------------
The obligation of each Lender (including any lender that was not a Lender
prior to the execution and delivery of a Lender Addition and Acknowledgment
Agreement) to make Revolving Loans in connection with a Borrowing in respect of
the Revolver Increase is subject to the satisfaction of the following additional
conditions precedent:
(a) The Administrative Agent shall have received the following, each
dated as of the effective date of the Revolver Increase and, except for any
certificates or instruments required to be delivered under the Pledge Agreement,
in sufficient copies for each Lender:
(i) An amended and restated Revolving Note for each Lender
participating in the Revolver Increase, in the amount of such Lender's
revised Revolving Credit Commitment (after giving effect to such Lender's
pro rata share of the Revolver Increase) and a new Revolving Note for any
lender who becomes a Lender hereunder pursuant to a Lender Addition and
Acknowledgment Agreement, in the amount of such Lender's Revolving Credit
Commitment, each duly executed by the Borrower; and
(ii) the favorable opinions of (A) Xxxxxx & Xxxx, PC, or such
other law firm reasonably acceptable to the Administrative Agent, as
special counsel to the Borrower, in substantially the form of Exhibit H-5,
and (B) Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P., or such other law
firm reasonably acceptable to the Administrative Agent, as FCC counsel to
the Borrower, in substantially the form of Exhibit H-6, in each case
addressed to the Administrative Agent and the Lenders and addressing such
other matters as the Administrative Agent or any Lender may reasonably
request.
(b) The Administrative Agent shall have received a certificate of the
secretary or an assistant secretary of the Borrower and each Subsidiary of the
Borrower, in form and substance satisfactory to the Administrative Agent,
certifying that subsequent to the delivery of the certificate with respect to
such entity required by Section 4.1(c), there has been no amendment to the
articles or certificate of incorporation or bylaws of such entity.
(c) The Administrative Agent shall have received a certificate as of a
recent date of the good standing of the Borrower and each Subsidiary under the
laws of its jurisdiction of organization, from the Secretary of State (or
comparable Governmental Authority) of such jurisdiction.
(d) The Administrative Agent shall have received evidence in form and
substance satisfactory to it that all filings, recordings, registrations and
other actions (including, without limitation, the filing of duly completed and
executed UCC-1 financing statements, if applicable) as necessary or, in the
reasonable opinion of the Administrative Agent, desirable to perfect the Liens
created by the Security Documents shall have been completed, or arrangements
satisfactory to the Administrative Agent for completion thereof shall have been
made.
(e) Each of the conditions set forth in Section 4.4 shall have been
satisfied.
51
(f) Each of the Pledge Agreement, the Security Agreement and, to the
extent required to have been executed and delivered pursuant to Section 6.11(a),
the Subsidiary Guaranty shall be in full force and effect.
4.4 Conditions of All Borrowings. The obligation of each Lender to make
----------------------------
any Loans hereunder, including the initial Loans, and the obligation of the
Issuing Lender to issue any Letters of Credit hereunder, is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or date of issuance:
(a) The Administrative Agent shall have received a Notice of Borrowing
in accordance with Section 2.2(b), or (together with the Issuing Lender) a
Letter of Credit Notice in accordance with Section 3.2, as applicable;
(b) Each of the representations and warranties contained in Article V
and in the other Credit Documents shall be true and correct on and as of such
Borrowing Date (including the Closing Date, in the case of the initial Loans
made hereunder) or date of issuance with the same effect as if made on and as of
such date, both immediately before and after giving effect to the Loans to be
made or Letter of Credit to be issued on such date (except to the extent any
such representation or warranty is expressly stated to have been made as of a
specific date, in which case such representation or warranty shall be true and
correct in all material respects as of such date);
(c) No Default or Event of Default shall have occurred and be continuing
on such date, both immediately before and after giving effect to the Loans to be
made or Letter of Credit to be issued on such date; and
(d) If required to have been executed and delivered pursuant to
Section 6.11(a), the Administrative Agent shall have received, in sufficient
copies for each Lender, the Subsidiary Guaranty duly completed and executed by
each Subsidiary of the Borrower and delivered to the Administrative Agent for
and on behalf of the Lenders, in addition to the favorable opinion of (A) Xxxxxx
& Xxxx PC, or another law firm reasonably acceptable to the Administrative
Agent, as special counsel to the Borrower, in substantially the form of Exhibit
H-7, and (B) Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P. or such other law
firm reasonably acceptable to the Administrative Agent, as FCC Counsel to the
Borrower, in substantially the form of Exhibit H-8, in each case addressed to
the Administrative Agent and the Lenders and addressing such other matters as
the Administrative Agent or any Lender may reasonably request.
Each giving of a Notice of Borrowing or a Letter of Credit Notice, and
the consummation of each Borrowing or issuance of a Letter of Credit, shall be
deemed to constitute a representation by the Borrower that the statements
contained in subsections (b) and (c) above are true, both as of the date of such
notice or request and as of the relevant Borrowing Date or date of issuance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to induce the Lenders to extend the credit contemplated hereby,
the Borrower represents and warrants to the Administrative Agent and the Lenders
as follows:
52
5.1. Corporate Organization and Power. Each of the Borrower and its
--------------------------------
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has the
full corporate or other power and authority to execute, deliver and perform the
Credit Documents to which it is or will be a party, to own and hold its property
and to engage in its business as presently conducted, and (iii) is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the nature of its business or the ownership of its
properties requires it to be so qualified, except where the failure to be so
qualified would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect.
5.2. Authorization; Enforceability. Each of the Borrower and its
-----------------------------
Subsidiaries has taken, or on the Closing Date will have taken, all necessary
corporate or other action to execute, deliver and perform each of the Credit
Documents to which it is or will be a party, and has, or on the Closing Date (or
any later date of execution and delivery) will have, validly executed and
delivered each of the Credit Documents to which it is or will be a party. This
Agreement constitutes, and each of the other Credit Documents upon execution and
delivery will constitute, the legal, valid and binding obligation of each of the
Borrower and its Subsidiaries that is a party hereto or thereto, enforceable
against it in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, by general equitable principles or by
principles of good faith and fair dealing.
5.3. No Violation. The execution, delivery and performance by each
------------
of the Borrower and its Subsidiaries of this Agreement and each of the other
Credit Documents to which it is or will be a party, and compliance by it with
the terms hereof and thereof, do not and will not (i) violate any provision of
its articles or certificate of incorporation or bylaws or contravene any other
Requirement of Law applicable to it, (ii) conflict with, result in a breach of
or constitute (with notice, lapse of time or both) a default under any
indenture, agreement or other instrument to which it is a party, by which it or
any of its properties is bound or to which it is subject, or (iii) except for
the Liens granted in favor of the Administrative Agent pursuant to the Security
Documents, result in or require the creation or imposition of any Lien upon any
of its properties or assets. No Subsidiary is a party to any agreement or
instrument or otherwise subject to any restriction or encumbrance that restricts
or limits its ability to make dividend payments or other distributions in
respect of its Capital Stock, to repay Indebtedness owed to the Borrower or any
other Subsidiary, to make loans or advances to the Borrower or any other
Subsidiary, or to transfer any of its assets or properties to the Borrower or
any other Subsidiary, in each case other than such restrictions or encumbrances
existing under or by reason of the Credit Documents or applicable Requirements
of Law.
5.4. Governmental and Third-Party Authorization; Permits and Licenses.
----------------------------------------------------------------
(a) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by each of the Borrower and its Subsidiaries
of this Agreement or any of the other Credit Documents to which it is or will be
a party (or any of the transactions contemplated hereby) or the legality,
validity or enforceability hereof or thereof, other than (i) any filings of
Uniform Commercial Code financing statements and other instruments and actions
necessary to perfect the Liens created by the Security Documents, (ii) consents
and filings the failure of which to obtain or make would not, individually or in
the aggregate, have a Material Adverse Effect.
(b) Each of the Borrower and its Subsidiaries has, and is in good
standing with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as
53
presently conducted and to own or lease and operate its properties (including
without limitation all FCC Licenses), except for those the failure to obtain
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect.
(c) Schedule 5.4 attached hereto accurately and completely lists all
material FCC Licenses granted or assigned to the Borrower or any Subsidiary,
including those under which the Borrower and its Subsidiaries have the right to
operate its respective broadcast stations ("Broadcast Stations") covered thereby
(and includes, with respect to each such license, the city of license and the
call letters, frequency and expiration date thereof). The FCC Licenses listed
on such schedule with respect to any Broadcast Station include all material
authorizations, licenses and permits issued by the FCC that are required or
necessary for the operation of such station and the conduct of the business of
the Borrower and its Subsidiaries with respect to such station, as now conducted
or proposed to be conducted. The FCC Licenses listed in such schedule are on
the date hereof validly issued and in full force and effect. The Borrower and
its Subsidiaries will have fulfilled and performed all of their obligations with
respect thereto (including without limitation the filing of all registrations,
applications, reports, and other documents as required by the FCC), except where
the failure to perform such obligations would not reasonably be expected to have
a Material Adverse Effect, and have paid all fees and other amounts required to
be paid under the Communications Act or the FCC Regulations and have full power
and authority to operate thereunder, except for those the failure to pay which
would not be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect. No event has occurred that would be reasonably likely
to result in the revocation, termination or material adverse modification of any
FCC License or affect materially adversely any rights of the Borrower or any
Subsidiary thereunder, and neither the Borrower nor any Subsidiary has any
reason to believe that any FCC License will not be renewed in the ordinary
course of business.
5.5. Litigation. Except as set forth on Schedule 5.5, there are no
----------
actions, investigations, suits or proceedings pending or, to the knowledge of
the Borrower, threatened, at law, in equity or in arbitration, before any court,
other Governmental Authority or other Person, (i) against or affecting the
Borrower, any of its Subsidiaries or any of their respective properties that
would, if adversely determined, be reasonably likely to have a Material Adverse
Effect, or (ii) with respect to this Agreement or any of the other Credit
Documents.
5.6. Taxes. Each of the Borrower and its Subsidiaries has timely
-----
filed all federal, state and local tax returns and reports required to be filed
by it and has paid all taxes, assessments, fees and other charges levied upon it
or upon its properties that are shown thereon as due and payable, other than
those that are being contested in good faith and by proper proceedings and for
which adequate reserves have been established in accordance with GAAP. Such
returns accurately reflect in all material respects all liability for taxes of
the Borrower and its Subsidiaries for the periods covered thereby. There is no
ongoing audit or examination or, to the knowledge of the Borrower, other
investigation by any Governmental Authority of the tax liability of the Borrower
or any of its Subsidiaries, and there is no unresolved claim by any Governmental
Authority concerning the tax liability of the Borrower or any of its
Subsidiaries for any period for which tax returns have been or were required to
have been filed, other than claims for which adequate reserves have been
established in accordance with GAAP. Neither the Borrower nor any of its
Subsidiaries has waived or extended or has been requested to waive or extend the
statute of limitations relating to the payment of any taxes.
5.7. Subsidiaries. Schedule 5.7 sets forth a list, as of the Closing
------------
Date, of all of the Subsidiaries of the Borrower and, as to each such
Subsidiary, the percentage ownership (direct and indirect) of the Borrower in
each class of its Capital Stock and each direct owner thereof. Except for the
54
Capital Stock expressly indicated on Schedule 5.7, there are no shares of
capital stock, warrants, rights, options or other equity securities, or other
Capital Stock of any Subsidiary of the Borrower outstanding or reserved for any
purpose. All outstanding Capital Stock of each Subsidiary of the Borrower are
duly and validly issued, fully paid and nonassessable. The Borrower is the sole
legal, record and beneficial owner of, and has good and valid title to, all such
Capital Stock, free and clear of all Liens other than the Liens created pursuant
to any of the Credit Documents.
5.8. Full Disclosure. All factual information heretofore or
---------------
contemporaneously furnished to the Administrative Agent or any Lender in writing
by or on behalf of the Borrower or any of its Subsidiaries for purposes of or in
connection with this Agreement and the transactions contemplated hereby is, and
all other such factual information hereafter furnished to the Administrative
Agent or any Lender in writing by or on behalf of the Borrower or any of its
Subsidiaries will be, true and accurate in all material respects on the date as
of which such information is dated or certified (or, if such information has
been amended or supplemented, on the date as of which any such amendment or
supplement is dated or certified) and not made incomplete by omitting to state a
material fact necessary to make the statements contained therein, in light of
the circumstances under which such information was provided, not misleading.
5.9. Margin Regulations. Neither the Borrower nor any of its
------------------
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. No proceeds of the Loans will be used, directly or indirectly, to
purchase or carry any Margin Stock, to extend credit for such purpose or for any
other purpose that would violate or be inconsistent with Regulations G, T, U or
X or any provision of the Exchange Act.
5.10. No Material Adverse Change. There has been no Material Adverse
--------------------------
Change since the date of the most recent consolidated financial statements of
the Borrower delivered to the Lenders, and there exists no event, condition or
state of facts that could reasonably be expected to result in a Material Adverse
Change, except as disclosed in any reports filed with the Securities and
Exchange Commission.
5.11. Financial Matters. (a) The Borrower has heretofore furnished
-----------------
to the Administrative Agent copies of (i) the audited consolidated balance
sheets of the Borrower and its Subsidiaries as of December 31, 1997, 1996, and
1995, and the related statements of income and cash flows for the fiscal years
ended December 31, 1997, 1996 and 1995, together with the opinion of Ernst &
Young thereon, and (ii) the unaudited consolidated balance sheet of the Borrower
and its Subsidiaries as of September 30, 1998, and the related statements of
income and cash flows for the nine-month period then ended. Such financial
statements have been prepared in accordance with GAAP and, if applicable,
Regulation S-X under the Exchange Act (subject, with respect to the unaudited
financial statements, to the absence of notes required by GAAP and to normal
year-end adjustments) and present fairly the financial condition of the Borrower
and its Subsidiaries on a consolidated basis as of the respective dates thereof
and the consolidated results of operations of the Borrower and its Subsidiaries
for the respective periods then ended. Except as fully reflected in the most
recent financial statements referred to above and the notes thereto, there are
no material liabilities or obligations with respect to the Borrower or any of
its Subsidiaries of any nature whatsoever (whether absolute, contingent or
otherwise and whether or not due).
(b) The unaudited pro forma balance sheet of the Borrower as of
December 31, 1998, a copy of which has heretofore been delivered to the
Administrative Agent, gives pro forma effect to the consummation of the initial
extensions of credit made under this Agreement, the WOKR Acquisition and the
payment of transaction fees and expenses related to the foregoing, all as if
such events had occurred
55
on such date (the "Pro Forma Balance Sheet"). The Pro Forma Balance Sheet has
been prepared in accordance with GAAP (subject to the absence of footnotes
required by GAAP and subject to normal year-end adjustments) and, subject to
stated assumptions made in good faith and having a reasonable basis set forth
therein, presents fairly the financial condition of the Borrower on an unaudited
pro forma basis as of the date set forth therein after giving effect to the
consummation of the transactions described above.
(c) The Borrower has prepared, and has heretofore furnished to the
Administrative Agent a copy of, annual projected balance sheets and statements
of income and cash flows of the Borrower for the eight year period beginning
with the year ended December 31, 1998, giving effect to the initial extensions
of credit made under this Agreement, the WOKR Acquisition and the payment of
transaction fees and expenses related to the foregoing (the "Projections"). In
the opinion of management of the Borrower, the assumptions used in the
preparation of the Projections were fair, complete and reasonable when made and
continue to be fair, complete and reasonable as of the date hereof. The
Projections have been prepared in good faith by the executive and financial
personnel of the Borrower, are complete and represent a reasonable estimate of
the future performance and financial condition of the Borrower, subject to the
uncertainties and approximations inherent in any projections.
(d) Each of the Borrower and its Subsidiaries, after giving effect to
the consummation of the transactions contemplated hereby, (i) has capital
sufficient to carry on its businesses as conducted and as proposed to be
conducted, (ii) has assets with a fair salable value, determined on a going
concern basis, (y) not less than the amount required to pay the probable
liability on its existing debts as they become absolute and matured and (z)
greater than the total amount of its liabilities (including identified
contingent liabilities, valued at the amount that can reasonably be expected to
become absolute and matured), and (iii) does not intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay such debts
and liabilities as they mature.
5.12. Properties; Assets. (a) Each of the Borrower and its
------------------
Subsidiaries (i) has good and marketable title to all real property owned by it,
(ii) holds interests as lessee under valid leases in full force and effect with
respect to all material leased real and personal property used in connection
with its business, (iii) possesses or has rights to use licenses, patents,
copyrights, trademarks, service marks, trade names and other assets sufficient
to enable it to continue to conduct its business substantially as heretofore
conducted and without any material conflict with the rights of others, and (iv)
has good title to all of its other properties and assets reflected in the most
recent financial statements referred to in Section 5.11(a) (except as sold or
otherwise disposed of since the date thereof in the ordinary course of
business), in each case under (i), (ii), (iii) and (iv) above free and clear of
all Liens other than Permitted Liens.
(b) All of the properties, equipment and systems of the Borrower and
the Subsidiaries are in good repair, working order and condition (ordinary wear
and tear excepted) and are and will be in compliance with all applicable
standards, rules or requirements imposed by (i) any Governmental Authority
(including, without limitation, the FCC); (ii) any FCC License; and (iii) any
agreements with any radio or television networks including without limitation
the Network Affiliation Agreements, the failure with which to comply would
reasonably be expected to have a Material Adverse Effect.
5.13. ERISA. Each Plan is and has been administered in compliance in
-----
all material respects with all applicable Requirements of Law, including,
without limitation, the applicable provisions of ERISA and the Internal Revenue
Code. No ERISA Event has occurred and is continuing or to the knowledge of the
Borrower, is reasonably expected to occur with respect to any Plan, in either
case that
56
would be reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect. No Plan has any Unfunded Pension Liability, and neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA, in either instance where the same
would be reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect. Neither the Borrower nor any ERISA Affiliate is required to
contribute to or has, or has at any time had, any liability to a Multiemployer
Plan.
5.14. Environmental Matters. (a) No Hazardous Substances are or have
---------------------
been generated, used, located, released, treated, disposed of or stored by the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, by any
other Person (including any predecessor in interest) or otherwise, in, on or
under any portion of any real property, leased or owned, of the Borrower or any
of its Subsidiaries, except in material compliance with all applicable
Environmental Laws, and no portion of any such real property or, to the
knowledge of the Borrower, any other real property at any time leased, owned or
operated by the Borrower or any of its Subsidiaries, has been contaminated by
any Hazardous Substance; and no portion of any real property, leased or owned,
of the Borrower or any of its Subsidiaries has been or is presently the subject
of an environmental audit, assessment or remedial action.
(b) No portion of any real property, leased or owned, of the Borrower
or any of its Subsidiaries has been used by the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person, as or
for a mine, a landfill, a dump or other disposal facility, a gasoline service
station, or (other than for petroleum substances stored in the ordinary course
of business) a petroleum products storage facility; no portion of such real
property or any other real property at any time leased, owned or operated by the
Borrower or any of its Subsidiaries has, pursuant to any Environmental Law, been
placed on the "National Priorities List" or "CERCLIS List" (or any similar
federal, state or local list) of sites subject to possible environmental
problems; and there are not and have never been any underground storage tanks
situated on any real property, leased or owned, of the Borrower or any of its
Subsidiaries.
(c) All activities and operations of the Borrower and its Subsidiaries
are in compliance with the requirements of all applicable Environmental Laws,
except to the extent the failure so to comply, individually or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect. Each of the
Borrower and its Subsidiaries has obtained all licenses and permits under
Environmental Laws necessary to its respective operations; all such licenses and
permits are being maintained in good standing; and each of the Borrower and its
Subsidiaries is in compliance with all terms and conditions of such licenses and
permits, except for such licenses and permits the failure to obtain, maintain or
comply with which would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect. Neither the Borrower nor any of
its Subsidiaries is involved in any suit, action or proceeding, or has received
any notice, complaint or other request for information from any Governmental
Authority or other Person, with respect to any actual or alleged Environmental
Claims that, if adversely determined, would be reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect; and, to the knowledge of
the Borrower, there are no threatened actions, suits, proceedings or
investigations with respect to any such Environmental Claims, nor any basis
therefor.
5.15. Compliance With Laws. Each of the Borrower and its Subsidiaries
--------------------
has timely filed all material reports, documents and other materials required to
be filed by it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to be
retained by it under all applicable Requirements of Law, and is otherwise in
compliance with all applicable Requirements of Law in respect of the conduct of
its business and the ownership and
57
operation of its properties, except for such Requirements of Law the failure to
comply with which, individually or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect.
5.16. Regulated Industries. Neither the Borrower nor any of its
--------------------
Subsidiaries is (i) an "investment company," a company "controlled" by an
"investment company," or an "investment advisor," within the meaning of the
Investment Company Act of 1940, as amended, or (ii) a "holding company," a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
5.17. Insurance. Schedule 5.17 sets forth a true and complete
---------
summary of all insurance policies or arrangements carried or maintained by the
Borrower and its Subsidiaries as of the Closing Date, indicating in each case
the insurer, policy number, expiration, amount and type of coverage and
deductibles. The assets, properties and business of the Borrower and its
Subsidiaries are insured against such hazards and liabilities, under such
coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility.
5.18. Material Contracts. Schedule 5.18 lists, as of the Closing
------------------
Date, each "material contract" (within the meaning of Item 601(b)(10) of
Regulation S-K under the Exchange Act) to which the Borrower or any of its
Subsidiaries is a party, by which any of them or their respective properties is
bound or to which any of them is subject (collectively, "Material Contracts").
As of the Closing Date, except as could not reasonably be expected to have a
Material Adverse Effect, (i) each Material Contract is in full force and effect
and is enforceable by the Borrower or the Subsidiary that is a party thereto in
accordance with its terms, and (ii) neither the Borrower nor any of its
Subsidiaries (nor, to the knowledge of the Borrower, any other party thereto) is
in breach of or default under any Material Contract in any material respect or
has given notice of termination or cancellation of any Material Contract.
5.19. Security Documents. The provisions of each of the Security
------------------
Documents (whether executed and delivered prior to or on the Closing Date or
thereafter) are and will be effective to create in favor of the Administrative
Agent, for its benefit and the benefit of the Lenders, a valid and enforceable
security interest in and Lien upon all right, title and interest of each of the
Borrower and its Subsidiaries that is a party thereto in and to the Collateral
purported to be pledged by it thereunder and described therein, and upon (i) the
initial extension of credit hereunder, (ii) the filing of appropriately
completed Uniform Commercial Code financing statements and continuations thereof
in the jurisdictions specified therein, and (iii) if applicable, the filing of
appropriately completed short form assignments in the U.S. Patent and Trademark
Office and the U.S. Copyright Office, and (iv) the possession by the
Administrative Agent of any certificates evidencing the securities pledged
thereby, such security interest and Lien shall constitute a fully perfected and
first priority security interest in and Lien upon such right, title and interest
of the Borrower or such Subsidiary, as applicable, in and to such Collateral, to
the extent that such security interest and Lien can be perfected by such
filings, actions and possession, subject only to Permitted Liens.
5.20. Labor Relations. Neither the Borrower nor any of its
---------------
Subsidiaries is engaged in any unfair labor practice within the meaning of the
National Labor Relations Act of 1947, as amended. There is (i) no unfair labor
practice complaint before the National Labor Relations Board, or grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement, pending or, to the knowledge of the Borrower, threatened, against the
Borrower or any of its Subsidiaries, (ii) no strike, lock-out, slowdown,
stoppage, walkout or other labor dispute pending or, to the knowledge of the
Borrower, threatened, against the Borrower or any of its Subsidiaries, and (iii)
to the knowledge of the
58
Borrower, no petition for certification or union election or union organizing
activities taking place with respect to the Borrower or any of its Subsidiaries.
5.21 Year 2000 Compatibility. Any reprogramming required to permit the
-----------------------
proper functioning, before, on and after January 1, 2000, of (i) the Borrowers'
and its Subsidiaries' computer-based systems and (ii) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which the Borrowers or any of its Subsidiaries systems interface), and the
testing of all such material systems and equipment, as so reprogrammed, will be
substantially completed by September 30, 1999. The cost to the Borrower and its
Subsidiaries of such reprogramming and testing and of the reasonably foreseeable
consequences of the year 2000 to the Borrower and its Subsidiaries (including,
without limitation, reprogramming errors and the failure of others systems or
equipment) will not result in a Default or Material Adverse Effect. Except for
such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower and
its Subsidiaries are, and with ordinary course upgrading and maintenance will
continue for the term of this Agreement to be, sufficient to permit the Borrower
and its Subsidiaries to conduct their respective businesses without a Material
Adverse Effect.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment in full of all principal and interest with respect to the Loans and all
Reimbursement Obligations together with all other amounts then due and owing
hereunder:
6.1. Financial Statements. The Borrower will deliver to each Lender:
--------------------
(a) As soon as available and in any event within fifty (50) days after
the end of each of the first three fiscal quarters of each fiscal year,
beginning with the fiscal quarter ending March 31, 1999, unaudited consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of such fiscal
quarter, unaudited consolidated statements of cash flows for the Borrower and
its Subsidiaries and unaudited consolidated statements of income for the
Borrower and its Subsidiaries and unaudited consolidating statements of
Consolidated EBITDA for the fiscal quarter then ended and for that portion of
the fiscal year then ended, in each case setting forth comparative consolidated
(or consolidating) figures as of the end of and for the corresponding period in
the preceding fiscal year, together with comparative budgeted figures for the
fiscal year then ended, all in reasonable detail and prepared in accordance with
GAAP (subject to the absence of notes required by GAAP and subject to normal
year-end adjustments) applied on a basis consistent with that of the preceding
quarter or containing disclosure of the effect on the financial condition or
results of operations of any change in the application of accounting principles
and practices during such quarter; and
(b) As soon as available and in any event within ninety-five (95) days
after the end of each fiscal year, beginning with the fiscal year ending
December 31, 1998, an audited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and audited consolidated
statements of income and cash flows for the Borrower and its Subsidiaries for
the fiscal year then ended, including the notes thereto, in each case setting
forth comparative figures as of the end of and for the preceding fiscal year,
all in reasonable detail and certified by the independent certified public
accounting
59
firm regularly retained by the Borrower or another independent certified public
accounting firm of recognized national standing reasonably acceptable to the
Required Lenders, together with (y) a report thereon by such accountants that is
not qualified as to going concern or scope of audit and to the effect that such
financial statements present fairly the consolidated financial condition and
results of operations of the Borrower and its Subsidiaries as of the dates and
for the periods indicated in accordance with GAAP applied on a basis consistent
with that of the preceding year or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such year, and (z) a report by such
accountants to the effect that, based on and in connection with their
examination of the financial statements of the Borrower and its Subsidiaries,
they obtained no knowledge of the occurrence or existence of any Default or
Event of Default relating to accounting or financial reporting matters, or a
statement specifying the nature and period of existence of any such Default or
Event of Default disclosed by their audit; provided, however, that such
-------- -------
accountants shall not be liable by reason of the failure to obtain knowledge of
any Default or Event of Default that would not be disclosed or revealed in the
course of their audit examination.
6.2. Other Business and Financial Information. The Borrower will
----------------------------------------
deliver to each Lender:
(a) Concurrently with each delivery of the financial statements
described in Section 6.1, a Compliance Certificate in the form of Exhibit C with
respect to the period covered by the financial statements then being delivered,
executed by a Financial Officer of the Borrower, together with a Covenant
Compliance Worksheet in the form of Attachment A to Exhibit C reflecting the
computation of the financial covenants set forth in Sections 7.1 through 7.3 as
of the last day of the period covered by such financial statements;
(b) Concurrently with each delivery of the financial statements
described in Section 6.1(b), and in any event not later than ninety-five (95)
days after the last day of each fiscal year, beginning with the fiscal year
ending December 31, 2000, a certificate executed by a Financial Officer of the
Borrower in form and substance satisfactory to the Administrative Agent and
setting forth the calculation of Excess Cash Flow for such fiscal year;
(c) As soon as available and in any event within 45 days following the
end of each fiscal year, beginning with the fiscal year ending December 31,
1999, a consolidated operating budget for the Borrower and its Subsidiaries for
the succeeding fiscal year (prepared on a quarterly basis), consisting of a
consolidated statement of income, together with a certificate of a Financial
Officer of the Borrower to the effect that such budgets have been prepared in
good faith and are reasonable estimates of the results of operations of the
Borrower and its Subsidiaries for the period covered thereby; and as soon as
available from time to time thereafter, any modifications or revisions to or
restatements of such budget;
(d) Promptly upon receipt thereof, copies of any "management letter"
submitted to the Borrower or any of its Subsidiaries by its certified public
accountants in connection with each annual, interim or special audit, and
promptly upon completion thereof, any response reports from the Borrower or any
such Subsidiary in respect thereof;
(e) Promptly upon the sending, filing or receipt thereof, copies of (i)
all financial statements, reports, notices and proxy statements that the
Borrower or any of its Subsidiaries shall send or make available generally to
its shareholders, (ii) all regular, periodic and special reports, registration
statements and prospectuses (other than on Form S-8) that the Borrower or any of
its Subsidiaries shall render to or file with the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any national
securities exchange, and (iii) all press releases and other statements made
60
available generally by the Borrower or any of its Subsidiaries to the public
concerning material developments in the business of the Borrower or any of its
Subsidiaries;
(f) Except as otherwise indicated below, promptly upon (and in any
event within five (5) Business Days after) any Responsible Officer of the
Borrower obtaining knowledge thereof, written notice of any of the following:
(i) the occurrence of any Default or Event of Default, together
with a written statement of a Responsible Officer of the Borrower
specifying the nature of such Default or Event of Default, the period of
existence thereof and the action that the Borrower has taken and proposes
to take with respect thereto;
(ii) the institution or threatened institution of any action,
suit, investigation or proceeding against or affecting the Borrower or any
of its Subsidiaries, including any such investigation or proceeding by any
Governmental Authority (other than routine periodic inquiries,
investigations or reviews), that would be required to be disclosed by the
Company pursuant to the Exchange Act (such disclosure to be made to the
Administrative Agent when required to be disclosed pursuant to such Act),
and any material development in any litigation or other proceeding
previously reported pursuant to Section 5.5 or this subsection;
(iii) the receipt by the Borrower or any Subsidiary from the FCC or
any other Governmental Authority or filing or receipt thereof by the
Borrower or any Subsidiary, (a) a copy of any order or notice of the FCC or
any other Governmental Authority or any court of competent jurisdiction
which designates any material license, permit, or authorization
("Authorization") of the Borrower or any Subsidiary, or any application
therefor, for a hearing, or which refuses renewal or extension of, or
revokes, materially modifies, terminates or suspends any Authorization now
or hereafter held by the Borrower or any Subsidiary which is required to
construct or operate any broadcast station or its other businesses in
compliance with all applicable laws and regulations, (b) a copy of any
competing application filed with respect to any Authorization of the
Borrower or any Subsidiary, or any citation, notice of violation or order
to show cause issued by the FCC or any Governmental Authority with respect
to the Borrower or any Subsidiary which is available to the Borrower or any
Subsidiary and (c) a copy of any notice or application by the Borrower or
any Subsidiary requesting authority to or notifying the FCC of its intent
to cease broadcasting on any broadcast station for any period in excess of
10 days;
(iv) the occurrence of any ERISA Event, together with (x) a
written statement of a Responsible Officer of the Borrower specifying the
details of such ERISA Event and the action that the Borrower has taken and
proposes to take with respect thereto, (y) a copy of any notice with
respect to such ERISA Event that may be required to be filed with the PBGC
and (z) a copy of any notice delivered by the PBGC to the Borrower or such
ERISA Affiliate with respect to such ERISA Event;
(v) the occurrence of any material default under, or any proposed
or threatened termination or cancellation of, any Material Contract the
termination or cancellation of which would be reasonably likely to have a
Material Adverse Effect;
(vi) the occurrence of any of the following: (x) the assertion of
any Environmental Claim against or affecting the Borrower, any of its
Subsidiaries or any of their respective real property, leased or owned; (y)
the receipt by the Borrower or any of its Subsidiaries of notice of
61
any alleged violation of or noncompliance with any Environmental Laws; or
(z) the taking of any remedial action by the Borrower, any of its
Subsidiaries or any other Person in response to the actual or alleged
generation, storage, release, disposal or discharge of any Hazardous
Substances on, to, upon or from any real property leased or owned by the
Borrower or any of its Subsidiaries; but in each case under clauses (x),
(y) and (z) above, only to the extent the same would be reasonably likely
to have a Material Adverse Effect;
(vii) any other matter or event that has, or would be reasonably
likely to have, a Material Adverse Effect, together with a written
statement of a Responsible Officer of the Borrower setting forth the nature
and period of existence thereof and the action that the Borrower has taken
and proposes to take with respect thereto; and
(g) As promptly as reasonably possible, such other information about the
business, condition (financial or otherwise), operations or properties of the
Borrower or any of its Subsidiaries (including any Plan and any information
required to be filed under ERISA) as the Administrative Agent or any Lender may
from time to time reasonably request.
6.3. Corporate Existence; Franchises; Maintenance of Properties. The
----------------------------------------------------------
Borrower will, and will cause each of its Subsidiaries to, (i) maintain and
preserve in full force and effect its corporate existence, except as expressly
permitted otherwise by Section 8.1, (ii) obtain, maintain and preserve in full
force and effect all other rights, franchises, licenses, permits,
certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business (including the FCC Licenses), except to the
extent the failure to do so would not be reasonably likely to have a Material
Adverse Effect, and (iii) keep all material properties in good working order and
condition (normal wear and tear excepted) and from time to time make all
necessary repairs to and renewals and replacements of such properties, except to
the extent that any of such properties are obsolete or are being replaced.
6.4. Compliance with Laws. The Borrower will, and will cause each of
--------------------
its Subsidiaries to, comply in all respects with all Requirements of Law
applicable in respect of the conduct of its business and the ownership and
operation of its properties (including, without limitation, the Communications
Act and the FCC Regulations), except to the extent the failure so to comply
would not be reasonably likely to have a Material Adverse Effect.
6.5. Payment of Obligations. The Borrower will, and will cause each
----------------------
of its Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to have a Material Adverse
Effect, and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
the Borrower or any of its Subsidiaries; provided, however, that neither the
-------- -------
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings and as to which the Borrower or such Subsidiary is
maintaining adequate reserves with respect thereto in accordance with GAAP.
6.6. Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance with respect to its assets, properties and business, against
such hazards and liabilities, of such types and in such amounts, as is
customarily maintained by companies in the same or similar businesses similarly
situated, and maintain such other or
62
additional insurance on such terms and subject to such conditions as may be
required under any Security Document.
6.7. Maintenance of Books and Records; Inspection. The Borrower
--------------------------------------------
will, and will cause each of its Subsidiaries to, (i) maintain adequate books,
accounts and records, in which full, true and correct entries shall be made of
all financial transactions in relation to its business and properties, and
prepare all financial statements required under this Agreement, in each case in
accordance with GAAP and in compliance with the requirements of any Governmental
Authority having jurisdiction over it, and (ii) permit employees or agents of
the Administrative Agent or any Lender to inspect its properties and examine or
audit its books, records, working papers and accounts and make copies and
memoranda of them, and to discuss its affairs, finances and accounts with its
officers and employees and, upon notice to the Borrower, the independent public
accountants of the Borrower and its Subsidiaries (and by this provision the
Borrower authorizes such accountants to discuss the finances and affairs of the
Borrower and its Subsidiaries), all at such times and from time to time, upon
reasonable notice and during business hours, as may be reasonably requested.
6.8. Interest Rate Protection. Within ninety (90) days after the
------------------------
Closing Date, the Borrower shall have entered into or obtained, and the Borrower
will thereafter maintain in full force and effect, Hedge Agreements in form and
substance reasonably satisfactory to the Administrative Agent the effect of
which shall be to fix or limit interest rates payable by the Borrower as to at
least fifty percent (50%) of Consolidated Funded Debt for a period of not less
than three (3) years after such date (it being understood that the Hedge
Agreements of the Borrower in place as of the date hereof are deemed to be in
compliance with the foregoing). The Borrower will deliver to the Administrative
Agent, promptly upon receipt thereof, copies of such Hedge Agreements (and any
supplements or amendments thereto), and promptly upon request therefor, any
other information reasonably requested by the Administrative Agent to evidence
its compliance with the provisions of this Section.
6.9. Permitted Acquisitions. (a) Subject to the provisions of
----------------------
subsection (b) below, the provisions of Section 6.10 below and the requirements
contained in the definition of Permitted Acquisition, and subject to the other
terms and conditions of this Agreement, the Borrower may from time to time on or
after the Closing Date effect Permitted Acquisitions, provided that, with
--------
respect to each Permitted Acquisition:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of the consummation of such Permitted Acquisition or
would exist immediately after giving effect thereto;
(ii) if the Leverage Ratio would be greater than 5.5 to 1.0, the
Acquisition Amount with respect thereto (regardless of the form of
consideration) together with the aggregate of the Acquisition Amounts
(regardless of the form of consideration) for all other Permitted
Acquisitions consummated during the same fiscal quarter and the period of
three consecutive fiscal quarters immediately prior thereto, shall not
exceed $100,000,000 without the prior written approval of the Required
Lenders.
(b) Not less than ten (10) Business Days prior to the consummation of
any Permitted Acquisition, the Borrower shall have delivered to the
Administrative Agent and each Lender the following, if such Acquisition
(together with any related transaction or series of related transactions)
involves an Acquisition Amount of $10,000,000 or more:
63
(i) a reasonably detailed description of the material terms of
such Permitted Acquisition (including, without limitation, the purchase
price and method and structure of payment) and of each Person or business
that is the subject of such Permitted Acquisition (each, a "Target");
(ii) historical financial statements of the Target (or, if there
are two or more Targets that are the subject of such Permitted Acquisition
and that are part of the same consolidated group, consolidated historical
financial statements for all such Targets) for the most recent fiscal year
available and, if available, for any interim periods since the most recent
fiscal year-end; and
(iii) a certificate, in form and substance reasonably satisfactory
to the Administrative Agent, executed by a Financial Officer of the
Borrower setting forth the Acquisition Amount and further to the effect
that, to the best of such individual's knowledge, (x) the consummation of
such Permitted Acquisition will not result in a violation of any provision
of this Section, and after giving effect to such Permitted Acquisition and
any Borrowings made in connection therewith, the Borrower will be in
compliance with the financial covenants contained in Sections 7.1 through
7.3, such compliance determined with regard to calculations made on a pro
---
forma basis in accordance with GAAP as if each Target had been consolidated
-----
with the Borrower for those periods applicable to such covenants (such
calculations to be attached to the certificate), (y) the Borrower believes
in good faith that it will continue to comply with such financial covenants
for a period of one year following the date of the consummation of such
Permitted Acquisition, and (z) after giving effect to such Permitted
Acquisition and any Borrowings in connection therewith, the Borrower
believes in good faith that it will have sufficient availability under the
Revolving Credit Commitments to meet its ongoing working capital
requirements.
(c) As soon as reasonably practicable after the consummation of any
Permitted Acquisition, the Borrower will deliver to the Administrative Agent and
each Lender a copy of the fully executed acquisition agreement (including
schedules and exhibits thereto) and other material documents and closing papers
delivered in connection therewith.
(d) The consummation of each Permitted Acquisition shall be deemed to be
a representation and warranty by the Borrower that (except as shall have been
approved in writing by the Required Lenders) all conditions thereto set forth in
this Section and in any description furnished under clause (i) of subsection (b)
above have been satisfied, that the same is permitted in accordance with the
terms of this Agreement, and that the matters certified to by the Financial
Officer of the Borrower in the certificate referred to in clause (iii) of
subsection (b) above are, to the best of such individual's knowledge, true and
correct in all material respects as of the date such certificate is given, which
representation and warranty shall be deemed to be a representation and warranty
as of the date thereof for all purposes hereunder, including, without
limitation, for purposes of Sections 4.4 and 9.1.
(e) With respect to the acquisition of television station WOKR in
Rochester, New York, television station KMTR in Eugene, Oregon (and related
television broadcast stations), television station KKTV in Santa Maria,
California, and television station KION in Salinas, California, the
Administrative Agent and each Lender acknowledge their receipt of the
information required to be provided by Borrower under paragraph (b) above and
give their approval as required under clause (a)(ii) above.
6.10. Creation or Acquisition of Subsidiaries. Subject to the
---------------------------------------
provisions of Section 8.5, the Borrower may from time to time create or acquire
new Wholly Owned Subsidiaries in connection with
64
Permitted Acquisitions or otherwise, and the Wholly Owned Subsidiaries of the
Borrower may create or acquire new Wholly Owned Subsidiaries, provided that:
--------
(a) Concurrently with (and in any event within ten (10) Business Days
thereafter) the creation or direct or indirect acquisition by the Borrower
thereof, each such new Subsidiary will execute and deliver to the Agent (i) a
joinder to the Subsidiary Guaranty (if then in effect), pursuant to which such
new Subsidiary shall become a party thereto and shall guarantee the payment in
full of the Obligations of the Borrower under this Agreement and the other
Credit Documents, and (ii) a joinder to the Security Agreement, pursuant to
which such new Subsidiary shall become a party thereto and shall grant to the
Agent a first priority Lien upon and security interest in its material personal
property (as determined in good faith by the Administrative Agent) as Collateral
for its obligations under the Subsidiary Guaranty, subject only to Permitted
Liens;
(b) Concurrently with (and in any event within ten (10) Business Days
thereafter) the creation or acquisition of any new Subsidiary all or a portion
of the Capital Stock of which is directly owned by the Borrower, the Borrower
will execute and deliver to the Administrative Agent an amendment or supplement
to the Pledge Agreement, pursuant to which all of the Capital Stock of such new
Subsidiary owned by the Borrower shall be pledged to the Administrative Agent,
together with the certificates evidencing such Capital Stock and undated stock
powers duly executed in blank; and from and after the Closing Date concurrently
with (and in any event within ten (10) Business Days thereafter) the creation or
acquisition of any new Subsidiary all or a portion of the Capital Stock of which
is directly owned by another Subsidiary (the "Parent Subsidiary"), the Parent
Subsidiary will execute and deliver to the Administrative Agent an appropriate
joinder, amendment or supplement to the Pledge Agreement, pursuant to which all
of the Capital Stock of such new Subsidiary owned by such Parent Subsidiary
shall be pledged to the Administrative Agent, together with the certificates
evidencing such Capital Stock and undated stock powers duly executed in blank;
and
(c) As promptly as reasonably possible, the Borrower will deliver any
such other documents, certificates and opinions (including opinions of local
counsel in the jurisdiction of organization of each such new Subsidiary), in
form and substance reasonably satisfactory to the Administrative Agent, as the
Administrative Agent may reasonably request in connection therewith and will
take such other action as the Administrative Agent may reasonably request to
create in favor of the Administrative Agent a perfected security interest in the
Collateral being pledged pursuant to the documents described above.
6.11 Additional Security.
-------------------
(a) Upon the repayment of the 10.48% Subordinated Notes due 2000, which
comprise part of the Existing Subordinated Indebtedness, or in the event such
Notes no longer limit the Borrower's Subsidiaries' ability to guarantee the
Obligations, the Borrower shall cause each of its Subsidiaries (other than SSI,
Inc.) to execute and deliver to the Administrative Agent for and on behalf of
the Lenders the Subsidiary Guaranty and to cause to be delivered to the
Administrative Agent the other documents contemplated by Section 4.4(d).
(b) The Borrower will, and will cause each of its Subsidiaries (other
than SSI, Inc. in respect of the granting of Liens that would require the
approval of the NBA) to, grant to the Administrative Agent from time to time
security interests, mortgages and other Liens in and upon such assets and
properties of the Borrower or such Subsidiary as are not covered by the Security
Documents executed and delivered on the Closing Date or pursuant to Section 6.10
and as may be reasonably requested from
65
time to time by the Required Lenders (provided, however, that no Required Lender
approval shall be required with respect to grants of Liens on assets acquired by
the Borrower or a Subsidiary in connection with any Permitted Acquisition). Such
security interests, mortgages and Liens shall be granted pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent and shall constitute valid and perfected security interests
and Liens, subject to no Liens other than Permitted Liens. Without limitation of
the foregoing, in connection with the grant of any mortgage or deed of trust
with respect to any interest in real property, the Borrower will, and will cause
each applicable Subsidiary to, at the Borrowers expense, prepare, obtain and
deliver to the Administrative Agent any environmental assessments, appraisals,
surveys, title insurance and other matters or documents as the Administrative
Agent may reasonably request or as may be required under applicable banking laws
and regulations.
6.12. NBA Lockout. If the National Basketball Association lockout in
-----------
effect as of the date of this Agreement shall not have been resolved on or prior
to December 31, 1999, then the Borrower shall deliver to the Administrative
Agent revised projections for the five-year period following such date.
6.13. Year 2000. The Borrower shall take all action necessary to assure
---------
that the Borrower's computer based systems are able to operate and effectively
process data including dates on and after January 1, 2000. At the request of the
Administrative Agent, the Borrower shall provide the Administrative Agent
assurances reasonably acceptable to the Administrative Agent of the Borrower's
Year 2000 capacity.
6.14. Further Assurances. The Borrower will, and will cause each of its
------------------
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Administrative Agent or
the Required Lenders to perfect and maintain the validity and priority of the
Liens granted pursuant to the Security Documents and to effect, confirm or
further assure or protect and preserve the interests, rights and remedies of the
Administrative Agent and the Lenders under this Agreement and the other Credit
Documents.
ARTICLE VII
FINANCIAL COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment in full of all principal and interest with respect to the Loans and all
Reimbursement Obligations together with all other amounts then due and owing
hereunder:
7.1. Leverage Ratios. (a) Leverage Ratio. The Borrower will not
--------------- --------------
permit the Leverage Ratio as of the last day of any fiscal quarter during the
periods set forth below to be greater than the ratio set forth below opposite
such period:
66
Date Maximum Leverage Ratio
---- ----------------------
Closing through March 31, 1999 7.25 : 1.00
June 30, 1999 through September 30, 1999 7.00 : 1.00
December 31, 1999 through March 31, 2000 6.75 : 1.00
June 30, 2000 through September 30, 2000 6.25 : 1.00
December 31, 2000 through March 31, 2001 6.00 : 1.00
Thereafter 5.50 : 1.00
(b) Senior Leverage Ratio. The Borrower will not permit the Senior
---------------------
Leverage Ratio as of the last day of any fiscal quarter during the periods set
forth below to be greater than the ratio set forth below opposite such period:
Date Maximum Leverage Ratio
---- ----------------------
Closing through September 30, 1999 4.50 to 1.00
December 31, 1999 through September 30, 2000 4.25 to 1.00
Thereafter 4.00 : 1.00
7.2. Interest Coverage Ratio. The Borrower will not permit the Interest
-----------------------
Coverage Ratio as of the last day of any fiscal quarter during the periods set
forth below to be less than the ratio set forth below opposite such period:
Date Maximum Leverage Ratio
---- ----------------------
Closing through March 31, 2000 1.60 : 1.00
June 30, 2000 through March 31, 2001 1.75 : 1.00
Thereafter 2.00 : 1.00
7.3. Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed
---------------------------
Charge Coverage Ratio as of the last day of any fiscal quarter, beginning with
the fiscal quarter ending June 30, 1999, to be less than 1.05 to 1.00.
7.4 Capital Lease Obligations. The Borrower will not, and will not
-------------------------
permit or cause its Subsidiaries to, incur any Capital Lease Obligations if,
after giving effect to such Capital Lease Obligations the aggregate amount of
all Capital Lease Obligations then outstanding at such time would exceed
$15,000,000.
67
ARTICLE VIII
NEGATIVE COVENANTS
The Borrower covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment in full of all principal and interest with respect to the Loans and all
Reimbursement Obligations together with all other amounts then due and owing
hereunder:
8.1. Merger; Consolidation. The Borrower will not, and will not permit
---------------------
or cause any of its Subsidiaries to, liquidate, wind up or dissolve, or enter
into any consolidation, merger or other combination, or agree to do any of the
foregoing; provided, however, that:
-------- -------
(i) the Borrower may merge or consolidate with another Person so
long as (x) the Borrower is the surviving entity, (y) unless such other
Person is a Wholly Owned Subsidiary immediately prior to giving effect
thereto, such merger or consolidation shall constitute a Permitted
Acquisition and the applicable conditions and requirements of Sections 6.9
and 6.10 shall be satisfied, and (z) immediately after giving effect
thereto, no Default or Event of Default would exist;
(ii) any Subsidiary may merge or consolidate with another Person
so long as (x) the surviving entity is the Borrower or a Subsidiary, (y)
unless such other Person is a Wholly Owned Subsidiary immediately prior to
giving effect thereto, such merger or consolidation shall constitute a
Permitted Acquisition and the applicable conditions and requirements of
Sections 6.9 and 6.10 shall be satisfied, and (z) immediately after giving
effect thereto, no Default or Event of Default would exist.
8.2. Indebtedness. The Borrower will not, and will not permit or
------------
cause any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than:
(i) Indebtedness incurred under this Agreement, the Notes and the
other Credit Documents;
(ii) Indebtedness existing on the Closing Date and described in
Schedule 8.2;
(iii) accrued expenses (including salaries, accrued vacation and
other compensation), current trade or other accounts payable and other
current liabilities arising in the ordinary course of business and not
incurred through the borrowing of money, provided that the same shall be
--------
paid when due except to the extent being contested in good faith and by
appropriate proceedings;
(iv) loans and advances by the Borrower or any Subsidiary to any
other Subsidiary or by any Subsidiary to the Borrower, provided that any
--------
such loan or advance is subordinated in right and time of payment to the
Obligations;
(v) Indebtedness of the Borrower under Hedge Agreements required
pursuant to, and entered into in accordance with, Section 6.8;
68
(vi) unsecured Indebtedness of the Borrower that is expressly
subordinated and made junior in right and time of payment to the
Obligations and that is evidenced by one or more written agreements or
instruments having terms, conditions and provisions (including without
limitation provisions relating to principal amount, maturity, covenants,
defaults, interest, and subordination) satisfactory in form and substance
to the Required Lenders in their sole discretion and which shall provide,
at a minimum and without limitation, that such Indebtedness (a) shall
mature by its terms no earlier than the second anniversary of the Term Loan
Maturity Date, (b) shall not require any scheduled payment of principal
prior to the first anniversary of the Term Loan Maturity Date, (c) shall
have covenants and undertakings that, taken as a whole, are materially less
restrictive than those contained herein, and (d) shall bear interest at an
overall rate not exceeding 12.5% per annum and, to the extent payable only
in cash, at a rate not exceeding 10.5% per annum (the Indebtedness
described hereinabove, "Subordinated Indebtedness"); provided that, as
--------
further conditions to the issuance of any Subordinated Indebtedness, (1)
immediately after giving effect to the issuance of such Subordinated
Indebtedness, no Default or Event of Default shall exist, (2) all
agreements and instruments evidencing or governing such Subordinated
Indebtedness shall have been approved in writing by the Required Lenders
(or the Administrative Agent on their behalf), and (3) prior to or
concurrently with the issuance of such Subordinated Indebtedness, the
Borrower shall have delivered to each Lender a certificate, signed by a
Financial Officer of the Borrower, satisfactory in form and substance to
the Required Lenders and to the effect that, after giving effect to the
incurrence of such Subordinated Indebtedness, the Borrower is in compliance
with the financial covenants set forth in Sections 7.1 through 7.3, such
compliance being determined with regard to calculations made on a pro forma
basis in accordance with GAAP as of the last day of the fiscal quarter then
most recently ended and as if such Subordinated Indebtedness had been
incurred on the first day of the period applicable to such covenants (such
calculations to be attached to such certificate); and provided further that
-------- -------
the Net Cash Proceeds from the issuance of such Subordinated Indebtedness
shall be applied to prepay the Loans in accordance with, and to the extent
required under, the provisions of Section 2.6(d); notwithstanding the
foregoing limitations, the Existing Subordinated Indebtedness is permitted
to exist subject to the terms of Section 8.9;
(vii) purchase money Indebtedness of the Borrower and its
Subsidiaries incurred solely to finance the payment of all or part of the
purchase price of any equipment, real property or other fixed assets
acquired in the ordinary course of business, and any renewals, refinancings
or replacements thereof (subject to the limitations on the principal amount
thereof set forth in this clause (vii)), which Indebtedness shall not
exceed $5,000,000 in aggregate principal amount outstanding at any time;
(viii) Indebtedness in respect of performance bonds or contract
performance guarantees the outstanding amount of which may not exceed
$20,000,000 in the aggregate at any time;
(ix) Contingent Obligations incurred in connection with time
brokerage agreements, LMA's and similar arrangements, not to exceed
$25,000,000 in the aggregate at any time (in addition to Indebtedness in
respect of performance bonds as described in clause (ix) above;
(x) Capital Lease Obligations not to exceed $15,000,000 at any
time; and
(xi) other unsecured Indebtedness not exceeding $5,000,000 in
aggregate principal amount outstanding at any time.
69
8.3. Liens. The Borrower will not, and will not permit or cause any of
-----
its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist, any Lien upon or with respect to any part of its property or
assets, whether now owned or hereafter acquired, or file or permit the filing
of, or permit to remain in effect, any financing statement or other similar
notice of any Lien with respect to any such property, asset, income or profits
under the Uniform Commercial Code of any state or under any similar recording or
notice statute, or agree to do any of the foregoing, other than the following
(collectively, "Permitted Liens"):
(i) Liens created under the Security Documents;
(ii) Liens in existence on the Closing Date and set forth on
Schedule 8.3;
(iii) Liens imposed by law, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and other similar Liens
incurred in the ordinary course of business for sums not constituting
borrowed money that are not overdue for a period of more than sixty (60)
days or that are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance with
GAAP (if so required);
(iv) Liens (other than any Lien imposed by ERISA, the creation or
incurrence of which would result in an Event of Default under Section
9.1(k)) incurred in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure the performance of letters
of credit, bids, tenders, statutory obligations, surety and appeal bonds,
leases, government contracts and other similar obligations (other than
obligations for borrowed money) entered into in the ordinary course of
business;
(v) Liens for taxes, assessments or other governmental charges or
statutory obligations that are not delinquent or remain payable without any
penalty or that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been established in
accordance with GAAP (if so required);
(vi) Liens securing the purchase money Indebtedness permitted
under clause (vii) of Section 8.2, provided that any such Lien (a) shall
attach to such property concurrently with or within ten (10) days after the
acquisition thereof by the Borrower or such Subsidiary, (b) shall not
exceed the lesser of (y) the fair market value of such property or (z) the
cost thereof to the Borrower or such Subsidiary and (c) shall not encumber
any other property of the Borrower or any of its Subsidiaries;
(vii) any attachment or judgment Lien not constituting an Event of
Default under Section 9.1(i) that is being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(viii) Liens arising from the filing, for notice purposes only, of
financing statements in respect of true leases;
(ix) Liens on Borrower Margin Stock, to the extent the fair market
value thereof exceeds 25% of the fair market value of the assets of the
Borrower and its Subsidiaries (including Borrower Margin Stock);
70
(x) with respect to any real property occupied by the Borrower or
any of its Subsidiaries, all easements, rights of way, licenses and similar
encumbrances on title that do not materially impair the use of such
property for its intended purposes;
(xi) Liens attributable to Capital Lease Obligations permitted under
Section 8.2(x) hereof; and
(xii) other liens securing obligations of the Borrower and its
Subsidiaries not exceeding $5,000,000 in the aggregate amount outstanding
at any time.
8.4. Disposition of Assets. The Borrower will not, and will not permit or
---------------------
cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties (including, without limitation,
any Capital Stock of any Subsidiary), or enter into any arrangement with any
Person providing for the lease by the Borrower or any Subsidiary as lessee of
any asset that has been sold or transferred by the Borrower or such Subsidiary
to such Person, or agree to do any of the foregoing, except for:
(i) sales of inventory and licenses or leases of intellectual
property and other assets, in each case in the ordinary course of business;
(ii) the sale or exchange of used or obsolete equipment to the
extent (y) the proceeds of such sale are applied towards, or such equipment
is exchanged for, replacement equipment or (z) such equipment is no longer
necessary for the operations of the Borrower or its applicable Subsidiary
in the ordinary course of business;
(iii) the sale or other disposition by the Borrower and its
Subsidiaries of any Borrower Margin Stock to the extent the fair market
value thereof exceeds 25% of the fair market value of the assets of the
Borrower and its Subsidiaries (including Borrower Margin Stock), provided
--------
that fair value is received in exchange therefor;
(iv) the sale, lease or other disposition of assets by a Subsidiary
of the Borrower to the Borrower or to a Subsidiary if, immediately after
giving effect thereto, no Default or Event of Default would exist; and
(v) the sale or disposition of assets outside the ordinary course
of business for fair value, provided that (w) the greater of (1) the fair
--------
market value and (2) the book value, of the assets being disposed of
pursuant to this subsection, when aggregated with such values of assets
disposed of in connection with all other sales and dispositions not
otherwise specifically permitted under this Section that are consummated
during the same fiscal quarter or the period of three consecutive fiscal
quarters immediately prior thereto, does not exceed either (A) $10,000,000
in the aggregate for the Borrower and its Subsidiaries during any period of
four consecutive fiscal quarters, or (B) $25,000,000 in the aggregate for
the Borrower and its Subsidiaries over the term of this Agreement, (x) any
Net Cash Proceeds are delivered to the Administrative Agent promptly after
receipt thereof for application in prepayment of the Loans in accordance
with the provisions of Section 2.6(h); (y) in no event shall the Borrower
or any of its Subsidiaries sell or otherwise dispose of any of the Capital
Stock of any Subsidiary; and (z) immediately after giving effect thereto,
no Default or Event of Default would exist.
71
8.5. Investments; LMAs'. (a) The Borrower will not, and will not permit
-----------------
or cause any of its Subsidiaries to, directly or indirectly, purchase, own,
invest in or otherwise acquire any Capital Stock, evidence of indebtedness or
other obligation or security or any interest whatsoever in any other Person, or
make or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or purchase
or otherwise acquire (whether in one or a series of related transactions) any
portion of the assets, business or properties of another Person (including
pursuant to an Acquisition), or create or acquire any Subsidiary, or become a
partner or joint venturer in any partnership or joint venture (collectively,
"Investments"), or make a commitment or otherwise agree to do any of the
foregoing, other than:
(i) Cash Equivalents;
(ii) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment or licenses or leases of
intellectual property and other assets, in each case in the ordinary course
of business;
(iii) Investments consisting of loans and advances to employees for
reasonable travel, relocation and business expenses in the ordinary course
of business (not to exceed $5,000,000 in the aggregate at any time),
extensions of trade credit in the ordinary course of business, and prepaid
expenses incurred in the ordinary course of business;
(iv) without duplication, Investments consisting of intercompany
Indebtedness permitted under clause (iv) of Section 8.2;
(v) Investments existing on the Closing Date and described on
Schedule 8.5;
(vi) Investments of the Borrower under Hedge Agreements required
pursuant to, and entered into in accordance with, Section 6.8;
(vii) Investments consisting of the making of capital contributions
or the purchase of Capital Stock (a) by the Borrower or any Subsidiary in
any other Wholly Owned Subsidiary that is (or immediately after giving
effect to such Investment will be) a Subsidiary, provided that the Borrower
--------
complies with the provisions of Section 6.10, and (b) by any Subsidiary in
the Borrower; and
(viii) Permitted Acquisitions.
(b) Neither the Borrower nor any of its Subsidiaries will enter into any
LMA or incur any LMA Obligations (except for LMAs pursuant to Permitted LMA
Agreements and except for any other LMAs involving aggregate consideration,
other payments or the incurrence or assumption of liabilities not to exceed
$25,000,000 at any time) without, in either case, the prior written approval of
the Required Lenders (which approval shall not be unreasonably withheld).
8.6. Restricted Payments. (a) The Borrower will not, and will not
-------------------
permit or cause any of its Subsidiaries to, directly or indirectly, declare or
make any dividend payment, or make any other distribution of cash, property or
assets, in respect of any of its Capital Stock or any warrants, rights or
options to acquire its Capital Stock, or purchase, redeem, retire or otherwise
acquire for value any shares of its Capital Stock or any warrants, rights or
options to acquire its Capital Stock, or set aside funds for any of the
foregoing, except that:
72
(i) the Borrower may declare and make dividend payments or other
distributions payable solely in its common stock;
(ii) each Wholly Owned Subsidiary of the Borrower may declare and
make dividend payments or other distributions to the Borrower or another
Wholly Owned Subsidiary of the Borrower, to the extent not prohibited under
applicable Requirements of Law; and
(iii) the Borrower may declare and make cash dividend payments in
respect of its Capital Stock in an aggregate amount, over the term of this
Agreement, not to exceed the sum of $4,500,000, plus 25% of the Borrower's
cumulative Excess Cash Flow, if any, for each fiscal year of the Borrower
beginning with its fiscal year ending December 31, 1999 as long as no Event
of Default exists as of the time of payment or would result therefrom
(provided, that no such cash dividend payment shall be made prior to the
---------
delivery by the Borrower of the certification of Excess Cash Flow pursuant
to Section 2.6(g) hereof).
(b) The Borrower will not, and will not permit or cause any of its
Subsidiaries to, make (or give any notice in respect of) any voluntary or
optional payment or prepayment of principal on any Subordinated Indebtedness, or
directly or indirectly make any redemption (including pursuant to any change of
control provision), retirement, defeasance or other acquisition for value of any
Subordinated Indebtedness, or make any deposit or otherwise set aside funds for
any of the foregoing purposes.
8.7. Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit or cause any of its Subsidiaries to, enter into any transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director,
stockholder or other Affiliate of the Borrower or any Subsidiary, except in the
ordinary course of its business and upon fair and reasonable terms that are no
less favorable to it than would obtain in a comparable arm's length transaction
with a Person other than an Affiliate of the Borrower or such Subsidiary;
provided, however, that nothing contained in this Section shall prohibit:
-------- -------
(i) transactions described on Schedule 8.7 or otherwise expressly
permitted under this Agreement; and
(ii) the payment by the Borrower of reasonable and customary fees
to members of its board of directors.
8.8. Lines of Business. The Borrower will not, and will not permit or
-----------------
cause any of its Subsidiaries to, engage in any business other than the
businesses engaged in by it on the date hereof and businesses and activities
reasonably related thereto.
8.9. Certain Amendments. The Borrower will not, and will not permit or
------------------
cause any of its Subsidiaries to, (i) amend, modify or waive, or permit the
amendment, modification or waiver of, any provision of any agreement or
instrument evidencing or governing any Subordinated Indebtedness (including
without limitation the Existing Subordinated Indebtedness), the effect of which
would be to (a) increase the principal amount due thereunder, (b) shorten or
accelerate the time of payment of any amount due thereunder, (c) increase the
applicable interest rate or amount of any fees or costs due thereunder, (d)
amend any of the subordination provisions thereunder (including any of the
definitions relating thereto), (e) make any covenant therein more restrictive or
add any new covenant, or (f) otherwise materially and adversely affect the
Lenders, or breach or otherwise violate any of the
73
subordination provisions applicable thereto, including, without limitation,
restrictions against payment of principal and interest thereon, (ii) amend,
modify or change any provision of its articles or certificate of incorporation
or bylaws, or the terms of any class or series of its Capital Stock, other than
in a manner that could not reasonably be expected to adversely affect the
Lenders, or (iv) amend, modify or change any provision of any Permitted LMA
Agreement other than in a manner that could not reasonably be expected to
adversely affect the Lenders.
8.10. Limitation on Certain Restrictions. The Borrower will not, and
----------------------------------
will not permit or cause any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any restriction
or encumbrance on (i) the ability of the Borrower and its Subsidiaries to
perform and comply with their respective obligations under the Credit Documents
or (ii) the ability of any Subsidiary of the Borrower to make any dividend
payments or other distributions in respect of its Capital Stock, to repay
Indebtedness owed to the Borrower or any other Subsidiary, to make loans or
advances to the Borrower or any other Subsidiary, or to transfer any of its
assets or properties to the Borrower or any other Subsidiary, in each case other
than such restrictions or encumbrances existing under or by reason of applicable
Requirements of Law.
8.11. No Other Negative Pledges. The Borrower will not, and will not
-------------------------
permit or cause any of its Subsidiaries to, directly or indirectly, enter into
or suffer to exist any agreement or restriction that prohibits or conditions the
creation, incurrence or assumption of any Lien upon or with respect to any part
of its property or assets, whether now owned or hereafter acquired, or agree to
do any of the foregoing, other than as set forth in (i) this Agreement and the
Security Documents, (ii) any agreement or instrument creating a Permitted Lien
(but only to the extent such agreement or restriction applies to the assets
subject to such Permitted Lien), and (iii) operating leases of real or personal
property entered into by the Borrower or any of its Subsidiaries as lessee in
the ordinary course of business.
8.12. Fiscal Year. The Borrower will not, and will not permit or
-----------
cause any of its Subsidiaries to, change the ending date of its fiscal year to a
date other than December 31.
8.13. Accounting Changes. The Borrower will not, and will not permit
------------------
or cause any of its Subsidiaries to, make or permit any material change in its
accounting policies or reporting practices, except as may be required by GAAP.
8.14 Waiver of Stay, Extension or Usury Laws. The Borrower covenants (to
---------------------------------------
the extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive the Borrower from paying all or any portion of the principal of or
interest on the Obligations as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the Obligations or the
performance hereunder; and (to the extent that it may lawfully do so) the
Borrower hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Administrative Agent or the Lenders, but will suffer and
permit the execution of every such power as though no such law had been enacted.
8.15 Limitation on Preferred Stock of Subsidiaries. The Borrower
---------------------------------------------
shall not permit any of its Subsidiaries to issue any Preferred Stock (other
than to the Borrower or to a Wholly-Owned Subsidiary of the Borrower) or permit
any Person (other than the Borrower or a Wholly-Owned Subsidiary of the
Borrower) to own any Preferred Stock of a Subsidiary (other than Acquired
Preferred Stock; provided that at the time the issuer of such Acquired Preferred
Stock becomes a Subsidiary of the Borrower or
74
merges with the Borrower or any of its Subsidiaries, and after giving effect to
such transaction, the Borrower shall be able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
7.1(a)).
8.16 Certain Restrictions. Notwithstanding any other provision herein to
--------------------
the contrary, until the FHS Covenant Calculation Date (as defined in the
definition of "Consolidated EBITDA"), if any:
(a) the Borrower will not, and will not permit any Subsidiary to, make any
Investment of cash or Cash Equivalents in FHS (or AK Media Group, to
the extent the proceeds thereof are to be used by FHS); and
(b) the Borrower will not permit FHS (or AK Media Group, Inc. on its
behalf) to:
(i) incur, or enter into any agreement with respect to the
incurrence, of any Indebtedness (other than any Indebtedness
(excluding any refinancings thereof) in existence as of the date
hereof as set forth on Schedule 8.16 or Indebtedness in the form
of the Subsidiary Guaranty required hereunder or any subsidiary
guarantee in respect of the Indenture, dated as of December 14,
1998, providing for the issuance of the Borrower's 9.00% Senior
Subordinated Notes due January 15, 2009) or grant any Liens to
secure any Indebtedness;
(ii) merge with any other Person or sell, assign, transfer or
otherwise dispose of any of its assets (except for the sale or
exchange of used or obsolete equipment to the extent (y) the
proceeds of such sale are applied towards, or such equipment is
exchanged for, replacement equipment or (z) such equipment is no
longer necessary for the operations of the such Subsidiary in
the ordinary course of business); and
(iii) make any Investments in or Acquisitions of or enter into any
joint ventures or similar transactions with any other Persons
other than as required by the NBA.
ARTICLE IX
EVENTS OF DEFAULT
9.1. Events of Default. The occurrence of any one or more of the
-----------------
following events shall constitute an "Event of Default":
(a) The Borrower shall fail to pay any principal of any Loan, any
Reimbursement Obligation, any fee or any other Obligation when due or any
interest in respect of any Loan within five (5) Business Days after the date on
which such interest is due;
(b) The Borrower shall fail to observe, perform or comply with any
condition, covenant or agreement contained in any of Sections 2.14, 6.1, 6.2,
6.3(i), 6.8, 6.9, 6.10 or in Article VII or Article VIII;
75
(c) The Borrower or any of its Subsidiaries shall fail to observe,
perform or comply with any condition, covenant or agreement contained in this
Agreement or any of the Credit Documents other than those enumerated in
subsections (a) and (b) above, and such failure (i) is deemed by the terms of
the relevant Credit Document to constitute an Event of Default and (ii) shall
continue unremedied for any grace period specifically applicable thereto or, if
no such grace period is applicable, for a period of thirty (30) days after the
earlier of (y) the date on which a Responsible Officer of the Borrower acquires
knowledge thereof and (z) the date on which written notice thereof is delivered
by the Administrative Agent or any Lender to the Borrower;
(d) There shall occur a "Default" under the Monterey Credit Agreement
or the Utica Credit Agreement.
(e) Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries in this Agreement, any of the other
Credit Documents or in any certificate, instrument, report or other document
furnished in connection herewith or therewith or in connection with the
transactions contemplated hereby or thereby shall prove to have been false or
misleading in any material respect as of the time made, deemed made or
furnished;
(f) The Borrower or any of its Subsidiaries shall (i) fail to pay when
due (whether by scheduled maturity, acceleration or otherwise and after giving
effect to any applicable grace period) any principal of or interest on any
Funded Debt (other than the Funded Debt incurred pursuant to this Agreement)
having an aggregate principal amount of at least $1,000,000 or other
Indebtedness having an aggregate principal amount of at least $2,000,000, or
(ii) fail to observe, perform or comply with any condition, covenant or
agreement contained in any agreement or instrument evidencing or relating to any
such Funded Debt or Indebtedness, or any other event shall occur or condition
exist in respect thereof, and the effect of such failure, event or condition is
to cause, or permit the holder or holders of such Indebtedness (or a trustee or
Administrative Agent on its or their behalf) to cause (with the giving of
notice, lapse of time, or both), such Indebtedness to become due, or to be
prepaid, redeemed, purchased or defeased, prior to its stated maturity;
(g) The Borrower or any of its Subsidiaries shall (i) file a voluntary
petition or commence a voluntary case seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts or any other
relief under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any
petition or case of the type described in subsection (g) below, (iii) apply for
or consent to the appointment of or taking possession by a custodian, trustee,
receiver or similar official for or of itself or all or a substantial part of
its properties or assets, (iv) fail generally, or admit in writing its
inability, to pay its debts generally as they become due, (v) make a general
assignment for the benefit of creditors or (vi) take any corporate action to
authorize or approve any of the foregoing;
(h) Any involuntary petition or case shall be filed or commenced
against the Borrower or any of its Subsidiaries seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts, the appointment
of a custodian, trustee, receiver or similar official for it or all or a
substantial part of its properties or any other relief under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of sixty (60) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding;
76
(i) Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (exclusive of
amounts fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has acknowledged its liability in writing) in excess of
$5,000,000 shall be entered or filed against the Borrower or any of its
Subsidiaries or any of their respective properties and the same shall not be
dismissed, stayed or discharged for a period of thirty (30) days or in any event
later than five days prior to the date of any proposed sale thereunder;
(j) Any Security Document to which the Borrower or any of its
Subsidiaries is now or hereafter a party shall for any reason cease to be in
full force and effect or cease to be effective to give the Administrative Agent
a valid and perfected security interest in and Lien upon the Collateral
purported to be covered thereby, subject to no Liens other than Permitted Liens,
in each case unless any such cessation occurs in accordance with the terms
thereof or is due to any act or failure to act on the part of the Administrative
Agent or any Lender; or the Borrower or any such Subsidiary shall assert any of
the foregoing or any Subsidiary of the Borrower or any Person acting on behalf
of any such Subsidiary shall deny or disaffirm such Subsidiary's obligations
under the Subsidiary Guaranty (after such Subsidiary Guaranty is required to
have been executed and delivered pursuant to Section 6.11(a));
(k) Any ERISA Event shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result thereof, together with all other ERISA
Events then existing, the Borrower and its ERISA Affiliates have incurred or
would be reasonably likely to incur liability to any one or more Plans or
Multiemployer Plans or to the PBGC (or to any combination thereof) in excess of
$1,000,000;
(l) The Borrower or any Subsidiary (a "Credit Party") shall lose, fail
to keep in force, suffer the termination, suspension or revocation of or
terminate, forfeit or suffer an amendment to any license at any time held by it,
the loss, termination, suspension or revocation of which could have a Material
Adverse Effect; any Governmental Authority shall conduct a hearing on the
renewal of any license (with respect to basic qualification issues) held by a
Credit Party, and there shall have been designated against the Credit Party an
issue as to whether such Credit Party possesses the minimum qualifications
required to hold a broadcast license and the Required Lenders reasonably believe
that the result thereof is likely to be the termination, revocation, suspension
or material adverse amendment of such license (it being understood that the
filing of a petition to deny the renewal of any FCC License shall not be
sufficient to invoke the Lenders' rights pursuant to this paragraph); or any
Governmental Authority shall commence an action or proceeding seeking the
termination, suspension, revocation or material adverse amendment of any license
held by any Credit Party, and the result thereof, in the reasonable opinion of
the Required Lenders, is likely to be the termination, suspension, revocation or
material adverse amendment of such license that would have a Material Adverse
Effect;
(m) Any one or more Environmental Claims shall have been asserted
against the Borrower or any of its Subsidiaries (or a reasonable basis shall
exist therefor); the Borrower and its Subsidiaries have incurred or would be
reasonably likely to incur liability as a result thereof; and such liability has
or would be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect; and
(n) The failure of the Xxxxxxxx Family to own, of record and
beneficially, with full power to vote, at least 51% of the voting stock of the
Borrower. As used herein, "Xxxxxxxx Family" means (i) Xxxxx X. Xxxxxxxx and the
spouse and lineal descendants of Xxxxx X. Xxxxxxxx, whether by blood or
adoption, (ii) any trusts for the exclusive benefit of the individuals referred
to in clause (i) above or the executor or administrator of the estate of or
other legal representative of the individuals referred to in clause (i) above,
and (iii) any other Person, at least a majority of the outstanding voting stock
of which is owned, of record and beneficially, by any of the Persons referred to
in clause (i) or (ii) above.
77
9.2. Remedies: Termination of Commitments, Acceleration, etc. Upon
-------------------------------------------------------
and at any time after the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall at the direction, or may with the
consent, of the Required Lenders, take any or all of the following actions at
the same or different times:
(a) Declare the Commitments and the Issuing Lender's obligation to
issue Letters of Credit, to be terminated, whereupon the same shall terminate
(provided that, upon the occurrence of an Event of Default pursuant to Section
---------
9.1(g) or Section 9.1(h), the Commitments and the Issuing Lender's obligation to
issue Letters of Credit shall automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of the
Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents, shall become immediately due and payable without
presentment, demand, protest, notice of intent to accelerate or other notice or
legal process of any kind, all of which are hereby knowingly and expressly
waived by the Borrower (provided that, upon the occurrence of an Event of
--------
Default pursuant to Section 9.1(g) or Section 9.1(h), all of the outstanding
principal amount of the Loans and all other amounts described in this subsection
(b) shall automatically become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrower);
(c) Direct the Borrower to deposit (and the Borrower hereby agrees,
forthwith upon receipt of notice of such direction from the Administrative
Agent, to deposit) with the Administrative Agent from time to time such
additional amount of cash as is equal to the aggregate Stated Amount of all
Letters of Credit then outstanding (whether or not any beneficiary under any
Letter of Credit shall have drawn or be entitled at such time to draw
thereunder), such amount to be held by the Administrative Agent in the Cash
Collateral Account as security for the Letter of Credit Exposure as described in
Section 3.8; and
(d) Exercise all rights and remedies available to it under this
Agreement, the other Credit Documents and applicable law.
To enforce the provisions of this Section 9.2, the Administrative
Agent is empowered to seek from the FCC and any other Governmental Authority, to
the extent required, consent to or approval of an involuntary transfer of
control of the Borrower or any of its Subsidiaries for the purpose of seeking a
bona fide purchaser to whom control will ultimately be transferred. The
Borrower hereby agrees to authorize and to cause its Subsidiaries to authorize
such an involuntary transfer of control upon the request of the Administrative
Agent after and during the continuation of an Event of Default and, without
limiting any rights of the Administrative Agent under this Agreement, authorize
the Administrative Agent to nominate a trustee or receiver to assume control,
subject only to any required judicial, FCC and other Governmental Authority
consent, in order to effectuate the transactions contemplated hereby. Such
trustee or receiver shall have all the rights and powers as provided to it by
law, court order or to the Administrative Agent under this Agreement. The
Borrower shall cooperate fully and cause its Subsidiaries to cooperate fully in
obtaining the consent of the FCC and the approval or consent of each other
Governmental Authority required to effectuate the foregoing. The Borrower shall
further use its best efforts, and will cause its Subsidiaries to use their best
efforts, to assist in obtaining consent or approval of the FCC and any other
Governmental Authority, if required, for any action or transactions
78
contemplated by this Agreement including, without limitation, the preparation,
execution and filing with the FCC of the transferor's portion of any application
or applications for consent to the transfer of control necessary or appropriate
under the FCC's rules and regulations for approval of the transfer or assignment
of any portion of the Collateral. If the Borrower fails to execute or cause the
execution of such applications, requests for consent or other instruments, the
clerk of any court that has jurisdiction over the Credit Documents may execute
and file the same on behalf of the Borrower or its Subsidiaries.
9.3. Remedies: Set-Off. Subject to Section 2.15(b), in addition to
-----------------
all other rights and remedies available under the Credit Documents or applicable
law or otherwise, upon and at any time after the occurrence and during the
continuance of any Event of Default, each Lender may, and each is hereby
authorized by the Borrower, at any such time and from time to time, to the
fullest extent permitted by applicable law, without presentment, demand, protest
or other notice of any kind, all of which are hereby knowingly and expressly
waived by the Borrower, to set off and to apply any and all deposits (general or
special, time or demand, provisional or final) and any other property at any
time held (including at any branches or agencies, wherever located), and any
other indebtedness at any time owing, by such Lender to or for the credit or the
account of the Borrower against any or all of the Obligations to such Lender now
or hereafter existing, whether or not such Obligations may be contingent or
unmatured, the Borrower hereby granting to each Lender a continuing security
interest in and Lien upon all such deposits and other property as security for
such Obligations. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application; provided, however,
-------- -------
that the failure to give such notice shall not affect the validity of such set-
off and application.
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1. Appointment. Each Lender hereby irrevocably appoints and
-----------
authorizes First Union to act as Administrative Agent hereunder and under the
other Credit Documents and to take such actions as Administrative Agent on its
behalf hereunder and under the other Credit Documents, and to exercise such
powers and to perform such duties, as are specifically delegated to the
Administrative Agent by the terms hereof or thereof, together with such other
powers and duties as are reasonably incidental thereto.
10.2. Nature of Duties. The Administrative Agent shall have no
----------------
duties or responsibilities other than those expressly set forth in this
Agreement and the other Credit Documents. The Administrative Agent shall not
have, by reason of this Agreement or any other Credit Document, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any
other Credit Document, express or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations or
liabilities in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein. The Administrative Agent may execute any
of its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact that it selects with reasonable
care. The Administrative Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by it with respect to
all matters pertaining to this Agreement and the other Credit Documents and its
duties hereunder and thereunder and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts. The Lenders hereby acknowledge that the
Administrative Agent shall not be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Credit Document unless it shall be requested in writing to do
79
so by the Required Lenders (or, where a higher percentage of the Lenders is
expressly required hereunder, such Lenders).
10.3. Exculpatory Provisions. Neither the Administrative Agent nor
----------------------
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action taken or omitted to be taken by it
or such Person under or in connection with the Credit Documents, except for its
or such Person's own gross negligence or willful misconduct, (ii) responsible in
any manner to any Lender for any recitals, statements, information,
representations or warranties herein or in any other Credit Document or in any
document, instrument, certificate, report or other writing delivered in
connection herewith or therewith, for the execution, effectiveness, genuineness,
validity, enforceability or sufficiency of this Agreement or any other Credit
Document, or for the financial condition of the Borrower, its Subsidiaries or
any other Person, or (iii) required to ascertain or make any inquiry concerning
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document or the existence or possible
existence of any Default or Event of Default, or to inspect the properties,
books or records of the Borrower or any of its Subsidiaries.
10.4. Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
notice, statement, consent or other communication (including, without
limitation, any thereof by telephone, telecopy, telex, telegram or cable)
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons. The Administrative Agent may deem
and treat each Lender as the owner of its interest hereunder for all purposes
hereof unless and until a written notice of the assignment, negotiation or
transfer thereof shall have been given to the Administrative Agent in accordance
with the provisions of this Agreement. The Administrative Agent shall be
entitled to refrain from taking or omitting to take any action in connection
with this Agreement or any other Credit Document (i) if such action or omission
would, in the reasonable opinion of the Administrative Agent, violate any
applicable law or any provision of this Agreement or any other Credit Document
or (ii) unless and until it shall have received such advice or concurrence of
the Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders) as it deems appropriate or it shall first have
been indemnified to its satisfaction by the Lenders against any and all
liability and expense (other than liability and expense arising from its own
gross negligence or willful misconduct) that may be incurred by it by reason of
taking, continuing to take or omitting to take any such action. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Administrative Agent as a result of the Administrative Agent's
acting or refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders (or, where a higher
percentage of the Lenders is expressly required hereunder, such Lenders), and
such instructions and any action taken or failure to act pursuant thereto shall
be binding upon all of the Lenders (including all subsequent Lenders).
10.5. Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representation or warranty to it and that no act by the Administrative
Agent or any such Person hereinafter taken, including any review of the affairs
of the Borrower and its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that (i) it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to enter into this
80
Agreement and extend credit to the Borrower hereunder, and (ii) it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action hereunder and under the other Credit Documents
and to make such investigation as it deems necessary to inform itself as to the
business, prospects, operations, properties, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except as expressly
provided in this Agreement and the other Credit Documents, the Administrative
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information concerning the
business, prospects, operations, properties, financial or other condition or
creditworthiness of the Borrower, its Subsidiaries or any other Person that may
at any time come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
10.6. Notice of Default. The Administrative Agent shall not be
-----------------
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent shall have received written notice from
the Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent will give notice thereof to the Lenders as soon as reasonably practicable;
provided, however, that if any such notice has also been furnished to the
-------- -------
Lenders, the Administrative Agent shall have no obligation to notify the Lenders
with respect thereto. The Administrative Agent shall (subject to Sections 10.4
and 11.6) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders; provided that, unless and
--------
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of the Required
Lenders or all of the Lenders.
10.7. Indemnification. To the extent the Administrative Agent is not
---------------
reimbursed by or on behalf of the Borrower, and without limiting the obligation
of the Borrower to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys' fees and expenses) or disbursements of any kind or nature whatsoever
that may at any time (including, without limitation, at any time following the
repayment in full of the Loans and the termination of the Commitments) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any other Credit Document or any
documents contemplated by or referred to herein or the transactions contemplated
hereby or thereby or any action taken or omitted by the Administrative Agent
under or in connection with any of the foregoing, and (ii) to reimburse the
Administrative Agent upon demand, ratably in proportion to their respective
percentages as used in determining the Required Lenders as of the date of
determination, for any expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, delivery,
administration, amendment, modification, waiver or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Credit
Documents (including, without limitation, reasonable attorneys' fees and
expenses and compensation of agents paid for services rendered on behalf of the
Lenders); provided, however, that no Lender shall be liable for any portion of
-------- -------
such liabilities,
81
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from the gross negligence or
willful misconduct of the party to be indemnified.
10.8. The Administrative Agent in its Individual Capacity. With
---------------------------------------------------
respect to its Commitment, the Loans made by it, the Letters of Credit issued or
participated in by it and the Note or Notes issued to it, the Administrative
Agent in its individual capacity and not as Administrative Agent shall have the
same rights and powers under the Credit Documents as any other Lender and may
exercise the same as though it were not performing the agency duties specified
herein; and the terms "Lenders," "Required Lenders," "holders of Notes" and any
similar terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent and
its Affiliates may accept deposits from, lend money to, make investments in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower, any of its Subsidiaries or any of their respective
Affiliates as if the Administrative Agent were not performing the agency duties
specified herein, and may accept fees and other consideration from any of them
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
10.9. Successor Administrative Agent. The Administrative Agent may
------------------------------
resign at any time by giving ten (10) days' prior written notice to the Borrower
and the Lenders. Upon any such notice of resignation, the Required Lenders
will, with the prior written consent of the Borrower (which consent shall not be
unreasonably withheld), appoint from among the Lenders a successor to the
Administrative Agent (provided that the Borrower's consent shall not be required
--------
in the event a Default or Event of Default shall have occurred and be
continuing). If no successor to the Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within such ten-day period, then the retiring Administrative Agent may, on
behalf of the Lenders and after consulting with the Lenders and the Borrower,
appoint a successor Administrative Agent from among the Lenders. Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Credit Documents. After any retiring Administrative Agent's resignation
as Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent. If no successor to the Administrative Agent has accepted
appointment as Administrative Agent by the thirtieth (30th) day following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall thereafter perform all of the duties of the
Administrative Agent hereunder and under the other Credit Documents until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
as provided for hereinabove.
10.10. Collateral Matters. (a) The Administrative Agent is hereby
------------------
authorized on behalf of the Lenders, without the necessity of any notice to or
further consent from the Lenders, from time to time (but without any obligation)
to take any action with respect to the Collateral and the Security Documents
that may be necessary to perfect and maintain perfected the Liens upon the
Collateral granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the
Commitments, termination or expiration of all outstanding Letters of Credit and
payment in full of all of the Obligations, (ii) constituting property sold or to
be sold or disposed of as part of or in connection with any disposition
expressly permitted hereunder or under any other Credit
82
Document or to which the Required Lenders have consented or (iii) otherwise
pursuant to and in accordance with the provisions of any applicable Credit
Document. Upon request by the Administrative Agent at any time, the Lenders will
confirm in writing the Administrative Agent's authority to release Collateral
pursuant to this subsection (b).
10.11. Issuing Lender. The provisions of this Article (other than
--------------
Section 10.9) shall apply to the Issuing Lender mutatis mutandis to the same
------- --------
extent as such provisions apply to the Administrative Agent.
10.12. Other Agents. Neither the Documentation Agent nor any of the
------------
Co-Agents named herein shall have any additional administrative duties hereunder
by virtue of such titles, and such titles are nominal in nature.
ARTICLE XI
MISCELLANEOUS
11.1. Fees and Expenses. The Borrower agrees (i) whether or not the
-----------------
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent (including, without limitation, the reasonable fees and expenses of
counsel to the Administrative Agent) in connection with (w) the Administrative
Agent's due diligence investigation in connection with, and the preparation,
negotiation, execution, delivery and syndication of, this Agreement and the
other Credit Documents, and any amendment, modification or waiver hereof or
thereof or consent with respect hereto or thereto, (x) the administration,
monitoring and review of the Loans and the Collateral (including, without
limitation, out-of-pocket expenses for travel, meals, long-distance telephone
calls, wire transfers, facsimile transmissions and copying and with respect to
the engagement of appraisers, consultants, auditors or similar Persons by the
Administrative Agent at any time, whether before or after the Closing, to render
opinions concerning the Borrower's financial condition and the value of the
Collateral), (y) any attempt to inspect, verify, protect, collect, sell,
liquidate or otherwise dispose of any Collateral and (z) the creation,
perfection and maintenance of the perfection of the Administrative Agent's Liens
upon the Collateral, including, without limitation, Lien search, filing and
recording fees, (ii) to pay upon demand all reasonable out-of-pocket costs and
expenses of the Administrative Agent and each Lender (including, without
limitation, reasonable attorneys' fees and expenses) in connection with (y) any
refinancing or restructuring of the credit arrangement provided under this
Agreement, whether in the nature of a "work-out," in any insolvency or
bankruptcy proceeding or otherwise and whether or not consummated, and (z) the
enforcement, attempted enforcement or preservation of any rights or remedies
under this Agreement or any of the other Credit Documents, whether in any
action, suit or proceeding (including any bankruptcy or insolvency proceeding)
or otherwise, and (iii) to pay and hold the Administrative Agent and each Lender
harmless from and against all liability for any intangibles, documentary, stamp
or other similar taxes, fees and excises, if any, including any interest and
penalties, and any finder's or brokerage fees, commissions and expenses (other
than any fees, commissions or expenses of finders or brokers engaged by the
Administrative Agent or any Lender), that may be payable in connection with the
transactions contemplated by this Agreement and the other Credit Documents.
11.2. Indemnification. The Borrower agrees, whether or not the
---------------
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold the Administrative Agent, each Lender and their respective Affiliates
and each of their respective directors, officers, employees, and agents (each,
an
83
"Indemnified Person") harmless from and against any and all claims, losses,
damages, obligations, liabilities, penalties, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) of any kind or
nature whatsoever, whether direct, indirect or consequential (collectively,
"Indemnified Costs"), that may at any time be imposed on, incurred by or
asserted against any such Indemnified Person as a result of, arising from or in
any way relating to the preparation, execution, performance or enforcement of
this Agreement or any of the other Credit Documents, any of the transactions
contemplated herein or therein or any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any Loans or
Letters of Credit (including, without limitation, in connection with the actual
or alleged generation, presence, discharge or release of any Hazardous
Substances on, into or from, or the transportation of Hazardous Substances to or
from, any real property at any time owned or leased by the Borrower or any of
its Subsidiaries, any other Environmental Claims or any violation of or
liability under any Environmental Law), or any action, suit or proceeding
(including any inquiry or investigation) by any Person, whether threatened or
initiated, related to any of the foregoing, and in any case whether or not such
Indemnified Person is a party to any such action, proceeding or suit or a
subject of any such inquiry or investigation; provided, however, that no
-------- -------
Indemnified Person shall have the right to be indemnified hereunder for any
Indemnified Costs to the extent resulting from the gross negligence or willful
misconduct of such Indemnified Person. All of the foregoing Indemnified Costs
of any Indemnified Person shall be paid or reimbursed by the Borrower, as and
when incurred and upon demand.
11.3. Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE
--------------------------------------
OTHER CREDIT DOCUMENTS HAVE BEEN EXECUTED, DELIVERED AND ACCEPTED IN, AND SHALL
BE DEEMED TO HAVE BEEN MADE IN, NORTH CAROLINA AND SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED
--------
THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT OR, IF NO
SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICES FOR
DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER OF COMMERCE, AS IN EFFECT FROM TIME
TO TIME (THE "UNIFORM CUSTOMS"), OR, IN RESPECT OF STANDBY LETTERS OF CREDIT,
THE INTERNATIONAL STANDBY PRACTICES RULES ("ISP98"), AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS OR ISP98, THE LAWS OF THE STATE OF NORTH
CAROLINA (WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF). THE
BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT
WITHIN MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN
THE WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING
INSTITUTED HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR
ANY PROCEEDING TO WHICH THE ADMINISTRATIVE AGENT OR ANY LENDER OR THE BORROWER
IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION
WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER OR THE BORROWER.
THE BORROWER IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF
APPEAL) BY ANY JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE
OR FORUM NON
---------
84
CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING. THE BORROWER CONSENTS THAT
-----------
ALL SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT
ITS ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY
ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE
AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.
11.4. Arbitration; Preservation and Limitation of Remedies. (a)
----------------------------------------------------
Upon demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Agreement or any other Credit Document ("Disputes")
between or among the Borrower, its Subsidiaries, the Administrative Agent and
the Lenders, or any of them, shall be resolved by binding arbitration as
provided herein. Institution of a judicial proceeding by a party does not waive
the right of that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class actions,
claims arising from documents executed in the future, Disputes as to whether a
matter is subject to arbitration, or claims arising out of or connected with the
transactions contemplated by this Agreement and the other Credit Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA"), as in effect from time to time, and the Federal
Arbitration Act, Title 9 of the U.S. Code, as amended. All arbitration hearings
shall be conducted in the city in which the principal office of the
Administrative Agent is located. A hearing shall be held within ninety (90)
days of demand for arbitration and all hearings shall be concluded within one
hundred twenty (120) days of demand for arbitration. These time limitations may
not be extended unless a party shows cause for extension and then no more than a
total of sixty (60) days. The expedited procedures set forth in Rule 51 et seq.
-- ---
of the Arbitration Rules shall be applicable to claims of less than $1,000,000.
All applicable statutes of limitation shall apply to any Dispute. A judgment
upon the award may be entered in any court having jurisdiction. The panel from
which all arbitrators are selected shall be comprised of licensed attorneys
selected from the Commercial Financial Dispute Arbitration Panel of the AAA.
The single arbitrator selected for expedited procedure shall be a retired judge
from the highest court of general jurisdiction, state or federal, of the state
where the hearing will be conducted. Notwithstanding the foregoing, this
arbitration provision does not apply to Disputes under or related to Hedge
Agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any Collateral by
exercising a power of sale granted pursuant to any of the Credit Documents or
under applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help, including peaceful occupation
of real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies, including
injunctive relief, sequestration, garnishment, attachment, appointment of a
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Any claim or controversy with
regard to any party's entitlement to such remedies is a Dispute. Preservation
of these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute. The parties hereto
agree that no
95
party shall have a remedy of punitive or exemplary damages against any other
party in any Dispute, and each party hereby waives any right or claim to
punitive or exemplary damages that it has now or that may arise in the future in
connection with any Dispute, whether such Dispute is resolved by arbitration or
judicially.
The parties acknowledge that by agreeing to binding arbitration, they
have irrevocably waived any right they may have to a jury trial with regard to a
Dispute.
11.5. Notices. All notices and other communications provided for
-------
hereunder shall be in writing (including telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered to the party to be notified at the following
addresses:
(a) if to the Borrower, to 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Telecopy No. (000) 000-0000,
with a copy to Xxxxxx & Xxxx PC, 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx, Telecopy No. (000) 000-0000;
(b) if to the Administrative Agent, to First Union National Bank, Xxx
Xxxxx Xxxxx Xxxxxx, XX-00, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000, Attention: Syndication Agency Services, Telecopy No. (000) 000-0000;
and
(c) if to any Lender, to it at the address set forth on its signature
page hereto (or if to any Lender not a party hereto as of the date hereof, at
the address set forth in its Assignment and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given (i) if mailed as provided above by any method
other than overnight delivery service, on the third Business Day after deposit
in the mails, (ii) if mailed by overnight delivery service, telegraphed,
telexed, telecopied or cabled, when delivered for overnight delivery, delivered
to the telegraph company, confirmed by telex answerback, transmitted by
telecopier and confirmed in writing or telephonically by the recipient or
delivered to the cable company, respectively, or (iii) if delivered by hand,
upon delivery; provided that notices and communications to the Administrative
--------
Agent shall not be effective until received by the Administrative Agent.
11.6. Amendments, Waivers, etc. No amendment, modification, waiver
------------------------
or discharge or termination of, or consent to any departure by the Borrower
from, any provision of this Agreement or any other Credit Document, shall be
effective unless in a writing signed by the Required Lenders (or by the
Administrative Agent at the direction or with the consent of the Required
Lenders), and then the same shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
-------- -------
amendment, modification, waiver, discharge, termination or consent shall:
(a) unless agreed to by each Lender directly affected thereby, (i)
reduce or forgive the principal amount of any Loan, reduce the rate of or
forgive any interest thereon, or reduce or forgive any fees or other Obligations
(other than fees payable to the Administrative Agent for its own account), (ii)
extend the Term Loan Maturity Date, the Revolving Credit Maturity Date or any
other date (including any scheduled date for a mandatory prepayment or the
mandatory reduction or termination of any Commitments) fixed for the payment of
any principal of or interest on any Loan (other than additional interest payable
under Section 2.8(b) at the election of the Required Lenders, as provided
86
therein), any fees (other than fees payable to the Administrative Agent for its
own account) or any other Obligations or extend the expiry date of any Letter of
Credit beyond the seventh day prior to the Revolving Credit Maturity Date or
(iii) waive the closing conditions set forth in Section 4.2;
(b) unless agreed to by all of the Lenders, (i) increase or extend any
Commitment of any Lender (it being understood that a waiver of any Event of
Default, if agreed to by the requisite Lenders hereunder, shall not constitute
such an increase), (ii) change the percentage of the aggregate Commitments or of
the aggregate unpaid principal amount of the Loans, or the number or percentage
of Lenders, that shall be required for the Lenders or any of them to take or
approve, or direct the Administrative Agent to take, any action hereunder
(including as set forth in the definition of "Required Lenders"), (iii) except
as may be otherwise specifically provided in this Agreement or in any other
Credit Document, release all or substantially all of the Collateral or release
any guarantor from its guaranty obligations in respect of the Loans, or (iv)
change any provision of Section 2.15 or this Section; and
(c) unless agreed to by the Issuing Lender or the Administrative Agent
in addition to the Lenders required as provided hereinabove to take such action,
affect the respective rights or obligations of the Issuing Lender or the
Administrative Agent, as applicable, hereunder or under any of the other Credit
Documents;
and provided further that (i) if any amendment, modification, waiver or consent
-------- -------
would adversely affect the holders of Loans of a particular Class (the "affected
Class") relative to holders of Loans of any other Class (including, without
limitation, by way of reducing the relative proportion of any payments,
prepayments or Commitment reductions to be applied for the benefit of holders of
Loans of the affected Class under Sections 2.6(d) through 2.6(h)), then such
amendment, modification, waiver or consent shall require the consent of Lenders
holding fifty-one percent (51%) or more of the aggregate outstanding principal
amount of all Loans of the affected Class, and (ii) the Fee Letter and any Hedge
Agreement to which any Lender (or such Lender's Affiliate) is a party may be
amended or modified, and any rights thereunder waived, in a writing signed by
the parties thereto.
11.7. Assignments, Participations. (a) Each Lender may assign to
---------------------------
one or more other Eligible Assignees (each, an "Assignee") all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the outstanding Loans made by it, the Note
or Notes held by it and its participations in Letters of Credit); provided,
--------
however, that (i) any such assignment (other than an assignment to a Lender or
-------
an Affiliate of a Lender) shall not be made without the prior written consent of
the Administrative Agent and the Borrower (to be evidenced by its
counterexecution of the relevant Assignment and Acceptance), which consent shall
not be unreasonably withheld (provided that the Borrower's consent shall not be
--------
required in the event a Default or Event of Default shall have occurred and be
continuing), (ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender, no such assignment shall be in an aggregate principal
amount (determined as of the date of the Assignment and Acceptance with respect
to such assignment) less than $5,000,000 (or, if less, the full amount of the
aggregate of the assigning Lender's outstanding Term Loans and Revolving Credit
Commitment), and (iii) the parties to each such assignment will execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment, and will pay a nonrefundable processing fee of $3,000 to the
Administrative Agent for its own account. Upon such execution, delivery,
acceptance and recording of the Assignment and Acceptance, from and after the
effective date specified therein, which effective date shall be at least five
Business Days after the execution thereof (unless the Administrative Agent shall
otherwise agree), (A) the Assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and
87
Acceptance, shall have the rights and obligations of the assigning Lender
hereunder with respect thereto and (B) the assigning Lender shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than rights under the
provisions of this Agreement and the other Credit Documents relating to
indemnification or payment of fees, costs and expenses, to the extent such
rights relate to the time prior to the effective date of such Assignment and
Acceptance) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto). The terms and provisions of each
Assignment and Acceptance shall, upon the effectiveness thereof, be incorporated
into and made a part of this Agreement, and the covenants, agreements and
obligations of each Lender set forth therein shall be deemed made to and for the
benefit of the Administrative Agent and the other parties hereto as if set forth
at length herein.
(b) The Administrative Agent will maintain at its address for notices
referred to herein a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower and
each Lender at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and, if required,
counterexecuted by the Borrower, together with the Note or Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the
Administrative Agent will (i) accept such Assignment and Acceptance, (ii) on the
effective date thereof, record the information contained therein in the Register
and (iii) give notice thereof to the Borrower and the Lenders. Within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, will execute and deliver to the Administrative Agent, in exchange for
the surrendered Note or Notes, a new Note or Notes to the order of the Assignee
(and, if the assigning Lender has retained any portion of its rights and
obligations hereunder, to the order of the assigning Lender), prepared in
accordance with the applicable provisions of Section 2.4 as necessary to
reflect, after giving effect to the assignment, the Commitments (or outstanding
Term Loans, as the case may be) of the Assignee and (to the extent of any
retained interests) the assigning Lender, dated the date of the replaced Note or
Notes and otherwise in substantially the form of Exhibits A-1 or A-2 as
applicable. The Administrative Agent will return canceled Notes to the
Borrower.
(d) Each Lender may, without the consent of the Borrower, the
Administrative Agent or any other Lender, sell to one or more other Persons
(each, a "Participant") participations in any portion comprising less than all
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Commitments, the outstanding Loans made by it, the
Note or Notes held by it and its participations in Letters of Credit); provided,
--------
however, that (i) such Lender's obligations under this Agreement shall remain
-------
unchanged and such Lender shall remain solely responsible for the performance of
such obligations, (ii) no Lender shall sell any participation that, when taken
together with all other participations, if any, sold by such Lender, covers all
of such Lender's rights and obligations under this Agreement, (iii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and no Lender shall permit any Participant to
have any voting rights or any right to control the vote of such Lender with
respect to any amendment, modification, waiver, consent or other action
88
hereunder or under any other Credit Document (except as to actions that would
(x) reduce or forgive the principal amount of any Loan, reduce the rate of or
forgive any interest thereon, or reduce or forgive any fees or other
Obligations, (y) extend the Term Loan Maturity Date, the Revolving Credit
Maturity Date or any other date fixed for the payment of any principal of or
interest on any Loan, any fees or any other Obligations, or (z) increase or
extend any Commitment of any Lender), and (iv) no Participant shall have any
rights under this Agreement or any of the other Credit Documents, each
Participant's rights against the granting Lender in respect of any participation
to be those set forth in the participation agreement, and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not granted
such participation. Notwithstanding the foregoing, each Participant shall have
the rights of a Lender for purposes of Sections 2.16(a), 2.16(b), 2.17, 2.18 and
9.3, and shall be entitled to the benefits thereto, to the extent that the
Lender granting such participation would be entitled to such benefits if the
participation had not been made, provided that no Participant shall be entitled
--------
to receive any greater amount pursuant to any of such Sections than the Lender
granting such participation would have been entitled to receive in respect of
the amount of the participation made by such Lender to such Participant had such
participation not been made.
(e) Nothing in this Agreement shall be construed to prohibit any
Lender from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
-------- -------
release a Lender from any of its obligations hereunder.
(f) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section, disclose to the Assignee or Participant or proposed Assignee or
Participant any information relating to the Borrower and its Subsidiaries
furnished to it by or on behalf of any other party hereto, provided that such
--------
Assignee or Participant or proposed Assignee or Participant agrees in writing to
keep such information confidential to the same extent required of the Lenders
under Section 11.13.
11.8. No Waiver. The rights and remedies of the Administrative
---------
Agent and the Lenders expressly set forth in this Agreement and the other Credit
Documents are cumulative and in addition to, and not exclusive of, all other
rights and remedies available at law, in equity or otherwise. No failure or
delay on the part of the Administrative Agent or any Lender in exercising any
right, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude other
or further exercise thereof or the exercise of any other right, power or
privilege or be construed to be a waiver of any Default or Event of Default. No
course of dealing between any of the Borrower and the Administrative Agent or
the Lenders or their agents or employees shall be effective to amend, modify or
discharge any provision of this Agreement or any other Credit Document or to
constitute a waiver of any Default or Event of Default. No notice to or demand
upon the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
right of the Administrative Agent or any Lender to exercise any right or remedy
or take any other or further action in any circumstances without notice or
demand.
11.9. Successors and Assigns. This Agreement shall be binding upon,
----------------------
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, and all references herein to any party shall be
deemed to include its successors and assigns; provided, however, that (i) the
-------- -------
Borrower shall not sell, assign or transfer any of its rights, interests, duties
or obligations under this Agreement without the prior written consent of all of
the Lenders and (ii) any Assignees and Participants shall have such rights and
obligations with respect to this Agreement and the other Credit Documents as are
provided for under and pursuant to the provisions of Section 11.7.
89
11.10. Survival. All representations, warranties and agreements made
--------
by or on behalf of the Borrower or any of its Subsidiaries in this Agreement and
in the other Credit Documents shall survive the execution and delivery hereof or
thereof, the making and repayment of the Loans and the issuance and repayment of
the Letters of Credit. In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, including, without limitation, the provisions of Sections 2.16(a),
2.16(b), 2.17, 2.18, 10.7, 11.1 and 11.2, shall survive the payment in full of
all Loans and Letters of Credit, the termination of the Commitments and all
Letters of Credit, and any termination of this Agreement or any of the other
Credit Documents.
11.11. Severability. To the extent any provision of this Agreement
------------
is prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
11.12. Construction. The headings of the various articles, sections
------------
and subsections of this Agreement have been inserted for convenience only and
shall not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
11.13. Confidentiality. Each Lender agrees to keep confidential,
---------------
pursuant to its customary procedures for handling confidential information of a
similar nature and in accordance with safe and sound banking practices, all
nonpublic information provided to it by or on behalf of the Borrower or any of
its Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
-------- -------
directors, employees and agents and to its auditors, counsel and other
professional advisors, (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over such Lender, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with any proceeding to enforce its rights hereunder
or under any other Credit Document or any other litigation or proceeding related
hereto or to which it is a party, (iv) to the Administrative Agent or any other
Lender, (v) to the extent the same has become publicly available other than as a
result of a breach of this Agreement and (vi) pursuant to and in accordance with
the provisions of Section 11.7(f).
11.14. Counterparts; Effectiveness. This Agreement may be executed
---------------------------
in any number of counterparts and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto and receipt by the Administrative Agent and the
Borrower of written or telephonic notification of such execution and
authorization of delivery thereof.
11.15. Disclosure of Information. The Borrower agrees and consents
-------------------------
to the Administrative Agent's disclosure of information relating to this
transaction to Gold Sheets and other similar bank trade publications. Such
-----------
information will consist of deal terms and other information customarily found
in such publications.
90
11.16. Entire Agreement. THIS AGREEMENT AND THE OTHER DOCUMENTS AND
----------------
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE COMMITMENT
LETTER FROM FIRST UNION TO THE BORROWER DATED NOVEMBER 24, 1998, BUT
SPECIFICALLY EXCLUDING THE FEE LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED,
CONTRADICTED OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
91
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
THE XXXXXXXX GROUP, INC.
By: _________________________________
Title: _________________________________
(signatures continued)
92
FIRST UNION NATIONAL BANK, as
Administrative Agent and as a Lender
Revolving Credit By: __________________________________
Commitment:
$_______________
Title: _______________________________
Tranche A Term Loan Commitment:
$_______________
Instructions for wire transfers to the
Administrative Agent:
Tranche B Term Loan Commitment:
$_______________
First Union National Bank
ABA Routing Xx. 000000000
Xxxxxxxxx, Xxxxx Xxxxxxxx
General Ledger No. 465906, RC No. 5007
Attention: Syndication Agency Services
Re: The Xxxxxxxx Group, Inc.
Address for notices as a Lender:
First Union National Bank
One First Union Center, 5th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
First Union National Bank
One First Union Center, 5th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
93
FLEET BANK, N.A.
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Address for notices:
Tranche B Term Loan Commitment:
$_______________ Fleet Bank, N.A.
1185 Avenue of the Americas, 00xx Xxxxx,
XXXXX00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Fleet Bank, N.A.
1185 Avenue of the Americas, 00xx Xxxxx
XXXXX00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
94
BANK OF MONTREAL, CHICAGO BRANCH
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
Bank of Montreal, Chicago Branch
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Bank of Montreal, Chicago Branch
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
95
KEYBANK NATIONAL ASSOCIATION
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment; Address for notices:
$_______________
KeyBank National Association
000 Xxxxx Xxxxxx, 00xx Xxxxx, XX-XX-00-00-0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
KeyBank National Association
000 Xxxxx Xxxxxx, 00xx Xxxxx, XX-XX-00-00-0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
Union Bank of California
000 Xxxxx Xxxxxxxx Xxxxxx, X00-000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Union Bank of California
000 Xxxxx Xxxxxxxx Xxxxxx, X00-000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
97
U.S. BANK NATIONAL ASSOCIATION
Revolving Credit By: _________________________________
Commitment:
$11,375,000 Title: ______________________________
Tranche A Term Loan Commitment:
$4,225,000
Tranche B Term Loan Commitment: Address for notices:
$5,525,000
U.S. Bank National Association
Media/Telecom Group
0000 0xx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
U.S. Bank National Association
Media/Telecom Group
0000 0xx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
00
XXXX XX XXXXXXX
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
Bank of America
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Lending Office:
Bank of America
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
(signatures continued)
00
XXX XXXX XX XXXX XXXXXX
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Address for notices:
Tranche B Term Loan Commitment;
$_______________ The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxx,
Relationship Manager
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxx,
Relationship Manager
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
000
XXXXXXXX XXXX XX, XXX XXXX & GRAND CAYMAN BRANCHES
Revolving Credit By:________________________________________
Commitment:
$_______________ Title:_____________________________________
Tranche A Term Loan Commitment:
$_______________ By:________________________________________
Title: ___________________________________
Tranche B Term Loan Commitment:
$_______________
Address for notices:
Dresdner Bank AG
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Dresdner Bank AG
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
101
THE CIT GROUP/EQUIPMENT FINANCING, INC.
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche B Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
The CIT Group/Equipment Financing, Inc.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: UPI Credit Notice
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
The CIT Group/Equipment Financing, Inc.
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx X'Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
102
BANQUE NATIONALE DE PARIS
Revolving Credit By:__________________________
Commitment:
$7,000,000.00 Title:_______________________
Tranche A Term Loan Commitment:
$2,600,000.00 By:_________________________
Tranche B Term Loan Commitment: Title:______________________
$3,400,000.00 Address for notices:
Banque Nationale de Paris
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Banque Nationale de Paris
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
103
CITY NATIONAL BANK
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
City National Bank
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxx X. Xxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
City National Bank
000 Xxxxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxx X. Xxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
104
FIRST HAWAIIAN BANK
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
First Hawaiian Bank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
First Hawaiian Bank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
105
THE FUJI BANK, LIMITED, LOS ANGELES AGENCY
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
The Fuji Bank, Limited, Los Angeles Agency
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
The Fuji Bank, Limited, Los Angeles Agency
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
000
XXXXX XXXXXX XXXX AND TRUST COMPANY
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
000
XXXXXXXX XXXX, XXXXXXX XXXXXXX, N.A.
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
SunTrust Bank, Central Florida, N.A.
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
SunTrust Bank, Central Florida, N.A.
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
108
COMPAGNIE FINANCIERE DE CIC ET DE
l'UNION EUROPEENNE
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
Compagnie Financiere de CIC et de
l'Union Europeenne
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Compagnie Financiere de CIC, et de
l'Union Europeenne
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(signatures continued)
109
MICHIGAN NATIONAL BANK
Revolving Credit By: _________________________________
Commitment:
$_______________ Title:________________________________
Tranche A Term Loan Commitment:
$_______________
Tranche B Term Loan Commitment: Address for notices:
$_______________
Michigan National Bank
27777 Inkster
Specialty Industries 00-00
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Lending Office:
Michigan National Bank
27777 Inkster
Specialty Industries 00-00
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
110
SCHEDULE 5.4
MATERIAL FCC LICECSES
Primary Broadcast City of License
----------------- ------- -------
Station License License Frequency Expiration
--------------- ------- ---------- ----------
WIXT(TV) Syracuse, NY Ch. No. 9 (186-192 MHz) June 1, 0000
XXXX(XX) Xxxxxxxxxx, XX Ch. No. 34 (590-596 MHz) June 1, 1999
KCBA(TV) Salinas, CA Ch. No. 35 (596-602 MHz) Dec. 1, 0000 /0/
XXXX(XX) Xxxxx Xxxx, XX Ch. No. 50 (686-692 MHz) Dec. 1, 0000
XXXX(XX) Xxxxxxxx Xxxxxxx, XX Ch. No. 11 (198-204 MHz) April 1, 2006
KVOS(TV) Bellingham, WA Ch. No. 12 (204-210 MHz) Feb. 1, 0000 /0/
XXXX(XX) Xxxxxxxxxxx, XX Ch. No. 17 (488-494 MHz) Dec. 1, 0000
XXXX(XX) Xxxxxx, XX Ch. No. 6 (82-88 MHz) Dec. 1, 2006
KHHO(AM) Tacoma, WA Ch. No. N/A (850 KHz) Feb. 1, 2006
KJR(AM) Seattle, WA Ch. No. N/A (950 KHz) Feb. 1, 0000
XXX-XX Xxxxxxx, XX Xx. Xx. 000X (00.0 XXx) Feb. 1, 0000
XXXX(XX) Xxxxxxx, XX Xx. Xx. 000X (00.0 XXx) Feb. 1, 2006
/1/ Application for Renewal of License submitted to FCC on July 31, 1998 (File
No. XXXX-000000XX), Public Notice dated August 25, 1998.
/2/ Application for Renewal of License submitted to FCC on October 1, 1998 (File
No. XXXX-000000XX), Public Notice dated October 19, 1998.
SCHEDULE 5.5
LITIGATION
1. Van Alstyne x. Xxxxxxxx Communications, Inc., et al. Complaint filed June
7, 1996 in the U.S. District Court for the Northern District of New York.
2. Xxxxxxx x. Xxxxxxxx et al. Complaint filed December 12, 1994 in the U.S.
District Court for the Western District of Washington.
3. RSA Media, Inc. v. AK Media Group, Inc. Complaint filed June 4, 1997 in
the U.S. District Court for the District of Massachusetts.
SCHEDULE 5.7
SUBSIDIARIES
Subsidiaries Owned by Borrower
------------------------------
Subsidiary Percentage of Ownership
Xxxxxxxx Airport Advertising, Inc. 100%
AK Media Group, Inc. 100%
Central NY News, Inc. 100%
SSI, Inc. 100%
TC Aviation, Inc. 100%
Subsidiaries Owned by AK Media Group, Inc.
------------------------------------------
Subsidiary Percentage of Ownership
Xxxxxxxx Communications of Massachusetts, Inc. 100%
(Inactive)
KVOS TV, Ltd. 100%
SCHEDULE 5.17
INSURANCE
See attached schedule.
THE XXXXXXXX GROUP
Schedule of Policies
-----------------------------------------------------------------------------------------------------------------------------------
Effective Expiration
Coverage Description Company Policy Number Date Date Premium
-----------------------------------------------------------------------------------------------------------------------------------
Property & Inland Marine Commonwealth Insurance Company CICA1246 06/30/98 06/30/99 $286,053
Excess Property & Inland Marine TIG Insurance Company XPT37954061 06/30/98 06/30/99 118,625
Boiler & Machinery Pacific Indemnity Company 76400889 06/01/98 06/01/99 1,206
Auto & General Liability Fidelity & Guaranty Insurance 1CP30030187001 06/30/98 06/30/99 337,094
Workers' Compensation Employers Insurance of Wausau 481900000431 06/30/98 06/30/99 82,127
Workers' Compensation Employers Insurance of Wausau 481902000431 06/30/98 06/30/99 64,041
Workers' Compensation Employers Insurance of Wausau 482900000431 06/30/98 06/30/99 14,000
Commercial Umbrella Federal Insurance Company 79663950 06/30/98 06/30/99 92,700
Broadcasters Liability Employers Reinsurance Company BR04603-3 06/30/98 06/30/99 38,691
Commercial Package Royal Insurance Company of Canada 62324051 06/30/98 06/30/99 3,520
Railroad Protective Liability Fidelity & Guaranty Insurance RPL30000936901 06/30/98 06/30/99 1,200
Aviation American Home Insurance HL338659202 06/29/98 06/29/99 131,395
Aviation United States Aviation Underwriters 400AC40333 06/29/98 06/29/99 134,450
Aviation CIGNA Insurance Company ATA017305 06/29/98 06/29/99 29,863
Aviation Lloyds of London XX0000000 06/29/98 06/29/99 199,786
Aviation Various Subscribing Insurance Cos. 360AC254070 07/16/98 07/16/99 49,346
Aviation Lloyds of London TBD 08/04/98 06/29/99 45,050
Hull War Risk Lloyds of London AM9800832 06/29/98 06/29/99 4,500
Directors & Officers Liability National Union Fire Ins. Co. of PA D07704887 12/30/97 12/30/00 410,750
Excess Directors & Officers Reliance National Insurance Company NDA014328997 12/30/97 12/30/00 191,250
SCHEDULE 5.18
MATERIAL CONTRACTS
Note Agreements between the Company and certain insurance companies, dated as of
December 1, 1989.
Amendment No. 1 dated October 18, 1991 to Note Agreements dated December 1,
1989.
Agreements of Waiver and Amendment dated September 30, 1990.
Implementation and Waiver Agreement dated October 18, 1991.
Indenture by and among the Company, various guarantors, and The Bank of New
York, dated December 14, 1998.
Registration Rights Agreement by and among the Company, Xxxxxxx Xxxxx Xxxxxx,
Inc., First Union Capital Markets, and Fleet Securities, Inc., dated December
14, 1998.
The Company's Employee Stock Option Plan, as amended and restated on June 10,
1998.
Nonemployee-Director's Equity Compensation Plan, amended and restated on March
12, 1997.
Premises Use and Occupancy Agreement between The City of Seattle and SSI, Inc.
dated March 2, 1994.
Asset Purchase Agreement between AK Media Group, Inc. and Xxxxxx Television of
Monterey, dated November 3, 1998.
Time Brokerage Agreement between AK Media Group, Inc. and Xxxxxx Television of
Monterey, dated April 24, 1996.
SCHEDULE 5.18
MATERIAL CONTRACTS
Asset Purchase Agreement between AK Media Group, Inc. and Seal Rock
Broadcasters, L.L.C., dated November 2, 1998.
Time Brokerage Agreement between AK Media Group, Inc. and Seal Rock
Broadcasters, L.L.C., dated November 2, 1998.
Guaranty Agreement between The Xxxxxxxx Group, Inc. and First Union National
Bank, as agent, dated April 24, 1996.
Time Brokerage Agreement between Central NY News, Inc. and Utica Television
Partners, L.L.C., dated June 30, 1997.
Guaranty Agreement between The Xxxxxxxx Group, Inc. and First Union National
Bank, as agent, dated June 30, 1997.
Purchase Agreement by and among AK Media Group, Inc. and Xxxxxxxx
Communications, Inc., dated September 25, 1998, regarding television station
WOKR, Rochester, New York.
Acquisition Agreement by and among AK Media Group, Inc. and Xxxxx Broadcast
Group Limited Partnership, dated November 30, 1998, regarding television station
KMTR, Eugene, Oregon, and related broadcast stations.
Asset Exchange Agreement between AK Media Group, Inc., Benedek Broadcasting
Corporation and Benedek License Corporation, dated December 30, 1998.
Aircraft Lease between TC Aviation, Inc. and Fleet Capital Corporation, dated
July 11, 1996.
Private Carrier Agreement between SS Aviation, Inc. and SSI, Inc., dated June
29, 1990.
SCHEDULE 8.2
INDEBTEDNESS EXISTING ON THE CLOSING DATE
All Dollars in Thousands (000's)
Revolver $ 61,813
9% Senior Subordinated Notes 175,000
10.48% Senior Subordinated Notes 20,000
Loans Related to Sonics Aircraft 15,423
Letters of Credits 3,750
Deferred Compensation 2,180
Capital Lease Obligation 5,686
Contingent Obligations Attributable to Guaranties 10,430
Total Indebtedness Existing on Closing Date $294,282
========
SCHEDULE 8.3
LIENS
The following are the Borrower's liens in existence on the closing date:
1. Liens related to the Consent to Sublease and Assignment among Fleet
Capital Corporation, TC Aviation, Inc. and AK Media Group, Inc. (formerly
Xxxxxxxx Communications Group, Inc.) pledging the sublease as security for the
operating lease of the Company corporate jet.
2. Lien on certain assets of the Key Arena for the Capital Lease Obligation
on Key Arena leasehold assets.
3. Security Agreement and related liens to secure the Promissory Notes in
the aggregate principal amount of $15,000,000 to the order of KeyCorp Leasing
regarding the purchase of the Sonics jet.
SCHEDULE 8.5
INVESTMENTS EXISTING AT CLOSING DATE
The following are the Borrower's investments in existence on the closing date:
1. Investment in The National Basketball Association (A Joint Venture).
2. Investment in The NBA Market Extension Partnership.
3. Investment in NBA Properties, Inc.
SCHEDULE 8.7
TRANSACTIONS WITH AFFILIATES
The following are the Borrower's transactions with affiliates:
2. From time to time, the Borrower advances funds to Xxxxx X. Xxxxxxxx and
other executive officers for their personal use. For the year ended December
31, 1998, the aggregate outstanding principal amount of loans to Xxxxx
Xxxxxxxx was $2,062,339 and to all other officers and directors was
$376,000. Interest on this indebtedness accrues and is imputed at the same
rate as that charged to the Borrower on its senior bank debt./1/
---------------------------------
/1/ Loans and advances to the Company's management will not exceed $5 million
in aggregate at any one time.
SCHEDULE 8.16
EXISTING FHS INDEBTEDNESS
The following are the Borrower's transactions with affiliates:
From time to time, the Borrower advances funds to Xxxxx X. Xxxxxxxx and
other executive officers for their personal use. For the year ended
December 31, 1998, the aggregate outstanding principal amount of loans to
Xxxxx Xxxxxxxx was $2,062,339 and to all other officers and directors was
$376,000. Interest on this indebtedness accrues and is imputed at the same
rate as that charged to the Borrower on its senior bank debt.1
1 Loans and advances to the Company's management will not exceed $5 million in
aggregate at any one time.
The following is the indebtedness of Full House Sports & Entertainment, a
division of AK Media Group, Inc.:
Indebtedness in the amount of $1,905,848 under certain deferred
compensation agreements.
EXHIBIT A-1
-----------
Borrower's Taxpayer Identification No. _____________
FORM OF
TRANCHE A TERM NOTE
___________$ January ___, 1999
Charlotte, North Carolina
FOR VALUE RECEIVED, THE XXXXXXXX GROUP, INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of
______________________________ (the "Lender"), at the offices of FIRST
UNION NATIONAL BANK (the "Agent") located at One First Union Center, 301 South
College Street, Charlotte, North Carolina (or at such other place or places as
the Agent may designate), at the times and in the manner provided in the Credit
Agreement, dated as of January __, 1999 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), among the Borrower, the Lenders from
time to time parties thereto, FLEET BANK, N.A., as Documentation Agent and FIRST
UNION NATIONAL BANK, as Administrative Agent, the principal sum of
__________________________ DOLLARS ($___________), under the terms and
conditions of this promissory note (this "Tranche A Term Note") and the Credit
Agreement. The defined terms in the Credit Agreement are used herein with the
same meaning. The Borrower also unconditionally promises to pay interest on the
aggregate unpaid principal amount of this Tranche A Term Note at the rates
applicable thereto from time to time as provided in the Credit Agreement.
This Tranche A Term Note is one of a series of Tranche A Term Notes
referred to in the Credit Agreement and is issued to evidence the Tranche A Term
Loans made by the Lender pursuant to the Credit Agreement. All of the terms,
conditions and covenants of the Credit Agreement are expressly made a part of
this Tranche A Term Note by reference in the same manner and with the same
effect as if set forth herein at length, and any holder of this Tranche A Term
Note is entitled to the benefits of and remedies provided in the Credit
Agreement and other Credit Documents. Reference is made to the Credit Agreement
for provisions relating to the interest rate, maturity, payment, prepayment and
acceleration of this Tranche A Term Note.
In the event of an acceleration of the maturity of this Tranche A Term
Note, this Tranche A Term Note shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Tranche A Term Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
This Tranche A Term Note shall be governed by and construed in accordance
with the internal laws and judicial decisions of the State of North Carolina.
The Borrower hereby submits to the nonexclusive jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Tranche A Term Note to be
executed under seal by its duly authorized corporate officer as of the day and
year first above written.
THE XXXXXXXX GROUP, INC.
By: _______________________________
Title: ______________________________
-2-
EXHIBIT A-2
-----------
Borrower's Taxpayer Identification No. __________
FORM OF
TRANCHE B TERM NOTE
___________$ January ___, 1999
Charlotte, North Carolina
FOR VALUE RECEIVED, THE XXXXXXXX GROUP, INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of
______________________________ (the "Lender"), at the offices of FIRST
UNION NATIONAL BANK (the "Agent") located at One First Union Center, 301 South
College Street, Charlotte, North Carolina (or at such other place or places as
the Agent may designate), at the times and in the manner provided in the Credit
Agreement, dated as of January __, 1999 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), among the Borrower, the Lenders from
time to time parties thereto, FLEET BANK, N.A., as Documentation Agent and FIRST
UNION NATIONAL BANK, as Administrative Agent, the principal sum of
__________________________ DOLLARS ($___________), under the terms and
conditions of this promissory note (this "Tranche B Term Note") and the Credit
Agreement. The defined terms in the Credit Agreement are used herein with the
same meaning. The Borrower also unconditionally promises to pay interest on the
aggregate unpaid principal amount of this Tranche B Term Note at the rates
applicable thereto from time to time as provided in the Credit Agreement.
This Tranche B Term Note is one of a series of Tranche B Term Notes
referred to in the Credit Agreement and is issued to evidence the Tranche B Term
Loans made by the Lender pursuant to the Credit Agreement. All of the terms,
conditions and covenants of the Credit Agreement are expressly made a part of
this Tranche B Term Note by reference in the same manner and with the same
effect as if set forth herein at length, and any holder of this Tranche B Term
Note is entitled to the benefits of and remedies provided in the Credit
Agreement and other Credit Documents. Reference is made to the Credit Agreement
for provisions relating to the interest rate, maturity, payment, prepayment and
acceleration of this Tranche B Term Note.
In the event of an acceleration of the maturity of this Tranche B Term
Note, this Tranche B Term Note shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Tranche B Term Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
This Tranche B Term Note shall be governed by and construed in accordance
with the internal laws and judicial decisions of the State of North Carolina.
The Borrower hereby submits to the nonexclusive jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Tranche B Term Note to be
executed under seal by its duly authorized corporate officer as of the day and
year first above written.
THE XXXXXXXX GROUP, INC.
By: _______________________________
Title: ____________________________
-2-
EXHIBIT A-3
-----------
Borrower's Taxpayer Identification No. _____________
FORM OF
REVOLVING NOTE
___________$ January ___, 1999
Charlotte, North Carolina
FOR VALUE RECEIVED, THE XXXXXXXX GROUP, INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of
______________________________ (the "Lender"), at the offices of FIRST
UNION NATIONAL BANK (the "Agent") located at One First Union Center, 301 South
College Street, Charlotte, North Carolina (or at such other place or places as
the Agent may designate), at the times and in the manner provided in the Credit
Agreement, dated as of January __, 1999 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), among the Borrower, the Lenders from
time to time parties thereto, FLEET BANK, N.A., as Documentation Agent, and
FIRST UNION NATIONAL BANK, as Administrative Agent, the principal sum of
__________________________ DOLLARS ($___________), or such lesser amount as
may constitute the unpaid principal amount of the Revolving Loans made by the
Lender, under the terms and conditions of this promissory note (this "Revolving
Note") and the Credit Agreement. The defined terms in the Credit Agreement are
used herein with the same meaning. The Borrower also unconditionally promises
to pay interest on the aggregate unpaid principal amount of this Revolving Note
at the rates applicable thereto from time to time as provided in the Credit
Agreement.
This Revolving Note is one of a series of Revolving Notes referred to in
the Credit Agreement and is issued to evidence the Revolving Loans made by the
Lender pursuant to the Credit Agreement. All of the terms, conditions and
covenants of the Credit Agreement are expressly made a part of this Revolving
Note by reference in the same manner and with the same effect as if set forth
herein at length, and any holder of this Revolving Note is entitled to the
benefits of and remedies provided in the Credit Agreement and the other Credit
Documents. Reference is made to the Credit Agreement for provisions relating to
the interest rate, maturity, payment, prepayment and acceleration of this
Revolving Note.
In the event of an acceleration of the maturity of this Revolving Note,
this Revolving Note shall become immediately due and payable, without
presentation, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
This Revolving Note shall be governed by and construed in accordance with
the internal laws and judicial decisions of the State of North Carolina. The
Borrower hereby submits to the nonexclusive jurisdiction and venue of the
federal and state courts located in Mecklenburg County, North Carolina, although
the Lender shall not be limited to bringing an action in such courts.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
executed under seal by its duly authorized corporate officer as of the day and
year first above written.
THE XXXXXXXX GROUP, INC.
By: _______________________________
Title: ____________________________
-2-
EXHIBIT B-1
-----------
FORM OF
NOTICE OF BORROWING
[Date]
First Union National Bank, as Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, THE XXXXXXXX GROUP, INC. (the "Borrower"), refers to the
Credit Agreement, dated as of January __, 1999, among the Borrower, certain
banks and other financial institutions from time to time parties thereto (the
"Lenders"), FLEET BANK, N.A. as Documentation Agent and you, as Administrative
Agent for the Lenders (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 2.2(B) of the Credit Agreement, hereby gives
you, as Administrative Agent, irrevocable notice that the Borrower requests a
Borrowing of [Tranche B Term][Revolving]/1/ Loans under the Credit Agreement,
and to that end sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by SECTION 2.2(B) of the Credit Agreement:
(i) The aggregate principal amount of the Proposed Borrowing is
$_______________./2/
(ii) The Loans comprising the Proposed Borrowing shall be
initially made as [Base Rate Loans] [LIBOR Loans]./3/
(iii) The initial Interest Period for the LIBOR Loans comprising
the Proposed Borrowing shall be [one/two/three/six months]./4/
_______________________
/1/Select the applicable class of Loans.
/2/Amount of Proposed Borrowing must comply with Section 2.2(b) of the Credit
Agreement.
/3/Select the applicable Type of Loans.
/4/Include this clause in the case of a Proposed Borrowing comprised of LIBOR
Loans, and select the applicable Interest Period.
(iv) The Proposed Borrowing is requested to be made on
__________________ (the "Borrowing Date")./5/
The Borrower hereby certifies that the following statements are true on and
as of the date hereof and will be true on and as of the Borrowing Date:
A. Each of the representations and warranties contained in ARTICLE V
of the Credit Agreement and in the other Credit Documents is and will be
true and correct on and as of each such date, with the same effect as if
made on and as of each such date, both immediately before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
therefrom (except to the extent any such representation or warranty is
expressly stated to have been made as of a specific date, in which case
such representation or warranty shall be true and correct as of such date);
B. No Default or Event of Default has occurred and is continuing or
would result from the Proposed Borrowing or from the application of the
proceeds therefrom; and
C. After giving effect to the Proposed Borrowing, the sum of (i) the
aggregate principal amount of Revolving Loans outstanding, and (ii) the
aggregate Letter of Credit Exposure of all Lenders, will not exceed the
aggregate Revolving Credit Commitments.
Very truly yours,
THE XXXXXXXX GROUP, INC.
By: _______________________________
Title: ____________________________
_________________________
/5/Shall be no later than the Business Day of the Borrowing (in the case of
Base Rate Loans) or at least three Business Days after the date hereof (in the
case of LIBOR Loans). In the case of Tranche B Term Loans, the Proposed
Borrowing shall not occur after the Tranche B Term Loan Commitment Expiration
Date.
-2-
EXHIBIT B-2
-----------
FORM OF
NOTICE OF CONVERSION/CONTINUATION
[Date]
First Union National Bank, as Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
The undersigned, THE XXXXXXXX GROUP, INC. (the "Borrower"), refers to
the Credit Agreement, dated as of January __, 1999, among the Borrower, certain
banks and other financial institutions from time to time parties thereto (the
"Lenders"), FLEET BANK, N.A. as Documentation Agent and you, as Administrative
Agent for the Lenders (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 2.11(B) of the Credit Agreement, hereby gives
you, as Administrative Agent, irrevocable notice that the Borrower requests a
[conversion] [continuation]/1/ of Loans under the Credit Agreement, and to that
end sets forth below the information relating to such [conversion]
[continuation] (the "Proposed [Conversion] [Continuation]") as required by
SECTION 2.11(B) of the Credit Agreement:
(i) The Proposed [Conversion] [Continuation] is requested to be
made on _______________./2/
(ii) The Proposed [Conversion] [Continuation] involves
$____________/3/ in aggregate principal amount of [Tranche A Term] [Tranche
B Term] [Revolving]/4/ Loans made pursuant to a Borrowing on
________________,/5/ which Loans are presently
___________________________
/1/Insert "conversion" or "continuation" throughout the notice, as
applicable.
/2/Shall be no later than the Business Day of the Conversion (in the case of
any conversion of LIBOR Loans into Base Rate Loans) or at least three Business
Days after the date hereof (in the case of any conversion of Base Rate Loans
into, or continuation of, LIBOR Loans), and additionally, in the case of any
conversion of LIBOR Loans into Base Rate Loans, or continuation of LIBOR Loans,
shall be the last day of the Interest Period applicable to such LIBOR Loans.
/3/Amount of Proposed Conversion or Continuation must comply with Section
2.11(b) of the Credit Agreement.
/4/Select the applicable Class of Loans.
/5/Insert the applicable Borrowing Date for the Loans being converted or
continued.
maintained as [Base Rate] [LIBOR] Loans and are proposed hereby to be
[converted into Base Rate Loans] [converted into LIBOR Loans] [continued as
LIBOR Loans]./6/
[(iii) The initial Interest Period for the Loans being [converted
into] [continued as] LIBOR Loans pursuant to the Proposed [Conversion]
[Continuation] shall be [one/two/three/six months].]/7/
The Borrower hereby certifies that the following statement is true
both on and as of the date hereof and on and as of the effective date of the
Proposed [Conversion] [Continuation]: no Default or Event of Default has or will
have occurred and is continuing or would result from the Proposed [Conversion]
[Continuation].
Very truly yours,
THE XXXXXXXX GROUP, INC.
By: ______________________________
Title: ___________________________
____________________________
/6/Complete with the applicable bracketed language.
/7/Include this clause in the case of a Proposed Conversion or Continuation
involving a conversion of Base Rate Loans into, or continuation of, LIBOR Loans,
and select the applicable Interest Period.
EXHIBIT B-3
-----------
FORM OF
LETTER OF CREDIT NOTICE
[Date]
First Union National Bank, as Administrative Agent
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
First Union National Bank, as
Issuing Lender
One First Union Center, 5th Floor
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: _______________________
Ladies and Gentlemen:
The undersigned, THE XXXXXXXX GROUP, INC. (the "Borrower"), refers to
the Credit Agreement, dated as of January __, 1999, among the Borrower, certain
banks and other financial institutions from time to time parties thereto (the
"Lenders"), FLEET BANK, N.A. as Documentation Agent and you, as Administrative
Agent for the Lenders (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined), and, pursuant to SECTION 3.2 of the Credit Agreement, hereby gives
you, as Issuing Lender, irrevocable notice that the Borrower requests the
issuance of a Letter of Credit for its account under the Credit Agreement, and
to that end sets forth below the information relating to such Letter of Credit
(the "Requested Letter of Credit") as required by SECTION 3.2 of the Credit
Agreement:
(i) The Business Day on which the Requested Letter of Credit is
requested to be issued is _______________./1/
(ii) The Stated Amount of the Requested Letter of Credit is
$____________.
(iii) The expiry date of the Requested Letter of Credit is
______________.
(iv) The name and address of the beneficiary of the Requested
Letter of Credit is _____________________________________________________
_________________________
/1/Shall be at least three Business Days (or such shorter period as is
acceptable to the Issuing Lender in any given case) after the date hereof.
The undersigned agrees to complete all application procedures and
documents required by you in connection with the Requested Letter of Credit.
The undersigned hereby certifies that the following statements are true on
the date hereof and will be true on the date of issuance of the Requested Letter
of Credit:
A. Each of the representations and warranties contained in ARTICLE V
of the Credit Agreement and in the other Credit Documents is and will be
true and correct on and as of each such date, with the same effect as if
made on and as of each such date, both immediately before and after giving
effect to the issuance of the Requested Letter of Credit (except to the
extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty
shall be true and correct as of such date);
B. No Default or Event of Default has occurred and is continuing or
would result from the issuance of the Requested Letter of Credit;
C. After giving effect to the issuance of the Requested Letter of
Credit, the sum of (i) the aggregate principal amount of Revolving Loans
outstanding and (ii) the aggregate Letter of Credit Exposure of all
Lenders, will not exceed the aggregate Revolving Credit Commitments; and
D. After giving effect to the issuance of the Requested Letter of
Credit, the sum of (i) the aggregate principal amount of Revolving Loans
outstanding and (ii) the aggregate Letter of Credit Exposure of all
Lenders, will not exceed the aggregate Revolving Credit Commitments.
Very truly yours,
THE XXXXXXXX GROUP, INC.
By: ______________________________
Title: ___________________________
EXHIBIT C
---------
FORM OF
COMPLIANCE CERTIFICATE
THIS CERTIFICATE is given pursuant to SECTION 6.2(A) of the Credit
Agreement, dated as of __________, 1999 (as amended, modified or supplemented
from time to time, the "Credit Agreement," the terms defined therein being used
herein as therein defined), among THE XXXXXXXX GROUP, INC. (the "Borrower"),
certain banks and other financial institutions from time to time parties thereto
(the "Lenders"), and First Union National Bank, as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent").
The undersigned hereby certifies that:
1. He is a duly elected Financial Officer of the Borrower.
2. Enclosed with this Certificate are copies of the financial statements
of the Borrower and its Subsidiaries as of _____________, and for the [________-
month period] [year] then ended, required to be delivered under SECTION
[6.1(A)][6.1(B)] of the Credit Agreement. Such financial statements have been
prepared in accordance with GAAP [(subject to the absence of notes required by
GAAP and subject to normal year-end adjustments)]/1/ and fairly present the
financial condition of the Borrower and its Subsidiaries on a consolidated basis
as of the date indicated and the results of operation of the Borrower and its
Subsidiaries on a consolidated basis for the period covered thereby.
3. The undersigned has reviewed the terms of the Credit Agreement and has
made, or caused to be made under the supervision of the undersigned, a review in
reasonable detail of the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by such financial statements.
4. The examination described in paragraph 3 above did not disclose, and
the undersigned has no knowledge of the existence of, any Default or Event of
Default during or at the end of the accounting period covered by such financial
statements or as of the date of this Certificate. [, except as set forth below.
Describe here or in a separate attachment any exceptions to paragraph 4 above by
listing, in reasonable detail, the nature of the Default or Event of Default,
the period during which it existed and the action that the Borrower has taken or
proposes to take with respect thereto.]
____________
/1/Insert in the case of quarterly financial statements.
5. Attached to this Certificate as Attachment A is a covenant compliance
worksheet reflecting the computation of the financial covenants set forth in
ARTICLE VII of the Credit Agreement as of the last day of the period covered by
the financial statements enclosed herewith.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of _____________, ____.
THE XXXXXXXX GROUP, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
2
ATTACHMENT A
COVENANT COMPLIANCE WORKSHEET
A. LEVERAGE RATIO (SECTION 7.1(A) OF THE CREDIT AGREEMENT)
--------------------------------------------------------------------------------
(1) Consolidated Funded Debt of the Borrower and its
Subsidiaries as of the date of determination
(without duplication):
------------------------------------------------------------------------------
(a) Aggregate indebtedness and obligations of
Borrower and its Subsidiaries for borrowed money
or in respect of loans or advances of any kind as $_______
of the date of determination
------------------------------------------------------------------------------
(b) Aggregate obligations of Borrower and its
Subsidiaries evidenced by notes, bonds,
debentures or similar instruments as of the date $_______
of determination
------------------------------------------------------------------------------
(c) Aggregate reimbursement obligation of
Borrower and its Subsidiaries with respect to
surety bonds, letters of credit, and bankers'
acceptances as of the date of determination,
excluding obligations in respect of performance
bonds the outstanding amount of which do not $_______
exceed $20,000,000
------------------------------------------------------------------------------
(d) Aggregate obligation of Borrower and its
Subsidiaries to pay the deferred purchase price
of property or services as of the date of $_______
determination
------------------------------------------------------------------------------
(e) Aggregate indebtedness created or arising
under any conditional sale or other title
retention agreement with respect to property
acquired by the Borrower or its Subsidiaries as
of the date of determination $_______
------------------------------------------------------------------------------
i
------------------------------------------------------------------------------
(f) Capital Lease Obligations as of the date of $_______
determination
------------------------------------------------------------------------------
(g) All Disqualified Capital Stock issued by the
Borrower or its Subsidiaries to the extent in
excess of the greater of such Disqualified
Capital Stock's voluntary or involuntary
liquidation preference and its maximum fixed $_______
repurchase price (but excluding accrued
dividends) as of the date of determination.
------------------------------------------------------------------------------
(h) Aggregate obligations attributable to
guaranties of Indebtedness of other Persons as of $_______
the date of determination
------------------------------------------------------------------------------
(i) Aggregate obligations in respect of any
earned deferred compensation for which the
Borrower or its Subsidiaries is liable as of the $_______
date of determination
------------------------------------------------------------------------------
(j) Aggregate indebtedness of the Borrower and
its Subsidiaries secured by any Lien on any
property or asset owned or held by the Borrower $_______
or its Subsidiaries as of the date of
determination
------------------------------------------------------------------------------
(k) Add Lines 1(a) through 1(j)
$_______
------------------------------------------------------------------------------
ii
------------------------------------------------------------------------------
(2) Consolidated EBITDA for the most recently ended
four consecutive fiscal quarters (the
"Measurement Period"*
------------------------------------------------------------------------------
(a) Consolidated Net Income during such
Measurement Period $_______
------------------------------------------------------------------------------
(b) Aggregate tax expense of Borrower and its
Subsidiaries during such Measurement Period
$_______
------------------------------------------------------------------------------
(c) Consolidated Interest Expense during such
Measurement Period $_______
------------------------------------------------------------------------------
(d) Aggregate depreciation, amortization, and
other non-cash expenses of the Borrower
and its Subsidiaries reducing Consolidated
Net Income of the Borrower and its $_______
Subsidiaries during the Measurement Period
determined on a consolidated basis in
accordance with GAAP
------------------------------------------------------------------------------
(e) Add Lines 2(a) through 2(d) $_______
------------------------------------------------------------------------------
(3) Leverage Ratio:
Divide Line 1(k) by Line 2(e)
------------------------------------------------------------------------------
(4) Maximum Leverage Ratio as of the date of SEE SECTION
determination 7.1(A) OF CREDIT
AGREEMENT
------------------------------------------------------------------------------
___________
* As applicable, adjusted to exclude operating losses of Full House Sports, per
Credit Agreement.
iii
B. SENIOR LEVERAGE RATIO (SECTION 7.1(B) OF THE CREDIT AGREEMENT)
--------------------------------------------------------------------------------
(1) Consolidated Senior Funded Debt as of
the date of determination
--------------------------------------------------------------------------------
(a) Consolidated Funded Debt as of the
date of determination (from A, Line $_________
1(k) above)
--------------------------------------------------------------------------------
(b) Subordinated Indebtedness of the
Borrower and its Subsidiaries as of $_________
the date of determination
--------------------------------------------------------------------------------
(c) Subtract Line 1(b) from Line 1(a) $_________
--------------------------------------------------------------------------------
(2) Consolidated EBITDA for the most
recently ended four consecutive fiscal
quarters (the "Measurement Period")
(from A, Line 2(e))
--------------------------------------------------------------------------------
(3) Senior Leverage Ratio: Divide Line 1(c)
by Line 2 _________
--------------------------------------------------------------------------------
(4) Maximum Senior Leverage Ratio as of the date SEE SECTION
of determination 7.1(B) OF
CREDIT
AGREEMENT
--------------------------------------------------------------------------------
iv
C. INTEREST COVERAGE RATIO (SECTION 7.2 OF THE CREDIT AGREEMENT)
--------------------------------------------------------------------------------
(1) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on the date of $___________
determination (the "Measurement Period") (from A,
Line 2(e))
--------------------------------------------------------------------------------
(2) Consolidated Interest Expense of the Borrower and
its Subsidiaries for the Measurement Period $___________
(without duplication)
--------------------------------------------------------------------------------
(3) Interest Coverage Ratio:
Divide Line 1 by Line 2 ____________
--------------------------------------------------------------------------------
(4) Minimum Interest Coverage Ratio as of the date of SEE SECTION 7.2
determination OF CREDIT
AGREEMENT
--------------------------------------------------------------------------------
v
D. FIXED CHARGE COVERAGE RATIO (SECTION 7.3 OF THE CREDIT AGREEMENT)
--------------------------------------------------------------------------------
(1) Consolidated EBITDA for the period of four
consecutive fiscal quarters then ending (the $___________
"Measurement Period")(from A, Line 2(e) above)
--------------------------------------------------------------------------------
(2) Consolidated Fixed Charges during such
Measurement Period:
--------------------------------------------------------------------------------
(a) Consolidated Interest Expense during such
Measurement Period (from C, Line 2) $___________
--------------------------------------------------------------------------------
(b) Aggregate tax expense of Borrower and its
Subsidiaries during such Measurement Period $___________
--------------------------------------------------------------------------------
(c) Capital Expenditures for such Measurement $___________
Period
--------------------------------------------------------------------------------
(d) Aggregate amount of principal payments on
Consolidated Funded Debt scheduled or
required to have been made by Borrower
and its Subsidiaries during such period $___________
including the aggregate principal amount
of the Term Loans due during such
Measurement Period
--------------------------------------------------------------------------------
(e) Aggregate of all amounts paid by
Borrower or any of its Subsidiaries during
such Measurement Period under any LMA
Agreements attributable to principal being
paid by the other parties to such LMA $___________
Agreements pursuant to their respective
senior credit facilities.
--------------------------------------------------------------------------------
(f) Add Lines 2(a) through 2(e) $___________
--------------------------------------------------------------------------------
(3) Fixed Charge Coverage Ratio:
Divide Line 1 by Line 2(f) $___________
--------------------------------------------------------------------------------
(4) Minimum Fixed Charge Coverage Ratio as of the
date of determination 1.05 : 1.00
--------------------------------------------------------------------------------
vi
EXHIBIT D
---------
FORM OF
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE (this "Assignment and Acceptance") is made this
_____ day of ____________, ____, by and between _________________________ (the
"Assignor") and ________________________ (the "Assignee"). Reference is made to
the Credit Agreement, dated as of January __, 1999 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), among THE XXXXXXXX
GROUP, INC. (the "Borrower"), certain banks and other financial institutions
from time to time parties thereto (the "Lenders"), FLEET BANK, N.A. as
Documentation Agent, and FIRST UNION NATIONAL BANK, as Administrative Agent for
the Lenders (the "Administrative Agent"). Unless otherwise defined herein,
capitalized terms used herein without definition shall have the meanings given
to them in the Credit Agreement.
The Assignor and the Assignee hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions hereof,
-------------------------
the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, without recourse to the Assignor and,
except as expressly provided herein, without representation or warranty by the
Assignor, the interest or interests as of the Effective Date (as hereinafter
defined) in and to all of the Assignor's rights and obligations under the Credit
Agreement and the other Credit Documents (in its capacity as a Lender
thereunder) with respect to each Class of Loans represented by the percentage
interest or interests specified with regard to such Class under the heading
"Assigned Share" in Item 4 of Annex I (each such assigned interest, an "Assigned
------ -------
Share"), including, without limitation, (i) in the case of Term Loans, the
relevant Assigned Share of all rights and obligations of the Assignor with
respect to its Term Loan Commitment (unless terminated), Term Note and Term
Loans, and (ii) in the case of Revolving Loans, the relevant Assigned Share of
all rights and obligations of the Assignor with respect to its Revolving Credit
Commitment, Letter of Credit Exposure, Revolving Notes and Revolving Loans.
2. The Assignor. The Assignor (i) represents and warrants that it is the
------------
legal and beneficial owner of each interest being assigned by it hereunder, that
each such interest is free and clear of any adverse claim, and that as of the
date hereof the amount of its Commitments and outstanding Loans of each Class
with regard to which an interest is being assigned hereunder (and Letter of
Credit Exposure, if applicable) is as set forth in Item 4 of Annex I, (ii)
------ -------
except as set forth in clause (i) above, makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, any other
Credit Document or any other instrument or document furnished pursuant thereto
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, any other Credit Document or any other
instrument or document furnished pursuant thereto, and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its Subsidiaries or the
performance or observance by the Borrower or any of its Subsidiaries of any of
their respective obligations under the Credit Agreement, any other Credit
Document or any other instrument or document furnished pursuant thereto.
3. The Assignee. The Assignee (i) represents and warrants that it is legally
------------
authorized to enter into this Assignment and Acceptance, (ii) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements most recently required to have been delivered under SECTION
6.1 of the Credit Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance, (iii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, (iv) confirms that it is an Eligible
Assignee, (v) appoints and authorizes the Administrative Agent to take such
actions as agent on its behalf under the Credit Agreement and the other Credit
Documents, and to exercise such powers and to perform such duties, as are
specifically delegated to the Administrative Agent by the terms thereof,
together with such other powers and duties as are reasonably incidental thereto,
and (vi) agrees that it will perform in accordance with their respective terms
all of the obligations that by the terms of the Credit Agreement are required to
be performed by it as a Lender. [To the extent legally entitled to do so, the
Assignee will deliver to the Administrative Agent, as and when required to be
delivered under the Credit Agreement, duly completed and executed originals of
the applicable tax withholding forms described in SECTION 2.17(D) of the Credit
Agreement].
4. Effective Date. Following the execution of this Assignment and Acceptance
--------------
by the Assignor and the Assignee, an executed original hereof, together with all
attachments hereto, shall be delivered to each of the Administrative Agent and
the Borrower (and also to the Administrative Agent, the processing fee referred
to in SECTION 11.7(A) of the Credit Agreement). The effective date of this
Assignment and Acceptance (the "Effective Date") shall be the earlier of (i) the
date of acceptance hereof by the Administrative Agent and the Borrower or (ii)
the date, if any, designated as the Effective Date in Item 5 of Annex I (which
---- - -------
date shall be not less than five (5) Business Days after the date of execution
hereof by the Assignor and the Assignee). As of the Effective Date, (y) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, shall have the rights and obligations of a
Lender thereunder and under the other Credit Documents, and (z) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights (other than rights under the provisions of the Credit Agreement and the
other Credit Documents relating to indemnification or payment of fees, costs and
expenses, to the extent such rights relate to the time prior to the Effective
Date) and be released from its obligations under the Credit Agreement and the
other Credit Documents.
5. Payments; Settlement. On or prior to the Effective Date, in consideration
--------------------
of the sale and assignment provided for herein and as a condition to the
effectiveness of this Assignment and Acceptance, the Assignee will pay to the
Assignor an amount (to be confirmed between the Assignor and the Assignee) that
represents the Assigned Share of the principal amount of the Loans of each
relevant Class made by the Assignor and outstanding on the Effective Date
(together, if and to the extent the Assignor and the Assignee so elect, with the
Assigned Share of any related accrued but unpaid interest, fees and other
amounts). From and after the Effective Date, the Administrative Agent will make
all payments required to be made by it under the Credit Agreement in respect of
each interest assigned hereunder (including, without limitation, all payments of
principal, interest and fees in respect of the Assigned Share of the Assignor's
Commitments and Loans assigned hereunder) directly
____________
/1/Insert if the Assignee is organized under the laws of a jurisdiction
outside the United States.
2
to the Assignee. The Assignor and the Assignee shall be responsible for making
between themselves all appropriate adjustments in payments due under the Credit
Agreement in respect of the period prior to the Effective Date. All payments
required to be made hereunder or in connection herewith shall be made in Dollars
by wire transfer of immediately available funds to the appropriate party at its
address for payments designated in Annex I.
-------
6. Governing Law. This Assignment and Acceptance shall be governed by, and
-------------
construed in accordance with, the internal laws of the State of North Carolina
(without regard to the conflicts of laws principles thereof).
7. Entire Credit Agreement. This Assignment and Acceptance, together with the
-----------------------
Credit Agreement and the other Credit Documents, embody the entire agreement and
understanding between the parties hereto and supersede all prior agreements and
understandings of the parties, verbal or written, relating to the subject matter
hereof.
8. Successors and Assigns. This Assignment and Acceptance shall be binding
----------------------
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns.
9. Counterparts. This Assignment and Acceptance may be executed in any
------------
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
3
IN WITNESS WHEREOF, the parties have caused this Assignment and Acceptance to
be executed by their duly authorized officers as of the date first above
written.
ASSIGNOR:
___________________________________
By: _______________________________
Title: _____________________________
ASSIGNEE:
__________________________________
By: _______________________________
Title: _____________________________
Accepted this _______ day of
______________, 19___:
FIRST UNION NATIONAL BANK, as Administrative Agent
By: __________________________________
Title: _______________________________
Consented and agreed to:
THE XXXXXXXX GROUP, INC.
By: __________________________________
Title: _______________________________
4
ANNEX I
-------
1. Borrower: The Xxxxxxxx Group, Inc.
2. Name and Date of Credit Agreement:
Agreement, dated as of January __, 1999, among The Xxxxxxxx Group, Inc.,
certain Lenders from time to time parties thereto, Fleet Bank, N.A., as
Documentation Agent and First Union National Bank, as Administrative Agent.
3. Date of Assignment and Acceptance: ________________, 19___.
4. Amounts:
Amount of Aggregate
Aggregate Assigned Assigned for Assignor
for Assignor Share/1/ Share (after assignment)
--------------- --------------- -------------- -------------------
(a) Term Loan Commitment/2/ $__________ _____% $_________ $___________
(b) Term Loans $__________ _____% $_________ $___________
(c) Revolving Credit Commitment $__________ _____% $_________ $___________
(d) Revolving Credit Loans/3/ $__________ _____% $_________ $___________
(e) Letter of Credit Exposure $__________ _____% $_________ $___________
5. Effective Date: ___________________, 19___./4/
6. Addresses for Payments:
Assignor: ______________________________
______________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ____________________
Reference: ___________________
______________
/1/Percentage taken to up to ten decimal places, if necessary.
/2/Applicable only to assignments made prior to the Closing Date.
/3/Insert amounts outstanding as of the date of the Assignment and Acceptance.
/4/Shall be a date not less than five Business Days after the date of the
Assignment and Acceptance.
Assignee: ______________________________
______________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ____________________
Reference: ___________________
7. Addresses for Notices:
Assignor: ______________________________
______________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ____________________
Reference: ___________________
Assignee: ______________________________
______________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ____________________
Reference: ___________________
8. Lending Office of Assignee:
______________________________
______________________________
Attention: ___________________
Telephone: ___________________
Telecopy: ____________________
Reference: ___________________
EXHIBIT E
---------
PLEDGE AGREEMENT
[FILED AS EXHIBIT 10.3 TO REGISTRATION STATEMENT]
EXHIBIT F
---------
SECURITY AGREEMENT
[FILED AS EXHIBIT 10.2 TO REGISTRATION STATEMENT]
EXHIBIT G
---------
FORM OF
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY, dated as of the _____ day of ______________, ____
(this "Guaranty"), is made by each of the undersigned Subsidiaries of THE
XXXXXXXX GROUP, INC., a Delaware corporation (the "Borrower"), and each other
Subsidiary of the Borrower that, after the date hereof, executes an instrument
of accession hereto substantially in the form of Exhibit A (a "Guarantor
---------
Accession"; the undersigned and such other Subsidiaries of the Borrower,
collectively, the "Guarantors"), in favor of the Guaranteed Parties (as
hereinafter defined). Capitalized terms used herein without definition shall
have the meanings given to them in the Credit Agreement referred to below.
RECITALS
A. The Borrower, certain banks and other financial institutions
(collectively, the "Lenders"), and First Union National Bank, as agent for the
Lenders (in such capacity, the "Agent"), are parties to a Credit Agreement,
dated as of January ___, 1999 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), providing for the availability of certain credit
facilities to the Borrower upon the terms and conditions set forth therein.
B. It is a condition to the continuing extension of credit to the
Borrower under the Credit Agreement that each Guarantor shall have agreed, by
executing and delivering this Guaranty, to guarantee to the Guaranteed Parties
the payment in full of the Guaranteed Obligations (as hereinafter defined). The
Guaranteed Parties are relying on this Guaranty in their decision to continue to
extend credit to the Borrower under the Credit Agreement, and would not have
entered into the Credit Agreement without the agreement of the Borrower to cause
its subsidiaries to execute and deliver this Guaranty upon the Borrower's
payment in full of its 10.48% Senior Subordinated Notes due 2000.
C. The Borrower and the Guarantors are engaged in related businesses and
undertake certain activities and operations on an integrated basis. As part of
such integrated operations, the Borrower, among other things, will advance to
the Guarantors from time to time certain proceeds of the Loans made to the
Borrower by the Lenders under the Credit Agreement. Each Guarantor will
therefore obtain benefits as a result of the extension of credit to the Borrower
under the Credit Agreement, which benefits are hereby acknowledged, and,
accordingly, desires to execute and deliver this Guaranty.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Guaranteed Parties to enter into the Credit
Agreement and to induce the Lenders to extend credit to the Borrower thereunder,
each Guarantor hereby agrees as follows:
1. Guaranty. (a) Each Guarantor hereby irrevocably, absolutely and
--------
unconditionally, and jointly and severally:
(i) guarantees (a) to the Lenders (including the Issuing Lender in
its capacity as such) and the Agent (collectively, the "Guaranteed
Parties") the full and prompt payment, at any time and from time to time as
and when due (whether at the stated maturity, by acceleration or
otherwise), of all Obligations of the Borrower under the Credit Agreement
and the other Credit Documents, including, without limitation, all
principal of and interest on the Loans, all Reimbursement Obligations in
respect of Letters of Credit, all fees, expenses, indemnities and other
amounts payable by the Borrower under the Credit Agreement or any other
Credit Document (including interest accruing after the filing of a petition
or commencement of a case by or with respect to the Borrower seeking relief
under any Insolvency Laws (as hereinafter defined), whether or not the
claim for such interest is allowed in such proceeding), and all Obligations
that, but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due, and (b) to each applicable Lender in
its capacity as a counterparty to any Hedge Agreement with the Borrower
required or permitted under the Credit Agreement, all obligations of the
Borrower under such Hedge Agreement, in each case under (a) and (b) whether
now existing or hereafter created or arising and whether direct or
indirect, absolute or contingent, due or to become due (all liabilities and
obligations described in this clause (i), collectively, the "Guaranteed
Obligations"); and
(ii) agrees to pay or reimburse upon demand all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred or paid by (y) any Guaranteed Party in connection with
any suit, action or proceeding to enforce or protect any rights of the
Guaranteed Parties hereunder and (z) the Agent in connection with any
amendment, modification or waiver hereof or consent pursuant hereto, and to
indemnify and hold each Guaranteed Party and its directors, officers,
employees, agents and Affiliates harmless from and against any and all
claims, losses, damages, obligations, liabilities, penalties, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) of any kind or nature whatsoever, whether direct, indirect or
consequential, that may at any time be imposed on, incurred by or asserted
against any such indemnified party as a result of, arising from or in any
way relating to this Guaranty or the collection or enforcement of the
Guaranteed Obligations; provided, however, that no indemnified party shall
-------- -------
have the right to be indemnified hereunder for any such claims, losses,
costs and expenses to the extent resulting from the gross negligence or
willful misconduct of such indemnified party (all liabilities and
obligations described in
2
this clause (ii), collectively, the "Other Obligations"; and the Other
Obligations, together with the Guaranteed Obligations, the "Total
Obligations").
(b) Notwithstanding the provisions of subsection (a) above and
notwithstanding any other provisions contained herein or in any other Credit
Document:
(i) no provision of this Guaranty shall require or permit the
collection from any Guarantor of interest in excess of the maximum rate or
amount that such Guarantor may be required or permitted to pay pursuant to
applicable law; and
(ii) the liability of each Guarantor under this Guaranty as of any
date shall be limited to a maximum aggregate amount (the "Maximum
Guaranteed Amount") equal to the greatest amount that would not render such
Guarantor's obligations under this Guaranty subject to avoidance, discharge
or reduction as of such date as a fraudulent transfer or conveyance under
applicable federal and state laws pertaining to bankruptcy, reorganization,
arrangement, moratorium, readjustment of debts, dissolution, liquidation or
other debtor relief, specifically including, without limitation, the
Bankruptcy Code and any fraudulent transfer and fraudulent conveyance laws
(collectively, "Insolvency Laws"), in each instance after giving effect to
all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under applicable Insolvency Laws (specifically excluding, however,
any liabilities of such Guarantor in respect of intercompany indebtedness
to the Borrower or any of its Affiliates to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by
such Guarantor hereunder, and after giving effect as assets to the value
(as determined under applicable Insolvency Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar rights of
such Guarantor pursuant to (y) applicable law or (z) any agreement
(including this Guaranty) providing for an equitable allocation among such
Guarantor and other Affiliates of the Borrower of obligations arising under
guaranties by such parties).
(c) The Guarantors desire to allocate among themselves, in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made hereunder on any date by a
Guarantor (a "Funding Guarantor") that exceeds its Fair Share (as hereinafter
defined) as of such date, that Funding Guarantor shall be entitled to a
contribution from each of the other Guarantors in the amount of such other
Guarantor's Fair Share Shortfall (as hereinafter defined) as of such date, with
the result that all such contributions will cause each Guarantor's Aggregate
Payments (as hereinafter defined) to equal its Fair Share as of such date. "Fair
Share" means, with respect to a Guarantor as of any date of determination, an
amount equal to (i) the ratio of (x) the Adjusted Maximum Guaranteed Amount (as
hereinafter defined) with respect to such Guarantor to (y) the aggregate of the
Adjusted Maximum Guaranteed Amounts with respect to all Guarantors, multiplied
by (ii) the aggregate amount paid or distributed on or before such date by all
Funding Guarantors hereunder in respect of the obligations guarantied. "Fair
Share Shortfall" means, with respect to a Guarantor as of any date of
determination, the excess, if any, of the Fair Share of such Guarantor over the
Aggregate Payments of such Guarantor. "Adjusted Maximum Guaranteed Amount"
means, with respect to a Guarantor as of any date of determination, the Maximum
Guaranteed Amount of such
3
Guarantor, determined in accordance with the provisions of subsection (b) above;
provided that, solely for purposes of calculating the "Adjusted Maximum
--------
Guaranteed Amount" with respect to any Guarantor for purposes of this subsection
(c), any assets or liabilities arising by virtue of any rights to subrogation,
reimbursement or indemnity or any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such Guarantor.
"Aggregate Payments" means, with respect to a Guarantor as of any date of
determination, the aggregate amount of all payments and distributions made on or
before such date by such Guarantor in respect of this Guaranty (including,
without limitation, in respect of this subsection (c)). The amounts payable as
contributions hereunder shall be determined as of the date on which the related
payment or distribution is made by the applicable Funding Guarantor. Each
Funding Guarantor's right of contribution under this subsection (c) shall be
subject to the provisions of SECTION 4. The allocation among Guarantors of their
obligations as set forth in this subsection (c) shall not be construed in any
way to limit the liability of any Guarantor hereunder to the Guaranteed Parties.
(d) The guaranty of each Guarantor set forth in this Section is a guaranty
of payment as a primary obligor, and not a guaranty of collection. Each
Guarantor hereby acknowledges and agrees that the Guaranteed Obligations, at any
time and from time to time, may exceed the Maximum Guaranteed Amount of such
Guarantor and may exceed the aggregate of the Maximum Guaranteed Amounts of all
Guarantors, in each case without discharging, limiting or otherwise affecting
the obligations of any Guarantor hereunder or the rights, powers and remedies of
any Guaranteed Party hereunder or under any other Credit Document.
2. Guaranty Absolute. Each Guarantor agrees that its obligations
-----------------
hereunder are irrevocable, absolute and unconditional, are independent of the
Guaranteed Obligations and any Collateral or other security therefor or other
guaranty or liability in respect thereof, whether given by such Guarantor or any
other Person, and shall not be discharged, limited or otherwise affected by
reason of any of the following, whether or not such Guarantor has notice or
knowledge thereof:
(i) any change in the time, manner or place of payment of, or in any
other term of, any Guaranteed Obligations or any guaranty or other
liability in respect thereof, or any amendment, modification or supplement
to, restatement of, or consent to any rescission or waiver of or departure
from, any provisions of the Credit Agreement, any other Credit Document or
any agreement or instrument delivered pursuant to any of the foregoing;
(ii) the invalidity or unenforceability of any Guaranteed
Obligations, any guaranty or other liability in respect thereof or any
provisions of the Credit Agreement, any other Credit Document or any
agreement or instrument delivered pursuant to any of the foregoing;
(iii) the addition or release of Guarantors hereunder or the taking,
acceptance or release of other guarantees of any Guaranteed Obligations or
additional Collateral or
4
other security for any Guaranteed Obligations or for any guaranty or other
liability in respect thereof;
(iv) any discharge, modification, settlement, compromise or other
action in respect of any Guaranteed Obligations or any guaranty or other
liability in respect thereof, including any acceptance or refusal of any
offer or performance with respect to the same or the subordination of the
same to the payment of any other obligations;
(v) any agreement not to pursue or enforce or any failure to pursue
or enforce (whether voluntarily or involuntarily as a result of operation
of law, court order or otherwise) any right or remedy in respect of any
Guaranteed Obligations, any guaranty or other liability in respect thereof
or any Collateral or other security for any of the foregoing; any sale,
exchange, release, substitution, compromise or other action in respect of
any such Collateral or other security; or any failure to create, protect,
perfect, secure, insure, continue or maintain any Liens in any such
Collateral or other security;
(vi) the exercise of any right or remedy available under the Credit
Documents, at law, in equity or otherwise in respect of any Collateral or
other security for any Guaranteed Obligations or for any guaranty or other
liability in respect thereof, in any order and by any manner thereby
permitted, including, without limitation, foreclosure on any such
Collateral or other security by any manner of sale thereby permitted,
whether or not every aspect of such sale is commercially reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in the
corporate structure or existence of the Borrower or any other Person
directly or indirectly liable for any Guaranteed Obligations;
(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in reduction of any Guaranteed Obligations or any other
obligations of the Borrower or any other Person directly or indirectly
liable for any Guaranteed Obligations, regardless of what Guaranteed
Obligations may remain unpaid after any such application; or
(ix) any other circumstance that might otherwise constitute a legal
or equitable discharge of, or a defense, set-off or counterclaim available
to, the Borrower, any Guarantor or a surety or guarantor generally, other
than the occurrence of all of the following: (x) the payment in full of the
Total Obligations, (y) the termination of the Commitments and the
termination or expiration of all Letters of Credit under the Credit
Agreement, and (z) the termination of, and settlement of all obligations of
the Borrower under, each Hedge Agreement to which the Borrower and any
Lender are parties (the events in clauses (x), (y) and (z) above,
collectively, the "Termination Requirements").
5
3. Certain Waivers. Each Guarantor hereby knowingly, voluntarily and
---------------
expressly waives:
(i) presentment, demand for payment, demand for performance,
protest and notice of any other kind, including, without limitation, notice
of nonpayment or other nonperformance (including notice of default under
any Credit Document with respect to any Guaranteed Obligations), protest,
dishonor, acceptance hereof, extension of additional credit to the Borrower
and of any of the matters referred to in SECTION 2 and of any rights to
consent thereto;
(ii) any right to require the Guaranteed Parties or any of them, as
a condition of payment or performance by such Guarantor hereunder, to
proceed against, or to exhaust or have resort to any Collateral or other
security from or any deposit balance or other credit in favor of, the
Borrower, any other Guarantor or any other Person directly or indirectly
liable for any Guaranteed Obligations, or to pursue any other remedy or
enforce any other right; and any other defense based on an election of
remedies with respect to any Collateral or other security for any
Guaranteed Obligations of for any guaranty or other liability in respect
thereof, notwithstanding that any such election (including any failure to
pursue or enforce any rights or remedies) may impair or extinguish any
right of indemnification, contribution, reimbursement or subrogation or
other right or remedy of any Guarantor against the Borrower, any other
Guarantor or any other Person directly or indirectly liable for any
Guaranteed Obligations or any such Collateral or other security; and,
without limiting the generality of the foregoing, each Guarantor hereby
specifically waives the benefits of Sections 26-7 through 26-9, inclusive,
of the General Statutes of North Carolina, as amended from time to time,
and any similar statute or law of any other jurisdiction, as the same may
be amended from time to time;
(iii) any right or defense based on or arising by reason of any
right or defense of the Borrower or any other Person, including, without
limitation, any defense based on or arising from a lack of authority or
other disability of the Borrower or any other Person, the invalidity or
unenforceability of any Guaranteed Obligations, any Collateral or other
security therefor or any Credit Document or other agreement or instrument
delivered pursuant thereto, or the cessation of the liability of the
Borrower for any reason other than the satisfaction of the Termination
Requirements;
(iv) any defense based on any Guaranteed Party's acts or omissions
in the administration of the Guaranteed Obligations, any guaranty or other
liability in respect thereof or any Collateral or other security for any of
the foregoing, and promptness, diligence or any requirement that any
Guaranteed Party create, protect, perfect, secure, insure, continue or
maintain any Liens in any such Collateral or other security;
(v) any right to assert against any Guaranteed Party, as a defense,
counterclaim, crossclaim or set-off, any defense, counterclaim, claim,
right of recoupment or set-off that it may at any time have against any
Guaranteed Party (including, without
6
limitation, failure of consideration, statute of limitations, payment,
accord and satisfaction and usury), other than compulsory counterclaims;
and
(vi) any defense based on or afforded by any applicable law that
limits the liability of or exonerates guarantors or sureties or that may in
any other way conflict with the terms of this Guaranty.
4. Waiver of Subrogation; Subordination. Each Guarantor hereby knowingly,
------------------------------------
voluntarily and expressly waives all claims and rights that it may have against
the Borrower or any other Guarantor at any time as a result of any payment made
under or in connection with this Guaranty or the performance or enforcement
hereof, including all rights of subrogation to the rights of any of the
Guaranteed Parties against the Borrower or any other Guarantor, all rights of
indemnity, contribution or reimbursement against the Borrower or any other
Guarantor (including rights of contribution as set forth in SECTION 1(C)), all
rights to enforce any remedies of any Guaranteed Party against the Borrower or
any other Guarantor, and any benefit of, and any right to participate in, any
Collateral or other security held by any Guaranteed Party to secure payment of
the Guaranteed Obligations, in each case whether such claims or rights arise by
contract, statute (including without limitation the Bankruptcy Code), common law
or otherwise. Each Guarantor agrees that all indebtedness and other obligations,
whether now or hereafter existing, of the Borrower or any other Subsidiary of
the Borrower to such Guarantor, including, without limitation, any such
indebtedness in any proceeding under the Bankruptcy Code and any intercompany
receivables, together with any interest thereon, shall be, and hereby are,
subordinated and made junior in right of payment to the Total Obligations. Each
Guarantor further agrees that if any amount shall be paid to or any distribution
received by any Guarantor (i) on account of any such indebtedness at any time
after the occurrence and during the continuance of an Event of Default, or (ii)
on account of any such rights of subrogation, indemnity, contribution or
reimbursement at any time prior to the satisfaction of the Termination
Requirements, such amount or distribution shall be deemed to have been received
and to be held in trust for the benefit of the Guaranteed Parties, and shall
forthwith be delivered to the Agent in the form received (with any necessary
endorsements in the case of written instruments), to be applied against the
Guaranteed Obligations, whether or not matured, in accordance with the terms of
the applicable Credit Documents and without in any way discharging, limiting or
otherwise affecting the liability of such Guarantor under any other provision of
this Guaranty. Additionally, in the event the Borrower or any Subsidiary of the
Borrower becomes a "debtor" within the meaning of the Bankruptcy Code, the Agent
shall be entitled, at its option, on behalf of the Guaranteed Parties and as
attorney-in-fact for each Guarantor, and is hereby authorized and appointed by
each Guarantor, to file proofs of claim on behalf of each relevant Guarantor and
vote the rights of each such Guarantor in any plan of reorganization, and to
demand, xxx for, collect and receive every payment and distribution on any
indebtedness of the Borrower or such Subsidiary to any Guarantor in any such
proceeding, each Guarantor hereby assigning to the Agent all of its rights in
respect of any such claim, including the right to receive payments and
distributions in respect thereof.
7
5. Representations and Warranties. Each Guarantor hereby represents and
------------------------------
warrants to the Guaranteed Parties as follows:
(a) Such Guarantor is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
the full corporate power and authority to execute, deliver and perform this
Guaranty and the other Credit Documents to which it is or will be a party, to
own and hold its property and to engage in its business as presently conducted.
(b) Such Guarantor has taken all necessary corporate action to execute,
deliver and perform this Guaranty and each of the other Credit Documents to
which it is or will be a party, and has, or on any later date of execution and
delivery will have, validly executed and delivered each of the Credit Documents
to which it is or will be a party. This Guaranty constitutes, and each of such
other Credit Documents upon execution and delivery will constitute, the legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general equitable principles.
(c) The execution, delivery and performance by such Guarantor of this
Guaranty and the other Credit Documents to which it is a party, and compliance
by it with the terms hereof and thereof, do not and will not (i) violate any
provision of its articles or certificate of incorporation or bylaws, (ii)
contravene any Requirement of Law applicable to it, (iii) conflict with, result
in a breach of or constitute (with notice, lapse of time or both) a default
under any indenture, loan agreement, mortgage, deed of trust, lease or other
agreement or instrument to which it is a party, by which it or any of its
properties is bound or to which it is subject, or (iv) result in or require the
creation or imposition of any Lien upon any of its properties, other than Liens
created pursuant to the Credit Documents.
(d) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority is or will be required
as a condition to or otherwise in connection with the due execution, delivery
and performance by such Guarantor of this Guaranty and the other Credit
Documents to which it is a party or the legality, validity or enforceability
hereof or thereof.
(e) Except as may be disclosed in the Schedules to the Credit Agreement,
there are no actions, investigations, suits or proceedings pending or, to the
knowledge of such Guarantor, threatened, at law, in equity or in arbitration,
before any court, other Governmental Authority or other Person, (i) against or
affecting such Guarantor or any of its properties that would, if adversely
determined, be reasonably likely to have a Material Adverse Effect or (ii) with
respect to this Guaranty or any of the other Credit Documents to which such
Guarantor is a party.
(f) Such Guarantor has been provided with a true and complete copy of the
executed Credit Agreement, as in effect as of the date it became a party hereto,
and its principal officers
8
are familiar with the contents thereof, particularly insofar as the contents
thereof relate or apply to such Guarantor.
6. Financial Condition of Borrower. Each Guarantor represents that it has
-------------------------------
knowledge of the Borrower's financial condition and affairs and that it has
adequate means to obtain from the Borrower on an ongoing basis information
relating thereto and to the Borrower's ability to pay and perform the Guaranteed
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect with respect to such
Guarantor. Each Guarantor agrees that the Guaranteed Parties shall have no
obligation to investigate the financial condition or affairs of the Borrower for
the benefit of any Guarantor nor to advise any Guarantor of any fact respecting,
or any change in, the financial condition or affairs of the Borrower that might
become known to any Guaranteed Party at any time, whether or not such Guaranteed
Party knows or believes or has reason to know or believe that any such fact or
change is unknown to any Guarantor, or might (or does) materially increase the
risk of any Guarantor as guarantor, or might (or would) affect the willingness
of any Guarantor to continue as a guarantor of the Guaranteed Obligations.
7. Payments; Application; Set-Off. (a) Each Guarantor agrees that, upon
------------------------------
the failure of the Borrower to pay any Guaranteed Obligations when and as the
same shall become due (whether at the stated maturity, by acceleration or
otherwise), and without limitation of any other right or remedy that any
Guaranteed Party may have at law, in equity or otherwise against such Guarantor,
such Guarantor will, subject to the provisions of SECTION 1(B), forthwith pay or
cause to be paid to the Agent, for the benefit of the Guaranteed Parties, an
amount equal to the amount of the Guaranteed Obligations then due and owing as
aforesaid.
(b) All payments made by each Guarantor hereunder will be made in Dollars
to the Agent, without set-off, counterclaim or other defense and, in accordance
with the Credit Agreement, free and clear of and without deduction for any
Taxes, each Guarantor hereby agreeing to comply with and be bound by the
provisions of the Credit Agreement in respect of all payments made by it
hereunder and the provisions of which Section are hereby incorporated into and
made a part of this Guaranty by this reference as if set forth herein at length.
(c) All payments made hereunder shall be applied upon receipt as follows:
(i) first, to the payment of all Other Obligations owing to the
Agent;
(ii) second, after payment in full of the amounts specified in
clause (i) above, to the ratable payment of all other Total Obligations
owing to the Guaranteed Parties; and
(iii) third, after payment in full of the amounts specified in
clauses (i) and (ii) above, and following the termination of this Guaranty,
to the Guarantors or any other Person lawfully entitled to receive such
surplus.
(d) For purposes of applying amounts in accordance with this Section, the
Agent shall be entitled to rely upon any Guaranteed Party that has entered into
a Hedge Agreement with the
9
Borrower for a determination (which such Guaranteed Party agrees to provide or
cause to be provided upon request of the Agent) of the outstanding Guaranteed
Obligations owed to such Guaranteed Party under any such Hedge Agreement. Unless
it has actual knowledge (including by way of written notice from any such
Guaranteed Party) to the contrary, the Agent, in acting hereunder, shall be
entitled to assume that no Hedge Agreements or Obligations in respect thereof
are in existence between any Guaranteed Party and the Borrower.
(e) The Guarantors shall remain jointly and severally liable to the extent
of any deficiency between the amount of all payments made hereunder and the
aggregate amount of the sums referred to in clauses (i) and (ii) of subsection
(c) above.
(f) In addition to all other rights and remedies available under the
Credit Documents or applicable law or otherwise, upon and at any time after the
occurrence and during the continuance of any Event of Default, each Guaranteed
Party may, and is hereby authorized by each Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by each Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such
Guaranteed Party to or for the credit or the account of such Guarantor against
any or all of the obligations of such Guarantor to such Guaranteed Party
hereunder now or hereafter existing, whether or not such obligations may be
contingent or unmatured, each Guarantor hereby granting to each Guaranteed Party
a continuing security interest in and Lien upon all such deposits and other
property as security for such obligations. Each Guaranteed Party agrees to
notify any affected Guarantor promptly after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
-------- -------
validity of such set-off and application.
8. No Waiver. The rights and remedies of the Guaranteed Parties expressly
---------
set forth in this Guaranty and the other Credit Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Guaranteed
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between any of the Guarantors and the
Guaranteed Parties or their agents or employees shall be effective to amend,
modify or discharge any provision of this Guaranty or any other Credit Document
or to constitute a waiver of any Default or Event of Default. No notice to or
demand upon any Guarantor in any case shall entitle such Guarantor or any other
Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of any Guaranteed Party to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
9. Enforcement. The Guaranteed Parties agree that, except as provided in
-----------
SECTION 7(F), this Guaranty may be enforced only by the Agent, acting upon the
instructions or
10
with the consent of the Required Lenders as provided for in the Credit
Agreement, and that no Guaranteed Party shall have any right individually to
enforce or seek to enforce this Guaranty or to realize upon any Collateral or
other security given to secure the payment and performance of the Guarantors'
obligations hereunder. The obligations of each Guarantor hereunder are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against each Guarantor whether or not action is brought against the
Borrower or any other Guarantor and whether or not the Borrower or any other
Guarantor is joined in any such action. Each Guarantor agrees that to the extent
all or part of any payment of the Guaranteed Obligations made by any Person is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid by or on behalf of any Guaranteed Party to a trustee,
receiver or any other party under any Insolvency Laws (the amount of any such
payment, a "Reclaimed Amount"), then, to the extent of such Reclaimed Amount,
this Guaranty shall continue in full force and effect or be revived and
reinstated, as the case may be, as to the Guaranteed Obligations intended to be
satisfied as if such payment had not been received; and each Guarantor
acknowledges that the term "Guaranteed Obligations" includes all Reclaimed
Amounts that may arise from time to time.
10. Amendments, Waivers, etc. No amendment, modification, waiver,
------------------------
discharge or termination of, or consent to any departure by any Guarantor from,
any provision of this Guaranty, shall be effective unless in a writing signed by
the Agent and such of the Lenders as may be required under the provisions of the
Credit Agreement to concur in the action then being taken, and then the same
shall be effective only in the specific instance and for the specific purpose
for which given.
11. Addition, Release of Guarantors. Each Guarantor recognizes that the
-------------------------------
provisions of the Credit Agreement require Persons that become Subsidiaries of
the Borrower and that are not already parties hereto to become Guarantors
hereunder by executing a Guarantor Accession, and agrees that its obligations
hereunder shall not be discharged, limited or otherwise affected by reason of
the same, or by reason of the Agent's actions in effecting the same or in
releasing any Guarantor hereunder, in each case without the necessity of giving
notice to or obtaining the consent of any other Guarantor.
12. Continuing Guaranty; Term; Successors and Assigns; Assignment;
--------------------------------------------------------------
Survival. This Guaranty is a continuing guaranty and covers all of the
--------
Guaranteed Obligations as the same may arise and be outstanding at any time and
from time to time from and after the date hereof, and shall (i) remain in full
force and effect until satisfaction of all of the Termination Requirements
(provided that the provisions of clause (ii) of SECTION 1(A) shall survive any
---------
termination of this Guaranty), (ii) be binding upon and enforceable against each
Guarantor and its successors and assigns (provided, however, that no Guarantor
-------- -------
may sell, assign or transfer any of its rights, interests, duties or obligations
hereunder without the prior written consent of the Lenders) and (iii) inure to
the benefit of and be enforceable by each Guaranteed Party and its successors
and assigns. Without limiting the generality of clause (iii) above, any
Guaranteed Party may, in accordance with the provisions of the Credit Agreement,
assign all or a portion of the Guaranteed Obligations held by it (including by
the sale of participations), whereupon each Person that becomes the holder of
any such Guaranteed Obligations shall (except as may be otherwise agreed
11
between such Guaranteed Party and such Person) have and may exercise all of the
rights and benefits in respect thereof granted to such Guaranteed Party under
this Guaranty or otherwise. Each Guarantor hereby irrevocably waives notice of
and consents in advance to the assignment as provided above from time to time by
any Guaranteed Party of all or any portion of the Guaranteed Obligations held by
it and of the corresponding rights and interests of such Guaranteed Party
hereunder in connection therewith. All representations, warranties, covenants
and agreements herein shall survive the execution and delivery of this Guaranty
and any Guarantor Accession.
13. Governing Law; Consent to Jurisdiction; Appointment of Borrower as
------------------------------------------------------------------
Representative, Process Agent, Attorney-in-Fact. (a) THIS GUARANTY HAS BEEN
-----------------------------------------------
EXECUTED, DELIVERED AND ACCEPTED AT, AND SHALL BE DEEMED TO HAVE BEEN MADE IN,
NORTH CAROLINA AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
GUARANTEED PARTIES AND THE GUARANTORS DETERMINED, IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NORTH
CAROLINA. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, EACH
GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE COURT WITHIN
MECKLENBURG COUNTY, NORTH CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE
WESTERN DISTRICT OF THE STATE OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED
HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN
CONNECTION WITH THIS GUARANTY OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY
PROCEEDING TO WHICH ANY GUARANTEED PARTY OR SUCH GUARANTOR IS A PARTY, INCLUDING
ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
ANY GUARANTEED PARTY OR SUCH GUARANTOR. EACH GUARANTOR IRREVOCABLY AGREES TO BE
BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR
RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED
ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
--------------------
OF ANY SUCH PROCEEDING.
(b) EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES AND APPOINTS THE BORROWER
AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE ON ITS BEHALF ALL SERVICE OF
PROCESS IN ANY ACTION OR PROCEEDING AND ANY OTHER NOTICE OR COMMUNICATION
HEREUNDER, CONSENTS THAT ALL SERVICE OF PROCESS UPON IT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL DIRECTED TO THE BORROWER AT ITS ADDRESS SET FORTH
HEREINABOVE (AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) BUSINESS DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED),
12
AND AGREES THAT SERVICE SO MADE SHALL BE EFFECTIVE AND BINDING UPON SUCH
GUARANTOR IN EVERY RESPECT AND THAT ANY OTHER NOTICE OR COMMUNICATION GIVEN TO
THE BORROWER AT THE ADDRESS AND IN THE MANNER SPECIFIED HEREIN SHALL BE
EFFECTIVE NOTICE TO SUCH GUARANTOR. FURTHER, EACH GUARANTOR DOES HEREBY
IRREVOCABLY MAKE, CONSTITUTE AND APPOINT THE BORROWER AS ITS TRUE AND LAWFUL
ATTORNEY-IN-FACT, WITH FULL AUTHORITY IN ITS PLACE AND STEAD AND IN ITS NAME,
THE BORROWER'S NAME OR OTHERWISE, AND WITH FULL POWER OF SUBSTITUTION IN THE
PREMISES, FROM TIME TO TIME IN THE BORROWER'S DISCRETION TO AGREE ON BEHALF OF,
AND SIGN THE NAME OF, SUCH GUARANTOR TO ANY AMENDMENT, MODIFICATION OR
SUPPLEMENT TO, RESTATEMENT OF, OR WAIVER OR CONSENT IN CONNECTION WITH, THIS
GUARANTY, ANY OTHER CREDIT DOCUMENT OR ANY DOCUMENT OR INSTRUMENT PURSUANT
HERETO OR THERETO, AND TO TAKE ANY OTHER ACTION AND DO ALL OTHER THINGS ON
BEHALF OF SUCH GUARANTOR THAT THE BORROWER MAY DEEM NECESSARY OR ADVISABLE TO
CARRY OUT AND ACCOMPLISH THE PURPOSES OF THIS GUARANTY AND THE OTHER CREDIT
DOCUMENTS. THE BORROWER WILL NOT BE LIABLE FOR ANY ACT OR OMISSION NOR FOR ANY
ERROR OF JUDGMENT OR MISTAKE OF FACT UNLESS THE SAME SHALL OCCUR AS A RESULT OF
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE BORROWER. THIS POWER, BEING
COUPLED WITH AN INTEREST, IS IRREVOCABLE BY ANY GUARANTOR FOR SO LONG AS THIS
GUARANTY SHALL BE IN EFFECT WITH RESPECT TO SUCH GUARANTOR. BY ITS SIGNATURE
HERETO, THE BORROWER CONSENTS TO ITS APPOINTMENT AS PROVIDED FOR HEREIN AND
AGREES PROMPTLY TO DISTRIBUTE ALL PROCESS, NOTICES AND OTHER COMMUNICATIONS TO
EACH GUARANTOR.
(c) NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY GUARANTEED PARTY
TO BRING ANY ACTION OR PROCEEDING AGAINST ANY GUARANTOR IN THE COURTS OF ANY
OTHER JURISDICTION.
14. Arbitration; Preservation and Limitation of Remedies. (a) Upon
----------------------------------------------------
demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Guaranty or any other Credit Document ("Disputes")
between or among the Guarantors and the Guaranteed Parties, or any of them,
shall be resolved by binding arbitration as provided herein. Institution of a
judicial proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from documents
executed in the future, disputes as to whether a matter is subject to
arbitration, or claims arising out of or connected with the transactions
contemplated by this Guaranty, the Credit Agreement and the other Credit
Documents. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the
13
"Arbitration Rules") of the American Arbitration Association (the "AAA"), as in
effect from time to time, and the Federal Arbitration Act, Title 9 of the U.S.
Code, as amended. All arbitration hearings shall be conducted in the city in
which the principal office of the Agent is located. A hearing shall begin within
ninety (90) days of demand for arbitration and all hearings shall be concluded
within 120 days of demand for arbitration. These time limitations may not be
extended unless a party shows cause for extension and then for no more than a
total of sixty (60) days. The expedited procedures set forth in Rule 51 et seq.
-- ---
of the Arbitration Rules shall be applicable to claims of less than $1,000,000.
All applicable statutes of limitation shall apply to any Dispute. A judgment
upon the award may be entered in any court having jurisdiction. The panel from
which all arbitrators are selected shall be comprised of licensed attorneys
selected from the Commercial Financial Dispute Arbitration Panel of the AAA. The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted. Notwithstanding the foregoing, this arbitration
provision does not apply to Disputes under or related to any Hedge Agreement.
The parties do not waive applicable federal or state substantive law except as
provided herein.
(b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: [(i) all rights to foreclose against any Collateral by
exercising a power of sale granted pursuant to any of the Credit Documents or
under applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale;] (ii) all rights of self-help, including peaceful
occupation of real property and collection of rents, set-off, and peaceful
possession of personal property; (iii) obtaining provisional or ancillary
remedies, including injunctive relief, sequestration, garnishment, attachment,
appointment of a receiver and filing an involuntary bankruptcy proceeding; and
(iv) when applicable, a judgment by confession of judgment. Any claim or
controversy with regard to any party's entitlement to such remedies is a
Dispute. Preservation of these remedies does not limit the power of an
arbitrator to grant similar remedies that may be requested by a party in a
Dispute. The parties hereto agree that no party shall have a remedy of punitive
or exemplary damages against any other party in any Dispute, and each party
hereby waives any right or claim to punitive or exemplary damages that it has
now or that may arise in the future in connection with any Dispute, whether such
Dispute is resolved by arbitration or judicially. The parties acknowledge that
by agreeing to binding arbitration they have irrevocably waived any right they
may have to a jury trial with regard to a Dispute.
15. Notices. All notices and other communications provided for hereunder
-------
shall be in writing (including telegraphic, telex, facsimile transmission or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered (a) if to any Guarantor, in care of the Borrower and at the Borrower's
address for notices set forth in the Credit Agreement and (b) if to any
Guaranteed Party, at its address for notices set forth in the Credit Agreement;
or to such other address as any of the Persons listed above may designate for
itself by like notice to the other Persons listed above; and in each case, with
copies to such other Persons as may be
14
specified under the provisions of the Credit Agreement. All such notices and
communications shall be deemed to have been given (i) if mailed as provided
above by any method other than overnight delivery service, on the third Business
Day after deposit in the mails, (ii) if mailed by overnight delivery service,
telegraphed, telexed, telecopied or cabled, when delivered for overnight
delivery, delivered to the telegraph company, confirmed by telex answerback,
transmitted by telecopier or delivered to the cable company, respectively, or
(iii) if delivered by hand, upon delivery; provided that notices and
--------
communications to the Agent shall not be effective until received by the Agent.
16. Severability. To the extent any provision of this Guaranty is
------------
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Guaranty in any jurisdiction.
17. Construction. The headings of the various sections and subsections of
------------
this Guaranty have been inserted for convenience only and shall not in any way
affect the meaning or construction of any of the provisions hereof. Unless the
context otherwise requires, words in the singular include the plural and words
in the plural include the singular.
18. Counterparts; Effectiveness. This Guaranty may be executed in any
---------------------------
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Guaranty shall
become effective, as to any Guarantor, upon the execution and delivery by such
Guarantor of a counterpart hereof or a Guarantor Accession.
15
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
by its duly authorized officers as of the date first above written.
XXXXXXXX AIRPORT ADVERTISING, INC.
By: ________________________________
Title: ________________________________
XXXXXXXX COMMUNICATIONS OF
MASSACHUSETTS, INC.
By: ________________________________
Title: ________________________________
AK MEDIA GROUP, INC.
By: ________________________________
Title: ________________________________
CENTRAL NEW YORK NEWS, INC.
By: ________________________________
Title: ________________________________
(signatures continued)
16
KJR RADIO, INC.
By: ________________________________
Title: ________________________________
KVOS TV, LTD.
By: ________________________________
Title: ________________________________
(signatures continued)
17
SSI, INC.
By: ________________________________
Title: ________________________________
TC AVIATION, INC.
By: ________________________________
Title: ________________________________
WIXT TV, INC.
By: ________________________________
Title: ________________________________
WOKR, INC.
By: ________________________________
Title: ________________________________
Accepted and agreed to:
FIRST UNION NATIONAL BANK, as
Agent
By: __________________________________
Title: __________________________________
18
The Borrower hereby joins in this Guaranty for purposes of evidencing its
consent to, and agreement to perform, the provisions of SECTION 13(B).
THE XXXXXXXX GROUP, INC.
By: __________________________________
Title: __________________________________
19
Exhibit A to Subsidiary Guaranty
First Union National Bank, as Agent
The Xxxxxxxx Group, Inc.
___________________________________
GUARANTOR ACCESSION
THIS GUARANTOR ACCESSION (this "Accession"), dated as of _____________,
____, is executed and delivered by [NAME OF NEW GUARANTOR], a ______________
corporation (the "Company"), pursuant to the Subsidiary Guaranty referred to
hereinbelow.
Reference is made to the Credit Agreement, dated as of ________________,
1999, among The Xxxxxxxx Group, Inc. (the "Borrower"), the Lenders party
thereto, and the Agent (as amended, modified or supplemented from time to time,
the "Credit Agreement"). In connection with and as a condition to the initial
and continued extensions of credit under the Credit Agreement, the Borrower and
certain of its subsidiaries have executed and delivered a Subsidiary Guaranty,
dated as of ________________, ____ (as amended, modified or supplemented from
time to time, the "Subsidiary Guaranty"), pursuant to which such subsidiaries
have guaranteed the payment in full of the obligations of the Borrower under the
Credit Agreement and the other Credit Documents (as defined in the Credit
Agreement). Capitalized terms used herein without definition shall have the
meanings given to them in the Subsidiary Guaranty.
The Borrower has agreed under the Credit Agreement to cause each of its
future subsidiaries to become a party to the Subsidiary Guaranty as a guarantor
thereunder. The Company is a subsidiary of the Borrower. The Company will obtain
benefits as a result of the continued extension of credit to the Borrower under
the Credit Agreement, which benefits are hereby acknowledged, and, accordingly,
desire to execute and deliver this Accession. Therefore, in consideration of the
foregoing and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and to induce the Lenders to continue to
extend credit to the Borrower under the Credit Agreement, the Company hereby
agrees as follows:
1. The Company hereby joins in and agrees to be bound by each and all of
the provisions of the Subsidiary Guaranty as a Guarantor thereunder. In
furtherance (and without limitation) of the foregoing, pursuant to Section 1 of
the Subsidiary Guaranty, the Company hereby irrevocably, absolutely and
unconditionally, and jointly and severally with each other Guarantor, guarantees
to the Guaranteed Parties the full and prompt payment, at any time and from time
to time as and when due (whether at the stated maturity, by acceleration or
otherwise), of all of the Guaranteed Obligations, and agrees to pay or reimburse
upon demand all Other Obligations, all on the terms and subject to the
conditions set forth in the Subsidiary Guaranty.
2. The Company hereby represents and warrants that after giving effect to
this Accession, each representation and warranty contained in Section 5 of the
Subsidiary Guaranty is true and correct with respect to the Company as of the
date hereof, as if such representations and warranties were set forth at length
herein.
3. This Accession shall be a Credit Document (within the meaning of such
term under the Credit Agreement), shall be binding upon and enforceable against
the Company and its successors and assigns, and shall inure to the benefit of
and be enforceable by each Guaranteed Party and its successors and assigns.
This Accession and its attachments are hereby incorporated into the Subsidiary
Guaranty and made a part thereof.
IN WITNESS WHEREOF, the Company has caused this Accession to be executed
under seal by its duly authorized officer as of the date first above written.
[NAME OF COMPANY]
By: __________________________________
Title: __________________________________
2
EXHIBIT H-1
-----------
_____________, 1999
First Union National Bank,
as Administrative Agent,
Fleet Bank, N.A. as Documentation Agent,
and the Lenders as Parties to the
Credit Agreement
RE: THE XXXXXXXX GROUP, INC.; CREDIT AGREEMENT
Ladies and Gentlemen:
We are counsel for The Xxxxxxxx Group, Inc. ("Borrower"). We have
represented the Borrower in connection with its execution and delivery of a
Credit Agreement dated as of January 22, 1999 ("Agreement") among the Borrower,
the Lenders, First Union National Bank as Administrative Agent ("Agent"), Fleet
Bank, N.A. as Documentation Agent, and Union Bank of California, N.A., KeyBank
National Association and Bank of Montreal, Chicago Branch, as co-agents, and
providing for Loans and Facility Letters of Credit in the aggregate principal
amount of up to $325,000,000. This opinion is being given pursuant to Section
4.1(a)(iii)(A) of the Agreement. All capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to such terms in the
Agreement, except that (a) the term "Credit Documents" shall refer only to those
Credit Documents executed and delivered by the Borrower and its Subsidiaries on
or prior to the Closing Date, (b) the term "State" refers to the State of
Washington, (c) the term "Collateral" has the meaning assigned to such term in
the Security Agreement, and (d) the term "Recording Office" means, with respect
to any county in the State of Washington, the office of such county where a
mortgage on real estate located in the county is required to be filed or
recorded under applicable Washington law.
In rendering the opinions expressed in this letter, we have examined and
relied upon such records, documents, instruments, certificates of public
officials and certificates of officers and employees of and accountants for the
Borrower as we have deemed appropriate, including:
1. The Borrower's Fourth Restated Certificate of Incorporation, as
certified to us by the Secretary of State of Delaware on January 11, 1999;
2. The Borrower's Bylaws, as certified to us by the Borrower's Secretary
as of January 21, 1999;
3. Resolutions of the Borrower's Board of Directors, as adopted at
meetings of the Board and by unanimous consent of the members of the Board, with
specific reference to actions
Fleet Bank, N.A. & First Union National Bank
January 22, 1999
Page 2
relating to the transactions covered by this opinion, as certified to us by the
Borrower's Secretary as of January 21, 1999;
4. The Credit Documents;
5. Certificates of good standing issued by the Secretaries of State of
the states of incorporation of the Borrower and its Subsidiaries, variously
dated from December 17, 1999 through January 21, 1999.
In reviewing the foregoing, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to or reviewed by us as
originals, and the conformity to the authentic original documents of all other
documents submitted to or examined by us as certified, conformed, or reproduced
copies. As to questions of fact material to these opinions, we have relied upon
certificates of public officials and statements, certificates or
representations, written or oral, of officers or representatives of the Borrower
without seeking to independently establish or otherwise verify them, as stated
on the certificates and documents furnished to us. Except to the extent we are
expressly opining with respect to the Borrower or any of its Subsidiaries having
all requisite power and authority, our opinion assumes that the parties to each
of the documents to which reference is made above have the power and authority
to execute, deliver and perform such documents, and that such documents are
valid as to such parties and binding upon such parties in accordance with their
terms.
Whenever a statement in this opinion is qualified by "known to us," "we are
not aware," "to the best of our knowledge," or a similar phrase, it is intended
to indicate that, during the course of our representation of the Borrower, no
information that would give us current actual knowledge of the inaccuracy of
such statement has come to the attention of those attorneys in this firm who
have rendered legal services in connection with the representation described in
the introductory paragraph of this opinion letter. However, we have not
undertaken any independent investigation to determine the accuracy of such
statement. Any limited inquiry undertaken by us during the preparation of this
opinion letter should not be regarded as such an investigation, and no inference
as to our knowledge of any matters bearing on the accuracy of any such statement
should be drawn from the fact of our representation of the Borrower.
Based upon and subject to the foregoing and the assumptions, limitations
and qualifications set forth below, it is our opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
2. Each of the Borrower and its Subsidiaries has the full corporate power
and authority to execute, deliver and perform the Credit Documents to which it
is a party, to own and hold its property and to engage in its business as
presently conducted.
Fleet Bank, N.A. & First Union National Bank
January 22, 1999
Page 3
3. Each of the Borrower and its Subsidiaries has taken all necessary
corporate action to execute, deliver and perform, and has validly executed and
delivered, each Credit Document to which it is a party. Each Credit Document to
which the Borrower or any Subsidiary is a party constitutes the legal, valid and
binding obligation of the Borrower or such Subsidiary, as the case may be,
enforceable against it in accordance with its terms, except to the extent that
the validity, binding nature, and enforceability of each such Credit Document
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting the rights of creditors generally.
4. The execution, delivery and performance by each of the Borrower and
its Subsidiaries of the Credit Documents to which it is a party, and compliance
by it with the terms thereof, do not and will not (i) violate any provision of
its articles or certificate of incorporation or bylaws, (ii) contravene any
provisions of any applicable law, rule or regulation of the United States of
America or the State or, to the best of our knowledge, any judgment, order,
writ, injunction or decree to which it is subject, (iii) conflict with, result
in a breach of or constitute (with notice, lapse of time or both) a default
under any indenture, agreement or other instrument to which it is a party, by
which it or any of its properties is bound or to which it is subject, or (iv)
except for the Liens created in favor of the Agent pursuant to the Security
Documents, result in or require the creation or imposition of any Lien upon any
of its property or assets.
5. No consent, approval, authorization, exemption or other action by,
notice to, or registration or filing with, any Governmental Authority of the
United States of America or the State is required in connection with the due
execution, delivery and performance by each of the Borrower and its Subsidiaries
of the Credit Documents to which it is a party, the legality, validity or
enforceability thereof or the consummation of the transactions contemplated
thereby.
6. To the best of our knowledge, there are no actions, investigations,
suits or proceedings pending or threatened, at law, in equity or in arbitration,
before any court, other Governmental Authority or other Person, (i) against or
affecting the Borrower and its Subsidiaries or any of their respective
properties that would, if adversely determined, be reasonably likely to have a
Material Adverse Effect, or (ii) with respect to any of the Credit Documents,
other than as disclosed on Schedule 5.5 to the Credit Agreement.
7. The authorized capital stock of each of the Subsidiaries of the
Borrower, the par value per share and the number of shares issued and
outstanding are as follows:
x. Xxxxxxxx Airport Advertising, Inc.: 500 shares of Common Stock,
par value $100.00 per share, 10 shares of which are issued and outstanding;
x. Xxxxxxxx Communications of Massachusetts, Inc.: 50,000 shares of
Common Stock, par value $.01 per share, 1,000 shares of which are issued
and outstanding;
Fleet Bank, N.A. & First Union National Bank
January 22, 1999
Page 4
c. AK Media Group, Inc.: 10,000 shares of Common Stock, par value
$10.00 per share, 1 share of which is issued and outstanding;
d. Central NY News, Inc.: 50,000 shares of Common Stock, par value
$.01 per share, 1,000 shares of which are issued and outstanding;
e. KVOS TV, Ltd.: 10,000 shares of Common Stock, no par value, 1
share of which is issued and outstanding;
f. SSI, Inc.: 50,000 shares of Common Stock, par value $1.00 per
share, 100 shares of which are issued and outstanding;
g. TC Aviation, Inc.: 5,000 shares of Common Stock, par value $1.00
per share, 1,000 shares of which are issued and outstanding;
8. All of the issued and outstanding shares of capital stock of each of
the Subsidiaries of the Borrower are duly authorized, validly issued, fully paid
and nonassessable and are owned of record and beneficially by the Borrower, free
and clear of any Liens or other adverse claims or restrictions on transfer.
9. The provisions of the Pledge Agreement are sufficient to create in
favor of the Agent a valid security interest in all right, title and interest of
the Borrower in and to the Pledged Stock (as defined in the Pledge Agreement)
and the delivery to the Agent of the certificates and instruments evidencing the
Pledged Stock, together with continued possession thereof by the Pledgee, will
be sufficient to perfect such security interest in such Pledged Stock, free of
any adverse claims.
10. Financing statements on Form UCC-1, in the form of Exhibits A-1
through A-6 hereto ("Financing Statements"), have been duly executed by the
Borrower and the Subsidiaries referenced in such statements ("Pledging
Subsidiaries"). To the extent that a security interest in the Collateral can be
perfected under the Uniform Commercial Code of Washington ("Washington UCC") by
the filing of the Financing Statements with the Department of Licensing of the
State of Washington (the "Department of Licensing"), and assuming proper filing
of such Financing Statements with the Department of Licensing, such filings,
together with the execution, delivery and performance of the Security Agreement,
are sufficient to perfect the security interest created in favor of the Agent
under the Security Agreement in all right, title and interest of the Borrower
and the Pledging Subsidiaries in and to the Collateral. To the extent that the
Collateral consists of "fixtures" under the Washington UCC, the proper filing of
financing statements, complying with the Washington UCC, with the Recording
Office of each county in which such fixtures are located would be sufficient to
perfect the security interest created in favor of the Agent under the Security
Agreement in all right, title and interest of the Borrower and the Pledging
Subsidiaries in and to such fixtures.
Fleet Bank, N.A. & First Union National Bank
January 22, 1999
Page 5
11. Neither the Borrower nor any of its Subsidiaries is (i) an "investment
company," a company "controlled" by an "investment company," or an "investment
advisor," within the meaning of the Investment Borrower Act of 1940, as amended,
or (ii) a "holding company," a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Borrower Act of 1935,
as amended.
12. To the best of our knowledge, neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock. The consummation of the transactions contemplated by the Credit
Agreement will not violate Regulations T, U or X of the Board of Governors of
the Federal Reserve system.
13. If the Credit Documents were governed by the laws of the State of
Washington, the fees, interest and other charges payable under the Credit
Documents would not violate any usury or similar laws of the State of
Washington.
14. No transfer, filing, stamp, privilege, franchise, indebtedness or
other taxes of the State of Washington are required to be paid in connection
with the execution, delivery and performance of the Credit Documents (other than
UCC filing fees) or as a precondition to the enforcement by the Agent and the
Lenders of their rights and remedies under the Credit Documents.
All of the opinions herein expressed are specifically subject to the
following limitations and qualifications:
A. We have assumed (i) that all parties, other than the Borrower and
its Subsidiaries, have complied with all applicable laws,
statutes, and regulations relating to their power and authority
to enter into the Credit Documents and to effect the transactions
contemplated therein, (ii) that the Credit Documents are the
legal, valid, and binding obligations of such parties (other than
the Borrower and its Subsidiaries) enforceable against them in
accordance with their respective terms, (iii) that there are no
agreements or other documents between the parties to the Credit
Documents that are inconsistent with or that modify the Credit
Documents, or would otherwise have an effect on the opinions
expressed in this letter, (iv) that each of the Borrower and the
Subsidiaries have sufficient rights in the Pledged Stock, and
sufficient value has been given, for a security interest in favor
of the Agent to attach to the Pledged Stock, (v) the shares of
Pledged Stock are evidenced by validly executed certificates that
have been delivered and endorsed to, and are in the possession
of, the Pledgee for the benefit of the Pledgee and the Lenders,
pursuant to the Pledge Agreement, (vi) that the Collateral
exists, (vii) each of the Borrower and the Subsidiaries have
sufficient rights in the Collateral,
Fleet Bank, N.A. & First Union National Bank
January 22, 1999
Page 6
and sufficient value has been given, for a security interest in
favor of the Agent to attach to the Collateral, and (viii) that
there has been no mutual mistake of fact or misunderstanding,
fraud, duress, undue influence, or a breach of any applicable
obligation of good faith and fair dealing.
B. The Credit Documents state that they are governed by North
Carolina law. Consequently, we have not examined the question of
what law would govern the interpretation or enforcement of such
documents, and our opinion is based upon the assumption that the
internal laws of the State of Washington and the federal laws of
the United States would govern the provisions of, and
transactions contemplated by, the Credit Documents. We note that
if the Credit Documents are not, in fact, valid, binding, and
enforceable under the laws of the State of North Carolina, the
Credit Documents may not be enforced by a State of Washington
court under applicable conflict of law principles. We express no
opinion as to whether a court located in the State of Washington
would hold that the State of Washington is a proper forum in
which to enforce the Credit Documents.
C. Our opinion in paragraph 1 regarding the Borrower's and each
Subsidiary's existence and good standing is based solely on
certificates of the Secretaries of State of their respective
states of incorporation, variously dated from January __, 1999
through January __, 1999.
D. Our opinion in paragraph 4 with respect to the violation of any laws
or regulations, and our opinion in paragraph 5 with respect to
authorizations of and other actions by any Governmental Authority,
each is limited to those governmental approvals, filings,
registrations, laws, or regulations applicable to transactions of the
type described in the Credit Documents and to entities engaged in the
types of businesses engaged in by the Borrower and the Subsidiaries,
and specifically excludes any opinion related to federal
communications laws or FCC matters.
E. Our opinions in paragraphs 9 and 10 above are limited to the
application of Article 9 of the Washington UCC, and we have not
attempted to determine the effect on the security interests referenced
in that paragraph of any other law of Washington or the laws of any
other jurisdiction.
F. Our opinions in paragraphs 9 and 10 above are subject to the following
additional requirements: (i) with respect to "proceeds," as such term
is defined in the Washington UCC, compliance with the provisions of
Section 62A.9-306 of the Washington UCC, subject to the limitations
included in that Section; (ii) with respect to a change of name,
identity or corporate structure by the Borrower or
Fleet Bank, N.A. & First Union National Bank
January 22, 1999
Page 7
any Subsidiary, compliance with Section 62A.9-402(7) of the Washington
UCC; (iii) with respect to a change of location of the Borrower or any
Subsidiary, or the transfer of the Collateral outside of Washington,
compliance with Section 62A.9-103 of the Washington UCC; and (iv) the
timely filing of proper continuation statements under Section 62A.9-
403(2)-(3) of the Washington UCC.
G. Our opinion in paragraph 13 is based on our understanding and
assumption that all proceeds provided under the Credit Documents are
to be used for business and commercial purposes and not for family or
household purposes.
H. Our opinion in paragraph 14 excludes any opinion as to whether any
taxes of the State of Washington would be required to be paid as a
result of any transfer of assets or control of Borrower or any of its
Subsidiaries to the Agent or any Lender pursuant to the terms of any
Credit Document, including pursuant to any remedy sought in law or
equity in connection with an Event of Default.
I. We express no opinion as to (i) the title or ownership of the Pledged
Stock or the Collateral, or (ii) the priority of any lien or security
interest created or purported to be created by the Pledge Agreement,
the Security Agreement or any of the other Credit Documents.
J. We express no opinion as to the enforceability of:
(1) Provisions relating to the waiver of rights, remedies and
defenses;
(2) Any reservation of the right to pursue inconsistent or cumulative
remedies;
(3) Provisions for payment or reimbursement of costs and expenses
(including without limitation attorneys fees) in excess of
statutory limits or amounts determined to be reasonable by any
court or other tribunal, and any provision for payment of
attorneys fees other than to the prevailing party.
(4) Limitations on the liabilities of parties for their own
negligence or misconduct;
(5) Indemnification provisions with respect to applicable securities
laws;
(6) Severability provisions; and
(7) Availability of equitable remedies.
K. Our opinions are limited to matters expressly stated herein, and no
other opinions may be implied or inferred.
Fleet Bank, N.A. & First Union National Bank
January 22, 1999
Page 8
L. Our opinions expressed in this letter are qualified in their entirety
by the effect, if any, of all matters which may be subject to judicial
discretion or general principles of equity or public policy; provided,
that such requirements should not, in our opinion, materially diminish
or interfere with the practical realization by the Lenders of the
rights and benefits intended to be conferred on them by the Credit
Documents.
The attorneys in this firm are members of the Bar of the State of
Washington. We do not hold ourselves out as being conversant with the laws of
any jurisdiction other than those of the United States of America, the State of
Washington, and the Delaware General Corporation Law. For purposes of this
opinion, we have assumed, without inquiry or investigation, that all applicable
state laws, including the laws of the State of North Carolina under which the
Credit Documents are governed, but excluding the Delaware General Corporation
Law, are identical to the laws of the State of Washington.
The opinions expressed in this letter are solely for the benefit of the
Administrative Agent, the Documentation Agent and the Lenders and their
respective participants, assignees and other transferees. They may not be
relied upon in any manner or for any purpose by any other person or entity
without our express written consent.
Very truly yours,
XXXXXX & XXXX PC
EXHIBIT H-2
-----------
January 22, 1999
First Union National Bank, as Administrative Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: The Xxxxxxxx Group, Inc.: Credit Agreement
Ladies and Gentlemen:
We are special counsel respecting Federal Communications Commission ("FCC")
matters for The Xxxxxxxx Group, Inc. (the "Borrower") and the Subsidiaries. We
have represented the Borrower in connection with the execution and delivery of a
Credit Agreement dated as of January 22, 1999 (the "Credit Agreement") among the
Borrower, the Lenders, First Union National Bank, as Administrative Agent, Fleet
Bank, N.A. as Documentation Agent, and Union Bank of California, N.A., Keybank
National Association and Bank of Montreal, Chicago Branch, as Co-Agents,
providing for term loan facilities in the aggregate principal amount of
$150,000,0000 and a reducing revolving credit facility in the initial aggregate
principal amount of $175,000,000 (which may be increased by $75,000,000 under
certain circumstances).
Capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to such terms in the Credit Agreement, except that for
purposes hereof the term "Credit Documents" shall refer only to those Credit
Documents executed and delivered by the Borrower and its Subsidiaries on or
prior to the Closing Date (including the Tranche A Term Notes, the Revolving
Notes, the Security Agreement and the Pledge Agreement).
In connection with rendering this opinion, we have reviewed originals, or
copies certified or otherwise identified to our satisfaction, of the Credit
Documents and such other documents and matters of fact and law as we have deemed
necessary for purposes of this opinion. In reviewing the foregoing, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to or reviewed by us as originals, and the conformity to the authentic
original documents of all other documents submitted to us or examined by us as
certified, conformed or reproduced copies. As to questions of fact material to
these opinions, we have relied upon certificates of public officials and
statements, certificates or representations, written or oral, of officers or
representatives of the Borrower without seeking to independently establish
or otherwise verify them, as stated on the certificates and documents furnished
to use. Our opinion assumes that the parties to each of the documents to which
reference is made above have the power and authority to execute, deliver and
perform such documents, and that such documents are valid as to such parties and
binding upon such parties in accordance with their terms.
Based upon and subject to the foregoing and the assumptions, limitations
and qualifications set forth below, it is our opinion that:
1. Exhibit A hereto contains a true, correct and complete list of the primary
broadcast station licenses issued by the Federal Communications Commission
(the "FCC") for the operation of the broadcast stations (the "Broadcast
Stations") owned by the Borrower or its Subsidiaries, indicating, for each
such license, the date of its expiration.
2. The consummation by the Borrower of the transactions contemplated by the
Credit Agreement do not and will not cause a violation of or a default
under any of the licenses, permits, consents, approvals and other
authorizations issued by the FCC for the operation of the Broadcast
Stations owned by the Borrower or its Subsidiaries (the "FCC Licenses"),
and all material authorizations, approvals and consents of the FCC under
the Communications Act required in connection with the Broadcast Stations
have been obtained, are in full force and effect, and have not been
reversed, stayed, enjoined, set aside, annulled or suspended.
3. Each material FCC License, including each primary broadcast station
license, is valid and in full force and effect, and no such license is
subject to any material adverse condition. Each material FCC License has
been granted or issued by an action of the FCC which is not subject to
administrative or judicial appeal, review or reconsideration by any party
or by the FCC on its own motion. We have no reason to believe that any FCC
Licenses will not, subject to the filing of renewal applications and
payment of any applicable filing fees, be renewed for a full term in the
ordinary course.
4. There are (a) no judgments, decrees or orders issued or, to counsel's
knowledge, threatened by the FCC with respect to the Borrower or any of its
Subsidiaries, (b) to counsel's knowledge, no material complaints,
petitions, applications, investigations or other proceedings pending or
threatened before the FCC, including, without limitation, any notice of
violation, notice of apparent liability or order to show cause, and (c) to
counsel's knowledge, no events have occurred that could result in (i) the
termination, revocation or adverse modification of any FCC License, or (ii)
the imposition of any material financial penalty by the FCC upon the
Borrower or any Subsidiary.
5. The Borrower and its Subsidiaries, to counsel's knowledge, have filed with
the FCC all material reports, documents, instruments, information and
applications required to be filed and have undertaken all other actions
required to be taken pursuant to the Act and the rules promulgated
thereunder or upon the request of the FCC.
6. The execution, delivery and performance by the Borrower under the Credit
Documents (a) do not and will not violate or conflict with any provision of
the Act, or with any rule, regulation or published policy of the FCC; (b) do
not and will not result in the forfeiture or the suspension or termination,
prior to its expiration date, revocation, material impairment, adverse
modification or non-renewal of any FCC License; and (c) do not and will not
require any consent, authorization or approval of, or notice to or filing
with, the FCC.
7. Neither the Agents nor any Lender under the Credit Documents will, solely by
reason of the execution, delivery and performance of any of the Credit
Documents, be subject to the regulation or the control of the FCC.
All of the opinions herein expressed are specifically subject to the
following limitations and qualifications:
A. We have assumed (i) that all parties have complied with all applicable laws,
statutes and regulations relating to their power and authority to enter into
the Credit Documents and to effect the transactions contemplated therein,
(ii) that the Credit Documents are the legal, valid and binding obligations
of such parties enforceable against them in accordance with their respective
terms, (iii) that there are no agreements or other documents between the
parties to the Credit Documents which are inconsistent with or which modify
the Credit Documents, and (iv) there has been no mutual mistake of fact or
misunderstanding, fraud, duress, undue influence, or a breach of any
applicable obligation of good faith and fair dealing;
B. Our representation of the Borrower and the Subsidiaries has been limited to
certain specific matters, and we do not represent the Borrower and the
Subsidiaries in all matters. Other law firms have performed, and continue to
perform, legal services for the Borrower and the Subsidiaries. Accordingly,
this opinion is limited to those specific matters within the scope of
representation that we have undertaken;
C. This opinion is provided to you as a legal opinion only, and not as a
guaranty or warranty of the matters discussed herein. Our opinion is limited
to matters expressly stated herein, and no other opinions may be implied or
inferred;
D. Our opinions are qualified in their entirety by the effect, if any, of all
matters which may be subject to judicial or administrative discretion or
general principles of equity or public policy, or the effect of any
applicable bankruptcy, exemption, insolvency, fraudulent conveyance,
reorganization or other similar laws, now or hereafter in effect, relating
to creditors rights generally; provided, that such requirements should not,
in our opinion, materially diminish or interfere with the practical
realization by the Lenders of the rights and benefits intended to be
conferred on them by the Credit Documents;
E. Our opinions are qualified in their entirety by any limitations on the
remedies of specific performance, injunction and other forms of equitable
relief, because they are subject to certain standards of equity
jurisdiction, equitable defenses and the discretion of the court; and
F. Our opinions are qualified in their entirety by generally applicable laws
and judicially created doctrines specifying the methods of enforcement of
obligations and/or limiting the availability of certain remedies if a
specified remedy is utilized.
The attorneys in this firm are members of the Bar of the District of
Columbia. We do not hold ourselves out as being conversant with the laws of any
jurisdiction other than those of the United States of America, the District of
Columbia and the laws, rules and regulations of the Federal Communications
Commission. We express no opinion as to any scientific or engineering questions
pertinent to the Stations. We have not conducted a physical inspection of the
Broadcast Stations and this opinion is not based on any condition which might be
revealed by such an inspection.
The opinions expressed in this letter are solely for the benefit of the
Managing Agents and the Lenders and their respective participants, assignees and
other transferees. They may not be relied upon in any manner or by any other
person or entity without our express written consent. We have not been
retained, and render no opinion, with respect to any items or matters not
specifically referred to herein. This opinion is issued as of the date hereof,
and we undertake no obligation to advise you if facts should come to our
attention after the date hereof that might change the opinion rendered herein.
Very truly yours,
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P.
Exhibit A
The Xxxxxxxx Group, Inc. (and subsidiaries)
Primary Broadcast Station Licenses
Station License Expiration Date
--------------- ---------------
WIXT(TV) June 1, 1999
WIVT(TV) June 1, 1999
KCBA(TV) Dec. 1, 1998(1)
KFTY(TV) Dec. 1, 2006
KKTV(TV) April 1, 2006
KVOS(TV) Feb. 1, 1999(2)
KGET(TV) Dec. 1, 2006
KVIQ(TV) Dec. 1, 2006
KHHO(AM) Feb. 1, 2006
KJR(AM) Feb. 1, 2006
KJR-FM Feb. 1, 2006
XXXX(FM) Feb. 1, 2006
1. Application for Renewal of License submitted to FCC on July 31, 1998 (File
No. XXXX-000000XX), Public Notice dated August 25, 1998. Comments were filed by
certain local persons in connection with KCBA license renewal application.
2. Application for Renewal of License submitted to FCC on October 1, 1998
(File No. XXXX-000000XX), Public Notice dated October 19, 1998.
EXHIBIT H-3
-----------
First Union National Bank,
as Administrative Agent,
Fleet Bank, N.A. as Documentation Agent,
and the Lenders as Parties to the
Credit Agreement
RE: THE XXXXXXXX GROUP, INC.; CREDIT AGREEMENT
Ladies and Gentlemen:
We are counsel for The Xxxxxxxx Group, Inc. ("Borrower"). We have
represented the Borrower in connection with its execution and delivery of a
Credit Agreement dated as of January 22, 1999 ("Agreement") among the Borrower,
the Lenders, First Union National Bank as Administrative Agent ("Agent"), Fleet
Bank, N.A. as Documentation Agent, and Union Bank of California, N.A., KeyBank
National Association and Bank of Montreal, Chicago Branch, as co-agents, and
providing for Loans and Facility Letters of Credit in the aggregate principal
amount of up to $325,000,000. This opinion is being given pursuant to Section
4.2(a)(ii)(A) of the Agreement. All capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to such terms in the
Agreement, except that (a) the term "Credit Documents" refers only to those
Credit Documents executed and delivered by the Borrower and its Subsidiaries on
or prior to the closing date of the Tranche B Term Loans, (b) the term "State"
refers to the State of Washington, (c) the term "Collateral" has the meaning
assigned to such term in the Security Agreement, and (d) the term "Recording
Office" means, with respect to any county in the State of Washington, the office
of such county where a mortgage on real estate located in the county is required
to be filed or recorded under applicable Washington law.
In rendering the opinions expressed in this letter, we have examined and
relied upon such records, documents, instruments, certificates of public
officials and certificates of officers and employees of and accountants for the
Borrower as we have deemed appropriate, including:
1. The Borrower's Fourth Restated Certificate of Incorporation, as
certified to us by the Secretary of State of Delaware on January 11, 1999;
2. The Borrower's Bylaws, as certified to us by the Borrower's Secretary
as of January 21, 1999;
3. Resolutions of the Borrower's Board of Directors, as adopted at
meetings of the Board and by unanimous consent of the members of the Board, with
specific reference to actions
Page 2
relating to the transactions covered by this opinion, as certified to us by the
Borrower's Secretary as of January 21, 1999;
4. The Credit Documents;
5. Certificates of good standing issued by the Secretaries of State of
the states of incorporation of the Borrower and its Subsidiaries, variously
dated from December 17, 1999 through January 21, 1999.
In reviewing the foregoing, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to or reviewed by us as
originals, and the conformity to the authentic original documents of all other
documents submitted to or examined by us as certified, conformed, or reproduced
copies. As to questions of fact material to these opinions, we have relied upon
certificates of public officials and statements, certificates or
representations, written or oral, of officers or representatives of the Borrower
without seeking to independently establish or otherwise verify them, as stated
on the certificates and documents furnished to us. Except to the extent we are
expressly opining with respect to the Borrower or any of its Subsidiaries having
all requisite power and authority, our opinion assumes that the parties to each
of the documents to which reference is made above have the power and authority
to execute, deliver and perform such documents, and that such documents are
valid as to such parties and binding upon such parties in accordance with their
terms.
Whenever a statement in this opinion is qualified by "known to us," "we are
not aware," "to the best of our knowledge," or a similar phrase, it is intended
to indicate that, during the course of our representation of the Borrower, no
information that would give us current actual knowledge of the inaccuracy of
such statement has come to the attention of those attorneys in this firm who
have rendered legal services in connection with the representation described in
the introductory paragraph of this opinion letter. However, we have not
undertaken any independent investigation to determine the accuracy of such
statement. Any limited inquiry undertaken by us during the preparation of this
opinion letter should not be regarded as such an investigation, and no inference
as to our knowledge of any matters bearing on the accuracy of any such statement
should be drawn from the fact of our representation of the Borrower.
Based upon and subject to the foregoing and the assumptions, limitations
and qualifications set forth below, it is our opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
2. Each of the Borrower and its Subsidiaries has the full corporate power
and authority to execute, deliver and perform the Credit Documents to which it
is a party, to own and hold its property and to engage in its business as
presently conducted.
Page 3
3. Each of the Borrower and its Subsidiaries has taken all necessary
corporate action to execute, deliver and perform, and has validly executed and
delivered, each Credit Document to which it is a party. Each Credit Document to
which the Borrower or any Subsidiary is a party constitutes the legal, valid and
binding obligation of the Borrower or such Subsidiary, as the case may be,
enforceable against it in accordance with its terms, except to the extent that
the validity, binding nature, and enforceability of each such Credit Document
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting the rights of creditors generally.
4. The execution, delivery and performance by each of the Borrower and
its Subsidiaries of the Credit Documents to which it is a party, and compliance
by it with the terms thereof, do not and will not (i) violate any provision of
its articles or certificate of incorporation or bylaws, (ii) contravene any
provisions of any applicable law, rule or regulation of the United States of
America or the State or, to the best of our knowledge, any judgment, order,
writ, injunction or decree to which it is subject, (iii) conflict with, result
in a breach of or constitute (with notice, lapse of time or both) a default
under any indenture, agreement or other instrument to which it is a party, by
which it or any of its properties is bound or to which it is subject, or (iv)
except for the Liens created in favor of the Agent pursuant to the Security
Documents, result in or require the creation or imposition of any Lien upon any
of its property or assets.
5. No consent, approval, authorization, exemption or other action by,
notice to, or registration or filing with, any Governmental Authority of the
United States of America or the State is required in connection with the due
execution, delivery and performance by each of the Borrower and its Subsidiaries
of the Credit Documents to which it is a party, the legality, validity or
enforceability thereof or the consummation of the transactions contemplated
thereby.
6. To the best of our knowledge, there are no actions, investigations,
suits or proceedings pending or threatened, at law, in equity or in arbitration,
before any court, other Governmental Authority or other Person, (i) against or
affecting the Borrower and its Subsidiaries or any of their respective
properties that would, if adversely determined, be reasonably likely to have a
Material Adverse Effect, or (ii) with respect to any of the Credit Documents,
other than as disclosed on Schedule 5.5 to the Credit Agreement.
All of the opinions herein expressed are specifically subject to the
following limitations and qualifications:
A. We have assumed (i) that all parties, other than the Borrower and its
Subsidiaries, have complied with all applicable laws, statutes, and
regulations relating to their power and authority to enter into the
Credit Documents and to effect the transactions contemplated therein,
(ii) that the Credit Documents are the legal, valid, and binding
obligations of such parties (other than the Borrower and its
Subsidiaries) enforceable against them in accordance with their
respective terms, (iii) that there are no agreements or other
documents between the parties to the
Page 4
Credit Documents that are inconsistent with or that modify the Credit
Documents, or would otherwise have an effect on the opinions expressed
in this letter, (iv) that each of the Borrower and the Subsidiaries
have sufficient rights in the Pledged Stock, and sufficient value has
been given, for a security interest in favor of the Agent to attach to
the Pledged Stock, (v) the shares of Pledged Stock are evidenced by
validly executed certificates that have been delivered and endorsed
to, and are in the possession of, the Pledgee for the benefit of the
Pledgee and the Lenders, pursuant to the Pledge Agreement, (vi) that
the Collateral exists, (vii) each of the Borrower and the Subsidiaries
have sufficient rights in the Collateral, and sufficient value has
been given, for a security interest in favor of the Agent to attach to
the Collateral, and (viii) that there has been no mutual mistake of
fact or misunderstanding, fraud, duress, undue influence, or a breach
of any applicable obligation of good faith and fair dealing.
B. The Credit Documents state that they are governed by North Carolina
law. Consequently, we have not examined the question of what law would
govern the interpretation or enforcement of such documents, and our
opinion is based upon the assumption that the internal laws of the
State of Washington and the federal laws of the United States would
govern the provisions of, and transactions contemplated by, the Credit
Documents. We note that if the Credit Documents are not, in fact,
valid, binding, and enforceable under the laws of the State of North
Carolina, the Credit Documents may not be enforced by a State of
Washington court under applicable conflict of law principles. We
express no opinion as to whether a court located in the State of
Washington would hold that the State of Washington is a proper forum
in which to enforce the Credit Documents.
C. Our opinion in paragraph 1 regarding the Borrower's and each
Subsidiary's existence and good standing is based solely on
certificates of the Secretaries of State of their respective states of
incorporation, variously dated from December 17, 1999 through January
21, 1999.
D. Our opinion in paragraph 4 with respect to the violation of any laws
or regulations, and our opinion in paragraph 5 with respect to
authorizations of and other actions by any Governmental Authority,
each is limited to those governmental approvals, filings,
registrations, laws, or regulations applicable to transactions of the
type described in the Credit Documents and to entities engaged in the
types of businesses engaged in by the Borrower and the Subsidiaries,
and specifically excludes any opinion related to federal
communications laws or FCC matters.
E. We express no opinion as to (i) the title or ownership of the Pledged
Stock or the Collateral, or (ii) the priority of any lien or security
interest created or purported
Page 5
to be created by the Pledge Agreement, the Security Agreement or any
of the other Credit Documents.
F. We express no opinion as to the enforceability of:
(1) Provisions relating to the waiver of rights, remedies and
defenses;
(2) Any reservation of the right to pursue inconsistent or cumulative
remedies;
(3) Provisions for payment or reimbursement of costs and expenses
(including without limitation attorneys fees) in excess of
statutory limits or amounts determined to be reasonable by any
court or other tribunal, and any provision for payment of
attorneys fees other than to the prevailing party.
(4) Limitations on the liabilities of parties for their own
negligence or misconduct;
(5) Indemnification provisions with respect to applicable securities
laws;
(6) Severability provisions; and
(7) Availability of equitable remedies.
G. Our opinions are limited to matters expressly stated herein, and no
other opinions may be implied or inferred.
H. Our opinions expressed in this letter are qualified in their entirety
by the effect, if any, of all matters which may be subject to judicial
discretion or general principles of equity or public policy; provided,
that such requirements should not, in our opinion, materially diminish
or interfere with the practical realization by the Lenders of the
rights and benefits intended to be conferred on them by the Credit
Documents.
The attorneys in this firm are members of the Bar of the State of
Washington. We do not hold ourselves out as being conversant with the laws of
any jurisdiction other than those of the United States of America, the State of
Washington, and the Delaware General Corporation Law. For purposes of this
opinion, we have assumed, without inquiry or investigation, that all applicable
state laws, including the laws of the State of North Carolina under which the
Credit Documents are governed, but excluding the Delaware General Corporation
Law, are identical to the laws of the State of Washington.
Page 6
The opinions expressed in this letter are solely for the benefit of the
Administrative Agent, the Documentation Agent and the Lenders and their
respective participants, assignees and other transferees. They may not be
relied upon in any manner or for any purpose by any other person or entity
without our express written consent.
Very truly yours,
XXXXXX & XXXX PC
Exhibit H-4
[date]
First Union National Bank, as Administrative Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: The Xxxxxxxx Group, Inc.: Credit Agreement
Ladies and Gentlemen:
We are special counsel respecting Federal Communications Commission ("FCC")
matters for The Xxxxxxxx Group, Inc. (the "Borrower") and the Subsidiaries. We
have represented the Borrower in connection with the execution and delivery of a
Credit Agreement dated as of January ___, 1999 (the "Credit Agreement") among
the Borrower, the Lenders, First Union National Bank, as Administrative Agent,
Fleet Bank, N.A. as Documentation Agent, and Union Bank of California, N.A.,
Keybank National Association and Bank of Montreal, Chicago Branch, as Co-Agents,
providing for term loan facilities in the aggregate principal amount of
$150,000,0000 and a reducing revolving credit facility in the initial aggregate
principal amount of $175,000,000 (which may be increased by $75,000,000 under
certain circumstances).
Capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to such terms in the Credit Agreement, except that for
purposes hereof the term "Credit Documents" shall refer only to those Credit
Documents executed and delivered by the Borrower and its Subsidiaries on or
prior to the date of the Tranche B Term Notes.
In connection with rendering this opinion, we have reviewed originals, or
copies certified or otherwise identified to our satisfaction, of the Credit
Documents and such other documents and matters of fact and law as we have deemed
necessary for purposes of this opinion. In reviewing the foregoing, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to or reviewed by us as originals, and the conformity to the authentic
original documents of all other documents submitted to us or examined by us as
certified, conformed or reproduced copies. As to questions of fact material to
these opinions, we have relied upon certificates of public officials and
statements, certificates or representations, written or oral, of officers or
representatives of the Borrower without seeking to independently establish or
otherwise verify them, as stated on the certificates and documents furnished to
use. Our
First Union National Bank
[date]
Page 2
opinion assumes that the parties to each of the documents to which reference is
made above have the power and authority to execute, deliver and perform such
documents, and that such documents are valid as to such parties and binding upon
such parties in accordance with their terms.
Based upon and subject to the foregoing and the assumptions, limitations
and qualifications set forth below, it is our opinion that:
1. Exhibit A hereto contains a true, correct and complete list of the primary
broadcast station licenses issued by the Federal Communications Commission
(the "FCC") for the operation of the broadcast stations (the "Broadcast
Stations") owned by the Borrower or its Subsidiaries, indicating, for each
such license, the date of its expiration.
2. The consummation by the Borrower of the transactions contemplated by the
Credit Agreement do not and will not cause a violation of or a default
under any of the licenses, permits, consents, approvals and other
authorizations issued by the FCC for the operation of the Broadcast
Stations owned by the Borrower or its Subsidiaries (the "FCC Licenses"),
and all material authorizations, approvals and consents of the FCC under
the Communications Act required in connection with the Broadcast Stations
have been obtained, are in full force and effect, and have not been
reversed, stayed, enjoined, set aside, annulled or suspended.
3. Each material FCC License, including each primary broadcast station
license, is valid and in full force and effect, and no such license is
subject to any material adverse condition. Each material FCC License has
been granted or issued by an action of the FCC which is not subject to
administrative or judicial appeal, review or reconsideration by any party
or by the FCC on its own motion. We have no reason to believe that any FCC
Licenses will not, subject to the filing of renewal applications and
payment of any applicable filing fees, be renewed for a full term in the
ordinary course.
4. There are (a) no judgments, decrees or orders issued or, to counsel's
knowledge, threatened by the FCC with respect to the Borrower or any of its
Subsidiaries, (b) to counsel's knowledge, no material complaints,
petitions, applications, investigations or other proceedings pending or
threatened before the FCC, including, without limitation, any notice of
violation, notice of apparent liability or order to show cause, and (c) to
counsel's knowledge, no events have occurred that could result in (i) the
termination, revocation or adverse modification of any FCC License, or (ii)
the imposition of any material financial penalty by the FCC upon the
Borrower or any Subsidiary.
5. The Borrower and its Subsidiaries, to counsel's knowledge, have filed with
the FCC all material reports, documents, instruments, information and
applications required to be filed and have
First Union National Bank
[date]
Page 3
undertaken all other actions required to be taken pursuant to the Act and the
rules promulgated thereunder or upon the request of the FCC.
6. The execution, delivery and performance by the Borrower under the Credit
Documents (a) do not and will not violate or conflict with any provision of
the Act, or with any rule, regulation or published policy of the FCC; (b)
do not and will not result in the forfeiture or the suspension or
termination, prior to its expiration date, revocation, material impairment,
adverse modification or non-renewal of any FCC License; and (c) do not and
will not require any consent, authorization or approval of, or notice to or
filing with, the FCC.
7. Neither the Agents nor any Lender under the Credit Documents will, solely
by reason of the execution, delivery and performance of any of the Credit
Documents, be subject to the regulation or the control of the FCC.
All of the opinions herein expressed are specifically subject to the
following limitations and qualifications:
A. We have assumed (i) that all parties have complied with all
applicable laws, statutes and regulations relating to their power
and authority to enter into the Credit Documents and to effect
the transactions contemplated therein, (ii) that the Credit
Documents are the legal, valid and binding obligations of such
parties enforceable against them in accordance with their
respective terms, (iii) that there are no agreements or other
documents between the parties to the Credit Documents which are
inconsistent with or which modify the Credit Documents, and (iv)
there has been no mutual mistake of fact or misunderstanding,
fraud, duress, undue influence, or a breach of any applicable
obligation of good faith and fair dealing;
B. Our representation of the Borrower and the Subsidiaries has been
limited to certain specific matters, and we do not represent the
Borrower and the Subsidiaries in all matters. Other law firms
have performed, and continue to perform, legal services for the
Borrower and the Subsidiaries. Accordingly, this opinion is
limited to those specific matters within the scope of
representation that we have undertaken;
C. This opinion is provided to you as a legal opinion only, and not
as a guaranty or warranty of the matters discussed herein. Our
opinion is limited to matters expressly stated herein, and no
other opinions may be implied or inferred;
First Union National Bank
[date]
Page 4
D. Our opinions are qualified in their entirety by the effect, if
any, of all matters which may be subject to judicial or
administrative discretion or general principles of equity or
public policy, or the effect of any applicable bankruptcy,
exemption, insolvency, fraudulent conveyance, reorganization or
other similar laws, now or hereafter in effect, relating to
creditors rights generally; provided, that such requirements
should not, in our opinion, materially diminish or interfere with
the practical realization by the Lenders of the rights and
benefits intended to be conferred on them by the Credit
Documents;
E. Our opinions are qualified in their entirety by any limitations
on the remedies of specific performance, injunction and other
forms of equitable relief, because they are subject to certain
standards of equity jurisdiction, equitable defenses and the
discretion of the court; and
F. Our opinions are qualified in their entirety by generally
applicable laws and judicially created doctrines specifying the
methods of enforcement of obligations and/or limiting the
availability of certain remedies if a specified remedy is
utilized.
The attorneys in this firm are members of the Bar of the District of
Columbia. We do not hold ourselves out as being conversant with the laws of
any jurisdiction other than those of the United States of America, the
District of Columbia and the laws, rules and regulations of the Federal
Communications Commission. We express no opinion as to any scientific or
engineering questions pertinent to the Stations. We have not conducted a
physical inspection of the Broadcast Stations and this opinion is not based
on any condition which might be revealed by such an inspection.
The opinions expressed in this letter are solely for the benefit of
the Managing Agents and the Lenders and their respective participants,
assignees and other transferees. They may not be relied upon in any manner
or by any other person or entity without our express written consent. We
have not been retained, and render no opinion, with respect to any items or
matters not specifically referred to herein. This opinion is issued as of
the date hereof, and we undertake no obligation to advise you if facts
should come to our attention after the date hereof that might change the
opinion rendered herein.
Very truly yours,
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P.
First Union National Bank
[date]
Page 5
Exhibit A
The Xxxxxxxx Group, Inc. and Subsidiaries
Primary Broadcast Station Licenses
Station License Expiration Date
--------------- ---------------
EXHIBIT H-5
-----------
First Union National Bank,
as Administrative Agent,
Fleet Bank, N.A. as Documentation Agent,
and the Lenders as Parties to the
Credit Agreement
RE: THE XXXXXXXX GROUP, INC.; CREDIT AGREEMENT
Ladies and Gentlemen:
We are counsel for The Xxxxxxxx Group, Inc. ("Borrower"). We have
represented the Borrower in connection with its execution and delivery of a
Credit Agreement dated as of January ___, 1999 ("Agreement") among the Borrower,
the Lenders, First Union National Bank as Administrative Agent ("Agent"), Fleet
Bank, N.A. as Documentation Agent, and Union Bank of California, N.A. and
KeyBank National Association, as co-agents, and providing for Loans and Facility
Letters of Credit in the aggregate principal amount of up to $325,000,000. This
opinion is being given pursuant to Section [4.3(A)(II)(A)] of the Agreement.
All capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to such terms in the Agreement, except that for purposes
of this opinion the term "Credit Documents" refers only to those Credit
Documents executed and delivered by the Borrower and its Subsidiaries on or
prior to the closing date of the Tranche B Term Loans, and the term "State"
refers to the State of Washington.
In rendering the opinions expressed in this letter, we have examined
and relied upon such records, documents, instruments, certificates of public
officials and certificates of officers and employees of and accountants for the
Borrower as we have deemed appropriate, including:
(1) The Borrower's Fourth Restated Certificate of Incorporation, as
certified to us by the Secretary of State of Delaware on January 11, 1999;
(2) The Borrower's Bylaws, as certified to us by the Borrower's
Secretary as of January, 1999;
(3) Resolutions of the Borrower's Board of Directors, as adopted at
meetings of the Board and by unanimous consent of the members of the Board, with
specific reference to actions
Page 2
relating to the transactions covered by this opinion, as certified to us by the
Borrower's Secretary as of January, 1999;
4. The Credit Documents;
5. Certificates of good standing issued by the Secretaries of State
of the states of incorporation of the Borrower and its Subsidiaries, variously
dated from December, 17 through January, 21.
In reviewing the foregoing, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to or reviewed by us as
originals, and the conformity to the authentic original documents of all other
documents submitted to or examined by us as certified, conformed, or reproduced
copies. As to questions of fact material to these opinions, we have relied upon
certificates of public officials and statements, certificates or
representations, written or oral, of officers or representatives of the Borrower
without seeking to independently establish or otherwise verify them, as stated
on the certificates and documents furnished to us. Except to the extent we are
expressly opining with respect to the Borrower or any of its Subsidiaries having
all requisite power and authority, our opinion assumes that the parties to each
of the documents to which reference is made above have the power and authority
to execute, deliver and perform such documents, and that such documents are
valid as to such parties and binding upon such parties in accordance with their
terms.
Whenever a statement in this opinion is qualified by "known to us,"
"we are not aware," "to the best of our knowledge," or a similar phrase, it is
intended to indicate that, during the course of our representation of the
Borrower, no information that would give us current actual knowledge of the
inaccuracy of such statement has come to the attention of those attorneys in
this firm who have rendered legal services in connection with the representation
described in the introductory paragraph of this opinion letter. However, we
have not undertaken any independent investigation to determine the accuracy of
such statement. Any limited inquiry undertaken by us during the preparation of
this opinion letter should not be regarded as such an investigation, and no
inference as to our knowledge of any matters bearing on the accuracy of any such
statement should be drawn from the fact of our representation of the Borrower.
Based upon and subject to the foregoing and the assumptions,
limitations and qualifications set forth below, it is our opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
2. Each of the Borrower and its Subsidiaries has the full corporate
power and authority to execute, deliver and perform the Credit Documents to
which it is a party, to own and hold its property and to engage in its business
as presently conducted.
Page 3
3. Each of the Borrower and its Subsidiaries has taken all necessary
corporate action to execute, deliver and perform, and has validly executed and
delivered, each Credit Document to which it is a party. Each Credit Document to
which the Borrower or any Subsidiary is a party (including without limitation
each of the Amended and Restated Credit Notes) constitutes the legal, valid and
binding obligation of the Borrower or such Subsidiary, as the case may be,
enforceable against it in accordance with its terms.
4. The execution, delivery and performance by each of the Borrower
and its Subsidiaries of the Credit Documents to which it is a party (including
without limitation each of the Amended and Restated Credit Notes), and
compliance by it with the terms thereof, do not and will not (i) violate any
provision of its articles or certificate of incorporation or bylaws, (ii)
contravene any provisions of any applicable law, rule or regulation of the
United States of America or the State or, to the best of our knowledge, any
judgment, order, writ, injunction or decree to which it is subject, (iii)
conflict with, result in a breach of or constitute (with notice, lapse of time
or both) a default under any indenture, agreement or other instrument to which
it is a party, by which it or any of its properties is bound or to which it is
subject, or (iv) except for the Liens created in favor of the Agent pursuant to
the Security Documents, result in or require the creation or imposition of any
Lien upon any of its property or assets.
5. No consent, approval, authorization, exemption or other action by,
notice to, or registration or filing with, any Governmental Authority of the
United States of America or the State is required in connection with the due
execution, delivery and performance by each of the Borrower and its Subsidiaries
of the Credit Documents to which it is a party, the legality, validity or
enforceability thereof or the consummation of the transactions contemplated
thereby.
6. To the best of our knowledge, there are no actions,
investigations, suits or proceedings pending or threatened, at law, in equity or
in arbitration, before any court, other Governmental Authority or other Person,
(i) against or affecting the Borrower and its Subsidiaries or any of their
respective properties that would, if adversely determined, be reasonably likely
to have a Material Adverse Effect, or (ii) with respect to any of the Credit
Documents.
All of the opinions herein expressed are specifically subject to the
following limitations and qualifications:
A. We have assumed (i) that all parties, other than the Borrower and
its Subsidiaries, have complied with all applicable laws, statutes,
and regulations relating to their power and authority to enter into
the Credit Documents and to effect the transactions contemplated
therein, (ii) that the Credit Documents are the legal, valid, and
binding obligations of such parties (other than the Borrower and
its Subsidiaries) enforceable against them in accordance with their
respective terms, (iii) that there are no agreements or other
documents between the parties to the
Page 4
Credit Documents that are inconsistent with or that modify the
Credit Documents, or would otherwise have an effect on the opinions
expressed in this letter, (iv) each of the Borrower and the
Subsidiaries have sufficient rights in the Pledged Stock for a
security interest to attach to the Pledged Stock, (v) the shares of
Pledged Stock are evidenced by validly executed certificates that
have been delivered and endorsed to, and are in the possession of,
the Pledgee for the benefit of the Pledgee and the Lenders,
pursuant to the Pledge Agreement, (vi) the Lenders have given value
to the Borrower pursuant to the Credit Documents, and (vii) there
has been no mutual mistake of fact or misunderstanding, fraud,
duress, undue influence, or a breach of any applicable obligation
of good faith and fair dealing.
B. The Credit Documents state that they are governed by North Carolina
law. Consequently, we have not examined the question of what law
would govern the interpretation or enforcement of such documents,
and our opinion is based upon the assumption that the internal laws
of the State of Washington and the federal laws of the United
States would govern the provisions of, and transactions
contemplated by, the Credit Documents. We note that if the Credit
Documents are not, in fact, valid, binding, and enforceable under
the laws of the State of North Carolina, the Credit Documents may
not be enforced by a State of Washington court under applicable
conflict of law principles. We express no opinion as to whether a
court located in the State of Washington would hold that the State
of Washington is a proper forum in which to enforce the Credit
Documents.
C. Our opinion in paragraph 1 regarding the Borrower's and each
Subsidiary's existence and good standing is based solely on
certificates of the Secretaries of State of their respective states
of incorporation, variously dated from December 17, 1999, through
January 21 1999.
D. Our opinion in paragraph 4 with respect to the violation of any
laws or regulations, and our opinion in paragraph 5 with respect to
authorizations of and other actions by any Governmental Authority,
each is limited to those governmental approvals, filings,
registrations, laws, or regulations applicable to transactions of
the type described in the Credit Documents and to entities engaged
in the types of businesses engaged in by the Borrower and the
Subsidiaries, and specifically excludes any opinion related to
federal communications laws or FCC matters.
E. We express no opinion as to (i) the title or ownership of the
Pledged Stock, or (ii) the priority of any lien or security
interest created or purported
PAGE 5
to be created by the Pledge Agreement, the Security Agreement or
any of the other Credit Documents.
F. We express no opinion as to the enforceability of:
(1) Provisions relating to the waiver of rights, remedies and
defenses;
(2) Any reservation of the right to pursue inconsistent or
cumulative remedies;
(3) Provisions for payment or reimbursement of costs and expenses
(including without limitation attorneys fees) in excess of
statutory limits or amounts determined to be reasonable by any
court other tribunal, and any provision for payment of
attorneys fees other than to the prevailing party.
(4) Limitations on the liabilities of parties for their own
negligence or misconduct;
(5) Indemnification provisions with respect to applicable
securities laws;
(6) Severability provisions; and
(7) Availability of equitable remedies.
G. Our opinions are limited to matters expressly stated herein, and
no other opinions may be implied or inferred.
H. Our opinions expressed in this letter are qualified in their
entirety by the effect, if any, of all matters which may be
subject to judicial discretion or general principles of equity or
public policy; provided, that such requirements should not, in
our opinion, materially diminish or interfere with the practical
realization by the Lenders of the rights and benefits intended to
be conferred on them by the Credit Documents.
The attorneys in this firm are members of the Bar of the State of
Washington. We do not hold ourselves out as being conversant with the laws of
any jurisdiction other than those of the United States of America, the State of
Washington, and the Delaware General Corporation Law. For purposes of this
opinion, we have assumed, without inquiry or investigation, that all applicable
state laws, including the laws of the State of North Carolina under which the
Credit Documents are governed, but excluding the Delaware General Corporation
Law, are identical to the laws of the State of Washington.
Page 6
The opinions expressed in this letter are solely for the benefit of
the Administrative Agent, the Documentation Agent and the Lenders and their
respective participants, assignees and other transferees. They may not be
relied upon in any manner or for any purpose by any other person or entity
without our express written consent.
Very truly yours,
XXXXXX & XXXX PC
Exhibit H-6
[date]
First Union National Bank, as Administrative Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: The Xxxxxxxx Group, Inc.: Credit Agreement
Ladies and Gentlemen:
We are special counsel respecting Federal Communications Commission ("FCC")
matters for The Xxxxxxxx Group, Inc. (the "Borrower") and the Subsidiaries. We
have represented the Borrower in connection with the execution and delivery of a
Credit Agreement dated as of January ___, 1999 (the "Credit Agreement") among
the Borrower, the Lenders, First Union National Bank, as Administrative Agent,
Fleet Bank, N.A. as Documentation Agent, and Union Bank of California, N.A.,
Keybank National Association and Bank of Montreal, Chicago Branch, as Co-Agents,
providing for term loan facilities in the aggregate principal amount of
$150,000,0000 and a reducing revolving credit facility in the initial aggregate
principal amount of $175,000,000 (which may be increased by $75,000,000 under
certain circumstances).
Capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to such terms in the Credit Agreement, except that for
purposes hereof the term "Credit Documents" shall refer only to those Credit
Documents executed and delivered by the Borrower and its Subsidiaries on or
prior to the date of the Revolver Increase.
In connection with rendering this opinion, we have reviewed originals, or
copies certified or otherwise identified to our satisfaction, of the Credit
Documents and such other documents and matters of fact and law as we have deemed
necessary for purposes of this opinion. In reviewing the foregoing, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to or reviewed by us as originals, and the conformity to the authentic
original documents of all other documents submitted to us or examined by us as
certified, conformed or reproduced copies. As to questions of fact material to
these opinions, we have relied upon certificates of public officials and
statements, certificates or representations, written or oral, of officers or
representatives of the Borrower without seeking to independently establish or
otherwise verify them, as stated on the certificates and documents furnished to
use. Our
First Union National Bank
[date]
Page 2
opinion assumes that the parties to each of the documents to which reference is
made above have the power and authority to execute, deliver and perform such
documents, and that such documents are valid as to such parties and binding upon
such parties in accordance with their terms.
Based upon and subject to the foregoing and the assumptions, limitations
and qualifications set forth below, it is our opinion that:
1. Exhibit A hereto contains a true, correct and complete list of the primary
broadcast station licenses issued by the Federal Communications Commission
(the "FCC") for the operation of the broadcast stations (the "Broadcast
Stations") owned by the Borrower or its Subsidiaries, indicating, for each
such license, the date of its expiration.
2. The consummation by the Borrower of the transactions contemplated by the
Credit Agreement do not and will not cause a violation of or a default
under any of the licenses, permits, consents, approvals and other
authorizations issued by the FCC for the operation of the Broadcast
Stations owned by the Borrower or its Subsidiaries (the "FCC Licenses"),
and all material authorizations, approvals and consents of the FCC under
the Communications Act required in connection with the Broadcast Stations
have been obtained, are in full force and effect, and have not been
reversed, stayed, enjoined, set aside, annulled or suspended.
3. Each material FCC License, including each primary broadcast station
license, is valid and in full force and effect, and no such license is
subject to any material adverse condition. Each material FCC License has
been granted or issued by an action of the FCC which is not subject to
administrative or judicial appeal, review or reconsideration by any party
or by the FCC on its own motion. We have no reason to believe that any FCC
Licenses will not, subject to the filing of renewal applications and
payment of any applicable filing fees, be renewed for a full term in the
ordinary course.
4. There are (a) no judgments, decrees or orders issued or, to counsel's
knowledge, threatened by the FCC with respect to the Borrower or any of its
Subsidiaries, (b) to counsel's knowledge, no material complaints,
petitions, applications, investigations or other proceedings pending or
threatened before the FCC, including, without limitation, any notice of
violation, notice of apparent liability or order to show cause, and (c) to
counsel's knowledge, no events have occurred that could result in (i) the
termination, revocation or adverse modification of any FCC License, or (ii)
the imposition of any material financial penalty by the FCC upon the
Borrower or any Subsidiary.
5. The Borrower and its Subsidiaries, to counsel's knowledge, have filed with
the FCC all material reports, documents, instruments, information and
applications required to be filed and have
First Union National Bank
[date]
Page 3
undertaken all other actions required to be taken pursuant to the Act and
the rules promulgated thereunder or upon the request of the FCC.
6. The execution, delivery and performance by the Borrower under the Credit
Documents (a) do not and will not violate or conflict with any provision of
the Act, or with any rule, regulation or published policy of the FCC; (b)
do not and will not result in the forfeiture or the suspension or
termination, prior to its expiration date, revocation, material impairment,
adverse modification or non-renewal of any FCC License; and (c) do not and
will not require any consent, authorization or approval of, or notice to or
filing with, the FCC.
7. Neither the Agents nor any Lender under the Credit Documents will, solely
by reason of the execution, delivery and performance of any of the Credit
Documents, be subject to the regulation or the control of the FCC.
All of the opinions herein expressed are specifically subject to the
following limitations and qualifications:
A. We have assumed (i) that all parties have complied with all
applicable laws, statutes and regulations relating to their power
and authority to enter into the Credit Documents and to effect
the transactions contemplated therein, (ii) that the Credit
Documents are the legal, valid and binding obligations of such
parties enforceable against them in accordance with their
respective terms, (iii) that there are no agreements or other
documents between the parties to the Credit Documents which are
inconsistent with or which modify the Credit Documents, and (iv)
there has been no mutual mistake of fact or misunderstanding,
fraud, duress, undue influence, or a breach of any applicable
obligation of good faith and fair dealing;
B. Our representation of the Borrower and the Subsidiaries has been
limited to certain specific matters, and we do not represent the
Borrower and the Subsidiaries in all matters. Other law firms
have performed, and continue to perform, legal services for the
Borrower and the Subsidiaries. Accordingly, this opinion is
limited to those specific matters within the scope of
representation that we have undertaken;
C. This opinion is provided to you as a legal opinion only, and not
as a guaranty or warranty of the matters discussed herein. Our
opinion is limited to matters expressly stated herein, and no
other opinions may be implied or inferred;
First Union National Bank
[date]
Page 4
D. Our opinions are qualified in their entirety by the effect, if
any, of all matters which may be subject to judicial or
administrative discretion or general principles of equity or
public policy, or the effect of any applicable bankruptcy,
exemption, insolvency, fraudulent conveyance, reorganization or
other similar laws, now or hereafter in effect, relating to
creditors rights generally; provided, that such requirements
should not, in our opinion, materially diminish or interfere with
the practical realization by the Lenders of the rights and
benefits intended to be conferred on them by the Credit
Documents;
E. Our opinions are qualified in their entirety by any limitations
on the remedies of specific performance, injunction and other
forms of equitable relief, because they are subject to certain
standards of equity jurisdiction, equitable defenses and the
discretion of the court; and
F. Our opinions are qualified in their entirety by generally
applicable laws and judicially created doctrines specifying the
methods of enforcement of obligations and/or limiting the
availability of certain remedies if a specified remedy is
utilized.
The attorneys in this firm are members of the Bar of the District of
Columbia. We do not hold ourselves out as being conversant with the laws of
any jurisdiction other than those of the United States of America, the
District of Columbia and the laws, rules and regulations of the Federal
Communications Commission. We express no opinion as to any scientific or
engineering questions pertinent to the Stations. We have not conducted a
physical inspection of the Broadcast Stations and this opinion is not based
on any condition which might be revealed by such an inspection.
The opinions expressed in this letter are solely for the benefit of
the Managing Agents and the Lenders and their respective participants,
assignees and other transferees. They may not be relied upon in any manner
or by any other person or entity without our express written consent. We
have not been retained, and render no opinion, with respect to any items or
matters not specifically referred to herein. This opinion is issued as of
the date hereof, and we undertake no obligation to advise you if facts
should come to our attention after the date hereof that might change the
opinion rendered herein.
Very truly yours,
Xxxxx, Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxx, L.L.P.
First Union National Bank
[date]
Page 5
Exhibit A
The Xxxxxxxx Group, Inc. and Subsidiaries
Primary Broadcast Station Licenses
Station License Expiration Date
--------------- ---------------
EXHIBIT H-7
-----------
First Union National Bank,
as Administrative Agent,
Fleet Bank, N.A. as Documentation Agent,
and the Lenders as Parties to the
Credit Agreement
RE: THE XXXXXXXX GROUP, INC.; CREDIT AGREEMENT
Ladies and Gentlemen:
We are counsel for The Xxxxxxxx Group, Inc. ("Borrower"). We have
represented the Borrower in connection with its execution and delivery of a
Credit Agreement dated as of January 22, 1999 ("Agreement") among the Borrower,
the Lenders, First Union National Bank as Administrative Agent ("Agent"), Fleet
Bank, N.A. as Documentation Agent, and Union Bank of California, N.A., KeyBank
National Association and Bank of Montreal, Chicago Branch, as co-agents, and
providing for Loans and Facility Letters of Credit in the aggregate principal
amount of up to $325,000,000. This opinion is being given pursuant to Section
4.3(d)(A) of the Agreement. All capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the
Agreement, except that (a) the term "Credit Documents" refers only to those
Credit Documents executed and delivered by the Borrower and its Subsidiaries on
or prior to the date hereof, (b) the term "State" refers to the State of
Washington, (c) the term "Collateral" has the meaning assigned to such term in
the Security Agreement, and (d) the term "Recording Office" means, with respect
to any county in the State of Washington, the office of such county where a
mortgage on real estate located in the county is required to be filed or
recorded under applicable Washington law.
In rendering the opinions expressed in this letter, we have examined and
relied upon such records, documents, instruments, certificates of public
officials and certificates of officers and employees of and accountants for the
Borrower as we have deemed appropriate, including:
1. The Borrower's Fourth Restated Certificate of Incorporation, as
certified to us by the Secretary of State of Delaware on January 11, 1999;
2. The Borrower's Bylaws, as certified to us by the Borrower's Secretary
as of January 21, 1999;
3. Resolutions of the Borrower's Board of Directors, as adopted at
meetings of the Board and by unanimous consent of the members of the Board, with
specific reference to actions
Page 2
relating to the transactions covered by this opinion, as certified to us by the
Borrower's Secretary as of January 21, 1999;
4. The Credit Documents;
5. Certificates of good standing issued by the Secretaries of State of the
states of incorporation of the Borrower and its Subsidiaries, variously dated
from December 17, 1999 through January 21, 1999.
In reviewing the foregoing, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to or reviewed by us as
originals, and the conformity to the authentic original documents of all other
documents submitted to or examined by us as certified, conformed, or reproduced
copies. As to questions of fact material to these opinions, we have relied upon
certificates of public officials and statements, certificates or
representations, written or oral, of officers or representatives of the Borrower
without seeking to independently establish or otherwise verify them, as stated
on the certificates and documents furnished to us. Except to the extent we are
expressly opining with respect to the Borrower or any of its Subsidiaries having
all requisite power and authority, our opinion assumes that the parties to each
of the documents to which reference is made above have the power and authority
to execute, deliver and perform such documents, and that such documents are
valid as to such parties and binding upon such parties in accordance with their
terms.
Whenever a statement in this opinion is qualified by "known to us," "we are
not aware," "to the best of our knowledge," or a similar phrase, it is intended
to indicate that, during the course of our representation of the Borrower, no
information that would give us current actual knowledge of the inaccuracy of
such statement has come to the attention of those attorneys in this firm who
have rendered legal services in connection with the representation described in
the introductory paragraph of this opinion letter. However, we have not
undertaken any independent investigation to determine the accuracy of such
statement. Any limited inquiry undertaken by us during the preparation of this
opinion letter should not be regarded as such an investigation, and no inference
as to our knowledge of any matters bearing on the accuracy of any such statement
should be drawn from the fact of our representation of the Borrower.
Based upon and subject to the foregoing and the assumptions, limitations
and qualifications set forth below, it is our opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
2. Each of the Borrower and its Subsidiaries has the full corporate power
and authority to execute, deliver and perform the Credit Documents to which it
is a party, to own and hold its property and to engage in its business as
presently conducted.
Page 3
3. Each of the Borrower and its Subsidiaries has taken all necessary
corporate action to execute, deliver and perform, and has validly executed and
delivered, each Credit Document to which it is a party. Each Credit Document to
which the Borrower or any Subsidiary is a party constitutes the legal, valid and
binding obligation of the Borrower or such Subsidiary, as the case may be,
enforceable against it in accordance with its terms, except to the extent that
the validity, binding nature, and enforceability of each such Credit Document
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting the rights of creditors generally.
4. The execution, delivery and performance by each of the Borrower and its
Subsidiaries of the Credit Documents to which it is a party (including without
limitation the Subsidiary Guaranty), and compliance by it with the terms
thereof, do not and will not (i) violate any provision of its articles or
certificate of incorporation or bylaws, (ii) contravene any provisions of any
applicable law, rule or regulation of the United States of America or the State
or, to the best of our knowledge, any judgment, order, writ, injunction or
decree to which it is subject, (iii) conflict with, result in a breach of or
constitute (with notice, lapse of time or both) a default under any indenture,
agreement or other instrument to which it is a party, by which it or any of its
properties is bound or to which it is subject, or (iv) except for the Liens
created in favor of the Agent pursuant to the Security Documents, result in or
require the creation or imposition of any Lien upon any of its property or
assets.
5. No consent, approval, authorization, exemption or other action by,
notice to, or registration or filing with, any Governmental Authority of the
United States of America or the State is required in connection with the due
execution, delivery and performance by each of the Borrower and its Subsidiaries
of the Credit Documents to which it is a party, the legality, validity or
enforceability thereof or the consummation of the transactions contemplated
thereby.
6. To the best of our knowledge, there are no actions, investigations,
suits or proceedings pending or threatened, at law, in equity or in arbitration,
before any court, other Governmental Authority or other Person, (i) against or
affecting the Borrower and its Subsidiaries or any of their respective
properties that would, if adversely determined, be reasonably likely to have a
Material Adverse Effect, or (ii) with respect to any of the Credit Documents,
other than as disclosed on Schedule 5.5 to the Credit Agreement.
All of the opinions herein expressed are specifically subject to the
following limitations and qualifications:
A. We have assumed (i) that all parties, other than the Borrower and its
Subsidiaries, have complied with all applicable laws, statutes, and
regulations relating to their power and authority to enter into the
Credit Documents and to effect the transactions contemplated therein,
(ii) that the Credit Documents are the legal, valid, and binding
obligations of such parties (other than the Borrower and its
Subsidiaries) enforceable against them in accordance with their
respective terms,
Page 4
(iii) that there are no agreements or other documents between the parties
to the Credit Documents that are inconsistent with or that modify the
Credit Documents, or would otherwise have an effect on the opinions
expressed in this letter, (iv) that each of the Borrower and the
Subsidiaries have sufficient rights in the Pledged Stock, and sufficient
value has been given, for a security interest in favor of the Agent to
attach to the Pledged Stock, (v) the shares of Pledged Stock are
evidenced by validly executed certificates that have been delivered and
endorsed to, and are in the possession of, the Pledgee for the benefit of
the Pledgee and the Lenders, pursuant to the Pledge Agreement, (vi) that
the Collateral exists, (vii) each of the Borrower and the Subsidiaries
have sufficient rights in the Collateral, and sufficient value has been
given, for a security interest in favor of the Agent to attach to the
Collateral, and (viii) that there has been no mutual mistake of fact or
misunderstanding, fraud, duress, undue influence, or a breach of any
applicable obligation of good faith and fair dealing.
B. The Credit Documents state that they are governed by North Carolina law.
Consequently, we have not examined the question of what law would govern
the interpretation or enforcement of such documents, and our opinion is
based upon the assumption that the internal laws of the State of
Washington and the federal laws of the United States would govern the
provisions of, and transactions contemplated by, the Credit Documents. We
note that if the Credit Documents are not, in fact, valid, binding, and
enforceable under the laws of the State of North Carolina, the Credit
Documents may not be enforced by a State of Washington court under
applicable conflict of law principles. We express no opinion as to
whether a court located in the State of Washington would hold that the
State of Washington is a proper forum in which to enforce the Credit
Documents.
C. Our opinion in paragraph 1 regarding the Borrower's and each Subsidiary's
existence and good standing is based solely on certificates of the
Secretaries of State of their respective states of incorporation,
variously dated from December 17, 1999 through January 21, 1999.
D. Our opinion in paragraph 4 with respect to the violation of any laws or
regulations, and our opinion in paragraph 5 with respect to
authorizations of and other actions by any Governmental Authority, each
is limited to those governmental approvals, filings, registrations, laws,
or regulations applicable to transactions of the type described in the
Credit Documents and to entities engaged in the types of businesses
engaged in by the Borrower and the Subsidiaries, and specifically
excludes any opinion related to federal communications laws or FCC
matters.
Page 5
E. We express no opinion as to (i) the title or ownership of the Pledged
Stock or the Collateral, or (ii) the priority of any lien or security
interest created or purported to be created by the Pledge Agreement,
the Security Agreement or any of the other Credit Documents.
F. We express no opinion as to the enforceability of:
(1) Provisions relating to the waiver of rights, remedies and
defenses;
(2) Any reservation of the right to pursue inconsistent or cumulative
remedies;
(3) Provisions for payment or reimbursement of costs and expenses
(including without limitation attorneys fees) in excess of
statutory limits or amounts determined to be reasonable by any
court or other tribunal, and any provision for payment of
attorneys fees other than to the prevailing party.
(4) Limitations on the liabilities of parties for their own
negligence or misconduct;
(5) Indemnification provisions with respect to applicable securities
laws;
(6) Severability provisions; and
(7) Availability of equitable remedies.
G. Our opinions are limited to matters expressly stated herein, and no
other opinions may be implied or inferred.
H. Our opinions expressed in this letter are qualified in their entirety
by the effect, if any, of all matters which may be subject to judicial
discretion or general principles of equity or public policy; provided,
that such requirements should not, in our opinion, materially diminish
or interfere with the practical realization by the Lenders of the
rights and benefits intended to be conferred on them by the Credit
Documents.
The attorneys in this firm are members of the Bar of the State of
Washington. We do not hold ourselves out as being conversant with the laws of
any jurisdiction other than those of the United States of America, the State of
Washington, and the Delaware General Corporation Law. For purposes of this
opinion, we have assumed, without inquiry or investigation, that all applicable
state laws, including the laws of the State of North Carolina under which the
Credit Documents are governed, but excluding the Delaware General Corporation
Law, are identical to the laws of the State of Washington.
Page 6
The opinions expressed in this letter are solely for the benefit of the
Administrative Agent, the Documentation Agent and the Lenders and their
respective participants, assignees and other transferees. They may not be
relied upon in any manner or for any purpose by any other person or entity
without our express written consent.
Very truly yours,
XXXXXX & XXXX PC
EXHIBIT I
---------
FINANCIAL CONDITION CERTIFICATE
THIS FINANCIAL CONDITION CERTIFICATE is delivered pursuant to Section
4.1(k) of the Credit Agreement dated as of January __, 1999 (the "Credit
Agreement"), among THE XXXXXXXX GROUP, INC., a Delaware corporation (the
"Borrower"), certain banks and other financial institutions from time to time
parties thereto (the "Lenders"), and FIRST UNION NATIONAL BANK, as
administrative agent for the Lenders. Capitalized terms used herein without
definition shall have the meanings given to such terms in the Credit Agreement.
The undersigned hereby certifies for and on behalf of the Borrower as
follows:
1. Capacity. The undersigned is, and at all pertinent times mentioned
--------
herein has been, the Borrower's duly qualified and acting chief financial
officer (and in such capacity has responsibility for the management of the
Borrower's financial affairs) and senior accounting officer (and in such
capacity has responsibility for the preparation of the Borrower's financial
statements).
2. Procedures. For purposes of this Certificate, the undersigned, or
----------
officers or other personnel of the Borrower under the direction and supervision
of the undersigned, have, as of or prior to the date hereof, undertaken the
following activities in connection herewith:
2.1 The undersigned has carefully reviewed the following:
(a) the contents of this Certificate;
(b) the Credit Agreement (including the exhibits and schedules
thereto);
(c) the audited consolidated balance sheets of the Borrower and its
subsidiaries for the fiscal years ended December 31, 1997, 1996
and 1995, and the related consolidated statements of income,
stockholders equity and cash flows of the Borrower and its
subsidiaries for the fiscal period ended December 31, 1997, 1996
and 1995;
(d) the unaudited consolidated balance sheet of the Borrower and its
subsidiaries as of September 30, 1998 and the related
consolidated statements of income, stockholders equity and cash
flows of the Borrower and its subsidiaries for the nine-month
period then ended;
(e) the Pro Forma Balance Sheet; and
(f) the Projections.
2.2 The undersigned has made inquiries of certain other officers and
personnel of the Borrower with responsibility for financial and accounting
matters regarding whether the unaudited financial statements described in
paragraph 2.1(d) above and the Pro Forma Balance Sheet are in conformity with
Generally Accepted Accounting Principles applied on a basis substantially
consistent with that of the audited financial statements described in paragraph
2.1(c) above, and whether notes omitted from the unaudited consolidated
financial statements and the Pro Forma Balance Sheet would have disclosed any
new information that would be necessary to make such materials not misleading.
2.3 With respect to any Contingent Obligations of the Borrower, the
undersigned:
(a) has inquired of certain officers and other personnel of the
Borrower who have responsibility for the legal, financial and
accounting affairs of the Borrower, as to the existence and
estimated amounts of all Contingent Obligations known to them;
(b) has confirmed with senior officers of the Borrower that, to the
best of such officers' knowledge, (i) all appropriate items have
been included in the Contingent Obligations made known to the
undersigned in the course of the inquiry of the undersigned in
connection herewith, and (ii) the amounts relating thereto were
the maximum estimated amounts of liability reasonably likely to
result therefrom as of the date hereof, and
(c) confirms that, to the best of his knowledge, all material
Contingent Obligations that may arise from any pending
litigation, asserted claims and assessments, guarantees,
uninsured risks, and other Contingent Obligations of the Borrower
have been considered in making the certification set forth
herein, and with respect to each such Contingent Obligations the
estimable maximum estimated of liability with respect thereto was
used in making such certification.
2.4 The Pro Forma Balance Sheet and the Projections have been prepared
under the direction of the undersigned, and the undersigned has reexamined the
Pro Forma Balance Sheet and the Projections as of the date hereof and considered
the effect thereon of any changes since the date of the preparation thereof on
the financial condition set forth and the results projected therein.
2.5 The officers and other personnel of the Borrower who were involved in
the preparation of the Projections have relied on historical financial and other
information and upon information with respect to sales, costs and other data
obtained in discussions with the chief executive officer of the Borrower, and
other officers and supervisory personnel directly responsible for the various
operations involved. In the opinion of the undersigned, the assumptions upon
which the Projections are based were fair, complete and reasonable when made,
and continue as of the date hereof to be fair, complete and reasonable.
2.6 The undersigned has inquired of certain officers of the Borrower
having responsibility for financial reporting and accounting matters regarding
whether such persons were aware of any events or conditions that, as of the date
hereof, would cause the statements made in Section 3 below to be untrue.
2.7 The undersigned has conferred with counsel to the Borrower for the
purpose of discussing the meaning of the contents of this Certificate
(including, without limitation, Sections 3.4, 3.5 and 3.6 below).
3. Certifications. Based on the foregoing, the undersigned hereby
--------------
certifies as follows:
3.1 Attached hereto as ANNEX A is a true, correct and complete copy of the
Pro Forma Balance Sheet. Such Pro Forma Balance Sheet gives pro forma effect to
the consummation of the transactions contemplated by the Credit Agreement, the
completion of the initial extensions of credit made under this Credit Agreement,
the WOKR Acquisition and the payment of transaction fees and expenses relating
to the foregoing, all as if such events had occurred on December 31, 1998. The
Pro Forma Balance Sheet has been prepared in good faith and in accordance with
Generally Accepted Accounting Principles (subject to the absence of footnotes
required by Generally Accepted Accounting Principles and subject to normal year-
end adjustments) and, subject to stated assumptions made in good faith and
having a reasonable basis set forth therein, presents fairly the financial
condition of the Borrower on an unaudited pro forma basis as of the date set
forth therein after giving effect to the consummation of the transactions as
described above.
3.2 Attached hereto as ANNEX B is a true, correct and complete copy of the
Projections. Such Projections cover the eight-year period beginning with the
fiscal year ending December 31, 1997 and give effect to the consummation of the
transactions contemplated by the Credit Agreement, initial extensions of credit
made under
this Credit Agreement, the WOKR Acquisition and the payment of transaction fees
and expenses incident to the foregoing. In the opinion of management of the
Borrower, the assumptions used in the preparation of the Projections were fair,
complete and reasonable when made and continue to be fair, complete and
reasonable as of the date hereof. The Projections have been prepared in good
faith by the executive and financial personnel of the Borrower and represent a
reasonable estimate of the future performance and financial condition of the
Borrower, subject to the uncertainties and approximations inherent in any
projections.
3.3 After giving effect to the transactions contemplated by the Credit
Agreement, all material accounts and other liabilities of the Borrower are
current and not past due.
3.4 The Borrower is not now, nor will the incurrence of the Obligations
pursuant to the Credit Agreement render the Borrower, "insolvent" (as
hereinafter defined). The undersigned understands that, in this context,
"insolvent" means that the present fair saleable value of assets is less than
the amount that will be required to be paid on or in respect of the existing
debts and other liabilities as such debts and liabilities of the Borrower
mature. The undersigned understands that the term "debts" includes any legal
liability, whether matured or unmatured, liquidated or unliquidated, absolute,
fixed or contingent, including any guaranty obligations. The foregoing is
supported by an analysis of the Pro Forma Balance Sheet.
3.5 The undersigned believes that, by incurring the Obligations pursuant
to the Credit Agreement, the Borrower will not incur debts beyond its ability to
pay as such obligations mature (taking into account the timing and amounts of
cash to be payable on or in respect of the Borrower's Indebtedness). The
foregoing conclusion is based in part on the Projections, which demonstrate that
the cash flow of the Borrower, after taking into account all anticipated uses of
the cash of the Borrower, will at all times be sufficient to pay all amounts on
or in respect of Indebtedness of the Borrower when such amounts are required to
be paid (including without limitation scheduled payments pursuant to the Credit
Agreement).
3.6 After giving effect to the consummation of the transactions
contemplated by the Credit Agreement, the assets of the Borrower do not
constitute "unreasonably small capital" (within the meaning of Section 548(a) of
the Bankruptcy Code, 11 U.S.C. Section 548(a)), for the Borrower to carry on its
business as now conducted and as proposed to be conducted (taking into account
the particular capital requirements of the business conducted and to be
conducted by the Borrower and the availability of capital in respect thereof
(with reference to, without limitation, the Projections)).
3.7 The Borrower has not executed the Credit Agreement or any documents
mentioned herein, or made any transfer or incurred any obligations thereunder,
with intent to hinder. delay or defraud either present or future creditors of
the Borrower.
3.8 The undersigned understands that the Lenders have performed their own
review and analysis of the financial condition of the Borrower, but that the
Lenders are relying on the foregoing statements in connection with the extension
of credit to the Borrower pursuant to the Credit Agreement.
Executed this ___th day of January, 1999.
__________________________________
Chief Financial Officer
The Xxxxxxxx Group, Inc.
FINANCIAL CONDITION CERTIFICATE
ANNEX A
THE XXXXXXXX GROUP, INC.
PRO FORMA BALANCE SHEET
[see attached]
FINANCIAL CONDITION CERTIFICATE
ANNEX B
THE XXXXXXXX GROUP, INC.
PROJECTIONS
[see attached]
EXHIBIT J
---------
FORM OF
LENDER ADDITION
AND
ACKNOWLEDGEMENT AGREEMENT
Reference is made to the Credit Agreement dated as of January ___, 1999 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
among The Xxxxxxxx Group, Inc. (the "Borrower"), certain banks and other
financial institutions from time to time parties thereto (the "Lenders") and
First Union National Bank, as Agent for the Lenders (the "Administrative
Agent"). Unless otherwise defined herein, capitalized terms without definition
shall have the same meanings herein as the Credit Agreement.
The Borrower and __________________________ (the "[New or Current] Lender")
agree as follows:
1. Subject to Section 2.19 of the Credit Agreement and this Lender
Addition and Acknowledgement Agreement, the aggregate of the Lenders' Revolving
Credit Commitments is hereby increased by an amount equal to [$75,000,000].
This Lender Addition and Acknowledgement Agreement memorializes the Revolver
Increase and is entered into pursuant to, and is authorized by, Section 2.19(b)
of the Credit Agreement.
2. The parties hereto acknowledge and agree that, as of the date hereof
and prior to giving effect to any Revolver Increase, (a) the percentage of the
total Revolving Credit Commitments under the Credit Agreement of each Lender,
including, without limitation, the [New or Current] Lender, (b) the Revolving
Credit Commitment under the Credit Agreement of each Lender, including, without
limitation, the [New or Current] Lender, and (c) the outstanding balances of the
Revolving Loans under the Credit Agreement made by each Lender, including,
without limitation, the [New or Current] Lender, are each set forth on Schedule
--------
1 hereto.
-
3. The parties hereto acknowledge and agree that, as of the Effective Date
(as defined below), and after giving effect to the Revolver Increase, (a) the
percentage of the total Revolving Credit Commitments under the Credit Agreement
of each Lender, including, without limitation, the [New or Current] Lender, (b)
the Revolving Credit Commitment under the Credit Agreement of each Lender,
including, without limitation, the [New or Current] Lender, and (c) the
outstanding balances of the Revolving Loans under the Credit Agreement made by
each Lender, including, without limitation, the [New or Current] Lender, are
each set forth on Schedule 2 hereto.
----------
4. The Borrower acknowledges that it shall ensure that all filings and
recordations that are necessary to perfect the security interests of the Lenders
in the Collateral shall have been
filed or recorded in all appropriate locations and it shall deliver to the
Administrative Agent evidence satisfactory to the Administrative Agent that such
security interests constitute valid and perfected first priority Liens therein
(including evidence satisfactory that the amount of indebtedness secured
reflects the increase in the aggregate of the Revolving Credit Commitments of
the Lenders and that all necessary tax or other indebtedness has been paid).
5. [The Current Lender is delivering to the Administrative Agent (for
cancellation on behalf of the Borrower) the Revolving Credit Note delivered to
it under the Credit Agreement and requests that the Borrower exchange such Note
for a new Revolving Credit Note payable to the current Lender as follows:
Revolving Note
Payable to the Order of: Principal Amount of Note:
----------------------- ------------------------
________________________ $_____________
OR
The New Lender requests that the Borrower issue a new Revolving Credit Note
payable to the New Lender as follows:
Revolving Note
Payable to the Order of: Principal Amount of Note:
----------------------- ------------------------
________________________ $_____________ ]
6. The [New or Current] Lender (i) represents and warrants that it is
legally authorized to enter into this Lender Addition and Acknowledgement
Agreement; (ii) confirms that it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 6.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Lender Addition and Acknowledgement Agreement; (iii) agrees that it will,
independently and without reliance upon any other Lender or the Administrative
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iv) confirms that it meets the criteria set
forth in the definition of Eligible Assignee; (v) appoints and authorizes
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Credit Documents as are
delegated to such Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (vi) agrees that it will perform in
accordance with their terms all the obligations which by the terms of the Credit
Agreement and the other Credit Documents are required to be performed by it as a
Lender; and (vii) agrees that it will keep confidential all the information with
respect to the Borrower furnished to it by the Borrower (other than information
required or requested to be disclosed by it pursuant to regulatory requirements
or legal process;
-2-
information requested by and disclosed to its auditors, accountants and
attorneys, provided that the [New or Current] Lender shall use its best efforts
--------
to have such Persons enter into a confidentiality agreement with respect to such
information; and information generally available to the public or otherwise
available to the [New or Current] Lender on a nonconfidential basis).
7. The effective date for this Lender Addition and Acknowledgement
Agreement shall be _____________ (the "Effective Date"). Following the
execution of this Lender Addition and Acknowledgement Agreement, it will be
delivered to the Administrative Agent for the consent of the Administrative
Agent and acceptance and recording in the Register.
8. Upon such consents, acceptance and recording, from and after the
Effective Date, the [New or Current] Lender shall be a party to the Credit
Agreement and the other Credit Documents to which Lenders are parties and to the
extent provided in this Lender Addition and Acknowledgement Agreement, have the
rights and obligations of a Lender under each such agreement.
9. Upon such consents, acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the interest
assigned hereby (including payments of principal, interest, fees and other
amounts) to the [New or Current] Lender.
10. The representations and warranties of the Borrower under the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date hereof, both before and after giving effect to the
Revolver Increase.
11. THIS LENDER ADDITION AND ACKNOWLEDGEMENT AGREEMENT SHALL BE DEEMED TO
BE A CONTRACT UNDER SEAL AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES.
THE XXXXXXXX GROUP, INC.
By: ________________________________
Name:________________________________
Title:_______________________________
-3-
[CURRENT LENDER OR NEW LENDER]
Revolving Credit Commitment $________
Percentage of Total Revolving Credit
Commitment ____%
By: ________________________________
Name:________________________________
Title:_______________________________
-4-
Acknowledged and Consented to:
FIRST UNION NATIONAL BANK, as
Administrative Agent
By: ________________________________
Name: ______________________________
Title: _____________________________
-5-
Schedule 1
to
Lender Addition and Acknowledgement Agreement
Lenders and Commitments
-----------------------
(as of the date hereof)
A. Revolving Credit Commitment Percentage of Each Lender.
-----------------------------------------------------
1. First Union National Bank _________%
2. _________________________ _________%
3. _________________________ _________%
4. [Other] _________%
B. Revolving Credit Commitment of Each Lender.
----------------------------------------------------------
1. First Union National Bank $_________
2. _________________________ $_________
3. _________________________ $_________
4. [Other] $_________
C. Outstanding Balance of the Revolving Loans of Each Lender.
----------------------------------------------------------
1. First Union National Bank $_________
2. _________________________ $_________
3. _________________________ $_________
4. [Other] $_________
-6-
Schedule 2
to
Lender Addition and Acknowledgement Agreement
Lenders and Commitments
-----------------------
(as of the Effective Date)
A. Revolving Credit Commitment Percentage of Each Lender.
-----------------------------------------------------
1. First Union National Bank _________%
2. _________________________ _________%
3. _________________________ _________%
4. [Other] _________%
B. Revolving Credit Commitment of Each Lender.
----------------------------------------------------------
1. First Union National Bank $_________
2. _________________________ $_________
3. _________________________ $_________
4. [Other] $_________
C. Outstanding Balance of the Revolving Loans of Each Lender.
----------------------------------------------------------
1. First Union National Bank $_________
2. _________________________ $_________
3. _________________________ $_________
4. [Other] $_________
-7-
a
