Exhibit 3
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FOOTHILL.
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
CHILDREN'S BROADCASTING CORPORATION
AND
FOOTHILL CAPITAL CORPORATION
DATED AS OF JULY 1, 1997
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(Page 39 of 142 Pages)
TABLE OF CONTENTS
PAGE(S)
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1. DEFINITIONS AND CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.3 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.4 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.5 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . 29
2. LOAN AND TERMS OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . 29
2.1 Revolving Advances . . . . . . . . . . . . . . . . . . . . . . . . 29
2.2 Term Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Appraisals; Mandatory Prepayments of the Term Loan . . . . . . . . 30
2.4 [Intentionally omitted]. . . . . . . . . . . . . . . . . . . . . . 31
2.5 Overadvances . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.6 Interest: Rates, Payments, and Calculations . . . . . . . . . . . 31
2.7 Collection of Accounts . . . . . . . . . . . . . . . . . . . . . . 32
2.8 Crediting Payments; Application of Collections . . . . . . . . . . 32
2.9 Designated Account.. . . . . . . . . . . . . . . . . . . . . . . . 33
2.10 Maintenance of Loan Account; Statements of Obligations . . . . . . 33
2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3. CONDITIONS; TERM OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . 34
3.1 Conditions Precedent to the Initial Advance and the Term Loan. . . 34
3.1A Conditions Precedent to the Term Loan. . . . . . . . . . . . . . . 38
3.2 Conditions Precedent to all Advances and the Term Loan . . . . . . 39
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.3 Condition Subsequent . . . . . . . . . . . . . . . . . . . . . . . 39
3.4 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.5 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . 40
3.6 Early Termination by Borrower. . . . . . . . . . . . . . . . . . . 40
3.7 Termination Upon Event of Default. . . . . . . . . . . . . . . . . 40
4. CREATION OF SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . 41
4.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . 41
4.2 Negotiable Collateral. . . . . . . . . . . . . . . . . . . . . . . 41
4.3 Collection of Accounts, General Intangibles, and Negotiable
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.4 Delivery of Additional Documentation Required. . . . . . . . . . . 42
4.5 Power of Attorney. . . . . . . . . . . . . . . . . . . . . . . . . 42
4.6 Right to Inspect . . . . . . . . . . . . . . . . . . . . . . . . . 43
(Page 40 of 142 Pages)
5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . 43
5.1 No Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2 Eligible Accounts. . . . . . . . . . . . . . . . . . . . . . . . . 44
5.3 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . 44
5.4 Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5 Location of Inventory and Equipment. . . . . . . . . . . . . . . . 44
5.6 [intentionally omitted]. . . . . . . . . . . . . . . . . . . . . . 44
5.7 Location of Chief Executive Office; FEIN . . . . . . . . . . . . . 45
5.8 Due Organization and Qualification; Subsidiaries . . . . . . . . . 45
5.9 Due Authorization; No Conflict . . . . . . . . . . . . . . . . . . 46
5.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.11 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . 47
5.12 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.13 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . 48
5.14 Environmental Condition. . . . . . . . . . . . . . . . . . . . . . 48
5.15 Key Leases; Tower Leases . . . . . . . . . . . . . . . . . . . . . 49
5.16 LPMA; Network Affiliates . . . . . . . . . . . . . . . . . . . . . 49
5.17 No Default In Communication Franchise Agreements . . . . . . . . . 49
5.18 Governmental Authority . . . . . . . . . . . . . . . . . . . . . . 49
6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.1 Accounting System. . . . . . . . . . . . . . . . . . . . . . . . . 50
6.2 Collateral Reporting . . . . . . . . . . . . . . . . . . . . . . . 50
6.3 Financial Statements, Reports, Certificates. . . . . . . . . . . . 50
6.4 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.5 Guarantor Reports. . . . . . . . . . . . . . . . . . . . . . . . . 52
6.6 Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.7 Title to Equipment . . . . . . . . . . . . . . . . . . . . . . . . 53
6.8 Maintenance of Equipment . . . . . . . . . . . . . . . . . . . . . 53
6.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.10 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.11 No Setoffs or Counterclaims. . . . . . . . . . . . . . . . . . . . 55
6.12 Location of Inventory and Equipment. . . . . . . . . . . . . . . . 55
6.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 56
6.14 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . 56
6.15 Leases.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.16 Government Authorization . . . . . . . . . . . . . . . . . . . . . 57
6.17 Off-the-Air Reports. . . . . . . . . . . . . . . . . . . . . . . . 57
6.18 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.19 Permitted Acquisitions; Permitted Unrestricted Subsidiary
Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.20 License Renewals . . . . . . . . . . . . . . . . . . . . . . . . . 58
7. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.2 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.3 Restrictions on Fundamental Changes. . . . . . . . . . . . . . . . 59
(Page 41 of 142 Pages)
7.4 Disposal of Assets . . . . . . . . . . . . . . . . . . . . . . . . 60
7.5 Change Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.6 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.7 Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . 60
7.8 Prepayments and Amendments . . . . . . . . . . . . . . . . . . . . 60
7.9 Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . 60
7.10 Consignments . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.11 Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.12 Accounting Methods . . . . . . . . . . . . . . . . . . . . . . . . 61
7.13 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.14 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . 61
7.15 Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.16 Communication Franchise Agreements . . . . . . . . . . . . . . . . 62
7.17 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.18 Change in Location of Chief Executive Office; Inventory and
Equipment with Bailees . . . . . . . . . . . . . . . . . . . . . . 63
7.19 No Prohibited Transactions Under ERISA . . . . . . . . . . . . . . 63
7.20 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . 64
7.21 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . 65
8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9. FOOTHILL'S RIGHTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . 68
9.1 Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . 68
9.2 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . 71
10. TAXES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . 72
11. WAIVERS; INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 72
11.1 Demand; Protest; etc.. . . . . . . . . . . . . . . . . . . . . . . 72
11.2 Foothill's Liability for Collateral. . . . . . . . . . . . . . . . 72
11.3 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 73
12. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. . . . . . . . . . . . . . . 74
14. DESTRUCTION OF OBLIGORS' DOCUMENTS. . . . . . . . . . . . . . . . . . . 75
15. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
15.1 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
15.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 75
15.3 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . 76
15.4 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 76
15.5 Severability of Provisions . . . . . . . . . . . . . . . . . . . . 76
15.6 Amendments in Writing. . . . . . . . . . . . . . . . . . . . . . . 76
15.7 Counterparts; Telefacsimile Execution. . . . . . . . . . . . . . . 76
(Page 42 of 142 Pages)
15.8 Revival and Reinstatement of Obligations . . . . . . . . . . . . . 76
15.9 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SCHEDULES AND EXHIBITS
Schedule P-1 Permitted Liens
Schedule R-1 Guarantor Real Property Collateral
Schedule 5.3 Licenses and Permits and Renewals thereof
Schedule 5.7 XXXXx
Schedule 5.8 Subsidiaries and Capital Stock thereof
Schedule 5.10 Litigation
Schedule 5.13 ERISA Benefit Plans
Schedule 5.14 Environmental Condition
Schedule 5.15(a) Key Leases
Schedule 5.15(b) Tower Leases
Schedule 5.16(a) LPMAs
schedule 5.16(b) Network Affiliates
Schedule 6.12 Location of Inventory and Equipment
Schedule 7.1 Permitted Indebtedness
Schedule 7.14 Permitted Transactions with Affiliates
Exhibit A-1 Form of Borrower's Affiliation Agreement
Exhibit C-1 Form of Compliance Certificate
(Page 43 of 142 Pages)
LOAN AND SECURITY AGREEMENT
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THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (THIS
"AGREEMENT"), is entered into as of July 1, 1997, between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Foothill"), with a place of business
located at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000-0000 and CHILDREN'S BROADCASTING CORPORATION, a Minnesota corporation
("Borrower"), with its chief executive office located at 000 Xxxxx Xxxxxx,
Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
R E C I T A L S:
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WHEREAS, Borrower and Foothill are parties to that certain Loan and
Security Agreement, dated as of November 25, 1996 as heretofore amended (the
"Existing Loan Agreement");
WHEREAS, Foothill made a term loan to Borrower pursuant to the
Existing Loan Agreement in the original principal amount of (i) $11,500,000
PLUS (ii) the amount of the Closing Fee under SECTION 2.11(a) (the "Existing
Term Loan"). As of the date hereof, the amount outstanding on the Existing
Term Loan is $11,279,900;
WHEREAS, on or about June 27, 1997, Foothill made an acquisition
term loan to Borrower in the amount of $2,400,000 (the "Acquisition Loan");
WHEREAS, Borrower has requested that Foothill make an additional
term loan to Borrower in the amount of $3,000,000 (the "New Term Loan");
WHEREAS, Borrower and Foothill have agreed to combine the Existing
Term Loan, the Acquisition Loan, and the New Term Loan into a single term
loan that will be repaid by Borrower in accordance with the terms of this
Agreement;
WHEREAS, Borrower and Foothill desire to amend and restate the
Existing Loan Agreement in its entirety as provided in this Agreement, it
being understood that no repayment of the obligations under the Existing Loan
Agreement is being effected hereby, but merely an amendment and restatement
in accordance with the terms hereof.
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms
shall have the following definitions:
"ABC PARTIES" has the meaning set forth in the definition of
"Eligible Accounts."
(Page 44 of 142 Pages)
"ACCOUNT DEBTOR" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account.
"ACCOUNTS" means all currently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to an
Obligor arising out of the sale or lease of goods or the rendition of
services by an Obligor, irrespective of whether earned by performance, and
any and all credit insurance, guaranties, or security therefor.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person
existing at the time such Person becomes an Unrestricted Subsidiary or is
assumed in connection with the acquisition of assets or properties from such
Person, and not incurred by such Person in connection with, or in
anticipation of, such acquisition or such Person becoming an Unrestricted
Subsidiary.
"ACQUIRED SYSTEM" has the meaning set forth in SECTION 6.19.
"ACQUISITION" means any purchase or other acquisition by the
Borrower of the assets or stock of any other Person, other than the purchase
of inventory or equipment in the ordinary course of business.
"ACQUISITION LOAN" shall have the meaning ascribed to such
term in the recitals of this Agreement.
"ADVANCES" has the meaning set forth in SECTION 2.1(a).
"ADVERTISING AGENCY ACCOUNT DEBTOR" means any Account Debtor
that is an advertising agency.
"AFFILIATE" means, as applied to any Person, any other Person
who directly or indirectly controls, is controlled by, is under common
control with or is a director or officer of such Person. For purposes of
this definition, "control" means the possession, directly or indirectly, of
the power to vote 5% or more of the securities having ordinary voting power
for the election of directors or the direct or indirect power to direct the
management and policies of a Person.
"AFFILIATION AGREEMENT" means an Affiliation Agreement between
Borrower and a Network Affiliate, substantially in the form of EXHIBIT A-1.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"ALTERNATIVE LIQUIDATION VALUE" means, in respect of any
asset, the net liquidation value of such asset as determined pursuant to a
Permitted Liquidation Value Dispute Resolution. Any determination of the net
liquidation value of such asset that is not made in strict compliance with
each of the procedures set forth in the definition of "Permitted Liquidation
Value Dispute Resolution" shall not constitute an Alternative Liquidation
Value.
(Page 45 of 142 Pages)
"AMENDED CLOSING DATE" means the date of the first to occur of
the making of the initial Advance or the initial funding of the Term Loan on
or after the first date written above.
"AUTHORIZED PERSON" means any officer or other employee of
Borrower.
"AVERAGE UNUSED PORTION OF MAXIMUM REVOLVING AMOUNT" means, as
of any date of determination, (a) the Maximum Revolving Amount, LESS (b) the
average Daily Balance of Advances that were outstanding during the
immediately preceding month.
"BANKRUPTCY CODE" means the United States Bankruptcy Code (11
U.S.C. Section 101 ET SEQ.), as amended, and any successor statute.
"BENEFIT PLAN" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which Borrower, any Subsidiary of Borrower, or
any ERISA Affiliate has been an "employer" (as defined in Section 3(5) of
ERISA) within the past six years.
"BIA" means Broadcast Investment Advisors.
"BOOKS" means all of the Obligors' books and records
including: ledgers; records indicating, summarizing, or evidencing the
Obligors' properties or assets (including the Collateral) or liabilities; all
information relating to the Obligors' business operations or financial
condition; and all computer programs, disk or tape files, printouts, runs, or
other computer prepared information.
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BORROWER COLLATERAL" means all right, title, or interest with
respect of Borrower with respect to the following:
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) the Real Property Collateral,
(Page 46 of 142 Pages)
(h) any money, or other assets of one or more of Borrower
that now or hereafter come into the possession, custody, or control of
Foothill, and
(i) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the Collateral, and any and all Accounts, Books, Equipment,
General Intangibles, Inventory, Negotiable Collateral, Real Property, money,
deposit accounts, or other tangible or intangible property resulting from the
sale, exchange, collection, or other disposition of any of the foregoing, or
any portion thereof or interest therein, and the proceeds thereof.
"BORROWER PERSONAL PROPERTY COLLATERAL" means all Borrower
Collateral other than the Borrower Real Property Collateral.
"BORROWER REAL PROPERTY COLLATERAL" means any Real Property
now owned or hereafter acquired by Borrower.
"BROADCAST SYSTEM" means all of the properties and operating
rights constituting a complete, fully integrated system for transmitting
radio signals from a transmitter licensed by the FCC, together with any
sub-system which is ancillary to any system referred to above.
"BROOKFIELD TOWER LEASE" means the Tower Lease entered into
between Group and Milwaukee Telephone Company with respect to the broadcast
tower located at 0000 X. 000xx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx.
"BUSINESS DAY" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close.
"CERTIFICATE OF DESIGNATION" means Borrower's Certificate of
Designation of Preferences and Rights of Convertible Preferred Stock Series
1993-A.
"CHANGE OF CONTROL" shall be deemed to have occurred at such
time as (a) Borrower shall cease to own and control, beneficially, directly,
and of record, all of the issued and outstanding capital stock of each of the
Guarantors, or (b) a "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934), directly or indirectly, of more than 10% of the total voting
power of all classes of stock then outstanding of Borrower entitled to vote
in the election of directors.
"CLOSING DATE" means November 25, 1996.
"CODE" means the California Uniform Commercial Code.
"COLLATERAL" means the Borrower Collateral and the Guarantor
Collateral.
(Page 47 of 142 Pages)
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver,
mortgagee waiver, bailee letter, or acknowledgement agreement of any
warehouseman, processor, lessor, consignee, or other Person in possession of,
having a Lien upon, or having rights or interests in the Equipment or
Inventory, in each case, in form and substance satisfactory to Foothill.
"COLLATERAL ASSIGNMENTS OF KEY LEASES" means one or more
collateral assignments, mortgages, or deeds of trust, in form and substance
reasonably satisfactory to Foothill, between one or more of the Obligors
(including Borrower) and Foothill respecting the hypothecation of such
Obligor's rights under the Key Leases.
"COLLATERAL ASSIGNMENTS OF TOWER LEASES" means one or more
collateral assignments, mortgages, or deeds of trust, in form and substance
reasonably satisfactory to Foothill, between one of the Obligors and Foothill
respecting the hypothecation of such Obligor's rights under the Tower Leases.
"COLLECTIONS" means all cash, checks, notes, instruments, and
other items of payment (including, insurance proceeds, proceeds of cash
sales, rental proceeds, and tax refunds).
"COMMUNICATIONS FRANCHISE" means a franchise, license, right,
permit, authorization, consent, or other instrument granted by the United
States (including FCC Licenses), or any state, city, town, county, or other
municipality or other political subdivision thereof, whether pursuant to or
in any franchise, ordinance, license or other agreement or otherwise,
pursuant to which a Person has, or is given, the right to construct, maintain
or operate a Communications System, or any part thereof.
"COMMUNICATION FRANCHISE AGREEMENTS" means all of the
Obligors' agreements related to any Communications Franchise or Communication
System.
"COMMUNICATIONS SYSTEM" means any Broadcast System or any
business or activity (including the ownership or leasing of property)
directly relating to the ownership or operation thereof other than the
development or syndication of programming for others.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C-1 and delivered by the chief accounting officer of
Borrower to Foothill.
"CONCENTRATION ACCOUNT" means account number 6355036114 of
Borrower maintained with the Concentration Account Bank.
"CONCENTRATION ACCOUNT AGREEMENT" means an agreement in form
and substance reasonably satisfactory to Foothill, among Borrower, Foothill,
and the Concentration Account Bank.
(Page 48 of 142 Pages)
"CONCENTRATION ACCOUNT BANK" means Norwest Bank Minnesota,
National Association.
"CONSOLIDATED CURRENT ASSETS" means, as of any date of
determination, the aggregate amount of all current assets of Borrower that
would, in accordance with GAAP, be classified on a balance sheet as current
assets.
"CONSOLIDATED CURRENT LIABILITIES" means, as of any date of
determination, the aggregate amount of all current liabilities of Borrower
that would, in accordance with GAAP, be classified on a balance sheet as
current liabilities. For purposes of this definition, all Obligations
outstanding under this Agreement shall be deemed to be current liabilities
without regard to whether they would be deemed to be so under GAAP.
"CONTROL AGREEMENTS" means the agreements with financial
intermediaries or depositaries required under SECTION 3.1(c)(12) hereof.
"COPYRIGHT SECURITY AGREEMENT" means a Copyright Security
Agreement executed and delivered by Borrower, the form and substance of which
is reasonably satisfactory to Foothill.
"CRLA" means Children's Radio of Los Angeles, Inc., a
Minnesota corporation.
"CRNY" means Children's Radio of New York, Inc., a New Jersey
corporation.
"XXXX" means Xx. Xxxxxxxxxxx Xxxx.
"DAILY BALANCE" means the amount of an Obligation owed at the
end of a given day.
"DEEMS ITSELF INSECURE" means that the Person deems itself
insecure in accordance with the provisions of Section 1208 of the Code.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"DESIGNATED ACCOUNT" means account number 180192002426 of
Borrower maintained with Borrower's Designated Account Bank, or such other
deposit account of Borrower (located within the United States) which has been
designated, in writing and from time to time, by Borrower to Foothill.
"DESIGNATED ACCOUNT BANK" means First Bank System of
Minnesota, whose office is located at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, and whose ABA number is 000-000-000.
(Page 49 of 142 Pages)
"DILUTION" means, in each case based upon the experience of
the immediately prior 3 months, the result of dividing the Dollar amount of
(a) bad debt write-downs, discounts, advertising, returns, promotions,
credits, or other dilution with respect to the Accounts, by (b) the Obligors'
Collections (excluding extraordinary items) plus the Dollar amount of clause
(a).
"DISBURSEMENT LETTER" means an instructional letter executed
and delivered by Borrower to Foothill regarding the extensions of credit to
be made on the Amended Closing Date, the form and substance of which shall be
satisfactory to Foothill.
"DOLLARS OR $" means United States dollars.
"EARLY TERMINATION PREMIUM" has the meaning set forth in
SECTION 3.6.
"ELIGIBLE ACCOUNTS" means those Accounts created by an Obligor
(net of reserves for offsets in respect of barter transactions) in the
ordinary course of business, that arise out of an Obligor's rendition of
services, that strictly comply with each and all of the representations and
warranties respecting Accounts made to Foothill in the Loan Documents, and
that are and at all times continue to be acceptable to Foothill in all
respects; PROVIDED, HOWEVER, that standards of eligibility may be fixed and
revised from time to time by Foothill in Foothill's reasonable credit
judgment. Eligible Accounts shall not include the following:
(a) Accounts that the Account Debtor has failed to pay within
120 days of invoice date or Accounts with selling terms of more than 30 days;
(b) (i) Accounts owed by an Account Debtor or its Affiliates
(other than an Advertising Agency Account Debtor or its Affiliates) where 50%
or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above;
(ii) Accounts, that were created on behalf of a
particular client of an Advertising Agency Account Debtor, owed by an
Advertising Agency Account Debtors where 50% or more of the Accounts owed by
that Advertising Agency Account Debtor (or its Affiliates) related to that
particular client are deemed ineligible under clause (a) above or where 50%
or more of all Accounts owed by that Advertising Agency Account Debtor (or
its Affiliates) are deemed ineligible under clause (a) above;
(c) Accounts owed by an Advertising Agency Account Debtor or
its Affiliates to the extent of advertising commissions owed thereto;
(d) Accounts owed by an Account Debtor or its Affiliates to
the extent of finance charges in respect thereof;
(Page 50 of 142 Pages)
(e) Accounts owed by the American Broadcasting Corporation
(ABC) or its Affiliates (including The Xxxx Disney Company, Capital
Cities/ABC Inc., ABC Holding Company, Inc., and ABC Radio Network, Inc.)
(collectively, the "ABC Parties");
(f) Accounts with respect to which the Account Debtor is an
employee, Affiliate, or agent of an Obligor;
(g) Accounts with respect to which the payment by the Account
Debtor may be conditional;
(h) Accounts that are not payable in Dollars or with respect
to which the Account Debtor: (i) does not maintain its chief executive office
in the United States, or (ii) is not organized under the laws of the United
States or any State thereof, or (iii) is the government of any foreign
country or sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof, unless (y) the Account is
supported by an irrevocable letter of credit satisfactory to Foothill (as to
form, substance, and issuer or domestic confirming bank) that has been
delivered to Foothill and is directly drawable by Foothill, or (z) the
Account is covered by credit insurance in form and amount, and by an insurer,
satisfactory to Foothill;
(i) Accounts with respect to which the Account Debtor is
either (i) the United States or any department, agency, or instrumentality of
the United States (exclusive, however, of Accounts with respect to which the
applicable Obligor has complied, to the satisfaction of Foothill, with the
Assignment of Claims Act, 31 U.S.C. Section 3727), or (ii) any State of the
United States (exclusive, however, of Accounts owed by any State that does
not have a statutory counterpart to the Assignment of Claims Act);
(j) except as otherwise provided in clause (k) of this
definition, Accounts with respect to which the Account Debtor is a creditor
of an Obligor, has or has asserted a right of setoff, has disputed its
liability, or has made any claim with respect to the Account;
(k) Accounts with respect to an Account Debtor whose total
obligations owing to all Obligors exceed 10% of all Eligible Accounts, to the
extent of the obligations owing by such Account Debtor in excess of such
percentage;
(l) Accounts with respect to which the Account Debtor is
subject to any Insolvency Proceeding, or becomes insolvent, or goes out of
business;
(m) Accounts the collection of which Foothill, in its
reasonable credit judgment, believes to be doubtful by reason of the Account
Debtor's financial condition;
(Page 51 of 142 Pages)
(n) Accounts with respect to which the services giving rise
to such Account have not been performed and accepted by the Account Debtor,
or the Account otherwise does not represent a final sale;
(o) Accounts with respect to which the Account Debtor is
located in the states of New Jersey, Minnesota, Indiana, or West Virginia (or
any other state that requires a creditor to file a Business Activity Report
or similar document in order to bring suit or otherwise enforce its remedies
against such Account Debtor in the courts or through any judicial process of
such state), unless the applicable Obligor has qualified to do business in
New Jersey, Minnesota, Indiana, West Virginia, or such other states, or has
filed a Notice of Business Activities Report with the applicable division of
taxation, the department of revenue, or with such other state offices, as
appropriate, for the then-current year, or is exempt from such filing
requirement; and
(p) Accounts that represent progress payments or other
advance xxxxxxxx that are due prior to the completion of performance by an
Obligor of the subject contract for services.
"EQUIPMENT" means all of the Obligors' present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), tools, parts,
goods (other than consumer goods, farm products, or Inventory), wherever
located, including, (a) any interest of any of the Obligors in any of the
foregoing, and (b) all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, 29 U.S.C. Sections 1000 et seq., amendments thereto, successor
statutes, and regulations or guidance promulgated thereunder.
"ERISA AFFILIATE" means (a) any corporation subject to ERISA
whose employees are treated as employed by the same employer as the employees
of Borrower under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower under IRC Section 414(c), (c) solely for purposes of
Section 302 of ERISA and Section 412 of the IRC, any organization subject to
ERISA that is a member of an affiliated service group of which Borrower is a
member under IRC Section 414(m), or (d) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any party subject to ERISA that is a party
to an arrangement with Borrower and whose employees are aggregated with the
employees of Borrower under IRC Section 414(o).
"ERISA EVENT" means (a) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan, (b) the withdrawal of Borrower, any of
its Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan year
in which it was a "substantial employer" (as defined in Section 4001(a)(2) of
ERISA), (c) the providing of notice of intent to terminate a Benefit Plan in
a distress termination (as described in Section 4041(c) of ERISA), (d) the
institution by the PBGC of proceedings to terminate a Benefit Plan or
Multiemployer Plan, (e) any event or condition (i) that provides a
(Page 52 of 142 Pages)
basis under Section 4042(a)(1), (2), or (3) of ERISA for the termination of,
or the appointment of a trustee to administer, any Benefit Plan or
Multiemployer Plan, or (ii) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA, (f) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
Borrower, any of its Subsidiaries or ERISA Affiliates from a Multiemployer
Plan, or (g) providing any security to any Plan under Section 401(a)(29) of
the IRC by Borrower or its Subsidiaries or any of their ERISA Affiliates.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.
"EXISTING LENDER" means Bank of Denver.
"EXISTING LENDER PAY-OFF LETTER" means a letter, in form and
substance reasonably satisfactory to Foothill, from Existing Lender
respecting the amount necessary to repay in full all of the obligations of
Group owing to Existing Lender (other than a mortgage financing of
approximately $225,000) and obtain a termination or release of all of the
Liens existing in favor of Existing Lender (other than Liens with respect to
the Real Property that secures the mortgage financing) on the properties or
assets of the Obligors.
"EXISTING LOAN AGREEMENT" shall have the meaning ascribed to
such term in the recitals of this Agreement.
"EXISTING TERM LOAN" shall have the meaning ascribed to such
term in the recitals of this Agreement.
"FCC" means the United States Federal Communications
Commission (or any successor agency, commission, bureau, department, or other
political subdivision of the United States).
"FCC LICENSE" means any license, permit, certificate of
compliance, franchise, approval, or authorization, rented or issued by the
FCC for the operation of a Broadcast System.
"FEIN" means Federal Employer Identification Number.
"FIRST AMENDMENT DATE" means February 13, 1997.
"FOOTHILL" has the meaning set forth in the preamble to this
Agreement.
"FOOTHILL ACCOUNT" has the meaning set forth in SECTION 2.7.
"FOOTHILL EXPENSES" means all: actual costs or expenses
(including taxes, and insurance premiums) required to be paid by any Obligor
under any of the Loan Documents that are paid or incurred by Foothill;
reasonable fees or charges paid or incurred by Foothill in connection with
Foothill's transactions with any Obligor,
(Page 53 of 142 Pages)
including, fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles),
filing, recording, publication, appraisal (including periodic collateral
appraisals), real estate surveys, real estate title policies and
endorsements, and environmental audits; actual costs and expenses incurred by
Foothill in the disbursement of funds to Borrower (by wire transfer or
otherwise); actual charges paid or incurred by Foothill resulting from the
dishonor of checks; reasonable costs and expenses paid or incurred by
Foothill to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated; reasonable costs and expenses paid or incurred by Foothill in
examining the Books; reasonable costs and expenses of third party claims or
any other suit paid or incurred by Foothill in enforcing or defending the
Loan Documents or in connection with the transactions contemplated by the
Loan Documents or Foothill's relationship with Borrower or any guarantor; and
Foothill's reasonable attorneys fees and expenses incurred in advising,
structuring, drafting, reviewing, administering, amending, terminating,
enforcing (including attorneys fees and expenses incurred in connection with
a "workout," a "restructuring," or an Insolvency Proceeding concerning any
Obligor), defending, or concerning the Loan Documents, irrespective of
whether suit is brought.
"FORT WORTH TOWER LEASE" means the Tower Lease entered into
between Group and Xxxx Communications with respect to the broadcast tower
located at 0000 Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means all of the Obligors' present and
future general intangibles and other personal property (including contract
rights, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due
or recoverable from pension funds, route lists, rights to payment and other
rights under any royalty or licensing agreements (including all FCC
Licenses), Communications Franchise Agreements, infringement claims, computer
programs, information contained on computer disks or tapes, literature,
reports, catalogs, deposit accounts, insurance premium rebates, tax refunds,
and tax refund claims), other than goods, Accounts, and Negotiable Collateral.
"GOVERNING DOCUMENTS" means the certificate or articles of
incorporation, by-laws, or other organizational or governing documents of any
Person.
"GROUP" means Children's Radio Group, Inc., a Minnesota
corporation.
(Page 54 of 142 Pages)
"GUARANTOR COLLATERAL" means all right, title, or interest of
any Guarantor with respect to the following:
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Negotiable Collateral,
(g) the Real Property Collateral,
(h) any money, or other assets of one or more of the
Guarantors that now or hereafter come into the possession, custody, or
control of Foothill, and
(i) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the Guarantor Collateral, and any and all Accounts, Books,
Equipment, General Intangibles, Inventory, Negotiable Collateral, Real
Property, money, deposit accounts, or other tangible or intangible property
resulting from the sale, exchange, collection, or other disposition of any of
the foregoing, or any portion thereof or interest therein, and the proceeds
thereof.
"GUARANTOR PERSONAL PROPERTY COLLATERAL" means all Guarantor
Collateral other than the Guarantor Real Property Collateral.
"GUARANTOR REAL PROPERTY COLLATERAL" means the parcels of real
property and the related improvements thereto identified on SCHEDULE R-1 and
any Real Property hereafter acquired by one or more of the Guarantors
(including the Real Property that is to be acquired by CRLA and that is
referred to as the "Mira Loma site."
"GUARANTOR SECURITY AGREEMENT" means that certain Security
Agreement, dated as of even date herewith, made by the Guarantors in favor of
Foothill, pursuant to which they grant to Foothill a security interest in all
the Guarantor Personal Property Collateral to secure their present and future
obligations to Foothill pursuant to the Guaranty.
"GUARANTOR STOCK PLEDGE AGREEMENT" means that certain Stock
Pledge Agreement made by the Guarantors (other than License Subs) in favor of
Foothill, pursuant to which they grant to Foothill a security interest in, among
other
(Page 55 of 142 Pages)
things, all the capital stock of the License Subs in order to secure their
present and future obligations to Foothill pursuant to the Guaranty.
"GUARANTORS" means any one or more of CRLA, CRNY, CHILDREN'S
RADIO OF MINNEAPOLIS, INC. a Minnesota corporation, CHILDREN'S RADIO OF
GOLDEN VALLEY, INC., a Minnesota corporation, CHILDREN'S RADIO OF MILWAUKEE,
INC., a Minnesota corporation, CHILDREN'S RADIO OF DENVER, INC., a Minnesota
corporation, CHILDREN'S RADIO OF KANSAS CITY, INC., a Minnesota corporation,
CHILDREN'S RADIO OF DALLAS, INC., a Minnesota corporation, CHILDREN'S RADIO
OF HOUSTON, INC., a Minnesota corporation, CHILDREN'S RADIO OF PHILADELPHIA,
INC., a Minnesota corporation, CHILDREN'S RADIO OF DETROIT, INC., a Minnesota
corporation, CHILDREN'S RADIO OF CHICAGO, INC., a Minnesota corporation,
CHILDREN'S RADIO OF PHOENIX, INC., a Minnesota corporation, WWTC-AM, INC., a
Minnesota corporation, KYCR-AM, INC., a Minnesota corporation, WZER-AM, INC.,
a Minnesota corporation, KKYD-AM, INC., a Minnesota corporation, KCNW-AM,
INC., a Minnesota corporation, KAHZ-AM, INC., a Minnesota corporation,
KTEK-AM, INC., a Minnesota corporation, WPWA-AM, INC., a Minnesota
corporation, WCAR-AM, INC., a Minnesota corporation, WJDM-AM, INC., a
Minnesota corporation, KPLS-AM, INC., a Minnesota corporation, WAUR-AM, INC.,
a Minnesota corporation, KIDR-AM, INC., a Minnesota corporation, and each
other Subsidiary of Borrower formed or acquired from time to time.
"GUARANTY" means that certain Guaranty, dated as of even date
herewith, made by each of the Guarantors in favor of Foothill, pursuant to
which they guaranty the payment and performance of all present and future
Obligations.
"HARMONY" means Harmony Holdings, Inc., a Los Angeles-based
holding company whose Subsidiaries are producers of television commercials.
"HARMONY ACQUISITION" means the acquisition by Borrower of
20-25% of the common stock of Harmony for cash consideration not to exceed
$2,400,000, on the terms disclosed to Foothill prior to June 26, 1997,
including the replacement upon consummation of such acquisition of the
existing CEO of Harmony with a manager selected by Borrower, and including
the immediate pledge and delivery of the acquired common stock to Foothill as
additional Collateral.
"HAZARDOUS MATERIALS" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that
(Page 56 of 142 Pages)
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of 50 parts per million.
"HMSPA" means, collectively, Hessian XxXxxx & Xxxxxxxxx, P.A.,
for itself and its co-counsel representing Borrower in the litigation between
Borrower and one or more of the ABC Parties described in SCHEDULE 5.10.
"INDEBTEDNESS" means: (a) all obligations of one or more of
the Obligors for borrowed money, (b) all obligations of one or more of the
Obligors evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations of one or more of the Obligors in
respect of letters of credit, bankers acceptances, interest rate swaps, or
other financial products, (c) all obligations of one or more of the Obligors
under capital leases, (d) all obligations or liabilities of others secured by
a Lien on any property or asset of one or more of the Obligors, irrespective
of whether such obligation or liability is assumed, (e) any obligation of one
or more of the Obligors guaranteeing or intended to guarantee (whether
guaranteed, endorsed, co-made, discounted, or sold with recourse to one or
more of the Obligors) any indebtedness, lease, dividend, letter of credit, or
other obligation of any other Person, and (f) any Prohibited Preferred Stock.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any
other bankruptcy or insolvency law, assignments for the benefit of creditors,
formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.
"INVENTORY" means all present and future inventory in which
one or more of the Obligors has any interest, including goods held for sale
or lease or to be furnished under a contract of service and all of the
Obligors' present and future raw materials, work in process, finished goods,
and packing and shipping materials, wherever located.
"INVESTMENT PROPERTY" means "investment property" as that term
is defined in Section 9-115 of the Uniform Commercial Code and as defined in
California Senate Xxxx 1591 which was approved by the Governor on September
14, 1996 and will be effective on January 1, 1997.
"IRC" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.
"KCAZ LPMA" means the LPMA between Borrower and Group, on the
one hand, and KBEA/KXTR Broadcasting Companies, on the other hand, in respect
of the KCAZ-AM Communications System.
"KEY LEASES" means (a) that certain lease between Borrower and
5501 Building Co., a partnership, relative to the lease by Borrower of its
broadcasting studio located in Saint Louis Park, Minnesota, (b) that certain
lease between Borrower
(Page 57 of 142 Pages)
and 724 Associates, a partnership, relative to the lease by Borrower of its
administrative offices located in Saint Louis Park, Minnesota, and (c) any
and all contracts, licenses, leases, or other agreements relative to any
Obligor's use or operation of satellite dishes, satellite up-link systems,
satellite down-link systems, or other broadcasting facilities.
"KPLS SELLERS" means any one or more of Xxxxxx Xxxxxxxxxx, the
X. Xxxxxxxxxx Family Trust, Xxxxx Xxxxxxxxxx, the X. Xxxxxxxxxx Family Trust,
and the Xxxxxx Family Trust.
"KPLS SELLERS' COLLATERAL" means the assets of Borrower and
CRLA in which, as of the Closing Date, the KPLS Sellers have a Lien to secure
the KPLS Sellers Indebtedness of CRLA.
"KPLS SELLERS' INDEBTEDNESS" means (a) the $315,489.72 of
Indebtedness owed by CRLA to the KPLS Sellers pursuant to the Non-Competition
Agreement, and (b) the option to purchase CRLA granted by Borrower and CRLA
to the KPLS Sellers pursuant to the Option Agreement, which option is
exercisable if, among other things, Borrower fails to redeem, in the
approximate aggregate amount of $2,902,130, all of the 1993-A Preferred Stock
at the time set forth in and in accordance with the Certificate of
Designation.
"KPLS SELLERS' PAY-OFF LETTER" means a letter, in form and
substance reasonably satisfactory to Foothill, from the KPLS Sellers
respecting the amount necessary to repay in full all of the KPLS Sellers'
Indebtedness and obtain a termination or release of all of the Liens existing
in favor of the KPLS Sellers on the KPLS Sellers' Collateral.
"LEGAL FEE STOCK" means the 200,000 shares of common stock of
Borrower issued by Borrower to HSMPA as a retainer for legal fees incurred or
to be incurred by HMSPA in connection with the litigation between Borrower
and one or more of the ABC Parties described in SCHEDULE 5.10.
"LICENSE SUB" means a separate, special purpose Subsidiary
formed and solely owned by an Obligor owning and operating a Broadcast System
for the purpose of holding, as that Subsidiary's sole asset, the FCC
License(s) in respect of such Broadcast System.
"LIEN" means any interest in property securing an obligation owed
to, or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, adverse
claim or charge, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes and also including reservations,
(Page 58 of 142 Pages)
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting
Real Property.
"LIQUIDATION VALUE" means, in respect of any asset, (a) the
net liquidation value of such asset as determined by BIA or a similarly
qualified appraisal company selected by Foothill, or (b) if applicable, the
Alternative Liquidation Value of such asset; it being understood and agreed
that, in the event that Borrower and Foothill fail to agree in good faith on
the identity of the Acceptable Appraiser (as defined in the definition of
"Permitted Liquidation Value Dispute Resolution") within the period allowed
therefor, the Liquidation Value of such asset shall be the value set forth in
item (a) of this definition.
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.10.
"LOAN DOCUMENTS" means this Agreement, the Disbursement
Letter, the Concentration Account Agreement, the Mortgages, the Collateral
Assignments of Key Leases, the Collateral Assignments of Tower Leases, the
Guaranty, the Guarantor Security Agreement, the Guarantor Stock Pledge
Agreement, the Control Agreements, the Stock Pledge Agreement, the Trademark
Security Agreement, (if and when executed and delivered pursuant hereto) the
Copyright Security Agreement, any note or notes executed by Borrower and
payable to Foothill, and any other agreement entered into, now or in the
future, in connection with this Agreement.
"LPMA" means a local programming and marketing agreement
between an Obligor and the owner of a Broadcast System relative to the
operation by Obligor of such Broadcast System.
"MATERIAL ADVERSE CHANGE" means, with respect to any Obligor,
(a) a material adverse change in the business, prospects, operations, results
of operations, assets, liabilities or condition (financial or otherwise) of
such Obligor, (b) the material impairment of such Obligor's ability to
perform its obligations under the Loan Documents to which it is a party or of
Foothill to enforce the Obligations or the "Guarantied Obligations" (as
defined in the Guaranty) or realize upon that Obligor's Collateral, (c) a
material adverse effect on the value of that Obligor's Collateral or the
amount that Foothill would be likely to receive (after giving consideration
to delays in payment and costs of enforcement) in the liquidation of such
collateral, or (d) a material impairment of the priority of Foothill's Liens
with respect to that Obligor's Collateral.
"MATURITY DATE" has the meaning set forth in SECTION 3.4.
"MAXIMUM AMOUNT" means, as of any date of determination, the
sum of (a) the Maximum Revolving Amount, and (b) the then outstanding
principal balance of the Term Loan plus any unadvanced balance of the Term
Loan Commitment.
"MAXIMUM REVOLVING AMOUNT" means $500,000.
(Page 59 of 142 Pages)
"XXXXXXXXXX PAY-OFF LETTER" means a letter, in form and
substance reasonably satisfactory to Foothill, from Xx. Xxxxxx XxXxxxxxxx
respecting the amount necessary to repay in full all of the obligations of
Group owing to him under the consulting agreement referenced in item
(a)(i)(y) of SECTION 7.17 and obtain a termination or release of all of the
Liens existing in favor of him on the properties or assets of the Obligors.
"MORTGAGES" means one or more mortgages, deeds of trust, or
deeds to secure debt, executed by an Obligor in favor of Foothill, the form
and substance of which shall be satisfactory to Foothill, that encumber the
Real Property Collateral and the related improvements thereto.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA) to which Borrower, any of its Subsidiaries,
or any ERISA Affiliate has contributed, or was obligated to contribute,
within the past six years.
"NEGOTIABLE COLLATERAL" means all of the Obligors' present and
future letters of credit, notes, drafts, instruments, Investment Property,
documents, personal property leases (wherein an Obligor is the lessor),
chattel paper, and Books relating to any of the foregoing.
"NET ISSUANCE PROCEEDS" means, in respect of any issuance of
equity securities, cash proceeds received in connection therewith, net of
reasonable out-of-pocket costs and expenses paid or incurred in connection
therewith in favor of any Person not an Affiliate of any Obligor, such costs
and expenses to be consistent with standard investment banking practices for
similar issuances.
"NETWORK AFFILIATE" means a Person (that is not an Affiliate
of any Obligor) to whom Borrower grants, pursuant to an Affiliation
Agreement, the exclusive license to broadcast Borrower's programming over the
air within the exclusive broadcast area represented by such Person's radio
station signal contour as identified in such Affiliation Agreement.
"NEWCO" has the meaning set forth within the definition of
"Restructuring Transactions."
"NEW TERM LOAN" shall have the meaning ascribed to such term
in the recitals of this Agreement.
"NEW YORK TOWER LEASES" means each of the Tower Leases
(pre-existing and the recently agreed upon lease) relative to the WJDM-AM
Elizabeth, New Jersey (serving the New York City broadcast area)
Communications System.
"1993-A PREFERRED STOCK" means Borrower's Convertible
Preferred Stock Series 1993-A.
(Page 60 of 142 Pages)
"NON-COMPETITION AGREEMENT" means that certain Non-Competition
Agreement, dated August 23, 1994, among Borrower and the KPLS Sellers.
"OBLIGATIONS" means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the
Bankruptcy Code, would have accrued), contingent reimbursement obligations
under any outstanding Letters of Credit, premiums (including Early
Termination Premiums), liabilities (including all amounts charged to
Borrower's Loan Account pursuant hereto), obligations, fees, charges, costs,
or Foothill Expenses (including any fees or expenses that, but for the
provisions of the Bankruptcy Code, would have accrued), lease payments,
guaranties, covenants, and duties owing by Borrower to Foothill of any kind
and description (whether pursuant to or evidenced by the Loan Documents or
pursuant to any other agreement between Foothill and Borrower, and
irrespective of whether for the payment of money), whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including any debt, liability, or obligation owing
from Borrower to others that Foothill may have obtained by assignment or
otherwise, and further including all interest not paid when due and all
Foothill Expenses that Borrower is required to pay or reimburse by the Loan
Documents, by law, or otherwise.
"OBLIGORS" means Borrower and the Guarantors, or any of them.
"OLD NEW YORK TOWER LEASE" means the Tower Lease entered into
between CRNY and Elizabeth Water Company with respect to the broadcast tower
located at Xxxxxx Ave. and Hammocks Field, Union, New Jersey.
"OPTION AGREEMENT" means that certain Option and Repurchase
Agreement, dated August 23, 1994, among Borrower, CRLA, and the KPLS Sellers.
"ORDINARY COURSE DISPOSITIONS" means the sale, exchange, or
other disposition, free and clear of Foothill's security interest (other than
its security interest in the proceeds of such sale, exchange, or other
disposition) of (a) Inventory in the ordinary course of the Obligors'
business, and (b) Equipment that is substantially worn, damaged, or obsolete
in the ordinary course of the Obligors' business.
"OVERADVANCE" has the meaning set forth in SECTION 2.5.
"PARTICIPANT" means any Person to which Foothill has sold a
participation interest in its rights under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation as
defined in Title IV of ERISA, or any successor thereto.
"PERMITTED ACQUISITION" means an Acquisition of all or
substantially all of the assets or stock of another Person made by Borrower so
long as (a) no Default or Event of Default shall have occurred and be continuing
or would result from the consummation of the proposed Acquisition, (b) the
assets being acquired, or the Person whose capital stock is being acquired, are
useful in or engaged in, as applicable, the
(Page 61 of 142 Pages)
business of the Obligors as such business exists on the Closing Date, (c)
Borrower has provided Foothill with confirmation, supported by detailed
calculations, that on a PRO FORMA basis created by adding the historical
consolidated financial statements of Borrower (including the consolidated
financial statements of any other Person or assets that were the subject of a
prior Permitted Acquisition during the relevant period) to the historical
consolidated financial statements of the Person to be acquired (or the
historical financial statements related to the assets to be acquired)
pursuant to the proposed Acquisition, Borrower would have been in compliance
with the financial covenants in SECTION 7.20 hereof for the 12 months ending
as of the fiscal quarter ended immediately prior to the proposed date of
consummation of such proposed Acquisition, (d) Foothill has completed its
audit, appraisal, and standard due diligence with respect to the assets or
Person that is to be the subject of the proposed Acquisition and the results
thereof are reasonably satisfactory to Foothill, (e)(i) in the case of the
acquisition of capital stock of a Person, such Person is acquired directly by
Borrower, (ii) in the case of the acquisition of the assets of a Person,
Borrower has formed a new Station Sub and a new License Sub to acquire such
assets, and (iii) in either such case, Borrower and such new Subsidiaries
shall have complied with SECTION 6.19, and (f) in connection with such
proposed Acquisition, Borrower may not use directly or indirectly the
proceeds of Advances in connection with the consummation of such proposed
Acquisition and shall provide an officer's certificate certifying that no
such proceeds have been used, directly or indirectly, to consummate such
Acquisition. The foregoing notwithstanding, the Harmony Acquisition is a
Permitted Acquisition.
"PERMITTED LIENS" means (a) Liens held by Foothill, (b) Liens
for unpaid taxes that either (i) are not yet due and payable or (ii) are the
subject of Permitted Protests, (c) Liens set forth on SCHEDULE P-1, (d) the
interests of lessors under operating leases and purchase money Liens of
lessors under capital leases to the extent that the acquisition or lease of
the underlying asset is permitted under SECTION 7.21 and so long as the Lien
only attaches to the asset purchased or acquired and only secures the
purchase price of the asset, (e) Liens arising by operation of law in favor
of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business of the Obligors and
not in connection with the borrowing of money, and which Liens either (i) are
for sums not yet due and payable, or (ii) are the subject of Permitted
Protests, (f) Liens arising from deposits made in connection with obtaining
worker's compensation or other unemployment insurance, (g) Liens or deposits
to secure performance of bids, tenders, or leases (to the extent permitted
under this Agreement), incurred in the ordinary course of business of the
Obligors and not in connection with the borrowing of money, (h) Liens arising
by reason of security for surety or appeal bonds in the ordinary course of
business of the Obligors, (i) Liens of or resulting from any judgment or
award that would not have a Material Adverse Effect and as to which the time
for the appeal or petition for rehearing of which has not yet expired, or in
respect of which an Obligor is in good faith prosecuting an appeal or
proceeding for a review, and in respect of which a stay of execution pending
such appeal or proceeding for review has been secured, (j) Liens with respect
to the Real Property Collateral that are exceptions to the commitments for
title insurance issued in connection with the Mortgages, as accepted by
Foothill, (k) with respect to any Real Property that is not part of the Real
Property Collateral, easements,
(Page 62 of 142 Pages)
rights of way, zoning and similar covenants and restrictions, and similar
encumbrances that customarily exist on properties of Persons engaged in
similar activities and similarly situated and that in any event do not
materially interfere with or impair the use or operation of the Collateral by
the Obligors or the value of Foothill's Lien thereon or therein, or
materially interfere with the ordinary conduct of the business of the
Obligors, (l) Liens of Existing Lender in and to the Real Property that
secures the mortgage financing provided by Existing Lender to Group, and (m)
Liens securing Permitted Unrestricted Subsidiary Indebtedness so long as the
Lien only attaches to the assets and properties of the relevant Unrestricted
Subsidiary.
"PERMITTED LIQUIDATION VALUE DISPUTE RESOLUTION" means, in
respect of any asset, the following process: (a) in the event that Foothill
shall notify Borrower in writing of the Liquidation Value of such asset
determined under an appraisal performed by or on behalf of Foothill (the date
that Foothill so notifies Borrower being the "Foothill Value Notice Date")
and Borrower disputes such Liquidation Value, Borrower shall notify Foothill
in writing of the existence of such dispute within 2 Business Days following
the Foothill Value Notice Date (the date that Borrower so notifies Foothill
being the "Disputed Value Notice Date"); (b) Borrower shall identify in
writing to Foothill another appraisal company acceptable to Foothill and with
nationally recognized experience in respect of the appraisal of radio
broadcasting enterprises (the "Acceptable Appraiser") within 5 Business Days
following the Disputed Value Notice Date (the date that Borrower so
identifies to Foothill and Foothill accepts in writing the Acceptable
Appraiser being the "Appraiser Acceptance Date"); and (c) the Acceptable
Appraiser shall determine the net liquidation value of such asset within 2
weeks following the Appraiser Acceptance Date pursuant to procedures and
methods reasonably acceptable to Borrower and Foothill, which determination
shall be binding on Borrower and Foothill.
"PERMITTED NETWORK AFFILIATE INVESTMENTS" means one or more
acquisitions by Borrower of not more than 20% (on a fully diluted basis) of
the issued and outstanding equity Securities of any Network Affiliate in the
ordinary course of Borrower's business and not for speculative purposes;
PROVIDED, HOWEVER, that the aggregate amount of all Permitted Network
Affiliate Investments shall not exceed $1,000,000 at any time outstanding.
"PERMITTED PROTEST" means the right of an Obligor to protest
any Lien other than any such Lien that secures the Obligations, tax (other
than payroll taxes or taxes that are the subject of a United States federal
tax lien), or rental payment, provided that (a) a reserve with respect to
such obligation is established on the books of the applicable Obligor in an
amount that is reasonably satisfactory to Foothill, (b) any such protest is
instituted and diligently prosecuted by such Obligor in good faith, and (c)
Foothill is satisfied that, while any such protest is pending, there will be
no impairment of the enforceability, validity, or priority of any of the
Liens of Foothill in and to the Collateral.
"PERMITTED LEGAL FEE STOCK REDEMPTIONS" means redemptions by
Borrower of the Legal Fee Stock in an aggregate amount not to exceed $1,000,000
for
(Page 63 of 142 Pages)
the purpose of satisfying the invoiced amount of fees and costs incurred by
HMSPA in connection with the litigation between Borrower and one or more of
the ABC Parties described in SCHEDULE 5.10.
"PERMITTED UNRESTRICTED SUBSIDIARY ACQUISITION" means an
Acquisition made by one of the Unrestricted Subsidiaries so long as (a) no
Default or Event of Default shall have occurred and be continuing or would
result from the consummation of the proposed Acquisition, (b) at least 10
days prior to the consummation of any proposed Permitted Unrestricted
Subsidiary Acquisition, Borrower shall have provided Foothill with a written
description, in reasonable detail, of the proposed Permitted Unrestricted
Subsidiary Acquisition, (c) Borrower may not use, directly or indirectly, the
proceeds of any Advances in connection with the consummation of such proposed
Acquisition and shall provide an officer's certificate certifying that no
such proceeds have been used, directly or indirectly, to consummate such
Acquisition in whole or in part, (d) the assets or properties being acquired,
or the Person whose Securities are being acquired, are useful in or engaged
in, as applicable, the operation of one or more Communications Systems, (e)
in the case of the acquisition of Securities of a Person, at or prior to the
consummation of such Acquisition, either (i) such Person is merged with and
into an existing Unrestricted Subsidiary, with such Unrestricted Subsidiary
being the surviving entity in such merger, or (ii) such Person is designated
as a Unrestricted Subsidiary in a writing sent to Foothill by Borrower, and,
at or prior to the consummation of such Acquisition, Borrower and such new
Subsidiaries shall have complied with SECTION 6.19; PROVIDED, HOWEVER, that
if any such Unrestricted Subsidiary is incurring Permitted Unrestricted
Subsidiary Indebtedness in connection with the consummation of such
Acquisition and to the extent the holder of such Indebtedness requires that
such Indebtedness be secured by a first priority Lien in favor of such holder
on all material assets of such Unrestricted Subsidiary, the holder of such
Permitted Unrestricted Subsidiary Indebtedness shall consent to a second
priority Lien in favor of Foothill with respect to the subject assets until
the related Permitted Unrestricted Subsidiary Indebtedness is repaid, at
which time Foothill shall have a first priority Lien with respect thereto,
(f) in the case of the acquisition of assets or properties of a Person, (i)
such assets or properties are acquired by an existing Station Sub and an
existing License Sub that are Unrestricted Subsidiaries, or (ii) such assets
or properties are acquired by a newly formed Station Sub and a newly formed
License Sub that are Unrestricted Subsidiaries identified in a writing sent
to Foothill by Borrower, and, at or prior to the consummation of such
Acquisition, Borrower and such new Subsidiaries shall have complied with
SECTION 6.19; PROVIDED, HOWEVER, that if any such Unrestricted Subsidiary is
incurring Permitted Unrestricted Subsidiary Indebtedness in connection with
the consummation of such Acquisition and to the extent the holder of such
Indebtedness requires that such Indebtedness be secured by a first priority
Lien in favor of such holder on all material assets of such Unrestricted
Subsidiary, the holder of such Permitted Unrestricted Subsidiary Indebtedness
shall consent to a second priority Lien in favor of Foothill with respect to
the subject assets until the related Permitted Unrestricted Subsidiary
Indebtedness is repaid, at which time Foothill shall have a first priority
Lien with respect thereto.
(Page 64 of 142 Pages)
"PERMITTED UNRESTRICTED SUBSIDIARY INDEBTEDNESS" means
Indebtedness incurred by an Unrestricted Subsidiary (including Acquired
Indebtedness) to Persons other than an Obligor in connection with the
consummation of a Permitted Unrestricted Subsidiary Acquisition, so long as
(a) no Default or Event of Default exists at the time of the incurrence
thereof, or would exist after giving effect thereto, (b) such Indebtedness is
on terms and conditions satisfactory to Foothill, in its reasonable
discretion, and (c) such Indebtedness is in an amount, with respect to each
Permitted Unrestricted Subsidiary Acquisition, not to exceed at any time 70%
of the sum of (i) the purchase price paid in connection with such Permitted
Unrestricted Subsidiary Acquisition, and (ii) the aggregate costs of any
renovations made with respect to the assets or properties acquired in such
Permitted Unrestricted Subsidiary Acquisition, PROVIDED, HOWEVER, that (y)
such Indebtedness shall be non-recourse to any Obligor (other than for any
customary carve-outs for environmental and "bad deed" indemnities by any
Unrestricted Subsidiary), but may be recourse to the applicable Unrestricted
Subsidiary (which Unrestricted Subsidiary shall have no material
Indebtedness, assets, or properties, other than those acquired in connection
with Permitted Unrestricted Subsidiary Acquisitions), and (z) if required by
the holder of such Indebtedness, such Indebtedness may be secured by a first
priority Lien upon in favor of such holder on all material assets of such
Unrestricted Subsidiary only.
"PERMITTED UNRESTRICTED SUBSIDIARY INVESTMENTS" means, so long
as no Default or Event of Default has occurred and is continuing, loans or
capital contributions by Borrower in or to any of the Unrestricted
Subsidiaries in an amount not to exceed, in the aggregate, an amount equal
to: (a) in respect of the Unrestricted Subsidiaries consisting of one new
Station Sub and one new License Sub to be formed and used in connection with
Borrower's Acquisition of the WAUR-AM 000, Xxxxxxxx, Xxxxxxxx Communications
System (serving the Chicago broadcast area), $2,000,000; and (b) in respect
of all other Unrestricted Subsidiaries, $2,000,000.
"PERSON" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships,
limited liability partnerships, joint ventures, trusts, land trusts, business
trusts, or other organizations, irrespective of whether they are legal
entities, and governments and agencies and political subdivisions thereof.
"PERSONAL PROPERTY COLLATERAL" means the Borrower Personal
Property Collateral and the Guarantor Personal Property Collateral.
"PLAN" means any employee benefit plan, program, or
arrangement maintained or contributed to by Borrower or with respect to which
it may incur liability.
"PREFERRED STOCK" means the capital stock of any class or
classes (however designated) that is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of the issuing Person, over shares of
capital stock of any other class of such Person.
(Page 65 of 142 Pages)
"PROHIBITED PREFERRED STOCK" means and refers to any Preferred
Stock that by its terms is mandatorily redeemable for consideration other
than preferred stock of the same class or common stock or is subject to any
other payment obligation (including any obligation to pay dividends, other
than dividends of preferred stock of the same class and series payable in
kind or dividends of common stock) or is redeemable at the option of the
holder thereof for cash or assets or securities (other than distributions in
kind of preferred stock of the same class and series or of common stock) of
the issuer or any of its Subsidiaries.
"QUALIFIED TRANSACTION" means (a) an underwritten registered
public offering of equity securities (other than Prohibited Preferred Stock)
of Borrower, or (b) the consummation of an investment in Borrower by one or
more Strategic Partners.
"REAL PROPERTY" means any estates or interests in real
property now owned or hereafter acquired by one or more of the Obligors.
"REAL PROPERTY COLLATERAL" means Borrower Real Property
Collateral and Guarantor Real Property Collateral.
"REFERENCE RATE" means the variable rate of interest, per
annum, most recently announced by Norwest Bank Minnesota, National
Association, or any successor thereto, as its "base rate," irrespective of
whether such announced rate is the best rate available from such financial
institution.
"REPORTABLE EVENT" means any of the events described in
Section 4043(c) of ERISA or the regulations thereunder other than a
Reportable Event as to which the provision of 30 days notice to the PBGC is
waived under applicable regulations.
"RESTRICTED SUBSIDIARY" shall mean any Subsidiary of Borrower
that is not an Unrestricted Subsidiary.
"RESTRUCTURING TRANSACTIONS" means the following transactions,
(a)(i) the due organization by Borrower of a new, directly owned Subsidiary
("Newco") of Borrower and the contribution and transfer by Borrower to Newco of
all of the assets of Borrower relative to the operation of the WWTC-AM,
Minneapolis, Minnesota Communications System, (ii) the due organization by Newco
of a License Sub and the contribution and transfer by Newco to such License Sub
of the FCC License in respect of the WWTC-AM, Minneapolis, Minnesota
Communications System, (iii) the due organization by CRLA of a License Sub and
the contribution and transfer by CRLA to such License Sub of the FCC License in
respect of the KPLS-AM, Orange, California Communications System, (iv) the due
organization by CRNY of a License Sub and the contribution and transfer by CRNY
to such License Sub of the FCC License in respect of the WJDM-AM, Elizabeth, New
Jersey Communications System, (v) the due organization by Group of 7 separate
Station Subs and the contribution and transfer by Group to each such Station Sub
of all of the assets of one of the Communications Systems owned and operated by
Group (other than the FCC Licenses in respect
(Page 66 of 142 Pages)
thereof) and (vi) the due organization by Group of 7 separate License Subs
and the contribution and transfer by Group to each such License Sub of one of
the FCC Licenses in respect of each of the Communications Systems owned and
operated by Group, (b) the execution and delivery by Newco, each such Station
Sub, and each such License Sub of a joinder to the Guaranty, a joinder to the
Guarantor Security Agreement, UCC-1 financing statements, fixture filings,
Collateral Access Agreements, Collateral Assignments of Tower Leases,
Collateral Assignments of Key Leases, and Mortgages, (c) the execution and
delivery by Borrower of an appropriate amendment to the Stock Pledge
Agreement and the delivery to Foothill of possession of the original stock
certificates respecting all of the issued and outstanding shares of stock of
Newco together with stock powers with respect thereto endorsed in blank, (d)
the execution and delivery by each Guarantor of the Guarantor Stock Pledge
Agreement and the delivery to Foothill of possession of the original stock
certificates respecting all of the issued and outstanding shares of stock of
each such Station Sub and each such License Sub together with stock powers
with respect thereto endorsed in blank, (e) the receipt by the Obligors of
the necessary FCC approvals to the transfer of such licenses to such License
Subs, and (f) upon the completion of each of the foregoing transactions, the
merger of Group with and into Borrower, with Borrower as the surviving entity.
"RETIREE HEALTH PLAN" means an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to
individuals after termination of their employment, other than as required by
Section 601 of ERISA.
"SECOND WARRANT AGREEMENT" means a warrant agreement
respecting 100,000 shares of Borrower's common stock, in form and substance
reasonably satisfactory to Foothill.
"SECURITIES ACCOUNT" means a "securities account" as that term
is defined in Section 8-501 of the uniform Code and as defined in California
Senate Xxxx 1591 which was approved by the Governor on September 14, 1996 and
will be effective on January 1, 1997.
"SECURITY" shall have the meaning set forth in Section 2(1) of
the Securities Act of 1933, as amended.
"SOLVENT" means, with respect to any Person on a particular date,
that on such date (a) at fair valuations, all of the properties and assets of
such Person are greater than the sum of the debts, including contingent
liabilities, of such Person, (b) the present fair salable value of the
properties and assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize upon its
properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts beyond such Person's ability to pay as such debts mature, and
(e) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's properties and
assets would constitute unreasonably small capital after giving
(Page 67 of 142 Pages)
due consideration to the prevailing practices in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount
that, in light of all the facts and circumstances existing at such time,
represents the amount that reasonably can be expected to become an actual or
matured liability.
"STATION SUB" means a separate, special purpose Subsidiary
formed and solely owned by Borrower for the purpose of owning and operating
an individual Broadcast System.
"STOCK PLEDGE AGREEMENT" means a Stock Pledge Agreement, dated
as of even date herewith, between Borrower and Foothill, pursuant to which
Borrower grants Foothill a security interest in, among other things, all of
the issued and outstanding capital stock of the Guarantors.
"STOCKHOLDER EQUITY" means, as of any date of determination,
Borrower's total stockholder's equity.
"STRATEGIC PARTNER" means a Person that (a) is not an
Affiliate of any Obligor, (b) is not a bank, finance company, insurance or
other financial institution or fund that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business, and (c) is in the telecommunications business, the entertainment
programming business, or a business reasonably related to the foregoing.
"SUBSIDIARY" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors
(or appoint other comparable managers) of such corporation, partnership,
limited liability company, or other entity.
"TERM LOAN" has the meaning set forth in SECTION 2.2.
"TERM LOAN COMMITMENT" means $16,700,000.
"TOWER LEASES" means (a) that certain lease between Borrower
and Xxxx relative to the lease by Borrower of the tower or antenna, and
related real property, at which Borrower transmits the broadcasting signals
for its WWTC-AM, Communications System, (b) that certain lease between Group
and Xxxx relative to the lease by Group of the tower or antenna, and related
real property, at which Group transmits the broadcasting signals for its
KYCR-AM Communications System, and (c) any and all other present or future
leases between an Obligor and a third Person relative to the lease by such
Obligor of a transmitting tower, antenna, or the real property on which
either or both is situated.
"TRADEMARK SECURITY AGREEMENT" means a Trademark Security
Agreement executed and delivered by Borrower, the form and substance of which
is reasonably satisfactory to Foothill.
(Page 68 of 142 Pages)
"TRIGGERING EVENT" means any of (a) the occurrence and
continuation of an Event of Default, or (b) Foothill deems itself insecure.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of Borrower
that is formed or acquired after the Closing Date in connection with the
consummation of a Permitted Unrestricted Subsidiary Acquisition and that (a)
is designated as being an "Unrestricted Subsidiary" in a writing delivered by
Borrower to Foothill at the time of such formation or acquisition, (b) except
as otherwise provided in the definition of "Permitted Unrestricted Subsidiary
Indebtedness," all of such Subsidiary's liabilities are non-recourse to
Borrower or any Restricted Subsidiary, and (c) no Affiliate of Borrower owns
any capital stock (or other interests) of such Subsidiary (except that any
Station Sub that is an Unrestricted Subsidiary may own the capital stock of
the related License Sub that is an Unrestricted Subsidiary).
"VOIDABLE TRANSFER" has the meaning set forth in SECTION 15.8.
"WARRANT AGREEMENT" means a warrant agreement respecting
50,000 shares of Borrower's common stock, in form and substance reasonably
satisfactory to Foothill.
"WORKING CAPITAL" means the result of (a) Consolidated Current
Assets MINUS (b) Consolidated Current Liabilities.
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein,
the term "financial statements" shall include the notes and schedules
thereto. Whenever the term "Borrower" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Borrower on
a consolidated basis unless the context clearly requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in
the Code shall be construed and defined as set forth in the Code unless
otherwise defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references
to the singular include the plural, the term "including" is not limiting, and
the term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. An Event of
Default shall "continue" or be "continuing" until such Event of Default has
been waived in writing by Foothill. Section, subsection, clause, schedule,
and exhibit references are to this Agreement unless otherwise specified. Any
reference in this Agreement or in the Loan Documents to this Agreement or any
of the Loan Documents shall include all alterations, amendments, changes,
extensions,
(Page 69 of 142 Pages)
modifications, joinders, renewals, replacements, substitutions, and
supplements, thereto and thereof, as applicable.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVING ADVANCES.
(a) Subject to the terms and conditions of this Agreement,
Foothill agrees to make advances ("Advances") to Borrower in an amount
outstanding not to exceed at any one time the Maximum Revolving Amount, MINUS
the aggregate amount of reserves, if any, established by Foothill under
SECTION 2.1(b).
(b) Anything to the contrary in SECTION 2.1(a) above
notwithstanding, Foothill may create reserves against the Maximum Revolving
Amount without declaring an Event of Default if there occurs a material
increase in Dilution or if Foothill determines that there has occurred a
Material Adverse Change.
(c) Foothill shall have no obligation to make Advances
hereunder to the extent they would cause the outstanding Obligations to
exceed the Maximum Amount.
(d) Amounts borrowed pursuant to this SECTION 2.1 may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed
at any time during the term of this Agreement.
2.2 TERM LOAN.
(a) Foothill previously has made the Existing Term Loan to
Borrower. In addition, Foothill previously has made the Acquisition Loan to
Borrower. As of the date hereof, Foothill has agreed to make the New Term
Loan to Borrower. Collectively, the Existing Term Loan, the Acquisition
Loan, and the New Term Loan shall be known as the "Term Loan."
(b) The Term Loan shall be repaid in monthly installments of
principal of $220,100.00 each. Each such installment shall be due and
payable on the first day of each month commencing on March 1, 1998 and
continuing on the first day of each succeeding month until and including the
date on which the unpaid balance of the Term Loan is paid in full. The
outstanding principal balance and all accrued and unpaid interest under the
Term Loan shall be due and payable upon the termination of this Agreement,
whether by its terms, by prepayment, by acceleration, or otherwise. All
amounts outstanding under the Term Loan shall constitute Obligations.
(Page 70 of 142 Pages)
In addition to the monthly installments of $220,100 each, Borrower
shall repay the Term Loan in monthly installments and such installments shall
be due and payable on the first day of the following months in the following
amounts:
MONTH/YEAR INSTALLMENT
--------------------------
January 1998 $1,000,000
--------------------------
February 1998 $1,000,000
--------------------------
March 1998 $1,000,000
--------------------------
April 1998 $1,000,000
--------------------------
May 1998 $1,000,000
--------------------------
June 1998 $ 500,000
--------------------------
July 1998 $ 500,000
--------------------------
August 1998 $ 500,000
--------------------------
September 1998 $ 500,000
--------------------------
October 1998 $ 160,800
--------------------------
2.3 APPRAISALS; MANDATORY PREPAYMENTS OF THE TERM LOAN. Foothill
shall have the right to have each Broadcast System of the Obligors
reappraised by BIA (or a similarly qualified appraisal company selected by
Foothill) from time to time after the Closing Date for the purpose of
redetermining the Liquidation Value of such Broadcast Systems. In the
absence of the occurrence and continuation of an Event of Default, such
appraisals shall occur no more frequently than annually. To the extent that
the then extant outstanding aggregate principal amount under the Term Loan
exceeds 33.33% of the aggregate Liquidation Value of all Broadcast Systems
that are owned and operated by Borrower and the Restricted Subsidiaries,
Borrower shall repay the Term Loan by an amount equal to such excess, and
such prepayments shall be applied to the scheduled installments of the Term
Loan in inverse order of their maturity until the Term Loan is paid in full.
2.4 [INTENTIONALLY OMITTED].
2.5 OVERADVANCES. If, at any time or for any reason, the amount
of Obligations owed by Borrower to Foothill pursuant to SECTION 2.1 is
greater than either the Dollar or percentage limitations set forth in SECTION
2.1 (an "Overadvance"), Borrower immediately shall pay to Foothill, in cash,
the amount of such excess to be used by Foothill to repay the outstanding
Obligations.
(Page 71 of 142 Pages)
2.6 INTEREST: RATES, PAYMENTS, AND CALCULATIONS.
(a) Interest Rate. All Obligations shall bear interest at a
per annum rate of 2.75 percentage points above the Reference Rate.
(b) [Intentionally Omitted]
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default, all Obligations shall bear interest at a
per annum rate equal to 5.75 percentage points above the Reference Rate.
(d) Minimum Interest. In no event shall the rate of interest
chargeable hereunder for any day be less than 9.00% per annum. To the extent
that interest accrued hereunder at the rate set forth herein would be less
than the foregoing minimum daily rate, the interest rate chargeable hereunder
for such day automatically shall be deemed increased to the minimum rate.
(e) Payments. Interest payable hereunder shall be due and
payable, in arrears, on the first day of each month during the term hereof.
Borrower hereby authorizes Foothill, at its option, without prior notice to
Borrower, to charge such interest, all Foothill Expenses (as and when
incurred), the fees and charges provided for in SECTION 2.11 (as and when
accrued or incurred), and all installments or other payments due under the
Term Loan or any Loan Document to Borrower's Loan Account, which amounts
thereafter shall accrue interest at the rate then applicable to Advances
hereunder. Any interest not paid when due shall be compounded and shall
thereafter accrue interest at the rate then applicable to Advances hereunder.
(f) Computation. The Reference Rate as of the date of this
Agreement is 8.25% per annum. In the event the Reference Rate is changed
from time to time hereafter, the applicable rate of interest hereunder
automatically and immediately shall be increased or decreased by an amount
equal to such change in the Reference Rate. All interest and fees chargeable
under the Loan Documents shall be computed on the basis of a 360 day year for
the actual number of days elapsed.
(g) Intent to Limit Charges to Maximum Lawful Rate. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate
permissible under any law that a court of competent jurisdiction shall, in a
final determination, deem applicable. Borrower and Foothill, in executing
and delivering this Agreement, intend legally to agree upon the rate or rates
of interest and manner of payment stated within it; PROVIDED, HOWEVER, that,
anything contained herein to the contrary notwithstanding, if said rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, IPSO facto as of the date of this Agreement, Borrower
is and shall be liable only for the payment of such maximum as allowed by
law, and payment received from Borrower in excess of such legal maximum,
whenever received, shall be applied to reduce the principal balance of the
Obligations to the extent of such excess.
(Page 72 of 142 Pages)
2.7 COLLECTION OF ACCOUNTS. Borrower shall at all times maintain
the Concentration Account and shall deposit (and cause the other Obligors to
deposit, and, by its execution and delivery of the Guaranty or a joinder
thereto, each of the Guarantors hereby agrees to deposit) all Collections
with respect to the Accounts, General Intangibles, and Negotiable Collateral
and other amounts received by any Obligor from any source immediately upon
receipt into the Concentration Account or into a deposit account of such
Obligor the proceeds of which are remitted on a daily basis to the
Concentration Account. Borrower, Foothill, and the Concentration Account Bank
shall enter into an agreement that, among other things, shall provide that
the Concentration Account Bank shall remit all proceeds received in the
Concentration Account to an account (the "Foothill Account") maintained by
Foothill at a depositary selected by Foothill. No arrangement contemplated
hereby shall be modified by any Obligor without the prior written consent of
Foothill.
2.8 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS. The receipt
of any Collections by Foothill (whether from transfers to Foothill by the
Concentration Account or otherwise) immediately shall be applied
provisionally to reduce the Obligations outstanding under SECTION 2.1, but
shall not be considered a payment on account unless such Collection item is a
wire transfer of immediately available federal funds and is made to the
Foothill Account or unless and until such Collection item is honored when
presented for payment. From and after the Closing Date, Foothill shall be
entitled to charge Borrower for 2 Business Days of `clearance' or `float' at
the rate set forth in SECTION 2.6(a) or SECTION 2.6(c), as applicable, on all
Collections that are received by Foothill (regardless of whether forwarded by
the Concentration Account Bank to Foothill, whether provisionally applied to
reduce the Obligations under SECTION 2.1, or otherwise). This
across-the-board 2 Business Day clearance or float charge on all Collections
is acknowledged by the parties to constitute an integral aspect of the
pricing of Foothill's financing of Borrower, and shall apply irrespective of
the characterization of whether receipts are owned by an Obligor or Foothill,
and whether or not there are any outstanding Advances, the effect of such
clearance or float charge being the equivalent of charging 2 Business Days of
interest on such Collections. Should any Collection item not be honored when
presented for payment, then Borrower shall be deemed not to have made such
payment, and interest shall be recalculated accordingly. Anything to the
contrary contained herein notwithstanding, any Collection item shall be
deemed received by Foothill only if it is received into the Foothill Account
on a Business Day on or before 11:00 a.m. California time. If any Collection
item is received into the Foothill Account on a non-Business Day or after
11:00 a.m. California time on a Business Day, it shall be deemed to have been
received by Foothill as of the opening of business on the immediately
following Business Day.
2.9 DESIGNATED ACCOUNT. Foothill is authorized to make the Advances
and the Term Loan under this Agreement based upon telephonic or other
instructions received from anyone purporting to be an Authorized Person, or
without instructions if pursuant to SECTION 2.6(e). Borrower agrees to
establish and maintain the Designated Account with the Designated Account Bank
for the purpose of receiving the proceeds of the Advances and the Term Loan
requested by Borrower and made by Foothill hereunder. Unless otherwise agreed
by Foothill and Borrower, any Advance and the
(Page 73 of 142 Pages)
Term Loan requested by Borrower and made by Foothill hereunder shall be made
to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS.
Foothill shall maintain an account on its books in the name of Borrower (the
"Loan Account") on which Borrower will be charged with all Advances and the
Term Loan made by Foothill to Borrower or for Borrower's account, including,
accrued interest, Foothill Expenses, and any other payment Obligations of
Borrower. In accordance with SECTION 2.8, the Loan Account will be credited
with all payments received by Foothill from Borrower or for Borrower's
account, including all amounts received in the Foothill Account from the
Concentration Account Bank. Foothill shall render statements regarding the
Loan Account to Borrower, including principal, interest, fees, and including
an itemization of all charges and expenses constituting Foothill Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrower and Foothill
unless, within 30 days after receipt thereof by Borrower, Borrower shall
deliver to Foothill written objection thereto describing the error or errors
contained in any such statements.
2.11 FEES. Borrower shall pay to Foothill the following fees:
(a) Closing Fee. A closing fee of $385,000, which amount
shall be included in the Term Loan but shall be earned in full and
non-refundable as of the Closing Date; in this regard, the payment of such
closing fee as set forth above shall constitute a repayment in full of the
commitment fee previously earned by Foothill and evidenced by a promissory
note issued by Borrower to the order of Foothill;
(b) Amendment Fee. An amendment fee of $250,000 which shall
be earned in full and non-refundable as of the Amended Closing Date. The
payment of such amendment fee shall be paid on the Amended Closing Date out
of the proceeds of the New Term Loan;
(c) Annual Facility Fee. An annual fee (the "Annual Fee") on
each anniversary of the Closing Date in an amount equal to (i) on the first
anniversary of the Closing Date, 0.50% times the sum of (x) the Maximum
Revolving Amount, plus (y) the then outstanding amount of the Term Loan, (ii)
on the second anniversary of the Closing Date, 0.75% times the sum of (x) the
Maximum Revolving Amount, plus (y) the then outstanding amount of the Term
Loan; and (iii) on the third anniversary of the Closing Date, 1.00% times the
sum of (x) the Maximum Revolving Amount, plus (y) the then outstanding amount
of the Term Loan. The applicable Annual Fee would be fully-earned and
non-refundable on each anniversary of the Closing Date;
(d) Financial Examination and Appraisal Fees. Foothill's
customary fee of $650 per day per examiner, plus out-of-pocket expenses for each
financial analysis and examination (i.e., audits) of Borrower performed by
personnel employed by Foothill; Foothill's customary appraisal fee of $1,500 per
day per appraiser, plus out-of-pocket expenses for each appraisal of the
Collateral performed by personnel employed by Foothill; PROVIDED, HOWEVER, that
Borrower shall not be obligated to
(Page 74 of 142 Pages)
reimburse Foothill with respect to appraisals of the same item of Collateral
that occur more frequently than once in any calendar year, unless an Event of
Default has occurred and is continuing, in which case Borrower shall be
obligated to reimburse Foothill with respect to as many appraisals as Lender
deems necessary to conduct; and, the actual charges paid or incurred by
Foothill if it elects to employ the services of one or more third Persons to
perform such financial analyses and examinations (i.e., audits) of Borrower
or to appraise the Collateral; and
(e) Servicing Fee. On the first day of each month during the
term of this Agreement, and thereafter so long as any Obligations are
outstanding, a servicing fee in an amount equal to $2,500.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE AND THE TERM LOAN.
The obligation of Foothill to make the initial Advance or to make the Term
Loan is subject to the fulfillment, to the satisfaction of Foothill and its
counsel, of each of the following conditions on or before the Closing Date:
(a) the Closing Date shall occur on or before November 25,
1996;
(b) Foothill shall have received searches reflecting the
filing of its financing statements and fixture filings;
(c) Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full force and
effect:
(1) the Concentration Account Agreement;
(2) the Disbursement Letter;
(3) the Existing Pay-Off Letter, together with UCC
termination statements and other documentation evidencing
the termination by Existing Lender of its Liens on the
properties and assets (other than Liens with respect to the
Real Property that secures mortgage financing provided by
Existing Lender to Group) of the Obligors;
(4) the KPLS Sellers Pay-Off Letter, together with UCC
termination statements and other documentation evidencing
the termination by the KPLS Sellers of its Liens on the KPLS
Sellers' Collateral;
(5) the XxXxxxxxxx Pay-Off Letter, together with UCC
termination statements and other documentation evidencing
(Page 75 of 142 Pages)
the termination by Xx. Xxxxxx XxXxxxxxxx of his Liens on the
properties and assets of the Obligors;
(6) the Warrant;
(7) each of the Mortgages, except to the extent Foothill
permits one or more of the same to be delivered after the
Closing Date pursuant to SECTION 3.3(e) hereof;
(8) each of the Collateral Assignments of Key Leases,
together with an appropriate consent to hypothecation from
the lessor under the relevant Key Lease, except to the
extent Foothill permits one or more of the same to be
delivered after the Closing Date pursuant to SECTION 3.3
hereof; it being understood that all Collateral Assignments
of Key Leases and consents thereto in respect of leases
wherein the lessor is an Affiliate of one or more Obligors
shall be delivered on or before the Closing Date;
(9) the Collateral Assignments of Tower Leases, together
with an appropriate consent to hypothecation from the lessor
under the relevant Tower Lease, except to the extent
Foothill permits one or more of the same to be delivered
after the Closing Date pursuant to SECTION 3.3 hereof; it
being understood that all Collateral Assignments of Tower
Leases and consents thereto in respect of: (y) leases
wherein the lessor is an Affiliate of one or more Obligors;
and (z) leases wherein the lessor is one or more of the KPLS
Sellers; in each case, shall be delivered on or before the
Closing Date;
(10) the Trademark Security Agreement;
(11) the Stock Pledge Agreement;
(12) Borrower, Foothill, and each applicable financial
intermediary or depositary shall enter into a control
agreement that, among other things, provides that, from and
after the giving of notice by Foothill to such financial
intermediary or depositary, it shall take instructions
solely from Foothill with respect to the applicable
Securities Account and related securities entitlements or
deposit account, as applicable. Foothill agrees that it
will not give such notice unless a Triggering Event has
occurred. Borrower agrees that it will not transfer assets
out of such Securities Accounts or deposit accounts other
than in the ordinary course of business and, if to another
financial
(Page 76 of 142 Pages)
intermediary or depositary, unless the Borrower,
Foothill, and the substitute financial intermediary or
depositary have entered into a control agreement of the
type described above. No arrangement contemplated hereby
shall be modified by Borrower without the prior written
consent of Foothill. Upon the occurrence of a Triggering
Event, Foothill may elect to notify the financial
intermediary to liquidate the securities entitlements in
such Securities Account and may elect to notify the
financial intermediary or depositary to remit the
proceeds in the Securities Account or deposit account to
the Foothill Account;
(13) the Guarantor Security Agreement;
(14) the Guaranty; and
(15) the Guarantor Stock Pledge Agreement;
(d) Foothill shall have received possession of the shares of
stock of each of the Subsidiaries of Borrower, as well as stock powers with
respect thereto endorsed in blank;
(e) Foothill shall have received a certificate from the
Secretary of each Obligor attesting to the resolutions of such Obligor's
Board of Directors authorizing its execution, delivery, and performance of
the Loan Documents to which such Obligor is a party and authorizing specific
officers of such Obligor to execute the same;
(f) Foothill shall have received copies of each Obligor's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of the applicable Obligor;
(g) Foothill shall have received a certificate of status with
respect to each Obligor, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Obligor, which certificate shall indicate that such Obligor
is in good standing in such jurisdiction;
(h) Foothill shall have received certificates of status with
respect to each Obligor, each dated within 15 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions in
which its failure to be duly qualified or licensed would constitute a Material
Adverse Change, which certificates shall indicate that such Obligor is in good
standing in such jurisdictions;
(i) Foothill shall have received a certificate of insurance,
together with the endorsements thereto, as are required by SECTION 6.10, the
form and substance of which shall be satisfactory to Foothill and its counsel;
(Page 77 of 142 Pages)
(j) Foothill shall have received such Collateral Access
Agreements from lessors and other third persons as Foothill may require,
except to the extent Foothill permits one or more of the same to be delivered
after the Closing Date pursuant to SECTION 3.3(e) hereof;
(k) Foothill shall have received consolidating balance sheet
information in form reasonably acceptable to Foothill, as of the Closing
Date, for each Communications System (as if such Communications System were a
separate legal entity) and a detailed description of such Communications
System's liabilities;
(l) Foothill shall have received a copy of each LPMA, each
Key Lease, and each Tower Lease together with a certificate of the Secretary
of the relevant Obligor certifying same to be a true and correct copy thereof;
(m) Foothill shall have received an opinion of Borrower's
counsel (including FCC counsel) in form and substance satisfactory to
Foothill in its sole discretion;
(n) Foothill shall have received (i) appraisals of the Real
Property Collateral and appraisals of the individual Communications Systems,
in each case satisfactory to Foothill, and (ii) mortgagee title insurance
policies (or marked commitments to issue the same) for the Real Property
Collateral issued by a title insurance company satisfactory to Foothill (each
a "Mortgage Policy" and, collectively, the "Mortgage Policies") in amounts
satisfactory to Foothill assuring Foothill that the Mortgages on such Real
Property Collateral are valid and enforceable first priority mortgage Liens
on such Real Property Collateral free and clear of all defects and
encumbrances except Permitted Liens, and the Mortgage Policies shall
otherwise be in form and substance reasonably satisfactory to Foothill; in
each case, except to the extent Foothill permits one or more of the same to
be delivered after the Closing Date pursuant to SECTION 3.3(e) hereof;
(o) Foothill shall have received satisfactory evidence that
all tax returns required to be filed by Borrower have been timely filed and
all taxes upon Borrower or its properties, assets, income, and franchises
(including real property taxes and payroll taxes) have been paid prior to
delinquency, except such taxes that are the subject of a Permitted Protest;
and
(p) all other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance reasonably
satisfactory to Foothill and its counsel.
3.1A CONDITIONS PRECEDENT TO THE NEW TERM LOAN. The obligation of
Foothill to make the New Term Loan is subject to the fulfillment, to the
satisfaction of Foothill and its counsel, of each of the following conditions
on or before the Amended Closing Date:
(Page 78 of 142 Pages)
(a) Foothill shall have received executed consents and
reaffirmations from each Guarantor, in form and substance satisfactory to
Foothill; and
(b) Foothill shall have received the Second Amended Warrant
and such Second Amended Warrant shall be duly executed, and in full force and
effect.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES AND THE TERM LOAN. The
following shall be conditions precedent to all Advances and the Term Loan
hereunder:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the date of such extension of credit, as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result
from the making thereof; and
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any governmental authority
against Borrower, Foothill, or any of their Affiliates.
3.3 CONDITION SUBSEQUENT. As conditions subsequent to initial
closing hereunder, Borrower shall perform or cause to be performed each of
the following (the failure by Borrower to so perform or cause to be performed
any of the following constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to Foothill
the certified copies of the policies of insurance, together with the
endorsements thereto, as are required by SECTION 6.10, the form and substance
of which shall be satisfactory to Foothill and its counsel.
(b) within 30 days following the First Amendment Date,
deliver to Foothill each of the Collateral Assignments of Key Leases,
together with an appropriate consent to hypothecation from the lessor under
the relevant Key Lease, to the extent the same were not required by Foothill
to be delivered on or before the Closing Date under SECTION 3.1.
(c) within 30 days following the First Amendment Date,
deliver to Foothill each of the Collateral Assignments of Tower Leases, other
than with respect to (i) the Old New York Tower Lease, (ii) the Fort Worth
Tower Lease, and (iii) the Brookfield Tower Lease, together with an
appropriate consent to hypothecation from the lessor under the relevant Tower
Lease, to the extent the same were not required by Foothill to be delivered
on or before the Closing Date under SECTION 3.1
(Page 79 of 142 Pages)
(d) within 30 days following the First Amendment Date,
deliver to Foothill each of the Mortgages (and Foothill shall have received
opinions of Foothill's several local counsel relative thereto, each in form
and substance satisfactory to Foothill in its reasonable (from the
perspective of a secured lender) discretion), Collateral Access Agreements
(other than with respect to (i) the Old New York Tower Lease, (ii) the Fort
Worth Tower Lease, and (iii) the Brookfield Tower Lease), Mortgage Policies,
in each case, to the extent the same were not required by Foothill to be
delivered on or before the Closing Date under SECTION 3.1.
(e) within 180 days following the Closing Date, deliver to
Foothill satisfactory evidence of the consummation of each of the
Restructuring Transactions.
3.4 TERM. This Agreement shall become effective upon the
execution and delivery hereof by Borrower and Foothill and shall continue in
full force and effect for a term ending on the date that is 4 years from the
Closing Date (the "Maturity Date"), unless sooner terminated pursuant to the
terms hereof. The foregoing notwithstanding, Foothill shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations immediately shall become due and payable without
notice or demand. No termination of this Agreement, however, shall relieve
or discharge Borrower of Borrower's duties, Obligations, or covenants
hereunder, and Foothill's continuing security interests in the Borrower
Collateral and the Guarantor Collateral shall remain in effect until all
Obligations have been fully and finally discharged and Foothill's obligation
to provide additional credit hereunder is terminated.
3.6 EARLY TERMINATION BY BORROWER. The provisions of SECTION 3.4
that allow termination of this Agreement by Borrower only on the Maturity
Date notwithstanding, Borrower has the option, at any time upon 90 days prior
written notice to Foothill, to terminate this Agreement by paying to
Foothill, in cash, the Obligations, in full, together with a premium (the
"Early Termination Premium") equal to (a) on or before the second anniversary
of the Closing Date, an amount equal to the product of (i) $20,000 TIMES (ii)
the number of months (or portion thereof) between the date of such
termination and the second anniversary of the Closing Date, and (b)
thereafter, zero (-0-); PROVIDED, HOWEVER, that Borrower shall be obligated
to pay only 50% of the Early Termination Premium otherwise payable under
SECTION 3.6(a) in the event that Borrower timely exercises its option to
terminate this Agreement (and timely terminates this Agreement) under and
pursuant to this SECTION 3.6 with the proceeds received by Borrower from the
consummation of a Qualified Transaction.
3.7 TERMINATION UPON EVENT OF DEFAULT. If Foothill terminates
this Agreement upon the occurrence of an Event of Default, in view of the
impracticability and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Foothill's
lost profits as a result thereof,
(Page 80 of 142 Pages)
Borrower shall pay to Foothill upon the effective date of such termination, a
premium in an amount equal to the Early Termination Premium. The Early
Termination Premium shall be presumed to be the amount of damages sustained
by Foothill as the result of the early termination and Borrower agrees that
it is reasonable under the circumstances currently existing. The Early
Termination Premium provided for in this SECTION 3.7 shall be deemed included
in the Obligations.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to
Foothill a continuing security interest in all right, title, and interest of
Borrower in and to all currently existing and hereafter acquired or arising
Borrower Personal Property Collateral in order to secure prompt repayment of
any and all Obligations and in order to secure prompt performance by Borrower
of each of its covenants and duties under the Loan Documents. Foothill's
security interests in the Borrower Personal Property Collateral shall attach
to all Borrower Personal Property Collateral without further act on the part
of Foothill or Borrower. Anything contained in this Agreement or any other
Loan Document to the contrary notwithstanding, except for Ordinary Course
Dispositions, no Obligor has any authority, express or implied, to dispose of
any item or portion of the Personal Property Collateral or the Real Property
Collateral. Anything to the contrary in this Agreement or the other Loan
Documents notwithstanding, to the extent this Agreement or any other Loan
Document purports to grant to Foothill a security interest in the FCC
Licenses, Foothill shall only have a security interest in such FCC Licenses
at such times and to the extent that a security interest in such FCC Licenses
is not prohibited under applicable law and Foothill agrees that, to the
extent prior FCC approval is required pursuant to the Communications Act of
1934, as amended, or the rules and regulations of the FCC for (a) the
operation and effectiveness of any remedy hereunder or under any Loan
Document, or (b) taking any action that may be taken by Foothill hereunder or
under any Loan Document, such remedy or action will be subject to such prior
FCC approval having been obtained by or in favor of Foothill; and Borrower
will use, and shall cause each of the other Obligors to (and, by its
execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees to) use, its reasonable best efforts to obtain any
such approval as promptly as possible after Foothill first becomes entitled
to exercise such remedy or action.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral,
Borrower, immediately upon the request of Foothill, shall (and shall cause
each of the other Obligors to, and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to)
endorse and deliver physical possession of such Negotiable Collateral to
Foothill.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time, Foothill or Foothill's designee may (a) notify
customers or Account Debtors of the Obligors that the Accounts, General
Intangibles, or Negotiable Collateral have been assigned to Foothill or that
Foothill has a security interest therein,
(Page 81 of 142 Pages)
and (b) collect the Accounts, General Intangibles, and Negotiable Collateral
directly and charge the collection costs and expenses to the Loan Account.
Borrower agrees that it will (and will cause each of the other Obligors to,
and, by its execution and delivery of the Guaranty or a joinder thereto, each
of the Guarantors hereby agrees to) hold in trust for Foothill, as Foothill's
trustee, any Collections that it receives and immediately will deliver said
Collections to Foothill in their original form as received by the applicable
Obligor.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time
upon the request of Foothill, Borrower shall (and shall cause each of the
other Obligors (including each new License Sub or Station Sub, whether
Restricted Subsidiary or Unrestricted Subsidiary) to, and, by its execution
and delivery of the Guaranty or a joinder thereto, each of the Guarantors
(including each new License Sub or Station Sub) hereby agrees to) execute and
deliver to Foothill all financing statements, continuation financing
statements, fixture filings, security agreements, pledges, assignments,
collateral assignments, mortgages, leasehold mortgages, deeds of trust,
leasehold deeds of trust, endorsements of certificates of title, applications
for title, affidavits, reports, notices, schedules of accounts, letters of
authority, and all other documents that Foothill reasonably may request, in
form satisfactory to Foothill, to perfect and continue perfected Foothill's
security interests in the Collateral (whether now owned or hereafter arising
or acquired), and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. In this regard and
without limiting the generality of the foregoing, Foothill shall have the
right to require Borrower to: (a) obtain phase-I environmental reports and
real estate surveys with respect to the Real Property Collateral from
environmental consultants and surveyors and setting forth results, in each
case, acceptable to Foothill in its sole discretion; (b) at such time or
times as Borrower or any Guarantor acquires any copyright registered with the
United States Copyright Office or applies for registration of any copyright
with the United States Copyright Office, execute and deliver (or cause such
Guarantor to execute and deliver (and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to
execute and deliver) promptly a Copyright Security Agreement or joinder or
supplement thereto in respect of such copyrights or copyright applications;
(c) cause CRLA to execute and deliver a Mortgage with respect to the Real
Property that it is to acquire in Southern California that is referred to as
the "Mira Loma site; and (d) cause CRNY to execute and deliver a Collateral
Assignment of Tower Lease with respect to its new Tower Lease.
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes,
constitutes, and appoints (and hereby causes each of the other Obligors to
make, constitute, and appoint, and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby makes,
constitutes, and appoints) Foothill (and any of Foothill's officers,
employees, or agents designated by Foothill) as the Obligors' true and lawful
attorney, with power to (a) if any Obligor refuses to, or fails timely to
execute and deliver any of the documents described in SECTION 4.4, sign the
name of such Obligor on any of the documents described in SECTION 4.4, (b) at
any time that an Event of Default has occurred and is continuing or Foothill
deems itself insecure, sign any Obligor's name on any invoice or xxxx of
lading relating to any Account, drafts against Account Debtors,
(Page 82 of 142 Pages)
schedules and assignments of Accounts, verifications of Accounts, and notices
to Account Debtors, (c) send requests for verification of Accounts, (d)
endorse any Obligor's name on any Collection item that may come into
Foothill's possession, (e) at any time that an Event of Default has occurred
and is continuing or Foothill deems itself insecure, notify the post office
authorities to change the address for delivery of any Obligor's mail to an
address designated by Foothill, to receive and open all mail addressed to an
Obligor, and to retain all mail relating to the Collateral and forward all
other mail to the Obligors in care of Borrower, (f) at any time that an Event
of Default has occurred and is continuing or Foothill deems itself insecure,
make, settle, and adjust all claims under the Obligors' policies of insurance
and make all determinations and decisions with respect to such policies of
insurance, and (g) at any time that an Event of Default has occurred and is
continuing or Foothill deems itself insecure, settle and adjust disputes and
claims respecting the Accounts directly with Account Debtors, for amounts and
upon terms that Foothill determines to be reasonable, and Foothill may cause
to be executed and delivered any documents and releases that Foothill
determines to be necessary. The appointment of Foothill as the Obligors'
attorney, and each and every one of Foothill's rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have
been fully and finally repaid and performed and Foothill's obligation to
extend credit hereunder is terminated.
4.6 RIGHT TO INSPECT. Foothill (through any of its officers,
employees, or agents) shall have the right, from time to time hereafter to
inspect the Books and to check, test, and appraise the Collateral in order to
verify any or all of the Obligors' financial condition or the amount,
quality, value, condition of, or any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce Foothill to enter into this Agreement, Borrower
makes the following representations and warranties which shall be true,
correct, and complete in all respects as of the date hereof, and shall be
true, correct, and complete in all respects as of the Closing Date, and at
and as of the date of the making of each Advance or Term Loan made
thereafter, as though made on and as of the date of such Advance or Term Loan
(except to the extent that such representations and warranties relate solely
to an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. The Obligors have good and indefeasible
title to the Collateral, free and clear of Liens except for Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are bona fide existing
obligations created by the sale and delivery of broadcasting time or the
production or syndication of radio programming to Account Debtors in the
ordinary course of the Obligors' business, unconditionally owed to one or more
of the Obligors without defenses, disputes, offsets, counterclaims, or rights of
return or cancellation. The services giving rise to such Eligible Accounts has
been fully performed. No Obligor has received any notice of actual or imminent
bankruptcy, insolvency, or material
(Page 83 of 142 Pages)
impairment of the financial condition of any Account Debtor, or, in the case
of an Advertising Agency Account Debtor, of the underlying client of such
Advertising Agency Account Debtor, regarding any Eligible Account.
5.3 LICENSES AND PERMITS. All material licenses, permits, and
consents and similar rights (including FCC Licenses) required from any
Federal, state, or local governmental body for the ownership, construction,
use, and operation of the Communications Systems and other properties now
owned and operated by any of the Obligors, have been validly issued and are
in full force and effect and each Obligor is in compliance, in all material
respects, with all of the provisions thereof and none of such licenses,
permits, or consents is the subject of any pending or, to the best of
Borrower's knowledge and belief, threatened proceeding for the revocation,
cancellation, suspension, or non-renewal thereof. As of the Closing Date or
of each subsequent date on which Borrower delivers to Foothill an updated
schedule pursuant to Section 6.20, set forth on SCHEDULE 5.3 is a complete
and accurate list of all such licenses, permits, and consents, and such
schedule identifies the date by which an application for the renewal of such
license, permit, or consent must be filed and describes the status of each
such pending application. Each of the Obligors owns or possesses all
material patents, trademarks, trade names, copyrights, and other similar
rights necessary for the conduct of its business as now carried on, without
any known conflict of the rights of others.
5.4 EQUIPMENT. All of the Equipment is used or held for use in
the Obligors' business and is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and
Equipment are not stored with a bailee, warehouseman, or similar party
(without Foothill's prior written consent) and are located only at the
locations identified on SCHEDULE 6.12 or otherwise permitted by SECTION 6.12.
5.6 [INTENTIONALLY OMITTED]
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of Borrower and each Guarantor is located at the address indicated in
the preamble to this Agreement and the XXXXx for each of the Obligors are as
set forth on SCHEDULE 5.7; PROVIDED, HOWEVER, that from time to time,
Borrower shall be entitled to update SCHEDULE 5.7 to add the XXXXx of newly
created or acquired Subsidiaries.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation and
qualified and licensed to do business in, and in good standing in, any state
where the failure to be so licensed or qualified reasonably could be expected
to have a Material Adverse Change.
(b) Each Guarantor is duly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation and
qualified and licensed
(Page 84 of 142 Pages)
to do business in, and in good standing in, any state where the failure to be
so licensed or qualified reasonably could be expected to have a Material
Adverse Change.
(c) Set forth on SCHEDULE 5.8 is a complete and accurate list
of Borrower's direct and indirect Subsidiaries, showing: (i) the jurisdiction
of their incorporation; (ii) the number of shares of each class of common and
preferred stock authorized for each of such Subsidiaries; and (iii) the
number and the percentage of the outstanding shares of each such class owned
directly or indirectly by Borrower; PROVIDED, HOWEVER, that from time to
time, Borrower shall be entitled to update SCHEDULE 5.8 to add the required
information concerning newly created or acquired Subsidiaries. All of the
outstanding capital stock of each such Subsidiary has been validly issued and
is fully paid and non-assessable.
(d) Except as set forth on SCHEDULE 5.8, no capital stock (or
any securities, instruments, warrants, options, purchase rights, conversion
or exchange rights, calls, commitments or claims of any character convertible
into or exercisable for capital stock) of Borrower is subject to the issuance
of any security, instrument, warrant, option, purchase right, conversion or
exchange right, call, commitment or claim of any right, title, or interest
therein or thereto.
(e) Except as set forth on SCHEDULE 5.8, no capital stock (or
any securities, instruments, warrants, options, purchase rights, conversion
or exchange rights, calls, commitments or claims of any character convertible
into or exercisable for capital stock) of any direct or indirect Subsidiary
of Borrower is subject to the issuance of any security, instrument, warrant,
option, purchase right, conversion or exchange right, call, commitment or
claim of any right, title, or interest therein or thereto.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) (i) The execution, delivery, and performance by Borrower
of this Agreement and the Loan Documents to which it is a party have been
duly authorized by all necessary corporate action. (ii) The execution,
delivery, and performance by each of the other Obligors of the Loan Documents
to which it is a party have been duly authorized by all necessary corporate
action.
(b) (i) The execution, delivery, and performance by Borrower
of this Agreement and the Loan Documents to which it is a party do not and
will not (w) violate any provision of federal, state, or local law or
regulation (including Regulations G, T, U, and X of the Federal Reserve
Board) applicable to Borrower, the Governing Documents of Borrower, or any
order, judgment, or decree of any court or other Governmental Authority
binding on any Obligor, (x) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation or material lease of any Obligor, (y) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any properties or assets of any Obligor, other than Permitted Liens, or
(z) require any approval of stockholders or any approval or consent of any
Person under any material contractual obligation of any Obligor.
(Page 85 of 142 Pages)
(ii) The execution, delivery, and performance by
each of the other Obligors of the Loan Documents to which it is a party do
not and will not (w) violate any provision of federal, state, or local law or
regulation (including Regulations G, T, U, and X of the Federal Reserve
Board) applicable to such Obligor, the Governing Documents of such Obligor,
or any order, judgment, or decree of any court or other Governmental
Authority binding on any Obligor, (x) conflict with, result in a breach of,
or constitute (with due notice or lapse of time or both) a default under any
material contractual obligation or material lease of any Obligor, (y) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any properties or assets of any Obligor, other than Permitted Liens, or
(z) require any approval of stockholders or any approval or consent of any
Person under any material contractual obligation of any Obligor.
(c) (i) Other than the filing of appropriate financing
statements, fixture filings, and Mortgages, the execution, delivery, and
performance by Borrower of this Agreement and the Loan Documents to which
Borrower is a party do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any
federal, state, foreign, or other Governmental Authority or other Person.
(ii) Other than the filing of appropriate financing
statements, fixture filings, and Mortgages, the execution, delivery, and
performance by each of the other Obligors of the Loan Documents to which such
Obligor is a party do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any
federal, state, foreign, or other Governmental Authority or other Person.
(d) (i) This Agreement and the Loan Documents to which
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by Borrower will be the legally valid and binding
obligations of Borrower, enforceable against Borrower in accordance with
their respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or
similar laws relating to or limiting creditors' rights generally.
(ii) The Loan Documents to which each of the other
Obligors is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Obligor will be the legally valid and
binding obligations of such Obligor, enforceable against such Obligor in
accordance with their respective terms, except as enforcement may be limited
by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors' rights
generally.
(e) (i) The Liens granted by Borrower to Foothill in and to
its properties and assets pursuant to this Agreement and the other Loan
Documents are validly created, perfected, and first priority Liens, subject
only to Permitted Liens.
(Page 86 of 142 Pages)
(ii) The Liens granted by each of the other Obligors to
Foothill in and to its properties and assets pursuant to the Loan Documents
are validly created, perfected, and first priority Liens, subject only to
Permitted Liens.
5.10 LITIGATION. There are no actions or proceedings pending by or
against any Obligor before any court or administrative agency and neither
Borrower nor any other Obligor has any knowledge or belief of any pending,
threatened, or imminent litigation, governmental investigations, or claims,
complaints, actions, or prosecutions involving any Obligor, except for: (a)
ongoing collection matters in which one or more of the Obligors is the
plaintiff; (b) matters disclosed on SCHEDULE 5.10; and (c) matters arising
after the date hereof that, if decided adversely to such Obligor, would not
have a Material Adverse Change.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating
to Borrower or any guarantor of the Obligations that have been delivered by
Borrower to Foothill have been prepared in accordance with GAAP (except, in
the case of unaudited financial statements, for the lack of footnotes and
being subject to year-end audit adjustments) and fairly present Borrower's
(or such guarantor's, as applicable) financial condition as of the date
thereof and Borrower's results of operations for the period then ended.
There has not been a Material Adverse Change with respect to Borrower (or
such guarantor, as applicable) since the date of the latest financial
statements submitted to Foothill on or before the Closing Date.
5.12 SOLVENCY. (a) Borrower is Solvent. No transfer of property
is being made by Borrower and no obligation is being incurred by Borrower in
connection with the transactions contemplated by this Agreement or the other
Loan Documents with the intent to hinder, delay, or defraud either present or
future creditors of Borrower.
(b) Each of the other Obligors is Solvent. No transfer of
property is being made by such Obligor and no obligation is being incurred by
such Obligor in connection with the transactions contemplated by this
Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of such Obligor.
5.13 EMPLOYEE BENEFITS. None of Borrower, any of its Subsidiaries,
or any of their ERISA Affiliates maintains or contributes to any Benefit
Plan, other than those listed on SCHEDULE 5.13. Borrower, each of its
Subsidiaries and each ERISA Affiliate have satisfied the minimum funding
standards of ERISA and the IRC with respect to each Benefit Plan to which it
is obligated to contribute. No ERISA Event has occurred nor has any other
event occurred that may result in an ERISA Event that reasonably could be
expected to result in a Material Adverse Change. None of Borrower or its
Subsidiaries, any ERISA Affiliate, or any fiduciary of any Plan is subject to
any direct or indirect liability with respect to any Plan under any
applicable law, treaty, rule, regulation, or agreement. None of Borrower or
its Subsidiaries or any ERISA Affiliate is required to provide security to
any Plan under Section 401(a)(29) of the IRC.
(Page 87 of 142 Pages)
5.14 ENVIRONMENTAL CONDITION. None of any Obligor's properties or
assets has ever been used by any Obligor or, to the best of Borrower's
knowledge, by previous owners or operators in the disposal of, or to produce,
store, handle, treat, release, or transport, any Hazardous Materials except
as disclosed on Schedule 5.14 (and, to the extent set forth on such schedule,
any such production, storage, handling, treatment, release, or transport of
such Hazardous Materials by any Obligor is in compliance with all applicable
laws and regulations in respect thereof). None of any Obligor's properties
or assets has ever been designated or identified in any manner pursuant to
any environmental protection statute as a Hazardous Materials disposal site,
or a candidate for closure pursuant to any environmental protection statute.
No Lien arising under any environmental protection statute has attached to
any revenues or to any real or personal property owned or operated by any
Obligor. No Obligor has received a summons, citation, notice, or directive
from the Environmental Protection Agency or any other federal or state
governmental agency concerning any action or omission by any Obligor
resulting in the releasing or disposing of Hazardous Materials into the
environment.
5.15 KEY LEASES; TOWER LEASES. (a) All Key Leases of the Obligors
are identified on Schedule 5.15(a) and each Obligor party to each of the Key
Leases is in compliance in all material respects with all of the terms of
that Key Lease the failure to comply with which reasonably could be expected
to result in a termination or non-renewal thereof or a change therein
materially adverse to that Obligor.
(b) All Tower Leases of the Obligors are identified on
Schedule 5.15(b) and each Obligor party to each of the Tower Leases is in
compliance in all material respects with all of the terms of that Tower Lease
the failure to comply with which reasonably could be expected to result in a
termination or non-renewal thereof or a change therein materially adverse to
that Obligor.
5.16 LPMA; NETWORK AFFILIATES. (a) All LPMAs of the Obligors are
identified on Schedule 5.16(a) and each Obligor party to each of the LPMAs is
in compliance with all of the terms of that LPMA the failure to comply with
which reasonably could be expected to result in a termination or non-renewal
thereof or a change therein materially adverse to that Obligor.
(b) All Network Affiliates of Borrower and a description of
any Permitted Network Affiliate Investments of Borrower in such Network
Affiliates are identified on Schedule 5.16(b); PROVIDED, HOWEVER, that from
time to time, Borrower shall be entitled to update SCHEDULE 5.16(b) to add
the required information concerning new Network Affiliates or Permitted
Network Affiliate Investments.
5.17 NO DEFAULT IN COMMUNICATION FRANCHISE AGREEMENTS. No material
default by any Obligor exists under any Communication Franchise Agreement to
which it is a party and no event has occurred or exists which, with notice or
lapse of time or both, would constitute a default by Borrower thereunder and
each such Communication Franchise Agreement has been duly authorized,
executed, and delivered by such Obligor and is in full force and effect.
(Page 88 of 142 Pages)
5.18 GOVERNMENTAL AUTHORITY. No consent, authorization, approval
or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other Person is required (i) for the
grant by any Obligor of the security interest in the Collateral granted
hereby or for the execution, delivery or performance of this Agreement and
the other Loan Documents by Borrower and the other Obligors, (ii) for the
perfection of such security interest or the exercise by Foothill of the
rights and remedies provided for in this Agreement or the other Loan
Documents, or (iii) except for the consents, authorizations, approvals,
actions, notices and filings with the FCC and other governmental authorities,
all of which have been duly obtained, taken, given or made and are in full
force and effect and are not subject to any conditions (other than those
conditions generally applicable to entities holding licenses, permits,
consents or authorizations granted or issued by the FCC and other
governmental authorities with respect to Broadcast Systems and Communications
Systems).
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, and
unless Foothill shall otherwise consent in writing, Borrower shall (and,
where applicable, cause each of the other Obligors to, and, by its execution
and delivery of the Guaranty or a joinder thereto, each of the Guarantors
hereby agrees to) do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a standard and modern system of
accounting that enables Borrower and each of the other Obligors to produce
financial statements in accordance with GAAP, and maintain records pertaining
to the Collateral that contain information as from time to time may be
requested by Foothill. The Obligors also shall keep a modern inventory
reporting system that shows all additions, sales, claims, returns, and
allowances with respect to the Inventory.
6.2 COLLATERAL REPORTING. Provide Foothill with the following
documents at the following times in form satisfactory to Foothill: (a) upon
the request of Foothill, a sales journal, collection journal, and credit
register, in each case in respect of each Communications System and the
overall radio network of the Obligors, (b) on a monthly basis and, in any
event, by no later than the 10th day of each month during the term of this
Agreement, a detailed aging, by total and in respect of each Communications
System and the overall radio network of the Obligors, of the Accounts, (c) on
a monthly basis and, in any event, by no later than the 10th day of each
month during the term of this Agreement, a summary aging, by vendor and in
respect of each Communications System and the overall radio network of the
Obligors, of each Obligor's accounts payable and any book overdraft, (d) upon
request, copies of invoices in connection with the Accounts, customer
statements, credit memos, remittance advices and reports, deposit slips, and
other documents in connection with the Accounts, (e) on a quarterly basis, a
detailed list of each Obligor's customers on a per Communications System
basis and on the basis of the overall radio network of the Obligors, (f) on a
monthly basis, a calculation of the Dilution for the prior month; and (g)
such other
(Page 89 of 142 Pages)
reports as to the Collateral or the financial condition of the Obligors as
Foothill may request from time to time.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to
Foothill: (a) as soon as available, but in any event within 30 days after
the end of each of the first, second, fourth, fifth, seventh, eighth, tenth,
and eleventh months during each of the Obligors' fiscal years, a company
prepared balance sheet, income statement, and statement of cash flow covering
the Obligors' operations (including the overall radio network of the
Obligors) during such period; (b) as soon as available, but in any event
within 45 days after the end of each of the third, sixth, ninth, and twelfth
months during each of the Obligors' fiscal years, a company prepared balance
sheet, income statement, and statement of cash flow covering the Obligors'
operations (including the overall radio network of the Obligors) for the
fiscal quarter then ended; and (c) as soon as available, but in any event
within 90 days after the end of each of the Obligors' fiscal years, financial
statements of the Obligors for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Foothill and certified,
without any qualifications, by such accountants to have been prepared in
accordance with GAAP, together with a certificate of such accountants
addressed to Foothill stating that such accountants do not have knowledge of
the existence of any Default or Event of Default. Such audited financial
statements shall include a balance sheet, profit and loss statement, and
statement of cash flow on a per Communications System basis as well as on the
basis of the overall radio network of the Obligors, and, if prepared, such
accountants' letter to management. In addition to the financial statements
referred to above, Borrower agrees to deliver balance sheet information in
form reasonably acceptable to Foothill and prepared on a consolidating, per
Obligor basis AND per Communications System basis, so as to present Borrower
and each such related entity separately and to present each Communications
System separately, and financial statements prepared on a consolidated basis.
Together with the above, Borrower also shall deliver to
Foothill Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual Reports,
and Form 8-K Current Reports, and any other filings made by Borrower with the
Securities and Exchange Commission, if any, as soon as the same are filed, or
any other information that is provided by Borrower to its securitiesholders,
and any other report reasonably requested by Foothill relating to the
financial condition of Borrower or any of the other Obligors.
Each month, together with the financial statements provided
pursuant to SECTION 6.3(a) or SECTION 6.3(b), as the case may be, Borrower
shall deliver to Foothill a certificate signed by its chief financial officer
to the effect that: (i) all financial statements delivered or caused to be
delivered to Foothill hereunder have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and fairly present
the financial condition of Borrower, its Subsidiaries, and each of their
respective Communications Systems, (ii) the representations and warranties of
the Obligors contained in this Agreement and the other Loan Documents are
true and correct in all material respects on and as of the date of such
certificate, as though made
(Page 90 of 142 Pages)
on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date), (iii) for each month that also
is the date on which a financial covenant in SECTION 7.20 is to be tested, a
Compliance Certificate demonstrating in reasonable detail compliance at the
end of such period with the applicable financial covenants contained in
SECTION 7.20, and (iv) on the date of delivery of such certificate to
Foothill there does not exist any condition or event that constitutes a
Default or Event of Default (or, in the case of clauses (i), (ii), or (iii),
to the extent of any non-compliance, describing such non-compliance as to
which he or she may have knowledge and what action the relevant Obligor has
taken, is taking, or proposes to take with respect thereto).
Borrower (and, if required, each of the other Obligors) shall
have issued written instructions to its independent certified public
accountants authorizing them to communicate with Foothill and to release to
Foothill whatever financial information concerning the Obligors that Foothill
may request. Borrower hereby irrevocably authorizes and directs (and hereby
agrees to cause promptly each of the other Obligors to irrevocably authorize
and direct, and, by its execution and delivery of the Guaranty or a joinder
thereto, each of the Guarantors hereby irrevocably authorizes and directs)
all auditors, accountants, or other third parties to deliver to Foothill, at
Borrower's expense, copies of the Obligors' financial statements, papers
related thereto, and other accounting records of any nature in their
possession, and to disclose to Foothill any information they may have
regarding the Obligors' business affairs and financial conditions.
Deliver to Foothill not less than 10 Business Days prior to the
closing of any proposed Permitted Acquisition each of the following (a) a
detailed description of the assets or stock that are the subject of such
proposed Permitted Acquisition, (b) a term sheet or other description setting
forth the essential terms and basic structure of the proposed Permitted
Acquisition (including, purchase consideration and method and structure of
payment; in this regard, if the purchase price includes a seller note,
non-compete agreement, or other right to payment, Borrower shall detail the
economic terms thereof), (c) projected statements of income for the Person or
assets that are proposed to be acquired for at least a 1 year period
following such proposed Permitted Acquisition (including a summary of
assumptions or PRO FORMA adjustments for such projections), and (d) a sources
and uses calculation showing the proposed amount of Indebtedness, if any, to
be utilized in connection with the consummation of the proposed Permitted
Acquisition.
6.4 TAX RETURNS. Deliver to Foothill copies of each of the
Obligors' future federal income tax returns, and any amendments thereto,
within 30 days of the filing thereof with the Internal Revenue Service.
6.5 GUARANTOR REPORTS. To the extent the same are not covered by
Section 6.3 hereof, cause any guarantor of any of the Obligations to deliver
(and by its execution and delivery of the Guaranty or a joinder thereto, each
of the Guarantors hereby agrees to deliver) its annual financial statements
at the time when Borrower provides its audited financial statements to
Foothill and copies of all federal income tax
(Page 91 of 142 Pages)
returns as soon as the same are available and in any event no later than 30
days after the same are required to be filed by law.
6.6 RETURNS. Cause returns and allowances, if any, as between any
Obligor and its Account Debtors to be on the same basis and in accordance
with the usual customary practices of such Obligor, as they exist at the time
of the execution and delivery of this Agreement. If, at a time when no Event
of Default has occurred and is continuing, any Account Debtor returns any
Inventory to any Obligor, such Obligor promptly shall determine the reason
for such return and, if such Obligor accepts such return, issue a credit
memorandum (with a copy to be sent to Foothill) in the appropriate amount to
such Account Debtor. If, at a time when an Event of Default has occurred and
is continuing, any Account Debtor returns any Inventory to any Obligor, such
Obligor promptly shall determine the reason for such return and, if Foothill
consents (which consent shall not be unreasonably withheld), issue a credit
memorandum (with a copy to be sent to Foothill) in the appropriate amount to
such Account Debtor.
6.7 TITLE TO EQUIPMENT. Upon Foothill's request, immediately
deliver to Foothill, properly endorsed, any and all evidences of ownership
of, certificates of title, or applications for title to any items of
Equipment.
6.8 MAINTENANCE OF EQUIPMENT. Maintain the Equipment in good
operating condition and repair (ordinary wear and tear excepted), and make
all necessary replacements thereto so that the value and operating efficiency
thereof shall at all times be maintained and preserved. Other than those
items of Equipment that constitute fixtures on the Closing Date, no Obligor
shall permit any item of Equipment to become a fixture to real estate or an
accession to other property, and such Equipment shall at all times remain
personal property.
6.9 TAXES. (a) Cause all assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against any Obligor or any of its property to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest.
(b) Make due and timely payment or deposit of all such
federal, state, and local taxes, assessments, or contributions required of it
by law, and execute and deliver to Foothill, on demand, appropriate
certificates attesting to the payment thereof or deposit with respect thereto.
(c) Make timely payment or deposit of all tax payments and
withholding taxes required of it by applicable laws, including those laws
concerning F.I.C.A., F.U.T.A., state disability, and local, state, and
federal income taxes, and, upon request, furnish Foothill with proof
satisfactory to Foothill indicating that the applicable Obligor has made such
payments or deposits.
(Page 92 of 142 Pages)
6.10 INSURANCE.
(a) At its expense, keep the Personal Property Collateral
insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as are ordinarily insured
against by other owners in similar businesses. Borrower also shall, and
shall cause each Obligor to (and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to),
maintain business interruption (including in respect of each Communications
System), public liability, product liability, and property damage insurance
relating to the Obligors' ownership and use of the Personal Property
Collateral, as well as insurance against larceny, embezzlement, and criminal
misappropriation.
(b) At its expense, obtain and maintain (i) insurance of the
type necessary to insure the Improvements and Chattels (as such terms are
defined in the Mortgages), for the full replacement cost thereof, against any
loss by fire, lightning, windstorm, hail, explosion, aircraft, smoke damage,
vehicle damage, earthquakes, elevator collision, and other risks from time to
time included under "extended coverage" policies, in such amounts as Foothill
may require, but in any event in amounts sufficient to prevent Borrower from
becoming a co-insurer under such policies, (ii) combined single limit bodily
injury and property damages insurance against any loss, liability, or damages
on, about, or relating to each parcel of Real Property Collateral, in an
amount of not less than $1,000,000; (iii) business rental insurance covering
annual receipts for a 12 month period for each parcel of Real Property
Collateral; and (iv) insurance for such other risks as Foothill may require.
Replacement costs, at Foothill's option, may be redetermined by an insurance
appraiser, satisfactory to Foothill, not more frequently than once every 12
months at Borrower's cost.
(c) All such policies of insurance shall be in such form,
with such companies, and in such amounts as may be reasonably satisfactory to
Foothill. All insurance required herein shall be written by companies which
are authorized to do insurance business in the State of California. All
hazard insurance and such other insurance as Foothill shall specify, shall
contain a California Form 438BFU (NS) mortgagee endorsement, or an equivalent
endorsement satisfactory to Foothill, showing Foothill as sole loss payee
thereof, and shall contain a waiver of warranties. Every policy of insurance
referred to in this SECTION 6.10 shall contain an agreement by the insurer
that it will not cancel such policy except after 30 days prior written notice
to Foothill and that any loss payable thereunder shall be payable
notwithstanding any act or negligence of any Obligor or Foothill which might,
absent such agreement, result in a forfeiture of all or a part of such
insurance payment and notwithstanding (i) occupancy or use of the Real
Property Collateral for purposes more hazardous than permitted by the terms
of such policy, (ii) any foreclosure or other action or proceeding taken by
Foothill pursuant to the Mortgages upon the happening of an Event of Default,
or (iii) any change in title or ownership of the Real Property Collateral.
Borrower shall deliver to Foothill certified copies of such policies of
insurance and evidence of the payment of all premiums therefor.
(Page 93 of 142 Pages)
(d) Original policies or certificates thereof satisfactory to
Foothill evidencing such insurance shall be delivered to Foothill at least 30
days prior to the expiration of the existing or preceding policies. Borrower
shall give Foothill prompt notice of any loss covered by such insurance, and
Foothill shall have the right to adjust any loss. Foothill shall have the
exclusive right to adjust all losses payable under any such insurance
policies without any liability to any Obligor whatsoever in respect of such
adjustments. Any monies received as payment for any loss under any insurance
policy including the insurance policies mentioned above, shall be paid over
to Foothill to be applied at the option of Foothill either to the prepayment
of the Obligations without premium, in such order or manner as Foothill may
elect, or shall be disbursed to the applicable Obligor under stage payment
terms satisfactory to Foothill for application to the cost of repairs,
replacements, or restorations. All repairs, replacements, or restorations
shall be effected with reasonable promptness and shall be of a value at least
equal to the value of the items or property destroyed prior to such damage or
destruction. Upon the occurrence of an Event of Default, Foothill shall have
the right to apply all prepaid premiums to the payment of the Obligations in
such order or form as Foothill shall determine.
(e) Borrower shall not, and shall not cause, suffer, or
permit any of the other Obligors to (and by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees not to),
take out separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this SECTION 6.10, unless
Foothill is included thereon as named insured with the loss payable to
Foothill under a standard California 438BFU (NS) Mortgagee endorsement, or
its local equivalent. Borrower immediately shall notify (and cause the
applicable Obligor immediately to notify, and, by its execution and delivery
of the Guaranty or a joinder thereto, each of the Guarantors hereby agrees
immediately to notify) Foothill whenever such separate insurance is taken
out, specifying the insurer thereunder and full particulars as to the
policies evidencing the same, and originals of such policies immediately
shall be provided to Foothill.
6.11 NO SETOFFS OR COUNTERCLAIMS. Make payments hereunder and
under the other Loan Documents by or on behalf of Borrower and the other
Obligors without setoff or counterclaim and free and clear of, and without
deduction or withholding for or on account of, any federal, state, or local
taxes.
6.12 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on SCHEDULE 6.12; PROVIDED,
HOWEVER, that Borrower may amend SCHEDULE 6.12 so long as such amendment
occurs by written notice to Foothill not less than 30 days prior to the date
on which the Inventory or Equipment is moved to such new location, so long as
such new location is within the continental United States, and so long as, at
the time of such written notification, the applicable Obligor provides any
financing statements or fixture filings necessary to perfect and continue
perfected Foothill's security interests in such assets and also provides to
Foothill a Collateral Access Agreement.
(Page 94 of 142 Pages)
6.13 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any governmental
authority, including the Fair Labor Standards Act and the Americans With
Disabilities Act, other than laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, would not have
and could not reasonably be expected to have a Material Adverse Change.
6.14 EMPLOYEE BENEFITS.
(a) Promptly, and in any event within 10 Business Days after
Borrower or any of its Subsidiaries knows or has reason to know that an ERISA
Event has occurred that reasonably could be expected to result in a Material
Adverse Change, a written statement of the chief financial officer of
Borrower describing such ERISA Event and any action that is being taking with
respect thereto by Borrower, any such Subsidiary or ERISA Affiliate, and any
action taken or threatened by the IRS, Department of Labor, or PBGC.
Borrower or such Subsidiary, as applicable, shall be deemed to know all facts
known by the administrator of any Benefit Plan of which it is the plan
sponsor, (ii) promptly, and in any event within 3 Business Days after the
filing thereof with the IRS, a copy of each funding waiver request filed with
respect to any Benefit Plan and all communications received by Borrower, any
of its Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate
with respect to such request, and (iii) promptly, and in any event within 3
Business Days after receipt by Borrower, any of its Subsidiaries or, to the
knowledge of Borrower, any ERISA Affiliate, of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice.
(b) Cause to be delivered to Foothill, upon Foothill's
request, each of the following: (i) a copy of each Plan (or, where any such
plan is not in writing, complete description thereof) (and if applicable,
related trust agreements or other funding instruments) and all amendments
thereto, all written interpretations thereof and written descriptions thereof
that have been distributed to employees or former employees of Borrower or
its Subsidiaries; (ii) the most recent determination letter issued by the IRS
with respect to each Benefit Plan; (iii) for the three most recent plan
years, annual reports on Form 5500 Series required to be filed with any
governmental agency for each Benefit Plan; (iv) all actuarial reports
prepared for the last three plan years for each Benefit Plan; (v) a listing
of all Multiemployer Plans, with the aggregate amount of the most recent
annual contributions required to be made by Borrower or any ERISA Affiliate
to each such plan and copies of the collective bargaining agreements
requiring such contributions; (vi) any information that has been provided to
Borrower or any ERISA Affiliate regarding withdrawal liability under any
Multiemployer Plan; and (vii) the aggregate amount of the most recent annual
payments made to former employees of Borrower or its Subsidiaries under any
Retiree Health Plan.
6.15 LEASES. Pay when due all rents and other amounts payable
under any leases to which an Obligor is a party or by which an Obligor's
properties and assets are bound (including the Key Leases and the Tower
Leases), unless such payments are
(Page 95 of 142 Pages)
the subject of a Permitted Protest. To the extent that any Obligor fails
timely to make payment of such rents and other amounts payable when due under
its leases, Foothill shall be entitled, in its discretion, to reserve an
amount equal to such unpaid amounts against the Maximum Revolving Amount.
6.16 GOVERNMENT AUTHORIZATION. Borrower shall deliver to Foothill,
as soon as practicable, and in any event within ten (10) days after the
receipt by any Obligor from the FCC or any other governmental agency having
jurisdiction over the operations of any Obligor or filing or receipt thereof
by any Obligor, (i) copies of any order or notice of the FCC or such other
agency or court of competent jurisdiction which designates any material FCC
License or other material franchise, permit, or other governmental operating
authorization of any Obligor, or any application therefor, for a hearing or
which refuses renewal or extension of, or revokes or suspends the authority
of any Obligor to construct or operate a Communications System (or portion
thereof), (ii) a copy of any competing application filed with respect to any
such FCC License or other authorization, or application therefor, of any
Obligor, or any citation, notice of violation, or order to show cause issued
by the FCC or other agency or any complaint filed by the FCC or other agency
which is available to any Obligor, and (iii) a copy of any notice or
application by any Obligor requesting authority to or notifying the FCC of
its intent to cease broadcasting on any broadcast station for any period in
excess of ten (10) days.
6.17 OFF-THE-AIR REPORTS. Borrower shall deliver promptly to
Foothill notice of each occurrence of a period of twenty-four (24)
consecutive hours or more during which any Communications System owned or
operated by any Obligor was not broadcasting.
6.18 NOTICES. Borrower promptly shall deliver, and shall cause
each of the Obligors to deliver promptly (and, by its execution and delivery
of the Guaranty or a joinder thereto, each of the Guarantors hereby agrees to
deliver promptly), to Foothill all material written notices received by it
with respect to the Collateral, including, the Communication Franchise
Agreements.
6.19 PERMITTED ACQUISITIONS; PERMITTED UNRESTRICTED SUBSIDIARY
ACQUISITIONS. In connection with any Permitted Acquisition or Permitted
Unrestricted Subsidiary Acquisition of a Communications System or Broadcast
System (an "Acquired System"), Borrower shall cause each of the following to
be satisfied: (i) organize a License Sub to hold each of the FCC Licenses in
respect of the Acquired System and organize a Station Sub to hold all assets
of the Acquired System other than the FCC Licenses; (b) cause each of such
License Sub and such Station Sub to execute and deliver all appropriate
joinder documents to make it an Obligor party to the Loan Documents
(including the Guaranty and the Guarantor Security Agreement) and of
appropriate UCC-1 financing statements, fixture filings, Collateral Access
Agreements, Collateral Assignments of Tower Leases, Collateral Assignments of
Key Leases, and Mortgages; (c) cause the execution and delivery by the
applicable Obligors of one or more appropriate supplements/joinders to the
Stock Pledge Agreement or the Guarantor Stock Pledge Agreement, and the
delivery to Foothill of possession of the
(Page 96 of 142 Pages)
original stock certificates, respecting all of the issued and outstanding
shares of stock of such License Sub and such Station Sub, together with stock
powers with respect thereto endorsed in blank; PROVIDED, HOWEVER, that to the
extent, if any, that such shares are required to be delivered to the holder
of Permitted Unrestricted Subsidiary Indebtedness that is secured by a first
priority Lien on such shares in favor of such holder, Borrower, in lieu of
the foregoing requirement of delivery of such stock certificates and stock
powers, shall cause such holder to deliver to Foothill a duly executed bailee
agreement, in form and substance reasonably satisfactory to Foothill, in
respect of the second priority Lien in favor of Foothill on such shares.
6.20 LICENSE RENEWALS. Commencing on the date six months following
the Closing Date and continuing every six months thereafter, Borrower shall
deliver to Foothill an updated SCHEDULE 5.3 reflecting thereon, as of the
date of such delivery, the information described in Section 5.3.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations,
Borrower will not do, and will not cause, suffer, or permit any of the other
Obligors to do (and by its execution and delivery of the Guaranty or a
joinder thereto, each Guarantor hereby agrees that it will not do), any of
the following without Foothill's prior written consent:
7.1 INDEBTEDNESS. Except with respect to Permitted Unrestricted
Subsidiary Investments, create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to
any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement;
(b) Indebtedness set forth on SCHEDULE 7.1 attached hereto;
(c) Indebtedness of the Obligors secured by Permitted Liens;
(d) Indebtedness of any Obligor (other than Unrestricted
Subsidiaries) owing to any other Obligor (other than Unrestricted
Subsidiaries); PROVIDED, HOWEVER, that (i) such intercompany Indebtedness
shall not be evidenced by promissory notes or any other instruments, and (ii)
such Intercompany Indebtedness shall not arise from one or a series of
related transactions between any two or more Obligors pursuant to which an
Obligor would be able to take an action that would not be permitted, or to
refrain from taking an action that would be required, under the Credit
Documents but for such transaction or transactions;
(e) Permitted Unrestricted Subsidiary Indebtedness; and
(f) refinancings, renewals, or extensions of Indebtedness
permitted under clauses (b), (c), (d), and (e) of this SECTION 7.1 (and
continuance or
(Page 97 of 142 Pages)
renewal of any Permitted Liens associated therewith) so long as: (i) the
terms and conditions of such refinancings, renewals, or extensions do not
materially impair the prospects of repayment of the Obligations by Borrower
or the "Guarantied Obligations" (as defined in the Guaranty) by any
Guarantor, (ii) the net cash proceeds of such refinancings, renewals, or
extensions do not result in an increase in the aggregate principal amount of
the Indebtedness so refinanced, renewed, or extended, (iii) such
refinancings, renewals, refundings, or extensions do not result in a
shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, and (iv) to the extent that Indebtedness
that is refinanced was subordinated in right of payment to the Obligations or
such Guarantied Obligations, then the subordination terms and conditions of
the refinancing Indebtedness must be at least as favorable to Foothill as
those applicable to the refinanced Indebtedness.
Anything contained in this SECTION 7.1 to the contrary notwithstanding, in no
event shall Borrower or any of the Restricted Subsidiaries co-make, endorse,
guaranty, or otherwise become liable or have any recourse with respect to any
Indebtedness or other liabilities (including Permitted Unrestricted
Subsidiary Indebtedness) of any of the Unrestricted Subsidiaries.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its property or assets, of
any kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens (including Liens that are replacements
of Permitted Liens to the extent that the original Indebtedness is refinanced
under SECTION 7.1(e) and so long as the replacement Liens only encumber those
assets or property that secured the original Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its capital
stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation
or dissolution), or convey, sell, assign, lease, transfer, or otherwise
dispose of, in one transaction or a series of transactions, all or any
substantial part of its property or assets (collectively, a "Fundamental
Change Transaction"), except for: (a) the Restructuring Transactions; (b)
Permitted Acquisitions permitted under SECTION 7.13; (c) Permitted
Unrestricted Subsidiary Acquisitions; and (d) Fundamental Change Transactions
involving solely Unrestricted Subsidiaries.
7.4 DISPOSAL OF ASSETS. Except for Ordinary Course Dispositions,
sell, lease, assign, transfer, or otherwise dispose of any properties or
assets of any of the Obligors.
7.5 CHANGE NAME. Change any Obligor's name, FEIN, corporate
structure (within the meaning of Section 9402(7) of the Code), or identity,
or add any new fictitious name.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except by endorsement of
instruments or
(Page 98 of 142 Pages)
items of payment for deposit to the account of an Obligor subject to a
Concentration Account Agreement or which are transmitted or turned over to
Foothill.
7.7 NATURE OF BUSINESS. Make any change in the principal nature
of Borrower's and the other Obligors' business, taken as a whole, without the
prior written consent of Foothill, which shall not be unreasonably (from the
perspective of a secured lender) withheld. Without limiting the generality
of the foregoing, Borrower and the Obligors shall be permitted to change the
format of programming of one or more of their Broadcast Systems from any
non-"children's format" programming to "children's format" programming.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by
SECTION 7.1(D), prepay, redeem, retire, defease, purchase, or otherwise
acquire any Indebtedness owing to any third Person, other than the
Obligations in accordance with this Agreement; and
(b) Directly or indirectly, amend, modify, alter, increase,
or change any of the terms or conditions of any agreement, instrument,
document, indenture, or other writing evidencing or concerning Indebtedness
permitted under SECTIONS 7.1(b), (c), OR (d).
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.10 CONSIGNMENTS. Consign any Inventory or sell any Inventory on
xxxx and hold, sale or return, sale on approval, or other conditional terms
of sale.
7.11 DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than capital stock) on, or
purchase, acquire, redeem, or retire any capital stock of any Obligor, of any
class, whether now or hereafter outstanding; PROVIDED, HOWEVER, that any
Subsidiary of Borrower may pay dividends or other distributions to Borrower;
PROVIDED FURTHER that Borrower may make Permitted Legal Fee Stock Redemptions
from time to time so long as Borrower delivers to Foothill concurrently
therewith a certificate of the Secretary of Borrower certifying that Borrower
has elected to satisfy its obligations under the relevant invoices of HMSPA
referenced therein by means of a Permitted Legal Fee Stock Redemption and
attesting to the aggregate amount of Permitted Legal Fee Stock Redemptions
made by Borrower (after giving effect to the subject redemption).
7.12 ACCOUNTING METHODS. Modify or change its method of accounting
or enter into, modify, or terminate any agreement currently existing, or at
any time hereafter entered into with any third party accounting firm or
service bureau for the preparation or storage of any Obligor's accounting
records without said accounting firm or service bureau agreeing to provide
Foothill information regarding the Collateral or such Obligor's financial
condition. Borrower hereby waives, and hereby agrees to cause
(Page 99 of 142 Pages)
the other Obligors to waive (and by its execution and delivery of the
Guaranty or a joinder thereto, each Guarantor hereby waives), the right to
assert a confidential relationship, if any, it may have with any accounting
firm or service bureau in connection with any information requested by
Foothill pursuant to or in accordance with this Agreement or any other Loan
Document, and agrees that Foothill may contact directly any such accounting
firm or service bureau in order to obtain such information.
7.13 INVESTMENTS. Except for Permitted Unrestricted Subsidiary
Investments, directly or indirectly make, acquire, or incur any liabilities
(including contingent obligations) for or in connection with (a) except for
Permitted Network Affiliate Investments, the acquisition of the securities
(whether debt or equity) of, or other interests in, a Person, (b) loans,
advances, capital contributions, or transfers of property to a Person, or (c)
the acquisition of all or substantially all of the properties or assets of a
Person; PROVIDED, HOWEVER, that the foregoing shall not prohibit any Obligor
from making any such investment in any other Obligor, so long as all of the
issued and outstanding capital stock of any Guarantor is and continues to be
owned by only one other Obligor.
7.14 TRANSACTIONS WITH AFFILIATES. Except for those transactions
described on SCHEDULE 7.14 attached hereto, directly or indirectly enter into
or permit to exist any material transaction with any Affiliate of the
Obligors (other than an Obligor) except for transactions that are in the
ordinary course of the Obligors' business, upon fair and reasonable terms,
that are fully disclosed to Foothill, and that are no less favorable to the
Obligors, or any of them, than would be obtained in an arm's length
transaction with a non-Affiliate.
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 COMMUNICATION FRANCHISE AGREEMENTS. Except solely as, and
solely to the extent, expressly permitted pursuant to this Agreement (i)
cancel or terminate any of the Communication Franchise Agreements or consent
to or accept any cancellation or termination thereof, (ii) sell, assign, or
otherwise dispose of (by operation of law or otherwise) any part of its
respective interest or rights under any Communication Franchise Agreements,
(iii) amend, supplement, or otherwise modify any of the Communication
Franchise Agreements in any way that could reasonably be expected to be
materially adverse to any Obligor, (iv) waive any material default under or
breach of any of the Communication Franchise Agreements or waive, fail to
enforce, forgive, or release any material right, interest, or entitlement of
any kind, howsoever arising under or in respect of any of the Communication
Franchise Agreements or vary or agree to the variation in any respect of any
of the material provisions of any of the Communication Franchise Agreements
in a manner that would be materially adverse to any Obligor, or (v) petition,
request, or take any other legal or administrative action which seeks, or may
reasonably be expected, to rescind, terminate, or suspend any of the
Communication Franchise Agreements or amend or modify any of the
Communication Franchise Agreements in any respect of any of the material
provisions of any of the Communication Franchise Agreements in a manner that
would be
(Page 100 of 142 Pages)
materially adverse to any Obligor. Borrower, at its expense, will, and will
cause each of the other Obligors to (and by its execution and delivery of the
Guaranty or a joinder thereto, each Guarantor hereby agrees that it will),
perform and comply, in all material respects, with all terms and provisions
of each of the Communication Franchise Agreements required to be performed or
complied with by it, will maintain each of the Communication Franchise
Agreements in full force and effect, will enforce each of the Communication
Franchise Agreements in accordance with their respective terms.
7.17 USE OF PROCEEDS. Use the proceeds of the Advances and the
Term Loan made hereunder for any purpose other than (i) on the Closing Date,
(w) to repay in full the outstanding principal, accrued interest, and accrued
fees and expenses owing to Existing Lender (other than a mortgage financing
of approximately $225,000), (x) to repay in full the KPLS Sellers'
Indebtedness owing to the KPLS Sellers, (y) to repay in full the obligations
of Group under a Consulting Agreement, dated October 29, 1993, as amended,
between Group and Mr. Xxxx XxXxxxxxxx, and (z) to pay transactional costs,
expenses, and fees incurred in connection with this Agreement, and (ii)
thereafter, consistent with the terms and conditions hereof, for its lawful
and permitted corporate purposes; PROVIDED, HOWEVER, that in no event shall
the proceeds of any Advance be used to finance, in whole or in part, directly
or indirectly, any Permitted Unrestricted Subsidiary Acquisition.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new
location without providing 30 days prior written notification thereof to
Foothill, unless, at the time of such written notification, the applicable
Obligor provides any financing statements or fixture filings necessary to
perfect and continue perfected Foothill's security interests and also
provides to Foothill a Collateral Access Agreement with respect to such new
location. The Inventory and Equipment shall not at any time now or hereafter
be stored with a bailee, warehouseman, or similar party without Foothill's
prior written consent.
7.19 NO PROHIBITED TRANSACTIONS UNDER ERISA. Directly or
indirectly:
(a) engage, or permit any Subsidiary of Borrower to engage,
in any prohibited transaction which is reasonably likely to result in a civil
penalty or excise tax described in Sections 406 of ERISA or 4975 of the IRC
for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302 of ERISA and 412
of the IRC), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to fail, to
pay timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan;
(Page 101 of 142 Pages)
(d) terminate, or permit any Subsidiary of Borrower to
terminate, any Benefit Plan where such event would result in any liability of
Borrower, any of its Subsidiaries or any ERISA Affiliate under Title IV of
ERISA;
(e) fail, or permit any Subsidiary of Borrower to fail, to make
any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to fail, to pay
any required installment or any other payment required under Section 412 of the
IRC on or before the due date for such installment or other payment;
(g) amend, or permit any Subsidiary of Borrower to amend, a Plan
resulting in an increase in current liability for the plan year such that either
of Borrower, any Subsidiary of Borrower or any ERISA Affiliate is required to
provide security to such Plan under Section 401(a)(29) of the IRC; or
(h) withdraw, or permit any Subsidiary of Borrower to withdraw,
from any Multiemployer Plan where such withdrawal is reasonably likely to result
in any liability of any such entity under Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $10,000.
7.20 FINANCIAL COVENANTS. Fail to maintain:
(a) Stockholder Equity. Stockholder Equity, measured on a
fiscal quarter-end basis, of at least the amount set forth below:
-------------------------------------------------------
-------------------------------------------------------
Qtr/Yr Minimum Stockholder Equity
-------------------------------------------------------
Q4/1996 $14,100,000
-------------------------------------------------------
Q1/1997 $14,100,000
-------------------------------------------------------
Q2/1997 $14,100,000
-------------------------------------------------------
Q3/1997 $14,100,000
-------------------------------------------------------
Q4/1997 $14,100,000
-------------------------------------------------------
Q1/1998 $13,200,000
-------------------------------------------------------
Q2/1998 $13,200,000
-------------------------------------------------------
Q3/1998 $13,200,000
-------------------------------------------------------
Q4/1998 $13,200,000
-------------------------------------------------------
Q1/1999 $12,700,000
-------------------------------------------------------
(Page 102 of 142 Pages)
-------------------------------------------------------
-------------------------------------------------------
Qtr/Yr Minimum Stockholder Equity
-------------------------------------------------------
Q2/1999 $12,700,000
-------------------------------------------------------
Q3/1999 $12,700,000
-------------------------------------------------------
Q4/1999 $12,700,000
-------------------------------------------------------
Q1/2000 $12,700,000
-------------------------------------------------------
Q2/2000 $12,700,000
-------------------------------------------------------
Q3/2000 $12,700,000
-------------------------------------------------------
Q4/2000 $12,700,000
-------------------------------------------------------
-------------------------------------------------------
(b) Working Capital. Working Capital, measured on a fiscal
quarter-end basis, of at least the amount set forth below:
------------------------------------------------------
------------------------------------------------------
Qtr/Yr Minimum Stockholder Capital
------------------------------------------------------
Q4/1996 $2,000,000
------------------------------------------------------
Q1/1997 $2,000,000
------------------------------------------------------
Q2/1997 $2,000,000
------------------------------------------------------
Q3/1997 $2,000,000
------------------------------------------------------
Q4/1997 $2,000,000
------------------------------------------------------
Q1/1998 $900,000
------------------------------------------------------
Q2/1998 $900,000
------------------------------------------------------
Q3/1998 $900,000
------------------------------------------------------
Q4/1998 $900,000
------------------------------------------------------
Q1/1999 $4,000,000
------------------------------------------------------
Q2/1999 $4,000,000
------------------------------------------------------
Q3/1999 $4,000,000
------------------------------------------------------
Q4/1999 $4,000,000
------------------------------------------------------
Q1/2000 $14,000,000
------------------------------------------------------
Q2/2000 $14,000,000
------------------------------------------------------
Q3/2000 $14,000,000
------------------------------------------------------
Q4/2000 $14,000,000
------------------------------------------------------
------------------------------------------------------
(Page 103 of 142 Pages)
7.21 CAPITAL EXPENDITURES. Make capital expenditures in any fiscal
year in excess of (a) $1,250,000 during 1997, and (b) $750,000 during any other
fiscal year.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1 (a) If Borrower fails to pay when due and payable or when
declared due and payable, any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due Foothill,
reimbursement of Foothill Expenses, or other amounts constituting Obligations);
PROVIDED, HOWEVER, that in the case of Overadvances that are caused by the
charging of interest, fees, or Foothill Expenses to Borrower's loan account with
Foothill, such event shall not constitute an Event of Default unless, within
three (3) Business Days telephonic notice of such Overadvance, Borrower fails to
prepay, or otherwise eliminate, such Overadvance; or
(b) If any other Obligor fails to pay when due and payable or
when declared due and payable, any portion of the "Guarantied Obligations" (as
defined in the Guaranty) (whether in respect of principal, interest (including
any interest which, but for the provisions of the Bankruptcy Code, would have
accrued on such amounts), fees and charges due Foothill, reimbursement of
Foothill Expenses, or other amounts constituting Obligations);
8.2 (a) If Borrower or any other Obligor fails or neglects to
perform, keep, or observe, in any material respect, any term, provision,
condition, covenant, or agreement contained in SECTIONS 6.2 (Collateral
Reports), 6.3 (Financial Statements), 6.16 (Governmental Authorization), 6.18
(Notices), or 6.20 (License Renewals) of this Agreement and such failure
continues for a period of five (5) days from the date Foothill sends Borrower
telephonic or written notice of such failure or neglect; (b) If Borrower or any
other Obligor fails or neglects to perform, keep, or observe, in any material
respect, any term, provision, condition, covenant, or agreement contained in
SECTIONS 6.4 (Tax Returns), 6.5 (Guarantor Reports), 6.7 (Title to Equipment),
6.12 (Location of Inventory and Equipment), 6.13 (Compliance with Laws), 6.14
(Employee Benefits), or 6.15 (Leases) of this Agreement and such failure
continues for a period of fifteen (15) days from the date of such failure or
neglect; (c) If Borrower or any other Obligor fails or neglects to perform,
keep, or observe, in any material respect, any term, provision, condition,
covenant, or agreement contained in SECTIONS 6.1 (Accounting System), 6.6
(Returns), or 6.8 (Maintenance of Equipment) of this Agreement and such failure
continues for a period of fifteen (15) days from the date Foothill sends
Borrower telephonic or written notice of such failure or neglect; or (d) If
Borrower or any other Obligor fails or neglects to perform, keep, or observe, in
any material respect, any other term, provision, condition, covenant, or
agreement contained in this Agreement, in any of the Loan Documents, or in any
other present or future agreement between one or more of the Obligors and
Foothill (other than any such term, provision, condition, covenant, or agreement
that is the subject of another provision of this SECTION 8);
(Page 104 of 142 Pages)
8.3 If there is a Material Adverse Change;
8.4 If any material portion of any Obligor's properties or assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any third Person;
8.5 If an Insolvency Proceeding is commenced by any Obligor;
8.6 If an Insolvency Proceeding is commenced against any Obligor and
any of the following events occur: (a) such Obligor consents to the institution
of the Insolvency Proceeding against it; (b) the petition commencing the
Insolvency Proceeding is not timely controverted; (c) the petition commencing
the Insolvency Proceeding is not dismissed within 45 calendar days of the date
of the filing thereof; PROVIDED, HOWEVER, that, during the pendency of such
period, Foothill shall be relieved of its obligation to extend credit hereunder;
(d) an interim trustee is appointed to take possession of all or a substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, any Obligor; or (e) an order for relief shall have
been issued or entered therein;
8.7 If any Obligor is enjoined, restrained, or in any way prevented
by court order from continuing to conduct all or any material part of its
business affairs;
8.8 If a notice of Lien, levy, or assessment is filed of record with
respect to any properties or assets of any of the Obligors by the United States
Government, or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, or if any taxes or debts owing
at any time hereafter to any one or more of such entities becomes a Lien,
whether xxxxxx or otherwise, upon any properties or assets of any of the
Obligors and the same is not paid on the payment date thereof;
8.9 If a judgment or other claim becomes a Lien or encumbrance upon
any material portion of any Obligor's properties or assets;
8.10 If there is a default in any material agreement to which an
Obligor is a party with one or more third Persons and such default (a) occurs at
the final maturity of the obligations thereunder, or (b) results in a right by
such third Person(s), irrespective of whether exercised, to accelerate the
maturity of an Obligor's obligations thereunder;
8.11 If an Obligor makes any payment on account of Indebtedness that
has been contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.12 If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or report made to Foothill
by any
(Page 105 of 142 Pages)
Obligor or any officer, employee, agent, or director of any Obligor, or if
any such warranty or representation is withdrawn;
8.13 If the obligation of any Guarantor or other third Person under
its guaranty or other Loan Document is limited or terminated by operation of law
or by such Guarantor or other third Person thereunder, or any such other third
Person becomes the subject of an Insolvency Proceeding; or
8.14 If any Obligor fails to keep in full force and effect, suffers
the termination or revocation of, terminates, forfeits, or suffers a materially
adverse amendment to, any Communications Franchise or Communications Franchise
Agreement at any time held by any Obligor that is necessary to the operation of
any Communications System owned by any Obligor.
9. FOOTHILL'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default Foothill may, at its election, without
notice of its election and without demand, do any one or more of the following,
all of which are authorized by Borrower (and hereby caused by Borrower to be
authorized by each of the other Obligors (and, by its execution and delivery of
the Guaranty or a joinder thereto, each of the Guarantors hereby authorizes
same)):
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement, under any of the Loan Documents, or
under any other agreement between Borrower and Foothill;
(c) Terminate this Agreement and any of the other Loan Documents
as to any future liability or obligation of Foothill, but without affecting
Foothill's rights and security interests in the Personal Property Collateral or
the Real Property Collateral and without affecting the Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Foothill considers advisable, and in
such cases, Foothill will credit Borrower's Loan Account with only the net
amounts received by Foothill in payment of such disputed Accounts after
deducting all Foothill Expenses incurred or expended in connection therewith;
(e) Borrower agrees that, upon the occurrence of and during the
continuance of an Event of Default and at Foothill's request, Borrower will, and
will cause each other Obligor to (and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to),
immediately file such
(Page 106 of 142 Pages)
applications for approval and shall take all other and further actions
required by Foothill to obtain such approvals or consents of regulatory
authorities as are necessary to transfer ownership and control to Foothill,
of the FCC Licenses held by it, or its interest in any Person holding any
such FCC License. To enforce the provisions of this SECTION 9.1(e), Foothill
is empowered to request the appointment of a receiver from any court of
competent jurisdiction. Such receiver shall be instructed to seek from the
FCC an involuntary transfer of control of any FCC License for the purpose of
seeking a bona fide purchaser to whom control will ultimately be transferred.
Borrower hereby agrees to authorize, and shall cause each other Obligor to
authorize (and, by its execution and delivery of the Guaranty or a joinder
thereto, each of the Guarantors hereby agrees to authorize), such an
involuntary transfer of control upon the request of the receiver so appointed
and, if Borrower or such other Obligor shall refuse to authorize the
transfer, its approval may be required by the court. Upon the occurrence and
continuance of an Event of Default, Borrower shall, and shall cause each of
the other Obligors to (and, by its execution and delivery of the Guaranty or
a joinder thereto, each of the Guarantors hereby agrees to), further use its
reasonable best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Agreement or
the Loan Documents, including, preparation, execution, and filing with the
FCC of the assignor's or transferor's portion of any application or
applications for consent to the assignment of any FCC License or 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,
together with any FCC License or other authorization. Borrower acknowledges,
and shall cause each of the other Obligors to acknowledge (and, by its
execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby acknowledges), that the assignment or transfer of FCC
Licenses is integral to Foothill's realization of the value of the
Collateral, that there is no adequate remedy at law for failure by Borrower
or any other Obligor to comply with the provisions of this SECTION 9.1(e) and
that such failure would not be adequately compensable in damages, and
therefore agrees that the agreements contained in this SECTION 9.1(e) may be
specifically enforced.
(f) Cause Borrower or any other Obligor to hold all Inventory in
trust for Foothill, segregate all Inventory from all other property of the
Obligors or in the Obligors' possession and conspicuously label said Inventory
as the property of Foothill;
(g) Without notice to or demand upon any Obligor or any other
guarantor, make such payments and do such acts as Foothill considers necessary
or reasonable to protect its security interests in the Collateral. Borrower
agrees to assemble, and cause each of the other Obligors to (and, by its
execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees to) assemble, the Personal Property Collateral if
Foothill so requires, and to make the Personal Property Collateral available to
Foothill as Foothill may designate. Borrower authorizes, and hereby agrees to
cause each of the other Obligors promptly to authorize (and, by its execution
and delivery of the Guaranty or a joinder thereto, each of the Guarantors hereby
authorizes), Foothill to enter the premises where the Personal Property
Collateral is located, to take and maintain possession of the Personal Property
(Page 107 of 142 Pages)
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or Lien that in Foothill's determination appears to
conflict with its security interests and to pay all expenses incurred in
connection therewith. With respect to any owned or leased premises of any of
the Obligors, Borrower hereby grants, and hereby causes each of the other
Obligors immediately to grant (and, by its execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby grants), Foothill a
license to enter into possession of such premises and to occupy the same,
without charge, for up to 120 days in order to exercise any of Foothill's rights
or remedies provided herein, at law, in equity, or otherwise;
(h) Without notice to any Obligor (such notice hereby being
expressly waived by Borrower and caused by Borrower to be waived by each of the
other Obligors, and, by its execution and delivery of the Guaranty or a joinder
thereto, each of the Guarantors hereby waives same), and without constituting a
retention of any collateral in satisfaction of an obligation (within the meaning
of Section 9505 of the Code), set off and apply to the Obligations any and all
(i) balances and deposits of Borrower or any of the other Obligors held by
Foothill, or (ii) indebtedness at any time owing to or for the credit or the
account of Borrower or any of the other Obligors held by Foothill;
(i) Hold, as cash collateral, any and all balances and deposits
of Borrower or any of the other Obligors held by Foothill to secure the full and
final repayment of all of the Obligations;
(j) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Personal Property Collateral. Borrower hereby grants, and agrees to
cause each of the other Obligors to grant (and, by its execution and delivery of
the Guaranty or a joinder thereto, each of the Guarantors hereby grants), to
Foothill a license or other right to use, without charge, the Obligors' labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Personal Property Collateral, in completing
production of, advertising for sale, and selling any Personal Property
Collateral and the Obligors' rights under all licenses and all franchise
agreements shall inure to Foothill's benefit;
(k) Sell the Personal Property Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including any of the Obligors'
premises) as Foothill determines is commercially reasonable. It is not
necessary that the Personal Property Collateral be present at any such sale;
(l) Foothill shall give notice of the disposition of the
Personal Property Collateral as follows:
(1) Foothill shall give the applicable Obligor and each
holder of a security interest in the Personal Property Collateral who has filed
with
(Page 108 of 142 Pages)
Foothill a written request for notice, a notice in writing of the time and
place of public sale, or, if the sale is a private sale or some other
disposition other than a public sale is to be made of the Personal Property
Collateral, then the time on or after which the private sale or other
disposition is to be made;
(2) The notice shall be personally delivered or mailed,
postage prepaid, to such Obligor as provided in SECTION 12, at least 5 days
before the date fixed for the sale, or at least 5 days before the date on or
after which the private sale or other disposition is to be made; no notice needs
to be given prior to the disposition of any portion of the Personal Property
Collateral that is perishable or threatens to decline speedily in value or that
is of a type customarily sold on a recognized market. Notice to Persons
claiming an interest in the Personal Property Collateral shall be sent to such
addresses as they have furnished to Foothill;
(3) If the sale is to be a public sale, Foothill also shall
give notice of the time and place by publishing a notice one time at least 5
days before the date of the sale in a newspaper of general circulation in the
countfy in which the sale is to be held;
(m) Foothill may credit bid and purchase at any public sale; and
(n) Any deficiency that exists after disposition of the Personal
Property Collateral as provided above will be paid immediately by Borrower. Any
excess will be returned, without interest and subject to the rights of third
Persons, by Foothill to Borrower.
9.2 REMEDIES CUMULATIVE. Foothill's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Foothill shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Foothill of one
right or remedy shall be deemed an election, and no waiver by Foothill of any
Event of Default shall be deemed a continuing waiver. No delay by Foothill
shall constitute a waiver, election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Obligor fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement or any other Loan Document, then, to
the extent that Foothill determines that such failure by that Obligor could
result in a Material Adverse Change, in its discretion and without prior notice
to any Obligor, Foothill may do any or all of the following: (a) make payment
of the same or any part thereof; (b) set up such reserves in Borrower's Loan
Account as Foothill deems necessary to protect Foothill from the exposure
created by such failure; or (c) obtain and maintain insurance policies of the
type described in SECTION 6.10, and take any action with respect to such
policies
(Page 109 of 142 Pages)
as Foothill deems prudent. Any such amounts paid by Foothill shall
constitute Foothill Expenses. Any such payments made by Foothill shall not
constitute an agreement by Foothill to make similar payments in the future or a
waiver by Foothill of any Event of Default under this Agreement. Foothill need
not inquire as to, or contest the validity of, any such expense, tax, or Lien
and the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guarantees at any time
held by Foothill on which Borrower or any other Obligor may in any way be
liable.
11.2 FOOTHILL'S LIABILITY FOR COLLATERAL. Borrower hereby agrees
that, and agrees to cause each of the other Obligors to agree that (and, by its
execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees that), so long as Foothill complies with its
obligations, if any, under Section 9207 of the Code, Foothill shall not in any
way or manner be liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner or
fashion from any cause; (c) any diminution in the value thereof; or (d) any act
or default of any carrier, warehouseman, bailee, forwarding agency, or other
Person. All risk of loss, damage, or destruction of the Collateral shall be
borne by Borrower and the other Obligors.
11.3 INDEMNIFICATION. Borrower shall pay, indemnify, defend, and hold
Foothill, each Participant, and each of their respective officers, directors,
employees, counsel, agents, and attorneys-in-fact (each, an "Indemnified
Person") harmless (to the fullest extent permitted by law) from and against any
and all claims, demands, suits, actions, investigations, proceedings, and
damages, and all reasonable attorneys fees and disbursements and other costs and
expenses actually incurred in connection therewith (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them in connection with or as a
result of or related to the execution, delivery, enforcement, performance, and
administration of this Agreement and any other Loan Documents or the
transactions contemplated herein, and with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event
or circumstance in any manner related thereto (INCLUDING THE NEGLIGENCE OF
BORROWER) (all the foregoing, collectively, the "Indemnified Liabilities").
Borrower shall have no obligation to any Indemnified Person under this SECTION
11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted proximately from the gross
negligence or willful misconduct of such Indemnified Person. This provision
shall survive the termination of this Agreement and the repayment of the
Obligations.
(Page 110 of 142 Pages)
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail (postage prepaid, return
receipt requested), overnight courier, or telefacsimile to Borrower or to
Foothill, as the case may be, at its address set forth below:
IF TO BORROWER: CHILDREN'S BROADCASTING CORPORATION
000 Xxxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxxxxx
Fax No. 000.000.0000
WITH COPIES TO: CHILDREN'S BROADCASTING CORPORATION
000 Xxxxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Fax No. 000.000.0000
IF TO FOOTHILL: FOOTHILL CAPITAL CORPORATION
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Business Finance Division Manager
Fax No. 000.000.0000
WITH COPIES TO: XXXXXXX, PHLEGER & XXXXXXXX LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No. 000.000.0000
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given
to the other. All notices or demands sent in accordance with this SECTION
12, other than notices by Foothill in connection with Sections 9504 or 9505
of the Code, shall be deemed received on the earlier of the date of actual
receipt or 3 days after the deposit thereof in the mail. Borrower, for
itself and each of the other Obligors, acknowledges and agrees that notices
sent by Foothill in connection with Sections 9504 or 9505 of the Code shall
be deemed sent when deposited in the mail or personally delivered, or, where
permitted by law, transmitted telefacsimile or other similar method set forth
above.
(Page 111 of 142 Pages)
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN AN ANOTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE
RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF FOOTHILL, IN ANY
OTHER COURT IN WHICH FOOTHILL SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS
AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.
EACH OF BORROWER (FOR ITSELF AND ON BEHALF OF EACH OF THE OTHER OBLIGORS) AND
FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE
TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13.
BORROWER (FOR ITSELF AND ON BEHALF OF EACH OF THE OTHER OBLIGORS) AND
FOOTHILL HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
EACH OF BORROWER (FOR ITSELF AND ON BEHALF OF EACH OF THE OTHER OBLIGORS) AND
FOOTHILL REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. DESTRUCTION OF OBLIGORS' DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered to Foothill may be destroyed or otherwise disposed of by Foothill 4
months after they are delivered to or received by Foothill, unless the
applicable Obligor requests, in writing, the return of said documents,
schedules, or other papers and makes arrangements, at Borrower's expense, for
their return.
(Page 112 of 142 Pages)
15. GENERAL PROVISIONS.
15.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower and Foothill.
15.2 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure
to the benefit of the respective successors and assigns of each of the
parties; PROVIDED, HOWEVER, that Borrower may not assign this Agreement or
any rights or duties hereunder without Foothill's prior written consent and
any prohibited assignment shall be absolutely void. No consent to an
assignment by Foothill shall release Borrower from its Obligations. Foothill
may assign this Agreement and the other Loan Documents and its rights and
duties hereunder and thereunder and no consent or approval by Borrower or any
other Obligor is required in connection with any such assignment. Foothill
reserves the right to sell, assign, transfer, negotiate, or grant
participations in all or any part of, or any interest in Foothill's rights
and benefits hereunder and under the other Loan Documents. In connection
with any such assignment or participation, Foothill may disclose all
documents and information which Foothill now or hereafter may have relating
to any Obligor or any Obligor's business. To the extent that Foothill
assigns its rights and obligations hereunder or under any other Loan Document
to a third Person, Foothill thereafter shall be released from such assigned
obligations to the relevant Obligor and such assignment shall effect a
novation between the relevant Obligor and such third Person.
15.3 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the
context, everything contained in each section applies equally to this entire
Agreement.
15.4 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Foothill or Borrower
or any other Obligor, whether under any rule of construction or otherwise.
On the contrary, this Agreement has been reviewed by all parties (including
Borrower for itself and on behalf of each of the other Obligors) and shall be
construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of all parties hereto.
15.5 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the
purpose of determining the legal enforceability of any specific provision.
15.6 AMENDMENTS IN WRITING. This Agreement can only be amended by
a writing signed by both Foothill and Borrower.
15.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to
be an original, and all of which, when taken together, shall constitute but
one and the same Agreement. Delivery of an executed counterpart of this
Agreement by telefacsimile
(Page 113 of 142 Pages)
shall be equally as effective as delivery of an original executed counterpart
of this Agreement. Any party delivering an executed counterpart of this
Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect
of this Agreement. The foregoing shall apply to each other Loan Document
MUTATIS MUTANDIS.
15.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence
or payment of the Obligations by Borrower or any guarantor of the Obligations
or the transfer by either or both of such parties to Foothill of any property
of either or both of such parties should for any reason subsequently be
declared to be void or voidable under any state or federal law relating to
creditors' rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, and other voidable or recoverable
payments of money or transfers of property (collectively, a "Voidable
Transfer"), and if Foothill is required to repay or restore, in whole or in
part, any such Voidable Transfer, or elects to do so upon the reasonable
advice of its counsel, then, as to any such Voidable Transfer, or the amount
thereof that Foothill is required or elects to repay or restore, and as to
all reasonable costs, expenses, and attorneys fees of Foothill related
thereto, the liability of Borrower or such guarantor automatically shall be
revived, reinstated, and restored and shall exist as though such Voidable
Transfer had never been made.
15.9 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the date hereof.
[remainder of page intentionally left blank]
(Page 114 of 142 Pages)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first written above.
CHILDREN'S BROADCASTING CORPORATION, a
Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Title: Chief Operating Officer
--------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ Xxxxx Xxxxxxxxx
------------------------------------
Title: Vice President
--------------------------------
(Page 115 of 142 Pages)
CONSENT, RATIFICATION, AND REAFFIRMATION BY GUARANTORS
Each of the undersigned Guarantors hereby consents to the
execution, delivery, and performance of the foregoing Amended and Restated
Loan and Security Agreement and agrees, ratifies, and reaffirms that its
obligations as a guarantor with respect to the Loan Documents, as heretofore
amended, and as amended by the foregoing amendment, remain in full force and
effect and are not impaired, diminished, or discharged in any respect.
Dated as of the date first set forth above:
CHILDREN'S RADIO OF LOS ANGELES, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF NEW YORK, INC.,
a New Jersey corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF MINNEAPOLIS, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
(Page 116 of 142 Pages)
CHILDREN'S RADIO OF GOLDEN VALLEY, INC., a
Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF MILWAUKEE, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF DENVER, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF KANSAS CITY, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
(Page 117 of 142 Pages)
CHILDREN'S RADIO OF DALLAS, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF HOUSTON, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF PHILADELPHIA, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF DETROIT, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
(Page 118 of 142 Pages)
CHILDREN'S RADIO OF CHICAGO, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
CHILDREN'S RADIO OF PHOENIX, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
WWTC-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
KYCR-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
(Page 119 pf 142 Pages)
WZER-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
KKYD-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
KCNW-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
KAHZ-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
(Page 120 of 142 Pages)
KTEK-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
WPWA-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
WCAR-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
WJDM-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
(Page 121 of 142 Pages)
KPLS-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
WAUR-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
KIDR-AM, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxxxxxx
------------------------------------
Title: Chief Operating Officer
---------------------------------
(Page 122 of 142 Pages)
