EXECUTION COPY
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GUARANTY
Dated as of August 31, 1999
from
COLLEGE TELEVISION NETWORK, INC.,
as Guarantor,
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in favor of
CANADIAN IMPERIAL BANK OF COMMERCE,
as Agent
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and
THE LENDERS PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
TABLE OF CONTENTS
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Page
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SECTION 1. Definitions.................................................... 1
SECTION 2. Guaranty....................................................... 1
SECTION 3. Guaranty Absolute.............................................. 2
SECTION 4. Reinstatement.................................................. 3
SECTION 5. Waivers........................................................ 4
SECTION 6. Payments....................................................... 4
SECTION 7. Representations and Warranties................................. 4
SECTION 8. Affirmative Covenants.......................................... 7
SECTION 9. Negative Covenants............................................. 9
SECTION 10. Amendments, Etc................................................ 10
SECTION 11. Notices, Etc................................................... 10
SECTION 12. No Waiver; Remedies............................................ 10
SECTION 13. Right of Set-off............................................... 10
SECTION 14. Continuing Guaranty; Assignments Under the Credit Agreement.... 10
SECTION 15. Governing Law.................................................. 11
GUARANTY
GUARANTY dated as of August 31, 1999 made by COLLEGE TELEVISION
NETWORK, INC., a Delaware corporation (the "Guarantor"), in favor of the lenders
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(the "Lenders") party to the Credit Agreement (as hereinafter defined) and
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CANADIAN IMPERIAL BANK OF COMMERCE, as agent (together with any successor agent
appointed pursuant to Article 8 of the Credit Agreement (as defined below), the
"Agent") for the Lenders.
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PRELIMINARY STATEMENT. The Lenders and the Agent have entered into a
Credit Agreement dated as of August 31, 1999 (such Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") with Armed Force Communications, Inc., a New York
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corporation doing business as Market Place Media and, immediately after the AF
Acquisition, a direct, wholly owned subsidiary of the Guarantor (the
"Borrower"). It is a condition precedent to the making of Loans by the Lenders
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under the Credit Agreement that the Guarantor, as owner of 100% of the
outstanding shares of Capital Stock of the Borrower, shall have executed and
delivered this Guaranty.
NOW, THEREFORE and in consideration of the premises and other
consideration, the receipt and sufficiency of which are hereby acknowledged in
order to induce the Lenders to make Loans under the Credit Agreement, the
Guarantor, intending to be legally bound, hereby agrees as follows:
SECTION 1. Definitions. As used in this Guaranty, terms defined in
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the Credit Agreement and not otherwise defined herein shall have the meanings
set forth in the Credit Agreement and the following terms shall have the
following meanings:
"Effective Leverage Ratio" shall mean, as of any date of determination, the
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ratio of (a) the excess of (i) Funded Debt over (ii) $5,000,000, divided by (b)
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Operating Cash Flow, for the four fiscal quarters then most recently ended.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
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business, operations, property, condition (financial or otherwise) or prospects
of the Borrower or any Corporate Guarantor, (b) the ability of the Guarantor
to perform its obligations under any Loan Document to which it is a party or
(c) the validity or enforceability of this Guarantee or any other Loan
Document, the Liens created hereunder or thereunder or the rights or remedies
of the Agent or the Lenders hereunder or thereunder.
SECTION 2. Guaranty. The Guarantor hereby unconditionally guarantees
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the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all Obligations of the Borrower now or hereafter existing under
the Loan Documents, whether for principal, interest, fees, expenses or otherwise
(such Obligations being the "Guaranteed Obligations"), and agrees to pay any and
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all expenses (including, without limitation, counsel fees
and expenses) incurred by the Agent or the Lenders in enforcing any rights under
this Guaranty; provided that
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(a) the Guaranteed Obligations and the liability of the Guarantor
hereunder, together with that of the other Corporate Guarantors under
their respective Corporate Guarantees, shall not exceed in the
aggregate $6,000,000, as such amount may be further reduced pursuant
to Section 14;
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(b) the Agent shall not seek payment under this Guaranty other than
(i) upon the occurrence and during the continuance of an Event of
Default described in Section 7.1(a) or Section 7.1(g) of the
Credit Agreement; or
(ii) at any time upon the Agent's or the Lender's acceleration of
payment obligations under the Credit Agreement or commencement
of the exercise of remedies by the Agent on behalf of the
Lenders in respect of any Event of Default.
(c) the Guarantor shall be liable hereunder only to the extent and to the
amount that WSP shall make a direct or indirect equity investment in
the Guarantor after the date hereof; provided that nothing contained
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herein shall require the Agent or any Lender to inquire as to the
source of any payment hereunder and the Guarantor and any party
claiming through or on behalf of the Guarantor shall have no right to
assert any claim as to the source of any payment.
SECTION 3. Guaranty Absolute. The Guarantor guarantees that the
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Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents and Section 2 of this Guaranty, regardless of any law, regulation
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or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Agent or the Lenders with respect thereto. The
Obligations of the Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of the Guarantor under this
Guaranty shall be absolute and unconditional irrespective of, and the Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any and all of the following:
(i) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to the Borrower or otherwise;
(iii) any taking, exchange, release or nonperfection of any Collateral, or
any taking, release, amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Guaranteed Obligations;
(iv) any manner of application of Collateral, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other disposition
of any Collateral for all or any of the Guaranteed Obligations or any other
assets of the Borrower;
(v) any change, restructuring or termination of the corporate structure
or existence of the Borrower; or
(vi) any other circumstance (including, without limitation, any statute of
limitations or any existence of or reliance on any representation by the Agent
or any Lender) that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor, other than payment in full in cash of
the Guaranteed Obligations.
SECTION 4. Reinstatement. The Guarantor agrees that this Guaranty
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(including, without limitation, Section 2 of this Guaranty) shall continue to be
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effective or be reinstated, as the case may be, if at any time, all or any
portion of any payment (whether in respect of principal, interest, fees, costs,
expenses or other amounts payable under this Guaranty, any Note or any other
Loan Document), is rescinded or must otherwise be restored by the Agent, any
Lender or the holder of any Note upon the bankruptcy or reorganization of the
Borrower or otherwise. For so long as any of the Obligations of the Borrower
shall remain outstanding or any Commitments shall remain in effect:
(a) all rights of the Guarantor against the Borrower, whether arising
as a result of rights of subrogation or otherwise, shall in all respects be
subordinate and junior in right of payment to the prior indefeasible
payment in full of all the Obligations to the Agent, the Lenders and other
holders of Notes, and, in the event the Guarantor receives any payment
prior to such indefeasible payment in full, the Guarantor shall receive
such payment in trust for, and shall immediately turn over all amounts to,
the Agent for application to the payment of such Obligations;
(b) until the 367th day after the Obligations are paid in full, the
Guarantor shall refrain from taking any action or commencing any proceeding
against the Borrower (or its successors or assigns, whether in connection
with a bankruptcy proceeding or otherwise) to recover any amounts in
respect of payments made under this Guaranty to the Agent, any Lender or
any holder of any Note; and
(c) until the 367th day after the Obligations are paid in full, the
Guarantor hereby waives any claim, right or remedy which the Guarantor may
now have or may hereafter acquire against the Borrower that arises
hereunder and/or from the performance by the
Guarantor hereunder including, without limitation, any claim, remedy or
right of subrogation, reimbursement, exoneration, contribution,
indemnification or participation in any claim, right or remedy of the
Lenders or the Agent against the Borrower or any security which the Lenders
or the Agent now have or hereafter acquire, whether or not such claim,
right or remedy arises in equity, under contract, by statute, under common
law or otherwise.
SECTION 5. Waivers. (a) The Guarantor hereby waives promptness,
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diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that the Agent or
any Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against the Borrower, any other
Corporate Guarantor or any other Person or any Collateral.
(b) Each of the Guarantor and the Agent, on behalf of itself and the
Lenders, hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents or any of the
transactions contemplated thereby, or the actions of the Agent or any Lender in
the negotiation, administration, performance or enforcement thereof.
(c) The Guarantor hereby irrevocably waives any duty on the part of the
Agent or any Lender to disclose to the Guarantor any matter, fact or thing
relating to the business, operation or condition of the Borrower and its assets
now or hereafter known by the Agent or any Lender.
SECTION 6. Payments. Any and all payments made by the Guarantor
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hereunder shall be made without setoff or counterclaim.
SECTION 7. Representations and Warranties. The Guarantor hereby
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represents and warrants as follows:
(a) The Guarantor (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
(b) The Guarantor has the power and authority, and the legal right, to
make, deliver and perform this Guaranty and each of the other Loan Documents to
which it is a party and to authorize the execution, delivery and performance of
this Guaranty and each of the other Loan
Documents to which it is a party. Except as set forth on Schedule 7(b), no
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consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required to be
obtained in connection with the execution, delivery, performance, validity or
enforceability of this Guaranty, the other Loan Documents and the AF Acquisition
Documents to which the Guarantor, the Borrower or any other Loan Party is a
party, except to the extent that failure to obtain or perform such consent,
authorization, notice or other act individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. This Guaranty has
been, and each other Loan Document to which the Guarantor, the Borrower or any
other Loan Party is a party will be, duly executed and delivered on behalf of
the Guarantor, the Borrower or such other Loan Party. This Guaranty constitutes,
and each other Loan Document to which the Guarantor is a party when executed and
delivered will constitute, a legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) The execution, delivery and performance of this Guaranty and each of
the other Loan Documents to which the Guarantor is a party, will not violate any
Requirement of Law or Contractual Obligation of the Guarantor, will not
accelerate or result in the acceleration of any payment obligations of the
Guarantor and will not result in, or require, the creation or imposition of any
Lien on any of the properties or revenues of the Guarantor pursuant to any such
Requirement of Law or Contractual Obligation other than as contemplated by the
Security Documents, except to the extent that such violation or Lien
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
(d) The Guarantor has, independently and without reliance upon the Lender
or the Agent and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty.
(e) The Guarantor is not in default under, or with respect to, any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
(f) The Guarantor is not a "holding company", a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended. The
Guarantor is not an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. The Guarantor is not subject to regulation under any Federal or
state statute, regulation, decree or order which limits its ability to incur
Indebtedness or conditions such ability upon any act, approval or consent of any
Governmental Authority (including, without limitation, the Small Business
Investment Company Act of 1958, as amended).
(g) After giving effect to the AF Acquisition and to the borrowings under
the Credit Agreement to be made on the Closing Date or such other date as Loans
requested thereunder are made, the Guarantor is Solvent.
(h) The audited balance sheet of the Guarantor as of October 31, 1997 and
December 31, 1998 and the related statements of income and changes in
stockholders equity for the fiscal years ended on such dates, reported on by
PricewaterhouseCoopers LLP, true, complete and correct copies of which have
heretofore been furnished to each Lender, present fairly in all material
respects the financial condition of the Guarantor as at such dates and the
results of its operations and stockholders' equity for each of the fiscal years
then ended. The unaudited balance sheet of the Guarantor as at June 30, 1999 and
the related unaudited statements of income for the six-month period ended on
such date, certified by a Responsible Officer of the Guarantor, copies of which
have heretofore been furnished to each Lender, present fairly in all material
respects the financial condition of the Guarantor at such date and the results
of its operations for the six-month period then ended (subject to normal year-
end audit adjustments). All such financial statements, including the related
schedules and notes thereto relating to the audited financial statements, have
been prepared in accordance with GAAP, except that such unaudited statements
lack footnotes and other presentation items, applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein).
(i) All information, reports and other papers and data (other than
projections) with respect to the Guarantor, UC Holdings or the Borrower (in each
case, prior to and after giving effect to the AF Acquisition), taken as a whole,
furnished to the Lenders by the Guarantor, UC Holdings or the Borrower, or on
behalf of the Guarantor, UC Holdings or the Borrower, were, at the time
furnished, complete and correct in all material respects, or have been
subsequently supplemented by other information, reports or other papers or data,
to the extent necessary to give the Lenders a true and accurate knowledge of the
subject matter in all material respects. All projections with respect to the
Guarantor, UC Holdings or the Borrower, furnished by the Guarantor, UC Holdings
or the Borrower, were prepared and presented in good faith by the Guarantor, UC
Holdings and the Borrower based upon facts and assumptions that the Guarantor,
UC Holdings and the Borrower believe to be reasonable in light of current and
foreseeable conditions. No document furnished or statement made in writing to
the Lenders by or on behalf of the Guarantor, UC Holdings or the Borrower in
connection with the negotiation, preparation or execution of this Guaranty
contains any untrue statement of a material fact, or omits to state any such
material fact necessary in order to make the statements contained therein not
misleading, in either case which has not been corrected, supplemented or
remedied by subsequent documents furnished or statements made in writing to the
Lenders. There is no fact known to the Guarantor, UC Holdings or the Borrower
which has, or could reasonably be expected to have, a Material Adverse Effect.
(j) The Guarantor has filed or caused to be filed all Federal, state,
local and foreign income tax returns and all other material tax returns
(including information returns) which are required to be filed and has paid all
taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any tax, fee or other charge the amount or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Guarantor; and no tax Lien has been filed (except for any such Lien
permitted under Section 6.3(a) of the Credit Agreement) and, no claim has been
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or is being asserted against the Guarantor in writing or, to the knowledge of
the taxpayer, otherwise, with respect to any such tax, fee or other charge.
SECTION 8. Affirmative Covenants. The Guarantor covenants and agrees
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that, subject to Section 14, so long as any part of the Guaranteed Obligations
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shall remain unpaid or any Lender shall have any Commitment under the Credit
Agreement, the Guarantor will:
(a) Payment of Obligations. Pay, discharge or otherwise satisfy at or
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before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Guarantor.
(b) Maintenance of Existence. Renew and keep in full force and effect its
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corporate existence, take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except to the extent such failure to maintain could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and comply,
in all material respects, with all Contractual Obligations and Requirements of
Law.
(c) Performance of AF Acquisition Documents. (i) Perform and observe all
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of the terms and provisions of each AF Acquisition Document to be performed or
observed by it, maintain each such AF Acquisition Document in full force and
effect and enforce each such AF Acquisition Document in accordance with its
terms, in each case except to the extent that the failure to so act could not
adversely affect the interest or rights of the Borrower or of the Agent or the
Lenders in any manner (it being acknowledged by the Guarantor that a change in
any financial or payment terms of any such AF Acquisition Document could
adversely affect such interest or rights), and take all such action to such end
as may be from time to time reasonably requested by the Agent and (ii) upon the
reasonable request of the Agent, make to each other party to each such AF
Acquisition Document such demands and requests for information and reports or
for action as the Guarantor is entitled to make under such AF Acquisition
Document.
(d) Financial Statements. Furnish to each Lender:
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(i) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Guarantor, a copy of the balance sheet of
the Guarantor as at the end of such year and the related statements of
income, stockholders equity and cash flows for such year, setting forth in
each case in comparative form the figures as of the end of and for the
previous year, reported on without a "going concern" or like qualification
or exception, or qualification arising out of the scope of the audit, by
PricewaterhouseCoopers LLP or other independent certified public
accountants of nationally recognized standing, together with a
consolidating balance sheet and consolidating statements of income and cash
flows of the Guarantor, reviewed by PricewaterhouseCoopers LLP or such
other independent certified public accountants; provided that the
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submission of the Borrower's report on Form 10-K shall satisfy the
foregoing requirements;
(ii) as soon as available, but in any event not later than 45 days
after the end of each quarterly period of the Guarantor, the unaudited
balance sheet of the Guarantor as at the end of such quarter and the
related unaudited statements of income and cash flows of the Guarantor for
such quarter and the portion of the fiscal year through the end of such
quarter and setting forth in each case in comparative form the figures from
the budget for such fiscal year furnished to the Lenders pursuant to
Section 8(f) and the actual figures for the corresponding date or period in
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the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments and the absence of footnotes); provided that submission of the
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Borrower's report on Form 10-Q shall satisfy the foregoing requirements;
and
(iii) as soon as available, but in any event not later than 30 days
after the end of each calendar month of the Guarantor, the regularly
prepared unaudited income statements of the Guarantor as at the end of such
month and the portion of the fiscal year through the end of such month,
setting forth in each case in comparative form the figures for the
comparable period from the budget for such fiscal year furnished to the
Lenders pursuant to Section 8(f) and the actual figures for the
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corresponding date or period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and except as to the unaudited statements subject to year-
end adjustments and the absence of footnotes).
(e) Tax-Sharing Agreement. In the event that the affiliated group of which
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the Guarantor is the common parent for Federal income tax purposes (the "CTN
Group") shall include any Person other than the Borrower, the members of the CTN
Group shall enter into a tax-sharing agreement, in form and substance acceptable
to the Agent, that provides for the payment by such members of their allocable
shares of the CTN Group's Federal income tax liability. Such tax-sharing
agreement shall be amended from time to time as may be necessary to include all
members that join the CTN Group. In addition, to the extent that the Guarantor
and the Borrower are members of a consolidated, combined or unitary group for
state income tax purposes that includes any Person other than the Guarantor and
the Borrower, the members of such group shall enter into a similar tax-sharing
agreement with respect to state income
taxes, in form and substance acceptable to the Agent, such agreement to be
amended from time to time as may be necessary to include all members that join
such group.
(f) Budget. Not later than 30 days after the end of each fiscal year of
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the Guarantor, the Guarantor will cause to be furnished to each Lender a copy of
the projections by the Guarantor of the operating budget and cash flow budget of
the Guarantor for the succeeding fiscal year set forth on a monthly basis, such
projections to be accompanied by a certificate of a Responsible Officer to the
effect that such projections have been prepared on the basis of sound financial
planning practices and that such Responsible Officer has no reason to believe
that such projections are incorrect or misleading in any material respect.
SECTION 9. Negative Covenants. The Guarantor covenants and agrees
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that, subject to Section 14, so long as any part of the Guaranteed Obligations
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shall remain unpaid or any Lender shall have any Commitment under the Credit
Agreement, the Guarantor will not:
(a) Liens, Etc. Create, incur, assume or suffer to exist any Lien on or
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with respect to any of its properties of any character (including, without
limitation, accounts), whether now owned or hereafter acquired, or sign or file
under the Uniform Commercial Code of any jurisdiction a financing statement that
names the Guarantor as debtor, or sign any security agreement authorizing any
secured party thereunder to file such financing statement, or assign any
accounts or other right to receive income, excluding, however, from the
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operation of the foregoing restrictions Liens permitted under the CTN Credit
Agreement or consented to by LaSalle Bank.
(b) Indebtedness. Create, incur, assume or suffer to exist any
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Indebtedness other than Indebtedness permitted under the CTN Credit Agreement or
consented to by LaSalle Bank.
(c) Limitation on Fundamental Changes. Enter into any merger,
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consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all its property,
business or assets.
(d) Amendments to Material Agreements. (i) Enter into or consent to any
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amendment of or waive any rights under any AF Acquisition Document or any other
agreement, instrument, certificate or other document executed in connection
therewith which restricts or diminishes in any material respects any right or
benefit enjoyed with respect to any of the foregoing by the Loan Parties, the
Agent or the Lenders or which could adversely affect the rights of the Agent and
the Lenders under the Loan Documents or the Liens of the Agent and the Lenders
created thereby.
(ii) Enter into or consent to any amendment of or waive any rights under
any provision of the CTN Credit Agreement or any other agreement, instrument,
certificate or other document executed in connection therewith which relates to
the Borrower or its business,
which individually or in the aggregate restricts or diminishes in any material
respects any right or benefit enjoyed with respect to any such provision by the
Borrower, the Agent or the Lenders or which could adversely affect the rights of
the Agent and the Lenders under the Loan Documents or the Liens of the Agent and
the Lenders created thereby.
SECTION 10. Amendments, Etc. No amendment or waiver of any provision
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of this Guaranty, and no consent to any departure by the Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Guarantor, the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 11. Notices, Etc. All notices, requests and demands to or
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upon the Guarantor or the Agent or any Lender to be effective shall be in
writing or by telegraph or telex and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or, in the case of mail, three days after deposit in the postal system, first
class postage prepaid, or, in the case of telegraphic notice, when sent,
answerback received, addressed to a party at the address provided for such party
on Schedule I or set forth under its signature below, as the case may be.
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SECTION 12. No Waiver; Remedies. No failure on the part of the Agent
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or any Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof or consent thereto; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 13. Right of Set-off. In the event that any amounts are owed
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under this Guarantee, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Guarantor against any and all the obligations of
the Guarantor now or hereafter existing under this Guaranty, whether or not such
Lender shall have made any demand under this Guaranty and although such
obligations may be unmatured. Each Lender agrees promptly to notify the
Guarantor after any such set-off and application made by such Lender; provided
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that the failure to give such notice shall not affect the validity of such set-
off and application. The rights of each Lender under this Section 13 are in
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addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
SECTION 14. Continuing Guaranty; Assignments Under the Credit
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Agreement. (a) Subject to Sections 14(b) and 14(c), this Guaranty is a
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continuing guaranty and shall (i) remain in full force and effect until the
later of (x) the payment in full in cash of the Guaranteed Obligations and all
other amounts payable under this Guaranty and (y) the Revolving Credit
Commitment Termination Date, (ii) be binding upon the Guarantor, its successors
and assigns and (iii) inure to the benefit of, and be enforceable by, the Agent,
the Lenders and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (iii), any Lender may assign or otherwise transfer all
or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitment or
Commitments, the payments owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender, herein or otherwise, in each
case as provided in Article 9 of the Credit Agreement.
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(b) The Guarantor's liability hereunder and the amount referred to in
Section 2(a) shall be reduced (i) to $5,000,000 in the aggregate upon the
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Borrower's demonstration to the reasonable satisfaction of the Agent that the
Effective Leverage Ratio is less than 3.00 to 1.00 (computed as of the most
recently completed fiscal quarter) ; and (ii) from time to time by an amount
equal to the amount of any direct or indirect equity contribution(s) to the
Borrower made from time to time by WSP, UC Holdings or the Guarantor; provided
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that the Guarantor's liability hereunder and the amount referred to in Section
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2(a) shall be reduced solely to the extent to which such equity contribution(s)
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shall have been used to make optional prepayments of principal of the Loans, and
which prepayments shall be applied, at the election of the Borrower, to any
scheduled installments of principal of the Term Loans or to the Revolving Credit
Loans (with a concommitant reduction in the Revolving Credit Commitments).
(c) This Guarantee shall terminate, and none of the Guarantor, the Agent
or the Lenders shall have any further rights or obligations hereunder, upon the
Borrower's demonstration to the reasonable satisfaction of the Agent that the
Leverage Ratio is less than 3.25 to 1.00 (computed as of the most recently
completed fiscal quarter).
SECTION 15. Governing Law. This Guaranty shall be governed by, and
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construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
COLLEGE TELEVISION NETWORK, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: President
Address for notice:
College Television Network, Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx, Chief Executive Officer
Telecopy: 000-000-0000
ACKNOWLEDGED AND AGREED:
CANADIAN IMPERIAL BANK OF COMMERCE, as Agent
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Executive Director
