EXHIBIT 10.1
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
BY AND AMONG
ACME TELEVISION, LLC
AS BORROWER,
ACME COMMUNICATIONS, INC.,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
XXXXX FARGO FOOTHILL, INC.
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF AUGUST 8, 2003
TABLE OF CONTENTS
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1. DEFINITIONS AND CONSTRUCTION........................................................................... 1
1.1 Definitions................................................................................... 1
1.2 Accounting Terms.............................................................................. 36
1.3 Code.......................................................................................... 36
1.4 Construction.................................................................................. 36
1.5 Schedules and Exhibits........................................................................ 36
2. LOAN AND TERMS OF PAYMENT.............................................................................. 36
2.1 Revolver Advances............................................................................. 36
2.2 Reduction of Maximum Revolver Amount.......................................................... 37
2.3 Borrowing Procedures and Settlements.......................................................... 39
2.4 Payments...................................................................................... 46
2.5 Overadvances.................................................................................. 49
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.................... 49
2.7 Cash Management............................................................................... 50
2.8 Crediting Payments............................................................................ 52
2.9 Designated Account............................................................................ 52
2.10 Maintenance of Loan Account; Statements of Obligations........................................ 52
2.11 Fees.......................................................................................... 53
2.12 Letters of Credit............................................................................. 54
2.13 LIBOR Option.................................................................................. 57
2.14 Capital Requirements.......................................................................... 60
3. CONDITIONS; TERM OF AGREEMENT.......................................................................... 61
3.1 Conditions Precedent to the Initial Extension of Credit....................................... 61
3.2 Conditions Precedent to Intermediate Notes Repayment.......................................... 64
3.3 Conditions Precedent to all Extensions of Credit.............................................. 66
3.4 Term.......................................................................................... 66
3.5 Effect of Termination......................................................................... 66
3.6 Early Termination by Borrower................................................................. 67
4. CREATION OF SECURITY INTEREST.......................................................................... 68
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TABLE OF CONTENTS
(continued)
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4.1 Grant of Security Interest.................................................................... 68
4.2 Negotiable Collateral......................................................................... 69
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral........................ 69
4.4 Delivery of Additional Documentation Required................................................. 69
4.5 Power of Attorney............................................................................. 70
4.6 Right to Inspect.............................................................................. 70
4.7 Control Agreements............................................................................ 71
4.8 Release of Collateral......................................................................... 71
5. REPRESENTATIONS AND WARRANTIES......................................................................... 71
5.1 No Encumbrances............................................................................... 71
5.2 [Intentionally omitted]....................................................................... 71
5.3 [Intentionally omitted]....................................................................... 71
5.4 Equipment..................................................................................... 71
5.5 Location of Inventory and Equipment........................................................... 72
5.6 [Intentionally omitted]....................................................................... 72
5.7 Location of Chief Executive Office; FEIN...................................................... 72
5.8 Due Organization and Qualification; Subsidiaries.............................................. 72
5.9 Due Authorization; No Conflict................................................................ 73
5.10 Litigation.................................................................................... 74
5.11 No Material Adverse Change.................................................................... 75
5.12 Fraudulent Transfer........................................................................... 75
5.13 Employee Benefits............................................................................. 75
5.14 Environmental Condition....................................................................... 75
5.15 Brokerage Fees................................................................................ 75
5.16 Intellectual Property......................................................................... 76
5.17 Leases........................................................................................ 76
5.18 DDAs.......................................................................................... 76
5.19 Complete Disclosure........................................................................... 76
5.20 Indebtedness.................................................................................. 77
5.21 Licenses and Permits.......................................................................... 77
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TABLE OF CONTENTS
(continued)
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5.22 No Default in Main Station Licenses........................................................... 78
5.23 LMAs.......................................................................................... 78
5.24 Governmental Authority........................................................................ 78
5.25 Inactive Subsidiary........................................................................... 78
5.26 The Stations.................................................................................. 78
5.27 Signal Carriage............................................................................... 79
5.28 Proceeds of Intermediate Notes................................................................ 80
6. AFFIRMATIVE COVENANTS.................................................................................. 80
6.1 Accounting System............................................................................. 80
6.2 Collateral Reporting.......................................................................... 80
6.3 Financial Statements, Reports, Certificates................................................... 80
6.4 [Intentionally omitted]....................................................................... 83
6.5 Advertising Rebates........................................................................... 83
6.6 Maintenance of Properties..................................................................... 83
6.7 Taxes......................................................................................... 83
6.8 Insurance..................................................................................... 84
6.9 Location of Inventory and Equipment........................................................... 85
6.10 Compliance with Laws.......................................................................... 85
6.11 Leases........................................................................................ 86
6.12 Brokerage Commissions......................................................................... 86
6.13 Existence..................................................................................... 86
6.14 Environmental................................................................................. 86
6.15 Government Authorization...................................................................... 86
6.16 Off-the-Air Reports........................................................................... 87
6.17 License Status................................................................................ 87
6.18 Notices....................................................................................... 87
6.19 Preservation of FCC Licenses.................................................................. 87
6.20 Construction of Digital Television Broadcast Stations......................................... 87
6.21 Signal Carriage............................................................................... 87
6.22 Disclosure Updates............................................................................ 88
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TABLE OF CONTENTS
(continued)
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6.23 Repayment of the Intermediate Notes........................................................... 88
7. NEGATIVE COVENANTS..................................................................................... 88
7.1 Indebtedness.................................................................................. 88
7.2 Liens......................................................................................... 89
7.3 Restrictions on Fundamental Changes........................................................... 90
7.4 Disposal of Assets............................................................................ 90
7.5 Change Name................................................................................... 90
7.6 Guarantee..................................................................................... 90
7.7 Nature of Business............................................................................ 91
7.8 Prepayments and Amendments.................................................................... 91
7.9 Change of Control............................................................................. 91
7.10 Change Governing Documents.................................................................... 92
7.11 Distributions................................................................................. 92
7.12 Accounting Methods............................................................................ 93
7.13 Investments................................................................................... 93
7.14 Transactions with Affiliates.................................................................. 93
7.15 Suspension.................................................................................... 93
7.16 [Intentionally omitted]....................................................................... 93
7.17 Use of Proceeds............................................................................... 93
7.18 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees............ 93
7.19 Deposit Accounts and Securities Accounts...................................................... 94
7.20 Main Station Licenses......................................................................... 94
7.21 Local Marketing Agreements.................................................................... 94
7.22 Financial Covenants........................................................................... 95
7.23 Inactive Subsidiary........................................................................... 98
8. EVENTS OF DEFAULT...................................................................................... 98
9. THE LENDER GROUP'S RIGHTS AND REMEDIES................................................................ 101
9.1 Rights and Remedies.......................................................................... 101
9.2 Remedies Cumulative.......................................................................... 104
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TABLE OF CONTENTS
(continued)
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10. TAXES AND EXPENSES.................................................................................... 104
11. WAIVERS; INDEMNIFICATION.............................................................................. 105
11.1 Demand; Protest; etc......................................................................... 105
11.2 The Lender Group's Liability for Collateral.................................................. 105
11.3 Indemnification.............................................................................. 105
12. NOTICES............................................................................................... 106
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER............................................................ 107
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS............................................................ 108
14.1 Assignments and Participations............................................................... 108
14.2 Successors................................................................................... 111
15. AMENDMENTS; WAIVERS................................................................................... 111
15.1 Amendments and Waivers....................................................................... 111
15.2 Replacement of Holdout Lender................................................................ 112
15.3 No Waivers; Cumulative Remedies.............................................................. 113
16. AGENT; THE LENDER GROUP............................................................................... 113
16.1 Appointment and Authorization of Agent....................................................... 113
16.2 Delegation of Duties......................................................................... 114
16.3 Liability of Agent........................................................................... 115
16.4 Reliance by Agent............................................................................ 115
16.5 Notice of Default or Event of Default........................................................ 115
16.6 Credit Decision.............................................................................. 116
16.7 Costs and Expenses; Indemnification.......................................................... 116
16.8 Agent in Individual Capacity................................................................. 117
16.9 Successor Agent.............................................................................. 117
16.10 Lender in Individual Capacity................................................................ 118
16.11 Withholding Taxes............................................................................ 118
16.12 Collateral Matters........................................................................... 120
16.13 Restrictions on Actions by Lenders; Sharing of Payments...................................... 121
16.14 Agency for Perfection........................................................................ 122
16.15 Payments by Agent to the Lenders............................................................. 122
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TABLE OF CONTENTS
(continued)
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16.16 Concerning the Collateral and Related Loan Documents......................................... 122
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information....................................................... 123
16.18 Several Obligations; No Liability............................................................ 124
16.19 Legal Representation of Agent................................................................ 124
17. GENERAL PROVISIONS.................................................................................... 125
17.1 Effectiveness................................................................................ 125
17.2 Section Headings............................................................................. 125
17.3 Interpretation............................................................................... 125
17.4 Severability of Provisions................................................................... 125
17.5 Amendments in Writing........................................................................ 125
17.6 Counterparts; Telefacsimile Execution........................................................ 125
17.7 Revival and Reinstatement of Obligations..................................................... 125
17.8 FCC Approvals................................................................................ 126
17.9 Integration.................................................................................. 126
17.10 Amendment and Restatement of Existing Loan Agreement......................................... 126
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
"Agreement"), is entered into as of August 8, 2003 between and among, on the one
hand, the lenders identified on the signature pages hereof (such lenders,
together with their respective successors and assigns, are referred to
hereinafter each individually as a "Lender" and collectively as the "Lenders"),
XXXXX FARGO FOOTHILL, INC. (formerly known as Foothill Capital Corporation), a
California corporation, as the arranger and administrative agent for the Lenders
("Agent"), and, on the other hand, ACME TELEVISION, LLC, a Delaware limited
liability company ("Borrower") and, solely for the purpose of making the
covenants, waivers, consents, and other agreements set forth in Sections 7.1,
7.2, 7.6, 7.8, 9.2, 11.3(b), 13, 14.2, 17.1, 17.3, 17.4, 17.5, 17.6, 17.9,
17.10, 17.12, and 17.13 and not as an Obligor, ACME COMMUNICATIONS, INC., a
Delaware corporation ("ACME Parent").
The parties agree to amend and restate in its entirety that
certain Loan and Security Agreement (as amended from time to time prior to the
date hereof, the "Existing Loan Agreement"), dated as of February 13, 2002, by
and among Borrower, the lenders that are parties thereto, and Agent, as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms
shall have the following definitions:
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, chattel paper,
or a General Intangible.
"Accounts" means all of Borrower's or the Obligors', as the
context requires, now owned or hereafter acquired right, title, and interest
with respect to "accounts" (as that term is defined in the Code), and any and
all supporting obligations in respect thereof.
"ACME Intermediate" means ACME Intermediate Holdings, LLC, a
Delaware limited liability company.
"ACME Intermediate Finance" means ACME Intermediate Finance,
LLC, a Delaware limited liability company.
"ACME Parent" has the meaning set forth in the preamble to
this Agreement.
"ACME Subsidiary Holdings II" means ACME Subsidiary Holdings
II, LLC, a Delaware limited liability company.
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"ACME Subsidiary Holdings III" means ACME Subsidiary Holdings
III, LLC, a Delaware limited liability company.
"ACME Television Holdings" means ACME Television Holdings,
LLC, a Delaware limited liability company.
"Acquisition" has the meaning set forth in the definition of
"Permitted Acquisition."
"Acquisition Agreement" means the acquisition, purchase or
other agreement which sets forth the terms and conditions of a Permitted
Acquisition.
"Acquisition Documents" means an Acquisition Agreement and any
other agreement entered into from time to time in connection with such
Acquisition Agreement.
"Acquisition License Company" means a Subsidiary of Borrower
which is directly or indirectly wholly owned by Borrower and is formed for the
sole purposes of holding one or more FCC Licenses in the market served by a
television broadcast property owned and operated by the related respective
Operating Company and acquired by an Obligor pursuant to a Permitted
Acquisition, a Permitted Joint Venture Acquisition, or a Permitted Swap.
"Acquisition Operating Company" means Subsidiary of Borrower
which is directly or indirectly wholly owned by Borrower and is formed for the
sole purpose of owning and operating a television broadcast property in the
market served by such television broadcast property acquired by an Obligor
pursuant to a Permitted Acquisition, a Permitted Joint Venture Acquisition or a
Permitted Swap.
"Acquisition Projections" has the meaning set forth in clause
(viii) of the definition of "Permitted Acquisitions".
"Additional Documents" has the meaning set forth in Section
4.4.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, for purposes of Section 7.14 hereof: (a) any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other members of the
governing body of a Person or 10% or more of the partnership or other ownership
interests of a Person (other than as a limited partner or non-managing member of
such Person) shall be deemed to
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control such Person, (b) each director (or comparable manager) of a Person shall
be deemed to be an Affiliate of such Person, and (c) each partnership or joint
venture in which a Person is a partner or joint venturer shall be deemed to be
an Affiliate of such Person.
"Affiliation Agreement" means an affiliation agreement between
an Obligor and a major television network.
"Agent" means WFF, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"Agent's Account" means the account identified on Schedule
A-1.
"Agent Advances" has the meaning set forth in Section
2.3(e)(i).
"Agent's Liens" means the Liens granted by Borrower to Agent
for the benefit of the Lender Group under this Agreement or the other Loan
Documents.
"Agent-Related Persons" means Agent together with its
Affiliates, officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Amortization of Syndicated Program Rights" means the charge
taken against net income in a period of time with respect to the amortization of
current and future series or features Syndicated Program Payments in accordance
with GAAP.
"Applicable Federal Percentage" means for any taxable year the
marginal federal tax bracket of ACME Parent, as calculated by reference to the
federal income tax returns of ACME Parent for the immediately preceding year as
delivered by ACME Parent to Agent.
"Applicable Prepayment Premium" means 1% times the Maximum
Revolver Amount.
"Applicable Eligible Value" means, as of any date of
determination, the Eligible OLV Value or the Eligible STAC Value, to be
determined by whether, as of such date, an OLV Value appraisal or a STAC Value
appraisal with respect to the Stations was most recently delivered to Agent;
provided that without limiting Agent's right to cause appraisals of the
Collateral to be conducted under this Agreement and so long as no Event of
Default has occurred and is continuing, an appraisal ordered by Agent may only
be the basis for re-calculating the Applicable Eligible Value if it is the same
type of appraisal (STAC Value or OLV Value) as the appraisal that is then in
effect for determining the Applicable Eligible Value.
"Assignee" has the meaning set forth in Section 14.1.
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"Assignment and Acceptance" means an Assignment and Acceptance
in the form of Exhibit A-1.
"Authorized Person" means any officer or other management
employee of Borrower.
"Availability" means, as of any date of determination, if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day, if such date of determination is not a
Business Day, the amount that Borrower is entitled to borrow as Advances under
Section 2.1 (after giving effect to all then outstanding Obligations and all
sublimits and reserves applicable hereunder).
"Bankruptcy Code" means the United States Bankruptcy Code, as
in effect from time to time.
"Base LIBOR Rate" means the rate per annum, determined by
Agent in accordance with its customary procedures, and utilizing such electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/16%), on the basis of the rates at which Dollar
deposits are offered to major banks in the London interbank market on or about
11:00 a.m. (California time) 2 Business Days prior to the commencement of the
applicable Interest Period, for a term and in amounts comparable to the Interest
Period and amount of the LIBOR Rate Loan requested by Borrower in accordance
with this Agreement, which determination shall be conclusive in the absence of
manifest error.
"Base Rate" means, the rate of interest announced from time to
time within Xxxxx Fargo at its principal office in San Francisco as its "prime
rate", with the understanding that the "prime rate" is one of Xxxxx Fargo's base
rates (not necessarily the lowest of such rates) and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Xxxxx Fargo may
designate.
"Base Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means 4.0 percentage points.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which Borrower or any Subsidiary or ERISA Affiliate
of Borrower has been an "employer" (as defined in Section 3(5) of ERISA) within
the past six years.
"Board of Directors" means the board of directors (or
comparable managers) of Borrower or any committee thereof duly authorized to act
on behalf of the board.
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"Books" means Borrower's, or the Obligors', as the case may
be, now owned or hereafter acquired books and records (including all of its
Records indicating, summarizing, or evidencing its assets (including the
Collateral) or liabilities, all of Borrower's, or the Obligors', as the case may
be, Records relating to its or their business operations or financial condition,
and all of its or their goods or General Intangibles related to such
information).
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances
made on the same day by the Lenders (or Agent on behalf thereof), or by Swing
Lender in the case of a Swing Loan, or by Agent in the case of an Agent Advance.
"Borrowing Base" has the meaning set forth in Section 2.1.
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term "Business Day" also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.
"Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means any Indebtedness
represented by obligations under a Capital Lease; the amount of such
Indebtedness for purposes of this Agreement being the capitalized amount
thereof, determined in accordance with GAAP.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Xxxxx'x,
(c) commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or Xxxxx'x, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
Xxxxx'x, or (ii) certificates of deposit less than or equal to $100,000 in the
aggregate issued by any other bank insured by the Federal Deposit Insurance
Corporation.
"Cash Management Account" has the meaning set forth in Section
2.7(a).
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"Cash Management Agreement" means that certain cash management
service agreement, in form and substance satisfactory to Agent, among Borrower,
Agent, and the Cash Management Bank.
"Cash Management Bank" has the meaning set forth in Section
2.7(a).
"Change of Control" means (a) any "person" or "group" (within
the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than
Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 20%, or more, of the Stock of
Borrower having the right to vote for the election of members of the Board of
Directors and the Permitted Holders, in the aggregate, are the beneficial
owners, directly or indirectly, of less than 30% of such Stock, or (b) a
majority of the members of the Board of Directors do not constitute Continuing
Directors or directors appointed by the Permitted Holders, or (c) Borrower
ceases to own and control 99%, or more, of the outstanding capital Stock of each
of its Subsidiaries (except in the case of Investments permitted hereunder).
"Closing Date" means May 1, 2002.
"Code" means the California Uniform Commercial Code, as in
effect from time to time.
"Collateral" means all of Borrower's now owned or hereafter
acquired right, title, and interest in and to each of the following:
(a) Accounts,
(b) Books,
(c) Deposit Accounts,
(d) Equipment,
(e) General Intangibles,
(f) Inventory,
(g) Investment Property (other than the stock of
Inactive Subsidiary),
(h) Negotiable Collateral,
(i) Real Property Collateral,
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(j) money or other assets of Borrower that now
or hereafter come into the possession, custody, or control of any member of the
Lender Group, and
(k) the proceeds and products, whether tangible
or intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Deposit Accounts,
Equipment, General Intangibles, Inventory, Investment Property, Negotiable
Collateral, Real Property, money, 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.
"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor (other than lessors of
Equipment not in possession of such Equipment), warehouseman, processor,
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 reasonably satisfactory to Agent.
"Collateral Assignments of Key Leases" means one or more
collateral assignments, mortgages or deeds of trust, in form and substance
reasonably satisfactory to Agent, between one or more Obligors and Agent
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 Agent, between one or more Obligors and Agent
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 of Borrower and its Subsidiaries).
"Commitment" means, with respect to each Lender, its
Commitment, and, with respect to all Lenders, their Commitments, in each case as
such Dollar amounts are set forth beside such Lender's name under the applicable
heading on Schedule C-1 or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of Section 14.1.
"Commitment Increase Fee" means a fee in the amount of
$200,000, to be shared by all Lenders at the time of payment thereof based upon
their respective Pro Rata Shares.
"Commitment Increase Option" has the meaning set forth in
Section 17.11.
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"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 delivered by the chief financial officer of Borrower to
Agent.
"Continuing Director" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Borrower on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Borrower (as such terms are used in Rule 14a-11 under
the Exchange Act) and whose initial assumption of office resulted from such
contest or the settlement thereof.
"Control Agreement" means a control agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by one or
more Obligors, Agent, and the applicable securities intermediary with respect to
a Securities Account or bank with respect to a Deposit Account.
"Daily Balance" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"Dayton Station" means WBDT-26 Dayton, Ohio.
"DDA" means any checking or other demand Deposit Account
maintained by Borrower.
"Decatur Station" means WBUI-23 Decatur, Illinois.
"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.
"Defaulting Lender" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) the Base Rate for the first
3 days from and after the date the relevant payment is due, and (b) thereafter,
at the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).
"Deposit Account" means any deposit account (as that term is
defined in the Code).
"Designated Account" means that certain DDA of Borrower
identified on Schedule D-1.
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"Disbursement Letter" means an instructional letter executed
and delivered by Borrower to Agent regarding the extension of credit to be made
on the Intermediate Notes Repayment Closing Date, the form and substance of
which is satisfactory to Agent.
"Dollars" or "$" means United States dollars.
"EBITDA" means, with respect to any fiscal period, Borrower's
and its Subsidiaries' consolidated net earnings (or loss), minus interest
income, extraordinary gains, and Syndicated Program Payments plus interest
expense, income taxes, depreciation and amortization, LMA Fees, Amortization of
Syndicated Program Rights, and other non-cash charges for such period, as
determined in accordance with GAAP.
"Eligible OLV Value" means, as of any date of determination,
the OLV Value of those Stations as to which Borrower has delivered to Agent (a)
a Collateral Assignment of Key Leases with respect to the Key Leases of such
Stations, (b) a Collateral Assignment of Tower Leases with respect to the Tower
Leases of such Stations, and (c) any required consents to hypothecation from the
lessors under such Key Leases and Tower Leases.
"Eligible STAC Value" means, as of any date of determination,
the STAC Value of those Stations as to which Borrower has delivered to Agent (a)
a Collateral Assignment of Key Leases with respect to the Key Leases of such
Stations, (b) a Collateral Assignment of Tower Leases with respect to the Tower
Leases of such Stations, and (c) any required consents to hypothecation from the
lessors under such Key Leases and Tower Leases.
"Eligible Transferee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having unimpaired
capital in excess of $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has unimpaired capital in excess of $100,000,000, provided that such bank
is acting through a branch or agency located in the United States, (c) a finance
company, insurance company, 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 having (together with its Affiliates)
unimpaired capital in excess of $100,000,000, (d) any Affiliate (other than
individuals) of a Lender that was party hereto as of the Closing Date, (e) so
long as no Event of Default has occurred and is continuing, any other Person
approved by Agent and Borrower, or (f) during the continuation of an Event of
Default, any other Person approved by Agent.
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, written claim, litigation, investigation,
judicial or administrative proceeding, judgment, letter, or other written
communication from any Governmental Authority, or any third party asserting
violations of Environmental Laws or releases of Hazardous Materials from (a) any
assets, properties, or businesses of the Obligors or any or their predecessors
in
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interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by the Obligors or any
of their predecessors in interest.
"Environmental Law" means any applicable federal, state, or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on the Obligors,
relating to the environment, employee health and safety, or Hazardous Materials,
including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC Section
1251 et seq; the Toxic Substances Control Act, 15 USC, Section 2601 et seq; the
Clean Air Act, 42 USC Section 7401 et seq.; the Safe Drinking Water Act, 42 USC.
Section 3803 et seq.; the Oil Pollution Act of 1990, 33 USC, Section 2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
USC. Section 11001 et seq.; the Hazardous Material Transportation Act, 49 USC
Section 1801 et seq.; and the Occupational Safety and Health Act, 29 USC.
Section 651 et seq. (only to the extent it regulates occupational exposure to
Hazardous Materials); any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action against any Obligor.
"Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"Equipment" means all of Borrower's or the Obligors', as the
context requires, now owned or hereafter acquired right, title, and interest
with respect to equipment, machinery, machine tools, motors, furniture,
furnishings, fixtures, vehicles (including motor vehicles and trailers), tools,
parts, goods (other than consumer goods, farm products, or Inventory), wherever
located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"Equipment Financing Letter Agreement" means that certain
letter agreement executed and delivered by WFF, GE Capital, and Borrower with
respect to certain financing that Borrower or its Subsidiaries may seek to
obtain after the Restatement Closing Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
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"ERISA Affiliate" means (a) any Person 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 Person 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).
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to Availability minus the aggregate
amount, if any, of all trade payables of Borrower and its Subsidiaries aged in
excess of 120 days from due date (excluding from such calculation the contingent
payable of approximately $1,500,000 owed as a result of Borrower's acquisition
of KPLR) and all book overdrafts in excess of historical practices with respect
thereto, in each case as determined by Agent in its Permitted Discretion.
"Excess Liquidity" means the amount, as of the date any
determination thereof is to be made, equal to (a) Excess Availability
(calculated without regard to any Default or Event of Default other than a
Triggering Event), plus (b) the amount of cash and Cash Equivalents then held by
the Obligors that are subject to Control Agreements in favor of Agent.
"Exchange Act" means the Securities Exchange Act of 1934, as
in effect from time to time.
"Existing Loan Agreement" has the meaning set forth in the
preamble to this Agreement.
"FAA" means the Federal Aviation Administration (or any
successor agency, commission, bureau, department or other political subdivision
of the United States of America).
"Family Member" means, with respect to any individual, any
other individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"Family Trusts" means, with respect to any individual, trusts
or other estate planning vehicles established for the benefit of Family Members
of such individual and in respect of which such individual serves as trustee or
in a similar capacity.
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"FCC" means the United States Federal Communications
Commission (or any successor agency, commission, bureau, department or other
political subdivision of the United States of America).
"FCC License" means any license, permit, certificate of
compliance, franchise, approval or authorization, issued by the FCC for the
operation of a Station.
"Fee Letter" means that certain amended and restated fee
letter, dated as of even date herewith, between Borrower and Agent, in form and
substance satisfactory to Agent.
"FEIN" means Federal Employer Identification Number.
"First Albuquerque Station" means KWBQ-19 Albuquerque, New
Mexico.
"Flint-Saginaw-Bay City Acquisition" means the Acquisition of
one or more broadcast licenses in the Flint-Saginaw-Bay City area of Michigan,
in consideration of the receipt by the applicable Seller of a Purchase Price not
to exceed $3,000,000.
"Foreign Person" has the meaning set forth in Section 14.1.
"Fort Xxxxx Station" means XXXX-00 Xxxx Xxxxx, Xxxxxxx.
"Funded Debt" means, without duplication and calculated on a
consolidated basis, all Indebtedness with respect to any of the following: (a)
money borrowed (whether recourse or non-recourse (but only to the extent of the
value of the collateral if non-recourse)), including principal and overdue
interest and premiums, (b) Rate Hedging Obligations, (c) obligations evidenced
by a bond, debenture, note or other like written obligation to pay money, (d)
Capitalized Lease Obligations, (e) obligations under conditional sales or other
title retention agreements or secured by any Lien, (f) any letters of credit,
bankers acceptances or similar instruments (including reimbursement obligations
with respect thereto), (g) the deferred unpaid purchase price of property or
services, except trade payables and accrued expenses incurred in the ordinary
course of business, or (h) any guaranty of any or all of the foregoing.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section
2.13(b)(ii).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"GE Capital" means General Electric Capital Corporation, a
Delaware corporation
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"General Intangibles" means all of Borrower's or the
Obligors', as the context requires, now owned or hereafter acquired right,
title, and interest with respect to general intangibles (including payment
intangibles, contract rights, rights to payment, 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), infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, insurance premium rebates, tax refunds, and tax refund claims),
and any and all supporting obligations in respect thereof, and any other
personal property other than goods (including Equipment and Inventory),
Accounts, Books, Investment Property, and Negotiable Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or
other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Green Bay Station" means XXXX-00 Xxxxx Xxx, Xxxxxxxxx.
"Guarantor Security Agreement" means an amended and restated
security agreement executed and delivered by each of the Guarantors and Agent,
the form and substance of which is satisfactory to Agent.
"Guarantors" means any one or more of ACME Subsidiary Holdings
III, ACME Television of Florida, LLC, a Delaware limited liability company, ACME
Television of Illinois, LLC, a Delaware limited liability company, ACME
Television of Madison, LLC, a Delaware limited liability company, ACME
Television of New Mexico, L.L.C., a Delaware limited liability company, ACME
Television of Ohio, LLC, a Delaware limited liability company, ACME Television
of Oregon, LLC, a Delaware limited liability company, ACME Television of
Tennessee, LLC, a Delaware limited liability company, ACME Television of Utah,
L.L.C., a Delaware limited liability company, ACME Television of Wisconsin, LLC,
a Delaware limited liability company, ACME Television Licenses of Florida, LLC,
a Delaware limited liability company, ACME Television Licenses of Illinois, LLC,
a Delaware limited liability company, ACME Television Licenses of Madison, LLC,
a Delaware limited liability company, ACME Television Licenses of New Mexico,
L.L.C., a Delaware limited liability company, ACME Television Licenses of Ohio,
LLC, a Delaware limited liability company, ACME Television Licenses of Oregon,
LLC, a Delaware limited liability company, ACME Television Licenses of
Tennessee, LLC, a Delaware limited liability company, ACME Television Licenses
of Utah, L.L.C., a Delaware limited liability company, and ACME Television
Licenses of Wisconsin, LLC, a Delaware limited liability company, and each
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License Company or Operating Company formed or acquired by Borrower or its
Subsidiaries after the date hereof.
"Guaranty" means that certain amended and restated general
continuing guaranty executed and delivered by each of the Guarantors in favor of
Agent, for the benefit of the Lender Group, in form and substance satisfactory
to Agent.
"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 contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedge Agreement" means any and all transactions, agreements,
or documents now existing or hereafter entered into between Borrower or its
Subsidiaries which provide for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging Borrower's
or its Subsidiaries' exposure to fluctuations in interest or exchange rates,
loan, credit exchange, security or currency valuations or commodity prices.
"Hold-Back Amount" means, with respect to any Permitted
Disposition of a Station, the aggregate amount of all payments payable to the
Obligors, directly or indirectly, in connection with such disposition, whether
at the time thereof or after such disposition, under earn-outs, indemnities or
other contingent obligations, escrowed funds, or other similar arrangements
entered into in connection with such disposition.
"Inactive Subsidiary" means ACME Finance Corporation, a
Delaware corporation.
"Indebtedness" means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all Capital Lease Obligations, (d) all obligations or liabilities of others
secured by a Lien on any asset of ACME Parent or its Subsidiaries, irrespective
of whether such obligation or liability is assumed, (e) all obligations for the
deferred purchase price of assets (other than trade debt incurred in the
ordinary course of business and repayable in accordance with customary trade
practices), and
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(f) any obligation guaranteeing or intended to guarantee (whether directly or
indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any
of the foregoing obligations of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section
11.3.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal 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.
"Insurance Proceeds Reserve" means, as of any date of
determination, the amount of monies that have been paid to Agent pursuant to
Section 6.8(b) and that remain available to be disbursed to Borrower for the
repair, replacement, or restoration of the asset that was damaged, destroyed, or
condemned. For clarity, it is understood that the amount of the Insurance
Proceeds Reserve reduces as monies are disbursed to Borrower for the repair,
replacement, or restoration of the asset that was damaged, destroyed or
condemned.
"Intangible Assets" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.
"Intercompany Advances" means loans or advances (a) from
Borrower or one of its Subsidiaries to Borrower or one of its Subsidiaries, (b)
from Borrower to one of the Parent Companies, or (c) from one of the Parent
Companies to a Subsidiary of such Parent Company.
"Intercompany Subordination Agreement" means an amended and
restated subordination agreement executed and delivered by each of the Parent
Companies, each of the Obligors, and Agent, the form and substance of which is
satisfactory to Agent.
"Interest Period" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, 3, or 6 months thereafter; provided, however, that (a) if any Interest
Period would end on a day that is not a Business Day, such Interest Period shall
be extended (subject to clauses (c)-(e) below) to the next succeeding Business
Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate
from and including the first day of each Interest Period to, but excluding, the
day on which any Interest Period expires, (c) any Interest Period that would end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no
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numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, 3, or 6 months after the date on which the Interest Period
began, as applicable, and (e) Borrower may not elect an Interest Period which
will end after the Maturity Date.
"Intermediate Indenture" means the Indenture dated September
30, 1997 among ACME Intermediate, ACME Intermediate Finance, and Wilmington
Trust Company, as Trustee.
"Intermediate Notes" means the 12% Senior Secured Discount
Notes due 2005 issued by ACME Intermediate and ACME Intermediate Finance
pursuant to the Intermediate Indenture in the aggregate original amount of
approximately $71,634,000, and the current outstanding principal amount of
$30,000,000.
"Intermediate Notes Repayment Closing Conditions" has the
meaning set forth in Section 3.2.
"Intermediate Notes Repayment Closing Date" means the date on
which all of the Intermediate Notes Repayment Closing Conditions are fulfilled
to the satisfaction of Agent.
"Intermediate Notes Reserve" means an amount equal to the
result of (a) $32,700,000 less as of any date of determination, the sum of
(b)(i) the aggregate principal amount of Intermediate Notes repurchased in the
open market, as of such date, as permitted under clause (d) of the definition of
"Permitted Restricted Payments", plus (ii) 3% of the amount in clause (i), plus
(iii) the amount of interest that would have accrued on the principal amount of
Intermediate Notes that are repurchased from the date of such repurchase through
October 1, 2003, until such time as the Intermediate Notes Repayment Closing
Conditions have been fulfilled to the satisfaction of Agent and Borrower, and
then, $0.
"Inventory" means all of Borrower's or the Obligors', as the
context requires, now owned or hereafter acquired right, title, and interest
with respect to inventory, including goods held for sale or lease or to be
furnished under a contract of service, goods that are leased by any such Obligor
as lessor, goods that are furnished by such Obligor under a contract of service,
and raw materials, work in process, or materials used or consumed in the
Obligor's business.
"Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
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"Investment Property" means all of Borrower's or the
Obligors', as the context requires, now owned or hereafter acquired right,
title, and interest with respect to "investment property" as that term is
defined in the Code, and any and all supporting obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"Issuing Lender" means WFF or any other Lender that, at the
request of Borrower and with the consent of Agent agrees, in such Lender's sole
discretion, to become an Issuing Lender for the purpose of issuing L/Cs or L/C
Undertakings pursuant to Section 2.12.
"Janesville-Madison Station" means WHPN Janesville-Madison,
Wisconsin.
"Key Leases" has the meaning set forth in Section 5.17.
"Knoxville Station" means WBXX-20 Knoxville, Tennessee.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section
2.12(a).
"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by Borrower under
any of the Loan Documents that are paid or incurred by the Lender Group, (b)
actual out-of-pocket fees or charges paid or incurred by Agent in connection
with the Lender Group's transactions with Borrower, including, actual
out-of-pocket 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 or business valuations to the extent of the fees and charges (and up
to but not exceeding the amount of any limitation) contained in this Agreement),
real estate surveys, real estate title policies and endorsements, and
environmental audits, (c) actual out-of-pocket costs and expenses incurred by
Agent in the
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disbursement of funds to Borrower (by wire transfer or otherwise), (d) charges
paid or incurred by Agent resulting from the dishonor of checks, (e) reasonable
costs and expenses paid or incurred by the Lender Group 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, (f) audit fees and expenses of
Agent related to audit examinations of the Books to the extent of the fees and
charges (and up to but not exceeding the amount of any limitation) contained in
this Agreement, (g) reasonable costs and expenses of third party claims or any
other suit paid or incurred by the Lender Group in enforcing or defending the
Loan Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group's relationship with Borrower or any guarantor of
the Obligations, (h) Agent's reasonable fees and expenses (including reasonable
attorneys fees) incurred in advising, structuring, drafting, reviewing,
administering, or amending the Loan Documents, (i) Agent's and each Lender's
reasonable fees and expenses (including attorneys fees) incurred in terminating,
enforcing (including attorneys fees and expenses incurred in connection with a
"workout," a "restructuring," or an Insolvency Proceeding concerning Borrower or
in exercising rights or remedies under the Loan Documents), or defending the
Loan Documents, irrespective of whether suit is brought, or in taking any
Remedial Action concerning the Collateral, and (j) the reasonable fees and
expenses of GE Capital's attorneys incurred in advising, structuring, drafting,
and reviewing this Agreement and the other Loan Documents.
"Lender-Related Person" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Usage" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of Credit
plus 100% of the amount of outstanding time drafts accepted by an Underlying
Issuer as a result of drawings under Underlying Letters of Credit.
"Lexington Acquisition" means the Acquisition of one or more
broadcast licenses in Lexington, Kentucky, in consideration of the receipt by
the applicable Seller of a Purchase Price not to exceed $3,000,000.
"LIBOR Deadline" has the meaning set forth in Section
2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit
L-1.
"LIBOR Rate" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by Agent (rounded upwards, if
necessary, to the next 1/16%) by
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dividing (a) the Base LIBOR Rate for such Interest Period, by (b) 100% minus the
Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the effective
day of any change in the Reserve Percentage.
"LIBOR Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means 5.25 percentage points.
"License Companies" means, collectively, ACME Television
Licenses of Florida, LLC, a Delaware limited liability company, ACME Television
Licenses of Illinois, LLC, a Delaware limited liability company, ACME Television
Licenses of Madison, LLC, a Delaware limited liability company, ACME Television
Licenses of New Mexico, L.L.C., a Delaware limited liability company, ACME
Television Licenses of Ohio, LLC, a Delaware limited liability company, ACME
Television Licenses of Tennessee, LLC, a Delaware limited liability company,
ACME Television Licenses of Utah, L.L.C., ACME Television Licenses of Wisconsin,
LLC, a Delaware limited liability company, and any Acquisition License Company
formed or acquired by Borrower or its Subsidiaries after the date hereof.
"Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset, 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, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"LMA" means a local marketing agreement, program service
agreement or time brokerage agreement between a broadcaster and a television
station licensee pursuant to which the broadcaster provides programming to, and
retains revenues of, such licensee's station in exchange for fees paid to such
licensee.
"LMA Fees" means LMA fees for each Station under contract to
be purchased within 12 months after the date the Acquisition Agreement was
entered into with respect to such Station (up to an aggregate of $500,000 for
all Stations in any consecutive 12-month period).
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Cash Management
Agreement, the Control Agreements, the Collateral
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Assignments of Key Leases, the Collateral Assignments of Tower Leases, the
Disbursement Letter, the Equipment Financing Letter Agreement, the Fee Letter,
the Guarantor Security Agreement, the Guaranty, the Intercompany Subordination
Agreement, the Letters of Credit, the Mortgages, the Officers' Certificate, the
Pledge Agreement, any note or notes executed by Borrower in connection with this
Agreement and payable to a member of the Lender Group, and any other agreement
entered into, now or in the future, by any of the Obligors and the Lender Group
in connection with this Agreement, including from and after the Intermediate
Notes Repayment Closing Date, the Parent Guarantor Security Agreement, the
Parent Guaranty, and the Parent Pledge Agreement.
"Main Station License" means a main station license issued by
the FCC authorizing a Station's primary transmissions, and not any auxiliary
licenses held by such Station.
"Master Lease Agreement" means that certain Master Lease
Agreement dated as of October 25, 1999, by and among Borrower, certain of
Borrower's Subsidiaries, and Bankers Commercial Corporation.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Obligors, taken as a
whole, (b) a material impairment of the Obligors' ability to perform the
obligations under the Loan Documents or of the Lender Group's ability to enforce
the Obligations or realize upon any material portion of the Collateral, or (c) a
material impairment of the enforceability or priority of the Agent's Liens with
respect to the Collateral as a result of an action or failure to act on the part
of any Obligor.
"Mature Stations" means the Salt Lake City Station, the First
Albuquerque Station, and the Second Albuquerque Station.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $40,000,000, subject to
Borrower's right to exercise the Commitment Increase Option as set forth in
Section 17.11 and subject to the possible reduction of such amount pursuant to
Section 2.2.
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by
the Obligors in favor of Agent, for the benefit of the Lender Group, in form and
substance satisfactory to Agent, that encumber the Real Property Collateral and
the related improvements thereto.
"Negotiable Collateral" means all of Borrower's or the
Obligors', as the context requires, now owned and hereafter acquired right,
title, and interest with respect to letters of credit, letter of credit rights,
instruments, promissory notes, drafts, documents, and
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chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
"Net Cash Proceeds" means, with respect to any disposition of
assets by one or more of the Obligors (including any LMA by any Obligor, as
"licensee" thereunder), the aggregate amount of all cash payments received by
the Obligors, directly or indirectly, in connection with such disposition,
whether at the time thereof or after such disposition, under deferred payment
arrangements or investments entered into or received in connection with such
disposition, minus the aggregate amount of (a) any Permitted Purchase Money
Indebtedness or other Permitted Indebtedness that was secured by the assets that
were the subject of the disposition and was required to be repaid as a result of
such disposition, (b) legal, accounting, regulatory, title and recording tax
expenses, commissions, and (c) any income taxes payable by the Obligors or any
of their direct or indirect stockholders, partners or members in connection with
such disposition.
"Non-Mature Stations" means (a) the Dayton Station, (b) the
Knoxville Station, (c) the Green Bay Station, (d) the Fort Xxxxx Station, (e)
the Decatur Station, and (f) the Janesville-Madison Station.
"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 with respect to
outstanding Letters of Credit, premiums, liabilities (including all amounts
charged to Borrower's Loan Account pursuant hereto), obligations, fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the provisions of
the Bankruptcy Code, would have accrued), guaranties, covenants, and duties of
any kind and description owing by Borrower to the Lender Group pursuant to or
evidenced by the Loan Documents 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 all interest not paid when due
and all Lender Group Expenses that Borrower is required to pay or reimburse by
the Loan Documents, by law, or otherwise. Any reference in this Agreement or in
the Loan Documents to the Obligations shall include all amendments, changes,
extensions, modifications, renewals, replacements, substitutions, and
supplements, thereto and thereof, as applicable, both prior and subsequent to
any Insolvency Proceeding.
"Obligors" means Borrower or the Guarantors or, after the
Intermediate Notes Repayment Closing Date, the Parent Guarantors, or any one of
them.
"Officers' Certificate" means the representations and
warranties of officers form submitted by Agent to Borrower, together with
Borrower's completed responses to the inquiries set forth therein.
"OLV Value" means the orderly liquidation value of a Station,
such value being determined by a qualified appraisal company selected by
Borrower and approved by
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the Required Lenders in their Permitted Discretion (it being understood that the
appraisal division of BIA Financial Network, Inc. is approved by the Required
Lenders).
"Operating Companies" means, collectively, ACME Television of
Florida, LLC, a Delaware limited liability company, ACME Television of Illinois,
LLC, a Delaware limited liability company, ACME Television of Madison, LLC, a
Delaware limited liability company, ACME Television of New Mexico, L.L.C., a
Delaware limited liability company, ACME Television of Ohio, LLC, a Delaware
limited liability company, ACME Television of Tennessee, LLC, a Delaware limited
liability company, ACME Television of Utah, L.L.C., a Delaware limited liability
company, ACME Television of Wisconsin, LLC, a Delaware limited liability
company, and any Acquisition Operating Company formed or acquired by Borrower or
its Subsidiaries after the date hereof.
"Overadvance" has the meaning set forth in Section 2.5.
"Overhead Expenses" means amounts payable by Borrower to the
Parent Companies in respect of reasonable accounting, legal, senior management,
trustees' fees owing under the Intermediate Indenture (including legal fees of
trustees), and other general expenses applicable to the ownership of Borrower
and its Subsidiaries, which expenses are not specifically related to the
operation of a Station (including expenses of ACME Television Holdings or any of
the other Parent Companies relating to the ownership of Sylvan Tower Co., LLC
but not specifically related to the operation of a Station).
"Parent Companies" means ACME Parent, ACME Television
Holdings, ACME Subsidiary Holdings II, ACME Intermediate, and ACME Intermediate
Finance.
"Parent Guarantors" means ACME Subsidiary Holdings II, ACME
Intermediate, and ACME Intermediate Finance.
"Parent Guarantor Security Agreement" means that certain
security agreement executed and delivered by each of the Parent Guarantors and
Agent, substantially in the form attached hereto as Exhibit P-1.
"Parent Guaranty" means that certain general continuing
guaranty to be executed and delivered by each of the Parent Guarantors in favor
of Agent, for the benefit of the Lender Group, substantially in the form
attached hereto as Exhibit P-2.
"Parent Pledge Agreement" means that certain pledge agreement
to be executed and delivered by ACME Intermediate and ACME Subsidiary Holdings
II to Agent, with respect to the pledge of the Stock owned by ACME Intermediate
and ACME Subsidiary Holdings II, substantially in the form attached hereto as
Exhibit P-3.
"Participant" has the meaning set forth in Section 14.1(e).
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"Participating Interests" has the meaning set forth in Section
14.1(e).
"Permitted Acquisition" means any acquisition from a third
party (the "Seller") by Borrower or any of its Subsidiaries, whether by way of
the purchase of assets or Stock, by merger or consolidation or otherwise, of
substantially all of the assets of or ownership interests in a television
broadcast property or FCC License or a construction permit with respect to a
broadcast property (each an "Acquisition"), so long as (a) such Acquisition has
been approved in writing by the Required Lenders in their Permitted Discretion,
and (b):
(i) No Default or Event of Default shall have occurred or
be continuing or shall result from the consummation of such Acquisition;
(ii) If such Acquisition involves the purchase of Stock,
such Acquisition shall be effected in such a manner as to assure that the
acquired entity becomes a wholly owned direct or indirect Subsidiary of
Borrower;
(iii) No later than (A) 30 days prior to the consummation
of such Acquisition or, if earlier, 10 Business Days after the execution and
delivery of the related Acquisition Agreement, Borrower shall have delivered to
Agent (with sufficient copies for all of the Lenders) copies of executed
counterparts of such Acquisition Agreement, together with all schedules thereto,
the forms of any additional agreements or instruments to be executed at the
closing of such Acquisition (to the extent available), and all applicable
financial information, including revised Projections, updated to reflect such
Acquisition and any related transactions, (B) promptly following a request
therefor, copies of such other information or documents relating to such
Acquisition as Agent shall have reasonably requested, and (C) promptly following
the consummation of such Acquisition, certified copies of the agreements,
instruments and documents referred to above to the extent the same have been
executed and delivered at the closing of such Acquisition;
(iv) The aggregate amount of all consideration payable by
Borrower or its Subsidiaries in connection with such Acquisition (other than
earn-outs and customary post-closing adjustments escrows, holdbacks and
indemnities and Indebtedness permitted under Section 7.1) shall be payable on
the date of such Acquisition;
(v) Neither Borrower nor its Subsidiaries shall, in
connection with such Acquisition, assume or remain liable with respect to any
Indebtedness (including any unpaid material tax or material ERISA liability),
except (A) to the extent permitted under Section 7.1 or otherwise expressly
permitted by the Required Lenders in their Permitted Discretion and (B)
obligations of the Seller or its Subsidiaries incurred in the ordinary course of
business and necessary or desirable to the continued operation of the underlying
properties, and any other such liabilities or obligations not permitted to be
assumed or otherwise supported by Borrower and its Subsidiaries hereunder shall
be paid in full or released on or before the consummation of such Acquisition;
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(vi) All assets and properties acquired in connection with
such Acquisition shall be free and clear of any Liens other than those permitted
under Section 7.2 or as otherwise expressly permitted by the Required Lenders in
their Permitted Discretion;
(vii) (A) All FCC Licenses to be acquired pursuant to such
Acquisition shall be acquired by an Acquisition License Company, (B) such
Acquisition License Company shall enter into a license agreement with a related
Acquisition Operating Company with respect to such FCC Licenses, and (C) all
other acquired assets of the Seller shall be acquired by such related
Acquisition Operating Company;
(viii) (A) In the case of any Acquisition other than those
listed in clause (B) below, after the consummation of such Acquisition, Borrower
and its Subsidiaries shall be in compliance with the provisions of Section 7.22,
calculated on a pro forma basis and for the period of four (4) consecutive
fiscal quarters prior to the date of such Acquisition for which financial
statements are required to be provided (and have been so delivered) under
Section 6.3, (B) in the case of the Portland Acquisition, the
Richmond-Petersburg Acquisition, the Flint-Saginaw-Bay City Acquisition, and the
Lexington Acquisition, after the consummation of each such Acquisition, Borrower
and its Subsidiaries shall be in compliance with the provisions of Section 7.22,
calculated on a pro forma basis and for the period of four (4) consecutive
fiscal quarters prior to the date of such Acquisition for which financial
statements are required to be provided (and have been so delivered) under
Section 6.3, subject to the pro forma adjustments set forth in the projections
delivered by Borrower to Agent prior to the date hereof (the "Acquisition
Projections"), and (C) prior to the consummation of such Acquisition, Borrower
shall provide to Agent, in form and substance satisfactory to Agent, a
certificate of its chief financial officer certifying such compliance;
(ix) On or before the consummation of such Acquisition,
(A) the applicable Acquisition License Company and any applicable Acquisition
Operating Company shall execute and deliver to Agent a joinder to the Guarantor
Security Agreement, the Guaranty and the Intercompany Subordination Agreement
and Collateral Assignments of Key Leases and Collateral Assignments of Tower
Leases, if such Key Leases or Tower Leases are in existence at the time of such
Acquisition; and (B) Borrower shall execute and deliver to Agent a pledge
agreement or an amendment to the Pledge Agreement, in form and substance
satisfactory to Agent, pursuant to which Borrower shall pledge to Agent the
Stock of the applicable Acquisition License Company and any applicable
Acquisition Operating Company; and (c) Agent shall have received all financing
statements required by Agent;
(x) On or before the consummation of such Acquisition,
Borrower shall deliver to Agent, in form and substance satisfactory to Agent, a
certificate of its chief financial officer, certifying as to the matters set
forth above with respect to such Acquisition;
(xi) On or before the consummation of such Acquisition,
Agent shall have received written opinions of (A) counsel to Obligors and (B)
special FCC counsel to Obligors, in each case dated the date of such
Acquisition, addressed to the Agent and the
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Lenders, and providing the substantive legal opinions that were given by such
counsel in the opinions delivered on the Closing Date (but relative to the
acquired assets, Stock, or joint venture interest only) or otherwise in form and
substance satisfactory to Agent; and
(xii) If reasonably requested in connection with any
material issues of state law raised in connection with such Acquisition, on or
before the consummation of such Acquisition, Agent shall have received the
favorable opinion of local counsel to the Obligors, dated as of the date of such
Acquisition, addressed to the Agent and the Lenders in form and substance
satisfactory to Agent.
The foregoing notwithstanding, each of the Portland
Acquisition, the Richmond-Petersburg Acquisition, the Flint-Saginaw-Bay City
Acquisition, and the Lexington Acquisition shall constitute Permitted
Acquisitions hereunder if each such Acquisition complies with the requirements
contained in clauses (i) through (xii) above and the written approval of the
Required Lenders shall not be required to qualify any such Acquisition as a
"Permitted Acquisition" hereunder.
"Permitted Discretion" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
"Permitted Disposition LMA" means an LMA entered into in
connection with, and in anticipation of, a Permitted Non-Mature Disposition so
long as no Default or Event of Default shall be continuing or shall result from
entering into such LMA.
"Permitted Dispositions" means (a) sales or other dispositions
by Borrower or its Subsidiaries of Equipment or other fixed assets that are
substantially worn, damaged, or obsolete in the ordinary course of business, (b)
the use or transfer of money or Cash Equivalents by Borrower or its Subsidiaries
in a manner that is not prohibited by the terms of this Agreement or the other
Loan Documents, (c) Permitted Non-Mature Dispositions, (d) Permitted Mature
Dispositions, (e) the sale of Equipment in connection with the consummation of a
Permitted Sale and Leaseback, (f) sales of Equipment or other fixed assets not
covered by clauses (a) through (e) above that are no longer used or useful in
the business of Borrower and its Subsidiaries in an aggregate amount not to
exceed $1,000,000 during any fiscal year of Borrower, (g) settlement of disputed
or delinquent Accounts at a discount in the ordinary course of the Obligors'
business consistent with past practices and (h) the sale by Borrower for fair
market value of the FCC License with respect to the low-power Station located in
Effingham, Illinois know as WEIL.
"Permitted Holder" means (a) Xxxxx Xxxxxxx, his Family
Members, and his Family Trusts, (b) Xxxxxxx Xxxxx, his Family Members, and his
Family Trusts, (c) Xxxxxx Xxxxx, his Family Members, and his Family Trusts, (d)
Xxx Xxxxxxxxx, his Family Members, and his Family Trusts, (e) Xxxx Xxxxxxx, his
Family Members, and his Family Trusts, (f) Xxxxxx Xxxxxxx, his Family Members,
and his Family Trusts, or (g) investment
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funds managed by Alta Communications, Inc., Seaport Capital Partners, or Trust
Company of the West.
"Permitted Intercompany Advances" means Intercompany Advances
so long as (a) no Triggering Event exists at the time of the making of any
Intercompany Advance or would exist after giving effect thereto, (b) after
giving effect to the making of such Intercompany Advance, the Person that is
acting as the lender or payor with respect thereto is Solvent, and (c) after
giving effect to the making of such Intercompany Advance, the Person that is
acting as the borrower or payee with respect thereto is Solvent.
"Permitted Investments" means (a) investments in Cash
Equivalents, (b) investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, (d) Permitted Intercompany Advances, (e) Permitted
Acquisitions and Permitted Joint Venture Acquisitions, (f) non-cash
consideration received by Borrower or its Subsidiaries in connection with a
Permitted Disposition, (g) assets received by Borrower or its Subsidiaries in
connection with a Permitted Swap, (h) so long as no Default or Event of Default
shall have occurred or be continuing or shall result from any such investment
and so long as such investments are in properties or assets directly related to
the primary business of Borrower and its Subsidiaries, investments made by
Borrower or its Subsidiaries after the date hereof in an aggregate amount not to
exceed $1,000,000, (i) so long as no Default or Event of Default shall have
occurred or be continuing or shall result from any such investment and so long
as such investments are in broadcasting properties or assets directly related to
the primary business of Borrower and its Subsidiaries, investments made by
Borrower or its Subsidiaries after the date hereof in broadcasting joint
ventures in an amount not to exceed $1,000,000 per fiscal year, and (i)
investments existing as of the date hereof and described on Schedule P-1.
"Permitted Joint Venture Acquisition" means a joint venture,
of which Borrower or one of its Subsidiaries or an Acquisition License Company
or an Acquisition Operating Company is one of the joint venturers, that is
formed for the purpose of effectuating the Portland Acquisition, the
Richmond-Petersburg Acquisition, the Flint-Saginaw-Bay Acquisition, or the
Lexington Acquisition (collectively, the "Subject Acquisitions") so long as:
(a) all of the requirements contained in clauses (i),
(iii) through (vi), (viii), and (x) through (xii) of the definition of
"Permitted Acquisition" are complied with;
(b) the portion of the Purchase Price paid by such Person
for its interest in such joint venture is a percentage of the total Purchase
Price for such joint venture that does not exceed the percentage of such joint
venture being acquired by such Person; provided that with respect to a joint
venture formed for the purpose of effectuating the Richmond-Petersburg
Acquisition, such percentage of the total Purchase Price for such joint venture
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may exceed the percentage of such joint venture being acquired by such Person by
1 percentage point;
(c) the aggregate Purchase Price paid with respect to
such joint venture by both joint venturers does not exceed the Purchase Price
limits set forth in the definitions of each of the Subject Acquisitions; and
(d) On or before the consummation of such Acquisition,
Borrower shall, or shall have caused the applicable Subsidiary, Acquisition
Operating Company, or Acquisition License Company, to execute and deliver to
Agent (i) any documentation deemed necessary or appropriate by Agent to evidence
and perfect Agent's security interest in the applicable joint venture interest
owned by such Person (including written authorization for Agent to file
financing statements required by Agent), and (ii) if such Subsidiary,
Acquisition Operating Company, or Acquisition License Company is not already a
Guarantor, a joinder to the Guarantor Security Agreement, the Guaranty and the
Intercompany Subordination Agreement.
"Permitted Liens" means (a) Liens held by Agent for the
benefit of Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are
not yet delinquent, or (ii) do not constitute an Event of Default hereunder and
are the subject of Permitted Protests, (c) Liens set forth on Schedule P-2, (d)
the interests of lessors under operating leases, (e) purchase money Liens or the
interests of lessors under Capital Leases to the extent that such Liens or
interests secure Permitted Purchase Money Indebtedness and so long as such Lien
attaches only to the asset purchased or acquired and the proceeds thereof, (f)
Liens arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
of business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (g) Liens arising from deposits made in connection with obtaining
worker's compensation or other unemployment insurance, (h) Liens or deposits to
secure performance of bids, tenders, or leases incurred in the ordinary course
of business and not in connection with the borrowing of money, (i) Liens granted
as security for surety or appeal bonds in connection with obtaining such bonds
in the ordinary course of business, (j) Liens resulting from any judgment or
award that is not an Event of Default hereunder, (k) Liens existing on any asset
prior to their acquisition in connection with a Permitted Acquisition or
Permitted Joint Venture Acquisition thereof by any Obligor and not created in
contemplation of such Permitted Acquisition; provided that the Required Lenders
shall have consented to such Liens in connection with such Permitted Acquisition
or Permitted Joint Venture Acquisition; (l) Liens on security deposits with
respect to leases of office space and other Liens arising by operation of law or
under leases to secure landlords or lessors, or under leases or rental
agreements made in the ordinary course of business and confined to the premises
or property rented and the tangible property located thereon, (m) 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
Agent, (n) with
-27-
respect to any Real Property that is not part of the Real Property Collateral,
easements, rights of way, and zoning restrictions that do not materially
interfere with or impair the use or operation thereof, (o) a Lien on cash of up
to $6,000,000 pledged to Bankers Commercial Corporation pursuant to the Master
Lease Agreement, (p) a Lien on cash of up to $3,000,000 pledged to Xxxxx Fargo
in connection with certain Equipment financing, and (q) Liens on the Stock of
Borrower securing the Intermediate Notes.
"Permitted LMA" means (a) an LMA entered into in connection
with, and in anticipation of, a Permitted Acquisition or a Permitted Joint
Venture Acquisition; provided, however, that (i) no Default or Event of Default
shall be continuing or shall result from entering into such LMA, and (ii) the
aggregate amount payable by Borrower or its Subsidiaries under such LMA, when
aggregated with all other payments by Borrower or its Subsidiaries under all
LMAs, does not exceed $500,000 in any fiscal year; and (b) a Permitted
Disposition LMA.
"Permitted Mature Disposition" means the disposition by
Borrower or any of its Subsidiaries of any Mature Station so long as such
disposition has been approved in writing by the Required Lenders in their sole
and absolute discretion.
"Permitted Non-Mature Disposition" means the disposition by
Borrower or any of its Subsidiaries of any Non-Mature Station so long as:
(a) No Default or Event of Default shall have occurred or
be continuing or shall result from the consummation of such disposition;
(b) Concurrent with the consummation of such disposition,
Borrower or its Subsidiaries receive payment in cash or Cash Equivalents (it
being understood that Indebtedness being assumed by the purchaser in such
disposition will be considered cash for purposes of this clause so long as it
was permitted under this Agreement) of at least 80% of the gross proceeds from
such disposition (other than like-kind exchanges under Section 1031 of the
Internal Revenue Code so long as the acquisition portion of such like-kind
exchange qualifies as a Permitted Acquisition);
(c) Agent shall have received reasonably satisfactory
evidence prior to the consummation of such disposition that the board of
directors and, if required by law, the holders of Stock of Borrower or its
Subsidiaries have approved such disposition;
(d) such disposition shall be consummated at fair value,
in good faith, and pursuant to an arm's length transaction;
(e) the Hold-Back Amount in connection with such
disposition is not greater than ten percent (10%) of the proceeds from such
disposition;
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(f) in the case of a disposition of the Dayton Station,
the gross consideration received by Borrower or its Subsidiaries as a result of
such disposition is equal to or greater than $24,000,000, and the Net Cash
Proceeds received by Borrower and its Subsidiaries as a result of such
disposition is equal to or greater than $19,000,000;
(g) in the case of a disposition of the Knoxville
Station, the gross consideration received by Borrower or its Subsidiaries as a
result of such disposition is equal to or greater than $23,000,000, and the Net
Cash Proceeds received by Borrower and its Subsidiaries as a result of such
disposition is equal to or greater than $18,000,000;
(h) in the case of a disposition of the Fort Xxxxx
Station, the gross consideration received by Borrower or its Subsidiaries as a
result of such disposition is equal to or greater than $19,000,000, and the Net
Cash Proceeds received by Borrower and its Subsidiaries as a result of such
disposition is equal to or greater than $15,000,000;
(i) in the case of a disposition of the Green Bay
Station, the gross consideration received by Borrower or its Subsidiaries as a
result of such disposition is equal to or greater than $9,000,000, and the Net
Cash Proceeds received by Borrower and its Subsidiaries as a result of such
disposition is equal to or greater than $7,000,000;
(j) in the case of a disposition of the Decatur Station,
the gross consideration received by Borrower or its Subsidiaries as a result of
such disposition is equal to or greater than $7,000,000, and the Net Cash
Proceeds received by Borrower and its Subsidiaries as a result of such
disposition is equal to or greater than $6,000,000; and
(k) in the case of a disposition of the
Janesville-Madison Station, the gross consideration received by Borrower and its
Subsidiaries as a result of such disposition is equal to or greater than
$4,000,000, and the Net Cash Proceeds received by Borrower and its Subsidiaries
as a result of such disposition is equal to or greater than $3,000,000.
"Permitted Protest" means the right of Borrower or any of its
Subsidiaries, as applicable, to protest any Lien (other than any such Lien that
secures the Obligations), taxes (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental or other payment,
provided that (a) a reserve with respect to such obligation is established on
the Books in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by Borrower or any of its
Subsidiaries, as applicable, in good faith, and (c) Agent is satisfied that,
while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Agent's Liens.
"Permitted Purchase Money Indebtedness" means, as of any date
of determination, Purchase Money Indebtedness in an aggregate principal amount
outstanding at any one time not in excess of $20,000,000.
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"Permitted Restricted Payments" means:
(a) so long as no Triggering Event exists at the time of
the making of any Intercompany Advance or dividend or would exist after giving
effect thereto and so long as Borrower has Excess Liquidity of not less than
$13,200,000 after giving effect to the proposed Intercompany Advance or
dividend, Permitted Intercompany Advances or dividends by Borrower to ACME
Intermediate to enable it to make regularly scheduled payments of interest with
respect to the Intermediate Notes;
(b) so long as no Triggering Event exists at the time of
the making of any Intercompany Advance or dividend or would exist after giving
effect thereto, Permitted Intercompany Advances or dividends by Borrower to the
Parent Companies in an amount not to exceed $900,000 during any fiscal year of
Borrower to enable the Parent Companies to make payment of Overhead Expenses;
(c) [intentionally omitted]
(d) so long as (i) no Event of Default exists at the time
of the making of the proposed Intercompany Advance or dividend or would exist
after giving effect thereto and (ii) Borrower has delivered to Agent a duly
executed Solvency Certificate giving effect to the proposed Intercompany Advance
or dividend, and (iii) Borrower has the Required Availability after giving
effect to the proposed Intercompany Advance or dividend, Permitted Intercompany
Advances or dividends by Borrower to ACME Intermediate of up to $10,000,000 in
the aggregate to enable ACME Intermediate to repurchase Intermediate Notes in
the open market at a price not to exceed the par value thereof plus accrued and
unpaid interest;
(e) so long as (i) no Event of Default exists at the time
of the making of the proposed Intercompany Advance or dividend or would exist
after giving effect thereto and (ii) the Intermediate Notes Repayment Closing
Conditions have been fulfilled to the satisfaction of Agent, Permitted
Intercompany Advances or dividends by Borrower to ACME Intermediate of up to
$32,700,000 in the aggregate to enable ACME Intermediate to repay, redeem, or
repurchase the remaining Intermediate Notes, accrued interest thereon and any
applicable premium thereon, and any applicable fees and expenses related
thereto;
if and so long as the payees under clauses (a) through (e) above (i) use the
proceeds of such dividends or Permitted Intercompany Advances within 10 Business
Days solely for the purposes described in such clauses and (ii) do not use such
dividends or Permitted Intercompany Advances to satisfy the obligations of any
other Person through the satisfaction of a guaranty or otherwise (other than as
specifically permitted in clauses (a) through (e) above).
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"Permitted Sale and Leaseback" means a sale and leaseback
transaction that is in respect of Equipment that is first acquired by Borrower
or any of its Subsidiaries after the date hereof ("Sale and Leaseback"), so long
as:
(a) No Default or Event of Default shall have occurred or
be continuing or shall result from the consummation of such Sale and Leaseback;
and
(b) such Sale and Leaseback shall be fully consummated
within 45 days following the date of the initial acquisition of such Equipment
by Borrower and its Subsidiaries.
"Permitted Swap" means a transaction pursuant to which
Borrower or any of its Subsidiaries transfers a Station to another Person in
consideration of, among other things, the receipt from such Person of a
television broadcast station (a "Swap"), so long as:
(a) such Swap has been approved in writing by the
Required Lenders in their Permitted Discretion;
(b) No Default or Event of Default shall have occurred or
be continuing or shall result from the consummation of such Swap;
(c) After the consummation of such Swap, Borrower and its
Subsidiaries shall be in compliance with the provisions of Section 7.22, (a)
calculated on a pro forma basis and for the period of four (4) consecutive
fiscal quarters most recently ended prior to the date of such Swap for which
financial statements are required to be provided (and have been so delivered)
under Section 6.3 and prior to the consummation of such Swap, Borrower shall
provide to Agent, in form and substance satisfactory to Agent, a certificate of
its chief financial officer certifying such compliance.
(d) On or before the consummation of such Swap, (a) the
applicable Acquisition License Company and the applicable Acquisition Operating
Company shall execute and deliver to Agent a joinder to the Guarantor Security
Agreement, the Guaranty and the Intercompany Subordination Agreement and
Collateral Assignments of Key Leases and Collateral Assignments of Tower Leases;
and (b) Borrower shall execute and deliver to Agent a pledge agreement or an
amendment to the Pledge Agreement, in form and substance satisfactory to Agent,
pursuant to which Borrower shall pledge to Agent the Stock of the applicable
Acquisition License Company and the applicable Acquisition Operating Company;
and (c) Agent shall have received all financing statements required by Agent;
"Person" means 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.
-31-
"Personal Property Collateral" means all Collateral other than
Real Property.
"Pledge Agreement" means an amended and restated pledge
agreement, in form and substance satisfactory to Agent, executed and delivered
by Borrower, ACME Subsidiary Holdings III, and Agent, with respect to the pledge
of the Stock owned by Borrower and ACME Subsidiary Holdings III.
"Portland Acquisition" means the Acquisition of one or more
broadcast licenses in Portland, Oregon in consideration of the receipt by the
applicable Seller of a Purchase Price not to exceed $4,000,000.
"Positive EBITDA Reserve" means $5,000,000, until such time as
the Positive EBITDA Reserve Release Condition is fulfilled to the satisfaction
of Agent, and then, $0.
"Positive EBITDA Reserve Release Condition" means the
achievement of positive EBITDA for 2 consecutive fiscal quarters of Borrower.
"Projections" means Borrower's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
basis consistent with Borrower's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters as to a
particular Lender (including the indemnification obligations arising under
Section 16.7), the percentage obtained by dividing (i) such Lender's Commitment,
by (ii) the aggregate amount of Commitments of all Lenders; provided, however,
that, in each case, in the event all Commitments have been terminated, Pro Rata
Share shall be determined according to the Commitments in effect immediately
prior to such termination.
"Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 45 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"Purchase Price" means, with respect to any Acquisition, the
aggregate amount of all payments paid or payable to the Seller, directly or
indirectly, in connection with such Acquisition, whether at the time thereof or
after such Acquisition, under seller notes, earn-outs, escrowed funds, deferred
payment arrangements or other similar arrangements entered into in connection
with such disposition.
"Rate Hedging Obligations" means any and all obligations of
Borrower, whether direct or indirect and whether absolute or contingent, at any
time created, arising, evidenced or existing under a Hedge Agreement.
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"Real Property" means any estates or interests in real
property now owned or hereafter acquired by one or more of the Obligors and
interests owned or hereafter acquired by one or more of the Obligors in the
improvements thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule R-1.
"Record" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Remedial Action" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
"Report" has the meaning set forth in Section 16.17.
"Required Availability" means Excess Availability and
unrestricted cash and Cash Equivalents in accounts that are subject to Control
Agreements in an amount of not less than $8,000,000.
"Required Lenders" means, at any time, Lenders whose Pro Rata
Shares aggregate 51% of the Commitments, or if the Commitments have been
terminated irrevocably, 51% of the Obligations.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Restatement Closing Date" means the earlier of (a) the date
of the making of the initial Advance (or other extension of credit hereunder),
or (b) the date on which Agent sends Borrower a written notice that each of the
conditions precedent set forth in Section 3.1 either have been satisfied or have
been waived.
"Restatement Closing Date Business Plan" means the set of
Projections of Borrower and its Subsidiaries for the 3 year period following the
Restatement Closing Date (on a year by year basis, and for the 1 year period
following the Restatement Closing Date,
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on a month by month basis), in form and substance (including as to scope and
underlying assumptions) satisfactory to Agent.
"Revolver Usage" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, plus (b) the then
extant amount of the Letter of Credit Usage.
"Richmond-Petersburg Acquisition" means the Acquisition of one
or more broadcast licenses in the Richmond-Petersburg area of Virginia, in
consideration of the receipt by the applicable Seller of a Purchase Price not to
exceed $8,200,000.
"Risk Participation Liability" means, as to each Letter of
Credit, all reimbursement obligations of Borrower to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrower, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"Salt Lake City Station" means XXXX-00 Xxxx Xxxx Xxxx, Xxxx.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"Second Albuquerque Station" means KASY-50 Albuquerque, New
Mexico.
"Securities Account" means a "securities account" as that term
is defined in the Code.
"Seller" has the meaning set forth in the definition of
"Permitted Acquisition."
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section
2.3(f)(i).
"Solvency Certificate" means a certificate of the chief
financial officer of Borrower, certifying as to the solvency of Borrower and its
Subsidiaries, taken as a whole, after giving effect to the payments contemplated
to be made by Borrower under clauses (c), (d), or (e), as applicable, of the
definition of "Permitted Restricted Payments" for the purpose of funding the
full repayment, redemption, or repurchase of the Intermediate Notes or the
repurchase of shares of common Stock of ACME Parent, substantially in the form
of Exhibit S-1 attached hereto.
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"STAC Value" means the fair market value of a Station,
calculated as a start-up affiliated station that is sold in a compressed time
frame, such value being determined by a qualified appraisal company selected by
Agent.
"Stations" means all of the television stations owned and
managed by one or more of the Obligors, where each such station consists of all
of the properties and operating rights constituting a complete, fully integrated
system for transmitting broadcast television signals from a transmitter licensed
by the FCC, together with any subsystem ancillary thereto, without payment of
any fee by the Persons receiving such signals.
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"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 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.
"Swap" has the meaning set forth in the definition of
"Permitted Swap".
"Swing Lender" means WFF, any successor to WFF as Agent
hereunder, or any other Lender that, at the request of Borrower and with the
consent of Agent agrees, in such Lender's sole discretion, to become the Swing
Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Syndicated Program Payments" means license or similar fees
scheduled to be paid in a period of time by the Obligors under license or
similar agreements with respect to syndicated series or features programming
rights (as opposed to network programming rights).
"Tangible Net Worth" means, as of any date of determination,
the result of (a) Borrower's total stockholder's equity, minus (b) the sum of
(i) all Intangible Assets of Borrower, (ii) all of Borrower's prepaid expenses,
and (iii) all amounts due to Borrower from Affiliates.
"Tax Distribution" has the meaning set forth in Section 7.11.
"Tax Withholding Amounts" means, with respect to any taxable
year of Borrower, (A) any and all amounts required under applicable law to have
been withheld or
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collected by Borrower from or in respect of payments made or deemed made to any
member of Borrower, which amounts were remitted by Borrower to any federal,
state, local, or foreign taxing authority during such taxable year, and (B) any
amounts withheld from payments made to Borrower in respect of which a member of
Borrower, or the beneficial owners of such member, receives a tax benefit in the
form of an actual reduction in the aggregate amount of such member's, or such
beneficial owners', tax liabilities for the taxable year in which such amounts
were withheld.
"Taxes" has the meaning set forth in Section 16.11(e).
"Total Debt" means, as of any date of determination, all
outstanding Funded Debt of the Borrower and its Subsidiaries, determined on a
consolidated basis, after eliminating intercompany items, in accordance with
GAAP.
"Tower Leases" has the meaning set forth in Section 5.17.
"Triggering Event" means the occurrence and continuation of
(a) an Event of Default under Section 8.1, or (b) an Event of Default occurring
as a result of any Obligor's failure to comply with the provisions of Sections
2.7, 6.8, or 7 applicable to such Obligor.
"Underlying Issuer" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrower.
"Underlying Letter of Credit" means a letter of credit that
has been issued by an Underlying Issuer.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National Association, a
national banking association.
"WFF" means Xxxxx Fargo Foothill, Inc., a California
corporation.
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 in
Section 7.22 or a related definition, it shall be understood to mean Borrower
and its Subsidiaries 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.
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1.4 CONSTRUCTION. Unless the context of this Agreement or any
other Loan Document 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" is not exclusive. The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to any Person
shall be construed to include such Person's successors and assigns. Any
requirement of a writing contained herein or in the other Loan Documents shall
be satisfied by the transmission of a Record and any Record transmitted shall
constitute a representation and warranty as to the accuracy and completeness of
the information contained therein.
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 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Lender agrees (severally,
not jointly or jointly and severally) to make advances ("Advances") to Borrower
in an amount at any one time outstanding not to exceed such Lender's Pro Rata
Share of an amount equal to the lesser of (i) the Maximum Revolver Amount less
the Letter of Credit Usage, less the Intermediate Notes Reserve, or (ii) the
Borrowing Base less the Letter of Credit Usage. For purposes of this Agreement,
"Borrowing Base," as of any date of determination, shall mean the result of:
(y) the 35% times the Applicable
Eligible Value, minus
(z) the Intermediate Notes Reserve,
plus the Positive EBITDA Reserve, plus the Insurance Proceeds
Reserve, plus the aggregate amount of reserves, if any,
established by Agent under Section 2.1(b).
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) sums that Borrower is required to pay
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(such as taxes, assessments, insurance premiums, or, in the case of leased
assets, rents or other amounts payable under such leases) and has failed to pay
under any Section of this Agreement or any other Loan Document, and (ii) amounts
owing by Borrower to any Person to the extent secured by a Lien on, or trust
over, any of the Collateral (other than any existing Permitted Lien set forth on
Schedule P-2), which Lien or trust, in the Permitted Discretion of Agent likely
would have a priority superior to the Agent's Liens (such as Liens or trusts in
favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral; provided, however, that in establishing reserves in its Permitted
Discretion, Agent shall take into account the amount of cash and Cash
Equivalents then held by the Obligors that are subject to Control Agreements in
favor of Agent.
(c) The Lenders shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would cause
the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section
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 REDUCTION OF MAXIMUM REVOLVER AMOUNT.
(a) Permitted Disposition or Permitted Swap.
Borrower agrees that at least 2 Business Days prior to the closing of any
Permitted Disposition of a Station (it being understood that this Section 2.2(a)
applies only to Permitted Dispositions under clauses (c) and (d) of the
definition of such term) or Permitted Swap of a Station, Borrower shall deliver
to Agent a certificate executed by the chief financial officer of Borrower, in
form and substance reasonably satisfactory to Agent, setting forth an estimate
of the Net Cash Proceeds to be received by the Obligors as a result of such
Permitted Disposition or Permitted Swap. In the event such Permitted Disposition
or Permitted Swap is consummated, Agent may, in its sole discretion, require
that the Net Cash Proceeds, in an amount up to the amount of Advances then
outstanding plus (if there is no Excess Availability after giving effect to such
Permitted Disposition or Permitted Swap) the amount of the Letter of Credit
Usage then extant, be remitted to Agent on the first Business Day after the date
or dates of their receipt by Borrower to be applied in accordance with Section
2.4(b) without penalty or premium (unless Borrower has elected to terminate this
Agreement in connection with such prepayment). At the time of the consummation
of any such Permitted Disposition or Permitted Swap, Borrower shall elect either
to (a) permanently reduce the Maximum Revolver Amount by the amount of the Net
Cash Proceeds from the subject Permitted Disposition or Permitted Swap, such
permanent reduction to occur on the date or dates on which Agent receives any of
the Net Cash Proceeds from such Permitted Disposition or Permitted Swap and, on
each such date, shall be in an amount equal to the
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proceeds received by Agent on such date, or (b) to re-invest such Net Cash
Proceeds in assets (including Stock of another Person) used or useful in the
business similar or ancillary to the business of the Obligors as it exists as of
the date hereof so long as such re-investment would constitute a Permitted
Acquisition or a Permitted Joint Venture Acquisition hereunder if it constitutes
an Acquisition; provided, however, that (i) such re-investment must occur within
179 days following the Obligor's receipt of such Net Cash Proceeds, and, (ii)
if, on such 179th day all or any portion of the Net Cash Proceeds received has
not been so re-invested, such amount shall constitute a permanent reduction of
the Maximum Revolver Amount as of such date. If Borrower fails to make the
foregoing election at the time of the consummation of a Permitted Disposition or
Permitted Swap, it shall be deemed to have elected to permanently reduce the
Maximum Revolver Amount in accordance with clause (a) above.
(b) Permitted Disposition LMA. Borrower agrees
that at least 2 Business Days prior to its execution of any Permitted
Disposition LMA (the "LMA Execution Date"), Borrower shall deliver to Agent a
certificate executed the chief financial officer of Borrower, in form and
substance reasonably satisfactory to Agent, setting forth an estimate of the Net
Cash Proceeds to be received by the Obligors as a result of entering into such
Permitted Disposition LMA. In the event such Permitted Disposition LMA is
consummated, Borrower must remit the Net Cash Proceeds to Agent, in an amount up
to the amount of Advances then outstanding plus (if there is no Excess
Availability after giving effect to such Permitted Disposition or Permitted
Swap) the amount of the Letter of Credit Usage then extant, on the first
Business Day after the date or dates of their receipt by Borrower to be applied
in accordance with Section 2.4(b) without penalty or premium (unless Borrower
has elected to terminate this Agreement in connection with such prepayment). At
the time of the consummation of any such Permitted Disposition LMA, Borrower
shall elect either to (a) permanently reduce the Maximum Revolver Amount by the
amount of the Net Cash Proceeds from the subject Permitted Disposition LMA, such
permanent reduction to occur on the date or dates on which Agent receives any of
the Net Cash Proceeds from such Permitted Disposition LMA and, on each such
date, shall be in an amount equal to the proceeds received by Agent on such
date, or (b) to re-invest such Net Cash Proceeds in assets (including Stock of
another Person) used or useful in the business similar or ancillary to the
business of the Obligors as it exists as of the date hereof so long as such
re-investment would constitute a Permitted Acquisition or a Permitted Joint
Venture Acquisition hereunder if it constitutes an Acquisition; provided,
however, that (i) such re-investment must occur within 179 days following the
Obligor's receipt of such Net Cash Proceeds, and (ii) if, on such 179th day all
or any portion of the Net Cash Proceeds received has not been so re-invested,
such amount shall constitute a permanent reduction of the Maximum Revolver
Amount as of such date. If Borrower fails to make the foregoing election at the
time of the consummation of a Permitted Disposition LMA, it shall be deemed to
have elected to permanently reduce the Maximum Revolver Amount in accordance
with clause (a) above.
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2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing
shall be made by an irrevocable written request by an Authorized Person
delivered to Agent (which notice must be received by Agent no later than 10:00
a.m. (California time) on the Business Day prior to the date that is the
requested Funding Date in the case of a request for an Advance specifying (i)
the amount of such Borrowing, and (ii) the requested Funding Date, which shall
be a Business Day; provided, however, that in the case of a request for Swing
Loan in an amount of $3,000,000 or less, such notice will be timely received if
it is received by Agent no later than 10:00 a.m. (California time) on the
Business Day that is the requested Funding Date) specifying (i) the amount of
such Borrowing, and (ii) the requested Funding Date, which shall be a Business
Day. At Agent's election, in lieu of delivering the above-described written
request, any Authorized Person may give Agent telephonic notice of such request
by the required time, with such telephonic notice to be confirmed in writing
within 24 hours of the giving of such notice.
(b) AGENT'S ELECTION. Promptly after receipt of
a request for a Borrowing pursuant to Section 2.3(a), Agent shall elect, in its
discretion, (i) to have the terms of Section 2.3(c) apply to such requested
Borrowing, or (ii) if the Borrowing is for an Advance, to request Swing Lender
to make a Swing Loan pursuant to the terms of Section 2.3(d) in the amount of
the requested Borrowing; provided, however, that if Swing Lender declines in its
sole discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall
elect to have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have
the terms of this Section 2.3(c) apply to a requested
Borrowing as described in Section 2.3(b), then promptly after
receipt of a request for a Borrowing pursuant to Section
2.3(a), Agent shall notify the Lenders, not later than 1:00
p.m. (California time) on the Business Day immediately
preceding the Funding Date applicable thereto, by telecopy,
telephone, or other similar form of transmission, of the
requested Borrowing. Each Lender shall make the amount of such
Lender's Pro Rata Share of the requested Borrowing available
to Agent in immediately available funds, to Agent's Account,
not later than 10:00 a.m. (California time) on the Funding
Date applicable thereto. After Agent's receipt of the proceeds
of such Advances, upon satisfaction of the applicable
conditions precedent set forth in Section 3 hereof, Agent
shall make the proceeds thereof available to Borrower on the
applicable Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to Borrower's
Designated Account; provided, however, that, subject to the
provisions of Section 2.3(i), Agent shall not request any
Lender to make, and no Lender shall have the obligation to
make, any Advance if Agent shall have
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actual knowledge that (1) one or more of the applicable
conditions precedent set forth in Section 3 will not be
satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) the
requested Borrowing would exceed the Availability on such
Funding Date.
(ii) Unless Agent receives notice from a Lender
on or prior to the Restatement Closing Date or, with respect
to any Borrowing after the Restatement Closing Date, at least
1 Business Day prior to the date of such Borrowing, that such
Lender will not make available as and when required hereunder
to Agent for the account of Borrower the amount of that
Lender's Pro Rata Share of the Borrowing, Agent may assume
that each Lender has made or will make such amount available
to Agent in immediately available funds on the Funding Date
and Agent may (but shall not be so required), in reliance upon
such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent any Lender shall
not have made its full amount available to Agent in
immediately available funds and Agent in such circumstances
has made available to Borrower such amount, that Lender shall
on the Business Day following such Funding Date make such
amount available to Agent, together with interest at the
Defaulting Lender Rate for each day during such period. A
notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available,
such payment to Agent shall constitute such Lender's Advance
on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to Agent on the Business
Day following the Funding Date, Agent will notify Borrower of
such failure to fund and, upon demand by Agent, Borrower shall
pay such amount to Agent for Agent's account, together with
interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Advances composing such
Borrowing. The failure of any Lender to make any Advance on
any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance on such Funding Date,
but no Lender shall be responsible for the failure of any
other Lender to make the Advance to be made by such other
Lender on any Funding Date.
(iii) Agent shall not be obligated to transfer to
a Defaulting Lender any payments made by Borrower to Agent for
the Defaulting Lender's benefit, and, in the absence of such
transfer to the Defaulting Lender, Agent shall transfer any
such payments to each other non-Defaulting Lender member of
the Lender Group ratably in accordance with their Commitments
(but only to the extent that such Defaulting Lender's Advance
was funded by the other members of the Lender Group) or, if so
directed by Borrower and if no Default or Event of Default had
occurred and is continuing (and to the extent such
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Defaulting Lender's Advance was not funded by the Lender
Group), retain same to be re-advanced to Borrower as if such
Defaulting Lender had made Advances to Borrower. Subject to
the foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrower for the account of such
Defaulting Lender the amount of all such payments received and
retained by it for the account of such Defaulting Lender.
Solely for the purposes of voting or consenting to matters
with respect to the Loan Documents, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero. This Section shall
remain effective with respect to such Lender until (x) the
Obligations under this Agreement shall have been declared or
shall have become immediately due and payable, (y) the
non-Defaulting Lenders, Agent, and Borrower shall have waived
such Defaulting Lender's default in writing, or (z) the
Defaulting Lender makes its Pro Rata Share of the applicable
Advance and pays to Agent all amounts owing by Defaulting
Lender in respect thereof. The operation of this Section shall
not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance
by such Defaulting Lender or any other Lender of its duties
and obligations hereunder, or to relieve or excuse the
performance by Borrower of its duties and obligations
hereunder to Agent or to the Lenders other than such
Defaulting Lender. Any such failure to fund by any Defaulting
Lender shall constitute a material breach by such Defaulting
Lender of this Agreement and shall entitle Borrower at its
option, upon written notice to Agent, to arrange for a
substitute Lender to assume the Commitment of such Defaulting
Lender, such substitute Lender to be acceptable to Agent. In
connection with the arrangement of such a substitute Lender,
the Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver a
completed form of Assignment and Acceptance Agreement in favor
of the substitute Lender (and agrees that it shall be deemed
to have executed and delivered such document if it fails to do
so) subject only to being repaid its share of the outstanding
Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability) without any premium or
penalty of any kind whatsoever; provided further, however,
that any such assumption of the Commitment of such Defaulting
Lender shall not be deemed to constitute a waiver of any of
the Lender Groups' or Borrower's rights or remedies against
any such Defaulting Lender arising out of or in relation to
such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the
consent of Swing Lender, as a Lender, to have the terms of
this Section 2.3(d) apply to a requested Borrowing as
described in Section 2.3(b), Swing Lender as a Lender shall
make such Advance in the amount of such Borrowing (any such
Advance
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made solely by Swing Lender as a Lender pursuant to this
Section 2.3(d) being referred to as a "Swing Loan" and such
Advances being referred to collectively as "Swing Loans")
available to Borrower on the Funding Date applicable thereto
by transferring immediately available funds to Borrower's
Designated Account. Each Swing Loan is an Advance hereunder
and shall be subject to all the terms and conditions
applicable to other Advances, except that all payments on any
Swing Loan shall be payable to Swing Lender as a Lender solely
for its own account (and for the account of the holder of any
Participating Interest with respect to such Swing Loan).
Subject to the provisions of Section 2.3(i), Agent shall not
request Swing Lender as a Lender to make, and Swing Lender as
a Lender shall not make, any Swing Loan if Agent has actual
knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless
such condition has been waived, or (ii) the requested
Borrowing would exceed the Availability on such Funding Date.
Swing Lender as a Lender shall not otherwise be required to
determine whether the applicable conditions precedent set
forth in Section 3 have been satisfied on the Funding Date
applicable thereto prior to making, in its sole discretion,
any Swing Loan.
(ii) The Swing Loans shall be secured by the
Agent's Liens, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrower and
the Lenders, from time to time in Agent's sole discretion, (1)
after the occurrence and during the continuance of a Default
or an Event of Default, or (2) at any time that any of the
other applicable conditions precedent set forth in Section 3
have not been satisfied, to make Advances to Borrower on
behalf of the Lenders that Agent, in its Permitted Discretion
deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the
likelihood of repayment of the Obligations, or (C) to pay any
other amount chargeable to Borrower pursuant to the terms of
this Agreement, including Lender Group Expenses and the costs,
fees, and expenses described in Section 10 (any of the
Advances described in this Section 2.3(e) shall be referred to
as "Agent Advances"). Each Agent Advance is an Advance
hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that no such Agent
Advance shall be eligible for the LIBOR Option and all
payments thereon shall be payable to Agent solely for its own
account (and for the account of the holder of any
Participating Interest with respect to such Agent Advance).
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(ii) The Agent Advances shall be repayable on
demand and secured by the Agent's Liens granted to Agent under
the Loan Documents, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.
(f) SETTLEMENT. It is agreed that each Lender's
funded portion of the Advances is intended by the Lenders to equal, at all
times, such Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, Agent, Swing Lender, and the other Lenders agree (which
agreement shall not be for the benefit of or enforceable by Borrower) that in
order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Advances, the Swing Loans, and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or on a
more frequent basis if so determined by Agent, (1) on behalf
of Swing Lender, with respect to each outstanding Swing Loan,
(2) for itself, with respect to each Agent Advance, and (3)
with respect to proceeds of Collections received, as to each
by notifying the Lenders by telecopy, telephone, or other
similar form of transmission, of such requested Settlement, no
later than 2:00 p.m. (California time) on the Business Day
immediately prior to the date of such requested Settlement
(the date of such requested Settlement being the "Settlement
Date"). Such notice of a Settlement Date shall include a
summary statement of the amount of outstanding Advances, Swing
Loans, and Agent Advances for the period since the prior
Settlement Date. Subject to the terms and conditions contained
herein (including Section 2.3(c)(iii)): (y) if a Lender's
balance of the Advances, Swing Loans, and Agent Advances
exceeds such Lender's Pro Rata Share of the Advances, Swing
Loans, and Agent Advances as of a Settlement Date, then Agent
shall, by no later than 12:00 p.m. (California time) on the
Settlement Date, transfer in immediately available funds to
the account of such Lender as such Lender may designate, an
amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of
the Advances, Swing Loans, and Agent Advances, and (z) if a
Lender's balance of the Advances, Swing Loans, and Agent
Advances is less than such Lender's Pro Rata Share of the
Advances, Swing Loans, and Agent Advances as of a Settlement
Date, such Lender shall no later than 12:00 p.m. (California
time) on the Settlement Date transfer in immediately available
funds to the Agent's Account, an amount such that each such
Lender shall, upon transfer of such amount, have as of the
Settlement Date, its Pro Rata Share of the Advances, Swing
Loans, and Agent Advances. Such amounts made available to
Agent under clause (z) of the immediately preceding sentence
shall be applied against the amounts of the applicable Swing
Loan or Agent Advance and, together with the portion of such
Swing Loan or Agent
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Advance representing Swing Lender's Pro Rata Share thereof,
shall constitute Advances of such Lenders. If any such amount
is not made available to Agent by any Lender on the Settlement
Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest
thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of
the Advances, Swing Loans, and Agent Advances is less than,
equal to, or greater than such Lender's Pro Rata Share of the
Advances, Swing Loans, and Agent Advances as of a Settlement
Date, Agent shall, as part of the relevant Settlement, apply
to such balance the portion of payments actually received in
good funds by Agent with respect to principal, interest, fees
payable by Borrower and allocable to the Lenders hereunder,
and proceeds of Collateral. To the extent that a net amount is
owed to any such Lender after such application, such net
amount shall be distributed by Agent to that Lender as part of
such next Settlement.
(iii) Between Settlement Dates, Agent, to the
extent no Agent Advances or Swing Loans are outstanding, may
pay over to Swing Lender any payments received by Agent, that
in accordance with the terms of this Agreement would be
applied to the reduction of the Advances, for application to
Swing Lender's Pro Rata Share of the Advances. If, as of any
Settlement Date, proceeds of Collections received since the
then immediately preceding Settlement Date have been applied
to Swing Lender's Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing
Lender shall pay to Agent for the accounts of the Lenders, and
Agent shall pay to the Lenders, to be applied to the
outstanding Advances of such Lenders, an amount such that each
Lender shall, upon receipt of such amount, have, as of such
Settlement Date, its Pro Rata Share of the Advances. During
the period between Settlement Dates, Swing Lender with respect
to Swing Loans, Agent with respect to Agent Advances, and each
Lender (subject to the effect of letter agreements between
Agent and individual Lenders) with respect to the Advances
other than Swing Loans and Agent Advances, shall be entitled
to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing
Lender, Agent, or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books
the principal amount of the Advances owing to each Lender, including the Swing
Loans owing to Swing Lender, and Agent Advances owing to Agent, and the
interests therein of each Lender, from time to time. In addition, each Lender is
authorized, at such Lender's option, to note the date and amount of each payment
or prepayment of principal of such Lender's Advances in its books
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and records, including computer records, such books and records constituting
conclusive evidence for the Lender Group, absent manifest error, of the accuracy
of the information contained therein.
(h) LENDERS' FAILURE TO PERFORM. All Advances
(other than Swing Loans and Agent Advances) shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Advance (or other extension of credit)
hereunder, nor shall any Commitment of any Lender be increased or decreased as a
result of any failure by any other Lender to perform its obligations hereunder,
and (ii) no failure by any Lender to perform its obligations hereunder shall
excuse any other Lender from its obligations hereunder.
(i) OPTIONAL OVERADVANCES. Any contrary
provision of this Agreement notwithstanding, the Lenders hereby authorize Agent
or Swing Lender, as applicable, and Agent or Swing Lender, as applicable, may,
but is not obligated to, knowingly and intentionally, continue to make Advances
(including Swing Loans) to Borrower notwithstanding that an Overadvance exists
or thereby would be created, so long as (i) after giving effect to such Advances
(including a Swing Loan), the outstanding Revolver Usage does not exceed the
Borrowing Base by more than $2,500,000 (ii) after giving effect to such Advances
(including a Swing Loan), the outstanding Revolver Usage (except for and
excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) does not exceed the Maximum Revolver Amount, and (iii) at the
time of the making of any such Advance (including any Swing Loan), Agent does
not believe, in good faith, that the Overadvance created by such Advance will be
outstanding for more than 90 days. The foregoing provisions are for the
exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended
to benefit Borrower in any way. The Advances and Swing Loans, as applicable,
that are made pursuant to this Section 2.3(i) shall be subject to the same terms
and conditions as any other Advance or Swing Loan, as applicable, except that
they shall not be eligible for the LIBOR Option and the rate of interest
applicable thereto shall be the rate applicable to Advances that are Base Rate
Loans under Section 2.6(c) hereof without regard to the presence or absence of a
Default or Event of Default.
(i) In the event Agent obtains actual knowledge
that the Revolver Usage exceeds the amounts permitted by the
preceding paragraph, regardless of the amount of, or reason
for, such excess, Agent shall notify Lenders as soon as
practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender
Group Expenses) unless Agent determines that prior notice
would result in imminent harm to the Collateral or its value),
and the Lenders thereupon shall, together with Agent, jointly
determine the terms of arrangements that shall be implemented
with Borrower intended to reduce, within a reasonable time,
the outstanding principal amount of the Advances to
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Borrower to an amount permitted by the preceding paragraph. In
the event Agent or any Lender disagrees over the terms of
reduction or repayment of any Overadvance, the terms of
reduction or repayment thereof shall be implemented according
to the determination of the Required Lenders.
(ii) Each Lender shall be obligated to settle
with Agent as provided in Section 2.3(f) for the amount of
such Lender's Pro Rata Share of any unintentional Overadvances
by Agent reported to such Lender, any intentional Overadvances
made as permitted under this Section 2.3(i), and any
Overadvances resulting from the charging to the Loan Account
of interest, fees, or Lender Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWER.
(i) Except as otherwise expressly
provided herein, all payments by Borrower shall be made to
Agent's Account for the account of the Lender Group and shall
be made in immediately available funds, no later than 11:00
a.m. (California time) on the date specified herein. Any
payment received by Agent later than 11:00 a.m. (California
time) shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
(ii) Unless Agent receives notice from
Borrower prior to the date on which any payment is due to the
Lenders that Borrower will not make such payment in full as
and when required, Agent may assume that Borrower has made (or
will make) such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so
required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent Borrower does not
make such payment in full to Agent on the date when due, each
Lender severally shall repay to Agent on demand such amount
distributed to such Lender, together with interest thereon at
the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS.
(i) Except as otherwise provided with
respect to Defaulting Lenders and except as otherwise provided
in the Loan Documents (including letter agreements between
Agent and individual Lenders), aggregate principal and
interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the
Obligations to which such
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payments relate held by each Lender) and payments of fees and
expenses (other than fees or expenses that are for Agent's
separate account, after giving effect to any letter agreements
between Agent and individual Lenders) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type
of Commitment or Obligation to which a particular fee relates.
All payments shall be remitted to Agent and all such payments
(other than payments received while no Event of Default has
occurred and is continuing and which relate to the payment of
principal or interest of specific Obligations or which relate
to the payment of specific fees), and all proceeds of Accounts
or other Collateral received by Agent, shall be applied as
follows:
first, to pay any Lender Group Expenses then
due to Agent under the Loan Documents, until paid in
full,
second, to pay any Lender Group Expenses
then due to the Lenders under the Loan Documents, on
a ratable basis, until paid in full,
third, to pay any fees then due to Agent
(for its separate account, after giving effect to any
letter agreements between Agent and individual
Lenders) under the Loan Documents, until paid in
full,
fourth, to pay any fees then due to any or
all of the Lenders (after giving effect to any letter
agreements between Agent and individual Lenders),
under the Loan Documents, on a ratable basis, until
paid in full,
fifth, to pay interest due in respect of all
Agent Advances, until paid in full,
sixth, ratably to pay interest due in
respect of the Advances (other than Agent Advances)
and the Swing Loans, until paid in full,
seventh, to pay the principal of all Agent
Advances until paid in full,
eighth, to pay the principal of all Swing
Loans until paid in full,
ninth, to pay the principal of all Advances
until paid in full,
tenth, if an Event of Default has occurred
and is continuing, to Agent, to be held by Agent, for
the ratable benefit of Issuing Lender and Lenders, as
cash collateral in an amount up to 105% of the then
extant Letter of Credit Usage until paid in full,
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eleventh, to pay any other Obligations then
due and payable until paid in full, and
twelfth, to Borrower (to be wired to the
Designated Account) or such other Person entitled
thereto under applicable law.
(ii) Agent promptly shall distribute to each
Lender, pursuant to the applicable wire instructions received
from each Lender in writing, such funds as it may be entitled
to receive, subject to a Settlement delay as provided in
Section 2.3(h).
(iii) In each instance, so long as no Event of
Default has occurred and is continuing, Section 2.4(b) shall
not be deemed to apply to any payment by Borrower specified by
Borrower to be for the payment of specific Obligations then
due and payable (or prepayable) under any provision of this
Agreement.
(iv) For purposes of the foregoing, "paid in
full" means payment of all amounts owing under the Loan
Documents according to the terms thereof, including loan fees,
service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any
Insolvency Proceeding), default interest, interest on
interest, and expense reimbursements, whether or not the same
would be or is allowed or disallowed in whole or in part in
any Insolvency Proceeding.
(v) In the event of a direct conflict between
the priority provisions of this Section 2.4 and other
provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions
in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this
Section 2.4 shall control and govern.
2.5 OVERADVANCES. Subject to Section 2.3(i), if, at any time or
for any reason, the amount of Obligations owed by Borrower to the Lender Group
pursuant to Sections 2.1 and 2.12 is greater than either the Dollar or
percentage limitations set forth in Sections 2.1 or 2.12, (an "Overadvance"),
Borrower immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance with
the priorities set forth in Section 2.4(b). In addition, Borrower hereby
promises to pay the Obligations (including principal, interest, fees, costs, and
expenses) in Dollars in full to the Lender Group as and when due and payable
under the terms of this Agreement and the other Loan Documents.
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2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause
(c) below, all Obligations (except for undrawn Letters of Credit and other
contingent Obligations not yet due and payable) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof as follows (i) if the relevant Obligation is an Advance that is
a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR
Rate Margin, and (ii) otherwise, at a per annum rate equal to the Base Rate plus
the Base Rate Margin.
(b) LETTER OF CREDIT FEE. Borrower shall pay
Agent (for the ratable benefit of the Lenders, subject to any letter agreement
between Agent and individual Lenders), a Letter of Credit fee (in addition to
the charges, commissions, fees, and costs set forth in Section 2.12(e)) which
shall accrue at a rate equal to 5.25% per annum times the Daily Balance of the
undrawn amount of all outstanding Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during
the continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn
Letters of Credit and other contingent Obligations
not yet due and payable) that have been charged to
the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof at a per
annum rate equal to 3 percentage points above the per
annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided
for above shall be increased to 3 percentage points
above the per annum rate otherwise applicable
hereunder.
(d) PAYMENT. Interest, Letter of Credit fees,
and all other fees payable hereunder shall be due and payable, in arrears, on
the first day of each month (except for interest on LIBOR Rate Loans which
interest shall be due and payable on (i) the last day of the applicable Interest
Period, and (ii) in the case of an Interest Period of 6 months, on the date that
is 3 months after the commencement of the applicable Interest Period) at any
time that Obligations or Commitments are outstanding. Agent shall, from time to
time without prior notice to Borrower, charge such interest and fees, all Lender
Group Expenses (as and when incurred), the charges, commissions, fees, and costs
provided for in Section 2.12(e) (as and when accrued or incurred), the fees and
costs provided for in Section 2.11 (as and when accrued or incurred), and all
other payments as and when due and payable under any Loan Document to Borrower's
Loan Account, which amounts thereafter shall constitute Advances hereunder and
shall accrue interest at the rate then applicable to Advances hereunder;
provided, however, that Agent will endeavor in good faith to notify Borrower
promptly after
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it charges any Lender Group Expenses to Borrower's Loan Account, but the failure
to provide such notification, unless willful, shall not result in any liability
of Agent. Any interest not paid when due shall be compounded by being charged to
Borrower's Loan Account and shall thereafter constitute Advances hereunder and
shall accrue interest at the rate then applicable to Advances that are Base Rate
Loans hereunder.
(e) COMPUTATION. 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. In the event the Base Rate is
changed from time to time hereafter, the rates of interest hereunder based upon
the Base Rate automatically and immediately shall be increased or decreased by
an amount equal to such change in the Base Rate.
(f) 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 the Lender Group, 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.
2.7 CASH MANAGEMENT.
(a) Borrower shall (i) prior to the\ Restatement
Closing Date, establish and maintain cash management services of a type and on
terms satisfactory to Agent at the bank set forth on Schedule 2.7(a) (the "Cash
Management Bank"), and shall take reasonable steps to ensure that all of its
Account Debtors forward payment of the amounts owed by them directly to such
Cash Management Bank, (ii) from and after the Restatement Closing Date, continue
its historical practice of requiring each of its Subsidiaries to remit to
Borrower all cash and Cash Equivalents of such Subsidiaries when the amount of
cash and Cash Equivalents of each such Subsidiary, in the aggregate for each
such Subsidiary equals $50,000 (other than amounts expected to be expended
within the next 5 Business Days) and arrange to have such excess amounts
remitted to the Cash Management Bank, and (iii) from and after the Restatement
Closing Date, deposit or cause to be deposited promptly, and in any event no
later than the first Business Day after the date of receipt thereof, all of its
Collections (including those Collections sent directly by Account Debtors to the
Cash Management Bank and excluding those resulting from a Permitted Disposition
or Permitted Swap, which Collections shall be remitted to Agent in accordance
with and to the extent required by Section 2.2; but excluding (for clarity) the
Collections of Borrower's
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Subsidiaries which are intended to be covered by clause (ii) above) into a bank
account (a "Cash Management Account") at the Cash Management Bank.
(b) The Cash Management Bank shall establish and
maintain a Cash Management Agreement with Agent and Borrower, in form and
substance acceptable to Agent. Each such Cash Management Agreement shall
provide, among other things, that (i) all items of payment deposited in such
Cash Management Account and proceeds thereof are held by such Cash Management
Bank as agent or bailee-in-possession for Agent, (ii) the Cash Management Bank
has no rights of setoff or recoupment or any other claim against the applicable
Cash Management Account other than for payment of its service fees and other
charges directly related to the administration of such Cash Management Account
and for returned checks or other items of payment, and (iii) upon receipt of
written notice from Agent to the Cash Management Bank, it immediately will
forward by daily sweep all amounts in the applicable Cash Management Account to
the Agent's Account. Anything contained herein to the contrary notwithstanding,
Agent agrees that it shall not provide the above-described notice to the Cash
Management Bank unless and until a Triggering Event has occurred and is
continuing at a time when Advances or Letters of Credit are outstanding. Once a
Triggering Event has occurred and is continuing at a time when Advances or
Letters of Credit are outstanding, Agent shall be free to exercise its right to
issue such notice and the subsequent elimination of the subject Triggering Event
shall not eliminate the effectiveness of such notice.
(c) So long as no Default or Event of Default
has occurred and is continuing, Borrower may amend Schedule 2.7(a) to add or
replace a Cash Management Bank or Cash Management Account; provided, however,
that (i) such prospective Cash Management Bank shall be satisfactory to Agent
and Agent shall have consented in writing in advance to the opening of such Cash
Management Account with the prospective Cash Management Bank, and (ii) prior to
the time of the opening of such Cash Management Account, Borrower and such
prospective Cash Management Bank shall have executed and delivered to Agent a
Cash Management Agreement. Borrower shall close any of its Cash Management
Accounts (and establish replacement cash management accounts in accordance with
the foregoing sentence) promptly and in any event within 30 days of notice from
Agent that the creditworthiness of any Cash Management Bank is no longer
acceptable in Agent's reasonable judgment, or as promptly as practicable and in
any event within 60 days of notice from Agent that the operating performance,
funds transfer, or availability procedures or performance of the Cash Management
Bank with respect to Cash Management Accounts or Agent's liability under any
Cash Management Agreement with such Cash Management Bank is no longer acceptable
in Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash
collateral accounts, with all cash, checks and similar items of payment in such
accounts securing payment of the Obligations, and in which Borrower is hereby
deemed to have granted a Lien to Agent.
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2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent
(whether from transfers to Agent by the Cash Management Banks pursuant to the
Cash Management Agreements or otherwise) shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrower shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's 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 Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances,
and Issuing Lender is authorized to issue the Letters of Credit, 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(d). Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the proceeds of
the Advances requested by Borrower and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Borrower, any Advance, Agent Advance, or
Swing Loan requested by Borrower and made by Agent or the Lenders hereunder
shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrower (the "Loan
Account") on which Borrower will be charged with all Advances (including Agent
Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to
Borrower or for Borrower's account, the Letters of Credit issued by Issuing
Lender for Borrower's account, and with all other payment Obligations hereunder
or under the other Loan Documents, including, accrued interest, fees and
expenses, and Lender Group Expenses. In accordance with Section 2.8, the Loan
Account will be credited with all payments received by Agent from Borrower or
for Borrower's account, including all amounts received in the Agent's Account
from any Cash Management Bank. Agent shall render statements regarding the Loan
Account to Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrower and the Lender Group
unless, within 60 days after receipt thereof by Borrower, Borrower shall deliver
to Agent written objection thereto describing the error or errors contained in
any such statements.
2.11 FEES. Borrower shall pay to Agent the following fees and
charges, which fees and charges shall be non-refundable when paid (irrespective
of whether this Agreement is
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terminated thereafter) and shall be apportioned among the Lenders in accordance
with the terms of letter agreements between Agent and individual Lenders:
(a) UNUSED LINE FEE. On the first day of each
month during the term of this Agreement, an unused line fee in an amount equal
to 0.50% per annum times the result of (i) the Maximum Revolver Amount less (ii)
the sum of (A) the average Daily Balance of Advances that were outstanding
during the immediately preceding month, plus (B) the average Daily Balance of
the Letter of Credit Usage during the immediately preceding month,
(b) FEE LETTER FEES. As and when due and payable
under the terms of the Fee Letter, Borrower shall pay to Agent the fees set
forth in the Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. For
the separate account of Agent, audit, appraisal, and valuation fees and charges
as follows (i) a fee of $850 per day, per auditor, plus out-of-pocket expenses
for each financial audit of Borrower performed by personnel employed by Agent,
(ii) a fee of $1,500 per day per appraiser, plus out-of-pocket expenses, for
each appraisal of the Collateral performed by personnel employed by Agent, and
(iii) the actual charges paid or incurred by Agent if it elects to employ the
services of one or more third Persons to perform financial audits of Borrower,
to appraise the Collateral, or any portion thereof, or to assess Borrower's
business valuation. The foregoing notwithstanding, so long as no Event of
Default is continuing, Borrower shall not be required to pay the fees and
charges of more than (a) 3 audits per fiscal year, and (b) 2 appraisals per
fiscal year. Without limiting the rights of Agent under this Section 2.11(c) and
so long as no Event of Default is continuing, Borrower, for the purpose of
adjusting the calculation of Applicable Eligible Value, shall be entitled to
cause to be performed, at Borrower's expense, up to 2 appraisals of the STAC
Value or the OLV Value of the Stations per fiscal year and shall be entitled to
choose whether the appraisal is a STAC Value or an OLV Value appraisal, and upon
delivery of any such appraisal to Agent, such appraisal shall constitute the
basis for calculating the Applicable Eligible Value.
2.12 LETTERS OF CREDIT
(a) Subject to the terms and conditions of this
Agreement, the Issuing Lender agrees to issue letters of credit for the account
of Borrower (each, an "L/C") or to purchase participations or execute
indemnities or reimbursement obligations (each such undertaking, an "L/C
Undertaking") with respect to letters of credit issued by an Underlying Issuer
(as of the Restatement Closing Date the prospective Underlying Issuer shall be
Xxxxx Fargo) for the account of Borrower. To request the issuance of an L/C or
an L/C Undertaking (or the amendment, renewal, or extension of an outstanding
L/C or L/C Undertaking), Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the
requested date of issuance, amendment, renewal, or extension) a notice
requesting the issuance of an L/C or L/C
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Undertaking, or identifying the L/C or L/C Undertaking to be amended, renewed,
or extended, the date of issuance, amendment, renewal, or extension, the date on
which such L/C or L/C Undertaking is to expire, the amount of such L/C or L/C
Undertaking, the name and address of the beneficiary thereof (or the beneficiary
of the Underlying Letter of Credit, as applicable), and such other information
as shall be necessary to prepare, amend, renew, or extend such L/C or L/C
Undertaking. If requested by the Issuing Lender, Borrower also shall be an
applicant under the application with respect to any Underlying Letter of Credit
that is to be the subject of an L/C Undertaking. The Issuing Lender shall have
no obligation to issue a Letter of Credit if any of the following would result
after giving effect to the requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the
Borrowing Base less the amount of outstanding Advances, or
(ii) the Letter of Credit Usage would exceed
$4,000,000, or
(iii) the Letter of Credit Usage would exceed the
Maximum Revolver Amount less the then extant amount of
outstanding Advances.
Borrower and the Lender Group acknowledge and agree that
certain Underlying Letters of Credit may be issued to support letters of credit
that already are outstanding as of the Restatement Closing Date. Each Letter of
Credit (and corresponding Underlying Letter of Credit) shall be in form and
substance acceptable to the Issuing Lender (in the exercise of its Permitted
Discretion), including the requirement that the amounts payable thereunder must
be payable in Dollars. If Issuing Lender is obligated to advance funds under a
Letter of Credit, Borrower immediately shall reimburse such L/C Disbursement to
Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not
later than 11:00 a.m., California time, on the date that such L/C Disbursement
is made, if Borrower shall have received written or telephonic notice of such
L/C Disbursement prior to 10:00 a.m., California time, on such date, or, if such
notice has not been received by Borrower prior to such time on such date, then
not later than 11:00 a.m., California time, on the following Business Day and,
in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans
under Section 2.6 unless and until converted to a LIBOR Rate Loan in accordance
with the terms hereof. To the extent an L/C Disbursement is deemed to be an
Advance hereunder, Borrower's obligation to reimburse such L/C Disbursement
shall be discharged and replaced by the resulting Advance. Promptly following
receipt by Agent of any payment from Borrower pursuant to this paragraph, Agent
shall distribute such payment to the Issuing Lender or, to the extent that
Lenders have made payments pursuant to Section 2.12(c) to reimburse the Issuing
Lender, then to such Lenders and the Issuing Lender as their interest may
appear.
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(b) Promptly following receipt of a notice of
L/C Disbursement pursuant to Section 2.12(a), each Lender agrees to fund its Pro
Rata Share of any Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if Borrower had requested such Advance and
Agent shall promptly pay to Issuing Lender the amounts so received by it from
the Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders, the Issuing Lender shall be deemed to
have granted to each Lender, and each Lender shall be deemed to have purchased,
a participation in each Letter of Credit, in an amount equal to its Pro Rata
Share of the Risk Participation Liability of such Letter of Credit, and each
such Lender agrees to pay to Agent, for the account of the Issuing Lender, such
Lender's Pro Rata Share of any payments made by the Issuing Lender under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to Agent, for the
account of the Issuing Lender, such Lender's Pro Rata Share of each L/C
Disbursement made by the Issuing Lender and not reimbursed by Borrower on the
date due as provided in clause (a) of this Section, or of any reimbursement
payment required to be refunded to Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share pursuant
to this Section 2.12(b) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in Section
3 hereof. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, Agent (for the account of the
Issuing Lender) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.
(c) Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless from any loss, cost, expense, or
liability, and reasonable attorneys fees incurred by the Lender Group arising
out of or in connection with any Letter of Credit; provided, however, that
Borrower shall not be obligated hereunder to indemnify for any loss, cost,
expense, or liability that is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group.
Borrower agrees to be bound by the Underlying Issuer's regulations and
interpretations of any Underlying Letter of Credit or by Issuing Lender's
interpretations of any L/C issued by Issuing Lender to or for Borrower's
account, even though this interpretation may be different from Borrower's own,
and Borrower understands and agrees that the Lender Group shall not be liable
for any error, negligence, or mistake, whether of omission or commission, in
following Borrower's instructions or those contained in the Letter of Credit or
any modifications, amendments, or supplements thereto. Borrower understands that
the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrower
against such Underlying Issuer. Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless
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with respect to any loss, cost, expense (including reasonable attorneys fees),
or liability incurred by the Lender Group under any L/C Undertaking as a result
of the Lender Group's indemnification of any Underlying Issuer; provided,
however, that Borrower shall not be obligated hereunder to indemnify for any
loss, cost, expense, or liability that is caused by the gross negligence or
willful misconduct of the Issuing Lender or any other member of the Lender
Group.
(d) Borrower hereby authorizes and directs any
Underlying Issuer to deliver to the Issuing Lender all instruments, documents,
and other writings and property received by such Underlying Issuer pursuant to
such Underlying Letter of Credit and to accept and rely upon the Issuing
Lender's instructions with respect to all matters arising in connection with
such Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and
costs incurred by the Issuing Lender relating to Underlying Letters of Credit
shall be Lender Group Expenses for purposes of this Agreement and immediately
shall be reimbursable by Borrower to Agent for the account of the Issuing
Lender; it being acknowledged and agreed by Borrower that, as of the Restatement
Closing Date, the issuance charge imposed by the prospective Underlying Issuer
is .825% per annum times the face amount of each Underlying Letter of Credit,
that such issuance charge may be changed from time to time, and that the
Underlying Issuer also imposes a schedule of charges for amendments, extensions,
drawings, and renewals.
(f) If by reason of (i) any change in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (ii) compliance by the
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
(i) any reserve, deposit, or similar requirement
is or shall be imposed or modified in respect of any Letter of
Credit issued hereunder, or
(ii) there shall be imposed on the Underlying
Issuer or the Lender Group any other condition regarding any
Underlying Letter of Credit or any Letter of Credit issued
pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Borrower, and Borrower shall pay on demand such amounts as Agent may
specify to be necessary to compensate the Lender Group for such additional cost
or reduced receipt, together with interest on such amount from the date of such
demand until payment in full thereof at the rate then applicable to Base Rate
Loans
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hereunder. The determination by Agent of any amount due pursuant to this
Section, as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto.
2.13 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu
of having interest charged at the rate based upon the Base Rate, Borrower shall
have the option (the "LIBOR Option") to have interest on all or a portion of the
Advances be charged at a rate of interest based upon the LIBOR Rate. Interest on
LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto, (ii) the occurrence of an Event of Default
in consequence of which the Required Lenders or Agent on behalf thereof elect to
accelerate the maturity of all or any portion of the Obligations, or (iii)
termination of this Agreement pursuant to the terms hereof. On the last day of
each applicable Interest Period, unless Borrower properly has exercised the
LIBOR Option with respect thereto, the interest rate applicable to such LIBOR
Rate Loan automatically shall convert to the rate of interest then applicable to
Base Rate Loans of the same type hereunder. At any time that an Event of Default
has occurred and is continuing, Borrower no longer shall have the option to
request that Advances bear interest at the LIBOR Rate and Agent shall have the
right to convert the interest rate on all outstanding LIBOR Rate Loans to the
rate then applicable to Base Rate Loans hereunder.
(b) LIBOR Election.
(i) Borrower may, at any time and from time to
time, so long as no Event of Default is continuing, elect to
exercise the LIBOR Option by notifying Agent prior to 11:00
a.m. (California time) at least 3 Business Days prior to the
commencement of the proposed Interest Period (the "LIBOR
Deadline"). Notice of Borrower's election of the LIBOR Option
for a portion of the Advances and an Interest Period pursuant
to this Section shall be made by delivery to Agent of a LIBOR
Notice received by Agent before the LIBOR Deadline, or by
telephonic notice received by Agent before the LIBOR Deadline
(to be confirmed by delivery to Agent of a LIBOR Notice
received by Agent prior to 5:00 p.m. (California time) on the
same day. Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the Lenders.
(ii) Each LIBOR Notice shall be irrevocable and
binding on Borrower. In connection with each LIBOR Rate Loan,
Borrower shall indemnify, defend, and hold Agent and the
Lenders harmless against any loss, cost, or expense incurred
by Agent or any Lender as a result of (a) the payment of any
principal of any LIBOR Rate Loan other than on the last day of
an Interest Period applicable thereto (including as a result
of an Event of Default),
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(b) the conversion of any LIBOR Rate Loan other than on the
last day of the Interest Period applicable thereto, or (c) the
failure to borrow, convert, continue or prepay any LIBOR Rate
Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, and expenses,
collectively, "Funding Losses"). Funding Losses shall, with
respect to Agent or any Lender, be deemed to equal the amount
determined by Agent or such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the
principal amount of such LIBOR Rate Loan had such event not
occurred, at the LIBOR Rate that would have been applicable
thereto, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in
the case of a failure to borrow, convert, or continue, for the
period that would have been the Interest Period therefor),
minus (ii) the amount of interest that would accrue on such
principal amount for such period at the interest rate which
Agent or such Lender would be offered were it to be offered,
at the commencement of such period, Dollar deposits of a
comparable amount and period in the London interbank market. A
certificate of Agent or a Lender delivered to Borrower setting
forth any amount or amounts that Agent or such Lender is
entitled to receive pursuant to this Section shall be
conclusive absent manifest error.
(iii) Borrower shall have not more than 8 LIBOR
Rate Loans in effect at any given time. Borrower only may
exercise the LIBOR Option for LIBOR Rate Loans of at least
$1,000,000 and integral multiples of $200,000 in excess
thereof.
(c) PREPAYMENTS. Borrower may prepay LIBOR Rate
Loans at any time; provided, however, that in the event that LIBOR Rate Loans
are prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any automatic prepayment through
the required application by Agent of proceeds of Collections in accordance with
Section 2.4(b) or for any other reason, including early termination of the term
of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, Borrower shall indemnify, defend, and hold Agent
and the Lenders and their Participants harmless against any and all Funding
Losses in accordance with clause (b)(ii) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with
respect to any Lender on a prospective basis to take into
account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased
costs due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general
applicability in corporate income tax laws)
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and changes in the reserve requirements imposed by the Board
of Governors of the Federal Reserve System (or any successor),
excluding the Reserve Percentage, which additional or
increased costs would increase the cost of funding loans
bearing interest at the LIBOR Rate. In any such event, the
affected Lender shall give Borrower and Agent notice of such a
determination and adjustment; provided, however, that before
making any such demand, the affected Lender agrees to use
reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions and so long as such efforts
would not be disadvantageous to it, in its reasonable
discretion, in any legal, economic (other than immaterial
costs related to such efforts), or regulatory manner) to
designate a different eurodollar lending office if the making
of such designation would allow the affected Lender to
continue to perform its obligations to make LIBOR Rate Loans
and avoid the need for, or materially reduce the amount of,
such increased cost; and Agent promptly shall transmit the
notice to each other Lender. Upon its receipt of the notice
from the affected Lender, Borrower may, by notice to such
affected Lender (y) require such Lender to furnish to Borrower
a statement setting forth the basis for adjusting such LIBOR
Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to
which such adjustment is made (together with any amounts due
under clause (b)(ii) above). In the case of clause (y) above,
within 30 days after its receipt of the notice from the
affected Lender, Borrower may, at its option, (I) elect to
substitute for such affected Lender any other bank or
financial institution reasonably acceptable to Agent, and such
affected Lender shall have no right to refuse to be replaced
hereunder, or (II) terminate the Commitment that is held by
such affected Lender.
(ii) In the event that any change in market
conditions or any law, regulation, treaty, or directive, or
any change therein or in the interpretation of application
thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Rate
Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such
Lender shall give written notice of such changed circumstances
to Agent and Borrower; provided, however, that before making
any such demand, the affected Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not
be disadvantageous to it, in its reasonable discretion, in any
legal, economic (other than immaterial costs related to such
efforts), or regulatory manner) to designate a different
eurodollar lending office if the making of such designation
would allow the affected Lender to continue to perform its
obligations to make LIBOR Rate Loans; and Agent promptly shall
transmit the notice to each other Lender. Within 30 days after
its receipt of the notice from
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such affected Lender, Borrower may, at its option, (I) elect
to substitute for such affected Lender any other bank or
financial institution reasonably acceptable to Agent, and such
affected Lender shall have no right to refuse to be replaced
hereunder, (II) terminate the Commitment that is held by such
affected Lender, or (III) elect to accept Base Rate Loans only
from such affected Lender.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything
to the contrary contained herein notwithstanding, neither Agent, nor any Lender,
nor any of their Participants, is required actually to acquire eurodollar
deposits to fund or otherwise match fund any Obligation as to which interest
accrues at the LIBOR Rate. The provisions of this Section shall apply as if each
Lender or its Participants had match funded any Obligation as to which interest
is accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change after the date hereof in any law,
rule, regulation or guideline regarding capital requirements for banks or bank
holding companies, or any change in the interpretation or application thereof by
any Governmental Authority charged with the administration thereof, or (ii)
compliance by such Lender or its parent bank holding company with any guideline,
request, or directive of any such entity regarding capital adequacy (whether or
not having the force of law), has or will have the effect of reducing the return
on such Lender's or such holding company's capital as a consequence of such
Lender's Commitments hereunder to a level below that which such Lender or such
holding company could have achieved but for such adoption, change, or compliance
(taking into consideration such Lender's or such holding company's then existing
policies with respect to capital adequacy and assuming the full utilization of
such entity's capital) by any amount deemed by such Lender to be material, then
such Lender may notify Borrower and Agent thereof. Following receipt of such
notice, Borrower agrees to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined (but in
no event for a period of more than 90 days prior to the date of the written
notice), payable within 90 days after presentation by such Lender of a statement
in the amount and setting forth in reasonable detail such Lender's calculation
thereof and the assumptions upon which such calculation was based (which
statement shall be deemed true and correct absent manifest error). In
determining such amount, such Lender may use any reasonable averaging and
attribution methods. The foregoing notwithstanding, in the event that payments
to any Lender are required to be made hereunder as a result of such additional
costs, Borrower shall be entitled to substitute for such Lender any other bank
or financial institution reasonably acceptable to Agent, and such Lender shall
have no right to refuse to be replaced hereunder. Each such Lender shall state
in the notice required by this Section 2.14, in reasonable detail, the cause and
amount of such additional cost. Within 30 days after receipt of such notice,
Borrower may, at its option, elect to terminate the Commitment that is held by
such Lender.
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3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfillment, to the satisfaction of Agent, of each of the conditions
precedent set forth below:
(a) the Restatement Closing Date shall occur on
or before August 11, 2003;
(b) Agent shall have received all UCC searches
and financing statements required by Agent with respect to the
Janesville-Madison Station, and the results of such searches shall be
satisfactory to Agent;
(c) Agent shall have received each of the
following documents, in form and substance satisfactory to Agent, duly executed,
and each such document shall be in full force and effect:
(i) Collateral Assignment of the Key Lease with
respect to the Janesville-Madison Station, together with an
appropriate consent to hypothecation from the lessor under
such Key Lease (to the extent any such consent is required
thereby),
(ii) Collateral Assignment of the Tower Lease
with respect to the Janesville-Madison Station, together with
an appropriate consent to hypothecation from the lessor under
such Tower Lease (to the extent any such consent is required
thereby),
(iii) the Control Agreements with respect to the
Janesville-Madison Station,
(iv) the Equipment Financing Letter Agreement,
(v) the Fee Letter,
(vi) the Guarantor Security Agreement,
(vii) the Guaranty,
(viii) the Intercompany Subordination Agreement,
(ix) modifications of the Mortgages, the
Collateral Assignments of Key Leases, and the Collateral
Assignments of Tower Leases, in form and substance
satisfactory to Agent, reflecting the amendment and
restatement of the Existing Loan Agreement and the increase in
the Maximum Revolver
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Amount, and confirmation of recordation in all applicable
jurisdictions of such modifications,
(x) the Pledge Agreement, together with all
certificates representing the certificated shares of Stock
pledged thereunder that were not delivered on the Closing
Date, as well as Stock powers with respect to such
certificated shares endorsed in blank;
(d) Agent shall have received a certificate from
the Secretary of Borrower attesting to the resolutions of Borrower's Board of
Directors authorizing its execution, delivery, and performance of this Agreement
and the other Loan Documents to which Borrower is a party and authorizing
specific officers of Borrower to execute the same;
(e) Agent shall have received copies of
Borrower's Governing Documents, as amended, modified, or supplemented to the
Restatement Closing Date, certified by the Secretary of Borrower or a
certificate from the Secretary of Borrower certifying that there have been no
amendments or other modifications to Borrower's Governing Documents since the
Closing Date;
(f) Agent shall have received a certificate of
status with respect to Borrower, dated within 10 days of the Restatement Closing
Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of Borrower, which certificate shall indicate that
Borrower is in good standing in such jurisdiction;
(g) Agent shall have received certificates of
status with respect to Borrower, each dated within 30 days of the Restatement
Closing Date, such certificates to be issued by the appropriate officer of the
jurisdictions (other than the jurisdiction of organization of Borrower) in which
its failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that Borrower is in good standing in
such jurisdictions;
(h) Agent shall have received a certificate from
the Secretary of each Guarantor attesting to the resolutions of such Guarantor's
Board of Directors authorizing its execution, delivery, and performance of the
Loan Documents to which such Guarantor is a party and authorizing specific
officers of such Guarantor to execute the same;
(i) Agent shall have received copies of each
Guarantor's Governing Documents, as amended, modified, or supplemented to the
Restatement Closing Date, certified by the Secretary of such Guarantor or a
certificate from the Secretary of such Guarantor certifying that there have been
no amendments or other modifications to such Borrower's Governing Documents
since the Closing Date;
(j) Agent shall have received a certificate of
status with respect to each Guarantor, dated within 10 days of the Restatement
Closing Date, such certificate to be
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issued by the appropriate officer of the jurisdiction of organization of such
Guarantor, which certificate shall indicate that such Guarantor is in good
standing in such jurisdiction;
(k) Agent shall have received certificates of
status with respect to each Guarantor, each dated within 30 days of the
Restatement Closing Date, such certificates to be issued by the appropriate
officer of the jurisdictions (other than the jurisdiction of organization of
such Guarantor) in which its failure to be duly qualified or licensed would
constitute a Material Adverse Change, which certificates shall indicate that
such Guarantor is in good standing in such jurisdiction;
(l) Agent shall have received (i) an opinion of
Obligors' counsel substantially in the form of the opinion delivered on the
Closing Date and otherwise in form and substance satisfactory to Agent and (ii)
an opinion of Obligors' special communications counsel with respect to the
Janesville-Madison Station, substantially in the form of the opinion delivered
on the Closing Date and otherwise in form and substance satisfactory to Agent;
(m) Agent shall have received satisfactory
evidence (including a certificate of the chief financial officer of Borrower)
that all tax returns required to be filed by Borrower and its Subsidiaries have
been timely filed and all taxes upon Borrower, its Subsidiaries, or their
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;
(n) Borrower shall have the Required
Availability after giving effect to the initial extensions of credit, if any,
hereunder;
(o) Agent shall have received Borrower's
Restatement Closing Date Business Plan;
(p) Borrower shall have paid all Lender Group
Expenses incurred in connection with the transactions evidenced by this
Agreement;
(q) Agent shall have received copies of each
LMA, Key Lease, Tower Lease, and Affiliation Agreement with respect to the
Janesville-Madison Station, together with a certificate of the Secretary of
Borrower certifying each such document as being a true, correct, and complete
copy thereof;
(r) Agent shall have received a title insurance
date down 1B endorsement on existing title insurance policies for the Real
Property Collateral issued by Chicago Title or another title insurance company
satisfactory to Agent reflecting the amendment and restatement of the Existing
Loan Agreement and the increase in the Maximum Revolver Amount; and
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(s) Borrower shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by Borrower of this Agreement or any
other Loan Document or with the consummation of the transactions contemplated
hereby and thereby.
3.2 CONDITIONS PRECEDENT TO INTERMEDIATE NOTES REPAYMENT. The
obligation of the Lender Group (or any member thereof) to make the Advances for
the purpose of funding the repayment, redemption, or repurchase of the
Intermediate Notes (other than the repurchase of Intermediate Notes in the open
market as permitted under clause (d) of the definition of "Permitted Restricted
Payments") is subject to the fulfillment, to the satisfaction of Agent, of each
of the conditions precedent set forth below (the "Intermediate Notes Repayment
Closing Conditions"):
(a) the Intermediate Notes Repayment Closing
Date shall occur on or before October 1, 2003;
(b) Agent shall have received each of the
following documents, duly executed, and each such document shall then be in full
force and effect or shall be in full force and effect concurrently with the
funding of the Advances permitted under clause (e) of the definition of
Permitted Restricted Payments:
(i) a Disbursement Letter,
(ii) the Parent Guarantor Security Agreement,
(iii) the Parent Guaranty,
(iv) the Parent Pledge Agreement, together with
all certificates representing the certificated shares of Stock
pledged thereunder, as well as Stock powers with respect to
such certificated shares endorsed in blank,
(v) a Solvency Certificate;
(c) Agent shall have received UCC searches with
respect to Parent Guarantors and the results of such searches shall be
satisfactory to Agent;
(d) Agent shall have received all financing
statements required by Agent with respect to Parent Guarantors;
(e) Agent shall have received a certificate from
the Secretary of each Parent Guarantor attesting to the resolutions of such
Parent Guarantor's Board of Directors authorizing its execution, delivery, and
performance of the Loan Documents to which such Parent Guarantor is a party and
authorizing specific officers of such Guarantor to execute the same;
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(f) Agent shall have received copies of each
Parent Guarantor's Governing Documents, as amended, modified, or supplemented to
the Intermediate Notes Repayment Closing Date, certified by the Secretary of
such Parent Guarantor;
(g) Agent shall have received a certificate of
status with respect to each Parent Guarantor, dated within 10 days of the
Intermediate Notes Repayment Closing Date, such certificate to be issued by the
appropriate officer of the jurisdiction of organization of such Parent
Guarantor, which certificate shall indicate that such Parent Guarantor is in
good standing in such jurisdiction;
(h) Agent shall have received certificates of
status with respect to each Parent Guarantor, each dated within 30 days of the
Restatement Closing Date, such certificates to be issued by the appropriate
officer of the jurisdictions (other than the jurisdiction of organization of
such Parent Guarantor) in which its failure to be duly qualified or licensed
would constitute a Material Adverse Change, which certificates shall indicate
that such Parent Guarantor is in good standing in such jurisdiction;
(i) Agent shall have received an opinion of
Parent Guarantors' counsel with respect to Parent Guarantors substantially in
the form of the opinion delivered on the Closing Date and otherwise in form and
substance satisfactory to Agent;
(j) Borrower shall have the Required
Availability after giving effect to the Advances to be made on the Intermediate
Notes Repayment Closing Date.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make all Advances (or
to extend any other credit hereunder) shall be subject to the following
conditions precedent:
(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,
(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, Agent, any Lender, or any of their Affiliates, and
(d) no Material Adverse Change shall have
occurred.
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3.4 TERM. This Agreement shall become effective upon the execution
and delivery hereof by Borrower, Agent, and the Lenders and shall continue in
full force and effect for a term ending on July 31, 2006 (the "Maturity Date").
The foregoing notwithstanding, the Lender Group, upon the election of the
Required Lenders, shall have the right to terminate its obligations under this
Agreement immediately and without notice during the continuation of an Event of
Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrower with respect to outstanding Letters of Credit) immediately shall become
due and payable without notice or demand (including either (i) providing cash
collateral to be held by Agent for the benefit of Lenders in an amount equal to
105% of the then extant Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to the Issuing Lender). No termination of this
Agreement, however, shall relieve or discharge Borrower of its duties,
Obligations, or covenants hereunder and the Agent's Liens in the Collateral
shall remain in effect (other than those Liens that were previously released in
accordance with the terms of this Agreement) until all Obligations (other than
contingent indemnification obligations or obligations to reimburse Lender for
drawings under outstanding Letters of Credit that have been cash collateralized
as provided herein) have been fully and finally discharged and the Lender
Group's obligations to provide additional credit hereunder have been terminated.
When this Agreement has been terminated and all of the Obligations (other than
contingent indemnification obligations or obligations to reimburse Lender for
drawings under outstanding Letters of Credit that have been cash collateralized
as provided herein) have been fully and finally discharged and the Lender
Group's obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrower's sole expense, execute and
deliver any UCC termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form)
as are reasonably necessary to release, as of record, the Agent's Liens (other
than with respect to the cash collateral provided pursuant to the first sentence
of this Section 3.5) and all notices of security interests and liens previously
filed by Agent with respect to the Obligations.
3.6 EARLY TERMINATION BY BORROWER. Borrower has the option, upon
no less than 30 days or more than 45 days prior written notice to Agent, to
terminate this Agreement by paying to Agent, for the benefit of the Lender
Group, in cash, the Obligations (including either (i) providing cash collateral
to be held by Agent for the benefit of Lenders in an amount equal to 105% of the
then extant Letter of Credit Usage, or (ii) causing the original Letters of
Credit to be returned to the Issuing Lender), in full, together with the
Applicable Prepayment Premium (to be allocated among the Lenders in accordance
with their respective Pro Rata Shares). If Borrower sends a notice of
termination pursuant to the provisions of this Section and does not revoke such
notice prior to the termination date set forth therein, then the Commitments
shall terminate and Borrower shall be obligated to repay the Obligations
(including (a) either (i) providing cash collateral to be held by Agent for the
benefit of
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Lenders in an amount equal to 105% of the then extant Letter of Credit Usage, or
(ii) causing the original Letters of Credit to be returned to the Issuing
Lender), in full, together with the Applicable Prepayment Premium, on the date
set forth in such notice. In the event of the termination of this Agreement and
repayment of the Obligations at any time prior to the Maturity Date, for any
other reason, including (a) termination upon the election of the Required
Lenders to terminate during the continuation of an Event of Default, (b)
foreclosure and sale of Collateral, (c) sale of the Collateral in any Insolvency
Proceeding, or (iv) restructure, reorganization, or compromise of the
Obligations by the confirmation of a plan of reorganization or any other plan of
compromise, restructure, or arrangement in any Insolvency Proceeding, then, in
view of the impracticability and extreme difficulty of ascertaining the actual
amount of damages to the Lender Group or profits lost by the Lender Group as a
result of such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrower shall pay the Applicable Prepayment Premium to Agent (to
be allocated among the Lenders in accordance with their respective Pro Rata
Shares), measured as of the date of such termination. The foregoing to the
contrary notwithstanding, in the event that any termination of this Agreement by
Borrower pursuant to the first sentence of this Section 3.6 occurs as a
proximate result of or in proximate connection with (A) Borrower's consummation
of an equity or subordinated debt issuance, (B) the sale of all or substantially
all of the Stock of Borrower or all or substantially all of Borrower's and its
Subsidiaries' assets, in one or a series of related transactions, or (C) a
refinancing of the Obligations provided solely by Xxxxx Fargo or one of its
Affiliates, or as to which Xxxxx Fargo or one of its Affiliates serves as the
administrative agent or makes a commitment to lend at least $10,000,000, then,
(i) in the case of (A) or (B) above, the Applicable Prepayment Premium shall be
equal to one-half of the Applicable Prepayment Premium that would otherwise be
applicable, and (ii) in the case of (C) above, the Applicable Prepayment Premium
shall be equal to zero. Agent shall return to Borrower any cash collateral held
by Agent in respect of any Letter of Credit within 30 days after the expiration
or termination of such Letter of Credit, net of the amount of any draws, costs,
expenses or letter of credit fees in respect of such letter of credit.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to Agent,
for the benefit of the Lender Group, a continuing security interest in all of
its right, title, and interest in all currently existing and hereafter acquired
or arising Personal Property Collateral in order to secure prompt repayment of
any and all of the Obligations in accordance with the terms and conditions of
the Loan Documents and in order to secure prompt performance by Borrower of each
of its covenants and duties under the Loan Documents. The Agent's Liens in and
to the Personal Property Collateral shall attach to all Personal Property
Collateral without further act on the part of Agent or Borrower. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Permitted Swaps, and
amendments, modifications or terminations of licenses not prohibited hereunder,
no Obligor has any authority, express or implied, to dispose of any item or
portion
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of the 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 Agent a security interest in the FCC Licenses,
Agent 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 Agent 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 Agent 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 Agent;
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 Agent first becomes entitled to exercise
such remedy or action (but only so long as Agent is so entitled); provided,
however, that, the foregoing exclusion shall in no way be construed (a) to apply
if any such prohibition is unenforceable under applicable law, or (b) so as to
limit, impair or otherwise affect Agent's unconditional continuing security
interests in and liens upon any rights or interests of Borrower in or to monies
due or to become due under any such license, or (c) to limit, impair, or
otherwise affect Agent's continuing security interest in and Lien upon any
rights or interests of Borrower in and to any proceeds from the sale, license,
lease, or other disposition of any such FCC License.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral, and if
and to the extent that perfection or priority of Agent's security interest is
dependent on or enhanced by possession, Borrower, promptly upon the request of
Agent, 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 Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time during the continuation of an Event of Default, Agent or
Agent's designee may (a) notify Account Debtors of the Obligors that the
Accounts, chattel paper, or General Intangibles have been assigned to Agent or
that Agent has a security interest therein, or (b) collect the Accounts, chattel
paper, or General Intangibles directly and charge the reasonable collection
costs and expenses to the Loan Account. Borrower agrees that it will, and will
cause each of the other Obligors to (and by execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to), hold in
trust for the Lender Group, as the Lender Group's trustee, any Collections that
it receives and, subject to the terms of Section 2.7, immediately will deliver
said Collections to Agent or a Cash Management Bank in their original form as
received by the applicable Obligor.
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4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time
upon the request of Agent, Borrower shall, and shall cause each of the other
Obligors to (and by execution and delivery of the Guaranty or a joinder thereto,
each of the Guarantors hereby agrees to), execute and deliver to Agent, any and
all financing statements, original financing statements in lieu of continuation
statements, fixture filings, mortgages, security agreements, pledges,
assignments (including Collateral Assignments of Key Leases and Collateral
Assignments of Tower Leases that are entered into by Borrower or any of its
Subsidiaries at or following the closing of any Permitted Acquisition),
endorsements of certificates of title, and all other documents (the "Additional
Documents") that Agent may request in its Permitted Discretion, in form and
substance satisfactory to Agent, to perfect and continue perfected or better
perfect the Agent's Liens in the Collateral (including Liens in joint venture
interests that are acquired in a Permitted Joint Venture Acquisitions) (whether
now owned or hereafter arising or acquired), to create and perfect Liens in
favor of Agent in any Real Property acquired after the Closing Date (in form
substantially similar to the Mortgages executed on or prior to the Closing Date
(subject to variations necessary to take into account local law and practice),
and in order to fully consummate all of the transactions contemplated hereby and
under the other Loan Documents. To the maximum extent permitted by applicable
law, Borrower authorizes Agent to execute any such Additional Documents in
Borrower's name and authorizes Agent to file such executed Additional Documents
in any appropriate filing office. In addition, on such periodic basis as Agent
shall require (but so long as no Event of Default is continuing, not more
frequently than monthly), Borrower shall, and shall cause each of the other
Obligors to (and by execution and delivery of the Guaranty or a joinder thereto,
each of the Guarantors hereby agrees to), (a) provide Agent with a report of all
new patentable, copyrightable, or trademarkable materials acquired or generated
by any of the Obligors during the prior period, (b) cause all patents,
copyrights, and trademarks acquired or generated by that are not already the
subject of a registration with the appropriate filing office (or an application
therefor diligently prosecuted) to be registered with such appropriate filing
office in a manner sufficient to impart constructive notice of the applicable
Obligor's ownership thereof, and (c) cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such patents, copyrights, and trademarks as being subject to the
security interests created thereunder.
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), Agent (and any of Agent's officers, employees, or agents designated
by Agent) 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, sign the Obligors' names on any invoice or xxxx of lading
relating to the Collateral, drafts against Account Debtors, or notices to
Account Debtors, (c) send requests for verification of
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Accounts, (d) endorse the Obligors' names on any Collection item that may come
into the Lender Group's possession, (e) at any time that an Event of Default has
occurred and is continuing, 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 (f) at any time that an Event of
Default has occurred and is continuing, settle and adjust disputes and claims
respecting the Accounts, chattel paper, or General Intangibles directly with
Account Debtors, for amounts and upon terms that Agent determines to be
reasonable, and Agent may cause to be executed and delivered any documents and
releases that Agent determines to be necessary. The appointment of Agent as the
Obligors' attorney, and each and every one of its rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been
fully and finally repaid and performed and the Lender Group's obligations to
extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective 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 Obligor's financial condition or
the amount, quality, value, condition of, or any other matter relating to, the
Collateral; provided, however, that any such audit or appraisal shall be subject
to the limitations set forth in Section 2.11(c).
4.7 CONTROL AGREEMENTS. Borrower agrees that, from and after the
Closing Date, it will not, and it will cause the other Obligors not to (and by
its execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees that it will not), transfer assets out of any
Securities Accounts unless such Securities Account contains assets of $100,000
or less and, if to another securities intermediary, unless each of the
applicable Obligor, Agent, and the substitute securities intermediary have
entered into a Control Agreement. No arrangement contemplated hereby or by any
Control Agreement in respect of any Securities Accounts or other Investment
Property shall be modified by any Obligor without the prior written consent of
Agent. During the continuance of an Event of Default, Agent may notify any
securities intermediary to liquidate the applicable Securities Account or any
related Investment Property maintained or held thereby and remit the proceeds
thereof to the Agent's Account for application against the Obligations.
4.8 RELEASE OF COLLATERAL. Upon any sale or disposition of any
Collateral that is expressly permitted under this Agreement and the other Loan
Documents, upon the request of the applicable Obligor and at such Obligor's
expense, Agent will promptly execute and deliver to such Obligor the proper
instruments or provide written authorization to such Obligor (including
authorization to file any UCC termination statements or amendments, as
applicable) as may be necessary or required to effect the release of Agent's
security interest in such Collateral.
5. REPRESENTATIONS AND WARRANTIES.
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In order to induce the Lender Group to enter into this
Agreement, Borrower makes the following representations and warranties to the
Lender Group, which shall be true, correct, and complete in all material
respects as of the Restatement Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of credit)
(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 their properties and assets (including all of the Stations), free and clear
of Liens except for Permitted Liens.
5.2 [INTENTIONALLY OMITTED].
5.3 [INTENTIONALLY OMITTED].
5.4 EQUIPMENT. All of the Equipment that is used or held for use
in the Obligors' businesses is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. Except (a) as set forth
on Schedule 5.5, and (b) for personal computers and other office equipment in an
aggregate amount not to exceed $100,000, the Inventory and Equipment are not
stored with a bailee, warehouseman, or similar party and are located only at the
locations identified on Schedule 5.5. Borrower may update Schedule 5.5 from time
to in accordance with Section 6.9; provided that (a) no such update to such
Schedule or representation shall be or be deemed to retroactively effect a
correction of any representation and warranty which was incorrect or untrue when
made or to constitute a waiver of any Default or Event of Default resulting from
the matters disclosed therein, except as consented to by Agent and Required
Lenders in writing, and (b) no update shall be permitted as to representations
and warranties that relate solely to the Closing Date or the Restatement Closing
Date.
5.6 [INTENTIONALLY OMITTED].
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of Borrower is located at the address indicated in Schedule 5.7 and
Borrower's FEIN is identified in Schedule 5.7.
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 organization and
qualified to do business in any state where the failure to be so qualified
reasonably could be expected to have a Material Adverse Change.
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(b) Set forth on Schedule 5.8(b) is a complete
and accurate description of the authorized capital Stock of Borrower, by class,
and, as of the Restatement Closing Date, a description of the number of shares
of each such class that are issued and outstanding. Other than as described on
Schedule 5.8(b), there are no subscriptions, options, warrants, or calls
relating to any shares of Borrower's capital Stock, including any right of
conversion or exchange under any outstanding security or other instrument.
Borrower is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital Stock or any
security convertible into or exchangeable for any of its capital Stock.
(c) Set forth on Schedule 5.8(c) is a complete
and accurate list of Borrower's direct and indirect Subsidiaries, showing: (i)
the jurisdiction of their organization, (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. 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(c),
there are no subscriptions, options, warrants, or calls relating to any shares
of Borrower's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. Neither Borrower
nor any of its Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of Borrowers'
Subsidiaries' capital Stock or any security convertible into or exchangeable for
any such capital Stock.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) 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 action on the part of Borrower.
(b) 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 (i) violate any provision of federal, state, or local law or
regulation applicable to Borrower, the Governing Documents of Borrower, or any
order, judgment, or decree of any court or other Governmental Authority binding
on Borrower, (ii) 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 of Borrower, (iii) result in or require the creation or imposition of
any Lien of any nature whatsoever upon any properties or assets of Borrower,
other than Permitted Liens, or (iv) require any approval of Borrower's
interestholders or any approval or consent of any Person under any material
contractual obligation of Borrower.
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(c) Other than as set forth on Schedule 5.9 and
other than the filing of mortgages, financing statements, and fixture filings,
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 Governmental Authority or other Person. Notwithstanding the foregoing
or the provisions of clause (h) below, (i) from time to time, the Obligors may
be required to obtain certain authorizations of or to make certain filings with
the FCC and which are required in the ordinary course of business, (ii) copies
of certain documents, including without limitation certain Loan Documents, may
be required to be filed with the FCC pursuant to 47 C.F.R Section 73.3613, (iii)
the FCC must be notified of the consummation of any assignments or transfers of
control of FCC authorizations for any television broadcast stations and
ownership reports are required to be filed with the FCC after such consummation
pursuant to 47 C.F.R. Section 73.3615, and (iv) prior to the exercise of certain
rights or remedies under the Loan Documents by Agent, FCC consents and
notifications with respect to such exercise may be required to be timely
obtained or made.
(d) This Agreement and the other Loan Documents
to which Borrower is a party, 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.
(e) The Agent's Liens are validly created,
perfected, and first priority Liens, subject only to Permitted Liens, except for
(i) Liens on certain Deposit Accounts and Securities Accounts which may not be
perfected due to there being no requirement in this Agreement of a Control
Agreement thereon, (ii) Liens on certain Real Property Collateral which may not
be perfected due to the legal description in the Mortgage thereon not being in
recordable form, and (iii) Liens in letter of credit rights which may not be
perfected due to Agent's not having control of such letter of credit rights
within the meaning of revised Article 9 of the Code.
(f) The execution, delivery, and performance by
Guarantors of the Loan Documents to which they are party have been duly
authorized by all necessary action on the part of each Guarantor.
(g) The execution, delivery, and performance by
Guarantors of the Loan Documents to which they are party do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable
to any Guarantor, the Governing Documents of any Guarantor, or any order,
judgment, or decree of any court or other Governmental Authority binding on any
Guarantor, (ii) 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 of any Guarantor, (iii) result in or require the creation or
imposition of any Lien of
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any nature whatsoever upon any properties or assets of any Guarantor, other than
Permitted Liens, or (iv) require any approval of any Guarantor's interestholders
or any approval or consent of any Person under any material contractual
obligation of any Guarantor.
(h) Other than as set forth on Schedule 5.9 and
other than the filing of mortgages, financing statements, and fixture filings
and subject to the final sentence of Section 5.9(c), the execution, delivery,
and performance by Guarantors of the Loan Documents to which they are party do
not and will not require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority or other
Person.
(i) The Loan Documents to which Guarantors are
party, and all other documents contemplated hereby and thereby, when executed
and delivered by Guarantors will be the legally valid and binding obligations of
each Guarantor, enforceable against each Guarantor 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.
5.10 LITIGATION. Other than those matters disclosed on Schedule
5.10, there are no actions, suits, complaints, or proceedings, investigations
(to the actual knowledge of Borrower) or governmental inquiries (to the actual
knowledge of Borrower) pending, or to the actual knowledge of Borrower,
threatened against any of the Obligors, except for (a) matters that are fully
covered by insurance (subject to customary deductibles), and (b) matters arising
after the Restatement Closing Date that, if decided adversely to the applicable
Obligor or Obligors, reasonably could not be expected to result in a Material
Adverse Change. None of the Obligors has received within the past 2 years any
notice of violation, notice of apparent liability for a forfeiture, or notice of
forfeiture from the FCC.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating
to Borrower or its Subsidiaries that have been delivered by Borrower to the
Lender Group 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 present fairly in all material respects,
Borrower's (or its Subsidiaries', as applicable) financial condition as of the
date thereof and results of operations for the period then ended. There has not
been a Material Adverse Change with respect to Borrower (or its Subsidiaries, as
applicable) since the date of the latest financial statements submitted to the
Lender Group on or before the Restatement Closing Date.
5.12 FRAUDULENT TRANSFER. No transfer of property is being made by
any Obligor and no obligation is being incurred by any Obligor in connection
with the transactions contemplated by this Agreement or the other Loan Documents
with the actual intent to hinder, delay, or defraud either present or future
creditors of any Obligor.
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5.13 EMPLOYEE BENEFITS. None of the Obligors or any of their ERISA
Affiliates maintains or contributes to any Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 5.14,
(a) to Borrower's knowledge, none of the Obligors' real property assets has ever
been used by the Obligors or by previous owners or operators in the disposal of,
or to produce, store, handle, treat, release, or transport, any Hazardous
Materials, where such production, storage, handling, treatment, release or
transport was in violation, in any material respect, of applicable Environmental
Law, (b) to Borrower's knowledge, none of the Obligors' properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) none of the
Obligors have received notice that a Lien arising under any Environmental Law
has attached to any revenues or to any Real Property owned or operated by the
Obligors, and (d) none of the Obligors have 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 of
the Obligors resulting in the releasing or disposing of Hazardous Materials into
the environment.
5.15 BROKERAGE FEES. Borrower has not utilized the services of any
broker or finder in connection with Borrower's obtaining financing from the
Lender Group under this Agreement and no brokerage commission or finders fee is
payable by Borrower in connection herewith.
5.16 INTELLECTUAL PROPERTY. The Obligors own, or hold licenses in,
all trademarks, trade names, copyrights, patents, patent rights, and licenses
that are necessary to the conduct of their business as currently conducted.
Attached hereto as Schedule 5.16 is a true, correct, and complete listing of all
material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which any of the Obligors is the
owner or is an exclusive licensee.
5.17 LEASES. Schedule 5.17 accurately and completely lists, and
sets forth a description of, all agreements between one or more of the Obligors
and any Person relating to the location of (i) tower and transmitter sites used
in the operation of the Stations (the "Tower Leases") and (ii) offices, studios
and other facilities (the "Key Leases"), and the same constitute the only Tower
Leases and the Key Leases necessary to the conduct by the Obligors of their
businesses as presently conducted. The Obligors enjoy peaceful and undisturbed
possession under all leases (including the Tower Leases) to which they are a
party as lessee, and all of such leases are valid, subsisting and in full force
and effect, and no material default by any Obligor exists under any of them.
None of such leases contains any provision restricting the incurrence of
indebtedness by the lessee. Borrower may update Schedule 5.17 from time to time
if Borrower enters into any new Tower Leases or Key Leases; provided that (a) no
such update to such Schedule or representation shall be or be deemed to
retroactively effect a correction of any representation and warranty which was
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incorrect or untrue when made or to constitute a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Required Lenders in writing, and (b) no update shall be permitted
as to representations and warranties that relate solely to the Closing Date or
the Restatement Closing Date.
5.18 DDAS. Set forth on Schedule 5.18 are all of the Obligors'
DDAs, including, with respect to each depository (i) the name and address of
such depository, and (ii) the account numbers of the accounts maintained with
such depository. Borrower may update Schedule 5.18 from time to time if any
Obligor opens a new DDA (subject to any requirements herein to cause a Control
Agreement to be delivered to Agent with respect to such new DDA); provided that
(a) no such update to such Schedule or representation shall be or be deemed to
retroactively effect a correction of any representation and warranty which was
incorrect or untrue when made or to constitute a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Required Lenders in writing, and (b) no update shall be permitted
as to representations and warranties that relate solely to the Closing Date or
the Restatement Closing Date..
5.19 COMPLETE DISCLOSURE. All factual information (taken as a
whole) furnished by or on behalf of the Obligors in writing to Agent or any
Lender (including all information contained in the Schedules hereto or in the
other Loan Documents) for purposes of or in connection with this Agreement, the
other Loan Documents, or any transaction contemplated herein or therein is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of the Obligors in writing to Agent or any Lender will be, true and
accurate, in all material respects, on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was
provided; provided that for the purposes of the foregoing, the Restatement
Closing Date Projections and any other Projections delivered to Agent are not
intended to be considered factual information. On the Restatement Closing Date,
the Restatement Closing Date Projections represent, and as of the date on which
any other Projections are delivered to Agent, such additional Projections
represent Borrower's good faith best estimate of the Obligors' future
performance for the periods covered thereby.
5.20 INDEBTEDNESS. Set forth on Schedule 5.20 is a true and
complete list of all Indebtedness of the Obligors outstanding immediately prior
to the Restatement Closing Date that is to remain outstanding after the
Restatement Closing Date and such Schedule accurately reflects the aggregate
principal amount of such Indebtedness.
5.21 LICENSES AND PERMITS. Except as set forth in Schedule 5.21,
all licenses, permits and similar rights (including FCC Licenses) required from
any Federal, state or local governmental body for the ownership, construction,
use and operation of the Stations and other properties now owned and operated by
the Obligors have been validly issued and are in full force and effect, unless
and to the extent the failure to obtain or maintain any such
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license, permit or similar right could not reasonably be expected to result in a
Material Adverse Change, and the Obligors are in compliance, in all material
respects, with all of the provisions thereof, unless and to the extent the
failure of the Obligors to be in compliance with any such provision thereof
could not reasonably be expected to result in a Material Adverse Change, 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, adverse modification, suspension, or non-renewal
thereof, unless and to the extent such revocation, cancellation, adverse
modification, suspension, or non-renewal thereof could not reasonably be
expected to result in a Material Adverse Change. Except as set forth on Schedule
5.21, the Obligors have completed construction of their respective
FCC-authorized digital television broadcast stations or shall have requested an
extension from the FCC for any such station for which construction has not been
completed and the FCC has not denied any such request by final order. As of the
Restatement Closing Date and as of each subsequent date on which Borrower
delivers to Agent an updated schedule pursuant to Section 6.17, set forth on
Schedule 5.21 is a complete and accurate list of all such licenses, permits,
special temporary authorizations, and consents, and a complete description of
any material waivers of any FCC rules granted by the FCC to any Obligor, and
such schedule identifies the date by which an application for the renewal of
such license, permit, special temporary authorization, consent, or waiver must
be filed and describes the status of each such pending application.
5.22 NO DEFAULT IN MAIN STATION LICENSES. No default by any Obligor
exists under any Main Station License 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 any Obligor thereunder and each such Main Station License has been
duly authorized, executed and delivered by each Obligor party thereto and is in
full force and effect and has not been amended or modified except as disclosed
in writing to Agent.
5.23 LMAS. All LMAs of the Obligors are identified on Schedule 5.23
and each of the Obligors party to any of the LMAs is in compliance with all of
the material terms of such LMA and, to the best of each Obligor's knowledge,
except as described on Schedule 5.23, all other parties to each such LMA are in
compliance with the provisions thereof. Without limiting Borrower's obligation
to comply with this representation and warranty or any other term of this
Agreement, Borrower may update Schedule 5.23 from time to time for the sole
purposes of adding a Permitted LMA to such Schedule and disclosing that a
non-Obligor party to a LMA is not in compliance with such LMA and upon such
disclosure, Borrower shall not be in violation of this Section due to such
non-compliance.
5.24 GOVERNMENTAL AUTHORITY. Except for the consents,
authorizations, approvals, actions, notices and filings with or by 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
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governmental authorities with respect to television stations), 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 the Borrower of the security interest in the Collateral granted
hereby or for the execution, delivery or performance of this Agreement by
Borrower, or (ii) for the perfection of such security interest.
5.25 INACTIVE SUBSIDIARY. The Inactive Subsidiary does not own any
material assets and does not engage in any business activity whatsoever.
5.26 THE STATIONS
.
(a) Each of the Obligors and the Stations is in
compliance, in all material respects, with all applicable federal, state and
local laws, published rules and regulations, and published policies of any
Governmental Authority having jurisdiction over such Obligor, including, without
limitation, the Children's Television Act of 1990, Telecommunications Act of
1996, the Communications Act of 1934, as amended, and the published rules and
policies of the FCC and all rules and laws governing equal employment
opportunity. Without limiting the generality of the foregoing:
(i) Each Obligor has filed all material reports
and other submissions required to be filed with the FCC, and
has timely paid all annual regulatory fees required to be paid
to the FCC, by such Obligor with respect to its Stations and
their operations;
(ii) the operation of the Stations is in
compliance in all material respects with American National
Standards Institute Standards C95.1-1992 to the extent
required under applicable rules and regulations;
(iii) all of the existing towers used in the
operation of the Stations are obstruction-marked and lighted
to the extent required by, and in accordance with, the
published rules and regulations of the FAA and appropriate
notifications to the FAA have been filed and determinations of
no hazard to air navigation have been obtained from the FAA
for each such tower where required, and all such towers have
been duly registered with the FCC as and to the extent such
registration is required by the FCC's regulations;
(iv) the Stations are in material compliance with
the provisions of the Communications Decency Act of 1996 in
effect, as well as any and all published FCC rules and
policies in effect to implement such Act.
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(b) None of the Obligors that own or manage the
Stations is subject to any FCC proceedings in respect of Equal Employment
Opportunity or other regulatory violations and, to Borrower's best knowledge, no
such proceedings are threatened.
(c) The assets of the Stations are adequate and
sufficient for all of the current operations of the Stations as contemplated as
of the date hereof.
5.27 SIGNAL CARRIAGE. The License Companies or the Operating
Companies, as the case may be, have timely and effectively notified the cable
television systems covering substantially all of the cable television
subscribers in the market areas in which the Stations are located (other than
cable television systems not capable of receiving such Stations' signal or not
required to carry such Stations' signals under "must carry" provisions of
applicable law) of the elections by such License Companies or such Operating
Companies, as the case may be, to have such Stations' signals carried on such
systems pursuant either to retransmission consent agreements or to mandatory
carriage requests by such Licensing Companies or such Operating Companies, as
the case may be, and, to Borrower's best knowledge, except as set forth in
Schedule 5.27, all such cable systems are doing so pursuant to such
retransmission consent agreements or such mandatory carriage requests. With
respect to any market area in which any of the Stations is located and in which
one or more direct broadcast satellite service provider(s) has or have (i)
announced an intention to provide so-called "local-to-local" retransmission of
the signals of television stations in such market area to its or their
subscribers in such market area, or (ii) commenced such retransmission, the
signal of such Station is being provided, or the License Companies or the
Operating Companies, as the case may be, shall diligently pursue the provision,
by such provider(s) to its or their subscribers in such market to the extent
required by the provisions of the Satellite Home Viewer Improvement Act of 1999
or the rules of the FCC.
5.28 PROCEEDS OF INTERMEDIATE NOTES
. Substantially all of the proceeds of the Intermediate Notes
were contributed or otherwise transferred to Borrower and its Subsidiaries
promptly after the issuance of the Intermediate Notes by ACME Intermediate and
ACME Intermediate Finance.
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
(other than contingent indemnification obligations or obligations to reimburse
the Lender Group for drawings under outstanding Letters of Credit that have been
cash collateralized as provided herein), Borrower shall, and shall cause each of
the other Obligors to, do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that
enables Borrower to produce financial statements in accordance with GAAP and
maintain records pertaining to
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the Collateral that contain information from time to time as reasonably may be
requested by Agent.
6.2 COLLATERAL REPORTING. Provide Agent (and if so requested by
Agent, with copies for each Lender) with the following documents at the
following times in form satisfactory to Agent:
=====================================================================================================================
Monthly (not later than (a) a summary aging of the accounts payable of each Station and of the Obligors' accounts
the 10th day of each payable and any book overdraft.
month)
----------------------------------------------------------------------------------------------------------------------
Quarterly (b) a detailed list of the Obligors' customers on a per Station basis and on the basis of
all of the Stations of the Obligors, and
(c) a report regarding the Obligors' accrued, but unpaid, ad valorem taxes.
----------------------------------------------------------------------------------------------------------------------
Upon request by Agent (d) such other reports as to the Collateral, or the financial condition of
the Obligors, as Agent may reasonably request.
=====================================================================================================================
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent,
with copies to each Lender:
(a) as soon as available, but in any event
within 30 days (45 days in the case of a month that is the end of one of the
first 3 fiscal quarters in a fiscal year) after the end of each month during
each of Borrower's fiscal years,
(i) a company prepared consolidated balance
sheet, income statement (including an income statement on a
Station-by-Station basis), and statement of cash flow covering
Borrower's and its Subsidiaries' operations during such
period,
(ii) a certificate signed by the chief financial
officer of Borrower to the effect that:
the financial statements delivered
hereunder have been prepared in accordance with GAAP
(except for the lack of footnotes and being subject
to year-end audit adjustments) and fairly present in
all material respects the financial condition of
Borrower and its Subsidiaries,
the representations and warranties of
Borrower contained in this Agreement and the other
Loan Documents are true and correct in
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all material respects (or, to the extent of any
representation and warranty being untrue or
incorrect, describing such lack of truth or
correctness as to which he or she may have knowledge
and what action Borrower has taken, is taking or
proposes to take with respect thereto) on and as of
the date of such certificate, as though made on and
as of such date (except to the extent that such
representations and warranties relate solely to an
earlier date), and
there does not exist any condition or
event that constitutes a Default or Event of Default
(or, to the extent of any non-compliance with this
Agreement or any other Loan Document, describing such
non-compliance as to which he or she may have
knowledge and what action Borrower has taken, is
taking, or proposes to take with respect thereto),
and
(iii) for each month that is the date on which a
financial covenant in Section 7.22 is to be tested, a
Compliance Certificate demonstrating, in reasonable detail,
compliance or, if applicable, non-compliance at the end of
such period with the applicable financial covenants contained
in Section 7.22, and
(b) as soon as available, but in any event
within 90 days after the end of each of Borrower's fiscal years,
(i) financial statements of Borrower and its
Subsidiaries for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Agent
(KPMG LLP being acceptable to Agent as of the date hereof) and
certified, without any qualifications, by such accountants to
have been prepared in accordance with GAAP (such audited
financial statements to include, if prepared, such
accountants' letter to management), and
(ii) an internally prepared balance sheet, income
statement, and statement of cash flow on a per Station basis
as well as on the basis of the overall Station group of
Borrower and its Subsidiaries,
(c) as soon as available, but in any event
within 30 days prior to the start of each of Borrower's fiscal years,
(i) copies of Borrower's Projections, in form,
scope, and underlying assumptions satisfactory to Agent, in
its Permitted Discretion, for the forthcoming 3 years, year by
year, and for the forthcoming fiscal year, month by month,
certified by the chief financial officer of Borrower and as
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being such officer's good faith best estimate of the financial
performance of Borrower and its Subsidiaries during the period
covered thereby,
(d) if and when filed by Borrower,
(i) Form 10-Q quarterly reports, Form 10-K
annual reports, and Form 8-K current reports,
(ii) any other filings made by Borrower with the
SEC,
(iii) if requested, copies of Borrower's federal
income tax returns, and any amendments thereto, filed with the
Internal Revenue Service, and
(iv) any other information that is provided by
Borrower's ultimate parent to its shareholders generally,
(e) if and when filed by Borrower and as
requested by Agent, satisfactory evidence of payment of applicable excise taxes
(other than those that are the subject of a Permitted Protest) in each
jurisdiction in which (i) any Obligor conducts business or is required to pay
any such excise tax, (ii) where any Obligor's failure to pay any such applicable
excise tax would result in a Lien on the properties or assets of any Obligor, or
(iii) where any Obligor's failure to pay any such applicable excise tax
reasonably could be expected to result in a Material Adverse Change,
(f) as soon as Borrower has knowledge of any
event or condition that constitutes a Default or an Event of Default, notice
thereof and a statement of the curative action that Borrower proposes to take
with respect thereto,
(g) as soon as available, but in any event
within 120 days after the end of each of Borrower's fiscal years, a certificate
of such accountants addressed to Agent and the Lenders stating that such
accountants do not have knowledge of the existence of any Default or Event of
Default under Section 7.22; provided that with respect to fiscal year 2002, the
certificate shall make reference to the Existing Loan Agreement as of December
31, 2002 and the foregoing time deadline shall be 5 days after the Restatement
Closing Date, and
(h) upon the request of Agent, any other report
reasonably requested relating to the financial condition of Borrower and its
Subsidiaries.
The financial statements described above shall be prepared on
both a consolidated and consolidating (per Station and related License Company)
basis and agrees that no Subsidiary of Borrower will have a fiscal year
different from that of Borrower. Borrower agrees that its independent certified
public accountants are authorized to communicate with Agent and to release to
Agent whatever financial information concerning
-00-
Xxxxxxxx Xxxxx reasonably may request. Borrower 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 Agent pursuant to
or in accordance with this Agreement, and agrees that Agent may contact directly
any such accounting firm or service bureau in order to obtain such information.
6.4 [INTENTIONALLY OMITTED].
6.5 ADVERTISING REBATES. Cause any advertising rebates or other
allowances, 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.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its
properties which are necessary or useful in the proper conduct of its business
in good working order and condition, ordinary wear and tear excepted, and
comply, in all material respects, at all times with the provisions of all
material leases to which it is a party as lessee so as to prevent any loss or
forfeiture thereof or thereunder. For clarity, it is understood that this
covenant is not intended to cover the Obligors' obligation to preserve their FCC
Licenses
6.7 TAXES. 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 assets, 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. Borrower will make, and will cause each other Obligor to
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
will, upon request, furnish, and will cause each other Obligor to furnish, Agent
with proof satisfactory to Agent indicating that the applicable Obligor has made
such payments or deposits. Upon request of Agent, Borrower shall, and shall
cause all other Obligors to, deliver satisfactory evidence of payment of
applicable excise taxes in each jurisdictions in which the applicable Obligor is
required to pay any such excise tax.
6.8 INSURANCE.
(a) At Borrower's expense, maintain insurance
respecting its assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Borrower also shall
maintain business interruption, and public liability insurance, as well as
insurance against larceny, embezzlement, and criminal misappropriation. The
insurance companies and coverages maintained by Borrower and its Subsidiaries as
of the date hereof are satisfactory to Agent as of such date. All such policies
of insurance shall be in such amounts and with such insurance companies as are
reasonably satisfactory to Agent. Borrower shall deliver copies of all such
policies to Agent with a
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satisfactory lender's loss payable endorsement naming Agent as sole loss payee
or additional insured, as appropriate. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 30 days prior
written notice to Agent in the event of cancellation of the policy for any
reason whatsoever.
(b) Borrower shall give Agent prompt notice of
any loss covered by such insurance. Agent shall have the exclusive right to
adjust any losses payable under any such insurance policies in excess of
$500,000, without any liability to Borrower whatsoever in respect of such
adjustments. If, as of the date of receipt thereof, there are Advances
outstanding hereunder, Borrower shall pay to Agent any monies received as
payment for any loss in excess of $500,000 under any insurance policy mentioned
above (other than liability insurance policies) or as payment of any award or
compensation for condemnation or taking by eminent domain in excess of $500,000,
to be applied to the prepayment of the Obligations without premium and without
causing a reduction in the Commitments. The foregoing notwithstanding, Borrower
may, at or within 30 days of the date of the receipt of any such payment by
Agent, request that Agent establish an Insurance Proceeds Reserve and,
thereafter, disburse to Borrower such monies from the Insurance Proceeds Reserve
and Agent agrees to disburse such monies (notwithstanding any lack of
Availability caused solely by the creation or maintenance of the Insurance
Proceeds Reserve) solely for the repair, replacement, or restoration of the
asset that has been damaged, destroyed or condemned, if all of the following
conditions are satisfied: (i) no Default or Event of Default is continuing or
would result therefrom, (ii) Borrower has cash, Cash Equivalents, borrowing
availability under Section 2.1 and/or business interruption insurance proceeds
in amounts sufficient, in the reasonable judgment of Agent, to ensure that
Borrower will be able to make payment as and when due of each of its Obligations
that will be payable during the period of such repair, replacement, or
restoration, (iii) Agent is reasonably satisfied that the amount of such cash,
Cash Equivalents, borrowing availability, insurance proceeds, and/or Insurance
Proceeds Reserve will be sufficient fully to repair, replace, or restore the
affected assets, (iv) construction, completion of the repair, replacement, or
restoration of the affected assets is to be completed in accordance with plans,
specifications, and drawings submitted to and approved by Agent, which approval
shall not be unreasonably withheld or delayed, (v) all construction and
completion of the repair, replacement, or restoration shall be effected with
reasonable promptness and shall be of a value (the "Replaced Value") that is (A)
at least equal to the replacement value (the "Destroyed Value") of the assets
destroyed or condemned prior to such destruction or condemnation, or (B) of a
value less than the Destroyed Value so long as the difference between the
Destroyed Value and the Replaced Value is applied to the prepayment of the
Obligations without premium, in such order or manner as Agent may elect, and
(vi) all monies paid by Borrower to Agent may be commingled with other funds of
Agent and will not bear interest pending disbursement hereunder. In the event
Agent fails to receive timely such written designation or the conditions set
forth in the following sentence are not satisfied, the payment shall be applied
in the manner set forth in the immediately preceding sentence.
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(c) Borrower will not take out separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained under this Section 6.8, unless Agent is included
thereon as named insured with the loss payable to Agent under a lender's loss
payable endorsement or its equivalent. Borrower immediately shall notify Agent
whenever such separate insurance is taken out, specifying the insurer thereunder
and full particulars as to the policies evidencing the same, and copies of such
policies promptly shall be provided to Agent.
6.9 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on Schedule 5.5 (other than personal
computers and other office equipment in an aggregate amount not to exceed
$100,000); provided, however, that Borrower may amend Schedule 5.5 so long as
such amendment occurs by written notice to Agent not less than 30 days prior to
the date on which 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, Borrower provides any financing
statements or fixture filings necessary to perfect and continue perfected the
Agent's Liens on such assets and also provides to Agent a Collateral Access
Agreement.
6.10 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 result in or reasonably could not be
expected to result in a Material Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under
any leases (including the Key Leases and the Tower Leases) to which any Obligor
is a party or by which the properties and assets of any Obligor are bound,
unless such payments are the subject of a Permitted Protest.
6.12 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Borrower's obtaining
financing from the Lender Group under this Agreement.
6.13 XXXXXXXXX.Xx all times preserve and keep in full force and
effect the Obligors' valid existence and good standing.
6.14 ENVIRONMENTAL.
(a) Keep any property either owned or operated
by any Obligor free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all material respects, with Environmental
Laws and provide to Agent documentation of such compliance which Agent
reasonably requests, (c) promptly notify Agent of any release of a Hazardous
Material in any reportable quantity from or onto property owned or operated by
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any Obligor and take any Remedial Actions required to xxxxx said release or
otherwise to come into compliance with applicable Environmental Law, and (d)
promptly provide Agent with written notice within 10 days of the receipt of any
of the following: (i) notice that an Environmental Lien has been filed against
any of the real or personal property of any Obligor, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against any Obligor, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.
6.15 GOVERNMENT AUTHORIZATION. Borrower shall deliver to Agent, as
soon as practicable, and in any event within 10 days after the receipt by any
Obligor from the FCC or any other governmental agency having jurisdiction over
the operations of the Obligors 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 Station (or portion thereof), or adversely modifies or threatens to
adversely modify any FCC License, (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, notice of
apparent liability for a forfeiture, or order to show cause issued by the FCC or
other agency or any complaint filed with 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 10 days.
6.16 OFF-THE-AIR REPORTS. Borrower shall deliver promptly to Agent
notice of each occurrence of a period of 24 consecutive hours or more during
which any Station owned or operated by any Obligor was not broadcasting or was
broadcasting with power or coverage materially reduced from that provided by a
Station's facilities as reflected in any FCC License for such Station.
6.17 LICENSE STATUS. Commencing on the date that is 6 months
following the Closing Date and continuing on every 6 month anniversary thereof,
Borrower shall deliver to Agent an updated Schedule 5.21 reflecting thereon, as
of the date of such delivery, the information described in Section 5.21.
6.18 NOTICES. Promptly deliver, and cause each of the other
Obligors to deliver promptly, to Agent, all material and adverse written notices
received by it with respect to the Collateral, including the Main Station
Licenses.
6.19 PRESERVATION OF FCC LICENSES. Borrower shall, and shall cause
each of the other Obligors to, preserve and maintain (a) the Main Station
Licenses, and (b) any other
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FCC Licenses, the loss of which could reasonably be expected to result in a
Material Adverse Change.
6.20 CONSTRUCTION OF DIGITAL TELEVISION BROADCAST STATIONS. Except
as set forth on Schedule 5.21, the Obligors shall have completed construction of
their respective FCC-authorized digital television broadcast stations or shall
have requested an extension from the FCC for any such station for which
construction has not been completed and the FCC shall not have denied any such
request by final order.
6.21 SIGNAL CARRIAGE. From and after the Restatement Closing Date,
Borrower shall, and shall cause each of the other Obligors to, maintain and
preserve the carriage of the signals of the Stations by substantially all cable
television systems in the market areas in which such Stations are located (other
than cable television systems not capable of receiving such Stations' signal or
not required to carry such Stations' signals under "must carry" provisions of
applicable law), by making, providing appropriate notices of, and enforcing,
timely and effective elections for such carriage, either pursuant to
retransmission consent agreements or pursuant to mandatory carriage requests.
Borrower shall, and shall cause all of the Obligors to, maintain and preserve,
or as appropriate the License Companies or the Operating Companies, as the case
may be, shall timely and diligently prosecute efforts to obtain, the carriage of
the signal of any Station located in a market area in which one or more direct
broadcast satellite service provider(s) has or have (i) announced an intention
to provide so-called "local-into-local" retransmission of the signals of the
television stations in such market area to its or their subscribers in such
market area, or (ii) commenced such retransmission, by such provider(s) to its
or their subscribers in such market to the extent required by the provisions of
the Satellite Home Viewer Improvement Act of 1999 or the rules of the FCC.
6.22 DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining actual knowledge thereof, (a) notify Agent if any
written information, exhibit, or report furnished to the Lender Group contained
any untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.
6.23 REPAYMENT OF THE INTERMEDIATE NOTES. Cause the repayment,
redemption or repurchase of the Intermediate Notes in full on or before October
1, 2003.
7. NEGATIVE COVENANTS.
So long as any credit hereunder shall be available and until
full and final payment of the Obligations (other than contingent indemnification
obligations or obligations to reimburse the Lender Group for drawings under
outstanding Letters of Credit that have
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been cash collateralized as provided herein), Borrower and, solely with respect
to Sections 7.1, 7.2, 7.6, and 7.8, ACME Parent covenants and agrees that:
7.1 INDEBTEDNESS. Borrower will not, and will not permit any of
the other Obligors to, and ACME Parent will not, and will not permit any of its
Subsidiaries to, 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 and
the other Loan Documents, together with Indebtedness owed to Underlying Issuers
with respect to Underlying Letters of Credit,
(b) Indebtedness (other than Permitted Purchase
Money Indebtedness) set forth on Schedule 5.20,
(c) Permitted Purchase Money Indebtedness,
(d) Permitted Intercompany Advances,
(e) refinancings, renewals, or extensions of
Indebtedness permitted under clauses (b) and (c) of this Section 7.1 (and
continuance or renewal of any Permitted Liens associated therewith) so long as:
(i) the terms and conditions of such refinancings, renewals, or extensions do
not, in Agent's judgment, materially impair the prospects of repayment of the
Obligations by Borrower or materially impair Borrower's creditworthiness, (ii)
such refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate (or with respect to any variable interest
rate, the interest rate margin) with respect to, the Indebtedness so refinanced,
renewed, or extended, (iii) such refinancings, renewals, or extensions do not
result in a shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, nor are they on terms or conditions that,
taken as a whole, are materially more burdensome or restrictive to Borrower, and
(iv) if the Indebtedness that is refinanced, renewed, or extended was
contractually subordinated in right of payment to the Obligations, then the
terms and conditions of the refinancing, renewal, or extension Indebtedness must
include subordination terms and conditions that are at least as favorable to the
Lender Group as those that were applicable to the refinanced, renewed, or
extended Indebtedness;
(f) Indebtedness of Borrower under any Hedging
Agreement so long as such Hedging Agreement is used solely as part of its normal
business operations as a risk management strategy or hedge against changes
resulting from market operations and not as a means to speculate for investment
purposes on trends and shifts in financial or commodities markets;
(g) Indebtedness permitted under Section 7.6;
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(h) Indebtedness composing Permitted
Investments;
(i) Indebtedness expressly permitted to be
incurred or remain outstanding in connection with the consummation of a
Permitted Acquisition or a Permitted Joint Venture Acquisition;
(j) Indebtedness under the Intermediate Notes;
and
(k) Indebtedness incurred after the Restatement
Closing Date by ACME Parent or ACME Television Holdings so long as such
Indebtedness (i) is unsecured, (ii) does not provide for any principal payments
or mandatory prepayments prior to the date that is 6 months after the Maturity
Date, (iii) may not be repaid until the Obligations have been indefeasibly paid
in full and the Commitments hereunder have been terminated, (iv) is not subject
to covenants or events of default that are more restrictive than the covenants
and events of default in this Agreement, and (v) provides that interest be added
to principal and not be paid in cash or property until the date that is 6 months
after the Maturity Date.
7.2 LIENS. Borrower will not, and will not permit any of the other
Obligors to, and ACME Parent will not, and will not permit any of its
Subsidiaries to, create, incur, assume, or permit to exist, any Lien on or with
respect to any of its 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, renewed, or extended under Section 7.1(e)
and so long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Borrower will not, and
will not permit any of the other Obligors to:
(a) Enter into any merger, consolidation,
reorganization, or recapitalization, or reclassify its Stock (other than a
Permitted Acquisition, a Permitted Joint Venture Acquisition, a Permitted
Disposition or Permitted Swap).
(b) Liquidate, wind up, or dissolve itself (or
suffer any liquidation or dissolution).
(c) Convey, sell, lease, license, assign,
transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or (other than Permitted Dispositions or Permitted Swaps) any
substantial part of its assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions or
Permitted Swaps, Borrower will not, and will not permit any of the other
Obligors to, convey, sell, lease, license, assign, transfer, or otherwise
dispose of any of the Obligors' assets.
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7.5 CHANGE NAME. Borrower will not, and will not permit any of the
other Obligors to, change any Obligor's name, FEIN, corporate structure, or
identity, or add any new fictitious name; provided, however, that an Obligor may
change its name upon at least 30 days prior written notice to Agent of such
change and so long as, at the time of such written notification, such Obligor
provides any financing statements or fixture filings necessary to perfect and
continue perfected the Agent's Liens.
7.6 GUARANTEE. Borrower will not, and will not permit any of the
other Obligors to, and ACME Parent will not, and will not permit any of its
Subsidiaries to, guarantee or otherwise become in any way liable with respect to
the obligations of any third Person, except:
(a) by endorsement of instruments or items of
payment for deposit to the account of the Obligors or which are transmitted or
turned over to Agent;
(b) guarantees of Indebtedness permitted
hereunder pursuant to clauses (a) and (b) of Section 7.1;
(c) guarantees of Indebtedness permitted
hereunder pursuant to clause (e) of Section 7.1 to the extent such Indebtedness
refinances, renews, or extends Indebtedness permitted under clause (b) of
Section 7.1;
(d) guarantees by ACME Parent or ACME Television
Holdings of Indebtedness permitted under clause (k) of Section 7.1; and
(e) in connection with Indebtedness permitted
pursuant to clause (j) of Section 7.1 to the extent such Guarantee or liability
exists as of the date hereof.
7.7 NATURE OF BUSINESS. Borrower will not, and will not permit any
of the other Obligors to, make any change in the principal nature of its
business.
7.8 PREPAYMENTS AND AMENDMENTS. Borrower will not, and will not
permit any of the other Obligors to, and ACME Parent will not, and will not
permit any of its Subsidiaries to:
(a) except in connection with a refinancing
permitted by Section 7.1(e), prepay, redeem, defease, purchase, or otherwise
acquire any Indebtedness of ACME Parent or any of its Subsidiaries, other than
(i) Permitted Purchase Money Indebtedness if Borrower has Excess Liquidity in an
amount equal to or greater than $15,000,000 after giving effect thereto, (ii)
Permitted Purchase Money Indebtedness that is secured by the assets that are the
subject of a Permitted Disposition and that is required to be prepaid as a
result of such disposition, (iii) Indebtedness assumed or acquired in connection
with a Permitted Acquisition, a Permitted Joint Venture Acquisition, or a
Permitted Swap of a Station that is required to be prepaid as a result of a
Permitted Disposition or Permitted Swap
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of the subject Station, (iv) prepayment of the Intermediate Notes as described
in clauses (d) and (e) of the definition of "Permitted Restricted Payments" or
payment, redemption or purchase of the Intermediate Notes at maturity, (v) the
exercise of an early purchase option under the Master Lease Agreement with
respect to certain equipment thereunder so long as the aggregate amount expended
on such early purchase option plus the amount required by Bankers Commercial
Corporation as cash collateral for future lease payments does not exceed
$6,000,000 and the aggregate amount expended on such early purchase option is
drawn exclusively from such $6,000,000 amount that, as of the date hereof, is
held by Bankers Commercial Corporation as cash collateral, or (vi) the
Obligations in accordance with this Agreement,
(b) except in connection with a refinancing
permitted by Section 7.1(e), 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) or (c) if any such amendment, modification, alteration, increase or
change could reasonably be expected to have an adverse effect on the Lender
Group; provided that Borrower and its Subsidiaries may amend the Master Lease
for the purpose of providing for the cash collateralization of Borrower's and
such Subsidiaries' obligations thereunder in an amount of up to $6,000,000, and
(c) directly or indirectly, amend, modify,
alter, or change any of the terms or conditions of any agreement, instrument,
document, indenture, or other writing evidencing or concerning the Key Leases,
the Tower Leases, or the Affiliation Agreements, if the affect of such
amendment, modification, alteration, or change reasonably could be expected to
result in a Material Adverse Change.
7.9 CHANGE OF CONTROL. Borrower will not, and will not permit any
of the other Obligors to, cause, permit, or suffer, directly or indirectly, any
Change of Control.
7.10 CHANGE GOVERNING DOCUMENTS. Borrower will not, and will not
permit any of the other Obligors to: (a) authorize the amendment of or amend the
Governing Documents of any Obligor that is a limited liability company to
provide that the Stock of such Obligor is governed by Article 8 of the Code; or
(b) authorize the issuance of or issue certificates evidencing the Stock of any
Obligor that is a limited liability company except with respect to the
certificates evidencing the Stock of Borrower in existence as of the Restatement
Closing Date.
7.11 DISTRIBUTIONS.
(a) Except for Permitted Restricted Payments, or
as otherwise provided herein, Borrower shall not make any distribution (in cash
or other property) on or in respect of, or purchase, acquire, redeem, or retire,
any of Borrower's membership interests, whether now or hereafter outstanding.
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(b) Notwithstanding the foregoing and
notwithstanding Section 7.14, during each taxable year of Borrower, Borrower, at
its option, may, in order to comply with its obligations hereunder (including
its obligations under Section 6.7 hereof), make one or more cash distributions
to each member in an aggregate amount not to exceed the amount of any Permitted
Taxes (as defined below) for which such member is, or the beneficial owners of
such member are, primarily liable under applicable law after taking into account
the relevant tax attributes of each such member or beneficial owner (each such
cash distribution, a "Tax Distribution"). A Permitted Tax shall mean any tax,
levy, impost, duty, fee, assessment or other charge of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein on, or with respect to income, activities or assets
of, any Obligor for any taxable period (or portion thereof) of such Obligor
ending on or prior to the date of any cash distribution made pursuant to this
Section 7.11(b).
(c) Borrower shall, prior to making any Tax
Distribution, provide Agent with such documentation and other information Agent
may require, in its Permitted Discretion, to confirm the basis for and the
amount of the Tax Distribution.
(d) For the purposes of computing the aggregate
amount of Tax Distributions made by Borrower to any member of Borrower for any
taxable period (or portion thereof), any Tax Withholding Amounts in respect of
payments made or deemed made to such member during such taxable period (or
portion thereof) shall be treated as a Tax Distribution made by Borrower to such
member of Borrower in respect of such taxable period.
(e) If, at the end of any taxable year of
Borrower, it is determined that the aggregate amount distributed by Borrower to
any member of Borrower for such taxable year pursuant to this Section 7.11
exceeded the allowable Tax Distributions to such member for such period, then
such excess amount shall be promptly paid to Borrower by such member, or at the
option of Agent, shall be treated as a Tax Distribution to such member in the
immediately following taxable year for the purposes of determining the Tax
Distributions that can be made to such member in such immediately following
taxable year pursuant to this Section 7.11.
7.12 ACCOUNTING METHODS. Borrower will not, and will not permit any
of the other Obligors to, modify or change its method of accounting (other than
as may be required to conform to GAAP) 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 Agent information regarding the Collateral or any Obligor's
financial condition.
7.13 INVESTMENTS. Borrower will not, and will not permit any of the
other Obligors to, except for Permitted Investments, directly or indirectly make
or acquire any Investment or
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incur any liabilities (including contingent obligations) for or in connection
with any Investment; provided, however, that the Obligors shall not have
Permitted Investments (other than in the Cash Management Accounts) in Deposit
Accounts or Securities Accounts in excess of $100,000 outstanding at any one
time unless the applicable Obligor and the applicable securities intermediary or
bank have entered into Control Agreements governing such Permitted Investments,
as Agent shall determine in its Permitted Discretion, to perfect (and further
establish) the Agent's Liens in such Permitted Investments.
7.14 TRANSACTIONS WITH AFFILIATES. Borrower will not, and will not
permit any of the other Obligors to, except for Permitted Restricted Payments
and except for those transactions described on Schedule 7.14, directly or
indirectly enter into or permit to exist any transaction with any Affiliate of
any Obligor except for transactions that are in the ordinary course of the
Obligors' business, upon fair and reasonable terms, that are fully disclosed to
Agent, and that are no less favorable to such Obligor than would be obtained in
an arm's length transaction with a non-Affiliate.
7.15 SUSPENSION. Borrower will not, and will not permit any of the
other Obligors to, suspend or go out of a substantial portion of its business
except in connection with a Permitted Disposition or a Permitted Disposition
LMA.
7.16 [INTENTIONALLY OMITTED].
7.17 USE OF PROCEEDS. Borrower will not, and will not permit any of
the other Obligors to, use the proceeds of the Advances for any purpose other
than (a) to pay transactional fees, costs, and expenses incurred in connection
with this Agreement, the other Loan Documents, and the transactions contemplated
hereby and thereby, and (b) consistent with the terms and conditions hereof, for
its lawful purposes.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Borrower will not, and will not permit any of the other
Obligors to, relocate its chief executive office to a new location without
providing 30 days prior written notification thereof to Agent and so long as, at
the time of such written notification, Borrower provides any financing
statements or fixture filings necessary to perfect and continue perfected the
Agent's Liens and also provides to Agent 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
Borrower providing Agent with a Collateral Access Agreement.
7.19 DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Borrower will not,
and will not permit any of the other Obligors to, establish or maintain any
Deposit Account or Securities Account, unless Agent shall have received a
Control Agreement in respect of such Deposit Account or Securities Account if
such Deposit Account or Securities Account contains assets in excess of
$100,000; provided, however, that, so long as control has not been exercised
pursuant to any such Control Agreement due to the occurrence and continuance of
an Event
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of Default, the Obligors may use the assets in such accounts (and the proceeds
thereof) to the extent not prohibited by this Agreement.
7.20 MAIN STATION LICENSES. Borrower will not, and will not permit
any of the other Obligors to, except solely to the extent expressly permitted
pursuant to this Agreement (i) cancel or terminate any of the Main Station
Licenses 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 in any rights under any Main Station Licenses, (iii)
amend, supplement or otherwise modify any of the Main Station Licenses, except
as otherwise permitted pursuant to this Agreement, (iv) waive any default under
or breach of any of the Main Station Licenses or waive, fail to enforce, forgive
or release any right, interest or entitlement of any kind, howsoever arising
under or in respect of any of the Main Station Licenses or vary or agree to the
variation in any respect of any of the provisions of any of the Main Station
Licenses 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 Main Station Licenses or amend or modify any of the Main
Station Licenses in a manner that would be materially adverse to Borrower or any
of its Subsidiaries. Borrower, at its expense, will perform and comply, and will
cause each of the other Obligors to perform and comply, in all material respects
with all terms and provisions of each of the Main Station Licenses required to
be performed or complied with by it or them, will maintain, or cause to be
maintained, each of the Main Station Licenses in full force and effect, will
enforce, or will cause to be enforced, each of the Main Station Licenses in
accordance with their respective terms and will take, or cause to be taken, all
such action to that end as from time to time may be reasonably requested by
Agent.
7.21 LOCAL MARKETING AGREEMENTS. Borrower will not, and will not
permit any of the Obligors to, enter into any LMA or other similar arrangement,
other than Permitted LMAs.
7.22 FINANCIAL COVENANTS. Borrower will not, and will not permit
any of the other Obligors to,
(a) fail to maintain:
(i) MINIMUM EBITDA. EBITDA, measured on a fiscal
quarter-end basis, of not less than the required amount set
forth in the following table for the applicable period set
forth opposite thereto;
Applicable Amount Applicable Period
----------------------------------------------------------------------------
($ 1,250,000) For the 3 month period
ending September 30, 2003
----------------------------------------------------------------------------
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($ 1,625,000) For the 6 month period
ending December 31, 2003
----------------------------------------------------------------------------
($ 2,600,000) For the 9 month period
ending March 31, 2004
----------------------------------------------------------------------------
($ 1,500,000) For the 12 month period
ending June 30, 2004
----------------------------------------------------------------------------
$ 365,000 For the 12 month period
ending September 30, 2004
----------------------------------------------------------------------------
$ 2,400,000 For the 12 month period
ending December 31, 2004
----------------------------------------------------------------------------
$ 3,580,000 For the 12 month period
ending March 31, 2005
----------------------------------------------------------------------------
$ 5,220,000 For the 12 month period
ending June 30, 2005
----------------------------------------------------------------------------
$ 6,600,000 For the 12 month period
ending September 30, 2005
----------------------------------------------------------------------------
$ 8,150,000 For the 12 month period
ending December 31, 2005
----------------------------------------------------------------------------
$ 8,935,000 For the 12 month period
ending March 31, 2006
----------------------------------------------------------------------------
$ 9,275,000 For the 12 month period
ending June 30, 2006
----------------------------------------------------------------------------
(ii) TANGIBLE NET WORTH. Tangible Net Worth of at
least the required amount set forth in the following table as
of the applicable date set forth opposite thereto:
Applicable Amount Applicable Date
-------------------------------------------------------------------------
$64,720,000 September 30, 2003
-------------------------------------------------------------------------
$61,830,000 December 31, 2003
-------------------------------------------------------------------------
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$58,050,000 March 31, 2004
-------------------------------------------------------------------------
$58,700,000 June 30, 2004
-------------------------------------------------------------------------
$56,290,000 September 30, 2004
-------------------------------------------------------------------------
$55,030,000 December 31, 2004
-------------------------------------------------------------------------
$52,130,000 March 31, 2005
-------------------------------------------------------------------------
$51,405,000 June 30, 2005
-------------------------------------------------------------------------
$50,295,000 September 30, 2005
-------------------------------------------------------------------------
$50,680,000 December 31, 2005
-------------------------------------------------------------------------
$48,650,000 March 31, 2006
-------------------------------------------------------------------------
$48,370,000 June 30, 2006
-------------------------------------------------------------------------
(iii) INDEBTEDNESS TO EBITDA. A ratio of (a) Total
Debt to (b) EBITDA of not greater than the ratio set forth in
the following table for the applicable period set forth
opposite thereto:
Applicable Ratio Applicable Period
---------------------------------------------------------------------------
(36.1:1.0) For the 3 month period
ending September 30, 2003
---------------------------------------------------------------------------
(30.9:1.0) For the 6 month period
ending December 31, 2003
---------------------------------------------------------------------------
(20.3:1.0) For the 9 month period
ending March 31, 2004
---------------------------------------------------------------------------
(34.9:1.0) For the 12 month period
ending June 30, 2004
---------------------------------------------------------------------------
146.9:1.0 For the 12 month period
ending September 30, 2004
---------------------------------------------------------------------------
22.4:1.0 For the 12 month period
ending December 31, 2004
---------------------------------------------------------------------------
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15.7:1.0 For the 12 month period
ending March 31, 2005
---------------------------------------------------------------------------
10.7:1.0 For the 12 month period
ending June 30, 2005
---------------------------------------------------------------------------
8.3:1.0 For the 12 month period
ending September 30, 2005
---------------------------------------------------------------------------
6.0:1.0 For the 12 month period
ending December 31, 2005
---------------------------------------------------------------------------
5.9:1.0 For the 12 month period
ending March 31, 2006
---------------------------------------------------------------------------
5.6:1.0 For the 12 month period
ending June 30, 2006
---------------------------------------------------------------------------
(b) make:
(i) CAPITAL EXPENDITURES. Capital expenditures
in any fiscal year in excess of the amount set forth in the
following table for the applicable period:
For the Fiscal Year ending For the 2 Fiscal Years For the 3 Fiscal Years For the 4 Fiscal Years
December 31, 2003 ending December 31, 2004 ending December 31, 2005 ending December 31, 2006
------------------------------------------------------------------------------------------------------------------
$7,755,000 $11,385,000 $15,015,000 $17,765,000
------------------------------------------------------------------------------------------------------------------
After the date of the consummation of each of the Portland
Acquisition, the Richmond-Petersburg Acquisition, the Flint-Saginaw-Bay City
Acquisition, and the Lexington Acquisition, the covenants set forth in this
Section 7.22 shall be adjusted to reflect the Acquisition Projections for the
applicable Acquisition. The foregoing notwithstanding, the covenants set forth
in this Section 7.22 shall also be adjusted following the consummation of any
other Permitted Acquisition, Permitted Joint Venture Acquisition or Permitted
LMA and as otherwise mutually agreed upon by Agent and Borrower.
7.23 INACTIVE SUBSIDIARY. Borrower will not permit the Inactive
Subsidiary to (a) own any material assets, or (b) engage in any business
activity.
8. EVENTS OF DEFAULT.
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Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay when due and payable, or when
declared due and payable, all or 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 the
Lender Group, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations); provided, however, that in the case of Overadvances
that are caused by the charging of interest, fees, or Lender Expenses to the
Loan Account, such event shall not constitute an Event of Default if, within 3
Business Days of its receipt of telephonic notice of such Overadvance, Borrower
eliminates such Overadvance.
8.2 If (a) Borrower fails or neglects to perform, keep, or
observe, or any other Obligor fails or neglects to perform, keep, or observe,
any term, provision, condition, covenant, or agreement contained in Sections 6.2
(Collateral Reporting), 6.3 (Financial Statements, Reports, Certificates), 6.9
(Location of Inventory and Equipment), 6.10 (Compliance with Laws), 6.11
(Leases), or 6.18 (Notices) (solely with respect to Main Station Licenses) of
this Agreement and such failure continues for a period of 5 days; (b) Borrower,
or any other Obligor, fails or neglects to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in Sections 6.1
(Accounting System), 6.5 (Advertising Rebates), 6.6 (Maintenance of Properties),
6.7 (Taxes), 6.14 (Environmental), 6.17 (License Status), 6.18 (Notices) (with
respect to FCC Licenses other than Main Station Licenses), 6.20 (Disclosure
Updates) of this Agreement and such failure continues for a period of 10 days;
or (c) Borrower, or any other Obligor, fails or neglects to perform, keep, or
observe any other term, provision, condition, covenant, or agreement contained
in this Agreement, in any of the other Loan Documents (giving effect to any
grace periods, if any, expressly provided for in such Loan Documents); in each
case, other than any such term, provision, condition, covenant, or agreement
that is the subject of another provision of this Section 8, in which event such
other provision of this Section 8 shall govern); provided that, during any
period of time that any such failure or neglect of Borrower, or any other
Obligor, referred to in this paragraph exists, even if such failure or neglect
is not yet an Event of Default by virtue of the existence of a grace period, the
Lenders shall not required during such period to make Advances to Borrower;
8.3 If any material portion of any Obligor's assets is attached,
seized, subjected to a writ or distress warrant, levied upon, or comes into the
possession of any third Person (excluding any securities intermediary or bank
that has entered into a Control Agreement) and the same is not discharged before
the earlier of 30 days after the date it first arises or 5 days prior to the
date on which such property or asset is subject to forfeiture;
8.4 If an Insolvency Proceeding is commenced by any of the
Obligors;
8.5 If an Insolvency Proceeding is commenced against any Obligor,
and any of the following events occur: (a) such Obligor consents to the
institution of such Insolvency
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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 60 calendar days of the date of the filing thereof;
provided, however, that, during the pendency of such period, Agent (including
any successor agent) and each other member of the Lender Group shall be relieved
of their obligations to extend credit hereunder, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
the Obligors, or (e) an order for relief shall have been entered therein;
8.6 If any Obligor is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of
the business affairs of the Obligors, taken as a whole;
8.7 If (a) a notice of Lien is filed of record with respect to any
of Borrower's or any of its Subsidiaries' assets by the United States, or any
department, agency, or instrumentality thereof (a "Federal Lien"), or by any
state, county, municipal, or governmental agency and such state, county,
municipal, or governmental agency Lien has priority over the Liens of Agent in
and to the Collateral or any portion thereof (a "Non-Federal Priority Lien"); or
(b) a notice of Lien is filed of record with respect to Borrower's or any of its
Subsidiaries' assets by any state, county, municipal, or governmental agency
that is not a Non-Federal Priority Lien (a "Non-Federal Non-Priority Lien");
provided, however, that, if the aggregate amount claimed with respect to any
such Non-Federal Non-Priority Liens, or the combination thereof, is less than
$250,000, an Event of Default shall not occur under this subsection if the
claims that are the subject of such Liens are the subject of Permitted Protests
and if the Liens are released, discharged, or bonded against within 30 days of
each such Lien first being filed of record or, if earlier, at least 5 days prior
to the date on which assets that are subject to such Liens are subject to being
sold or forfeited and, in any such case, Agent shall have the absolute right to
establish and maintain a reserve against the Borrowing Base and the Maximum
Revolver Amount in an amount equal to the aggregate amount of the underlying
claims (determined by Agent, in its Permitted Discretion, and irrespective of
any Permitted Protests with respect thereto and including any penalties or
interest that are estimated by Agent, in its Permitted Discretion, to arise in
connection therewith);
8.8 If a judgment or other claim involving $250,000, or more,
becomes a Lien or encumbrance upon any material portion of any Obligor's assets
and such judgment or claim is not discharged before the earlier of 30 days after
the date it first arises or 5 days prior to the date on which such property or
asset is subject to forfeiture;
8.9 If Borrower or any of the other Obligors causes a default
under any material agreement to which Borrower or any of the other Obligors is a
party, the termination of which could reasonably be expected to result in a
material adverse effect on any of the Stations, and such default results in the
termination of such agreement, or the refusal to renew such agreement pursuant
to an automatic renewal right therein;
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8.10 If any 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;
8.11 If any material misstatement or misrepresentation exists now
or hereafter in any warranty, representation, statement, or Record made (as and
when made) to the Lender Group by Borrower, its Subsidiaries, or any officer,
management employee, or director of Borrower or any of its Subsidiaries;
8.12 If the obligation of any Guarantor under the Guaranty is
limited (other than pursuant to its solvency savings clause) or terminated by
declaration of a court of competent jurisdiction or by such Guarantor
thereunder;
8.13 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason (other than negligence on the part of
Agent), fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien on or security
interest in the Collateral (other than Collateral having an aggregate value of
$10,000, or less) covered hereby or thereby and such event, if not occasioned by
an Obligor, continues for a period of 5 days;
8.14 Any material provision of any Loan Document shall at any time
for any reason be declared to be null and void, or the validity or
enforceability of any Loan Document shall be contested by any Obligor, or a
proceeding shall be commenced by any Obligor, or by any Governmental Authority
having jurisdiction over any Obligor, seeking to establish the invalidity or
unenforceability thereof, or any Obligor shall deny in writing that such Obligor
has any liability or obligation purported to be created under any Loan Document
and any such event, if not occasioned by an Obligor, continues for a period of 5
days;
8.15 If there is a default under or with respect to the
Intermediate Notes, the Intermediate Indenture, or any other evidence of
Indebtedness of Borrower or any of its Subsidiaries (other than to the Lender
Group hereunder) for borrowed money which, when aggregated with all other such
defaults of Borrower and its Subsidiaries or any of them, equals or exceeds
$500,000, if the effect of such default is to permit the holder of such
Indebtedness to accelerate the maturity of such Indebtedness;
8.16 If the transmission of the broadcast signal(s) of any
Station(s) shall be interrupted or if the operating power or coverage of any
Mature Station(s) shall be materially reduced below the power and coverage to be
obtained by such Station(s)' facilities as reflected on the FCC License(s) for
such Station(s), at any time for more than 48 consecutive hours on 2 occasions,
whether or not consecutive, in any 12 month period, unless such interruption
occurs by reason of force majeure, or (ii) in the event of force majeure, 14
days, in each case, unless (and only so long as) all damages, liabilities and
other effects of such
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interruption of service are fully covered (other than any reasonable deductible)
by business interruption insurance; or
8.17 If any Obligor fails to keep in force, suffers the termination
or revocation of, terminates, forfeits or suffers a materially adverse
modification to, (a) any Main Station License at any time held by such Obligor
and necessary to the operation of any Station owned by any Obligor, or (b) any
one or more licenses, the aggregate result of which deprives any Station owned
by any Obligor of the ability to reach the entire market area of such Station (a
"Market Area Loss") and such Market Area Loss results in a Material Adverse
Change.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by
Borrower:
(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 the Lender Group;
(c) Terminate this Agreement and any of the
other Loan Documents as to any future liability or obligation of the Lender
Group, but without affecting any of the Agent's Liens in the Collateral and
without affecting the Obligations;
(d) Settle or adjust disputes and claims
directly with Account Debtors for amounts and upon terms which Agent considers
advisable, and in such cases, Agent will credit Borrower's Loan Account with
only the net amounts received by Agent in payment of such disputed Accounts
after deducting all Lender Group 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 Agent's request,
Borrower will, and will cause each of the other Obligors to, immediately file,
or cause to be filed, such applications for approval, and shall take all other
and further actions required by Agent to obtain such approvals or consents, of
regulatory authorities as are necessary to transfer ownership and control to
Agent, for the benefit of the Lenders, of the FCC Licenses held by any Obligor,
or its interest in any Person holding any such FCC License. To enforce the
provisions of this
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Section 9.1(e), Agent 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 its consent to 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 to cause
each of the other Obligors to authorize, such an involuntary transfer of control
upon the request of the receiver so appointed and, if Borrower shall refuse to
authorize or cause any of the other Obligors to authorize the transfer, its
approval may be required by the court. Upon the occurrence and continuance of an
Event of Default, Borrower shall further use its 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 the FCC's 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 that the assignment or transfer of FCC Licenses is
integral to Agent's realization of the value of the Collateral, that there is no
adequate remedy at law for failure by Borrower 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) Without notice to or demand upon Borrower or
any other Obligor, make such payments and do such acts as Agent considers
necessary or reasonable to protect its security interests in the Collateral.
Borrower agrees to assemble the Personal Property Collateral if Agent so
requires, and to make the Personal Property Collateral available to Agent at a
place that Agent may designate which is reasonably convenient to both parties.
Borrower authorizes Agent to enter the premises where the Personal Property
Collateral is located, to take and maintain possession of the Personal Property
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
Lien that in Agent's determination appears to conflict with the Agent's Liens
and to pay all expenses incurred in connection therewith and to charge
Borrower's Loan Account therefor. With respect to any of the Obligors' owned or
leased premises, Borrower hereby grants Agent a license to enter into possession
of such premises and to occupy the same, without charge, in order to exercise
any of the Lender Group's rights or remedies provided herein, at law, in equity,
or otherwise;
(g) Without notice to Borrower (such notice
being expressly waived), and without constituting a retention of any collateral
in satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of Borrower held
by the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of Borrower held by the Lender Group;
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(h) Hold, as cash collateral, any and all
balances and deposits of Borrower held by the Lender Group, and any amounts
received in the Cash Management Accounts, to secure the full and final repayment
of all of the Obligations;
(i) 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 to
Agent a license or other right to use, without charge, for use only after the
occurrence and during the continuance of an Event of Default, Borrower's labels,
patents, copyrights, 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;
(j) 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
Borrower's premises) as Agent determines is commercially reasonable. It is not
necessary that the Personal Property Collateral be present at any such sale;
(k) Agent shall give notice of the disposition
of the Personal Property Collateral as follows:
(i) Agent shall give Borrower 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,
the time on or after which the private sale or other
disposition is to be made; and
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Borrower as provided in Section
12, at least 15 days before the earliest time of disposition
set forth in the notice; 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;
(l) Agent, on behalf of the Lender Group, may
credit bid and purchase at any public sale; and
(m) Agent may seek the appointment of a receiver
or keeper to take possession of all or any portion of the Collateral or to
operate same and, to the maximum extent permitted by law, may, in accordance
with applicable FCC rules or regulations, seek the appointment of such a
receiver without the requirement of prior notice or a hearing;
(n) The Lender Group shall have all other rights
and remedies available at law or in equity or pursuant to any other Loan
Document; and
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(o) Any deficiency that exists after disposition
of the Personal Property Collateral as provided above will be paid immediately
by Borrower. Any excess will be promptly returned, without interest and subject
to the rights of third Persons, by Agent to Borrower.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender
Group under this Agreement, the other Loan Documents, and all other agreements
shall be cumulative. The Lender Group shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If Borrower 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, then, Agent, in its sole discretion
and without prior notice to Borrower, 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 Agent deems necessary to protect the Lender Group
from the exposure created by such failure, or (c) in the case of the failure to
comply with Section 6.8 hereof, obtain and maintain insurance policies of the
type described in Section 6.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent 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 documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
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warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrower.
11.3 INDEMNIFICATION.
(a) Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons with respect to each
Lender, each Participant, and each of their respective officers, directors,
employees, 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 (a) in connection with or as a result of or
related to the review, execution, delivery, enforcement, performance, or
administration of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby, and (b) 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 (all the
foregoing, collectively, the "Indemnified Liabilities"). The foregoing to the
contrary notwithstanding, (a) 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 from the gross negligence or willful misconduct of such Indemnified
Person, and (b) Borrower shall have no obligation to any Assignee or
Participant, or its respective officers, directors, employees, agents, or
attorneys-in-fact with respect to any attorneys fees or disbursements and other
costs and expenses incurred by any of them in connection with or as a result of
or related to the review, execution, and delivery of this Agreement or the
Assignment and Acceptance or participation agreement pursuant to which they
become a party hereto or Participant herein. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrower was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrower
with respect thereto.
(b) NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE
OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER
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ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER
OR THEREUNDER.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrower or Agent to the other 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, electronic mail
(at such email addresses as Borrower or Agent, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrower or Agent, as
the case may be, at its address set forth below:
If to Borrower: ACME TELEVISION, LLC
0000 X. Xxxxxx Xxxxxx, Xxxxx 000X
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: Mr. Xxx Xxxxx
Fax No. 000.000.0000
with copies to: O'MELVENY & XXXXX LLP
1999 Avenue of the Stars
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.
Fax No. 000.000.0000
If to Agent: XXXXX FARGO FOOTHILL, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Structured Finance Division Manager
Fax No. 000.000.0000
with copies to: PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No. 000.000.0000
Agent and Borrower may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this Section 12,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after
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the deposit thereof in the mail. Borrower acknowledges and agrees that notices
sent by the Lender Group in connection with the exercise of enforcement rights
against the Collateral under the provisions of the Code shall be deemed sent
when deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN
DOCUMENT IN RESPECT OF SUCH OTHER 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.
(b) 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; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER, ACME PARENT, AND THE LENDER
GROUP WAIVE, 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(b).
(c) BORROWER, ACME PARENT, AND THE LENDER GROUP
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. BORROWER,
ACME PARENT, AND THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER
AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
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LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of
Agent and Borrower (provided that (i) no written consent of Agent or Borrower
shall be required in connection with any assignment and delegation by a Lender
to an Eligible Transferee, (ii) no written consent of Borrower shall be required
in connection with any assignment or delegation if an Event of Default shall
have occurred and be continuing, and (iii) no assignment and delegation shall be
made, without the prior written consent of Borrower, to any Person that is
organized in or under the laws of any jurisdiction other than the United States
or any state or other political subdivision thereof or is otherwise not a United
States person as defined in the IRC (a "Foreign Person") if payments to such
Person would require Borrower to pay any Taxes or any additional amounts
pursuant to Section 16.11(e)), assign and delegate to one or more assignees
(each an "Assignee") all, or any ratable part of all, of the Obligations, the
Commitments and the other rights and obligations of such Lender hereunder and
under the other Loan Documents, in a minimum amount of $5,000,000; provided,
however, that Borrower and Agent may continue to deal solely and directly with
such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Borrower and Agent by such Lender and the Assignee, (ii) such Lender and its
Assignee have delivered to Borrower and Agent an Assignment and Acceptance in
form and substance satisfactory to Agent, and (iii) the assignor Lender or
Assignee has paid to Agent for Agent's separate account a processing fee in the
amount of $5,000. Anything contained herein to the contrary notwithstanding, the
consent of Agent shall not be required (and payment of any fees shall not be
required) if such assignment is in connection with any merger, consolidation,
sale, transfer, or other disposition of all or any substantial portion of the
business or loan portfolio of such Lender.
(b) From and after the date that Agent notifies
the assignor Lender (with a copy to Borrower) that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except with respect to Section 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such
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Lender shall cease to be a party hereto and thereto), and such assignment shall
affect a novation between Borrower and the Assignee.
(c) By executing and delivering an Assignment
and Acceptance, the assigning Lender thereunder and the Assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(1) other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto, (2) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower or the performance or observance by Borrower of
any of its obligations under this Agreement or any other Loan Document furnished
pursuant hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (4) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (5) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance and receipt and
acknowledgment by Agent of such fully executed Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time, with the written
consent of Agent, sell to one or more commercial banks, financial institutions,
or other Persons not Affiliates of such Lender (a "Participant") participating
or other beneficial interests ("Participating Interests") in its Obligations,
the Commitment, and the other rights and interests of that Lender (the
"Originating Lender") hereunder and under the other Loan Documents (provided
that no written consent of Agent shall be required in connection with any sale
of any such Participating Interests by a Lender to an Eligible Transferee);
provided, however, that (i) the Originating Lender shall remain a "Lender" for
all purposes of this Agreement and the other Loan Documents and the Participant
receiving the Participating Interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder
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shall not constitute a "Lender" hereunder or under the other Loan Documents and
the Originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the Originating Lender shall remain solely responsible for the
performance of such obligations, (iii) Borrower, Agent, and the Lenders shall
continue to deal solely and directly with the Originating Lender in connection
with the Originating Lender's rights and obligations under this Agreement and
the other Loan Documents, (iv) no Lender shall transfer or grant any
Participating Interest under which the Participant has the right to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
all or a material portion of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant has a Participating Interest,
(D) postpone the payment of, or reduce the amount of, the interest or fees
payable to such Participant through such Lender, or (E) reduce the amount or due
dates of scheduled principal repayments or prepayments or premiums, and (v) all
amounts payable by Borrower under any of the Loan Documents (including, without
limitation, under Section 16.11) shall be determined as if such Lender had not
sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its Participating
Interest in amounts owing under this Agreement to the same extent as if the
amount of its Participating Interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrower, the
Collections, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.
(f) In connection with any such assignment or
Participating Interest or proposed assignment or Participating Interest, a
Lender may disclose all documents and information which it now or hereafter may
have relating to Borrower or Borrower's business, so long as such Lender has
first secured a customary confidentiality agreement from such proposed assignee
or Participant.
(g) Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
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14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and permitted assigns of each of the parties;
provided, however, that Borrower and ACME Parent may not assign this Agreement
or any rights or duties hereunder without the Lenders' prior written consent and
any prohibited assignment shall be absolutely void ab initio. No consent to
assignment by the Lenders shall release Borrower from its Obligations. A Lender
may assign this Agreement and the other Loan Documents and its rights and duties
hereunder and thereunder pursuant to Section 14.1 hereof and, except as
expressly required pursuant to Section 14.1 hereof, no consent or approval by
Borrower or ACME Parent is required in connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by Borrower therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Borrower and then any such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all of the Lenders affected
thereby and Borrower, do any of the following:
(a) increase or extend any Commitment of any
Lender,
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees, or other amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of
interest on, any loan or other extension of credit hereunder, or reduce any fees
or other amounts payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments
that is required to take any action hereunder,
(e) amend this Section or any provision of the
Agreement providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted
by Section 16.12,
(g) change the definition of "Required Lenders",
(h) contractually subordinate any of the Agent's
Liens,
(i) other than in connection with a Permitted
Disposition or Permitted Swap, or in connection with a sale or other
dispositions by Agent pursuant to its
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remedies as a secured creditor, release the Obligors from any obligation for the
payment of money, or
(j) change the definition of Borrowing Base or
the definition of Maximum Revolver Amount, or change Section 2.1(b), or
(k) amend any of the provisions of Section 16.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrower, shall not require consent by or the agreement of Borrower.
15.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender
Group or Agent hereunder requires the unanimous consent, authorization, or
agreement of all Lenders ("Subject Action"), and a Lender ("Holdout Lender")
fails to give its consent, authorization, or agreement, then Agent or Borrower,
upon at least 5 Business Days prior irrevocable notice to the Holdout Lender,
may permanently replace the Holdout Lender with one or more substitute Lenders
(each, a "Replacement Lender"), and the Holdout Lender shall have no right to
refuse to be replaced hereunder; provided, however, that in the case of any
Holdout Lender replaced by Borrower, Subject Action must (i) have been requested
in good faith and not for the purpose of avoiding any premium or penalty of any
kind whatsoever, and (ii) have been approved by the Required Lenders; and,
provided further, that Borrower may not permanently replace WFF as a Lender so
long as WFF is also Agent. Such notice to replace the Holdout Lender shall
specify an effective date for such replacement, which date shall not be later
than 15 Business Days after the date such notice is given. Notwithstanding the
foregoing, Borrower shall have the right to permanently replace any Holdout
Lender at any time (including Agent) so long as any and all applicable premiums
or penalties are paid by Borrower to such Holdout Lender in connection
therewith. Borrower shall be entitled to rely on any written representation by
Agent that the unanimous consent, authorization, or agreement of all Lenders has
been obtained with respect to any Subject Action.
(b) Prior to the effective date of such
replacement, the Holdout Lender and each Replacement Lender shall execute and
deliver an Assignment and Acceptance Agreement, subject only to the Holdout
Lender being repaid its share of the outstanding Obligations (including an
assumption of its Pro Rata Share of the Risk Participation Liability) without
any premium or penalty of any kind whatsoever. If the Holdout Lender shall
refuse or fail to execute and deliver any such Assignment and
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Acceptance Agreement prior to the effective date of such replacement, the
Holdout Lender shall be deemed to have executed and delivered such Assignment
and Acceptance Agreement. The replacement of any Holdout Lender shall be made in
accordance with the terms of Section 14.1. Until such time as the Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Holdout Lender hereunder and under the other
Loan Documents, the Holdout Lender shall remain obligated to make the Holdout
Lender's Pro Rata Share of Advances and to purchase a participation in each
Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent's and each Lender's rights thereafter to require strict
performance by Borrower of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints WFF as its representative under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 16.
Except for the provisions of Sections 16.10, 16.11, 16.12, and 16.17(d) below,
the provisions of this Section 16 are solely for the benefit of Agent, and the
Lenders, and Borrower shall have no rights as a third party beneficiary of any
of the provisions contained herein. Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that WFF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement
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and the other Loan Documents. Without limiting the generality of the foregoing,
or of any other provision of the Loan Documents that provides rights or powers
to Agent, Lenders agree that Agent shall have the right to exercise the
following powers as long as this Agreement remains in effect: (a) maintain, in
accordance with its customary business practices, ledgers and records reflecting
the status of the Obligations, the Collateral, the Collections, and related
matters, (b) execute or file any and all financing or similar statements or
notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Loan Documents,
(c) make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the proceeds of the
Collections as provided in the Loan Documents, (e) open and maintain such bank
accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections, (f) perform, exercise, and
enforce any and all other rights and remedies of the Lender Group with respect
to Borrower, the Obligations, the Collateral, the Collections, or otherwise
related to any of same as provided in the Loan Documents, and (g) incur and pay
such Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by Borrower or any
Subsidiary or Affiliate of Borrower, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the Books or properties of Borrower or the
books or records or properties of any of Borrower's Subsidiaries or Affiliates.
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16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrower
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders,
except with respect to Events of Default of which Agent has actual knowledge,
unless Agent shall have received written notice from a Lender or Borrower
referring to this Agreement, describing such Default or Event of Default, and
stating that such notice is a "notice of default." Agent promptly will notify
the Lenders of its receipt of any such notice or of any Event of Default of
which Agent has actual knowledge. If any Lender obtains actual knowledge of any
Event of Default, such Lender promptly shall notify the other Lenders and Agent
of such Event of Default. Each Lender shall be solely responsible for giving any
notices to its Participants, if any. Subject to Section 16.4, Agent shall take
such action with respect to such Default or Event of Default as may be requested
by the Required Lenders in accordance with Section 9; provided, however, that
unless and until Agent has received any such request, Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrower
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person (other than the Lender Group)
party to a Loan Document, and all applicable
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bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to Borrower.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of Borrower and any other Person (other
than the Lender Group) party to a Loan Document. Except for notices, reports,
and other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
Borrower and any other Person party to a Loan Document that may come into the
possession of any of the Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, reasonable
attorneys fees and expenses, costs of collection by outside collection agencies
and auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrower is obligated to reimburse Agent
or Lenders for such expenses pursuant to this Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from proceeds of
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses from proceeds of Collections
received by Agent, each Lender hereby agrees that it is and shall be obligated
to pay to or reimburse Agent for the amount of such Lender's Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of Borrower and without limiting the obligation
of Borrower to do so), according to their Pro Rata Shares, from and against any
and all Indemnified Liabilities; provided, however, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make an Advance or other extension of credit
hereunder. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for such Lender's ratable share of any costs or out-of-pocket
expenses (including attorneys fees and expenses) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment, or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that Agent is not reimbursed
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for such expenses by or on behalf of Borrower. The undertaking in this Section
shall survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents as though WFF were not Agent hereunder, and, in each
case, without notice to or consent of the other members of the Lender Group. The
other members of the Lender Group acknowledge that, pursuant to such activities,
WFF or its Affiliates may receive information regarding Borrower or its
Affiliates and any other Person (other than the Lender Group) party to any Loan
Documents that is subject to confidentiality obligations in favor of Borrower or
such other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will
use its reasonable best efforts to obtain), Agent shall not be under any
obligation to provide such information to them. The terms "Lender" and "Lenders"
include WFF in its individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice
to the Lenders. If Agent resigns under this Agreement, the Required Lenders
shall appoint a successor Agent for the Lenders. A successor Agent must be an
Eligible Transferee. If no successor Agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with the
Lenders, a successor Agent. If Agent has materially breached or failed to
perform any material provision of this Agreement or of applicable law, the
Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders. In any such event, upon the acceptance
of its appointment as successor Agent hereunder, such successor Agent shall
succeed to all the rights, powers, and duties of the retiring Agent and the term
"Agent" shall mean such successor Agent and the retiring Agent's appointment,
powers, and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 16 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 45 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as the Lenders appoint a successor Agent as
provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with Borrower
and its Subsidiaries and Affiliates and any other Person (other than the Lender
Group) party to any Loan Documents as though
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such Lender were not a Lender hereunder without notice to or consent of the
other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, such Lender and its respective
Affiliates may receive information regarding Borrower or its Affiliates and any
other Person (other than the Lender Group) party to any Loan Documents that is
subject to confidentiality obligations in favor of Borrower or such other Person
and that prohibit the disclosure of such information to the Lenders, and the
Lenders acknowledge that, in such circumstances (and in the absence of a waiver
of such confidentiality obligations, which waiver such Lender will use its
reasonable best efforts to obtain), such Lender not shall be under any
obligation to provide such information to them. With respect to the Swing Loans
and Agent Advances, Swing Lender shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though it were
not the sub-agent of Agent.
16.11 WITHHOLDING TAXES.
(a) If any Lender is a Foreign Person and such
Lender claims exemption from, or a reduction of, U.S. withholding tax under
Sections 1441 or 1442 of the IRC, such Lender agrees with and in favor of Agent
and Borrower, to deliver to Agent and Borrower:
(i) if such Lender claims an exemption from
withholding tax pursuant to its portfolio interest exception
described in Section 871(h) or 881(c) of the IRC, (a) a
statement of the Lender, signed under penalty of perjury, that
it is not a (I) a "bank" as described in Section 881(c)(3)(A)
of the IRC, (II) a 10% shareholder (within the meaning of
Section 881(c)(3)(B) of the IRC), or (III) a controlled
foreign corporation described in Section 881(c)(3)(C) of the
IRC, and (b) a properly completed IRS Form W-8BEN, before the
first payment of any interest under this Agreement and at any
other time reasonably requested by Agent or Borrower;
(ii) if such Lender claims an exemption from, or
a reduction of, withholding tax under a United States tax
treaty, a properly completed IRS Form W-8BEN before the first
payment of any interest under this Agreement and at any other
time reasonably requested by Agent or Borrower;
(iii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States
trade or business of such Lender, two properly completed and
executed copies of IRS Form W-8ECI before the first payment of
any interest is due under this Agreement and at any other time
reasonably requested by Agent or Borrower;
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(iv) such other form or forms as may be required
under the IRC or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction and, if an exemption or reduction of U.S. withholding tax under
Sections 1441 or 1442 of the IRC is available under such changed circumstances,
to provide any statement or form required to establish any such exemption or
reduction.
(b) If any Lender claims exemption from, or
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of its beneficial ownership interest in the Obligations of Borrower
to such Lender, such Lender agrees to promptly notify Agent and Borrower of the
percentage amount in which it is no longer the beneficial owner of Obligations
of Borrower to such Lender. To the extent of such percentage amount, Agent and
Borrower will treat statements or forms previously provided by such Lender
pursuant to this Section 16.11 as no longer valid.
(c) If any Lender is entitled to a reduction in
the applicable withholding tax, Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section 16.11 are not delivered to Agent or Borrower or
are no longer valid, then Agent and Borrower may withhold from any interest
payment to such Lender not providing such forms or other documentation, or in
respect of whom such forms or other documentation, although provided, are or
have become wholly or partially invalid, an amount equivalent to the applicable
withholding tax.
(d) If the IRS or any other Governmental
Authority of the United States or other jurisdiction asserts a claim that Agent
did not properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Agent harmless for all amounts paid, directly or indirectly, by Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this Section, together
with all costs and expenses (including attorneys fees and expenses). The
obligation of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of Agent.
(e) All payments made by Borrower hereunder or
under any note will be made without setoff, counterclaim, or other defense,
except as required by applicable law other than for Taxes (as defined below).
All such payments will be made free and clear
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of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction (other than the United States) or
by any political subdivision or taxing authority thereof or therein (other than
a political subdivision or taxing authority of or in the United States) with
respect to such payments (but excluding, any tax (and any interest, penalties or
similar liabilities with respect thereto) imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein (i) measured by or
based on the net income or net profits of a Lender (including any franchise,
branch profits or similar taxes), or (ii) to the extent that such tax results
from a change in the circumstances of the Lender, including a change in the
residence, place of organization, or principal place of business of the Lender,
or a change in the branch or lending office of the Lender participating in the
transactions set forth herein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, Borrower agrees to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement or under any note,
including any amount paid pursuant to this Section 16.11(e) after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein; provided, however, that Borrower shall not be required to
increase any such amounts payable to Agent or any Lender (i) if such Person
fails to comply with any requirements under this Section 16.11 to establish an
exemption from or reduction of any Tax, or (ii) if the increase in such amount
payable results from Agent's or such Lender's own willful misconduct or gross
negligence. Borrower will furnish to Agent as promptly as possible after the
date the payment of any Taxes is due pursuant to applicable law certified copies
of tax receipts evidencing such payment by Borrower.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize
Agent, at its option and in its sole discretion, to release any Lien on any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrower of all Obligations, (ii) constituting property
being sold or disposed of if a release is required or desirable in connection
therewith and if Borrower certifies to Agent that the sale or disposition is
permitted under Section 7.4 of this Agreement or the other Loan Documents (and
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which Borrower owned no interest at the time the
security interest was granted or at any time thereafter, or (iv) constituting
property leased to Borrower under a lease that has expired or is terminated in a
transaction permitted under this Agreement. Except as provided above, Agent will
not execute and deliver a release of any Lien on any Collateral without the
prior written authorization of (y) if the release is of all or substantially all
of the Collateral, all of the Lenders, or (z) otherwise, the Required Lenders.
Upon request by Agent or Borrower at any time, the Lenders will confirm in
writing Agent's authority to release any such Liens on particular types or items
of Collateral pursuant to this Section 16.12; provided, however, that
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(1) Agent shall not be required to execute any document necessary to evidence
such release on terms that, in Agent's opinion, would expose Agent to liability
or create any obligation or entail any consequence other than the release of
such Lien without recourse, representation, or warranty, and (2) such release
shall not in any manner discharge, affect, or impair the Obligations or any
Liens (other than those expressly being released) upon (or obligations of
Borrower in respect of) all interests retained by Borrower, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(b) Agent shall have no obligation whatsoever to
any of the Lenders to assure that the Collateral exists or is owned by Borrower
or is cared for, protected, or insured or has been encumbered, or that the
Agent's Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent's own interest in the Collateral in its capacity as
one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing, except as otherwise
provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall
not, without the express consent of Agent, and that it shall, to the extent it
is lawfully entitled to do so, upon the request of Agent, set off against the
Obligations, any amounts owing by such Lender to Borrower or any Deposit
Accounts of Borrower now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
by Agent, take or cause to be taken any action, including, the commencement of
any legal or equitable proceedings, to foreclose any Lien on, or otherwise
enforce any security interest in, any of the Collateral the purpose of which is,
or could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall
receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from Agent pursuant to the terms of
this Agreement, or (ii) payments from Agent in excess of such Lender's ratable
portion of all such distributions by Agent, such Lender promptly shall (1) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or
(2) purchase, without recourse or warranty, an undivided interest and
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participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Shares; provided, however, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall
be returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender
as its agent (and each Lender hereby accepts such appointment) for the purpose
of perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver such Collateral to Agent or
in accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
benefit of the Lender Group. Each member of the Lender Group agrees that any
action taken by Agent in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by Agent of its
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent
furnish such Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively, "Reports")
prepared by Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent
does not (i) make any representation or warranty as to the accuracy of any
Report, and (ii) shall not be liable for any information contained in any
Report,
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(c) expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that Agent or other party
performing any audit or examination will inspect only specific information
regarding Borrower and will rely significantly upon the Books, as well as on
representations of Borrower's personnel,
(d) agrees to keep all Reports and other
material, non-public information regarding Borrower and its Subsidiaries and
their operations, assets, and existing and contemplated business plans in a
confidential manner; it being understood and agreed by Borrower that in any
event such Lender may make disclosures (a) to counsel for and other advisors,
accountants, and auditors to such Lender, (b) reasonably required by any bona
fide potential or actual Assignee or Participant in connection with any
contemplated or actual assignment or transfer by such Lender of an interest
herein or any Participating Interest in such Lender's rights hereunder, so long
as such Lender has first secured a customary confidentiality agreement from such
potential or actual Assignee or Participant, (c) of information that has become
public by disclosures made by Persons other than such Lender, its Affiliates,
assignees, transferees, or Participants, or (d) as required or requested by any
court, governmental or administrative agency, pursuant to any subpoena or other
legal process, or by any law, statute, regulation, or court order; provided,
however, that, unless prohibited by applicable law, statute, regulation, or
court order, such Lender shall notify Borrower of any request by any court,
governmental or administrative agency, or pursuant to any subpoena or other
legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrower, and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent that has not been contemporaneously
provided by Borrower to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrower, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
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Lender's notice to Agent, whereupon Agent promptly shall request of Borrower the
additional reports or information reasonably specified by such Lender, and, upon
receipt thereof from Borrower, Agent promptly shall provide a copy of same to
such Lender, and (z) any time that Agent renders to Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to Borrower or any other Person for any failure by
any other Lender to fulfill its obligations to make credit available hereunder,
nor to advance for it or on its behalf in connection with its Commitment, nor to
take any other action on its behalf hereunder or in connection with the
financing contemplated herein.
16.19 LEGAL REPRESENTATION OF AGENT. In connection with the
negotiation, drafting, and execution of this Agreement and the other Loan
Documents, or in connection with future legal representation relating to loan
administration, amendments, modifications, waivers, or enforcement of remedies,
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP ("PHJ&W") only has represented and only
shall represent WFF in its capacity as Agent and as a Lender. Each other Lender
hereby acknowledges that PHJ&W does not represent it in connection with any such
matters.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower, ACME Parent, Agent, and each Lender whose
signature is provided for on the signature pages hereof.
17.2 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.
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17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group, Borrower, or ACME
Parent, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 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.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing signed by Agent (on behalf of the requisite Lenders), Borrower, and ACME
Parent.
17.6 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 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.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by the Obligors or the transfer to the Lender Group
of any property 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, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Lender Group 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 the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of the
Obligors automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
17.8 FCC APPROVALS. Notwithstanding anything herein or in any of
the Loan Documents to the contrary, but without limiting or waiving in any way
Borrower's obligations under this Agreement or the other Loan Documents, the
Lender Group's rights hereunder and under the Loan Documents are subject to the
Communications Act of 1934, as amended, and all applicable policies, rules and
regulations of the FCC. Agent and the Lenders will not take any action pursuant
to this Agreement or the Loan Documents which
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would constitute or result in any assignment or transfer of control of any FCC
License, whether de jure or de facto, if such assignment or transfer of control
would require under the then existing law (including the Communications Act of
1934, as amended, and the published policies, rules and regulations promulgated
by the FCC), the prior approval of the FCC, without first obtaining such
approval.
17.9 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and thereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the date hereof.
17.10 AMENDMENT AND RESTATEMENT OF EXISTING LOAN AGREEMENT. This
Agreement constitutes an amendment and restatement of the Existing Loan
Agreement effective from and after the Restatement Closing Date. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby are not intended by the parties to be, and shall not
constitute, a novation or an accord and satisfaction of the Obligations or any
other obligations owing to the Lenders or the Agent under the Existing Loan
Agreement or any other Loan Document. On the Restatement Closing Date, the
credit facilities and the terms and conditions thereof described in the Existing
Loan Agreement shall be amended and replaced by the credit facilities and the
terms and conditions thereof described herein, and all Advances and other
Obligations of Borrower outstanding as of such date under the Existing Loan
Agreement shall be deemed to be Advances and Obligations outstanding under the
corresponding facilities described herein (such that all Advances and Letters of
Credit which are outstanding on the Restatement Closing Date under the Existing
Loan Agreement shall become Advances and Letters of Credit, respectively, under
this Agreement), without further action by any Person. Each of the parties
hereto hereby acknowledges and agrees that the grant of the security interests
in the Collateral pursuant to Section 4.1 of this Agreement and in any other
Loan Document is not intended to, nor shall it be construed, as constituting a
release of any prior security interests granted by any Obligor in favor of Agent
or Lender in or to any Collateral or any other Property of such Obligor, but is
intended to constitute a restatement and reconfirmation of the prior security
interests granted by the Obligors in favor of Agent and Lenders in and to the
Collateral and a grant of a new security interest in those types of Collateral
that were not included in any prior security grants by the Obligors by virtue of
the recent enactment of Revised Article 9 of the Code.
17.11 COMMITMENT INCREASE OPTION; COMMITMENT DECREASE. The Lender
Group hereby grants to Borrower the option (the "Commitment Increase Option") of
increasing the Maximum Revolver Amount from $40,000,000 to $50,000,000 (subject
to any previous reductions in the Maximum Revolver Amount pursuant to Section
2.2, in which case the Maximum Revolver Amount shall increase by $10,000,000
above the Maximum Revolver Amount in effect immediately prior to the date of
Borrower's exercise of the
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Commitment Increase Option). Borrower may exercise the Commitment Increase
Option subject to the satisfaction in full of each of the following conditions:
(a) Borrower shall give Agent 5 Business Days
prior written notice of its intent to exercise the Commitment Increase Option;
(b) Concurrent with the increase of the Maximum
Revolver Amount, Borrower shall pay to Agent, for the benefit of the Lenders,
the Commitment Increase Fee;
(c) The Commitment Increase Option must be
exercised on or prior to March 31, 2004; and
(d) No Default or Event of Default exists or
would result therefrom.
If Borrower exercises the Commitment Increase Option, the
Maximum Revolver Amount shall thereupon increase to $50,000,000 (subject to any
previous reductions in the Maximum Revolver Amount pursuant to Section 2.2, in
which case the Maximum Revolver Amount shall increase by $10,000,000 above the
Maximum Revolver Amount in effect immediately prior to the date of Borrower's
exercise of the Commitment Increase Option). If the Maximum Revolver Amount is
increased due to Borrower's exercise of the Commitment Increase Option, it shall
automatically decrease by an amount equal to (i) $1,000,000 on the first
anniversary of the Restatement Closing Date and (ii) $1,000,000 on the second
anniversary of the Restatement Closing Date. The Lenders' respective Commitments
shall be increased or decreased as provided for in this Section 17.11 in
accordance with their respective Pro Rata Shares.
17.12 WAIVERS BY ACME PARENT.
(a) ACME Parent is executing this Agreement
solely for the purpose of making the covenants, waivers, consents, and other
agreements set forth in Sections 7.1, 7.2, 7.6, 7.8, 9.2, 11.3(b), 13, 14.2,
17.1, 17.3, 17.4, 17.5, 17.6, 17.9, 17.10, 17.12, and 17.13 and not as an
Obligor. In the event, however, that ACME Parent's execution of this Agreement
is determined to be in the nature of a guaranty or a suretyship, ACME Parent
makes the following waivers, consents, and agreements: Except as otherwise
expressly provided in this Agreement, ACME Parent hereby waives notice of
acceptance of its liability, notice of any Advances or Letters of Credit issued
under or pursuant to this Agreement, notice of the occurrence of any Default,
Event of Default, or of any demand for any payment under this Agreement, notice
of any action at any time taken or omitted by Agent or Lenders under or in
respect of any of the Obligations, any requirement of diligence or to mitigate
damages and, generally, to the extent permitted by applicable law, all demands,
notices and other formalities of every kind in connection with this Agreement
(except as otherwise provided in this Agreement). ACME Parent hereby assents to,
and waives notice of, any extension or postponement of the time for the payment
of any of the Obligations, the
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acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Obligor
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by Agent or Lenders
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations. Without limiting the generality of the foregoing, ACME Parent
assents to any other action or delay in acting or failure to act on the part of
any Agent or Lender with respect to the failure by any Obligor to comply with
any of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 17.12 afford grounds for terminating, discharging or
relieving ACME, in whole or in part, from any of its covenants under this
Agreement, it being the intention of ACME Parent that, so long as any of the
Obligations hereunder remain unsatisfied, the covenants of ACME Parent under
this Agreement shall not be discharged except by performance and then only to
the extent of such performance. The covenants of ACME Parent under this
Agreement shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any Obligor or any Agent or Lender. The covenants of ACME Parent
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
constitution or place of formation of any Obligor or any Agent or Lender.
(b) ACME Parent represents and warrants to Agent
and Lenders that ACME Parent is currently informed of the financial condition of
the Obligors and of all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Obligations. ACME
Parent further represents and warrants to Agent and Lenders that it has read and
understands the terms and conditions of the Loan Documents. ACME Parent hereby
covenants that it will continue to keep informed of the Obligors' financial
condition and of all other circumstances which bear upon the risk of nonpayment
or nonperformance of the Obligations.
(c) ACME Parent waives all rights and defenses
arising out of an election of remedies by Agent or any Lender, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for a guaranteed obligation, has destroyed ACME Parent's rights of subrogation
and reimbursement against Borrower by the operation of Section 580(d) of the
California Code of Civil Procedure or otherwise.
(d) ACME Parent waives all rights and defenses
that such Borrower may have because the Obligations are secured by Real
Property. This means, among other things:
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(i) Agent and Lenders may collect from any
Obligor without first foreclosing on any Real Property
Collateral or Personal Property Collateral pledged by any
other Obligor.
(ii) If Agent or any Lender forecloses on any
Real Property Collateral pledged by any Obligor:
The amount of the Obligations may be reduced
only by the price for which that collateral is sold
at the foreclosure sale, even if the collateral is
worth more than the sale price; and
Agent and Lenders may collect from such
Obligor even if Agent or Lenders, by foreclosing on
the Real Property Collateral, has destroyed any right
such Obligor may have to collect from the other
Obligors.
This is an unconditional and irrevocable waiver of any rights and defenses ACME
Parent may have because the Obligations are secured by Real Property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedure.
(e) The provisions of this Section 17.12 are
made for the benefit of the Agent, the Lenders and their respective successors
and assigns, and may be enforced by it or them from time to time against ACME
Parent as often as occasion therefor may arise and without requirement on the
part of any such Agent, Lender, successor or assign first to marshal any of its
or their claims or to exercise any of its or their rights against any of the
Obligors or to exhaust any remedies available to it or them against any of the
Obligors or to resort to any other source or means of obtaining payment of any
of the Obligations hereunder or to elect any other remedy. The provisions of
this Section 17.12 shall remain in effect until all of the Obligations shall
have been paid in full or otherwise fully satisfied. If at any time, any
payment, or any part thereof, made in respect of any of the Obligations, is
rescinded or must otherwise be restored or returned by any Agent or Lender upon
the insolvency, bankruptcy or reorganization of any of the Obligors, or
otherwise, the provisions of this Section 17.12 will forthwith be reinstated in
effect, as though such payment had not been made.
(f) ACME Parent hereby agrees that it will not
enforce any of its rights of contribution or subrogation against the Obligors
with respect to any liability incurred by it hereunder or under any of the other
Loan Documents, any payments made by it to the Agent or the Lenders with respect
to any of the Obligations or any collateral security therefor until such time as
all of the Obligations have been paid in full in cash. Any claim which ACME
Parent may have against any Obligor with respect to any payments to any Agent or
Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the
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Obligations arising hereunder or thereunder, to the prior payment in full in
cash of the Obligations and, in the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding under the
laws of any jurisdiction relating to any Obligor, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in full in
cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to ACME Parent therefor.
17.13 DISCLOSURE OF TAX INFORMATION.
Notwithstanding anything to the contrary set forth in this Agreement or in any
other Loan Document, the obligations of confidentiality contained herein and
therein, as they relate to the transactions contemplated by this Agreement,
shall not apply to the federal tax structure or federal tax treatment of the
transactions contemplated hereby, and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
Persons, without limitation of any kind, the federal tax structure and federal
tax treatment of the transactions contemplated hereby. The preceding sentence is
intended to cause the transaction contemplated hereby to be treated as not
having been offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended,
and shall be construed in a manner consistent with such purpose. In addition,
each party hereto acknowledges that it has no proprietary or exclusive rights to
the federal tax structure of the transactions contemplated by this Agreement or
any federal tax matter or federal tax idea related to such transactions.
[Signature page to follow.]
-131-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first above written.
ACME TELEVISION, LLC,
a Delaware limited liability company
By: /s/Xxxxxx X. Xxxxx
------------------------------------
Title: Executive Vice President and CFO
ACME COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/Xxxxxx X. Xxxxx
------------------------------------
Title: Executive Vice President and CFO
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent and
as a Lender
By: ____________________________________
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation, as a Lender
By:____________________________
Title:
[AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT]
S-1
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Exhibit P-1 Form of Parent Guarantor Security Agreement
Exhibit P-2 Form of Parent Guaranty
Exhibit P-3 Form of Parent Pledge Agreement
Exhibit S-1 Form of Solvency Certificate
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule P-1 Permitted Investments
Schedule P-2 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule 2.7(a) Cash Management Banks
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7 Chief Executive Office; FEIN
Schedule 5.8(b) Capitalization of Borrower
Schedule 5.8(c) Capitalization of Borrower's Subsidiaries
Schedule 5.9 Governmental Consents
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.17 Tower Leases and Key Leases
Schedule 5.18 Demand Deposit Accounts
Schedule 5.20 Permitted Indebtedness
Schedule 5.21 Licenses
Schedule 5.27 Signal Carriage
Schedule 5.23 LMAs
Schedule 7.14 Transactions with Affiliates
-1-
SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as
the account into which Borrower shall make all payments to Agent for the benefit
of the Lender Group and into which the Lender Group shall make all payments to
Agent under this Agreement and the other Loan Documents; unless and until Agent
notifies Borrower and the Lender Group to the contrary, Agent's Account shall be
that certain Deposit Account bearing account number 323-266193 and maintained by
Agent with JPMorgan Chase Bank, 0 Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, ABA #000000000.
-2-
SCHEDULE C-1
COMMITMENTS
COMMITMENTS (SUBJECT TO INCREASE OR DECREASE IN
ACCORDANCE WITH SECTION 17.11 OF THE AMENDED AND
LENDER RESTATED LOAN AND SECURITY AGREEMENT)
------------------------------------------------------------------------------------------
Xxxxx Fargo Foothill, Inc. $20,000,000
------------------------------------------------------------------------------------------
General Electric Capital Corporation $20,000,000
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
All Lenders $40,000,000
------------------------------------------------------------------------------------------
-3-
