Exhibit 10.1
MCG CAPITAL CORPORATION
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
February 28, 2002
NBG Radio Network, Inc.
The Cascade Building
000 XX Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxx, III, President
Re: Amendment to Credit Agreement ("Amendment")
Sir or Madam:
Reference is hereby made to that certain Credit Facility
Agreement (as amended and modified from time to time, the "Credit Agreement")
dated as of June 29, 2001, by and among NBG Radio Network, Inc. ("NBG"), and
certain of its direct and indirect Subsidiaries (each, including NBG, a
"Borrower"; collectively, including NBG, the "Borrowers"), and the Lenders
referred to therein, and MCG Capital Corporation ("MCG"), for its own account as
Lender and as administrative agent ("Administrative Agent"). Capitalized terms
used herein but not defined shall have the meaning given to such terms in the
Credit Agreement.
Borrowers have requested and Lenders have agreed to amend and
restate the financial covenants under Section 4.1 of the Credit Agreement.
Accordingly, for good and valuable consideration (receipt and sufficiency of
which are hereby acknowledged), and intending to be legally bound hereby, each
Borrower, Administrative Agent and each Lender hereby agree that Section 4.1 of
the Credit Agreement is hereby amended and restated in its entirety as follows:
"4.1. Financial and Operating Covenants and Ratios. As of the end of
each fiscal quarter -- beginning with the respective fiscal quarters
ending on the dates set forth below - Borrowers (on a consolidated basis) will
satisfy each of the following financial ratios and characteristics, each of
which will be determined using GAAP consistently applied, except as otherwise
expressly provided:
4.1.1. Interest Coverage Ratio. A ratio of OCF to Interest
Expense of not less than the following:
a. 1.50-to-1.0, from November 30, 2002 through
February 27, 2003; and
b. 2.50-to-1.0, from and after February 28, 2003.
4.1.2. Total Charge Coverage Ratio. A ratio of OCF to Total
Charges of not less than 1.0-to-1.0 from and after November 30,
2002.
4.1.3. Cash Flow Leverage Ratio. A ratio of Funded Debt to OCF
of not more than the following:
a. 3.00-to-1.0, from November 30, 2002 through
February 27, 2003; and
NBG Radio Network, Inc.
February 28, 2002
Page 2
b. 2.00-to-1.0, from February 28, 2003 through
November 29, 2003; and
c. 1.00-to-1.0, from and after November 30, 2003.
4.1.4. Maximum Programming Obligations and Affiliate Station
Expenses. The amount of Cumulative Programming Obligations of
Borrowers and Cumulative Affiliate Station Expenses of
Borrowers (on a consolidated basis) will not exceed the amounts
set forth below, compliance with such covenant to be measured on
a cumulative basis as of the end of each fiscal quarter:
Percentage of Upfront Revenues
------------------------------
Fiscal Year Cumulative Programming Cumulative Affiliate
Ending Obligations Station Expenses
------ ----------- ---------------
11/30/2002 See Below See Below
11/30/2003 28.9% 6.7%
Thereafter 28.9% 4.6%
Notwithstanding the foregoing, the maximum aggregate amount of
Cumulative Programming Obligations shall not exceed $2.4 million and
Cumulative Affiliate Station Expenses shall not exceed $2.8 million for
fiscal year ending November 30, 2002.
4.1.5. Minimum Adjusted OCF. OCF for the immediately preceding
four fiscal quarters of not less than the following:
a. ($1,800,000) as of February 28, 2002; and
b. ($750,000) as of May 31, 2002; and
c. ($100,000) as of August 31, 2002; and
d. $2,000,000 as of November 30, 2002.
4.1.6. Minimum Quarterly OCF. OCF for the immediately
preceding fiscal quarter of not less than the following:
a. ($200,000) as of February 28, 2002; and
b. $500,000 as of May 31, 2002; and
c. $500,000 as of August 31, 2002; and
d. $1,000,000 as of November 30, 2002.
NBG Radio Network, Inc.
February 28, 2002
Page 3
4.1.7. Minimum Cumulative Revenue. Cumulative Revenue, meaning
Gross Revenue as determined in accord with GAAP, prior to agent
commissions and sales rep commission, dating from February 28, 2002
of not less than the following:
a. $2,500,000 as of February 28, 2002; and
b. $5,900,000 as of May 31, 2002; and
c. $9,300,000 as of August 31, 2002; and
d. $13,400,000 as of November 30, 2002."
Upon execution of this Amendment, Borrowers will pay
Administrative Agent an Amendment Fee in the amount of $200,000, which fee shall
be fully earned and non-refundable as of the date hereof and shall be payable in
full upon the earlier to occur of (1) the closing date of Borrowers' next
corporate development or financing transaction, including, without limitation,
any increase or restructure of the Credit Facility, any merger or acquisition or
any issuance of equity (other than pursuant to a stock option plan), or (2)
November 30, 2002. If an event contemplated in clause number (1) above does not
occur on or prior to November 30, 2002, Borrowers agree that a principal payment
equal to 25% of Excess Cash Flow (i.e., Operating Cash Flow minus Total Charges)
for the trailing twelve-month period ending November 30, 2002 (such principal
payment not to exceed the amount of the Amendment Fee) shall be paid on or
before December 15, 2002 in immediately available funds and applied to the
Amendment Fee, with the balance of such Amendment Fee, if any, being thereupon
financed through an additional advance of principal under the Term Loan
Facility.
Upon execution of this Amendment, Borrowers also will pay a
Documentation Fee in immediately available funds to Administrative Agent in the
amount of $1500 to cover all fees, costs and expenses in connection with the
preparation and execution of this Amendment.
Except as expressly stated herein, all other terms of the Loan
Documents remain in full force and effect and unchanged. This Amendment will not
obligate Administrative Agent or Lenders to otherwise consent to any actions or
inactions in the future or to amend any Loan Document in any manner at any time
in the future or to waive compliance (temporarily or otherwise) with any
provision of any Loan Document. This Amendment may be executed in counterparts
and delivered by facsimile, and each such counterpart and facsimile shall be
considered an effective original.
[Remainder of Page Intentionally Left Blank]
NBG Radio Network, Inc.
February 28, 2002
Page 4
IN WITNESS WHEREOF, the undersigned (where appropriate, by
their duly authorized officers) have executed this Amendment, as an instrument
under seal (whether or not any such seals are physically attached hereto), as of
the day and year first above written.
ATTEST: NBG RADIO NETWORK, INC.
By:/s/XXXX X. XXXXXXXXX By:/s/XXXX X. XXXXXX III
------------------------------------ ------------------------------
Name: Xxxx X. Xxxxxxxxx Name: Xxxx X. Xxxxxx III
Title: Secretary Title: President
[SEAL]
ATTEST: XXXXX XXXXXX ENTERTAINMENT CORPORATION
By:/s/XXXX X. XXXXXXXXX By:/s/XXXX X. XXXXXX III
------------------------------------ ------------------------------
Name: Xxxx X. Xxxxxxxxx Name: Xxxx X. Xxxxxx III
Title: Secretary Title: President
[SEAL]
WITNESS: MCG CAPITAL CORPORATION
By:/s/XXXX XXXXXX By:/s/XXXX X. XXXXXXXX
------------------------------------ ------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
